Marxist Economics and Capitalist Crisis

With the return of capitalist crisis, there has been a renewed interest in Marxist economic theory. Even bourgeois economists have been forced increasingly to comment on Marx's ideas, if only to dismiss them. Hardly a day goes by without some reference in the financial press to Marx. Not surprisingly, this increased interest has served to focus on Marx's theory of crisis.

This interest has served to revive the controversy surrounding the "underconsumptionist" explanation of crisis, which, in broad terms, associates the difficulties of capitalism, especially in crisis conditions, with a lack of demand in the economy. Theories of "underconsumption" are often confused with Marx's ideas. But these are not the same as Marx explained long ago. It is fundamentally the crisis of overproduction that plagues the capitalist economy.

These days there is also considerable confusion about the tendency for the rate of profit to fall, not least in academic circles. This confusion arises from a one-sided, undialectical view, which isolates one element in Marx's economic theory and exaggerates its significance far beyond Marx's intention.

In this booklet, Rob Sewell deals with these two important aspects of Marx's theory of crisis.