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This chapter challenges the denial of “underconsumption” – the role of consumption demand in capitalist reproduction and its paucity in crises – in contemporary Marxism. At stake are better understandings not only of crisis theory but also, inter alia, of imperialism, “reformism,” and Marx's intellectual legacy. The chapter shows how the centrality of consumption demand is underlined in the three volumes of Capital and the Grundrisse, and goes on to discuss the origins, weaknesses, and persistence of this denial. The chapter also shows that Marx did not regard underconsumption as a moralistic argument about unfulfilled need. The denial originates not in Marx but in productionism, the idea that capitalism is a system of “production for production's sake.”

Originating in the overkill of Tugan Baranowski's refutation of the Russian populists’ view that capitalist development was impossible in Russia due to lack of a home market, productionism is based on his attempt to force Marxism into the marginalist and the general equilibrium framework. Despite its antipathy with Marxism, most contemporary Marxist economics are based on it. Inevitably its adherence to Say's Law – the denial of the possibility of gluts in the market – infects the tendency to assume that capitalism's contradictions do not lie in circulation. Productionism's denial of the importance of consumption demand also rests on nonsequiturs, nondialectical thinking, and an underestimation of the contradictions in capitalism Marx identified, other than the tendency of the rate of profit to fall. The chapter ends by showing the centrality of demand in the recent historical evolution of capitalism as reconstructed by Robert Brenner, followed by a discussion of whether underconsumption is “reformist.”

This article traces the history of a continuous tradition of Marxian stage theory from the beginning of the twentieth century until the present day. The resolution of the first crisis of Marxism was found in the work of Hilferding on finance capital, Bukharin on the world economy and Lenin on imperialism as a new stage of capitalism. Hilferding's, Bukarin's and Lenin's analysis was carried into the post–World War II era through the work of Sweezy and Mandel. A second wave of Marxian stage theorizing emerged with the end of the post–World War II expansion. Mandel's long wave theory (LWT), the Social Structure of Accumulation Framework (SSAF), and the Regulation Approach (RA) analyzed the stagflationary crises as the end of a long wave of growth. This long wave was underpinned by the emergence of a postwar stage of capitalism, which was analogous to the reorganization brought about by monopoly capital at the turn of the century. These new schools were reluctant to predict the non-resolution of the current crisis, thus opening up the possibility of further stages of capitalism in the future. This elevated Lenin's theory of the highest stage to a general theory of capitalist stages. The last decade has seen a substantial convergence in the three perspectives. In general, this convergence has reaffirmed the importance of Hilferding's, Bukarin's and Lenin's (HBL's) initial contributions to the stage theoretic tradition. The article concludes with some thoughts on the necessity of stage theory for understanding of the current period of globalization.

Following Braudel’s conceptualization of capitalism and Arrighi’s periodization of systemic cycles of accumulation, the authors focus on the patterns of recurrence of financial expansions enabling capitalism to revitalize itself through crisis; in this, crisis is considered in both aspects ‐ crisis‐as‐restructuring and crisis‐as‐rupture. The ways in whichfinance aided by the blocks of governmental and business agencies in the present stage affects investment and business cycles result in a progressive increase of inequality between rich and poor countries, as well as inequality within the most developed countries. The authors tackle the crisis phenomenon through a genealogical analysis of the formation, consolidation and disintegration of the successive regimes of accumulation on a world scale through which the capital economy expands. They furthermore examine the crisis of capitalist accumulation through the relation of money and the state, which leads them to the field of debates on the changed relationship between the global economy and the national state. However, the crisis is also marked by a milestone which, despite dangers and pitfalls, opens up endless possibilities. They end the paper with a critique of the politics of money and advocate a socially responsible finance management, which will pave the way for a structure of society in which humanity will exist as an end in itself, rather than as a resource for the accumulation of money.

This chapter aims at introducing the key themes in two entries written by Tadeusz Kowalik for the Encyclopaedia Einaudi. These two long essays represent further developments of Kowalik's interpretation of the nature of capital and the cause and consequences of cyclical developments in capitalism. While the chapter is divided into two sections corresponding to the two entries, at the same time it tries to highlight the structural method of the author for which the categories of capital and crisis are historically, economically and politically entangled.

This introduction to the essays that follow argues that the chief problem with the dominant understanding of world affairs in the disciplines of International Relations and International Political Economy, including their Marxist versions, is an a historical, non-contradictory and economically cosmopolitan conception of capitalism. In their place, geopolitical economy is a new approach which returns to the conception of capitalism embodied in the culmination of classical political economy, Marxism. It was historical in two senses, distinguishing capitalism as a historically specific mode of social production involving by value production and understanding that its contradictions drive forward capitalism’s own history in a central way. This approach must further develop and specify uneven and combined development as the dominant pattern in the unfolding of capitalist international relations, one that is constitutive of its component states themselves. Secondly, it must understand the logic of the actions undertaken by capitalist states as emerging from the struggles involved in the formation of capitalist states and from the contradictions that are set in train once capitalism is established. Finally, it must see in the ways that class and national struggles and resulting state actions have modified the functioning of capitalism the possibilities of replacing the disorder, contestation and war that are the spontaneous result of capitalism for international relations the basis for a cooperative order in relations between states, an order which can also be the means for realising the permanent revolution and solidifying its gains on the international or world plane.

Henryk Grossman was the first person to systematically explore Marx’s explanation of capitalist crises in terms of the tendency for the rate of profit to fall and to place it in the context of the distinction between use and exchange value. His “The Law of Accumulation and Breakdown of the Capitalist System” remains an important reference point in the Marxist literature on economic crises. That literature has been plagued by distortions of Grossman’s position which derive from early hostile reviews of his book. These accused Grossman of a mechanical approach to the end of capitalism and of neglecting factors which boost profit rates. Grossman, in fact, contributed a complementary economic element to the recovery of Marxism undertaken by Lenin (particularly in the area of Marxist politics) and Lukács (in philosophy). In both published and unpublished work, Grossman also dealt with and even anticipated criticisms of his methodology and treatment of countertendencies to the tendency for the rate of profit to fall. Far from being mechanical, his economic analysis can still assist the struggle for working class self-emancipation.

Rosa Luxemburg is not an under-consumptionist stressing the tendency to stagnation, it is rather an under-investment perspective: the effective demand crisis results from the disequilibria determined by a vibrant capitalist accumulation, and stems from production rather than circulation. To show this, the chapter deals with three dimensions of Rosa Luxemburg's economic thought. First, how Luxemburg's approach in her 1913 book is related with some of her prior writings, especially Social Reform or Revolution? and the Introduction to Political Economy. Second, the re-reading that Luxemburg herself provided of her own argument in terms of a macro-monetary circuit model like the one we read in her Anti-Critique. Third and last, in which sense Marx's monetary labour theory of value was for her the essential starting point, which cannot be just set aside. This last point will be preceded by a détour, the critical consideration of some key papers by Kalecki on capitalism and reform, including his late paper with Kowalik on the ‘crucial reform’. The chapter concludes with some hints pointing towards an interpretation of capitalism and its recurring crises where exploitation and effective demand are both essential in accounting for the ascent and collapses of different forms of capitalism itself.

Following Braudel's conceptualization of capitalism and Arrighi's periodization of systemic cycles of accumulation, the authors focus on the patterns of recurrence of financial expansions enabling capitalism to revitalize itself through crisis; in this, crisis is considered in both aspects — crisis‐as‐restructuring and crisis‐as‐rupture. The ways in which finance aided by the blocks of governmental and business agencies in the present stage affects investment and business cycles result in a progressive increase of inequality between rich and poor countries, as well as inequality within the most developed countries. The authors tackle the crisis phenomenon through a genealogical analysis of the formation, consolidation and disintegration of the successive regimes of accumulation on a world scale through which the capital economy expands. They furthermore examine the crisis of capitalist accumulation through the relation of money and the state, which leads them to the field of debates on the changed relationship between the global economy and the national state. However, the crisis is also marked by a milestone which, despite dangers and pitfalls, opens up endless possibilities. They end the paper with a critique of the politics of money and advocate a socially responsible finance management, which will pave the way for a structure of society in which humanity will exist as an end in itself, rather than as a resource for the accumulation of money.

One of the main functions of the absorptive class is to minimize the impact of economic crisis within a given national economy and where possible to shift the impact of economic crisis to less-developed or developing economies or indeed to another advanced economy. Hence the absorptive class displays the same feature of capitalism: it is simultaneously both national and international. This process of absorption is not done consciously, of course. It is the way the system has come to operate. Had the system not done so, capitalist economies would have lost a great degree of its capacity for resilience in the face of recurrent crises. Since the industrial revolution gathered momentum in England in the eighteenth century and spread rapidly to a limited number of countries in the world, economic crisis has been commonplace, threatening the very fabric of the economies created by the system. Economic crisis is taken to mean a severe disjuncture between production and consumption, marked by a reduction in economic growth. Depending on one's theoretical position economic crisis is caused by over-production or under-consumption or by some combination of the two. Adam Smith who published An Enquiry into the Wealth of Nations just about at the onset of the industrial revolution in England believed that any disjuncture between glut and scarcity was an effect of wrong-minded intervention by government. Left alone market forces would always tend toward the elimination of gluts. Thus, want of employment (the word unemployment was to be invented a 100 years later), so dangerous to the social fabric, would be avoided and capital accumulation would take place steadily in an unimpeded way. However, by the early nineteenth century, the British economy seemed to fluctuate ever more wildly than it had done in less industrial times, and as the urban population grew, such instability was especially feared by the ruling classes in Britain and, later, in Germany, the United States, France and Italy. Clearly, policy intervention by governments took place to manage such crises and the governments sought increasingly to achieve financial and price stability, and in Britain for instance this culminated in the Bank Charter Act of 1844, having 10 years previously introduced legislation aimed at achieving labour mobility with the infamous Poor Law Amendment Act.