CHAPTER XXIV.

Crises.
Editor's Introductory Note: Marx's theory of crises is so important for a comprehension of his whole teach- ing, that it cannot be omitted here. Unfortunately, t attempt to render fhis theory easily comprehensive in the same manner as the other parts of the work, that is to say by abbreviation and occasional modification of the terms of expression, has failed. In Capital, several hun- dred pages are devoted to this theory.1 Marx has here undertaken a detailed study of the proportions in which capital and labour must be distributed in the diflV branches of production, if the equilibrium between pro- duction and consumption is to remain undisturbed; and further, the demonstration that, with eu-ry in production increase which is continuous by capital's need for accumulation the capitalist system destroys the equilibrium, thereby causing th. Marx
thus shows th. re not caused by mistakes commit-
ted by the capitalists, but are, on the contrary, an n able result of normal activity of capital. If we vvi to repeat all Marx's calculations, unending series of ex- tremely dry arithmetical propositions would be the con- sequence, comprehensible only to those who, by dint of
iiotahlv vol. II, di. Ill, part 1,
vol. Ill, p:ul '1 cli. '5(i; in addition to win. throughout nil three volumes
I
CRISES. 265
exceptional energy, could remember the innumerable de- tails; and which, therefore, would probably be read by nobody. This, however, would be contrary to the pur- pose of The People's Marx.
We have therefore decided to go to work differently. We reproduce but a small fraction of Marx's calcula- tions, in order to illustrate the method adopted by him. We then supplement these calculations by means of an essay written by us personally, which aims at showing and making comprehensible to the reader all that, in the present chapter, is essential.
We would add, that in his book Finanzkapital (Vienna, 1910 ch. 16—20, especially pp. 304—318), Rudolf Hilferding has given a good summary of Marx's arguments. Another work which in this connection may be read usefully, is the third section of chapter 12 of Franz Mehring's book Karl Marx, (Leipzig, 1918, pp. 378—387.) The author of the section in question was Rosa Luxemburg.
If we consider the commodity product1 supplied by so- ciety during the course of the year, we find it includes those parts which go to replace capital, and also those destined for consumption and which are, in fact, consumed by la- bourers and capitalists. How is the value of the capital consumed in the process of production replaced out of the annual product? And how is this interwoven with the phenomenon of the consumption of surplus-value by the ca- pitalists and of labour-wages by the labourers?
We shall at first base our investigation on the assump- tion that the process of reproduction is carried-on on a simple scale, i. e. that this process is not extended, and is carried on as it was previously. We shall further assume that products are exchanged according to their value, and that the component parts of productive capital do not alter their value either. In so far as prices deviate from value, this can exert no influence on the movement of the totality of the social capital. After as before, products are exchanged, on the whole, to the same amount; only the value of the share of each individual capitalist in the process, is no longer
i Extracted from vol. II, ch. 20, German ed.
266
proportionate to the capital advanced, or to the surplus-value produced, by each one. But as far as other changes of value are concerned, such changes — in so far as they are of a uniform and general nature — cannot modify the rela- tion between the respective value of the various component parts of the total annual product. On the other hand, in so far as such changes are only local and are not uniform, they can be understood only if we consider them to be de- viations from relations of value which remain unchanged. But if we succeed in discovering the rules according to which one part of the annual product replaces constant, and another variable capital, a change in the value of the con- stant or variable capital would not modify those rules, but only the amount of the part passing over into the one or the other function.
The movement with which we are now dealing, /. e. the reconversion of a part of the value of the product into capi- tal, whereas the other part is absorbed by the consumption of the capitalist and labouring classes alike, does not only replace value, but also matter; and is thus determined alike by the mutual relation of the respective values of the various component parts of the social product to one another, and by the material composition of those parts.
It must, further, be remembered that simple reproduc- tion on a uniform scale does not in reality take place in capitalist society. On the one hand, to assume the absence of all accumulation on a capitalist basis, would be a strange hypothesis; on the other hand, the conditions of production are not absolutely identical in different years. However, in so far as accumulation takes place, simple reproduction in- variably forms part of it, and can therefore be considered in itself.
The total product, consequently also the total produc- tion, of society, may be divided into two main parts, viz: