>________
>Charles: However, in Vol. III of Capital Marx also
>says:
>
>>"The ultimate reason for all
>>real crises always remains the
>>poverty and restricted consumption
>>of the masses as opposed to the
>>drive of captialist production to develop
>>the productive forces as though only
>>the absolute consuming power of
>>society constituted their outer limit "
>>(Capital vol. III, Moscow, 1959, pp.
>>472-73) ;
Charles, There are at least three places one can turn for an interpretation of this passage. Guglielmo Carchedi, Frontiers of Political Economy. Verso, Paul Mattick, Economic Crisis and Crisis Theory Adolph Lowe, Path of Economic Growth, p. 252
Lowe presents Marx's argument as one of capital shortage:
"The case for a capital shortage found its strongest expression in Marx. However it was no longer considered that a deficiency of circulating capital in the form of an alleged wage fund caused the trouble, but rather a shortage of *fixed* capital. Ricardo had already discovered that it was somehow easier to absorb the displaced workers in 'menial services' than in industrial production. Now Marx offered an explicit argument. To find productive employment for the displaced, new working places--plant and equipment--have to be provided. This requires a process of saving and investment which is by no means automaticaly assured by the existence of idle facotrs or even surplus profits of the technical pioneers."
Lowe then reasons:
increasing capital intensity/increasing capital per worker->bottleneck of capital formations requiring steadily increasing rates of investment or the continuing lengthening of the adjustment period->high unemployment during the adjustment period or the absorption of workers in low paying menial services->downward pressure on the wage level and on aggregate consumption->cumulative deflation or cyclical downswing.
The proximate cause of crisis is thus indeed the poverty and the limited consumption of the masses. But the chain begins with a shortage of surplus value in the short and perhaps even long term with which to purchase additional fixed capital.
In Malthus time there was a technical inability to produce additional fixed capital with which to absorb the growing proletariat (there was insufficient technical development of the means by which to produce means of production with which to absorb additional workers)--hence, his fear of overpopulation.
The problem Marx theorizes is the opposite. There is now an enormous amount of fixed capital per worker, so enormous that an insufficient mass of surplus value can be extorted from these workers for the purchase of additional fixed capital. Moreover it may not even be profitable to further capitalize production given the amount of surplus value which can be extorted from relatively fewer workers. Now there is the absurd juxtaposition of idle capital and idle workers and the real threat of runaway cumulative deflation.
best, rakesh