Crisis theory

The Marxist theory of crisis, also called in accordance with current usage Marxist economic theory goes, assume that a capitalist economy is periodically struck by crises, and tries to explain this crisis cycle. The crisis cycle is based on the contradiction between the productive power development and utilization of capital overaccumulation variant. The increase in the productivity of labor (labor productivity ) is contradictory because it increases the relative surplus value and the rate of surplus value, for a given capital investment but simultaneously reduced the use of workers in favor of machines, ie fixed capital.

" [ The increase of the productive powers of labor ] increases the relative surplus value only by maintaining a reduced labor inputs for a given capital investment. Thus it reduces the rate of profit and creates a barrier recovery, which can be overcome only through the crisis. "

• 3.1 beginning of the cycle or lower turning point
• 3.2 prosperity
• 3.3 overaccumulation and crisis
• 3.4 stagnation
• 3.5 Cyclic motion of individual sizes 3.5.1 Interest rate and wage
• 3.5.2 prices

Cycle phases

The economy goes through such a circuit, which includes various phases. Neither number of phases nor their names are consistent with Marx. It can be found:

Or

Or

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Requirements

Necessary conditions - "possibility"

Only in a monetary economy may lead to a general market overcrowding, general overproduction, in subsistence economies or exchange economies, however, not or only partially.

A money economy includes the possibility that money will be hoarded. If you sell goods for money, can keep the money instead to use it to buy other goods. To thicken the circulation of money and the economy.

Sufficient conditions - "necessity"

A sufficient condition for the crisis cycle is the industrial-scale production with the aid of machinery, of fixed capital. This should work productivity to be increased, living labor is replaced by machinery, which increases the relative surplus value.

There is also in a market economy no macroeconomic coordination instance.

In Capital, Volume II, Marx shows how the banking of money for future major purchases of fixed capital ( banking of cash accumulation fund ) due to the hoarding of money. Hoarding is not only possibility of crisis, but a necessity, because otherwise the accumulation fund can not be established. Hence, the economy is threatened constantly interrupting the cash cycle. Theoretically enthorten same time other companies expend their accumulation fund. Without a common coordination, it is unlikely that both complemented each other just right. A way out is the credit system, the business of banking. While some companies invest their surplus income to the banks, others and their cash requirements at the banks lend. Through creation of money, the demand for money can be covered in theory. The problem of hoarding is absorbed elastically by the credit system, but emerge at a higher level again contradictions and causes of the crisis, as Marx then in Capital, Volume III, performs.

Industrial Machinery production due to time- lags, delays, such as between production and demand, or vice versa, or between investment and labor productivity. During the boom, the production reacts with a time-lag to the demand, the demand is greater than supply, the downturn reversed. Time - lags lead according to the Spinnwebtheorem or in the multiplier - accelerator model to oscillate.

Ultimately, consumer demand is a condition that in the production in value above can also be realized on the market. This is defined by From underconsumption theories that an increase in wages followed by greater demand for consumer goods can not solve the problem because it depends on the value that is determined according to Marx, by the labor theory of value. It depends on more profitable employment, not more pay. Although higher wages strengthen consumer demand, but on the other hand reduce the profits. If, finally, in the downturn to falling prices, this increases real wages, the purchasing power of workers, and that does not solve the problems from the perspective of the capitalist crisis.

Cycle

Beginning of the cycle or lower turning point

The economic recovery is initiated at the end of the period of stagnation, because below-average price level and below-average rate of profit cause is massively investing in new and improved production techniques. By the previous downturn existing production capacity has been devalued by moral wear, which leads to replacement investments in technically advanced basis. In order to get out of the crisis, new production techniques with higher labor productivity introduced, which are associated with higher use of fixed capital per worker. Marx assumed here that the newer procedures are more expensive than to replace the, so that a higher production is necessary, the new investments will pay off.

" Marx assumed that the newer method than are to be replaced more expensive and therefore require a higher level of production with productivity-enhancing applications. "

Prosperity

The general introduction of technically advanced production leads to a general economic upturn, the phase of prosperity, in which the new production techniques are more and more introduced into the economy, resulting in a boom in the logic of a multiplier - accelerator model. The offer can only follow the delayed demand, prices will rise.

After Alfred Müller initially achieve (similar to the economic theory of Joseph Schumpeter ) those who introduce the new production technology an extra profit at the expense of those who are still producing with old technology. These extra profits dwindle to the extent of how generalized the new production technology.

A profitable from the perspective of the capitalist use of capital and labor can be provided from the existing production possibilities immediately. It is because of the excess demand to a general rise in prices, perhaps mitigated by the fact that existing warehouse degraded or can be switched on or from the last downturn ago broke production lying. Workers from the reserve army now find work again. Maksakowski put it, that the prices in the " language of the market " under-production signal, they signal that the demand is greater than supply. In the " language production " there is actually already offer equal demand if the future supply of the still under construction production would already considered. This is because production that are produced, already appear on one side to the demand side, demand for labor and thus for consumer goods, demand for means of production. However, these production facilities under construction are not yet on the supply side effect, but only with a time lag. After Maksakowski prices are now generally higher than their value (for example labor theory of value ). This means that the value of money is less than its value.

Müller emphasized the redistribution of surplus value from the remaining companies towards the innovators who introduce the new productive technology. In Maksakowski a redistribution of surplus value within the cycle takes place. Added value is not realized in the downturn, in addition realized on the upswing. The law of value is true on average over the cycle, but not in the individual phases.

The profit rates rise. The wages lag behind the development, the wage rate falls on the upswing. The recovery is mainly driven by expansion and investment, employment rises, less through rationalization investments that will lead to an increase in the composition of capital.

Overaccumulation and crisis

The boom is supported by imitators of imitators, which are forced to accept the new productive investments. There is extensive growth, that is, substantially comprises a given production technology increasingly gained by both means of production are used more and more workers are hired. Some time passed between the time when a new investment is started to the time, reaches the production of new production to market the. Between investment decision and selling new products is a time "time lag".

Because of the time lag between investment decisions and the time at which to begin to produce even in a market, the investment is überakkumuliert. The demand is already satisfied, but there are still investing in the making that come to the market with delay, with time-lag, with their offer. In addition, the production fall after its completion as a demand, as required for their production labor, material and production capacity after completion of the facilities are no longer needed.

The result is overproduction, the supply is greater than demand. The downturn also follows the logic of a multiplier - accelerator model. It now from the perspective of the capitalists that more labor and production are employed, as are actually needed. Goods can not be sold or only value - the real crisis, partly produced in stock. Workers are laid in the reserve army, shut down production. This reinforces the downturn. After the Russian Marxist economist Pavel Maksakovsky prices are now lower than their corresponding values ​​(see labor theory of value ). As long as the production facilities are not yet adjusted to lower demand, says the " language of the market ," that is signaling the prices that the supply is greater than demand, even if in the "language of production," the dismantling of production already underway is, however, takes time. The rates of profit a break.

" After completion of the generalization phase and fade- productivity growth results in retrospect, that the capitalist use of machine technical progress " to a factor, the rate of surplus value, only magnified by ( by, AM) the other factor, the number of workers reduced " ( MEW 23 p 429). "

Stagnation

For now, the economy comes to a standstill because of the lack of demand and profits. Some companies separate from the market, others can just keep still, others still make profits. On one hand, the offer goes back, because capital is devalued and eliminated on the supply side. On the other hand, through new investments at a higher technical level that are associated with higher composition of capital, the costs are reduced by the same amount of goods produced with less labor. Expansion investments find initially takes little more, through rationalization investments that will lead to an increase in the composition of capital, the companies are trying to save necessary labor and reduce costs and generate profits so again. When did you finally enforced innovations in production techniques in the stagnation phase, it comes back with the leading companies to massive new investments with higher composition of capital and higher labor productivity with subsequent imitative investments so that utilizes a new upswing.

Cyclic movement of individual sizes

Interest rate and wage

During the stagnation low interest rates to form out what forms a basis for a new upswing. Compared to investment -seeking capital money but no profitable investment opportunities are characterized initially from ( emergency system ). During the prosperity then increases the interest rate because the demand for loans for new investments increases. At the beginning of the crisis, the company with the help of loans try to survive at the same time, the risk premium included in the interest rate increases. The interest rate reached its cyclical peak. In the stagnation of the rate then decreases again. While there are still investment -seeking profits, but still no predictable investment opportunities.

The wage decreases in crisis because of high unemployment, what forms a basis for a new upswing. In the upswing the wage rate rises, unemployment forms back. With rising prosperity in the profits grow the scope for distribution and thus also grows the capacity of the unions to enforce higher wages. Before the crisis, wages reached their cyclical peak (Marx: rising wages as " stormy petrel of the crisis ").

Prices

During the boom, the demand is ahead of the delayed following offer, so prices rise. When prices rise, the value of money hoarding decreases, so that money hoards are resolved and gets the money in circulation and thus the demand and thus reinforced the upswing. Conversely, in a downturn, when prices fall as a result of over-accumulation. This means that the value of money is higher than its value. With falling prices, the value of money hoarding, causing further hoarding of money increases. This reinforces the lack of demand and the downturn.

Demarcation from Joseph Schumpeter

When Joseph Schumpeter starting point of the business cycle is an equilibrium state, but it encourages market participants to innovate with extra profits, then upset the balance. In the following upswing impersonators take over the successful innovations ( innovations ), until such time as the extra profits wegkonkurriert and a new equilibrium has been established without growth, which is the end point of the cycle at the same time the starting point of a new cycle. Schumpeter has attempted to explain the boom as a result of the Depression and then the depression as a result of the boom, as a " perpetuum mobile reasoning" back. For Marx, however, the starting point is in contrast to Schumpeter no equilibrium position, but " depression " because of over-accumulation there is a depressed rate of profit, which enforces innovations. The innovators receive extra profits at the expense of the remainder. Thus, the remainder are forced to imitate the innovation. This leads to a temporary upswing. To the extent that the impersonators take over the innovations with higher rates of surplus value, the extra profits dwindle and the higher capital advances for fixed capital remain. There is now a new, compared to before the upswing, more unfavorable ratio of surplus value and capital stock out that triggers imbalance as a new wave of innovation.

Demarcation to the multiplier - accelerator model

In Keynesian economic theories fit the companies on investments that increase the capital stock, the production capacity of demand ( " capacity adjustment principle"). Macroeconomic is assumed that the capital stock with time-lag adapts to the demand. Since the investments are part of the demand itself, it can constantly be deviations between the target according to the expected demand and the production capacity is already changing by the investment demand. There may be economic fluctuations under certain assumptions, if the adjustment of production capacity overshoots regularly both upwards and downwards over the target. Such operations are shown in multiplier - accelerator models.

After the over-accumulation theory, however, does not demand a capacity to be adjusted, but the profits are used to build capacity, which regularly leads to over-investment, which offer opportunities exceed demand. This leads first to a profit crisis and a slump in the expansion. But then this will force replacement investments in technically higher level (usually with higher technical and organic composition of capital ) to escape the profit crisis. These replacements lead to a recovery. Both on - and in downturn multiplier Akzelarator processes can enter play.

Demarcation to wage pressure theory

A mathematical representation of the wage pressure theory is the Goodwin model. The cyclical fluctuations arising from shortage of labor. During the boom, the reserve army is falling, wages are rising, falling profits. In the then following the crisis reserve army increases, decrease wages, increase profits. This leads back to recovery. The rate of surplus value or the wage rate varies cyclically.

Technical progress and composition of capital play no role in the wage pressure theory. In the over-accumulation theory of motor cycle fluctuations, the composition of capital with the concomitant development of labor productivity and so influenced relative surplus value.

About Cyclical developments

" As the law of the tendential fall in the profit rate can only be explained together with the business cycle, the professional Trat law and the development of his inner contradictions equally on the dissolution process of capitalism act. "

The crisis cycle leaves its mark by only the larger capitals survive, it comes to Kapitalzentralisation. Assuming that only capital with a higher composition of capital have a sufficiently high labor productivity, which allows survival in the competition, there is a falling rate of profit (see law of the tendential fall in the profit rate ). The number of unemployed varies not just cyclical, but the reserve army is a long-term supplemented by a " Lazarus layer ", people who can not find any more work not only periodically, but permanently. Maybe this can permanently unneeded supply of labor in unproductive parts of the capitalist economy, such as are employed by the state.

These long-term trends eventually make the capitalist system as a whole in question and ask for a socialist revolution.

Overview of Marxist economic theories

Business cycle from

• Sphere of production

• Sphere of circulation

• Psyche of the capitalists

• Class struggle

• Circulation process of capital