The inevitability of crisis
These arguments used by Marx in Volume One of Capital "imply the possibility, and no more than the possibility, of crises" .6 But in Volume Three he went further, to argue for the inevitability of crises. He did so by moving beyond the most abstract considerations about the buying and selling of commodities with money to look at the concrete process involved in capitalist production and exchange. As is often remarked, Marx did not provide a single, integrated account of the crisis. Rather he refers to diferent aspects of the crisis in writings that are scattered in different parts of the text.7 But it is not that difficult to construct a coherent account from these.
The starting point is that competitive accumulation means that capitalists are simultaneously trying to increase the output of their goods as much as possible at the same time as trying to maximise profits by holding down wages. But wages constitute a major part of the money available to buy goods. Production tends to move in one direction, the consumption of the masses in the other:
The conditions of direct exploitation, and those of realising it, are not identical. They diverge not only in place and time, but also logically. The first are only limited by the productive power of society, the latter by the proportional relation of the various branches of production and the consumer power of society. But this last-named is based on antagonistic conditions of distribution, which reduce the consumption of the bulk of society to a minimum varying within more or less narrow limits. It is furthermore restricted by the tendency to accumulate, the drive to expand capital and produce surplus value on an extended scale . . . The more productiveness develops, the more it finds itself at variance with the narrow basis on which the conditions of consumption rest . . . 8
Some people have interpreted this passage as meaning that the mere fact that workers are exploited limits the scale of the market and creates crises.9 Such "underconsumptionist" versions of Marxism share some features in common with the form of the mainstream economics that developed in the 1930s under the influence of Keynes. The conclusion seems to be that capitalism can escape crisis if the state intervenes to raise consumption the moment a recession seems likely to develop.
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Understanding the System: Marx and Beyond