A Characterisation of Economic Romanticism, Chapter 1 - Part 41

Lenin fails to distinguish between such crises of overproduction of capital, which as Marx says always involve an overproduction of commodities, because capital is composed of commodities, and any overproduction of commodities in its own right. The former necessitates an overproduction of commodities, but the same is not true in reverse. For one thing, not all commodities are produced capitalistically. In Theories of Surplus Value, Chapter 17, Marx sets out that, as soon as money arises, production and consumption, demand and supply, use value and exchange-value are separated. Production and consumption, demand and supply form opposing poles of a contradictory whole with no reason why they must remain united, but may fall apart, resulting in a crisis that is merely the means by which the contradiction resolves itself. 

“If, for example, purchase and sale—or the metamorphosis of commodities—represent the unity of two processes, or rather the movement of one process through two opposite phases, and thus essentially the unity of the two phases, the movement is essentially just as much the separation of these two phases and their becoming independent of each other. Since, however, they belong together, the independence of the two correlated aspects can only show itself forcibly, as a destructive process. It is just the crisis in which they assert their unity, the unity of the different aspects. The independence which these two linked and complimentary phases assume in relation to each other is forcibly destroyed. Thus the crisis manifests the unity of the two phases that have become independent of each other. There would be no crisis without this inner unity of factors that are apparently indifferent to each other. But no, says the apologetic economist. Because there is this unity, there can be no crises. Which in turn means nothing but that the unity of contradictory factors excludes contradiction.” 

(Theories of Surplus Value, Chapter 17, Section 8) 

But, as Marx sets out, money and commodity production and exchange has existed for thousands of years, and consequently, so has the potential for such crises of overproduction. Say's Law means treating commodities as mere products, and implies conditions not just preceding capitalism, but going back to barter. 

“Following Say, Ricardo writes: “Productions are always bought by productions, or by services; money is only the medium by which the exchange is effected” (l.c., p. 341). 

Here, therefore, firstly commodity, in which the contradiction between exchange-value and use-value exists, becomes mere product (use-value) and therefore the exchange of commodities is transformed into mere barter of products, of simple use-values. This is a return not only to the time before capitalist production, but even to the time before there was simple commodity production; and the most complicated phenomenon of capitalist production—the world market crisis—is flatly denied, by denying the first condition of capitalist production, namely, that the product must be a commodity and therefore express itself as money and undergo the process of metamorphosis... 

Ricardo says: “No man produces, but with a view to consume or sell, and he never sells, but with an intention to purchase some other commodity, which may be immediately useful to him, or which may contribute to future production. By producing, then, he necessarily becomes either the consumer of his own goods, or the purchaser and consumer of the goods of some person. It is not to be supposed that be should, for any length of time, be ill-informed of the commodities which he can most advantageously produce, to attain the object which he has in view, namely, the possession of other goods; and, therefore, it is not probable that he will continually produce a commodity for which there is no demand” [l.c., pp. 339-40]. 

This is the childish babble of a Say, but it is not worthy of Ricardo. In the first place, no capitalist produces in order to consume his product. And when speaking of capitalist production, it is right to say that: “no man produces with a view to consume his own product”, even if he uses portions of his product for industrial consumption. But here the point in question is private consumption. Previously it was forgotten that the product is a commodity. Now even the social division of labour is forgotten. In a situation where men produce for themselves, there are indeed no crises, but neither is there capitalist production. Nor have we ever heard that the ancients, with their slave production ever knew crises, although individual producers among the ancients too, did go bankrupt. The first part of the alternative is nonsense. The second as well. A man who has produced, does not have the choice of selling or not selling. He must sell. In the crisis there arises the very situation in which he cannot sell or can only sell below the cost-price or must even sell at a positive loss. What difference does it make, therefore, to him or to us that he has produced in order to sell? The very question we want to solve is what has thwarted this good intention of his?” 

(ibid)

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