pen-l people might be interested in the following, which I posted to lbo-talk Rakesh writes [ in response to Barkley Rosser]: >As Grossmann showed, Marx attempted to develop and believed it possible to develop a formal crisis theory without reference to the "excess credit" at the basis of the Kindleberger/Minsky tradition. Since means of payment crises derived their character from the unsaleability of commodities and the non fufillment of a series of payments to which this non-saleability gave rise, what needed to be explained first is how purchase and sale became separated. Indeed Marx finds the recourse to "excess credit" or "means of payment" the kind of obvious theory which would be very attractive to economists. < >Marx writes: >"If the crisis appears, therefore,because purchase and sale become separated, it becomes a *money* crisis, as soon as money has developed as a means of payment, and this second form of crisis [non fufillment of a whole series of payments which depend on the sale of particular commodities within a particular time] follows as matter of course, when the first occurs [commodities are not saleable at their worth in a certain period of time].In investigating why the general possibility of crisis turns into a real crisis, in investigating the conditions of crisis, it is therefore quite superfluous to concern oneself with the forms of crisis which arise out of the development of money as a means of payment. This is precisely why economists like to suggest that this *obvious* form is the *cause* of crises. (In so far as the development of money as a means of payment is linked with the development of credit and *excess credit* the causes of the latter have to be examined, but this is not yet the place to do it.)" Theories of Surplus Value, Part II, p. 514-515.< As I understand Marx's crisis theory (which was never finished and thus combines a lot of brilliant insights with some overall incoherence), 1) the separation between purchase and sale -- which is a necessary result of the way in which capitalism operates in historical time -- only shows the _possibility_ of crisis, in contradiction of the silly "Say's Law" tradition that started with Adam Smith (if not before). It helps explain the realization crisis (the incomplete realization of previously produced surplus-value) that occurs as part of every crisis process, for whatever reason. 2) given this possibility of crisis, there are at least three different crisis _tendencies_ or at least tendencies that can be interpreted as encouraging crises (the excessive rise of the organic composition of capital, underconsumptionism, and the high-employment profit squeeze). Each of these can be interpreted as being manifested in a falling profit rate. Each of these has its limitations, including some limitations in terms of textual endorsement from Marx and Engels. But I interpret them as each having something to say about the contradictions of capitalist accumulation and as helping determine the _form_ of crisis in conjunction with the concrete situation faced by capital. (See my 1994 article in RESEARCH IN POLITICAL ECONOMY and other stuff I've written on crisis theory including my 1980 dissertation from UC-Berkeley.) 3) as Rakesh says, Marx did not blame the extension of credit _per se_ for crises. However, crises can be delayed and thus intensified by credit extension. The gap between purchase and sale can be smoothed over by lending the distressed capitalist money, allowing them to avoid the truth of their difficulties. If these difficulties continue or worsen, they have to accumulate more debt. When the crisis actually comes -- which becomes more likely as imbalances worsen -- the accumulated debt encourages bankruptcies and waves of bankruptcies and represents a barrier to continued accumulation. (A barrier, I might add, that is eventually purged by the recession and stagnation periods.) 4) It is also possible to have an autonomous financial crisis (a bubble followed by a pop, a panic) -- in addition to one that results from the "real sector's" crisis (falling profit rate). That type of crisis might hurt the real sector if that sector is sufficiently vulnerble. It is on these autonomous financial crises that we can learn from Keynes, Minsky, and Kindleberger. They also help us get a more sophisticated vision of those financial crises that result from real-sector crisis tendencies. (Among other things, we can avoid a type of Marxian political economy that relies only on the books that Marx and Engels wrote and those claiming to be orthodox representatives of M & E.) 5) the big difference can be seen in Minsky's phrase "financial fragility," which represents the core of his work. Minskyans basically see financial fragility as the only problem with a capitalist economy. Marxians see financial fragility as a problem, but also point to the more fundamental problem of real-sector fragility. An added clarification: the theory of financial fragility involves internally-generated (endogenous) instability; the Marxian theory of real-sector fragility involves internally-generated instability. in pen-l solidarity, Jim Devine [EMAIL PROTECTED] & http://clawww.lmu.edu/Departments/ECON/jdevine.html
