Vulgarisms, disavowals and their consequences
Aside from the view that the falling rate of profit is explanatory of all crisis formation in a capitalist economy, many other vulgarisms proliferate in relation to the theory. Each new vulgarism necessarily spawns at least as many disavowals of the notion that Marx possessed a breakdown theory, or that one is necessary. We do not have time today to run through even a representative portion of these different responses. As such, we will briefly consider another form of vulgarism and two disavowals of breakdown theory to illustrate some of the most prominent problems which arise from them.
Vulgarism: The German SPD and the immiseration thesis
It is common for opponents of a breakdown theory to argue that the position that capitalism tends toward its own abolition breeds a passivity among its proponents. This is often framed by juxtaposing the crude notion of a “final crisis” with proletarian action1. It is not, however, an objection without a basis. Throughout the history of Marxism, notions of inevitable breakdown have often been used to justify the lack of any strategy for revolutionary action. The classical example of this comes from the defence of revolutionary orthodoxy during the revisionist controversy2 within the early SPD.
The first congress of the SPD following the repeal of Germany’s anti-socialist laws in 1890, held in 1891, laid the basis for the revisionist controversy in the Erfurt programme. The theoretical components of the programme, authored by Kautsky, committed the party to upholding an orthodox Marxist breakdown theory rooted in the immiseration thesis and, consequently, revolutionary change. In contrast, the practical component of the text, authored by Eduard Bernstein, was entirely concerned with reformist demands like universal suffrage, freedom of expression, free schooling and a progressive income tax. Whilst the tension between these positions was contained for a number of years, Engels’ death in 1895 saw it burst into open. Bernstein began to publish a number of books and articles, most notably his 1899 Evolutionary Socialism, arguing that the polarisation of classes Marx had predicted was not unfolding, and that this meant pursuing alliances with Germany’s bourgeois political parties to exert pressure for reform. Kautsky responded with a defence of Marxist orthodoxy, denouncing Bernstein and his supporters as revisionist. This came to a head at the 1903 SPD congress in Dresden, with Kautsky’s orthodoxy winning out. Whilst breakdown theory won the theoretical argument, this was never translated into a practical programme for action. Instead, the party consoled itself with the view that capitalism’s collapse would lead it to victory. As the SPD’s role in leading the repression of the 1918 German revolution make clear, quite the opposite happened, and capitalism incorporated the party.
The notion that an empty strategy is the necessary result of a breakdown theory, though a justifiable reaction to history like the SPD’s failure, is straightforwardly incorrect. Many communists have both maintained a breakdown theory and laid stress on revolutionary strategy and action. This is so even for theorists raised on the SPD’s orthodoxy – Rosa Luxemburg, for example. The vulgarisation expressed by the SPD’s treatment of breakdown theory is the supposition that socialism inevitably follows from capitalist collapse – an ironically evolutionary view. Marx and Engels offer the clearest riposte, arguing that social collapse results “either in a revolutionary reconstitution of society at large, or in the common ruin of the contending classes.”3
Disavowal: The contortions of Professor David Harvey
First argument: David Harvey argues that Marx’s breakdown theory is an inconsequential draft that silly old Engels included in the third volume of Capital because he’s bad at thinking – a common refrain of those who wish to preserve Marx from the stain of Marxism’s history as a political movement. This led to a number of clashes with Michael Roberts over breakdown theory. Harvey’s attack on the legitimacy of the theory in Marx’s theory is frankly laughable: the falling rate of profit’s centrality to volume three’s argument is directly referenced in the first volume of capital and implied by the sections of this volume dealing with the rising organic composition of capital. It is clearly intended.
Second argument: In his more recent arguments, Harvey argues that proponents of the falling rate of profit theory do not account for the mass of profits which, he argues, stabilises the capitalist system by transferring value from labour intensive to capital intensive industries. He does not account for the view, put forward by Roberts, that the mass of profits falls with the rate of profit due to additional risks, the burdens of rent and merchant capital etc.
Consequences: Harvey’s most recent attempt to disavow breakdown theory leads him to argue that “consumer confidence and the level of consumption that matters in triggering crises not the rate or level of profits and investment” (Roberts). This implies that “the problem with contemporary capitalism is simply mismanagement” and “a potential identity of the economic interests of capitalism and the working class, framing the raising of wages as necessary for the continuation of accumulation” (me). This has consequences beyond simply crisis theory. As Boldizzoni correctly identifies, the Marxist theory of collapse – whilst not a summary – is derived from the core mechanics of Marx’s breakdown theory. Harvey’s rejection also leads him to reject much of this critique, arguing that “contemporary capitalist economies are 70 or even 80 percent driven by consumerism” and that Marxists must “actually spend some time propping it [capitalism] up”.
https://thenextrecession.wordpress.com/wp-content/uploads/2014/12/harvey-on-ltrpf.pdf
https://thenextrecession.wordpress.com/wp-content/uploads/2014/12/reply-to-harvey.pdf
https://thenextrecession.wordpress.com/2014/12/17/david-harvey-monomaniacs-and-the-rate-of-profit/
https://thenextrecession.wordpress.com/2021/08/25/the-rate-and-the-mass-of-profit/
Harvey, David. “Rate and Mass”, New Left Review, (2021), (130) (pp. 73-100)
Harvey, David. The Anti-Capitalist Chronicles (London: Pluto Press, 2020)
Roberts, Michael. “Marx’s law of value: a critique of David Harvey” Human Geography, (2020),
(13:1) (pp. 95-98)
Disavowal: Eco-socialism
Eco-socialists reject breakdown theory almost entirely, the only exceptions being James O’Connor and Jason W. Moore. Whilst an attempt to preserve breakdown theory and useful on its own ground, Moore’s theory of the “tendency of the ecological surplus to fall” crucially distinct from Marx, rooting the collapse of the capitalist system in an externalisation of its costs onto the natural world. This is more akin to the theories of John Stuart Mill or John Maynard Keynes than to Marx – both of these arguing that capitalism will collapse due to an environmental limit (something Boldizzoni terms the “exhaustion” thesis) rather than its own contradictions (“implosion” in Boldizzoni)
First argument: Paul Burkett gives an articulation in his 1991 Marx and Nature: “We may not like it, but the fact is that capitalism can survive any ecological catastrophe short of the extinction of human life.” Even granting this is likely hyperbole to some extent, this is absurd. Assuming this degree of elasticity contradicts both the basic requirements of capitalist accumulation – conditions conducive to sedentary labour processes, concentrated populations and expansive markets – but also the conditions Marx argues form the basis of all class societies: “The natural basis of surplus-labour in general, that is, a natural prerequisite without which such labour cannot be performed, is that Nature must supply — in the form of animal or vegetable products of the land, in fisheries, etc. — the necessary means of subsistence under conditions of an expenditure of labour which does not consume the entire working day.”4
Second argument: In eco-socialist developmental debates, the fetter thesis is often read as the expression of a Promethean Marx, with the development of machinery standing as the development of the means of production per se and the fetters placed upon this development by capitalism being tied to the productivity of said machines (see Kai Heron and Matt Huber debates). This prescribes a narrow view of the means of production which Marx did not adhere to, clearly listing land as a means of production, for example. An agro-ecology, requiring redistribution of land, is as much fettered by capitalist relations of production in its requirement for dispossessed workers and concentrated populations as automation is by capital’s need to consume labour to produce value.
Consequences: The eco-socialist rejection of breakdown theory posits a view that capitalism is fundamentally more durable than life itself. It ascribes a power to capital that requires one assume it can survive the abolition of all of its bases. Otherwise, its assumes a narrow view of development and the potentials for development of both non-mechanical production and automation.
https://newleftreview.org/sidecar/posts/the-great-unfettering
A mature breakdown theory
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These vulgarisms and disavowals show that the Marxist critique of capital, as well as Marx’s general view of historical development, require a breakdown theory. We will now clarify what we view as a viable articulation of such a theory.
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A mature breakdown theory argues not that the breakdown of capitalism is a mathematical question, the working out of a linearly falling rate of profit. Rather, the rate of profit is elastic, and may be increased enormously by utilisation of the counter-tendencies. As such, the breakdown of capitalism is not rooted in the falling rate of profit alone, but in the breakdown of these counter-tendencies – that is, the breakdown of capital’s ability to hold back its collapse.
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Each of these counter-tendencies describes vast social processes. Far from being a mathematical problem, therefore, the question of capitalist breakdown is one which requires detailed analysis of these phenomena. This is obviously not possible in the space we have today. Instead, we will consider historical examples of how elastic these counter-tendencies have been, then turn toward a brief analysis of the contemporary capitalist crisis to illustrate breakdown theory’s enduring power as a political/economic framework.
1Pannekoek (1934) offers one articulation of this argument, albeit a more sophisticated one than generally heard. See Rob Sewell, The Organic Crisis of Capitalism (2015): https://shorturl.at/06psa for a more vulgar, and common, articulation of this position.
2See Prolekult, Orthodoxy and Revisionism, Approaching Marxism (2023): https://shorturl.at/5STy5 and Varn Vlog, James of Prolekult Films on The Revisionist Controversy (2023): https://shorturl.at/OiYHX for a short overview of the revisionist controversy. See David McLellan, Chapter two, Marxism After Marx (1979), James Joll, Chapter four, The Second International 1889-1914 (1956), and Peter Netl, The German Social Democratic Party 1890-1914 as a Political Model (1965): https://shorturl.at/8CvWF for more detail.
3Marx and Engels, The Communist Manifesto (1848): https://shorturl.at/IWHhm.
4Marx, Chapter thirty seven, Capital, volume three (1894): https://shorturl.at/7gaBA.