Contribution to the "critical Marxism" seminar held in Athens in June 1983; text dated 1 June 1983. First printed in French as "La théorie marxiste des crises et l'actuelle dépression économique", Sous le drapeau du socialisme (Paris, organ of the Tendance marxiste-révolutionnaire internationale), no. 97/98, June 1984, pp. 40–43. Reprinted as "Les crises et les dépressions économiques", Critique communiste (LCR), série 2, no. 39, March 1985, pp. 21–25, from the Swiss weekly La Brèche; and in Castilian as "La teoría marxista de las crisis y las depresiones económicas", Inprecor (Liga Comunista Revolucionaria), no. 42, March–April 1985, pp. 4–9. Translated for Red Mole from the 1984 French text, compared throughout with the 1985 French and the Castilian page scans.
The first printing, in the review of Michel Pablo's tendency, is followed here, and its editors' introduction gives the occasion. The 1985 reprints, French and Castilian, drop the lecture's final paragraph, on socialisation, democratic planning, political pluralism and a world socialist federation of workers' councils; it is restored here. The other differences that matter are given in the notes. No English edition is recorded. Also printed in Red Mole Guide No. 27, Checked, Not Absent (2026).
[Introduction by the editors of Sous le drapeau du socialisme:]
We continue in this issue the publication, begun in no. 94 on the occasion of the hundredth anniversary of the death of Karl Marx, of a series of contributions on the relevance of critical Marxism. The section is meant as an opportunity to take up some of the main theoretical problems that, in our view, revolutionary Marxism must face in this last quarter of the twentieth century: the nature of the crisis, problems of strategy, the future of the working class, ecology, and so on.
In this issue we publish the contribution Ernest Mandel delivered at the "critical Marxism" seminar held in Athens in June 1983, organised by the Protagoras political and cultural circle, which is run, among others, by our Greek comrades, in collaboration with militants of various components of the Greek workers' movement, including the Communist Party (of the Interior).
Marx did not have time to work out a theory of crises systematically. He had reserved that work for one of the unwritten volumes of Capital, the volume devoted to the world market. But in volume III of Capital, in Theories of Surplus Value, in various descriptive journalistic writings, and in their correspondence, Marx and Engels included enough passages on the industrial cycle and on crisis for us to be able to speak of a genuine Marxist theory of crises, without straining the texts or falsifying their thought.
The Marxist explanation of crises
The Marxist theory of crises rejects every monocausal conception. Crises are not due exclusively to an excess of capital (over-accumulation) or, what comes to the same thing, to an insufficient mass of surplus value currently produced. They are not due exclusively to the insufficient purchasing power of the masses. Nor are they due exclusively to disproportionality between the two fundamental departments of production, the department producing means of production and the department producing consumer goods. All these causes play a part in setting off crises and in their cyclical reproduction, but none of them by itself determines the regular outbreak of crises.
The reason Marx rejects every monocausal explanation of crises is that he regards the industrial cycle, and the crises of overproduction to which it regularly leads, as inherent in the capitalist mode of production itself. This mode of production is founded on generalised commodity production. It is from the fact that the means of production (including land) and labour power have become commodities that the relation between capital and wage labour follows, that is, the capitalist mode of production.
Now, generalised commodity production implies labour that is not immediately social; it implies a contradiction between private labour and social labour, a fragmented disposal of the means of production (that is, private property in the economic and not merely the juridical sense of the term), fluctuations of investment over time, the contradiction between use value and exchange value, and the contradiction between commodity and money. From this follows Marx's fundamental opposition to J.-B. Say's "law of markets" and to the parallel errors of Ricardo. For Marx, production does not automatically create its own demand: a rejection of the theses taken up today by the monetarists and the "supply-side" economists. In the same way, demand does not automatically create its own production: a rejection of the theses taken up by today's neo-Keynesians.
The crisis has its roots in the fact that the conditions of production of surplus value do not automatically imply the conditions of its realisation (do not automatically coincide with them).
In this sense, within the framework of the Marxist theory of crises, the crisis is at once a crisis of overproduction of capital and a crisis of overproduction of commodities. All the internal contradictions of the capitalist mode of production take part in its preparation and its outbreak. The crisis can be represented as fundamentally determined by the tendency of the average rate of profit to fall, to the extent that the fluctuations of the rate of profit sum up all these contradictions.
By its very essence, then, the capitalist crisis is a crisis of overproduction of exchange values. In this it is the opposite of the crises of pre-capitalist societies and of crises in post-capitalist societies, which are essentially crises of underproduction of use values. Those crises are combined in them, to varying degrees, with phenomena connected with the market, to the extent that commodity production develops or survives in those societies. By contrast, as long as the capitalist mode of production survives, as long as the economy continues to be governed by the law of value, crises of overproduction are inevitable.
The Marxist explanation of the present depression
The recession of 1980–1982 was the twenty-first crisis of overproduction since "the birth of the world market for industrial goods", as Marx puts it, a birth that can be dated to around 1825. That gives an average length of the industrial cycle of a hundred and fifty years divided by twenty-one, that is, seven and a half years: a striking confirmation of one of Marx's hypotheses. The very nature of the industrial cycle implies that there is no "permanent crisis". After the recession comes the recovery, even if it is hesitant, shallow, of relatively limited duration and not synchronised. We believe that a recovery had already begun in 1983, at least in the United States, the Federal Republic of Germany, Britain and Canada, just as there was a recovery between the recession of 1974–1975 and the recession of 1980–1982.
We define the crises after the Second World War, in the epoch of "late capitalism" (Spätkapitalismus), as recessions, because they are crises combined with a permanent inflation that partly attenuates their effects. The inflation of credit, that is, of book money or "bank money", makes it possible to sell more commodities than the purchasing power actually created in the course of the process of production would allow. It makes it possible to accumulate more capital than the surplus value actually produced in the course of the process of production, and realised in the course of the process of circulation, would allow. Despite all the demagogy of the "monetarists" and all the deflationary measures taken by bourgeois governments (of the "right" and of the "left" alike), inflation persists in the course of the present industrial cycle, even if it has been reduced compared with the 1970s (though not compared with the 1950s and 1960s).
But "late capitalism" cannot attenuate its internal contradictions for a limited period by means of permanent inflation without paying a high price for that tendency, in the long run an unbearable one: the growing disorganisation of its international monetary system, and growing risks of a collapse of the whole international banking system and the whole international credit system.
Hypocritically, the capitalists and their ideologues concentrate their fire on this subject on the debts of the so-called "third world" countries and of the so-called socialist states, which we prefer to call bureaucratised workers' states or post-capitalist states. But in reality capitalism enjoyed its unforeseen economic boom after the Second World War floating on an ocean of debt that spilled onto four shores: private capitalist firms, including multinational firms; the so-called third-world countries; the imperialist governments; and the governments of the bureaucratised workers' states. Of these four masses of debt it is the first, and not the second, that is the largest. The third has already overtaken the fourth and may overtake the second.
The detonators of the recessions of 1974–1975 and 1980–1982 were the classical detonators, and their course was a classical course: overproduction in the key sectors of the preceding expansion (cars, building, steel, petrochemicals, etc.), a fall in the average rate of profit, an aggravation of speculative and inflationary tendencies, the obligation on the bourgeoisie to initiate a deflationary policy, rapidly rising unemployment and, as a result, a contraction of the domestic market, intensified inter-imperialist and inter-capitalist competition, with rising protectionism and a contraction of the world market.
Industrial cycle and long waves
The fact that Marx laid bare the fundamental, structural mechanisms of capitalist crises of overproduction implies that there are fundamental, structural features common to all these crises. But it does not imply that all crises are strictly identical. Each crisis in fact represents a combination of general features and particular features. Marx himself analysed in detail the particular features of a series of crises he lived through, such as the crisis of 1857–1858 and its monetary aspect, and that of 1861, bound up with the consequences of the Civil War in the United States.
I cannot analyse in detail all the particular features of the crises of 1970–1971, 1974–1975 and 1980–1982. But I want to insist on one essential aspect of this combination of particular and general features in the crises of our time: the combination of the seven-year or six-year industrial cycle with the long wave of depressive tendency that clearly began at the end of the 1960s. It succeeded a long expansive wave that ran from 1948–1949 to 1968 (except in the English-speaking countries, where it no doubt began around 1940).
This combination of the classical industrial cycle with the depressive long wave has considerable consequences for economic development in the medium and long term. It has equally important consequences in the social and political field.
The depressive long wave now under way is characterised by the "popularisation" of the technological innovations introduced during the preceding expansive long wave; this is, incidentally, a general characteristic of long waves of these two fundamentally different tonalities.
In practice this means three things: a fairly high annual rate of growth of productivity is maintained; "technological rents", the monopoly superprofits of the big trusts, including the "multinationals", fall if they do not disappear, which helps to depress the average rate of profit; and the average rate of growth of output falls considerably, remaining for a long time below the rate of growth of productivity. The result is clear: both the rise in unemployment and the bourgeoisie's austerity offensive will continue for a long period, independently of the cyclical fluctuations of annual output.
To speak only of unemployment in the imperialist countries: it rose from 10 million in 1970 to 15 million in 1975, 20 million in 1978, 30 million in 1980 and 35 million in 1983, and it will reach 40 million in 1985, independently of the recovery now under way. These are, moreover, statistics that heavily underestimate reality, because they do not include all those men and women who, as the bourgeois and petty-bourgeois ideologues so elegantly put it, "have left the labour market", having lost all hope of finding a job again. They are above all women pushed back into the home and immigrant workers pushed back to their countries of origin.
Within the framework of the depressive long wave there was a cyclical de-synchronisation between the crisis striking the imperialist countries and the crisis striking the semi-colonial countries and the semi-industrialised dependent countries. These last two in particular were able to maintain a relatively high rate of growth, above all in Mexico, Brazil, South Korea, India, Taiwan and a number of OPEC countries. But since 1980 the situation has been radically reversed. Today the so-called "third world" countries are struck head on by the crisis.
For the least underdeveloped among them, this means a complete change of socio-economic and political climate compared with the preceding ten years: a loss of credibility of projects of industrialisation (of development) within the framework of international capitalism, and of nationalist-populist projects, etc., with a brutal fall in the living standards of the masses. For the poorest among them, a tragedy of historic dimensions is unfolding, of which, to the shame of us all, the international revolutionary vanguard, not to say the international workers' movement, has not become aware at all. This tragedy can be summed up in one formula: the depressive long wave brings an absolute pauperisation in the poorest semi-colonial countries, which brings the purchasing power of average wages toward the level of the food rations of the Nazi concentration camps.
The political and social function of the different interpretations of the crisis
Defending the Marxist theory of crises is not only a duty of scientific honesty, of being able to understand, explain and forecast the course of the world economy. It also plays a precise role in the ideological struggle now going on within public opinion, that is, in the political class struggle, in the class struggle pure and simple. It plays a still more precise role in the division within the international workers' movement, between those who, in the most diverse forms and with the most contradictory excuses, accept the crisis as inevitable and content themselves with proposing recipes for managing this crisis with graduated doses of austerity, and those who want to organise, widen and generalise the refusal of all austerity policy, militant and active resistance to the offensive of capital, the fight against unemployment through the immediate introduction of the thirty-five-hour week without loss of pay and with compulsory hiring, the fight for an overall anticapitalist alternative to the policy of austerity. In the last analysis this division sets all the supporters of class collaboration against all the irreducible defenders of the political class independence of the proletariat, for which Marx fought all his life from 1850 on.
Without being able to draw up an exhaustive list of all the alternative "explanations" of the crisis offered in place of the Marxist explanation, we will mention the following ideological schemes:
- The crisis is supposed to be the inevitable result of the excessive rise of direct and indirect wages during the preceding boom. There is a right-wing version of this "explanation" (the neoclassical, monetarist explanation: "The workers priced themselves out of the labor market"). There is also a "left-wing" version of this explanation: the theory of the "profit squeeze", which, going back from Marx to Ricardo, reduces the fall in the rate of profit to the fall in the rate of surplus value, that is, explains the crisis by the rise in wages.
- The crisis is supposed to be the inevitable result of inflation, considerably swollen by the rises in the price of oil in 1973 and 1975.
- The crisis is supposed to be the result of a conspiracy of the "multinationals", or of a conspiracy of American imperialism, to restore (or consolidate) their hegemony over the international capitalist economy, or even over the world economy.
- The crisis is supposed to be nothing but a normal mechanism for relaunching and internationally redeploying the accumulation of capital, which capitalism is supposedly able to carry out and indeed is supposedly carrying out already.
The function of these "explanations" is political and social, not scientific. Sometimes their irrational side takes on a grotesque dimension: so, according to some in France (and not only in France!), it was first the rise in the price of oil and then its fall that caused, or considerably aggravated, the crisis! But once their scientific pretension, which is nil, has been set aside, we must on no account draw the conclusion that they are unimportant. They are of extreme importance, because they are instruments of the bourgeoisie for obtaining precise socio-political results:
- to make the working class and the workers' movement feel guilty, as responsible for the crisis;
- to "blame" the "oil sheikhs" or, more generally, the third-world countries, as responsible for the crisis;
- to present the crisis as a fate from which no one can escape;
- to justify the so-called inevitable concessions to the imperatives of austerity, that is, to the imperatives of profit.
All these intended results have one central aim: to exert enormous pressure on the working class so that it does not recognise that capitalism, and capitalism alone, is responsible for the crisis, and that every real and effective struggle against the disastrous consequences of the crisis for the labouring masses must be a struggle against capitalism, an anticapitalist struggle. It is pressure to prevent a resolute and consistent struggle against the international offensive of austerity and rearmament. It is pressure to prevent the emergence of an anticapitalist, socialist alternative to the crisis, for which broad masses would be ready to fight.
The crisis and the future of humanity
We are convinced that the depression is very serious; that it is in fact, in the context of the crisis of the imperialist system and of the social crisis, the deepest crisis capitalism has known since its birth. It is in the crisis that there is expressed, to recall a formula of Marx's, the tendency of capitalism periodically to transform productive forces into destructive forces. Now, the scale of the crisis determines the scale of the destructive potential released by the capitalist "solution" to the crisis. To get out of the crisis of the 1930s without getting out of capitalism, humanity paid the price of a hundred million dead, the price of Auschwitz and Hiroshima.
With the level armaments have now reached (above all, but not only, nuclear armaments), with the processes of environmental destruction under way, with the growth of hunger in the world, that destructive potential would today have to be multiplied at least by five. It implies the real risk of the destruction of the material and human infrastructure on earth.
Since 1914 humanity has been confronted with the dilemma: socialism or barbarism. Two world wars, innumerable local wars, the periodic rise of bloody fascist, semi-fascist and military dictatorships, the spread of torture to more than sixty countries: all this proves that the notion of "barbarism" is neither propagandist, nor mystifying, nor abstract, but charged with a real and ever more dramatic content. But today, with nuclear armament and over-armament, the dilemma "socialism or barbarism" takes on a new and still more precise dimension. Today the world victory of socialism has become a question of the physical survival of the human race. Today, in the long term, the dilemma is "socialism or the destruction of the human race".
I say: "in the long term". In the short and medium term, international capital comes up against immense obstacles and resistances to applying a course toward the reconquest of lost markets, that is, a course toward a third world war. Among these obstacles and resistances there is above all the strength of the workers' movement and the anti-war movement in the imperialist countries, and the strength of the anti-imperialist movement in the semi-colonial and dependent countries. What rearmament puts on the immediate agenda today is local counter-revolutionary wars, such as the aggression in Lebanon against the Palestinian revolution, the aggression against the Central American revolution, the aggression against the revolution in southern Africa. Until very severe defeats have been inflicted on the workers' movement and the mass movement of the main countries of the capitalist world, a third world war is not on the agenda.
But precisely because of the gravity and length of the depression, the risk of a third world war will tend to grow, to the extent that the offensive of austerity and rearmament succeeds in weakening or disarticulating the mass movement and the mass organisations in the main capitalist countries of the world.
For us it is not something already settled: the decisive battles are ahead of us, not behind. To take, with all the risks inherent in historical analogies, the stages that prepared the Second World War, we are today in 1929 and not in 1933 or 1938. The march toward the Second World War could have been reversed if Hitler had not been able to take power, if Franco had been beaten, if the revolutionary upsurge in France had not been stifled by the Popular Front. The great class battles to come in western Europe, in Brazil, in Mexico, in Argentina, in India, in Canada, in South Africa, in Japan and no doubt finally in the United States will decide the march toward a third world war, and so the fate of humanity.
The question can be asked: is it rational for capitalism, even headed by political personnel of the right and the far right, to contemplate a "solution" to the crisis through nuclear world war? The question itself is badly put. Bourgeois society as a whole is characterised by a peculiar combination of partial rationality and global irrationality. The same characteristic applies to armaments.
But to the extent that there is indeed an irrational core in the project of nuclear war, that in no way implies that the project cannot be carried out. Auschwitz too was irrational from the point of view of the overall interests of German imperialism, including from the point of view of an imperialist war seeking victory. Nevertheless, Auschwitz was carried out. What is decisive for imperialism at the present stage, in the perspective of preparing for war, is preparing the masses to become politically and ideologically accustomed to the irrational and the monstrous.
That is the central aim of the offensive in the mass media and the bourgeois universities, which is not only anti-communist, anti-Marxist and anti-socialist but a campaign against science, against reason, against the ideals of the bourgeois revolution and of the Enlightenment, and even against the elementary egalitarian ideas present in the Judaeo-Christian religious tradition. The barbarism of ideas precedes the barbarism of deeds. That is why a vigorous theoretical counter-offensive must be launched to defend Marxism, socialism, science, reason and the equal rights of all the men and all the women who inhabit our planet, against bull-headed stupidity endowed with formidable material means of diffusion and pressure.
This counter-offensive is mortgaged by an objective reality: the real economic, social, political, ideological, cultural and moral situation in the countries of the East, the bureaucratised societies of transition between capitalism and socialism, the bureaucratised workers' states. We of course reject any notion of a "really existing socialism" anywhere in the world. We likewise reject any notion that Marx is responsible for the practices of the Soviet bureaucracy, or for the practices of the reformist social-democratic bureaucracy. But we register a fact that weighs on us all. In the crisis of the 1930s there was near unanimity in the world workers' movement around one central idea: capitalism is in crisis; the solution is socialist planning. Today there is an important part of the world proletariat, including members of the Communist Parties, who no longer find that answer sufficient.
The fundamental reason for this change is not imperialist propaganda, nor the pressure of demoralised and sceptical petty-bourgeois milieux, though the importance of these factors must not be underestimated. The fundamental reason is the international proletariat's grasp, belated but salutary, of the economic and social reality in the countries of the East, as it was strikingly revealed by the rise of the political revolution and counter-revolution in Poland. The economic and social crisis in the East is a constituent factor of the world crisis. It is not identical with the capitalist crisis, though it is influenced by it. It is specific to those societies. It weighs heavily on the average consciousness of the international proletariat. It must be taken on frankly, in theory and in practice, by Marxists the world over.
It is certain that a purely theoretical and propagandist answer will never give sufficient satisfaction to the broad masses. As long as there does not exist, in fact, a "model" of transitional society that decisively transcends the abuses, aberrations, waste, inequalities and oppressions that exist today in the East, our answer will not convince everyone. But that does not mean we must wait for the victory of the socialist revolution in the West, or of the political revolution in the East, in order to defend resolutely what socialist planning, which is the socialist answer to the capitalist crisis, really is.
We say that an economy and a society founded on contemporary science and technology have become too complex and too heavy with catastrophes to be managed by any "experts" whatever (less and less competent ones, moreover), by any elite minorities whatever, whether bourgeois in the West or bureaucratic in the East. In the same way, we believe that this world crisis is too serious to be left to the mercy of "objective laws of the market" operating behind the back of humanity.
This crisis will be resolved only if the masses take into their own hands the management of their own affairs, of the economy, of the state, of society.
This crisis will be resolved only by the socialisation of the major means of production and their planned operation on the basis of priority objectives set democratically, with the political pluralism indispensable to democracy, by the mass of producer-consumers themselves; by the management of the economy by the associated producers; by the creation of a World Socialist Federation founded on the power of the workers, the power of workers' and people's councils throughout the world.
1 June 1983
Translator's notes.
- Base text. Translated from the first printing, Sous le drapeau du socialisme no. 97/98 (June 1984), pp. 40–43, read from the copy published on the CMRA site, and compared word by word with Critique communiste no. 39 (March 1985), read on the page scan, and with the Castilian Inprecor no. 42. The 1984 text repeats one phrase in the paragraph on the countries of the East, a typesetting error, and misplaces "hebdomadaire" in the demand for the 35-hour week; both are corrected silently. Critique communiste took the text from La Brèche with a short introduction of its own, which predicted "a new recession in 1986–1987".
- Where the 1985 reprints differ. They omit the final paragraph, restored here. They read "of relatively limited nature" where 1984 has "duration" (durée, as in the Castilian duración), and "monopoly profits" where 1984 has "superprofits", and they translate Mandel's English quotation of the monetarist slogan into French. In the paragraph on the 1930s, 1984 says that "nearly the whole" (la quasi-totalité) of the world proletariat no longer finds the socialist answer sufficient, where both reprints say "an important part" (une part importante, una parte importante); the reprints' reading is followed here, as the more likely, and the 1984 reading is recorded. The Castilian also omits "with compulsory hiring" after the 35-hour week, "the mass organisations" beside the mass movement, "bull-headed" and "equal" before rights, and reduces the sentence on the crisis in the East to "Marxists the world over must take it clearly into account". None of these changes the argument except the omitted final paragraph.
- Terms. "Monocausal" follows mono-causale. "Popularisation" renders vulgarisation / vulgarización, in quotation marks in both, Mandel's term for the generalisation of a long wave's innovations. "From 1850 on" is in both texts (à partir de 1850, desde 1850) and is kept. "Profit squeeze" is in English in the 1984 text; the 1985 French renders it l'écrasement du profit. It is the theory of Glyn and Sutcliffe. The lecture calls the 1980–82 downturn a récession and the long-wave period a dépression; the distinction is kept.