crisis two

According to Marx, capitalism as a subordinate economic system already appears in feudal Europe by the sixteenth century. Braudel and Polanyi would agree with that assessment – others would look at proto-capitalist enterprises in Northern Italy in the 14th century. Still, the full development of capitalism – wage labor as the predominant form of labor, the circulation of the commodity to money to commodity circle, the development of a world market and a credit market, an industrial technostructure, all really come together in the ‘advanced’ nations of Western Europe in the 19th century, and in North America, in the U.S. and Canada.

One could add that, since Marx, we have evidence for a demographic shift in households in the sixteenth century, as the paterfamilias household, in which sons and their wifes lived in the household complex with their parents, becomes much rarer, compared to the nuclear family type, in which the sons and their wives start new households – at a cost that forces up the age of marriage for both sexes. In a study of the Shipibo, an Indian group in Peru, Clifford Behrens discovered that the advent of a market economy in the sixties and seventies was marked by a similar shift to nuclear households, where before a matrilinear household pattern – husbands and wives living with the wife’s mother, which Behrens calls “uxorilocal’ – had held before, and in fact been the prevailing ethos in economic activity (a man had to provide for his wife’s mother). [Human Ecology 1992, 20: 4]

Since Marx’s death, we’ve seen two world wars and one cold war; we have seen the rise and fall of a communism that, at least, operated in Marx’s name, even if not in Marx’s spirit.

Capitalism is, of course, still here.

It has survived crisis after crisis. The capitalist class has managed to either physically exterminate revolutionaries who wanted to overthrow them or coopt the working class into arrangements that continued the process of valorization by which the capitalist accumulates surplus value from surplus labor.

At some point after Marx’s death, the inevitability of the collapse of capitalism due to its inherent crises became, as Karl Korsch pointed out in 1933, a point of entrance for reformist socialists into the system. If both crises and revolution pointed to the end of the capitalist system, then perhaps, from the point of view of crises, one could bargain with the system and fix it – in return for the worker’s receiving a higher share of the product.

Korsch was certainly not the only one to question the viability of this strategy.

Undoubtedly, we could look at the developed countries and say, Marx was wrong. The position of the working class was on the upswing, and as less variable capital was needed, the reserve industrial army was comfortably shoved into circulation work.

However, if we broaden our view, we might notice that the productive process, relocating in ever cheaper locales, is still actually mired in 19th century conditions. Meanwhile, the social cost of development has become global. While the U.S.S.R. might be remembered best, in the end, for having created the greatest human caused environmental disasters in history – this is surely true of the assassination of the Aral Sea – the acidification of the ocean and the unstoppable increase in CO2 in the atomosphere, which is leading to a global disaster such as homo sapiens have never faced, is surely equally condemnatory of the system we now live under.

It is in this broad overview that I want to locate crisis in Marx. Historically, I’d contend that the crisis doctrine has allured Western intellectuals into Marx’s teaching more than revolution. It has given Marxism the cast of a doctrine that preaches the historical inevitability of the collapse of capitalism due to contradictions in its immanent laws.

My presentation of Marx, on the contrary, is based on revolution – which hypothesizes that history is not, like nature, ruled by inevitable laws. However, a system may be constituted by relationships that derive, inevitably, from its fundamental structures. It can and does generate a second level of necessity, that is coordinate with its predominate mode of production. Revolution, which is itself dependent on a level of un-endurability, or alienation, does not emerge as some similar inevitability in the system. A system can collapse without causing a revolution, or without its collapse being caused by a revolution.

Such, at least, is the way I take Marx’s idea of revolution, which distinguishes it from the crisis of capitalism.

The questions is, then: what causes the crisis? And how does capitalism recuperate, or reproduce itself, given crises?

Let’s start with the contradiction between the classes. If the worker is dependent on the capitalist to the extent that he needs to sell his labor in order to survive, the capitalist is dependent on the workers to the extent that the purpose of his enterprise is to make a profit. The capitalist could care less about the efficient allocation of capital – the latter has never bought a yacht or merged two corporations in a deal paying off handsomely for the management. The capitalist only cares about profit. “The contradiction between production and valorization [Verwertung – realization in the standard translation] – the unity of which is capital, according to its concept – must be grasped still more immanently than simply as the indifferent, seemingly independent appearance of the individual moments of the process, or that the totality of the processes against each other.”

Marx projected an interesting scenario to explain crises as something that originates not in the circulation of money, but in the sphere of production. The scenario begins by distinguishing between two types of capitals – constant, which is all the dead labor in durables, instruments, machines, etc. – and variable – which is live, human labor. It is from that live human labor that the capitalist derives his profit – that is, the surplus labor objectified in the commodity. However, there is a tendency that the capitalist can’t avoid – the increase in constant capital in relation to variable capital. Competition, working on the surface, More dynamite, more meat, more Barbie dolls. More kinds of Barbie, more flavors and cuts of meat, more sophisticated explosives.

Marx makes a controversial move here – he claims that this general tendency – more constant capital, less variable – expresses itself in the fall of the rate of profit. Or at least that is one interpretation of the fall of the rate of profit.

There is, of course, another Marxian interpretation which claims that the working class makes the rate of profit fall when they become strong enough to bargain for higher wages, or another words, they cut into the surplus value of the capitalist.