David Yaffe - The Marxian Theory of Crisis, Capital and the State

1. Introduction

Marxists have always defended themselves with ardour against the attack that they hold to a 'crude' determinist theory of history. Unfortunately, their anxious protestations have too frequently led to a rejection of the 'materialist' basis of Marxist theory itself. That capitalism, admittedly with the interference of two world wars, has shown its capacity to survive and expand, has further made it all the more difficult to accept a theory that shows the historically limited character of this 'mode of production'. Discussion has, therefore, since the 1930s involved stressing particular aspects of Marxist theory to the detriment of the 'total' conception of Marx's work.

Among Western philosophers and sociologists attempts to reinterpret Marx concerned the emphasis on the 'humanistic' writings of the early Marx against the 'scientism' of the later writings. The Frankfurt School of philosophy and sociology represents what is probably the earliest version of this 'humanism'. The idea of 'Critical Theory' elaborates the distortions of human relations under capitalism and contrasts them with the 'potential' of a more rationally organised society. The 'possible' or 'potential' is counterposed to the 'actual' and the concept of 'enlightenment' is supposed to link the two. While for Marx the historical 'necessity' of the new society is shown in the contradictory development of the old society, for the critical theorists there is no such 'necessity'. This development has its counterpart in 'Marxist' political economy. Paul Baran's use of potential and actual economic surplus in relation to underdeveloped countries[3] and the 'wastage' of the alleged abundant surplus as described in Baran and Sweezy's Monopoly Capital employ similar 'critical' concepts.[4]

What all the above positions have in common is a rejection of the 'general laws - of motion of capitalist society', as developed by Marx in Capital, for 'late' capitalism. The contradictions of capitalist production for these theorists, where they have not been completely contained, do not lie in the production process itself but must be located in the ideological, technological and political spheres.

Many of the academic Marxist economists during this period have been more concerned to show how much of Keynes was or was not anticipated by Marx than to examine the limits to and contradictory nature of state intervention in capitalist economies.[5] The period of 'stability' since the second world war and the consequent 'ideological' hold of 'Keynesianism' have certainly contributed to this state of affairs, but, with increasing instability and growing unemployment in Western economies in the recent period new explanations are being sought. The failure of Social Democratic governments to substantially alter the condition of the working-class, and in Britain the complete subservience of the Labour Party as government party to the interests of international capital, have given added impetus to these tendencies since the mid 1960s.

If the capitalist mode of production can ensure, with or without government intervention, continual expansion and full employment, then the most important objective argument in support of revolutionary socialist theory breaks down. It will be the aim of this article to show that the 'value analysis' of capitalism as developed by Marx, must still be the starting point for an analysis of contemporary capitalism. On the basis of such an analysis it will be shown that state intervention in the economy, far from resolving the central contradictions of capitalist production has only given them new expression. Stagnation and inflation as two of the central features of advanced capitalist economies today indicate the limits and crisis-ridden nature of capitalist production.

The article will be in two main parts. The first section will contain an analysis of Marx's theory of crisis. It will attempt to answer various criticisms of that theory and examine, in particular, two false versions of the theory: the underconsumptionist and disproportionality theory of crisis. The second section will begin an analysis of the role of state intervention in the economy and will attempt to indicate the limitations of intervention by the capitalist state implied by the earlier analysis of the theory of crisis.


[3] P.A. Baran The Political Economy of Growth, Monthly Review Press, NY, 1962 and The Longer View: Essays towards a critique of Political Economy, Monthly Review Press N.Y. and London, 1969, pp249-307.

[4] Monthly Review Press, 1966.

[5] One of the most important exceptions has been the work of Paul Mattick especially his book Marx and Keynes the Limits of the Mixed Economy, Merlin Press, 1971. A great deal of the analysis in this paper owes much to Mattick or more generally to the same tradition of political economy that has clearly influenced Mattick. Roman Rosdolsky and Henryk Grossmann are of particular importance but unfortunately nothing of their work, as yet [1972 - SP], has been translated into English.