Andrew Kliman and his few associates have for a long time been the Cassandras of Marxist political economy. Against the general trend of today, Kliman has systematically argued for the validity of Marx's original analysis of capitalism, including the reproduction schema, the tendency of the rate of profit to fall, and the locus of capitalist crisis in production rather than distribution. All of these are fundamentals of Marxist economic theory, but have even by many Marxists been abandoned in favor of a more popular medley of Marxist and Keynesian elements, such as can be found in the works of many from Hyman Minsky to Paul Sweezy and even David Harvey. In "The Failure of Capitalist Production", however, Kliman makes good on the more theoretical promise of his earlier works on economic theory, and applies his insights to the current capitalist crisis.
As this book systematically sets out, using all available data from the Bureau of Labor Statistics, the Bureau of Economic Analysis, and other such 'neutral' sources of information, the current crisis is emphatically one that can be understood in Marxist terms. More importantly however, as Kliman notes, is not whether or not we apply Marxist terminology to the event, but to comprehend the immediate and more underlying causes in whatever terminology one wants. In order to do so, it must be possible to explain the same phenomena without particular reference to a prior acceptance of Marxist theory as such, and in this book Kliman demonstrates that both of these levels of analysis can be done.
The argument is particularly detailed and systematically supported with graphs and data, and I could not retrace it here without burdening the reader with a text as long as the book itself. But the important conclusions are clear and unmistakable, and to my view entirely right. They are that first, the TSSI interpretation of Marx's value theory voids the Okishio theorem objection to the tendency of the rate of profit to fall; which sounds more technical than it needs to, since the rate of profit falling as a result of overall price reductions due to technological change is a matter of common sense. That said, Kliman then systematically and unrelentingly demonstrates that, adjusted for inflationary factors and using 'property income' as a proxy for Marxian value terms, the rate of profit has gone down since the early 1970s in the United States, and has never since recovered. This was briefly masked by the period of high inflation that marked the end of Keynesianism, as well as the frequent blips of higher apparent profit rates that precede serious crises (like the dot-com boom and the current bubble). But as a trend, the result is unmistakable.
Equally significantly, Kliman refutes the explanations of the current capitalist crisis as being the result of the regime of neoliberalism as such, if understood in terms of wage repressions, anti-union measures and so forth, as a way to restore profits but bring down wages to a level that causes a crisis of underconsumptionism. Kliman not only argues empirically that neither the wage share of income nor total compensation for non-managerial workers has declined over the neoliberal period (although he admits they have been stagnant), but more importantly makes the essential logical point that underconsumptionist arguments fundamentally mistake the nature of capitalist production, and therefore capitalist crisis. After all, underconsumptionism rests on the premise that for capitalist profitability to be sufficient, there must be enough effective demand on the part of the working class. But this assumes in the first place that, as Kliman puts it, 'what is good for the working class is good for capitalism'; whereas of course it should be familiar to all that the real relationship between wages and profits is the exact opposite! If neoliberalism successfully reduces wages, this ought to restore profitability, and thereby in fact obviate crisis. The underconsumptionist argument has then been that the crisis is purely a crisis of financialization. But in reality, the financialization and the debt bubble is in the first place an effect, not a cause, of the underlying crisis of profitability. As Marx pointed out in his reproduction schema, there is no inherent need for capitalism to have an increase in worker demand in order to obtain economic growth indefinitely; the improvements in productivity in the sector producing for other capitals can be sufficient to obtain such growth, entirely independently of working class demand. Capitalism does not work for needs, but for accumulation, and therefore underconsumptionism is wrong.
As Kliman convincingly argues, it is in fact the failure of capitalism to restore the rate of profit that underlies the current crisis, and all previous crises - with ever increasing intensity - since the 1970s. As Marx argued, for capitalism to restore the rate of profit, it must destroy a very large amount of existing value, so as to restructure itself sufficiently that the rate of profit on remaining capital investment will be high enough to get accumulation going again. In businessmen's terms, this means that capitalism must go entirely and completely through the troughs of depression, with the attendant deflation, bankruptcies, and unemployment, for the remaining capitalists to be able to buy up the deeply devalued assets at fire-sale prices and thereby obtain a rate of profit on such investment that will make investment demand sufficiently high. This is what happened during and after the Great Depression, when the crisis was almost entirely allowed to work itself out before organized working class demands forced the Roosevelt government to alleviate the severe burdens on the general population this produced. However, such crises produce such immediate challenges to capitalism as such - exactly as Marx expected they would - that all capitalist governments since have tried to find various means of avoiding their consequences. This is where the Keynesian policies and subsequently the debt-fuelled expansionism of neoliberalism comes from: they are, in Kliman's persuasive reading, attempts to have the good aspects of capitalist conjuncture without their downsides. But such a thing cannot be had, precisely because of the lawlike nature of capitalist social phenomena as Marx described them. And therefore, all such measures do in the longer run is delay the full effect of crisis, but make it worse when it actually hits. The current international response to crisis has been to add a very vast amount of extra debt-fuelled expansion on top of the pre-existing one that led to crisis: so we must expect an even worse and and more extended one in the future.
Does all of this mean then that 'resistance is futile'? Not so, says Kliman. Working class organization and backlash against the capitalist market results not only in real gains for the majority of people, by forcing capitalist governments to make concessions in order to stave off fundamental challenges to capitalism; but more importantly, every time they happen they call into question this very inhumane logic of capital itself, the logic of capitalism as a way of organizing our society. However, it remains also the case that this logic is immanent to all forms of capital, and cannot be overcome without organizing production differently. No amount of left-Keynesian solutions can alleviate this in the long term, nor can worker-owned cooperatives, communes, or any such structures. Kliman criticizes even the Soviet and Maoist experiences here, because of their involvement in international competition and the way this forced them to think in terms of capitalist logic; this is unfortunately too cursory to fully produce an argument to engage with. But it is certainly essential for all who want to understand capitalism and its crises to locate them in production, not distribution, and in profit, not demand; only then does it become *politically* clear that the only long-term solution is not redistribution, nor regulations, nor taxation, but a revolution against the logic of capitalism itself.