26.05.

2020 The Econom c Cr s s Accord ng To Marx

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The Econom c Cr s s Accord ng To Marx

Thomas Gounet

What s the econom c cr s s? When one asks th s quest on to a leader of an econom c nst tut on (IMF, World Bank, etc.) or to
an employer, they w ll answer that t s some d sturb ng al en phenomena, an unpred ctable mass psychology, wh ch causes
the economy to drop. They w ll above all avo d quest on ng the work ng of the cap tal st system. However, t s n these
work ngs that we have to look for the fundamental explanat on. To really understand what happens, a rev ew of the wr t ngs of
Marx s nd spensable.

Marx wrote n the m ddle of the 19th century. W th Engels, he observes the cr ses of 1848 and 1858. He mmed ately
dent f es a relat on between the econom c s tuat on and the tens ons between soc al classes. He wr tes n 1850: ´W th th s
general prosper ty, n wh ch the product ve forces of bourgeo s soc ety develop as luxur antly as s at all poss ble w th n
bourgeo s relat onsh ps, there can be no talk of a real revolut on. Such a revolut on s only poss ble n the per ods when both
these factors, the modern product ve forces and the bourgeo s forms of product on, come n coll s on w th each other.’ And he
adds: 'A new revolut on s poss ble only n consequence of a new cr s s. It s, however, just as certa n as th s cr s s.' (1)

Marx expla ns that cap tal sm necessar ly generates contrad ct ons that t can not solve and t s th s very fact wh ch makes
object vely poss ble the overthrow of th s system. Th s s the v tal reason why t s necessary to study the econom c cr s s and
the revolut onary poss b l t es that they allow.

The explanat on of Marx f nds ts or g n n two fundamental and nd ssoc able character st cs of cap tal sm: the explo tat on of
work ng-class labour and the accumulat on. We have f rst to expla n that before exam n ng the cr s s tself.

1. The Explo tat on of Work ng-Class Labour

The ult mate goal of product on for an employer s prof t. But where does th s ga n come from? For that, th s cap tal st has to
sell the commod ty at a greater pr ce than the costs nvolved to make t. A car producer must sell cars at a pr ce greater (at a
value) than the one pa d to make t, that s greater than that pa d for the bu ld ngs, the mach nes, the robots, the tools, the
sheets steel, the electr c ty, etc. (the means of product on) and that pa d to the workers n form of salar es (the labour ng
power). The cap tal st has to sell the car for 300,000 Belg an francs f t cost, for example, 220,000 for the means of
product on and 50,000 francs for the salar es. It s only l ke th s that the cap tal st can have a prof t of 30,000 francs. (2)

F rst quest on: what s the bas s of the value (and therefore of the pr ce) of the commod t es? Why can the cap tal st sell ts
veh cle for 300,000 francs, buy the means of product on for 220,000 francs and even the labour ng power for 50,000 francs?

All the commod t es have an exchange-value wh ch make them comparable and therefore exchangeable between each other.
For th s they must conta n some common character st c wh ch allows th s compar son. Th s common th ng s the fact that all
commod t es are the product of labour. It s the workers who produce the wealth. (3) Th s expla ns why the a r has no
exchange value: t s not the product of labour. L kew se, the water of the r ver s free. It s pay ng only from the moment where
some work was needed to collect t, pur fy t, transform t, to bottle t and f nally put t at the d sposal of the consumer. A
commod ty w ll have as much value — and that w ll determ ne ts pr ce - as the labour conta ned n t: both past labour, wh ch
w ll have produced the means of product on necessary to ts manufacture, and present labour ach eved by the labour ng
power. If a commod ty s more expens ve than another, t s because t needs globally more work to produce t. If the car s
worth more than a loaf of bread, t s because one needs on the whole maybe 400 hours to make a car and probably less
than one hour to make a loaf of bread.

Second quest on: can the prof t come up from the exchange of commod t es? If those are sold at the r value, t s mposs ble.
Because the exchange s effected between equ valents, that s to say between products wh ch conta n the same quant ty of
labour (for example, the same number of work ng hours). If four hours were necessary to make a table and two hours to
make a cha r, f the da ly work cons sts n e ght hours, the producer of tables w ll sell two tables for four cha rs. Every
commod ty w ll be d sposed of for ts value (four hours for the table and two hours for the cha r). But there w ll be no prof t.

The prof t can appear n the exchange only f a product s sold below ts value. Now we would have to expla n why t s the
case. Moreover, what a cap tal st w ll w n w ll be lost by another. An employer would obta n a surplus of value, wh ch can only

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come from the fact that another sold h m h s commod ty below ts value. That would not expla n why the cap tal sts as a whole
make prof t and that these prof ts are the most regularly ncreas ng.

Th rd quest on: where does the prof t come from then? One needs a commod ty hav ng the capab l ty to create value, that s
to say labour. In that way, t can produce more value than what t s necessary for ts own product on. Th s commod ty s the
labour ng power. It s ndeed a commod ty because t s sold and bought. The worker exchanges w th the employer the r
capab l ty to work for a salary, because, depr ved of resources, t s the only way to l ve. The worker’s salary s only suff c ent
to purchase what s necessary for ts const tut on and restorat on: that s all the goods wh ch serve the worker’s educat on and
ma ntenance suff c ent to come back the day after to work ´ n the same cond t ons as regards health and strength’. (4)

But the labour ng power can work more than what s necessary for ts restorat on. It can therefore create a supplementary
value, wh ch w ll not be pa d by the employer, but wh ch w ll be appropr ated, as the owner of the means of product on, that s
to say of the factor es, bu ld ngs etc. The employer w ll h re employees to work, pay ng them only what s necessary for them
to come back the day after ´ n the same cond t ons as regards health and strength’. Th s value corresponds, for example, to
f ve hours of labour n terms of value. At that t me, the worker could say: I stop work ng. But, s nce t s the employer who
dec des, be ng the owner of the company, the worker s made to carry on for, for example, e ght hours. Dur ng the last three
hours, the worker then s work ng for free. The value created w ll be appropr ated by the employer, g ven that the cap tal st
takes possess on of the ent re product but only refunds part of t to the worker as a salary. The value produced dur ng the last
three hours const tutes what Marx calls the surplus-value. Th s s the bas s for the prof t of the cap tal st.

The ga n s therefore the result of an explo tat on of the workers by the employer. Th s expla ns the ncreas ng gap of wealth
between the cap tal sts and the workers. The former try to ncrease constantly the surplus-value produced to earn more, wh le
pay ng to the latter only what s necessary to l ve. The former grow r ch detr mental to the latter and ts source s the free
labour prov ded by the work ng populat on.

2. Accumulat on

Cap tal sts don't s mply want a prof t. They want to ceaselessly restore th s ga n and do t at an always h gher level. Th s s
accumulat on. The cap tal st devotes part of the surplus-value produced to ncrease the scale of product on, n order to have
st ll more surplus-value n the future.

D spos ng of a start ng cap tal under monetary form, that s a money-cap tal M, the cap tal st h res labour ng powers and buys
means of product on. In th s way the start ng money-cap tal s transformed nto commod ty-cap tal C. It s from that po nt that
products can be made. It s through th s product on (P) that a surplus-value appears. The result of the manufacture s a new
commod ty, wh ch potent ally conta ns the surplus-value, that s C’ (where ‘ refers to the surplus-value). Th s commod ty s
sold and the cap tal st rece ves a new money-cap tal ncorporat ng the costs of product on (for the means of product on and
the labour ng powers) ncreased by the surplus-value, that s a new money-cap tal M’. W th th s, the cap tal st can nvest n
new mach nes, h re employees, ncrease product on,... and ncrease the level of surplus-value and so of prof t. The scheme of
cap tal st product on takes then the follow ng form:

M - C ... P ... C’ — M’

The goal s to reproduce constantly th s scheme at an extended level.

W th the 30,000 francs of prof t on each car, the manufacturer can nvest n such a way to produce for example not 200,000
cars a year anymore, but 270,000. The ga n effected w ll then go from s x b ll ons of Belg an francs to 8.1 b ll ons, f the pr ce
of the veh cle doesn't change. It w ll therefore be poss ble to re nvest and try to manufacture 300,000 cars, and so on.

For the cap tal st, what matters s the prof t, the accumulat on, the product on of cap tal. No matter wh ch sector: a cap tal
must y eld money and even as much as poss ble. No matter f the product s boots, a car or a sheet of steel. The scheme on
wh ch the cap tal st s f nally based s the follow ng:

M — M’

No matter what s between M and M’, as long as the start ng money-cap tal M turns automat cally nto an ncreased money-
cap tal M’.

But th s s a delus on. The cap tal can not y eld prof t by tself. Even on the stockmarkets, where the cap tal seems to have
that faculty, t evolves n fact fundamentally as a funct on of the results of the compan es. The pr ce of a part of cap tal (a
share) w ll cl mb f the prospects for prof t for the company wh ch em tted th s share mprove. And these ga ns come from the
explo tat on of the workers. Bes des, when a company announces a restructur ng plan by wh ch t announces ts ntent on to
ncrease the value produced by each worker (therefore the surplus-value), the pr ce of the shares of th s company w ll
generally grow. It s poss ble that the pr ce of shares ncreases by speculat on, ndependently of the results of the company.
But th s ncrease s f ct t ous. E ther t s real sed at the expense of others cap tal sts: what s won by one s lost by another. Or
t w ll d sappear at some g ven t me, when some f nanc ers w ll real se that the current pr ce can not ncrease anymore and
therefore that t can only decrease and adjust to the level of the prof ts real sed by the company.

Nevertheless th s scheme C — C’ becomes the bas s of the act v ty of cap tal sts. F rst, the employer def nes the f rm’s own
ndustr al cycle as a funct on of ts prof tab l ty rate. Cap tal sts w ll nvest where they w ll earn a prof t, no matter the sector. If t
becomes more nterest ng to put money n the f nanc al stock-markets, the cap tal st w ll do t. Afterwards, these f nanc al
markets w ll develop on the bas s of that formula C — C’. On these markets, the cap tal becomes a commod ty wh ch s
bought and sold constantly. These markets become more and more autonomous. The buy ng of shares on the stockmarket s
progress vely dom nated by the speculat on, wh ch worr es only about the ncreases or decreases of the pr ces, no matter the

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reason of th s evolut on. The f nanc al markets attract a grow ng amount of money, nclud ng popular sav ngs through the
banks, the nsurance compan es or the var ous nvestment funds, creat ng so art f c ally a wealth wh ch has no equ valent n
the product on (but wh ch can d sappear very qu ckly). F nally the f nanc al markets d ctate more and more the gu del nes for
prof tab l ty for the compan es. And on th s bas s, they force them to constantly restructure, that s to say to d sm ss, to
ncrease product v ty, ntens ty of labour, n short to ncrease aga n the explo tat on of the workers. For example, the recent
mergers between o l g ants such as Exxon and Mob l, of the pharmaceut cal or chem cal ndustry, such as Hoechst and
Rhone-Poulenc etc. are ach eved, among other th ngs, to answer the need of the f nanc al markets to have ncreas ng prof ts
and therefore pr ces of shares n constant growth.

3. The Cr s s: A Block ng of the Accumulat on Process

For the cap tal sts, the cr s s man fests as a barr er to the ab l ty of the cap tal to produce a prof t by tself. The process st cks,
n fact, between C’ and M’ and therefore stops the passage to the next cycle. Because the cap tal st doesn't rece ve the
money of the sale of the commod ty, the money cannot be re nvested n the purchase of the means of product on and
labour ng powers to carry on accumulat on. In the scheme of the ndustr al cycle, there s a d fferent at on n t me between the
moment of the sale of the commod ty (C’ - M’) and the moment of the purchase (M - C).

Marx expla ns the follow ng: ´The commod ty (...) must be transformed nto money C - M. If th s d ff culty, the sale, s solved
then the purchase M - C, presents no d ff culty, s nce money s d rectly exchangeable for everyth ng else. (...) The poss b l ty
of a cr s s(...) thus only ar ses from the fact that the d fferences n form - the phases - wh ch t passes through n the course of
ts progress, are n the f rst place necessar ly compl mentary and secondly, desp te th s ntr ns c and necessary correlat on,
they are d st nct parts and forms of the process, ndependent of each other, d verg ng n t me and space, separable and
separated from each other. The poss b l ty of cr s s therefore l es solely n the separat on of sale from purchase. It s thus only
n the form of commod ty that the commod ty has to pass through th s d ff culty here. As soon as t assumes the form of
money t has got over th s d ff culty.’ (5)

An employer, for example a car manufacturer, possesses a money-cap tal that s nvested n a factory, mach nes, robots,
tools, raw mater als, etc. and n workers: n a f rst step, M - C, 220,000 francs s pa d for means of product on and 50,000
francs for salar es. In a second step, products are made: ...P... The cap tal st sets the workers to work, who, us ng the
mach nes, transform the sheets of steel nto veh cles. The cap tal st gets a car: C’. In a th rd step, the cap tal st wants to sell t,
so as to real se the surplus-value conta ned n the veh cle. The cap tal st can get the prof t of 30,000 francs only f the car s
sold for 300,000 francs. The cap tal st wants therefore to go from C’ to M’ n order to restart the cycle at the f rst step: M - C.
But t s prec sely at th s last step, the th rd, that t s blocked and so, s nce the nvestment s not recovered, the cap tal st
cannot restart the cycle of purchase of new raw mater als, of new restored labour ng powers, etc. The cap tal st cannot
ncrease the product on from 200,000 cars a year to 270,000 because the 300,000 francs s not recovered on each veh cle
sold.

Therefore, the cap tal st cannot go from M to M’ and so can not carry on accumulat ng. There s overproduct on, because the
commod t es wh ch can not f nd a purchaser beg n to accumulate.

The recess on spreads then, because the other cap tal sts come n relat ons w th the one who exper ences a problem of
d fferent at on between the t me of sale and the t me of purchase’. For one reason or another (what we w ll see n the next
sect on), the consumers don't want to replace the cars that they have. They prefer to lengthen the t me of use of old veh cles.
The car manufacturer therefore produces commod t es that cannot be sold. The cap tal st s unable to accumulate and so
stops the orders to the compan es supply ng th s company. Let's take the case of steel suppl es. The cap tal st produc ng steel
s now faced w th the problem of a barr er to the accumulat on cycle. Th s cap tal st stops purchas ng mach nes and
equ pment. Thus, next t becomes the turn of the cap tal sts n the mach ne-tools sector to fall nto d ff cult es, also v ct ms of
the halt of the orders com ng from the car-sector. Thus the cr s s becomes general sed.

The cr s s s the v olent solut on to th s blockage n the accumulat on process: s nce there can not be a normal passage
between C’ and M’, one must force t. ´Cr s s, wr tes Marx, s noth ng but the forc ble assert on of the un ty of phases of the
product on process wh ch have become ndependent of each other.’(6) If the commod t es can not be sold, because the
purchasers don't want them momentar ly, there s only one perspect ve left for the cap tal sts: sell to a lower pr ce. Instead of
sell ng the car for 300,000 francs, the manufacturer must d spose of t for 290,000, 280,000, 270,000, even 260,000 or
250,000 francs. But, n th s way, the employers reduce the r prof tab l ty: nstead of 30,000 francs a veh cle, t s 20,000 or
10,000 francs. By the game of compet t on, some cannot surv ve n these cond t ons and must close the r doors. If the
manufacturer cannot escape from the pos t on where veh cles are sold for 250,000 francs, bankruptcy w ll follow. Others
restructure, clos ng some workshops.

The result s a destruct on of the product ve forces. It s accompan ed by a mass d sm ssal of workers, ´who, explo ted by the
ndustr al sts at the t me of commerc al prosper ty, are now mass vely la d off and left to the r fate’.(7) It s n th s way that the
solut on to the cr s s s v olent: nstead of hav ng an harmon ous development, cap tal sm generates cont nuous jars caused by
the forced adjustment n the process of accumulat on; nstead of hav ng a permanent progress on of the product ve forces,
there are per od cally phases of destruct on; nstead of h r ng staff and secur ng the job of these workers, cap tal sm funct ons
by h r ng temporar ly a mass of workers, who t hastens to d sm ss as soon as the bus ness goes wrong.

The development of cap tal sm s thus cycl c. In a f rst step, cap tal sm expands. It s the per od of progress. The employers
nvest, h re staff. Afterwards the blockage emerges. Th s s the cr s s properly so called. The cr s s expands and general ses;
becomes a depress on. Then, some part of the product ve forces s destroyed, a ser es of compet tors are el m nated. The
cond t ons are ready for a restart of the cap tal st economy and thus a new per od of progress. In th s framework, the cr s s s
conjunctural, related to the econom c cycle descr bed above.

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It s th s cycle wh ch subord nates to ts rhythm the econom c l fe under cap tal sm and wh ch determ nes, for example, the
populat on movements, the m grat ons n part cular: ´The workpeople are thus cont nually both repelled and attracted, hustled
from p llar to post, wh le, at the same t me, constant changes take place n the sex, age, and sk ll of the lev es’.(8) So,
depend ng on the need, employers h re women and mm grants, then sack them, look for computer sc ent sts, then staff w th
low qual f cat ons, develop a reg on, then take the r nvestment back, etc.

The cr s s s fundamentally related to the cap tal st system. But the v s on perce ved by the var ous soc al classes s totally
d fferent. For the cap tal sts, t means a blockage of the process wh ch transforms the surplus-value nto cap tal. The solut on
to the cr s s s then to make the cycle of cap tal restart, even f t causes the ann h lat on of product ve forces and factor es, the
fall of the employment, etc. The workers suffer the consequences. But, for them, t s completely absurd: t s not because all
the needs of consumpt on are sat sf ed that the cr s s happens, but because there are too many commod t es w th respect to
what can be purchased.

Marx spec f es: ´There are not too many necess t es of l fe produced, n proport on to the ex st ng populat on. Qu te the
reverse. Too l ttle s produced to decently and humanely sat sfy the wants of the great mass. There are not too many means
of product on produced to employ the able-bod ed port on of the populat on.(...)On the other hand, too many means of labour
and necess t es of l fe are produced at t mes to perm t of the r serv ng as means for the explo tat on of labourers at a certa n
rate of prof t. Too many commod t es are produced to perm t a real sat on and convers on nto new cap tal of the value and
surplus-value conta ned n them under the cond t ons of d str but on and consumpt on pecul ar to cap tal st product on, .e., too
many to perm t of the consummat on of th s process w thout constantly recurr ng explos ons. Not too much wealth s
produced. But at t mes too much wealth s produced n ts cap tal st c, self-contrad ctory forms.’ (9)

The workers excluded from the product on - consumpt on c rcu t l ke commod t es wh ch can not serve anymore, f nd
themselves depr ved of the r ght to l ve (10). The cr s s man fests for them the d ctatorsh p of cap tal. It makes appear n them,
even f t s somet mes confused, the r ght and the necess ty to revolt aga nst that d ctatorsh p. It s start ng from th s po nt that
the overthrown of cap tal sm s made poss ble. As Marx and Engels wrote: ´But not only has the bourgeo s e forged the
weapons that br ng death to tself; t has also called nto ex stence the men who are to w eld those weapons - the modern
work ng class - the proletar ans.ª (11)

4. The Cr s s Breaks Out at The Heart of Cap tal sm

The quest on wh ch comes up now s to know why, at some g ven moment, the commod t es are not bought anymore, caus ng
the blockage of the accumulat on process.

F rst, the employers want to accumulate, thus to ncrease the surplus-value produced (therefore explo t workers more), to
ncorporate t n the r cap tal to accumulate more n the next step and get a prof t n constant progress on. It s that way that
they can become r ch and powerful. And f ever they would l ke to depart from th s path, the compet t on w ll push them back
to t, s nce a b g cap tal accumulates faster than a small one and tends to el m nate the latter. Marx spec f es: ‘Accumulat on
for accumulat on's sake, product on for product on's sake: by th s formula class cal economy expressed the h stor cal m ss on
of the bourgeo s e.(...) If to class cal economy, the proletar an s but a mach ne for the product on of surplus-value; on the
other hand, the cap tal st s n ts eyes only a mach ne for the convers on of th s surplus-value nto add t onal cap tal.’ (12)

To accumulate, the cap tal st must ceaselessly expand the level of product on. That means nvest ng n new bu ld ngs, new
factor es, new mach nes. The most v s ble aspect of th s phenomena s the construct on of new product on fac l t es.

The dec s on to accumulate s nd v dual, proper, to each cap tal st. It takes place n nd rect relat on w th the compet tors. It s
not because the r val bu lt a factory of such k nd for such part cular product that the cap tal st w ll not bu ld a quas dent cal
one. It s even the oppos te wh ch happens, because the goal s not to sat sfy a need but to make a prof t. Thus f the
compet tor embarks on a project, that means that there s probably a market to take and for the cap tal st that means the
obl gat on to also get nvolved n t.

In the car ndustry, the market for peoplemovers was non-ex stent n Europe n 1985. But, s nce, t has strongly developed.
Therefore all the manufacturers have set a new factory to be able to produce th s k nd of veh cles: F at and Peugeot n North
of France, Volkswagen and Ford n Portugal. etc. Result: the overcapac ty worsens, because the purchasers don't generally
buy a peoplemover n add t on but they replace another car, wh ch has been produced n another factory.

But, f there are too many factor es, too many capab l t es w th respect to what the consumers can buy, the cap tal st w ll do
h s best n order that the other f rms suffer the consequences: they have to reduce the pr ce of the r commod t es, real s ng
thus losses wh ch w ll lead them to close workshops, even factor es, thus d sm ss ng workers.

In 1977, that s three years after the erupt on of the cr s s n the ron ndustry, the pres dent of Cocker ll at that t me, Jul en
Charl er, expressed th s anarchy: ´Our ndustry suffers heav ly today from overcapac ty result ng from a paroch al
management of the nvestments. Yesterday, everyone wanted h s modern roll ng-m ll w thout much worry ng about the
mach nes wh ch already ex sted by the ne ghbour, ne ther about the real capab l t es of absorpt on by the market. One sees
now where that too m cro-econom c pol cy led the European ron ndustry.’ (13) That 'paroch al management' s compulsory
under cap tal sm: t comes from the pr vate property of the means of product on. It s t wh ch leads each cap tal st to ncrease
h s prof ts, to accumulate and always produce more, even f the effect s a general overproduct on, an overcapac ty that the
market w ll not be able to absorb.

Second element: to accumulate, the cap tal sts must create a b gger and b gger surplus-value, that s to say explo t the
workers more. Th s occurs by the ncrease of product v ty, that each employer s act vely look ng for. Thanks to th s, the
cap tal sts can produce more commod t es n the same per od of t me, w thout necessar ly extract ng th s ncrease from a

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supplementary spend ng of human labour (even f t s usually related). (14) It s a matter of new techn cal means, wh ch are
ntroduced and allow an ncrease of the product on.

For a same product on, the cap tal sts subst tute means of product on, essent ally mach nes, for labour ng powers. But th s
can enta l an ncrease of the product on, wh ch can have as a consequence that the employment doesn't decrease, nay, even
sl ghtly ncreases. Thus, a car factory w th 4,000 workers can produce 200,000 cars a year. Its product v ty w ll amount to 50
cars a year per person. (15) If product on ncreases to 300,000 cars a year, but employment only ncreases to 5,000 workers,
the product v ty w ll have ncreased to 60 cars a year per person (16). Employment s more mportant n absolute terms but
not n relat ve terms, that s to say, w th respect to the product on.

Th s phenomena nvolves an ncrease n explo tat on. The salary rece ved by the workers decreases relat vely. The value of
the labour ng power doesn't change n terms of purchas ng power. The workers produce more products but what they buy
tends to be st ll at the same level (or to ncrease n a lesser proport on than the product on). Therefore they rece ve a lesser
part of what s produced. The part wh ch grows s the surplus-value, hoarded by the cap tal sts.

The cap tal sts try to ncrease the explo tat on by other means. They pay the workers below the value of the labour ng power.
They try to lengthen the day of work by ntroduc ng supplementary hours, work accord ng to demand (17) and work dur ng the
weekend. They ntens fy labour. Each t me, the unpa d labour ncreases to produce more commod t es, thus more value s
hoarded by the employers.

That br ngs us to the th rd element. Pushed by the cap tal sts who try to accumulate more and more, the workers produce
ceaselessly b gger and b gger quant t es of commod t es. But, by the ncrease of the product v ty and the other forms of
explo tat on, they can only consume a smaller and smaller part of th s product on, even f th s consumpt on can ncrease n
absolute terms.

Let's suppose that the 4 m ll ons of Belg an workers produce a value of f nal commod t es of 8,000 b ll ons of Belg an francs a
year. Each of them earns 1.5 m ll on (18) dur ng the same lapse of t me. Together the r salar es amount thus to 6,000 b ll ons
of Belg an francs. They have therefore the poss b l ty to consume 6,000 of the 8,000 b ll ons of the produced commod t es, the
cap tal sts (wh ch are just a handful) consume the other 2,000 b ll ons. By the ncrease n product v ty and the ntens f cat on of
labour, the workers ncreased the produced value of the f nal commod t es to 10,000 b ll ons of Belg an francs. But the r
salar es stay blocked. That means that they st ll consume 6,000 b ll ons, but th s t me over a total sum of 10,000 b ll ons. That
means that the cap tal sts have ncreased the r part to 4,000 b ll ons. But can they consume t?

It s the fourth element. Pushed by the compet t on, the employers w ll tend to ded cate more and more money to the
nvestment and not to the consumpt on. They w ll spend larger and larger sums to the purchase of mach nes, factor es, wh ch
w ll allow them to beat the compet tors but not to absorb the produced commod t es of f nal consumpt on. They w ll carry on
produc ng, whereas they should consume ( f the r goal was to ensure the more or less harmon ous work ng of the system).
Instead of buy ng the 2,000 b ll ons of francs of supplementary f nal commod t es, they w ll str ve hard to ncrease aga n the
global amount of produced commod t es, br ng ng t to, for example, 12,000 b ll ons of francs. That looks absurd and t s. But
s the result of the anarchy generated by the pr vate ownersh p of the compan es: every cap tal st reacts w th respect to h s
nd v dual nterest to real se the h ghest ga n as poss ble at the expenses of the r compet tors and not w th respect to a plan
accord ng to peoples’ needs. Anyway, by the explo tat on, the part wh ch goes back to the cap tal st ncreases and the needs
of th s handful of employers are not extendable to the po nt that they could absorb the ncrease n the product on that the r
asp rat ons to accumulat on mpose to the soc ety.

In these c rcumstances — and th s s the f fth element —, every cap tal st w ll try nd v dually to aga n ncrease explo tat on to
be able to get r d of the r r vals. They w ll aga n ncrease product v ty, that s, accelerate the process of subst tut on of men by
mach nes. As these are the workers who produce the value of the commod t es, consequently the cap tal sts reduce relat vely
the bas s on wh ch they extract the r prof t, that s the surplus-value. The r rate of prof t tends to decrease and w ll end by
d m n sh ng effect vely. Th s w ll aga n nc te them to greater explo tat on, aga n accelerat ng the process. The r nvestments
w ll cont nue the rat onal sat ons, that s, replace the workers by mach nes, at ever-greater cost but also greater product v ty.
The cap tal sts w ll also put the r money nto the f nanc al markets wherever th s s more lucrat ve. All th s to ra se the r rate of
prof t nd v dually wh le los ng s ght that globally the el m nat on of workers from the product on process underm nes the bas s
on wh ch the r ga ns stand, that s the creat on of surplus-value, and that the hypertroph ed development of the f nanc al
markets can only keep on f the product on grows permanently.

Consequently, at some g ven t me, the f nal commod t es w ll not be bought because the workers w ll not be able to do t and
the cap tal sts, d mmed by prof t, w ll not be w ll ng to do t. At the same t me, the sector wh ch produces the means of
product on w ll have been more developed than the one of the goods of consumpt on. There w ll be too many mach nes w th
respect to the product on wh ch w ll be able to be sold. There w ll be overproduct on as well n the products of consumpt on as
n those wh ch serve to the product on.

The cr s s of overproduct on stands thus well at the heart of the cap tal st system. It s based on the process of accumulat on
and on the grow ng explo tat on that the employers extract from the labour of the workers. As Marx wr tes: ´The ult mate
reason for all real cr ses always rema ns the poverty and restr cted consumpt on of the masses as opposed to the dr ve of
cap tal st product on to develop the product ve forces as though only the absolute consum ng power of soc ety const tuted
the r l m t.’(19)

5. The Contrad ct ons Extended to a Larger Scale

How do the cap tal sts solve that contrad ct on? ´On the one hand, Marx answers, by enforced destruct on of a mass of
product ve forces; on the other, by the conquest of new markets, and by the more thorough explo tat on of the old ones.’ (20)
On the one hand, s nce there are too many means of product on and labour ng powers n act v ty, the cap tal sts scrap them.
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The cap tal sts reduce the pr ce of the commod t es n order to be able to sell them nevertheless. They d m n sh the product on
to br ng t back to what s purchased. To make the r equ pment the most prof table, every employer closes workshops and
factor es. They rat onal se product on w th mass ve d sm ssals, w thout worry ng about the lot of the workers, who lose the r
jobs and, consequently, the r ncomes. The weakest go bankrupt, putt ng masses of workers out of the runn ng.

Through the cr s s, cap tal sm appears l ke what t s: an neff c ent and nhuman system; neff c ent because t destroys
product ve forces, t gets r d of means of product on and labour ng powers that he cons ders useless, wh le elementary needs
are not sat sf ed; nhuman, because t s the workers who suffer the most dramat c effects of the cr s s, los ng the r job, the r
ncome and even the r place n the soc ety.

On the other hand, the cap tal sts try to extend the markets. Because the problem wh ch ar ses s the d ff culty of d spos ng of
the commod t es, they try to sell them on new markets wh ch can absorb them. Th s s what pushes them to get nvolved n
the external trade, to w den ceaselessly the l m ts of the market, to transform the precap tal st soc al relat ons nto merchant
relat ons and f nally to nvest abroad, subjugat ng further and further terr tor es. Thus, the cap tal sm becomes world-w de.

Are these solut ons durable and do they allow to avo d new cr s s? Certa nly not. The destruct on of product ve forces makes
qu ckly the place, w th the recovery, to a new development, wh ch has n t the same contrad ct ons as before. Because the
cap tal st accumulat on and the explo tat on of the labour of the workers to real se th s accumulat on, wh ch are the bas s of
the econom c cr s s, have not at all d sappeared. The extens on of the market, as for t, doesn't solve anyth ng fundamental.
The contrad ct ons wh ch are the or g n of the recess on are therefore s mply w dened to a larger f eld. And they burst as
necessar ly.

Marx wr tes: Cap tal st product on seeks cont nually to overcome these mmanent barr ers, but overcome them only by means
wh ch aga n place these barr ers n ts way and on a more form dable scale.’ (21) In the Man festo of the commun st party, he
adds after hav ng def ned the employers' solut ons to the cr s s.’ That s to say, by pav ng the way for more extens ve and
more destruct ve cr ses, and by d m n sh ng the means whereby cr ses are prevented.’ (22)

Notes
(1) Karl Marx and Fr edr ch Engels, Rev ew, n ‘Collected Works of Marx and Engels’, Part 10, Lawrence and W shart, London, 1978, p.510.

(2) 300,000 - 220,000 - 50,000 = 30,000.

(3) Nature prov des the resources. It s the raw mater als. They are at the d sposal of the human be ngs. But one needs a ‘labour’ to put them at d sposal, th s
labour can e ther be a s mple 'p ck ng', or a compl cated operat on of transformat on.

(4) Karl Marx, Cap tal, Volume 1, Progress Publ shers, Moscow, p.168.

(5) Karl Marx, Theor es of Surplus-Value, Part 2, Lawrence and W shart, London, 1969, p. 507-508.

(6) Karl Marx, Theor es of Surplus-Value, Part 2, Lawrence and W shart, London, 1969, p. 509.

(7) Fr edr ch Engels, The commerc al cr s s n England, n ´Collected Works of Marx and Engelsª, Part 6, Lawrence and W shart, London, 1978.

(8) Karl Marx, Cap tal, Volume 1, Progress Publ shers, Moscow, p.428.

(9) Karl Marx, Cap tal, Volume 3, Progress Publ shers, Moscow, p.257-258.

(10) In the r ch countr es, above all n Europe, a mechan sm of soc al secur ty has been establ shed, under the pressure of the class struggle. Th s soc al sol dar ty
has been extended after the second world war to avo d that the work ng class of theses countr es f ght openly for soc al sm. Bes des, s nce the fall of the Berl n's
wall n 1989, the acqu rements of th s soc al

secur ty are d smantled at h gh speed.

(11) Karl Marx and Fr edr ch Engels, Man festo of the Commun st Party, n ‘Selected Works of Marx and Engels’, Lawrence and W shart, London, 1968, p.41.

(12) Karl Marx, Cap tal, Volume 1, Progress Publ shers, Moscow, p.558.

(13) Echo de la Bourse, November 24, 1977, c ted n Groupe d'économ e marx ste, SOS S dérurg e, 1978, Fondat on Jacquemotte, p.31.

(14) But then t s an ntens f cat on of the labour. The latter s an ncrease of the product on caused by an use of a b gger spend ng of human force.

(15) 200,000/4,000 = 50.

(16) 300,000/5,000 = 60.

(17) If the demand s h gh, the employers force the r workers to come to produce. But f t s permanently h gh, that means longer days n a structural way.

(18) It s a gross amount nclud ng d rect and nd rect salary, s nce the part ded cated to soc al secur ty s n fact a d ffered salary, thus belong ng to the worker.

(19) Karl Marx, Cap tal, Volume 3, Progress Publ shers, Moscow, p.484.

(20) Karl Marx and Fr edr ch Engels, Man festo of the Commun st Party, n ‘Selected Works of Marx and Engels’, Lawrence and W shart, London, 1968, p.41.

(21) Karl Marx, Cap tal, Volume 3, Progress Publ shers, Moscow, p.250.

(22) Karl Marx and Fr edr ch Engels, Man festo of the Commun st Party, n ‘Selected Works of Marx and Engels’, Lawrence and W shart, London, 1968, p.41.

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