Disproportionality theory of crises
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I have recently been writing up something on various theories of capitalist crises and happened to re-read Simon Clarke's magnificent essay, "The Marxist Theory of Overaccumulation and Crisis"(http://homepages.warwick.ac.uk/~syrbe/pubs/sands.pdf).
As I understand it, Clarke supports disproportionality theory – the idea that crises originate out of disproportional growth between different lines of production which generates overshoot situations and then knock-on effects that can then lead to a generalised recession. This is as opposed to underconsumptionist theories that claim crises are the result of systemic deficiences in market demand or theories that focus on the falling rate of profit.
What is interesting about Clarke's peice is that he sharply differentiates between bourgeois theories of disproportional growth and the Marxian theory. He seems to be suggesting that Left wing critics of disproportionality theory have failed to notice the difference. Thus
Disproportionality theories of crisis have tended to be rejected by revolutionary socialists, primarily on the grounds of their very close reformist associations. The source of disproportionality theory was Tugan-Baranowsky's 1893 criticism of underconsumptionism on the basis of Marx's reproduction schemes, which supposedly showed that disproportionalities were the only possible source of crises, and that such crises were not necessary but contingent, arising from the ignorance of capitalists as to the future development of the market, and intensified by the expansion of credit which sustained the disproportional expansion of production. This argument was seized on by the reformist wing of Social Democracy as an argument in favour of reforms which would overcome the `anarchy of the market' through the centralised coordination of capitalist production
The argument is that such "bourgeois" interpretations tend to ground the source of disproportinalities in subjective factors or institutional shortcomings such as the excessively easy availability of cheap credit which induces capitalists to make irrational investment decisions. The implication of all this is that the origin of crises lie not with the very nature of a market economy itself but historically contingent factors that impede the effective running of such an economy. So we have Marshallian type explanations which attribute a crisis to some irrational "collective wave of optimism" in which the capitalists are caught up. Or the Schumpeterian explananation that it is "induced by the opportunities for surplus profit presented by technological innovation " . Or the Hayekian explanation that it is all down to the reckless and irresponsible expansion of easy credit What runs through all these arguments is the basic idea that it is by changing the perception of individuals or by tightening up on the availability of credit and generally conducting affairs in a more conscientious and responsible manner that crisis can be averted. Crises are not the product of capitalism but of the human agents inside capitalism (it is for much the same reason that workers are blamed for their own poverty)
Left wing critics of disproportionality theory, wanting to ground their own theories of capitist crises in objective, rather than subjective, factors have naturally tended to reject versions of this theory that give credence to the later. But Clarke too rejects such versions just as he rejects underconsumptionist and falling rate of profit explanations
As he puts it, the "disproportionalities, which Tugan- Baranowski correctly identified as the source of general crises, are not merely the contingent result of the `anarchy of the market', but are the necessary result of the social form of capitalist production, the expression of the tendency to the overproduction of commodities" (ibid). The accumulation process is inevitably subject to uneven development which is the outcome of objective factors and express itself in the form of disproportional growth. So for example, technical, social. labour supply or natural barriers may – and, indeed, inevitably will – affect different lines of production differentially, holding back growth in one branch of industry vis a vis others and so resulting in an overshoot situation from the standpoint of other branches, particularly those closely associated with the former. Overshoot then initiates a "knock on" process that can spiral into a generalised recession. Or to put it differently , "the specific form of disproportionality is not determined primarily by the disproportional growth of demand for particular commodities, but by the disproportional growth of supply, determined by the uneven development of the forces of production" (ibid).
I think Clarke's essay is a very useful addition to the arsenal of revolutionary socialist theory
robbo203 wrote:As he puts it, the "disproportionalities, which Tugan- Baranowski correctly identified as the source of general crises, are not merely the contingent result of the `anarchy of the market', but are the necessary result of the social form of capitalist production, the expression of the tendency to the overproduction of commodities" (ibid). The accumulation process is inevitably subject to uneven development which is the outcome of objective factors and express itself not in the form of general overproduction but, rather, disproportional growth. So for example, technical, social. labour supply or natural barriers may – and, indeed, inevitably will – affect different lines of production differentially, holding back growth in one branch of industry vis a vis others and so resulting in an overshoot situation from the standpoint of other branches, particularly those closely associated with the former. Overshoot then initiates a "knock on" process that can spiral into a generalised recession. Or to put it differently , "the specific form of disproportionality is not determined primarily by the disproportional growth of demand for particular commodities, but by the disproportional growth of supply, determined by the uneven development of the forces of production" (ibid). I think Clarke's essay is a very useful addition to the arsenal of revolutionary socialist theoryLooks very interesting, especially the link to the uneven development of the forces of production."Because humans produce their own means of life the means available to them to do so determines their level of existence. These are what Marx called the "productive forces" of society. The productive forces consist of means of production, and labour power. Means of production include tools, machinery, premises and infrastructure ("the means of labour"-what humans work with) and raw material ("the objects of labour"-what humans work on). Labour power (which enables them to work with means of production) includes strength, skill, knowledge and inventiveness.It is the level of development of productive forces, and the way in which society organises their operation, which marks out the different stages of human development. It is "the multitude of productive forces accessible to men" which, Marx says, "determines the nature of society" (The German Ideology)."However, it would help if you could substantiate if Clarke means by "uneven development" the global market forces or the (uneven) growth of the capitalist mode of production. Although, "the multitude of productive forces accessible to men determines the nature of society" suggests a corresponding overlap between market forces and the growth of capitalism imo making a distinction between the two will help in drawing out any impact the nuances may have on clarifiying a cause for crisis.Good stuff.
Yes, agreed that this, especially sections 5, 6 and 7, is a very clear exposition of the 'disproportionality' theory of crises setting out how and why disproportionality inevitability develops from (unpredictable) time to time. The earlier sections, pointing out the inadequacies of the 'falling rate of profit' theory as an explanation for crises (as opposed to being a long-run, secular tendency) are good too. Not so sure about sections 8 and 9 on the role of credit.
Correct me if I'm wrong but he seems to be saying that 'disproportionality' is due to the contradiction of the uneven development of market forces and the uneven development of the conditions of production for capitalism."The uneven development of the various branches of production is determinedprimarily by the uneven development of the conditions of production, rather thanby the dierent rates of growth of the market for their products. Thus the tendencyto overproduction, which is the driving force of capitalist accumulation, does notappear in the form of a tendency to the general overproduction of commodities, butin the form of the disproportional development of the various branches of production.There is noa priorireason why such uneven development should take the particularform of the overproduction of the means of subsistence, so that crises should appearas underconsumption crises.There is no doubt that the primary motivation of the development of the forcesof production is to economise on living labour, so that, other things being equal, themarket for the workers' means of subsistence might be expected to grow less rapidlythan that for the elements of constant capital. However, even if this tendency is notmodied by other circumstances, such as economy in the production and use of theelements of constant capital, this is by no means sucient to establish a tendencyto the overproduction of the means of subsistence, because the tendency to overpro-duction is not derived from a consideration of the static relationship between supplyand demand, but from the dynamic relationship between the various branches ofproduction. Thus the specic form of disproportionality is not determined primarilyby the disproportional growth of demand for particular commodities, but by the dis-proportional growth of supply, determined by the uneven development of the forcesof production." (p.15)
" Although, "the multitude of productive forces accessible to men determines the nature of society" suggests a corresponding overlap between market forces and the growth of capitalism imo making a distinction between the two will help in drawing out any impact the nuances may have on clarifiying a cause for crisis.". I read the above and wondered if I had gone to hell! on reflection, however, I wished I had. I understand the need to use this kind of language but with respect to spreading "our" case, or more properly put, the case for we, "workers", is this the kind of prose that would, or will, appeal to our fellow workers? Somehow, I think not! Steve Colborn.
steve colborn wrote:Brian wrote:" Although, "the multitude of productive forces accessible to men determines the nature of society" suggests a corresponding overlap between market forces and the growth of capitalism imo making a distinction between the two will help in drawing out any impact the nuances may have on clarifiying a cause for crisis.".I read the above and wondered if I had gone to hell! on reflection, however, I wished I had. I understand the need to use this kind of language but with respect to spreading "our" case, or more properly put, the case for we, "workers", is this the kind of prose that would, or will, appeal to our fellow workers? Somehow, I think not!
Dammit! Its just my lazy way of probing whether or not there's any mileage between the uneven development of market forces and capitalism in general. According to Adam apparently not.
I think he's making the point that you can't predict which industrial sector will overproduce nor whether this will have a knock-in effect leading to a crisis and a more widespread overproduction. Some (Ernst Mandel, for instance) have argued that it will always occur in the consumer goods sector. Clarke makes the point that this ain't necessarily so but could occur in any industry, at least in any key industry. It depends on the industry's weight in the economy.
I think he is talkimg about the 'uneven development' of different industries within a capitalist economy with some expanding faster or slower than others, not about the uneven development of capitalism in different parts of the world.
ALB wrote:I think he is talkimg about the 'uneven development' of different industries within a capitalist economy with some expanding faster or slower than others, not about the uneven development of capitalism in different parts of the world.Wow. Plenty of examples there to get our teeth into!
A comrade has pointed out that we reviewed two of Simon Clarke's books in the February 1995 issue of the Socialist Standard. The first Marx's Theory of Crisis was given a fairly favourable review but not the second What about the Workers? Workers and the Transition to Capitalism in Russia because, as the title suggested, it argued that Russia was something other than capitalism before the so-called "collapse of Communism" (which for us was the collapse of Russian state capitalism). Unfortunately, the review is not yet online but I could scan it if anyone is interested.
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