An Introductory Explanation of Capitalist Economic Crises


      This is an introduction to “my” version of the Marxist theory of capitalist economic crises. (I put the “my” in quotes because I have learned it primarily from reading Marx. However, you will also find the strands of several other, quite different, crisis theories in Marx’s writings, and other Marxists today, following those other strands, have very different crisis theories.) In addition to the basic theory of economic crises put forward here, I have also included chapters on how economic crises have changed during the imperialist era, on the Great Depression of the 1930s, and on what I view as a long-developing new economic crisis which I predict will relatively soon become comparable to the Great Depression itself.

      What are the major tasks of Marxist political economy today? I believe that the following list encompasses many of the most important ones:

  1. To further defend, explicate and develop the theory of capitalist economic crises. This continues to be of great importance because of the unfinished state of Marx’s work on this topic, because of some new phenomena or characteristics of capitalism and capitalist crises in the imperialist era, and because of all the many continuing disputes in this area.

  2. To explain why the Great Depression of the 1930s was so qualitatively more severe than previous economic crises.

  3. To explain how and why the Great Depression ended. (I.e., was it Keynesian “pump-priming”, or World War II, or something else that did it?)

  4. To explain why the Great Depression did not resume after the end of World War II.

  5. To explain the long post-World War II capitalist boom. (Not only did the Depression of the 1930s not resume, but there was actually a rapid and powerful new expansion of capitalist production during this period.)

  6. To explain why the recessions which have occurred since World War II have been so mild compared with the Great Depression.

  7. To explain why the quarter-century post-World War II boom came to an end in the early 1970s, and the long “slow down” that has continued since that time.

  8. To analyze the current long-term economic crisis as it continues to develop, and to predict, at least in rough outline, what will happen with the U.S. and world economy over the next few decades. And to predict how this current crisis might ultimately be resolved, or at least outline several plausible alternatives.

  9. To critique Soviet-style state monopoly capitalism. To show what it amounted to, and to deepen the Marxist understanding of capitalism in general based on the experience of this new form of capitalism, including our understanding of overall capitalist economic crisis theory.

  10. To properly sum up all this “globalization” business that we hear so much about today. (And to examine any hypothesized claims of fundamental changes or “new stages” to capitalism or capitalist-imperialism.)

  11. To more thoroughly explain exactly how imperialist countries exploit the rest of the world.

  12. To resolve the “transformation problem” and fix any real problems (if they truly exist) with the Labor Theory of Value.

  13. To futher develop a genuinely Marxist political economy appropriate for socialist society (i.e., the socialist transition period to communist society).

      This essay addresses the first 8 topics, and makes a start toward addressing the 9th. The rest of these topics will have to be addressed elsewhere.

      This essay will be more intelligible if you have some familiarity with basic Marxist terminology regarding dialectical contradictions and a few basic terms of political economy, such as ‘commodity’ and ‘productive forces’—though I will try to briefly explain a number of terms as I go along. It is also very helpful to already have some notion of ‘surplus value’, the most central concept in Marxist political economy. This draft is still being worked on and is subject to further revision and expansion. Criticisms and suggestions are welcome!

      —S.H.   (8/20/08)

Chapter I: The Basic Contradictions Underlying Capitalist Economic Crises
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