Abstract
Engels’s remarks on economic crises acquire their significance against the background of Marx’s theory of crisis. This chapter argues that many essential characteristics of the Marxian conception of crisis go back to Engels. However, Marx and Engels did not share the exact same theory of crisis. The weaknesses of Engels’s overproduction theory of crisis lie in technological reductionism, a narrow focus on private property as the deepest reason for crisis and the absence of monetary considerations. However, the equation of Marx and Engels is as misleading as the demonization of Engels. It was not only Engels’s insider and commercial knowledge, but also his numerous observations and analyses of business cycle phenomena that inspired and shaped Marx’s considerations. Along with his role as a pioneer, a major contribution of Engels should be seen in his analysis of concrete events and of the spirit of capitalism.
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Notes
- 1.
It is quite overlooked that, for Marx and Engels, crises do not imply only a revolutionary potential, but also that of general regression: “Society suddenly finds itself put back into a state of momentary barbarism” (Karl Marx and Friedrich Engels, Manifesto of the Communist Party, in MECW vol. 6, 489–90).
- 2.
Friedrich Engels, Outlines of a Critique of Political Economy, in MECW vol. 3, 433.
- 3.
John Wade, History of the Middle and Working Classes (London: Effingham Wilson, 1833), 211, 255.
- 4.
“Supply always follows close on demand without ever quite covering it. It is either too big or too small, never corresponding to demand; because in this unconscious condition of mankind no one knows how big supply or demand is.” (Engels, Outlines of a Critique of Political Economy, in MECW vol. 3, 433)
- 5.
Ibid., 435.
- 6.
Friedrich Engels, Anti-Dühring, in MECW vol. 25, 271–272.
- 7.
See Daniele Besomi, “John Wade’s Early Endogenous Dynamic Model: ‘Commercial Cycle’ and ‘Theories of Crises’,” European Journal of the History of Economic Thought, 15 (4) (2008).
- 8.
Wade, History of the Middle and Working Classes, 254.
- 9.
Engels, Outlines of a Critique of Political Economy, in MECW vol. 3, 433. This simple mechanism is still found in the works of Kautsky and Hilferding. See Simon Clarke, Marx’s Theory of Crisis (Basingstoke: Palgrave Macmillan, 1994), 77.
- 10.
Karl Marx, A Contribution to the Critique of Political Economy, in MECW vol. 29, 264.
- 11.
See Clarke, Marx’s Theory of Crisis, 81–82; Timm Graßmann, “The Unsolved Problem of Economic Crisis as a Turning Point of Marx’s Critique of Political Economy, 1844–1845,” The History of Economic Thought, 60 (1) (2018).
- 12.
Karl Marx, Excerpts from David Ricardo: Des principes de l’économie politique et de l’impôt, in MEGA vol. IV/2, 416.
- 13.
Later, in Manchester in 1845, Marx read Wade’s History of the Middle and Working Classes in detail on Engels’s recommendation. He found the outline of the systematicity of crises to be the “most original in Wade” (Karl Marx, Excerpts from John Wade: History of the Middle and Working Classes, in MEGA vol. IV/4, 298, my translation), but was less impressed with Wade’s contradictory understanding of the industrial revolution as both the condition of the cycle and its mitigation, as his mocking comments indicate (ibid., 297).
- 14.
That Marx is the only author of the final version is likely due to the chronology of its creation. As late as January 25, 1848, the Bund der Kommunisten complained about the lack of a manifesto (see Die Zentralbehörde des Bundes der Kommunisten, “Letter to Kreisbehörde Brüssel, 25 January 1848,” in MEGA vol. III/2, 384). Engels spent most of that January in Paris and did not return to Brussels until the 31st, so most likely Marx wrote the Manifesto at the end of January based on Engels’s Principles alone.
- 15.
Wade, History of the Middle and Working Classes, 253.
- 16.
Engels, Outlines of a Critique of Political Economy, in MECW vol. 3, 436. – Still in the Preface to the English Edition of Marx’s Capital, Engels wrote that “the productive power increases in a geometric, the extension of markets proceeds at best in an arithmetic ratio” (Friedrich Engels, Preface to the English Edition, in MECW vol. 35, 35). This is not to be mistaken with an underconsumptionist approach. In Anti-Dühring, Engels stated explicitly that crises do not directly arise from underconsumption of the masses, as Eugen Dühring assumed, but from a contradiction between socialized production and private appropriation (see part III of the present article). Underconsumption was just one “prerequisite condition of crises” (Engels, Anti-Dühring, in MECW vol. 25, 272).
- 17.
Marx and Engels, Manifesto of the Communist Party, in MECW vol. 6, 489–490.
- 18.
Friedrich Engels, Principles of Communism, in MECW vol. 6, 346–7.
- 19.
Marx and Engels, Manifesto of the Communist Party, in MECW vol. 6, 489.
- 20.
See Clarke, Marx’s Theory of Crisis, 84.
- 21.
“What will be the consequences of the final abolition of private ownership? […] There will be an end of crises” (Engels, Principles of Communism, in MECW vol. 6, 353).
- 22.
“Every change in the social order, every revolution in property relations, has been the necessary result of the creation of new productive forces which would no longer conform to the old property relations. Private property itself arose in this way.” (Engels, Principles of Communism, in MECW vol. 6, 348)
- 23.
“The proletariat arose as a result of the industrial revolution” (Engels, Principles of Communism, in MECW vol. 6, 341), so that “[u]p to 1780, England had few proletarians” (Friedrich Engels, The Condition of England, in MECW vol. 3, 487). This does not mean that, for Engels, only factory workers belong to the proletariat, because the characteristic of this class is its propertylessness. But, according to him, the separation of producers from the means of production did not occur until the introduction of machinery and the concentration of the means of production (see John M. Sherwood, “Engels, Marx, Malthus, and the Machine,” The American Historical Review, 90 (4) (1985), 844–845). Sherwood (ibid.), therefore, speaks of a “great machine theory of history” in Engels’s work, i.e. the productive forces embodied by large-scale industry and machinery are regarded as the actual agents of history.
- 24.
See Tiago Mata and Robert Van Horn, “Capitalist Threads: Engels the Businessman and Marx’s Capital,” History of Political Economy, 49 (2) (2017).
- 25.
Karl Marx, “Letter to Engels, 18 April 1863,” in MECW vol. 41, 469, emphasis added.
- 26.
Karl Marx, Capital. A Critique of Political Economy. Vol. 1 (London: Penguin, 1976), 349.
- 27.
In the Introduction of 1857, Marx listed other ways of comprehending the world in addition to science: “The totality as a conceptual totality seen by the mind is a product of the thinking mind, which assimilates the world in the only way open to it, a way which differs from the artistic-, religious- and practical-intellectual assimilation of this world” (Karl Marx, Introduction, in MECW vol. 28, 38). Engels mastered the practical-intellectual assimilation of the world: a knowledge of how things behave (know how). In contrast, the theoretical-scientific way seeks to understand the what and the why. See Urs Lindner, Marx und die Philosophie. Wissenschaftlicher Realismus, ethischer Perfektionismus und kritische Sozialtheorie (Stuttgart: Schmetterling-Verlag, 2013), 244. There is much to suggest that Marx saw no contradiction between science, art and practice, but rather a complementary relationship (ibid.).
- 28.
Karl Marx, “Letter to Engels, 18 December 1857,” in MECW vol. 40, 224–225.
- 29.
Friedrich Engels, “Letter to Marx, 19 November 1844,” in MECW vol. 38, 10.
- 30.
Marx and Engels, Manifesto of the Communist Party, in MECW vol. 6, 489.
- 31.
Karl Marx, Book of the Crisis of 1857, in MEGA vol. IV/14, 82.
- 32.
Karl Marx, The Financial Crisis in Europe, in MECW vol. 15, 408; Karl Marx, The Crisis in Europe, in MECW vol. 15, 411 (see MEGA vol. I/16 critical apparatus, 731, 738).
- 33.
Friedrich Engels, “Letter to Marx, 7 December 1857,” in MECW vol. 40, 212–213; Friedrich Engels, “Letter to Marx, 9 December 1857,” in MECW vol. 40, 218–222).
- 34.
Friedrich Engels, “Letter to Marx, 7 December 1857,” in MECW vol. 40, 212.
- 35.
Friedrich Engels, “Letter to Marx, 16 November 1857,” in MECW vol. 40, 205.
- 36.
Friedrich Engels, “Letter to Marx, 6 January 1858,” in MECW vol. 40, 239.
- 37.
Thomas Tooke and William Newmarch, A History of Prices, and of the State of the Circulation, during the Nine Years 1848–1856; forming the Fifth and Sixth Volumes of the History of Prices from 1792 to the Present Time. Vol. 2 (London: Longman, 1857), 150–152.
- 38.
Friedrich Engels, “Letter to Marx, 2 Marx 1852,” in MECW vol. 39, 57.
- 39.
Friedrich Engels, “Letter to Marx, 20 April 1852,” in MECW vol. 39, 83.
- 40.
Friedrich Engels, “Letter to Marx, 24 August 1852,” in MECW vol. 39, 165.
- 41.
Hence, the assessment, that “the economist of the period who grasped the essential fact that its discovery meant increased effective demand from the gold-producing nations and subsequent international multiplier effects was William Newmarch” (J. R. T. Hughes, Fluctuations in Trade, Industry and Finance. A Study of British Economic Development, 1850–1860 (Oxford: Clarendon Press, 1960), 14), requires revision: It was Engels.
- 42.
Karl Marx, “Letter to Engels, 23 April 1857,” in MECW vol. 40, 126. – In my dissertation, which is nearing completion, I argue that the gold rush had a significant influence on the monetary theory of the Grundrisse.
- 43.
In the case of kite-flying, the credit operation is not directly based on a commercial transaction but on another bill of exchange that is often due and cannot be honoured. Old debts are thus “settled” with new debts, or new debts are created on the basis of old, unredeemable ones.
- 44.
Friedrich Engels, “Letter to Karl Marx, 11 December 1857,” in MECW vol. 40, 220–221.
- 45.
See MEGA vol. IV/14 critical apparatus, 517.
- 46.
Karl Marx and Friedrich Engels, Review. May to October 1850, in MECW vol. 10, 490.
- 47.
Karl Marx, Economic Manuscript of 1864–1865 (Leiden: Brill, 2016), 570.
- 48.
Karl Marx, Capital. A Critique of Political Economy. Vol. 3 (London: Penguin, 1981), 619.
- 49.
See Docent Ingrid Hammerström, “Anglo-Swedish Economic Relations and the Crisis of 1857,” Scandinavian Economic History Review, 10 (2) (1962).
- 50.
Karl Marx, Outlines of the Critique of Political Economy, in MECW vol. 28, 340.
- 51.
Marx, Economic Manuscript of 1864–1865, 360.
- 52.
Marx, Capital. Vol. 3 (London: Penguin, 1981), 359.
- 53.
Assuming that Marx “may not have intended to write so much about the credit system in this book,” Moseley erroneously considers Engels’s modification as “accurate” (Fred Moseley, “Introduction,” in Marx, Economic Manuscript of 1864–1865, 22). However, in the Grundrisse and the Manuscript 1861–1863, Marx consistently refers to the importance of credit relations for the theory of crisis. Consequently, in Capital, he even considered the possibility of an autonomous monetary crisis (Marx, Capital. Vol. 1 (London: Penguin, 1976), 236).
- 54.
Engels, Anti-Dühring, in MECW vol. 25, 8.
- 55.
Ibid., 258, 259; Friedrich Engels, Socialism: Utopian and Scientific, in MECW vol. 24, 324. – Marx, on the other hand, in the Grundrisse, called overproduction the “basic contradiction [Grundwiderspruch] of developed capital” (Marx, Outlines of the Critique of Political Economy, in MECW vol. 28, 342) and in the Manuscript 1861–63 he specified: “the fundamental contradiction [Grundwiderspruch]: on the one hand, unrestricted development of the productive power and increase of wealth which, at the same time, consists of commodities and must be turned into cash; on the other hand, the system is based on the fact that the mass of producers is restricted to the necessaries.” (Karl Marx, Economic Manuscript of 1861–1863, in MECW vol. 32, 248) Marx dropped the term Grundwiderspruch in the manuscripts to Capital, which indicates an increasing emphasis on other contradictions and on other possibilities for the emergence of crises.
- 56.
See Nadja Rakowitz, Einfache Warenproduktion. Ideal und Ideologie (Freiburg: Ça Ira, 2000).
- 57.
Friedrich Engels, Supplement and Addendum to Volume 3 of Capital, in Marx, Capital. Vol. 3 (London: Penguin, 1981), 1037.
- 58.
Engels, Socialism: Utopian and Scientific, in MECW vol. 24, 308. – According to Marx, pre-capitalist societies were structured quite differently: The expenditure of labor was not based on the law of value, and the socialization of the labor products not carried out by means of exchange on the market, but rather by custom, convention, religious rules or personal rule. The vast majority of labor products did not take on the commodity form.
- 59.
Engels, Supplement and Addendum to Volume 3 of Capital, 1036. See Helmut Brentel, Soziale Form und ökonomisches Objekt. Studien zum Gegenstands- und Methodenverständnis der Kritik der politischen Ökonomie (Opladen: Westdeutscher Verlag, 1989), 140–141.
- 60.
“The instruments of labor – land, agricultural implements, the workshop, the tool – were the instruments of labour of single individuals, adapted for the use of one worker, and, therefore, of necessity, small, dwarfish, circumscribed. But, for this very reason they belonged, as a rule, to the producer himself.” (Engels, Socialism: Utopian and Scientific, in MECW vol. 24, 308)
- 61.
Engels, Anti-Dühring, in MECW vol. 25, 260.
- 62.
Engels, Socialism: Utopian and Scientific, in MECW vol. 24, 308.
- 63.
Ibid., 310.
- 64.
Choeng-Lip Chu, Ideologie und Kritik (Regensburg: Roderer, 1998), 55.
- 65.
See, as one of many examples, Ernest Mandel, Late Capitalism (London: New Left Books, 1975), ch. 18.
- 66.
Heinz Dieter Kittsteiner, “‚Logisch‘ und ‚Historisch‘. Über Differenzen des Marxschen und Engelsschen Systems der Wissenschaft,” Internationale wissenschaftliche Korrespondenz zur Geschichte der deutschen Arbeiterbewegung, 13 (1977), 45.
- 67.
Engels, Anti-Dühring, in MECW vol. 25, 263.
- 68.
See Ingo Elbe, Marx im Westen. Die neue Marx-Lektüre in der Bundesrepublik seit 1965 (Berlin: Akademie-Verlag, 2010), 115.
- 69.
Marx, Economic Manuscript of 1861–1863, in MECW vol. 32, 133.
- 70.
Marx wrote in the Manuscript of 1861–1863: “The fact that bourgeois production is compelled by its own immanent laws, on the one hand, to develop the productive forces as if production did not take place on a narrow restricted social foundation, while, on the other hand, it can develop these forces only within these narrow limits, is the deepest and most hidden cause of crises.” (Ibid., 274)
- 71.
Marx, on the other hand, seems to have made more of a communal turn towards the end of his life. See Luca Basso, Marx and the Common. From Capital to the Late Writings (Leiden: Brill, 2015).
- 72.
As novel and underlying developments, Engels cited the further expansion of the world market, the internationalization and diversification of the market for capital seeking investment, the weakening of national and international competition through the formation of trusts, monopolies and protective tariffs, and at the same time the intensification of international competition as a result of England’s loss of the monopoly on the world market (Marx, Capital. Vol. 3 (London: Penguin, 1981), 620–621).
- 73.
Engels, Anti-Dühring, in MECW vol. 25, 263.
- 74.
Engels, Preface to the English Edition, in MECW vol. 35, 35. See also Friedrich Engels, Marx and Rodbertus, in MECW vol. 26, 288.
- 75.
Engels in Marx, Capital. Vol. 3 (London: Penguin, 1981), 620.
- 76.
Friedrich Engels, On Peculiarities in England’s Economic and Political Development, in MECW vol. 27, 325.
- 77.
Engels in Marx, Capital. Vol. 3 (London: Penguin, 1981), 620. – So, contrary to what is often claimed (as f.i. in M. C. Howard and J. E. King, “Engels, Friedrich,” in David Glasner (ed.), Business Cycles and Depressions. An Encyclopedia (New York: Garland, 1997), 200), Engels has not only asserted the disappearance of the cycle.
- 78.
Karl Marx, “Letter to Nikolai Danielson, 10 April 1879,” in MECW vol. 45, 354.
- 79.
Ibid., 355.
- 80.
In 1878–9 in particular, Marx once again studied crises and credit. These excerpts will be published in MEGA vol. IV/25.
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Graßmann, T. (2021). Engels’s Theory of Economic Crisis. In: Saito, K. (eds) Reexamining Engels’s Legacy in the 21st Century. Marx, Engels, and Marxisms. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-55211-4_5
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