Is it pointless to try and understand a coherent pattern in economic crisis?

[RadioRaheem84]

After reading about several economic busts from the East Asian Flu Crisis, the Mexican Peso Crisis, Debt Crisis of the 80s, Black Monday in the 80s. Long Term Capital Management, Dot.Com, etc., I've noticed that there is no pattern. Each crisis is different and offers no coherent explanation as to a pattern between them all except that they're all examples of the anarchy of individual capitalists in competition.

There is no pattern even when the States come in to quell the panic. Sometimes they nationalize, sometimes they bailout, sometimes they let things fall. They'll let NYC sink in the late 70s, they'll bailout Mexico and sometimes they'll let certain banks fall while others they bailout. Sometimes they'll nationalize and then sell the banks a decade later.

You have to really examine things on a case by case basis to get anything coherent out of economic crisis from a classical economist perspective. How do they even formulate any theories out of such chaos!?

This is what leads me to believe in the validity of Marxist thought. It's all social, nothing natural about it. It's all at the whim of capitalists and state planners. The only way to understand it is through a social critique.

[Victus Mortuum]

There are several kinds of crisis that can happen in capitalism. But the one that is frequent, cyclical, and relatively predictable is the overproduction/underconsumption crises. These in modern times are coupled with credit crises (the means used to try and circumvent overproduction, but which inevitably makes the eventual crisis worse). The particular strategy used by the leading government at the time represents the strategy that is most in the interest of which particular members of the ruling class happen to be most strongly represented at the time.

[Oswy]

After reading about several economic busts from the East Asian Flu Crisis, the Mexican Peso Crisis, Debt Crisis of the 80s, Black Monday in the 80s. Long Term Capital Management, Dot.Com, etc., I've noticed that there is no pattern. Each crisis is different and offers no coherent explanation as to a pattern between them all except that they're all examples of the anarchy of individual capitalists in competition.

There is no pattern even when the States come in to quell the panic. Sometimes they nationalize, sometimes they bailout, sometimes they let things fall. They'll let NYC sink in the late 70s, they'll bailout Mexico and sometimes they'll let certain banks fall while others they bailout. Sometimes they'll nationalize and then sell the banks a decade later.

You have to really examine things on a case by case basis to get anything coherent out of economic crisis from a classical economist perspective. How do they even formulate any theories out of such chaos!?

This is what leads me to believe in the validity of Marxist thought. It's all social, nothing natural about it. It's all at the whim of capitalists and state planners. The only way to understand it is through a social critique.

I've not long finished a book by David Harvey, The Enigma of Capital (2010) and I think he makes a good attempt at putting all the crises of capitalism (especially since the 1970s) into a common framework. His emphasis is on what he calls the 'surplus capital absorption problem'. The problem appears to be structural to capitalism in that accumulation consistently generates levels of capital that cannot find sufficiently profitable productive activity in which to reinvest. Given that capitalists can only spend so much on big houses, yachts and antiques, the result is that too much money chases too little profitable enterprise. The dot.com bubble and the more recent 'financialisation' phenomena are thus both examples of money being thrown at ever more speculative activities which turn out to be worthless resulting in widespread devaluations. I don't think Harvey uses the term but it's as if capital accumulation generates a 'bottleneck' effect that can't be fixed and which will thus bring crisis after crisis. He notes that as time and space are shrunk through technological advance and globalisation, these crises will likely come at shorter intervals and have deeper knock-on effects.

What you might be especially interested in is the way Harvey offers up a schema of seven 'spheres of activity' through which capitalism can be understood as constituting itself and the variation among which explains geographic and historical variation, e.g. why capitalism in the UK is different from capitalism in Russia or China:

* Technologies and organisational forms.
* Social relations.
* Institutional and administrative arrangements.
* Production and labour processes.
* Relations to nature.
* Reproduction: of daily life and the species.
* 'mental concepts of the world'.

Harvey qualifies the schema by stating that none of these spheres necessarily dominate nor are any ever entirely independent of influence or effect in relation to the others. instead the spheres interact in a complex dynamic.

I don't know whether Harvey is considered a very orthodox Marxist (I don't know enough about Marxism) but he quotes Marx quite a bit and certainly sees capitalism as inherently crisis creating; economically, socially, politically and environmentally.

I very much recommend the book as it is jargon free and written in a conversational style.