Appendix 2: ‘Underconsumption’ and the Marxist Theory of Crisis

By Rob Sewell

In this article from issue 1 of the In Defence of Marxism magazine (June 2012), Rob Sewell discusses the Marxist explanation of capitalist crisis, contrasting this to the ‘underconsumptionist’ theories of Sismondi, Malthus and Keynes.

What did Marx mean by the contradictions of capitalism?” asks Samuel Brittan, the right-wing economist writing in the Financial Times. “Basically, that the system produced an ever-expanding flow of goods and services, which an impoverished proletarianised population could not afford to buy. Some 20 years ago, following the crumbling of the Soviet system, this would have seemed outmoded. But it needs another look, following the increase in the concentration of wealth and income.”¹

With the return of capitalist crisis, there has been a renewed interest in Marxist economic theory. Even bourgeois economists have been forced increasingly to comment on Marx’s ideas, if only to dismiss them. Hardly a day goes by without some reference in the financial press to Marx. Not surprisingly, this increased interest has served to focus on Marx’s theory of crisis.

This interest has served to revive the controversy surrounding the ‘underconsumptionist’ explanation of crisis, which, in broad terms, associates the difficulties of capitalism, especially in crisis conditions, with a lack of demand in the economy. According to this theory, capitalism has an inbuilt tendency to produce far more than can be absorbed by consumption. Modern ‘underconsumption’ theory is closely identified with John Maynard Keynes, who believed that the problem of the lack of ‘effective’ demand could be resolved by the intervention of the state through deficit financing.

Theories of ‘underconsumption’ are often confused with Marx’s ideas. But these are not the same as Marx explained long ago. While underconsumption certainly exists for the masses, as any worker can testify, it is not the direct cause of capitalist crisis.

The idea of ‘underconsumption’ as the cause of crisis pre-dates Keynes and even pre-dates Marx. It can be found in the writings of the great utopian socialists, such as Robert Owen. However, the best known proponents of these views were Jean Charles Sismondi (1773-1842), Thomas Malthus (1766-1834) and Johann Karl Rodbertus (1805-1875).

The most consistent and developed version of the theory, as well as the least vulgarised, was put forward by Jean Charles Sismondi. As Engels pointed out: “The ‘underconsumption’ explanation of crises originated with Sismondi, and in his exposition it still had a certain meaning.”² This “certain meaning” was also recognised by Marx, as can be seen from his writings on the subject.

Sismondi’s chief work, New Principles of Political Economy, was published in 1819. In this book he maintained that general crises were due to excess capacity, which in turn was due to the separation of the exchange-values of commodities from the needs and wants of society. According to Sismondi overproduction of commodities did not arise from the general over-fulfilment of human needs but from the mal-distribution of income and the poverty of the masses, resulting in insufficient demand in the society. In short, the working class did not receive enough in wages to buy back the goods that they produced, which is always the case under capitalism.

Say’s Law

Although one-sided, Sismondi was not entirely wrong in this supposition. Indeed, he made a whole number of correct observations, which also were accepted by Marx. It was Sismondi, for instance, who pointed out the error of Jean Baptiste Say (supported by James Mill and David Ricardo) that every seller meets a corresponding buyer (‘Say’s Law’) and they therefore regarded generalised overproduction as impossible. According to them, the economy would always arrive at equilibrium, which was clearly not the case. This vulgar ‘theory’ of equilibrium is the real origin of the ‘efficient market hypothesis’, which stated that the economy left unaided would reach an optimum state. This was the Credo of modern political economy – until its falsity was exposed by the greatest collapse of the productive forces for generations in 2008-9.

Unlike the vulgar bourgeois economists who dismissed crises, such as J.B Say, Sismondi understood that crisis was inherent in the process of commodity production. However, his understanding of the real nature of capitalist crisis, while more advanced, was limited and rather one-sided. The real nature and central contradictions of capitalism, while clearly present, nevertheless eluded him. Despite his shortcomings, Marx paid tribute to him and regarded him as an original thinker who, out of all the classical economists, was striving towards an understanding of capitalism and its tendency to crisis. In this regard, he was head and shoulders above David Ricardo, the outstanding representative of bourgeois classical political economy.

“Sismondi is profoundly conscious of the contradictions in capitalist production,” wrote Marx, “he is aware that, on the one hand, its forms – its production relations – stimulate unrestrained development of the productive forces and of wealth; and that, on the other hand, these relations are conditional, that their contradictions of use-value and exchange-value, commodity and money, purchase and sale, production and consumption, capital and wage-labour, etc., assume ever greater dimensions as productive power develops.”

Marx continues:

“He is particularly aware of the fundamental contradiction: on the one hand, unrestricted development of the productive forces and increase of wealth which, at the same time, consists of commodities and must be turned into cash; on the other hand, the system is based on the fact that the mass of producers is restricted to the necessities. Hence, according to Sismondi, crises are not accidental, as Ricardo maintains, but essential outbreaks – occurring on a large scale and at definite periods – of the immanent contradictions.”³

While recognising the great contribution of Sismondi, Marx was still well aware of his shortcomings and limitations, as with all the classical economists:

“He [Sismondi] forcefully criticises the contradictions of bourgeois production but does not understand them, and consequently does not understand the process whereby they can be resolved. However, at the bottom of his argument is indeed the inkling that new forms of the appropriation of wealth must correspond to productive forces and the material and social conditions for the production of wealth which have developed within capitalist society; that the bourgeois forms are only transitory forms, in which wealth attains only an antithetical existence and appears everywhere simultaneously as its opposite.”⁴

Thomas Malthus added nothing new to what Sismondi had already written. Malthus, the arch-vulgariser and reactionary apologist attempted to crudely use these arguments to justify the interests of ‘the aristocracy, Church, tax-eaters, toadies, etc.’ Marx accused Malthus of plagiarising the weak side of Adam Smith and caricaturing Sismondi.⁵

Marx developed his own ideas on capitalist crisis on the basis of a very thorough study and criticism of all the classical economists, especially its chief representatives, among others, Adam Smith and David Ricardo. While Marx did not manage to write a specific book on capitalist crisis, his theory of crisis is present throughout his economic writings, especially Capital and Theories of Surplus-value.

Rate of Profit

Some people falsely attribute the tendency of the rate of profit to decline as the real cause of capitalist crisis, but this is not correct and Marx never recognised it as such. While it is without question an important tendency under capitalism, it operates as a long-term tendency that bears down upon the system. Marx expressed himself in very precise terms that countervailing factors transformed this law into a tendency, describing it uniquely as “this double-edged law”. He went on to explain: “The law operates therefore simply as a tendency, whose effect is decisive only under certain particular circumstances and over long periods.”⁶

There have been long periods where the rate of profit was falling. That was the case towards the end of the long period of capitalist upswing that followed the Second World War. But there were also long periods when the rate of profit was rising as in the last 30 years. We therefore have to look elsewhere for an explanation of crisis, which Marx reveals in his extensive writings on political economy.

In the Theories of Surplus-value, described by Engels as volume four of Capital, Marx gives a clear outline of the fundamental contradiction facing capitalism:

“The fact that bourgeois production is compelled by its own immanent laws, on the one hand, to develop the productive forces as if production did not take place on a narrow restricted social foundation, while, on the other hand, it can develop these forces only within these narrow limits, is the deepest and most hidden cause of crises, of the crying contradictions within which bourgeois production is carried on and which, even at a cursory glance, reveal it as only a transitional, historical form.

“This is grasped rather crudely but nonetheless correctly by Sismondi, for example, as a contradiction between production for the sake of production and distribution which makes absolute development of productivity impossible.”⁷

Marx stated numerous times that the ultimate cause of capitalist crisis is overproduction. But this is not overproduction in relation to what people need or want. In a market economy overproduction refers only to what can be profitably sold. “The English, for example, are forced to lend their capital to other countries in order to create a market for their commodities,” explained Marx.

“Overproduction, the credit system, etc., are means by which capitalist production seeks to break through its own barriers and to produce over and above its own limits…Hence crises arise, which simultaneously drive it onward and beyond [its own limits] and force it to put on seven-league boots, in order to reach a development of the productive forces which could only be achieved very slowly within its own limits.”⁸

Marx reiterates this point again and again throughout his writings. “Overproduction is specifically conditioned by the general law of the production of capital: to produce to the limit set by the productive forces, that is to say, to exploit the maximum amount of labour with the given amount of capital, without any consideration for the actual limits of the market or the needs backed by the ability to pay.”⁹

Reproduction process

Again, in volume two of Capital, Marx explains:

“The volume of the mass of commodities brought into being by capitalist production is determined by the scale of this production and its needs for constant expansion, and not by a predestined ambit of supply and demand, of needs to be satisfied. Besides other industrial capitalists, mass production can have only wholesale merchants as its immediate purchasers. Within certain bounds, the reproduction process may proceed on the same or on an expanded scale, even though the commodities ejected from it do not actually enter either individual or productive consumption. The consumption of commodities is not included in the circuit of the capital from which they emerge. As soon as the yarn is sold, for example, the circuit of the capital value represented in the yarn can begin anew, at first irrespective of what becomes of the yarn when sold. As long as the product is sold everything follows its regular course, as far as the capitalist producer is concerned. The circuit of the capital value that he represents is not interrupted.”

Marx then goes on to explain that this expansion allows the whole reproduction process to be completed. However, they pile up and lie unsold in the hands of retail traders and remain on the market. “One stream of commodities,” writes Marx, “now follows another, and it finally emerges that the earlier stream had only seemed to be swallowed up by consumption. Commodity capitals now vie with each other for space on the market. The late-comers sell below the price in order to sell at all. The earlier streams have not yet been converted into ready money, while payment for them is falling due. Their owners must declare themselves bankrupt, or sell at any price in order to pay. This sale, however, has absolutely nothing to do with the real state of demand. It has only to do with the demand for payment, with the absolute necessity of transforming commodities into money. At this point the crisis breaks out. It first becomes evident not in the direct reduction of consumer demand, the demand for individual consumption, but rather in a decline in the number of exchanges of capital, in the reproduction process of capital.”¹⁰

The same point is again reiterated in volume three of Capital, where (once again) Marx emphases the fundamental contradiction of the capitalist mode of production: “The ultimate reason for all real crises always remains the poverty and restricted consumption of the masses as opposed to the drive of capitalist production to develop the productive forces as though only the absolute consuming power of society constituted their limit.”¹¹

Overproduction

Some ‘clever’ people have tried to get round this clear explanation of crisis by claiming that this statement of Marx was an isolated phrase, a ‘description’, or simply a ‘throw away remark’. But, even the most cursory examination of his writings shows that this is not the case. Far from being an isolated and accidental remark, this explanation is, in fact, absolutely central to Marx’s theory of crisis. This is a theory based not on ‘underconsumption’ theory, which is at best completely one-sided, but on the central contradiction of overproduction under capitalism. Marx and Engels had already alluded to this cause in the Communist Manifesto, where overproduction is described as an epidemic, “that, in earlier epochs, would have seemed an absurdity – the epidemic of overproduction.”

It was none other than the revisionist Eugene Dühring who borrowed and vulgarised the ‘underconsumptionist’ explanation of crisis, which he put forward in opposition to Marx’s theory of overproduction. Engels pointed out: “Rodbertus took it from Sismondi, and Herr Dühring has in turn copied it, in his usual vulgarising fashion, from Rodbertus.”¹²

It was left to Engels, assisted by Marx, to rebut the false ideas of professor Dühring, including the idea of ‘underconsumption’. The reply was so comprehensive that the series of articles published in the German party press, soon became a book entitled Anti-Dühring, which first appeared in 1878, and has become established as one of the fundamental classics of Marxist theory.

It is significant that when dealing with capitalist crisis, the explanation in Anti-Dühring contains not a single reference to the tendency of the rate of profit to fall. Yes, not one single solitary word – not even a ‘throw-away remark’ is to be found on the subject. Some academic ‘Marxists’ are extremely irritated by this silence. They are so irritated that have even tried to argue that Engels’ views did not coincide with those of Marx, in other words, that Engels was not really a Marxist!

Typical in this respect are Professor M.C. Howard and Senior Lecturer in Economics, J.E. King, who informed us in their History of Marxian Economics that Engels “interpreted Marx’s ideas in his own distinctive manner” and “came no closer than Marx to providing a coherent theory of economic crisis”. We are then told by these learned critics: “Indeed, by neglecting the tendency of the rate of profit to decline he renounced a major strand in Marx’s crisis theory, though he was followed in this by almost all Marxian economists before 1929.” They conclude that “Controversy still rages as to whether his [Engels] own later thought constitutes a distinct ‘Engelsism’ which, with its determinism and its application of natural scientific reasoning to the study of human history, is separate from and antagonistic towards Marx’s own philosophy and methods of analysis…It is conceivable that Engels took a conscious decision to suppress those of Marx’s writings with whose humanist orientation he had (by the 1880s) very little sympathy.”¹³

These are unfounded trumped-up allegations, which have no bearing in truth but are peddled around the universities like so much cheap gossip. They are part of the academic world, which is divorced from Marxism but attempts to make its mark by manufacturing differences between Marx and Engels. They may have read all the right books, but their views are not much use to Marxists or anybody else seeking a scientific explanation.

But can it really be true, as suggested, that Engels misunderstood or misrepresented Marx’s views on economics – in this case in his classic work Anti-Dühring? No, it is not true, and for a very good reason: Although this book was written by Engels, the completed drafts were read, and approved, by Marx, who also contributed a whole section to it. Which section did Marx write? While Engels concentrated on philosophy, history and science, it was Marx himself, as Engels admitted, who wrote a long section on economic theory in Anti-Dühring.

Since this book was written more than a decade after the drafts for Capital had been completed, and since Marx died some five years after its publication, the section on economics in Anti-Dühring can be taken as Marx’s final thoughts on capitalist crisis. Certainly these are the last things he wrote on the subject.

Anti-Dühring

It is clear that the views expressed in Anti-Dühring represent the standpoint of both Marx and Engels, which, despite all the efforts of the revisionists to misrepresent them, was identical.

Let us see what Engels (and Marx) wrote in Anti-Dühring.

“We have seen that the ever increasing perfectibility of modern machinery is, by the anarchy of social production, turned into a compulsory law that forces the individual industrial capitalist always to improve his machinery, always to increase its productive force”, explains the author. “The bare possibility of extending the field of production is transformed for him into a similar compulsory law. The enormous expansive force of modern industry, compared with which that of gases is mere child’s play, appears to us now as a necessity for expansion, both qualitative and quantitative, that laughs at all resistance.”¹⁴

Having described the relentless growth of the productive forces under capitalism, driven by compulsory laws, the author then goes on to explain the fundamental contradiction that plagues the capitalist system: namely the continuous outpouring of commodities which eventually crash into the limits of the market.

“Such resistance is offered by consumption, by sales, by the markets for the products of modern industry,” explains Engels. “But the capacity for extension, extensive and intensive, of the markets is primarily governed by quite different laws that work much less energetically.”

Here Engels (and Marx) describes a gap opening up between production and consumption, which operate by different laws, some more vigorous than others. “The extension of the markets cannot keep pace with the extension of production. The collision becomes inevitable…Capitalist production has begotten another ‘vicious circle’,” explains Engels¹⁵. He makes the same point in the November 1886 Preface to Capital: “While the productive power increases in a geometric, the extension of markets proceeds at best in an arithmetical ratio.”

So what is the character of crises under capitalism? Engels explains, “the character of these crises is so clearly marked that Fourier hit [the nail on the head] when he described the first as crise plethorique, a crisis of super-abundance.”¹⁶ In other words, they were crises of overproduction.

This simply repeats what Marx had explained elsewhere. For instance, in volume one of Capital: “The enormous power, inherent in the factory system, of expanding by jumps, and the dependence of that system on the markets of the world, necessarily beget feverish production, followed by over-filling of the markets, whereupon contraction of the markets brings on crippling of production. The life of modern industry becomes a series of periods of moderate activity, prosperity, overproduction, crisis and stagnation.”¹⁷

Use-values

In explaining the Marxist theory of crisis, Engels demolishes Eugene Dühring’s attempt to explain crises by the ‘underconsumption of the masses’. Engels draws the clear distinction between ‘underconsumption’ (which has always existed in class society, as a result of the poverty of the masses) and the phenomenon of overproduction, which is applicable to capitalism alone.

Pre-capitalist societies were natural economies, mainly based on the production of use-values. The phenomenon of overproduction was unknown in these societies, which suffered from the opposite problem, namely the problem of underconsumption arising from the scarcity of use-values, as a result of the low level of the productive forces and the natural disasters (drought, plague, pestilence, etc.) as well as war, to which these societies were prone.

Overproduction, then, is peculiar to capitalism, and exists in no other society. It arises from the anarchic laws of the market economy and commodity production. Under capitalism, the productive forces have been revolutionised to such an extent that they could, if production was rationally planned and organised, completely satisfy the basic needs of society. They have completely outgrown the capitalist system and private ownership.

On the basis of a rational plan of production, the productivity of labour, and with it the living standards of the overwhelming majority, could be vastly increased in a relatively short space of time. The problem is that under capitalism production is not rationally planned, but geared to the maximisation of profit and dominated by blind market forces. Here we are faced with the contradiction between social production and individual appropriation, where the capitalists appropriate the wealth produced by the social labour of the working class.

Overproduction arises under capitalism because the unlimited drive to expand production periodically comes into collision with the limited confines of the market economy. Plenty of people want and need things, but do not have the money to buy them. They lack ‘effective demand’, according to the bourgeois economists. This strange phenomenon of overproduction, where excess commodities, goods produced for sale, cannot be sold, arises ultimately from the fact that the working class cannot buy back the full value of what it produces. Profit is the unpaid labour of the working class. This state of affairs is irrational from any sane point of view, but arises out of the anarchy of the market economy and the class structure of capitalist society.

‘Underconsumption’ also exists under capitalism, as any working class person will testify. Surplus-value cannot come from machines or buildings, which simply transfer their own value to the commodities. Only human labour is able to produce new value. The working class receives in wages less value than they produce. This unpaid labour is the source of surplus-value, and is appropriated by the capitalist. The workers can never buy back what they produce as they only receive enough to maintain themselves and their families. As Marx explained, the problem is not to explain why there is crisis, but why, as a result, there is no permanent crisis under capitalism, starting from day one.

However, the capitalist system gets around this problem of insufficient ‘demand’ with the division of the economy into two main sectors: department one, which produces consumer goods, and department two, which produces capital goods (means of production).

“One section of capitalists produce goods which are directly consumed by the workers,” explained Marx, “another section produce either goods which are only indirectly consumed by them, insofar, for example, as they are part of the capital required for the production of necessities, as raw materials, machinery, etc., or commodities which are not consumed by the workers at all, entering only into the revenue of the non-workers.”¹⁸

As long as the capitalist class, which appropriates the surplus-value, takes the surplus and reinvests it in more new machinery, buildings and general infrastructure, the system can develop, but only at the cost of preparing the way for a new crisis of overproduction. In other words, the capitalist system creates its own market through the interaction between the two departments of production and temporarily overcomes this inherent contradiction. The only problem is that this increased capacity produces even more consumer goods, which eventually cannot be sold, and we have a new crisis. However, the slaughter of the values of capital arising from the slump, lays the basis for a new period of boom, but, in turn, reproduces the contradictions on a higher level. This takes the form under capitalism of a boom and slump cycle.

Unlimited expansion

The lack of purchasing power of the working class is therefore only one side of the equation. More significant is the capitalist’s continual drive for unlimited expansion by ploughing back the surplus extracted from the unpaid labour of the working class. This dialectical contradiction lies at the heart of the capitalist system. This uncontrolled drive to accumulate and produce will sooner or later hit the limits of consumption. Here we have a system of production for production’s sake, and accumulation for accumulation’s sake, as Marx explained. To sell this flood of commodities, the capitalist is forced to reduce his prices below the price of production, resulting in losses, falling profits, and likely bankruptcy. This drives out the weaker capitalists and prepares the ground for a new boom, based upon a higher rate of profit.

“[T]he underconsumption of the masses, the restriction of the consumption of the masses to what is necessary for their maintenance and reproduction, is not a new phenomenon,” explains Engels. “It has existed as long as there have been exploiting and exploited classes.” The crisis of overproduction is however a new phenomenon, which has arisen only under the capitalist mode of production. “Therefore, while underconsumption has been a constant feature for thousands of years,” continues Engels, it nevertheless “tells us just as little why crises exist today as why they did not exist before.”

He then goes on to explain the reason in the capitalist form of production, characterised by “the general shrinkage of markets which breaks out in crises as the result of a surplus of production [which] is a phenomenon only of the last fifty years.”¹⁹

The Marxist theory of crisis is based upon a dialectical contradiction: the unlimited drive to produce, which is unique to the capitalist mode of production, combined with the limited consumption of the masses arising from their social position. As a consequence, capitalism is like a man sawing away the branch on which he is sitting. It creates and destroys the market at the same time, by squeezing more and more surplus-value out of the working class, while attempting to hold down wages to the bare minimum. “The part falling to the share of the working class (reckoned per head)”, explains Engels, “either increases only slowly and inconsiderably or not at all, and under certain circumstances may even fall.”²⁰ This in turn becomes a barrier to the expansion of the market and therefore the realisation of surplus-value, as we are witnessing in this present period of prolonged austerity.

Push down wages

The capitalists as a whole naturally want to see an expanding market. Each individual capitalist would be delighted to see all competitors increase the wages of their workers to boost demand. Yet when it comes to their own workers, they are determined to keep down wages in order to reduce costs and increase profits. So the capitalists, driven by competition, all end up attempting to push down wages and therefore demand. “The product governs the producers,” explains Engels²¹.They are all caught up in this contradiction of capitalism.

In a kick against Dühring, Engels remarks: “It requires a strong dose of deep-rooted effrontery to explain the present complete stagnation in the yarn and cloth markets by the underconsumption of the English masses and not by the overproduction carried on by the English cotton mill owners.”²²

Such a view, it should be noted, has nothing in common with the positions of various schools of bourgeois economists known as ‘underconsumptionists’, most notably the Keynesians.

Marx himself had criticised the concept of ‘underconsumption’ as the cause of crisis in volume two of Capital, written some ten years before Anti-Dühring. Consumption alone (or rather the lack of it) is not the fundamental cause, he explained. If this were the case, the problem could be solved by increasing the purchasing power of the masses. This is precisely the false argument of the Keynesians. Marx answers this as follows:

“It is a sheer tautology to say that crises are caused by the scarcity of effective consumption, or effective consumers. The capitalist system does not know [of] any other modes of consumption than effective ones. That commodities are unsaleable means only that no effective purchasers have been found for them, i.e., consumers (since commodities are bought in the final analysis for productive or individual consumption).”

He continues:

“But if one were to attempt to give this tautology the semblance of a profounder justification by saying that the working class receives too small a portion of its own product and the evil would be remedied as soon as it receives a larger share of it and its wages increase in consequence, one could only remark that crises are always prepared by precisely a period in which wages rise generally and the working class actually gets a larger share of that part of the annual product which is intended for consumption. From the point of view of these advocates of sound and ‘simple’ (!) common sense, such a period should rather remove the crisis.” ²³

In other words, wages tend to rise at the peak of a boom, where labour tends to be in short supply, shortly before a slump in the economy. Therefore, lack of demand cannot be considered the real cause of the crisis of overproduction.

It is precisely the Keynesians who believe that crises are caused by a lack of ‘effective demand’ (‘underconsumption’) and that wages or state spending should be raised in order to fix the problem. Left reformists frequently put this Keynesian argument forward as a solution to the present crisis. While we are certainly in favour of increasing wages, the idea that this will solve the crisis of capitalism is completely wrong. In fact, increased wages will simply eat into profits and push the capitalists to cut back on investment and production, thereby cancelling out the effects of this measure. It is impossible to create demand from thin air. The laws of capitalism are determined by a system of commodity production, including labour-power. To call for the state to ‘create’ demand is also utopian. The attempt to use the printing press to ‘create’ money, not backed by extra production, will only serve to fuel inflation and reduce workers’ income. The only other way for the state to increase spending is to take a further slice of the surplus-value through taxation. Again, this will either mean cutting into profits, which will stop the capitalists investing, or taxing the working class, which will cut consumption, thereby reducing demand. It they borrow (deficit financing) they will have to pay it back with interest. At the end of the day, such solutions simply intensify the problems of capitalism, not solve them. It is a Catch 22 situation.

“The whole mechanism of the capitalist mode of production breaks down under the pressure of the productive forces, its own creations,” states Engels. “It is no longer able to turn all this mass of means of production into capital. They lie fallow, and for that very reason the industrial reserve army must also lie fallow. Means of production, means of subsistence, available labourers, all the elements of production and of general wealth, are present in abundance. But ‘abundance becomes the source of distress and want’ (Fourier), because it is the very thing that prevents the transformation of the means of production and subsistence into capital.”²⁴

Towards the end of his life, Engels once again returned to the fundamental contradictions of capitalism in his 1891 introduction to Marx’s Wage Labour and Capital. It could have been written to describe the situation in the world today. We therefore leave him the last word on the subject of crisis:

“This productivity of human labour which rises day by day to an extent previously unheard of, finally gives rise to a conflict in which the present-day capitalist economy must perish. On the one hand are immeasurable riches and a superfluity [super-abundance] of products which the purchasers cannot cope with; on the other hand, the great mass of society proletarianised, turned into wage-workers, and precisely for that reason made incapable of appropriating for themselves this superfluity [super-abundance] of products. The division of society into a small, excessively rich class and a large, propertyless class of wage-workers results in a society suffocating from its own superfluity [super-abundance], while the great majority of its members is scarcely, or even not at all, protected from extreme want. This state of affairs becomes daily more absurd and – more unnecessary. It must be abolished, it can be abolished.”²⁵

Footnotes