I recommend you have a look at Sam Williams’ blog http://critiqueofcrisistheory.wordpress.com/ he offers a comprehensive overview of Marxist crisis theory.

If you are on facebook there’s a group called Marxist Crisis Theory you could join.
There’s also a group with the same name on zsocial (the non-commercial facebook for political activists).

I refer to breakdown in my post http://thecommune.co.uk/2012/09/02/crisis-a-unifying-theory/

It’s all a very complex subject to master & I don’t pretend I have.

Regards.

my reason for wanting to know if this is the standard overproduction theory isn’t because i will accept or reject your explanation based on its popularity. it’s because, before i make up my mind about which crisis theory makes the most sense to me, i want to give a fair investigation into each of them.

but so far, your explanation does make sense to me!

anyways, i’m wondering what your take is on “breakdown” theory, i.e. whether capitalism’s inherent economic contradictions will cause it to fall into a crisis so big that it can’t recover? and do you have any posts about this? if you do, please link to them here!

thanks :)

Thanks for your comment.

I’m not dealing with the long term falling rate of profit due to capital accumulation itself (the rise in the organic composition of capital).
From a theoretical point of view I think this is separate to the boom & bust business cycle.

Stephanie doesn’t mention this difference, she sees crisis as being the business cycle, not the end of capitalism. This is not that surprising as most Marxists are not clear about the theoretical difference, with many arguing that it’s a case of a particular bad downturn coinciding with better worker’s organisation that will result in revolution.

So as for the business cycle, Stephanie portrays Marx as an underconsumptionist. I was trying to show that although Marx would accept that a crisis of underconsumption was possible, that it really is credit/debt that lies behind the overproduction (too many commodities relative to the amount of money) which results in the rate of profit being artifically supported & then collapsing. This is totally separate from the falling rate of profit caused by the rise in the organic composition of capital, at least from a theoretical perspective. In reality it may well be that the falling rate of profit due to the rise in the organic composition of capital actually led to the creation of the current fiat money regime & the subsequent financialisation (credit boom).

As regards your example, I think I agree. Eventually individuals have to pay off their debts with money. Organisations, whether they are corporations or governments, can only borrow a certain percentage of their income. The important point is lenders may not get their money back. Individuals & organisations can go bankrupt. Banks lent people money to buy houses, which when they couldn’t pay their mortgage resulted in them losing their house & the bank reposessing a house that was worth less than the money they lent. And remember the banks mostly didn’t have this money to lend, they either borrowed it from other financial organisations or conjured it into being through fractional reserve banking. It’s fictitious capital – capital that has no basis in production. It artifically supports profit rates for a while, but eventually the bubble bursts.

Although there was a big fall in asset prices after Lehmans, QE has reflated the bubble, but not the productive economy. The adjustment (collapse) is still to happen, I believe.

Regards.

I presume by this you mean if I buy product A on credit I am giving up my future labour time to buy the product? Whereas if I buy product A with money I am buying it with completed labour time. So doesn’t buying products on credit affect how much money I have? So if we imagine 2 months, if I have £100 to spend in each month and in month 1 I spend £100 with money and buy £50 of goods on credit, that means I only have £50 to spend in month 2. Isn’t this a zero sum game?

What do increases and decreases in credit tell us? For example household debt has risen sharply over recent decades, what does this tell us?

On realisation of value, doesn’t this occur later than value creation in almost every case?

And also, what are the reasons that claims on future labour times may not be realised?

I also don’t quite see the tie up between crisis and long term fall in the rate of profit from what you said above. The way you described the rate of profit fall was as a sympton of the over-production, so in effect, not really different to why workers can’t buy the product. Underconsumption is a sympton of the crisis.