The Dialetics of the Economics Crisis in the Sections II and III of Book III Of The Capital By Marx

Abstract

The crisis of capital is approached in this article following the dialectical method used by Marx. The falling trend of the profit rate would be an abstract and superficial way of understanding the crisis, since this trend does not point out the very moment of the crisis itself, which is determined by a falling of the profit mass, which in turn results from the excess of circulating capital. Excessive capital activity causes a rise in labor demand, reducing unemployment and thereby increasing the bargaining power of workers to earn better wages. When the rising of wages is not offset by the volume of capital accumulation, a decrease of the profit mass occurs, and makes unjustifiable, from the point of view of capital, to make new productive investments. This is the very moment of the crisis. Capitalists stop investing. This conception of crisis shows that capital is unable to bear the reduction of unemployment and the increase of wages. When the working class begins to improve its living conditions, the capital goes into crisis. In order to overcome this crisis, then capital compels the bankruptcy of companies, dismisses workers, reduces wages, and thereby regains the upward curve of profit mass, its sole objective. The solution to the crisis, however, does not occur without conflict. Mass layoffs and wage reductions do stress the contradictions between classes, since they represent a return to the principle that underlies capitalism from its origin: the violent separation between the workers and the means of production which are essential for the production of their survival. For this reason, the original violence contained in the mass layoffs makes capital crises privileged moments for overcoming this profit-based mode of production.