A Characterisation of Economic Romanticism, Chapter 1 - Part 48

Lenin says,

“Engels says: crises are possible, because the manufacturer does not know the demand; they are inevitable, but certainly not because the product cannot be realised at all. For it is not true: the product can be realised.” (p 170)

Unless what is meant, here, is that in theory, the product can be realised, which is trivial, that is nonsense. If no one wants the product, then its value, the labour-time required for its reproduction cannot be realised, and that is true whether it is produced by an individual producer or by socialised labour. What varies, here, is that the fact that the value of the product cannot be realised results in a crisis for the individual producer, and no one else, whereas, in the second case, the fact that the value of the product – a much larger value because of much greater production – becomes a crisis for a large number of workers, who are laid off, and whose own consumption, thereby, falls, leading to further under-consumption and overproduction amongst other producers, even where the latter have not changed production, and whose output would otherwise have found adequate demand.

Or it may be that the product can be sold, but only at a price that does not realise its value. The same thing still applies. Or, as Marx describes, it is only necessary that the value of the commodity cannot be realised within a given time, for it to result in a crisis, because it means the circuit of capital is broken. The point is not whether the value is theoretically realisable, but whether it is realised, which depends on demand. The truth is always concrete. As Marx says,

“Here a great confusion: (1) This identity of supply, so that it is a demand measured by its own amount, is true only to the extent that it is exchange value = to a certain amount of objectified labour. To that extent it is the measure of its own demand -- as far as value is concerned. But, as such a value, it first has to be realized through the exchange for money, and as object of exchange for money it depends (2) on its use value, but as use value it depends on the mass of needs present for it, the demand for it. But as use value it is absolutely not measured by the labour time objectified in it, but rather a measuring rod is applied to it which lies outside its nature as exchange value.”

(The Grundrisse)

These are factors specific to capitalism as against petty commodity production that lead to a generalised crisis and that makes such crises inevitable rather than merely a potential, but they all depend on the value of the output being either totally or partially unrealisable, so that the circuit of capital is broken, resulting in a crisis. (See: Marx and Engels' Theories of Crisis)

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