Skip to content

Another day another crisis

Marxist Analysis · 2026-05-13

Core Argument

The central thesis is that the capitalist system has entered a structural, not cyclical, crisis from which there is no escape within the framework of private property and the nation state. Rob Sewell argues that the post-2008 "recovery" was an illusion — a temporary stabilisation built on state bailouts and credit expansion that merely transferred the crisis from the private to the public sector. The present turbulence (August 2011) is not a crisis of confidence but the objective expression of capitalism having reached its historical limits. The system can no longer generate a genuine recovery; the best it can offer is decades of stagnation, punctuated by convulsions, austerity, and intensified class struggle. The only way out is socialist revolution.

Theoretical Grounding

The analysis is rooted in Marx's theory of crisis as developed in Volume III of Capital, particularly the argument that the ultimate cause of all real crises is "the poverty and restricted consumption of the masses" in the face of capital's drive to develop productive forces without limit. Sewell explicitly rejects explanations that reduce crisis to a fall in the rate of profit, characterising such approaches as "mechanical" and "simplistic." Instead, he insists on the primacy of overproduction relative to effective demand, with credit serving only to postpone the inevitable collision between production and the market.

The article also draws on Rosa Luxemburg's formulation of "socialism or barbarism" as the strategic horizon, and on the historical analogy of the 1930s — not as a mechanical repetition but as a structural parallel: a period in which partial recoveries were followed by new slumps, and genuine resolution came only through war. Sewell argues that war is no longer a viable outlet for capitalism's contradictions, meaning all pressures will be internalised as class struggle.

This places the article firmly within the tradition of Marxist crisis theory that emphasises the organic and systemic character of capitalist decline, as opposed to conjunctural or profit-rate-centric accounts. It is closer to the tradition of Paul Sweezy and the Monthly Review school on stagnation, and to Trotsky's analysis of the 1930s as a period of "decaying capitalism," than to the more technical value-theoretic approaches associated with the International Socialist tradition or the New Left Review.

Conjunctural Relevance

The article was written in August 2011, at the height of the eurozone sovereign debt crisis. Key conjunctural details include:

  • The US economy had grown at an annualised rate of only 0.8% in the preceding six months, with output still below its 2007 peak — a "lost decade" in the Economist's words.
  • The S&P downgrade of US sovereign debt had triggered global market panic.
  • The eurozone crisis had spread from Greece to Italy, Spain, and France, with banking shares under attack and rumours of a French downgrade.
  • The European Central Bank was forced to act as lender of last resort, buying Italian and Spanish debt — a measure Sewell correctly identifies as a "short-term palliative."
  • The Swiss National Bank was fighting a losing battle against speculative capital inflows, cutting interest rates to zero and flooding the system with cash.
  • Corporate profits had recovered sharply — S&P 500 profits up 18.7% — but this was at the expense of wages: US real wages rose by only $68bn against a $528bn profit increase; in Britain, real aggregate wages fell by £2bn while profits rose by £14bn.

Sewell's prediction that Greece would inevitably default, that the eurozone could break up with consequences comparable to the post-Soviet rouble zone collapse, and that the system faced "decades of stagnation" rather than recovery, has been substantially vindicated by subsequent events — though the eurozone has so far been held together through austerity and ECB intervention, at enormous social cost.

Where the Argument Continues

This article is an early statement of a position that the RCI has developed consistently over the subsequent decade. Key continuations include:

  • The analysis of the eurozone crisis is deepened in later IDOM articles on Greece, the ECB's role, and the political consequences of austerity. The RCI's position that the eurozone cannot be reformed and that the left must break with the EU entirely is a direct political conclusion from the economic analysis here.
  • The critique of profit-rate-centric crisis theory is elaborated in other IDOM theoretical pieces, particularly those engaging with the work of Andrew Kliman and the "temporal single-system interpretation" (TSSI) school.
  • The "socialism or barbarism" framework is developed in relation to climate change, war, and the pandemic in later articles and Against the Stream episodes.
  • The argument that war is no longer a viable outlet for capitalist crisis is revisited in the context of Ukraine and the growing danger of inter-imperialist conflict.

Connections

  • Marx, Capital Volume III, especially chapters on credit and crisis — the theoretical foundation.
  • Rosa Luxemburg, The Accumulation of Capital and The Crisis of Social Democracy (the Junius Pamphlet) — the "socialism or barbarism" formulation.
  • Leon Trotsky, The Transitional Programme and his writings on the 1930s — the analysis of decaying capitalism and the impossibility of a new period of progressive capitalist development.
  • Paul Sweezy, The Theory of Capitalist Development and Monthly Review articles on stagnation — the emphasis on underconsumption and the limits of the market.
  • Satyajit Das, Extreme Money — cited by Sewell as a bourgeois source that inadvertently confirms the Marxist analysis.
  • Kenneth Rogoff and Carmen Reinhart, This Time Is Different — the "Second Great Contraction" framework, which Sewell uses selectively to support his argument.

Key Quotes

  1. "The crisis is not a subjective thing but is rooted in the objective situation. The dangers in the US, where output has yet to retain its 2007 peak, are provoking panic. ... It is this crisis, arising out of the contradictions of capitalism, which results in a loss of confidence and not the other way around."

  2. "As Marx himself explained, 'The ultimate reason for all real crises always remains the poverty and restricted consumption of the masses, in the face of the drive of capitalist production to develop the productive forces as if only the absolute consumption capacity of society set a limit to them.' (Capital, vol.3, p.615)"

  3. "The problem with credit is that it has to be paid back with interest. As a result, consumer spending, which makes up two-thirds of US economic activity, is stagnant or shrinking. While corporations are flush with cash, they are not prepared to invest given the lack of markets but without investment there can be no recovery. This, in turn, adds to a collapse in demand. It is a vicious circle."

  4. "Some on the left have tried to explain the crisis exclusively by reference to profitability but this is a very mechanical approach. There is an attempt to equate the level of profits as an indication of the health of capitalism, but once again this is very simplistic."

  5. "In the Second World War, the capitalist system was able to purge itself of the crisis of over-production. Today, that is not an option. As a result, all the contractions will be internalized and reflect themselves in a ferocious struggle between the classes. The period opening up will be the stormiest period in world history."

  6. "The alternatives of 'Socialism or Barbarism' explained by Rosa Luxemburg, are now more relevant than ever. For us, the only choice is socialism."