Towards a hypothesis of the final collapse of capitalism

by Jehu

1. The ambiguity of capitalist collapse in Marx’s theory

I want to propose a hypothesis to describe what happens when capitalism finally collapses premised on the assumption that this collapse can occur in two separate and distinct phases: a lower phase, which we can refer to as the collapse of production based on exchange value; and a higher phase, which I will call the collapse of production based on wage labor. These two phases more or less reflect the dual character of capitalist commodity production: that capital is a form of commodity production which specifically aims to produce surplus value.

There is some controversy about the above definition among Marxist theorists. The orthodox view, advanced by Engels in volume 3 of Capital, is that simple commodity production (SCP) and capital commodity production (CCP) are related but historically distinct modes of production. Others hold to the view that simple commodity production and capitalist commodity production are identical to one another. The latter view, for instance, is advanced by some writers within the value-form school of Marxism — most prominently by Chris Arthur, who holds, contrary to Engels, that a simple commodity mode of production never existed independently of capitalist commodity production. Arthur also claims that Marx’s Capital is from the first solely concerned with capitalist commodity production:

“The orthodox tradition, from Engels, through Sweezy, through Meek, to Mandel, understood these chapters not to be about capitalism but to be about a putative mode of production termed by them ‘simple commodity production’. But, in truth, right from its first sentence the object of Marx’s Capital is indeed capitalism. This issue in turn raises the problem of Marx’s method of presentation; for it has to be acknowledged that the early chapters of Capital do not even mention wage labourers, capitalists and the like. Why not? The orthodox understanding of Marx’s method explains this by arguing that he presents his theory through a sequence of models, that a model of simple commodity production as a one class society allows him to give a complete account of the law of value, and that the subsequent introduction of a model of capitalism as a two class society allows him to demonstrate the origin of surplus-value through the specific inflection capital gives to this law of value; subsequently more complicated models, including landed property and the like, introduce still further distortions of the operation of the law of value. In opposition to this reading the position taken here is that the order of Marx’s presentation is not that of a sequence of models of more and more complex objects, but that of a progressive development of the forms of the same object, namely capitalism, from a highly abstract initial concept of it to more and more concrete levels of its comprehension.”


I think there are at least four good reasons to question Arthur’s reading of Marx. In my reading to Marx, he appears to make several arguments that raise questions about the nature of his prediction:

First, in the German Ideology, Marx and Engels argue the proletariat “has no longer any particular class interest to assert against the ruling class.” Instead of overthrowing the rule of another class, Marx argues the proletarians will be forced to overthrow the state itself:

“[The] proletarians, if they are to assert themselves as individuals, will have to abolish the very condition of their existence hitherto (which has, moreover, been that of all society up to the present), namely, labour. Thus they find themselves directly opposed to the form in which, hitherto, the individuals, of which society consists, have given themselves collective expression, that is, the State. In order, therefore, to assert themselves as individuals, they must overthrow the State.”

Second, I find it very curious that Marx never directly predicts the collapse of capitalism in his theoretical works. The most obvious example of this is Marx’s prediction in the Grundrisse of what he calls the breakdown or collapse of “production based on exchange value”. It is curious that Marx did not refer to this event as the “collapse of capitalism”, but specifically the collapse of production based on exchange value, i.e., the conditions of simple commodity production.

Third, another example of Marx’s curiously nuanced argument can be found in Capital itself. In chapter 32 of volume one, we find a fairly developed description of the historical trajectory of the capitalist mode of production, that culminates in Marx’s famous prediction of the end of capitalist private property:

“The monopoly of capital becomes a fetter upon the mode of production, which has sprung up and flourished along with, and under it. Centralisation of the means of production and socialisation of labour at last reach a point where they become incompatible with their capitalist integument. This integument is burst asunder. The knell of capitalist private property sounds. The expropriators are expropriated.”

What I find so curious about this statement, is that Marx predicts the demise of capitalist private property and the expropriation of the expropriators, but he never actually says who does the expropriating! Of course, Marx may be just leaving us to fill in the blanks, but I find it rather interesting that Marx never actually says the proletariat expropriates capitalist private property; instead, he limits his prediction to the expropriation of capitalist private property by some unnamed subject.

Fourth, by whom is capitalist private property expropriated? By the working class? Maybe, maybe not, because only a few years later in Socialism, Utopian and Scientific, we find that the proletarian revolution is not the only possible outcome of the crisis. It turns out there is another possible outcome of the crisis that Luxemburg would later frame in her famous slogan, “Socialism or Barbarism”. Even if the proletarian revolution is not successful, say Marx and Engels in Socialism, the bourgeois state will be forced to expropriate capitalist private property anyways.

“In any case, with trusts or without, the official representative of capitalist society — the state — will ultimately have to undertake the direction of production. This necessity for conversion into State property is felt first in the great institutions for intercourse and communication — the post office, the telegraphs, the railways.

If the crises demonstrate the incapacity of the bourgeoisie for managing any longer modern productive forces, the transformation of the great establishments for production and distribution into joint-stock companies, trusts, and State property, show how unnecessary the bourgeoisie are for that purpose. All the social functions of the capitalist has no further social function than that of pocketing dividends, tearing off coupons, and gambling on the Stock Exchange, where the different capitalists despoil one another of their capital. At first, the capitalistic mode of production forces out the workers. Now, it forces out the capitalists, and reduces them, just as it reduced the workers, to the ranks of the surplus-population, although not immediately into those of the industrial reserve army.”

In fact, if you think about it, Luxemburg’s famous slogan only makes sense if there is more than one possible outcome of the crisis. I argue that what Luxemburg called barbarism is none other than what Engels identified as the state becoming the national capitalist and direct exploiter of labor.


Let me put forward a possible narrative to explain these odd facts and tie them together into the beginning of an argument:

In Capital, (v1, c32), Marx is looking ahead to a major event that had two possible outcomes. The first, more familiar outcome for us is a proletarian socialist revolution that overthrows the existing state. The second, less well understood and almost never discussed outcome is that the state is forced by events to expropriate capitalist private property and undertake the direction of production, to function as the national capitalist, the direct exploiter of the proletarians. This second possible outcome is what Luxemburg labeled barbarism.

In Capital, Marx could predict the end of capitalist private property, but how this property would meet its end was itself contingent on a political conflict and on which class carried the day in that conflict — an outcome Marx obviously could not predict. In either case the outcome for capitalist private property would be the same: it would be expropriated. But who would do the expropriating of capitalist private property was not certain. Thus, Marx deliberately left this outcome ambiguous in volume one, chapter 32.

Based on my reading of Marx, the demise of capitalist private property was triggered by the event he predicted in the Grundrisse: the collapse of production based on exchange value. So far as I can tell, Marx’s prediction of the breakdown of commodity production, rather than the collapse of capitalism itself, only makes sense if the outcome of the breakdown was also historically indeterminate. Marx did not predict the final collapse of capitalism, but only a collapse of production based on commodity exchange. This, I think, was because whether capitalism itself collapsed also depended on the outcome of the above political conflict the result of which he could not predict with any reasonable certainty. The proletariat could seize power and undertake the final act of its emancipation, or it would be confronted with a new exploiter, the bourgeois state.

This second possible outcome would bring us full circle to Marx and Engels’s original prediction in the German Ideology: To assert themselves as individuals, the proletarians must overthrow the State.


As can be seen from the above argument, my hypothesis depends on the claim that production based on exchange value, what is commonly referred to as simple commodity production, can collapse without necessarily leading to the collapse of what I have here called production based on wage labor, i.e., capital proper.

I assume that the forces of production bound up with capital (i.e., the conditions of social labor) are fundamentally incompatible with production on the basis of exchange value, what has come to be called simple commodity production. The two, of course, constitute what we mean when we refer to capitalism, but they stand in an uneasy, antagonistic relation to one another within this social form. Only if this is true,  can production based on exchange value collapse, yet production based on wage labor need not necessarily collapse with it.

Further, let me stipulate that what we witnessed in the 1930s depression was the collapse of production based on exchange value, but not production based on wage labor. Since capitalism includes both production based on exchange value (simple commodity production) and production based on wage labor (capital), the Great Depression was in fact the partial breakdown of capitalism, but not its final demise. The final demise of capitalism, the second shoe to drop, is still in our future.

NEXT: Capitalism after the collapse of exchange value