We are still in the developing stage then! Or your theory needs refining! For a start all of your distinct stage characteristsic happen in every stage. So you get bubbles in the ‘developing stage’, there have been bubbles throughout capitalism’s history.

I think you are onto something with this stages theory but at the moment it is an ill thought out speculative idea that needs firming up with some hard facts. So stop wasting our time and get back to developing your theory and present it to us when we can take it seriously!

What’s the thinking and Historical context of the schema- Development stage,regulation stage and stagnation stage? Why different stages?

Trotsky and the fourth International did have a stagnation view. The productive forces stagnate, as the Transitional programme put it. But they did’t not even in the 1930′s (chemical,cars electrical industries) The economy was seen as a machine, somehow separate from social relations and ideas. The machine was grinding to a halt, which resulted in even the smallest reforms having revolutionary implications. So the masses in the reformist organisations trade unions and the Labour party, faced with leaders who would not or could not deliver reforms would look to new Trotskyist leaders. That was a schema not a reality.

Surely the solution is not new leaders,waiting in the wings, but the self emancipation of the working class. Workers themselves taking control and managing things. The task of communists /socialists/revolutionaries is to help facilitate the workers liberating themselves,rather than a self proclaimed leadership substituting for the class.

But as you conclude the way out of the slump could go either way: submission or liberation.

I will have another look at Sam Williams and your own comments. Obviously these debates are ongoing.There are some very complex concepts which does result in lack of clarity on many points for everyone.

On Rosa Luxemburg you Write :It is wrong to label Luxemburg as an underconsumptionist”

I raised Luxemburgs misinterpretation of Marx’s reproduction diagrams/schemes in Capital volume 2 because the Monthly review tradition or left keynesian current , basis itself on Luxemburg’s rejection of Marx’s conclusions.

Here’s Richard B Days summery in Rosa Luxemburg and The Accumulation of Capital,In Critque 12 1979 page 81

“Expanded reproduction,she argues,logically presupposes recourse to effective demand” And again “Luxemburg concludes that Capitalist expanded production depends on effective demand of non Capitalist elements”

The schemes are a sophisticated simplification. This is Marx’s method. The move from the abstract to the concrete. This is Rosdolsky from the Making of Marx’s Capital :”he regarded the method of the ascent from the abstract to the concrete as being the only adequate scientific means” page 68 Pluto Press 1980, And Henryk Grossman makes a similar point in his The law of accumulation and breakdown of the Capitalist system,Pluto press 1992 page 30, We make various assumptions that enable us to gain an understanding of the inner structure of the object under investigation. Both argue as do others that Luxemburg misunderstood Marx on accumulation.

Andrew Kliman recently in The Failure of Capitalist production,Pluto Press 2012 ,page 179, wrote this ” In her underconsumptionist writings of a century ago,Luxemburg invoked an external stimulus,imperialism in order to explain how capitalist economies are able to grow at all”.

I agree with you that underconsumption isn’t the cause of the crisis & therefore Keynesian fiscal stimulus will not resolve the crisis & save capitalism.

It is vitally important that those of us against capitalism can show we understand how it works & why it is prone to crises. I have tried to do this with a number of articles I’ve published on this site, the most recent being an explanation of the difference between underconsumption & overproduction – http://thecommune.co.uk/2012/10/06/underconsumption-and-overproduction/

In trying to explain the nature of crises I think it is vitally important to be able to differentiate between the two types of crisis: cyclical & breakdown. This, I think goes a long way in explaining the confusion between overproduction & the falling rate of profit – http://thecommune.co.uk/2012/09/02/crisis-a-unifying-theory/

This is essentially Sam Williams’ approach. It is not trying to find some kind of middle road. He is pointing out the limits of both approaches (underconsumptionist & falling rate of profit schools) by seeing only one type of crisis, & how they can overcome their limits & fully appeciate what Marx was saying.

It is also wrong to label Luxemburg as an underconsumptionist. She would not have seen the problem as being the underpayment of workers & therefore the solution being some form of redistribution. She understood that capitalism must grow & importantly that capitalism needed to plunder. A pure capitalist world where there are only workers & capitalists will have a realisation problem. Marx’s reproduction schema do not show that capitalism can go on forever. Those that argue this & say that show that Luxemburg is wrong fall into the trap of Say’s Law. A trap Marx would never have stepped into. The reproduction schema are merely a simple set of calculations to show how the capitalist economy reproduces itself in terms of labour time spent on the production of capital commodities (c) to replace those that depreciate through production, labour time spent of the production of subsistence commodities (v) to keep workers alive, & labour time that goes to the capitalists in profit (s) which is either on the production of luxury items for the rich or new capital investments in the case of enlarged reproduction, i.e. economic growth. Although Marx puts the production of gold (the money commodity in his day) under c, the schema are no sosphicated enough to model an economy where there is money hoarding (which can actually result in a crisis of underconsumption) or overproduction due to excessive issue of credit/debt. Luxemburg were much more aware of how capitalism worked than the simple underconsumptionists.

Furthermore, we also need to understand why underconsumptionism appeals. The trade unions naturally want more for their members. The theory suits their needs. Also ‘bleeding heart’ liberals who have a sense of guilt about the level of inequality have a simple theory they can agree with. Then we have the dispossed, those who have loss their jobs, or have never even had a stable job. For these life is so unfair that a theory offers something, even if its government hand-outs is welcome. All these people are our people. They are the working class. We are not against them. We support their struggle for more. But, as you rightly say, it’s now much more than a struggle for a better deal, it’s a struggle for a new society based upon need not profit.