“Movement of capital. Accumulation and crisis”. Some conclusions.

Photo by Paul Sparkes

Aníbal, July 2021

At this moment, the blog of Ediciones Interrev has published the book Movement of capital. Accumulation and crisis in Spanish language only.[1] The importance of this work is that it refutes the existence of a permanent crisis, or the decadence of capitalism, ideas that in different formulations are generally shared by ‘Marxist’ economists of the bourgeois political ‘Left’ and those that refer to the Communist Left. Starting from Marx’s Capital and texts by Engels, highlighting Pannekoek’s 1934 critique of Grossmann, this work refers to many statistical data to prove that the crisis in capitalism is periodical and not permanent.

In the following, the author gives some of its conclusions in English language.

The permanent crisis since 2007-2009 is non-existing

“We see after the major crisis of 2007-2009 a recovery culminating in the peak of 2010 (at a level coinciding with the starting level in 2007). This peak is followed by a moderate fall until 2012 and a subsequent period where the slight development of GDP continues with upward oscillations leading in 2019 to a point slightly lower than in 2012. This does not fit with the thesis of a long depression, continuous recession, and similar. The crisis that started in October 2007, then generating a financial crisis in 2008 and lasted till 2009, devalued a considerable percentage of capital, but not enough for the subsequent expansion cycle to be intense, broad-based, and consistently growing. It provided sufficient drain for the first spurt of strong recovery until 2010, with a solid base in the dynamism of capitalism in China and the so-called emerging economies. Even so, the tendency to generate overcapacity and overproduction has been developing since 2010, which is recurrent in capitalist history. All this is explained by scientific communism in terms of the devaluing and destructive effect of capital that necessarily and recurrently, cyclically, generates the general crises of capital on an international scale (to which are associated particular and partial crises, obviously). This crisis, is an element that propitiates a renewed and intense movement of new capital valorization, a dynamically developing accumulation.

An important cause of such a limitation of the devaluation that occurred in this crisis lies in the capacity for reactive action by capital, and particularly the degree of operational capacity of its most powerful forces… using part of the money funds accumulated in its reserves and central banks, together with those of centralization bodies such as the WB, IMF, BIS, etc. That is why a percentage of the overcapacity was maintained at the beginning of the expansionary cycle, generating a great deal of commodity production at low prices, which partly determines the monetary policy of such bodies. This production at low prices but in large quantities has developed unevenly, with dynamic centers led by China and to a lesser extent by the US and the EU, with India also standing out (this is a summary, the picture is broader and more complex). A part of capital with high levels of concentration and centralization, and some in highly specialized segments, has been counterbalancing the difficulty of increasing the rate of profit with an expansion of its mass, which has led to the financial market and its particular expression in terms of the development of fictitious capital. This is obviously not the classical, recurrent and mystified explanation of the ‘financialist’ thesis, partly developed by Chesnais. Nor is it about the inconsistencies of authors such as Michael Roberts, already criticized in this forum“.

“The traditional Marxist theses on accumulation and crisis are still valid and are in line with what is happening, allowing a proper understanding of the ongoing trends. Particularly the analysis of international market trends leads to the conclusion that:

‘It is a question of the superior progress of commodity production with respect to the possibilities of profitable realization on the market of the surplus-value generated.’

To sum up: the crisis of 2007-09 has been tested in all its severity, with a productive and trade re-emergence following it, which develops with oscillations from the peak of this upswing, and begins to slacken around 2017, with a tendency to stagnation until 2020. There is, therefore, no long depression, no permanent crisis, and no continuous recession. The Marxist thesis is verified according to which: ‘Accumulation as a mass is accelerating, while the rate of accumulation is decreasing along with the rate of profit.’ ( book III of Capital).”

“The rate of profit moves in various ways before a crisis, tending to fall or slowing down its upward movements and heading towards a reversal. But there is not necessarily a continuous and homogeneous prior expression due to the intervention of various counter-trends. It is especially in crises that it manifests itself decisively and flagrantly. Numerous studies go in this direction.

Marx also warns that the general movements of the fall in the rate of profit must be understood not in the short or medium term, but in the long term”.

(From Chapter 9.- In this chapter, the reader will find numerous data and graphs on the world economic evolution since the crisis of 2007-09 that refute the various interpretations existing among Marxological academism and the petty-bourgeois left media)

‘Secular stagnation’ and the ‘Long Depression’

“The theses of secular stagnation and the “Long Depression” are analyzed and criticized [in chapter 10], proving what does not fit in such theses with the real course of capitalism and its various expressions. It is reiterated that:

‘In the background, we have the question of the so-called decadence of capitalism, in this case in the form of “secular stagnation” (see below). Prolonged recession, chronic depression, repeated stagnation are different denominations of what the economist John Maynard Keynes explained in his “General Theory of Employment, Interest and Money,” interpreting the main cause of economic depressions as insufficient demand for goods and services. What other versions call a permanent crisis, which some declared Marxist sectors have echoed and wrongly defended although for Marx permanent crises do not and cannot exist’.”

(From Chapter 10)

Leftist predictions falsified by recoveries after crises

“Chapter 11 reviews the various predictions made by leftist economists, and after years and years, it is verified that they have not been fulfilled, going on to examine the causes of such errors, and offering a coherent interpretation based on scientific communism. Approaches based on decadentist theories, Kondratiev waves, Mandel’s long waves, long depression, secular stagnation, and in general collapse analyses are criticized.

Thus, in summary, data are given on the moments of recovery of capitalist accumulation as opposed to those who spread the opposite:

The recovery took place. And the subsequent course of the economy presented characteristics of mediocre, uneven, and irregular development of world capitalist accumulation, but an accumulation, a reproduction on an extended scale of capitalism, real and effective, which deserves to be carefully, thoroughly, and rigorously investigated.

Finally, the theory of the critique of value is critically reviewed:

For these ideological theorizations, the end of the Russian bloc and what happened around the fall of the Berlin Wall was part of a general collapse of capitalism, constituting a phase of capitalism. Capitalism that had been in motion for two centuries and had reached its ceiling, could not give any more, had reached its historical limits (in Robert Kurtz’s expression). We were witnessing a chronic crisis of the splitting of value of patriarchal capitalism.

 In addition, the theory of accumulation and the collapse of capitalism by Henryk Grossmann and Rosa Luxemburg is presented.

Capitalism, they claim, is irreversibly fleeing forward in death, it lives by simulating profitability, in permanent crisis, and this simulation is carried out on the basis of debt and credit… etc.

These are ideologically elaborated fictions, which deny the existing process and replace it with leftist collapsism… in process.

However, in the practical process of capitalism there is abundant generation of surplus value, ‘which constitutes the basis and aim of the whole process of accumulation’, as Marx put it. Capital continues to progress, it does not collapse. The concrete aspects of collapse, of collapse, are seen in the crises, as Marx stated; but then capital takes flight again, it does not fall to earth dying. There is no permanent crisis that would express the process of collapse according to this ideology of value; the crisis necessarily remains a periodic and cyclical episode and not a permanent, verified reality of constant devaluation and exhaustion of the extraction of surplus-value.

None of these criticized approaches is rigorously demonstrated by their authors based on studies and well related and explained data. Still, all of it is merely asserted, over and over again. This is another ideologically loaded system, not a developing critical science. For this, they use some of Marx’s approaches, but if the essential facts and trends of capitalism do not match within 50 years, then they make a pirouette by elaborating a new alibi, claiming that it is ‘a process’.

But the facts are stubborn, crises are cyclical and represent periodic relative solutions of the contradictions of the capitalist system. They have been overcome one after the other, engendering new contradictions that lead to new crises after periods of productive economic boom and of financial and mercantile business, periods in which productive overcapacity and overproduction of capital are generated again, and new crises of overaccumulation of capital, not of underaccumulation.

Capital does not progressively destroy itself. The devaluation and destruction of capital lead to a general re-emergence, a movement of development which leads to new over-productive tensions, realizing difficulties in the markets, saturations, acute and disseminated competitive crises, a fall in the rate of profit, dynamics of over-accumulation and a new crisis.

The capitalist mode of production and distribution has not collapsed. Capital has grown internationally and overproduces surplus-value, develops accumulation by increasing the proletariat and the bourgeoisie. Wasn’t this, for Marx, a key demonstration that accumulation had developed? Having arrived at the unfolding of numerous contradictions they simply don’t need to resort to the Marx handle and so calmly repeat their positions.

One is reminded of Anton Pannekoek’s adequate and well-founded critique of Henryk Grossmann’s theory of the collapse of capitalism:

‘Marx speaks of over-accumulation precipitating a crisis, of there being too much accumulated surplus value which is not invested and which depresses profits. But Grossmann’s collapse comes about through there being too little accumulated surplus value.

The simultaneous surplus of unused capital and unemployed workers is a typical feature of crises; Grossmann’s schema leads to a lack of sufficient capital, which he can only transform into a surplus by committing the mistake mentioned above. So Grossmann’s schema cannot demonstrate a final collapse, nor does it correspond to the real phenomena of collapse, crises.

It can also be added that his schema, in conformity with its origin, suffers from the same defect as Bauer’s: the real, impetuous pushing forward of capitalism over the world which brings more and more peoples under its domination is here represented by a calm and regular population growth of 5 per cent a year, as if capitalism was confined in a closed national economy.’

(Anton Pannekoek, The theory of the collapse of capitalism )

Rosa Luxemburg came to the conclusion that:

‘… the standstill of accumulation means that the development of the productive forces is arrested, and the collapse of capitalism follows inevitably, as an objective historical necessity. This is the reason for the contradictory behaviour of capitalism in the final stage of its historical career: imperialism.’

(Rosa Luxemburg, The Accumulation of Capital, Ch. 29)

In “The Law of Accumulation and the Collapse of the Capitalist System: A Theory of the Crisis”, Henryk Grossmann supports this conclusion of Rosa Luxemburg, even though he differs from other theses he considered to be sub-consumerist.”

(From Chapter 11)


[1] Anibal, Movimiento del capital. Acumulación y crisis: https://edicionesinterrev.files.wordpress.com/2021/07/acumulacion-y-crisis….pdf

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