Marxist Crisis Theories

The fundamental contradiction of capitalism is the contradiction between the private ownership of the means of production and the social character of production and the productive forces. The stability and self-sufficiency of capitalism has been debated since its inception. Marxists have not been able to put forward a common theoretical basis for the phenomenon of crisis and have periodically offered different interpretations of various crises in the history of capitalism. Other than the law of the tendency of the rate of profit to fall, there are two other explanations for crisis in the Marxist tradition: "the theory of underconsumption" and "the theory of disproportionality". The objective of capitalists is to maximize profits, and to that end, they seek to continuously increase capital accumulation. Increases in capital accumulation lead to an increase in the demand for labor and thus wages, and a decrease in the reserve army of the unemployed and thus in profits. The increase in wages cause capitalists to substitute physical (fixed) capital for relatively expensive labor, leading to an increase in capital accumulation, which in turn leads to a further fall in profit rates. According to the underconsumption approach, which was originally proposed by Engels, markets fall short as capitalists try to develop mechanization and productive forces and expand production under the pressure of competition. This view of Engels was the source of the first Marxist debates on the underconsumption crisis theory. In response to these theses, Tugan-Baranovsky argued that the cause of overproduction was disproportionality.

Keywords: Crisis, surplus value, rate of surplus value, tendency of the rate of profit to fall, disproportionality, underconsumption.

The fundamental contradiction of capitalism is the contradiction between the private ownership of the means of production and the social character of production and the productive forces. The stability and self-sufficiency of capitalism has been debated since its inception. Marxists have not been able to put forward a common theoretical basis for the phenomenon of crisis and have periodically offered different interpretations of various crises in the history of capitalism. Other than the law of the tendency of the rate of profit to fall, there are two other explanations for crisis in the Marxist tradition: "the theory of underconsumption" and "the theory of disproportionality". The objective of capitalists is to maximize profits, and to that end, they seek to continuously increase capital accumulation. Increases in capital accumulation lead to an increase in the demand for labor and thus wages, and a decrease in the reserve army of the unemployed and thus in profits. The increase in wages cause capitalists to substitute physical (fixed) capital for relatively expensive labor, leading to an increase in capital accumulation, which in turn leads to a further fall in profit rates. According to the underconsumption approach, which was originally proposed by Engels, markets fall short as capitalists try to develop mechanization and productive forces and expand production under the pressure of competition. This view of Engels was the source of the first Marxist debates on the underconsumption crisis theory. In response to these theses, Tugan-Baranovsky argued that the cause of overproduction was disproportionality.

Anahtar Kelimeler: Crisis, surplus value, rate of surplus value, tendency of the rate of profit to fall, disproportionality, underconsumption.

Page Range: 345-358

Islatince, H. (2023). Marxist Crisis Theories. Journal of Current Researches on Social Sciences, 13 (3), 345-358.