Capitalism’s Crises. Alfredo Saad-Filho
Over the past two centuries, crisis has been endemic to capitalism. Yet classical and neoclassical economics has tended to treat crisis more as an aberration to ‘the norm’ of a stable self-regulating market. Since the onset of the 2007/08 global crisis, however, this axiomatic truth of capitalist economics has been called into question. The 2007/08 crisis is ongoing and has been compared to the general crisis of the Great Depression (1929–1941). It is now considered one of the worst crises in the history of modern capitalism, having eclipsed the Great Depression. So, how do we characterise the nature of the contemporary capitalist crisis? Are we experiencing a cyclical crisis or a deeper systemic crisis? Are we living through a time of periodic and general crises? Given the scale and depth of the contemporary crisis, which poses major existential threats to planetary life, this chapter argues that we are dealing with an unprecedented civilisational crisis with multiple systemic dimensions: the systemic crises of capitalist civilisation.
I situate the argument in the context of Marx’s conceptions of capitalist crisis. Marx’s understanding of capitalism, as a body of knowledge and with its valuable contribution to modern social thought, has not been surpassed. However, in engaging Marx it is necessary to appreciate that classical theory on capitalist crisis, originating with Marx, is at an impasse in terms of comprehending the contemporary systemic crises of capitalist civilisation. The critical engagement with Marx is not about refuting his corpus, however, but about seeking new openings and ways of thinking about the contemporary capitalist crisis. It is about finding theoretical space in Marx’s understanding of the ‘deep structures of capital’ for the notion of the ‘systemic crisis of capitalist civilisation’ and other conjoined concepts, such as ‘capital as a geological force’. This is grounded in an appreciation that Marx’s work is unfinished and open to development by deploying his own dialectical method of thinking.
Also significant in this search for new openings and ways of thinking about capitalist crisis is the challenge of the level and scale at which we think about this crisis. To merely think about crisis in the abstract, at the level of the ‘deep structures of capital’, is not very useful in itself. Similarly, to think about the crises of capitalism as merely economic crises is wholly inadequate. Therefore, I argue that abstractions and economic reductionism do not help us come to terms with the level and scale of the crises of contemporary capitalist civilisation. This approach relates directly to the challenge of how we periodise historical capitalism to bring out its historical specificity. This chapter therefore advances a perspective on the historical development of capitalist civilisation and its periodisation at a historical level and as a global social system.
Finally, in this chapter I show how the various systemic dimensions of capitalist crisis can be understood in a non-reductionist way. This brings to the fore the role of the US-led bloc and transnational capital in both constituting and reproducing the systemic dimensions of capitalist civilisational crisis. In this regard, attention is given to the making and operations of the following systemic-crisis tendencies: financialised chaos, the climate crisis, peak oil, the food-system crisis and the securitisation of democracy. These dimensions of the systemic crisis relate to the challenge of left agency today and lead to the crucial question: is left politics about catastrophism or about the politics of a transformative moment?
In summary, the notion of the systemic crises of capitalist civilisation is essentially a thesis, which is tested in this chapter in relation to, firstly, Marx’s theoretical understanding of crisis; secondly, the challenge of providing a non-teleological but stages view of capitalism’s history, which captures the scale and depth of the crisis; thirdly, the empirical dimensions of the systemic crises of capitalist civilisation; and, finally, the challenges for left agency. The purpose of this approach is to open up new ways of thinking about capitalist crisis, while thinking about how the crises of capitalist civilisation prompt a rethink of left agency. At the same time, this analysis lays the basis for more in-depth theoretical and analytical work.
MARX’S UNDERSTANDING OF CAPITALIST CRISIS
Marx has provided social thought with a simple but powerful understanding of capitalism: it is a system that is prone to crisis and this crisis is internal to capitalism. However, Marx did not develop a systematic or adequate theory of capitalist crisis. His work contains ideas and concepts that suggest the existence of this crisis tendency. In the Preface to A Contribution to the Critique of Political Economy, Marx ([1859] 1999: 21) writes:
At a certain stage of development, the material productive forces of society come into conflict with the existing relations of production or – this merely expresses the same thing in legal terms – with the property relations within the framework of which they have operated hitherto. From forms of development of the productive forces these relations turn into their fetters.
This conception of crisis suggests a technological determinism as the basis of crisis and social change within the capitalist mode of production. The contradiction between forces/relations is also a historical contradiction that leads to the breakdown and then supersession of a mode of production. Yet what constitutes the forces of production is not a conceptually clear issue in Marxism, with some Marxists including, over and above the means of production and labour, science and geography into its definition. At the same time, where does this leave class struggle, particularly if, in the logic of accumulation, the forces of production have primacy? The blind veneration of technology and science associated with this perspective also has implications for the socialist alternative. For Stalin, it meant forced-march modernisation and building gigantic factories as the new basis for socialist relations of production. Yet this did not work and instead produced a tyrannical society. This conception of crisis, and ultimately social change, is a very contentious issue in Marxist thought.
In Capital, Marx abstracts to a very high level of generality the dynamics and tendencies that drive capitalism and its mode of production. Generally, the time taken to valorise money into capital, or M–C–M (money–commodity–money), is a simple, and the basic, idea of crisis in Capital. In other words, the failure to valorise money into capital produces crisis. In the three volumes of Capital there are three more important ideas that point to crisis tendencies in capitalism. This is Marx thinking at an abstract level about the deep structures of capital.
First, there is the notion of disproportionality. This relates to an allocation of resources between department one (means of production) and department two (means of consumption) within the scheme for simple and expanded reproduction. Essentially, given the anarchy of capitalist production, individual capitalists will tend to overinvest in a particular department. Allocation will not happen smoothly or rationally. The excess allocation of investment will lead to excess output, which cannot be sold, and the rate of profit will then decline relative to the narrow market. Furthermore, contraction in the overinvested department will not be matched by an adjustment in the underinvested department. This leads to aggregate demand falling, then to a realisation problem and then to a general crisis that ensues in both departments.
Second, underconsumption refers to a decline in aggregate demand, which ensues when capitalists cannot sell all they produce. Underconsumption points to a gap between supply, and what workers can purchase and consume. With workers not having a large enough proportion of the surplus, or with insufficient incomes, aggregate demand declines. Commodities are not sold and this creates a general crisis.
Third, overproduction refers to high levels of productivity or relative surplus value being produced as part of the generation of surplus output. This output or supply exceeds demand and cannot be sold, thus creating a general crisis.
Despite his recognising these tendencies towards crisis in capitalism, and as expressions of deeper contradictions, Marx did not bring these concepts together into a systematic theory of crisis.1 Therefore, Marx’s rich, complex, inchoate – and, in some instances, contradictory – approach to capitalist crisis laid the basis for further development of crisis theories. This task was left to subsequent generations of Marxists and it is a challenge we still face today. But guiding us in this endeavour is how Marx thought about and approached the study of capitalism (Ollman