This article was published by Revue L’Anticapitaliste 142 in January 2023.
The tour de force of Marx, a contemporary of the first great banking expansion of the Victorian years and the Second Empire, was to have gone beyond appearances, beyond the confused surface of things, to seek at the heart of the system the reasons for the madness, the logic of the illogical.
When, in the early 1850s, he set about the great task of his critique of political economy, he lacked the historical perspective to fully perceive the rhythms of the economy and unravel its mechanisms. Ricardo himself, writing about the crises of 1815, ‘basically knew nothing about crises’. His successors no longer had the same excuses: ‘Subsequent phenomena, in particular the almost regular periodicity of world market crises, no longer allow them to deny the facts or to interpret them as accidental.’
‘Money cries out its desire’
‘The crisis is keeping me desperately on my toes: every day, prices are falling. Manchester is sinking deeper and deeper into crisis,’ Engels wrote to Marx on 17 December 1857. His excitement at the spread of the American crisis of 1857 was contagious. Marx’s notes in his Manuscripts of 1857-1858 (or Grundrisse) bear witness to this. Crisis appears there as a metaphor for madness, but a madness that ‘dominates the life of nations’. The schizoid tendencies of the capitalist system are fully revealed. The apparent unity of the commodity is ‘split’. Use-value and exchange-value become ‘dissociated’ and ‘behave autonomously in relation to each other’. The economy as a whole becomes delirious, ‘alienated’, as an autonomous sphere that has become uncontrollable:
During crises – after the moment of panic – during the standstill of industry, money is immobilised in the hands of bankers, billbrokers etc.; and, just as the stag cries out for fresh water, money cries out for a field of employment where it may be realised as capital.
The overproduction and devalorisation of capital then appear as ‘the sudden reminder of all those necessary moments of production based on capital’. In short, a return of the repressed: crisis reminds the financial sphere (or the bubble) that it does not float in thin air, detached from what today is bizarrely called the ‘real economy’.
The condition of possibility for crises is inscribed in the duplicity of the commodity. Like any good bourgeois, it leads a double life. On the one hand, it is materialised abstract labour-time; on the other, it is the result of determinate labour. In order to be compared with other quantities of labour, it must ‘first be transposed into labour time, and thus into something that differs from it qualitatively’. This ‘double existence’ carries with it the permanent risk of a split; it ‘must necessarily progress to the point of difference, difference to the point of opposition and contradiction between the particular nature of the commodity as a product [use-value] and its universal nature as exchange-value’.
For Marx, the crisis of 1857 highlighted the divorce between the use-value of the product and the exchange-value expressed in money. It is possible that the commodity can no longer be ‘equated with its universal form, money’. Production and circulation become discordant. Buying and selling acquire forms of existence ‘spatially and temporally distinct from each other, indifferent to each other’. ‘Their immediate identity ceases.’ The crisis reveals and brings to a head this identity malaise. The quest for a lost identity becomes a headlong rush, a series of painful separations and fleeting reunions. As in the song from Jules et Jim, buying and selling repeatedly lose sight of one other and then meet up again:
They may or may not correspond; they may or may not coincide; their relationship may be marked by disproportions. Of course, they will constantly seek to equalise, but now it is the continual movement of equalisation that has replaced the previous immediate equality, an equalisation which presupposes that a non-equality is continually posited.
The crisis of 1857 highlighted the split between the commodity’s use-value and its exchange-value expressed in money, which threatens to interrupt its ‘convertibility’. The perilous leap of capital from commodity form to money form can then become lethal. The ‘germ of crises’ is therefore present in money as a ‘value that has become autonomous’, a ‘form of existence that has become autonomous from exchange-value’.
A split never comes alone. The split that divides exchange into the independent acts of buying and selling is reflected in the division between industrial, commercial and banking capital: ‘exchange for exchange’s sake is separated from exchange for commodities’. Marx then glimpses the complex order of capital’s arrhythmias:
So far in the realisation process, we have only the indifference of the individual moments towards one another; that they determine each other internally and search for each other externally; but that they may or may not find each other, balance each other, correspond to each other. The inner necessity of moments which belong together, and their indifferent, independent existence towards one another, are already a foundation of contradictions.
Still, we are by no means finished. The contradiction between production and realisation – of which capital, by its concept, is the unity – has to be grasped more intrinsically than merely as the indifferent, seemingly independent appearance of the individual moments of the process, or rather of the totality of processes.
The division spreads. The disrupted order of commodity production, where the value of things turns its back on their useful substance, creaks and jams on all sides. Everything now is weeping and wailing, the groans and tremblings of disarticulated bodies:
Thus the crisis manifests the unity of the two phases that have become independent of each another. There would be no crisis without this inner unity of factors that are apparently indifferent to each other.
Crisis is nothing but the forcible assertion of the unity of phases of the production process which have become independent of each other.
Crisis is the forcible establishment of unity between elements that have become independent and the enforced separation from one another of elements which are essentially one.
It is nothing other than the violent implementation of the unity of the phases of the production process that have become autonomous from each other. It is the establishment by force of unity between moments promoted to autonomy and the autonomisation by force of moments which are essentially one.
The order of capital – though not social harmony – must then be re-established by violence and force. This is what economists stubbornly deny, when they stick to an ‘essential unity’ and ignore what makes the elements of the overall process alien to each other, and hostile to the point of explosion.
In the passage from the Theories of Surplus-Value reproduced in this volume, Marx takes up and develops the analysis of crises and their recurrence initiated in the Grundrisse. He contrasts them with the theories of equilibrium inspired by the ‘insipid Jean-Baptiste Say’, according to which overproduction is impossible because demand and supply are immediately identical. The principle according to which ‘products are exchanged for products’ would, in his view, guarantee ‘a metaphysical equilibrium between sellers and buyers’. Ricardo borrowed this fable from Say, according to whom ‘no one produces unless it is with the intention of selling or consuming, and he never sells unless it is to buy another commodity that might be useful to him’. By producing, everyone would ‘necessarily become either a consumer of his own goods, or a buyer and consumer of someone else’s goods’. The loop would then be perfectly closed; the equilibrium between sale and purchase, supply and demand, assured.
Any malfunctioning could then only come from a lack of information linked to the growing complexity of the market. Ricardo envisaged this, but immediately reassured himself: ‘It cannot be admitted that the producer can long be ill-informed about the commodities that he can produce with the greatest profit’ and ‘it is therefore improbable that he can sustainably produce a commodity for which there is no demand’.
Closer to our own day, this was Friedrich Hayek’s liberal argument in favour of the free and undistorted competition so dear to the architects of the European Union. The privatisation of financial information and the invention of increasingly sophisticated financial products that blur the lines of communication have done away with this myth. The market has proved incapable of meeting the ‘informational challenge’ associated with microfinance. Noting the inability of the commission responsible for overseeing American markets (the SEC) to unravel the fabulous accounts of a Bernie Madoff, its former chairman, William Donaldson, admitted that ‘control adapted to complex market systems’ has yet to be ‘invented’. This is a clear admission of the failure of pretentious ‘financial mathematics’, which, as Denis Guedj aptly writes, is nothing more than mercenary mathematics applied to finance. Their Brownian models, designed to formalise ‘average agitation effects’, are powerless to account for ‘the extreme risk situations that can arise on the markets, so they fail to see crises and bankruptcies’, laments Olivier Le Courtois, professor of finance (!) at the EM Lyon business school. In the extreme situations that the capitalist system recurrently generates, the ‘wise chance’ on which calculations of risk operate actually transforms itself into ‘wild chance’.
Ricardo, for his part, was still able to believe in the impartiality and informational reliability of the market, if not in real time, at least in the long term. But in the meantime, the split between buying and selling remains, and the ‘disjunction of the immediate production process and the circulation process develops the possibility of crisis’. This possibility arises from the fact that the forms which capital passes through in the cycle of its metamorphoses (from money – M – into means of production – P; from means of production into commodities – C ; from commodities to money) ‘can be and are separated’. They ‘do not coincide in time and space’. Even less so with globalisation: the individual capitalist perceives the wage paid to his employees as a simple production cost when the consumer buys imported products and his own products are sold on a distant market. The supposedly virtuous circle between production and consumption, sale and purchase, is broken.
The separation of selling and buying distinguishes the capitalist economy from a barter economy where ‘no one can be a seller without being a buyer’ (and vice versa). Here the bulk of production is directly oriented towards satisfying immediate needs. ‘In market production’, on the other hand, ‘immediate production disappears’. Production is no longer for needs, but for profit, which takes no interest in social needs, only in solvent demand. Because ‘if there is no sale, there is a crisis’. In commodity production, in order to realise the surplus-value embedded in it, ‘the commodity must necessarily be transformed into money, whereas money does not necessarily have to be immediately transformed into commodities’. This is why buying and selling can be dissociated. In its first form, ‘the crisis is the metamorphosis of the commodity itself, the disjunction of buying and selling’. In its second form, it is the function of money as a means of payment that has become autonomous, ‘where money appears in two separate moments in time, in two different functions’, as a simple general equivalent between commodities and as accumulated capital.
This autonomisation of money finds its extension in the separation between business profit and interest-bearing capital. Karl Marx writes here:
[This] completes the autonomisation of the form of surplus-value, the ossification of its form as against its substance, its essence. One portion of profit, in contrast to the other, separates itself completely from the capital-relation as such, and presents itself as deriving not from the function of exploiting wage-labour but rather from the wage-labour of the capitalist himself. As against this, interest then seems independent both of the wage-labour of the worker and of the capitalist’s own labour; it seems to derive from capital as its own independent source. If capital originally appeared on the surface of circulation as the capital fetish, value-creating value, so it now presents itself once again in the figure of interest-bearing capital as its most estranged and peculiar form.
This prodigy of interest-bearing capital, of money which appears to make money without going through the process of production and circulation, without going through the full cycle of its metamorphoses, is the supreme stage of fetishism and of the mystification maintained by vulgar economists.
To realise surplus-value, it is therefore necessary to sell. But the insatiable quest for profit tends to restrict outlets by squeezing wages (‘purchasing power’!). Thanks to the wonders of credit, the autonomy of money allows a new cycle of production to begin and a new wave of goods to flow in, even though the previous batch has not yet been sold. Market saturation (overproduction) and the over-accumulation of capital are therefore who sides of the same coin. Ricardo’s successors, writes Marx, were willing to admit overproduction in one of its forms, ‘the plethora or overabundance of capital’, but they denied it in its other form, that of the overabundance of commodities on the market.
This overproduction has, of course, nothing to do with a saturation of social needs, which remain largely unsatisfied: ‘It has to do only with solvent needs.’ There is no absolute or inherent overproduction, simply an overproduction relative to the logic of accumulation of capital.
Capital bears crisis within it
In the Manuscripts of 1857-1858, crisis intervened in three ways: empirically, through the American recession; then through the separation of buying and selling, which creates the formal conditions for its possibility; and finally, metaphorically, as the madness and suffering of the split. But the theory still suffers from incompleteness in the overall critique of political economy.
In Volume One on ‘The Process of Production of Capital’, Marx resumed his critique of the classical law of outlets and equilibrium: ‘Nothing is more absurd than the dogma according to which circulation necessarily implies the equilibrium of purchases and sales, since every sale is a purchase and vice versa.’ It is claimed that this proves that ‘the seller brings to the market his own buyer’. This immediate identity, which existed in barter trade, is broken by the generalisation of market production and by the autonomisation of money as a general equivalent. It is no longer a direct exchange of one use-value for another, but of a commodity for money. The transaction becomes ‘a staging point’ or ‘an interlude in the life of the commodity that may last more or less long’. The autonomy of money sanctions the breaking of the perfect symmetry of exchange. The life of the commodity, the sequence of its metamorphoses, now depends on the desires and whims of its potential buyer, but also on their means and solvency. At the stall or in the shop window, it holds its breath in the face of money, that desirable suitor, who will either buy it or scorn it, according to its whim. If this interlude and wait drag on, the breathless commodity risks asphyxiation. Disjunction and asymmetry between the act of buying and the act of selling are thus a factor, not of equilibrium, but of dynamic disequilibrium.
The concept of crisis then appears for the first time in Capital, not to refer to empirical crises, but as the logical consequence of the ‘intimate’ and contradictory link between the disjointed and potentially contradictory acts of buying and selling. It appears again later, in the chapter on ‘The General Law of Capitalist Accumulation’. Here it is linked to the temporality of capital itself. Accumulation is presented as a ‘movement of quantitative extension’ which aims, thanks to technological innovations stimulated by competition, at an increase in the productivity of labour and an economising on living labour (and therefore of employment). Production can therefore continue to increase while outlets shrink. Despite appearances, the determining factor lies not in technology itself, but in the ebb and flow of the labour force employed.
Marx thus discusses not only the conditions that make crises possible, but also their recurrent and cyclical nature:
The ceaselessly renewed conversion of a part of the working class into as many semi-occupied, or quite idle, hands thus imbues the movement of modern industry with its typical form.
Just as the heavenly bodies always repeat a certain movement, once they have been flung into it, so also does social production, once it has been flung into this movement of alternate expansion and contraction. Effects become causes in their turn, and the various vicissitudes of the whole process, which always reproduces its own conditions take on the form of periodicity.
It was only in the 19th century, when the market became global and industrialised nations became numerous, ‘that we see repeated cycles whose successive waves last for years, and which always culminate in a general crisis, the end of one cycle and the starting point of another’. The concept of crisis is thus associated with that of the economic cycles that characterise the capitalist economy.
In Volume Two on ‘The Process of Circulation of Capital’, Marx marks the stations of the commodity’s ordeal in the process of circulation. He introduces new determinations, notably those of fixed and circulating capital, and their unequal rate of renewal. Marx also draws the consequences of the discontinuity between production and circulation. Subjected to the constraints of accumulation guided by the insatiable quest for profit, mass production can continue without the commodities produced in the previous cycle having actually entered and been disposed of in individual or productive consumption. There is therefore no guarantee that the cycle of capital’s metamorphoses will come full circle. If it fails, ‘one wave of commodities follows another’, while the previous waves have only apparently been absorbed by consumption. There is then ‘a standstill’: ‘buying and selling freeze each other’. Thus: ‘The whole process of production is in the most flourishing state while a large proportion of the goods have only apparently entered consumption and remain unsold in the hands of dealers, and are therefore in fact still on the market.’
This precipitates the ‘sales slump’, the slashing of prices to clear stocks, selling at a loss if necessary, in order to rebuild liquidity. Finally, in Volume Three on ‘the process of production as a whole’, Marx shows how the crystallisation of capital into various types of capital – industrial, commercial, banking – temporarily masks the growing disproportion between expanded reproduction and lagging final demand. The explosion of the crisis can thus be postponed, thanks in particular to the intervention of financial capitalists, who transform their realised profit into loan capital: ‘It follows that the accumulation of this capital, different from real accumulation, although it is the offspring of it, appears, if we consider only the financial capitalists, bankers, etc., as the accumulation specific to these capitalists.’ The accumulation of this ‘fictitious capital’ had reached such proportions on the eve of the recent crisis that the deflation of the financial bubble was equally vertiginous. In just over a year, between 29 December 2007 and 31 March 2009, HSBC’s market capitalisation fell from $199.9bn to $68bn, Bank of America’s from $194.6bn to $31.1bn, Citygroup’s from $151.3bn to $13bn, Natixis’ from $29.8bn to $4.9bn, and so on.
So, crisis cannot be averted indefinitely. The credit boom cannot grant it a reprieve, as happened in the 1990s when financial deregulation gave the illusion of a ‘return to growth’. But capital cannot prosper indefinitely on credit. A slump in sales, or bankruptcy due to accumulated insolvency, eventually signals a general bail-out. When it is no longer possible to ignore the fact that the first wave of goods has only apparently been absorbed by consumption (or thanks to risky credit), there is a stampede:
Commodity-capital fights for its place on the market. To sell, the last to arrive sell below price, while the first stocks are not liquidated by the payment deadline. Their holders are forced to declare themselves insolvent or to sell at any price in order to pay. This sale in no way corresponds to the state of demand, it only corresponds to the demand for payment, to the absolute necessity of converting the commodity into money. The crisis erupts.
This is precisely what has happened since the start of the 2008 crisis: we see dealers offering two cars for the price of one, property developers offering a car as a bonus with the purchase of a house, and monster sales starting at 70% or 90% off the initial sale price.
The first determination of crisis therefore lies in the disjunction between the sphere of production and that of circulation. The second is the disjunction between the rate of rotation of fixed capital and that of circulating capital. Volume Three introduces a new one, which presupposes and integrates the previous two: the ‘law of the tendency of the rate of profit to fall’. Chapter 15 on ‘Development of The Law’s Internal Contradictions’ summarises ‘three cardinal facts about capitalist production’: the concentration of the means of production in a few hands, the organisation of social labour and its division as cooperative labour, and the constitution of the world market:
The tremendous productive power, in proportion to the population, which is developed within the capitalist mode of production, and – even if not to the same degree – the growth in capital values (not only in their material substratum), these growing far more quickly than the population, contradicts the basis on behalf of which this immense productive power operates, since this basis becomes ever narrower in relation to the growth of wealth; and it also contradicts the conditions of valorisation of this swelling capital. Hence crises.
Translated by David Fernbach
 This text is the first part of Daniel Bensaïd’s introduction to Karl Marx, Les Crises du capitalisme (Paris: Demopolis, 2009).
 Karl Marx, Grundrisse (London: Penguin, 1973) p. 621.
 Grundrisse, p. 198.
 Grundrisse, pp. 414-5.
 Theories of Surplus-Value, Part Two (London: Lawrence and Wishart, 1969), pp. 500-11, 509, 513.
 Denis Guedj, ‘Ces mathématiques vendues aux financiers’, Libération, 10 December 2008.
 Capital Volume Three (London: Penguin, 1981), p. 968.
 Theories of Surplus-Value, Part Two, p. 497.
 Capital Volume One (London: Penguin, 1976), p. 786.
 The crisis of 1857 gave rise to an awareness of the periodicity of crises. In 1862, Clément Juglar published Les Crises commerciales et leur retour périodique en France, en Angleterre, aux États-Unis. In his correspondence with Engels, Marx sought to link the periodicity of crises to the rate at which fixed capital was renewed. The theory of long cycles, attributed to Kondratieff, came much later. On this subject, see Ernest Mandel, Long Waves of Capitalist Development (London: Verso, 1995), and Dockès and Rosier, Rythmes économiques, crises et changement social, une perspective historique (Paris: Maspero, 1983).
 Capital Volume Three, p. 635.
 Capital Volume Two, p. 156.
 Capital Volume Three, p. 375.