There are regular economic crises under capitalism of varying degrees, how do we explain them?
Marxism places these in historical perspective.
Capitalism is just the latest, & temporary, mode of production.
“It is enough to mention the commercial crises, that by their periodical return put the existence of the entire bourgeois society on trial, each time more threatening…In these crises, there breaks out an epidemic that, in all earlier epochs, would have seemed an absurdity – the epidemic of overproduction.” Marx, The Communist Manifesto
Was Engels correct to write that, “The extension of the markets cannot keep pace with the extensions of production.” (Anti-Duhring) ?
He never spelt out the laws that dictate the growth of the market.
Marx never wrote his book entitled ‘The World Market’ as he planned, & Volume III, that includes the law of the tendency of the rate of profit to fall, was put together from notes after his death by Engels.
If Marx was right about capitalism’s inherent instability, wasn’t he right that it would inevitably give way to a classless society?
3 main Marxist crisis theories:
1. Underconsumption
2. Profit Squeeze
3. Disproportionality
Profit squeeze has two sub-theories:
1. Decline in profit rate due to fall in unemployment
2. Decline in profit rate due to increase in the organic composition of capital
Disproportionality has two sub-theories:
1. Anarchy of production
2. Relationship between departments I & II (means of production & consumer goods)