Panic -- a purely financial event, though it can (and often does) play a role in:
Cyclical crises (roughly, recessions) -- crises that purge imbalances from the capitalist economic system, temporarily abolishing factors that are depressing profit rates. Under the right (or wrong) conditions, i.e., when debt loads are large, capacity utilization is low, the overhang of durable goods is high, etc., a cyclical crisis can turn into:
A depression -- an Impasse or a "long-wave" period of stagnation (as with the 1930s). Since I don't believe in long waves, I simply think of these periods where the purgative forces of a recession are roughly balanced by the depressing effects of debt, low capacity use, etc. Because of the rough balance and because of the depression's depth, the stagnation can persist, possibly turning into:
A Revolutionary Crisis -- here the depression encourages the mobilization of the working class and other oppressed groups to engage in radical, system-changing, mobilization. The Crisis itself encourages further stagnation because capitalist "animal spirits" are hurt and governments begin to want depression as a tool against the insurgency. If successful, this might lead to an actual:
Revolution -- an abolition of the existing mode of production. If successful, and if we don't get the mutual destruction of the contending classes, we can see the rise of socialism. But fascism is another alternative.
-------------
On Louis' proposed purging of Keynesianism from Marxist political economy:
It would be nice if we were in a revolutionary crisis at this point in history; maybe this is so in some countries, but not in the US. It will be at least a few months before the revolution comes. This means that we can't focus totally on issues of the strategy and tactics of class warfare and revolution. It also means that we have the leisure to do so.
So we can deal with issues such as the imcomplete state that Marx left his own economics in. For example, Marx didn't spend a lot of time on aggregate demand failure ("realization crises") even though they are part of his theory. His whole crisis theory is unfinished, a mess. Different authors have different, seemingly contradictory, theories of crisis. There seem to be more different schools of crisis theory among the small number of Marxist political economists in the world than there are schools of macroeconomics amongst the large number of mainstream (bourgeois) economists. Further, Marx's discussion of finance, though very suggestive, is incomplete.
If we want to solve these and other problems, we need to go beyond talmudic reading of Marx, the way great Marxist political economists like Sweezy & Henwood have. We need help from the outside. One source is Keynes, who emphasized the failures of capitalism. He wanted to save capitalism, but his ideas don't have to be used that way. Similarly, we don't have to accept his static world view. Some of his ideas can be encorporated in a dynamic, dialectical, vision. We don't have to subordinate Marx to Keynes the way Robinson did.
Also, as someone noted, reforms are possible (we are not in a revolutionary crisis). Well, what _kind_ of reforms are best? Maybe a little bit of Keynesian economics would tell us which reforms are most likely to succeed, which are least likely to boomerang back in our faces and have negative results. Marx didn't give us all the answers we need for all questions.
I read Louis' statement and see it as telling us that we don't need to learn _anything_ about economics at all (and not just from Keynes). (He seems to be saying that we should freeze the design of our weapons, like a country does when it's about to go to war.) I don't see any reason to stop studying the world.
Mainstream economics, including much of Keynesianism, has been and should be likened to a religion. But if Fidel Castro can call for a Christian-Marxist dialogue, I see no reason why we can't have a Keynesian-Marxist dialogue. Among other things, the mainstreamers, like the bourgeois economists Adam Smith and David Ricardo, have _some_ scientific content to their theory. It's ridiculous to assume that _all_ of it is religion or ideology. It's part of the Marxist political economist's job to pick out the wheat from the chaff.
(That's enough for today. I've been over-quota too much.)
Jim Devine jdevine at popmail.lmu.edu & http://clawww.lmu.edu/Departments/ECON/jdevine.html