Marx and Predictions of Capitalist Crisis

An interesting passage from Wilhelm Liebknecht’s book Karl Marx: Biographical Memoirs (1901) about Marx’s predictions:

“ … whoever prophesies revolutions is always mistaken in the date.

Well, though Marx was a prophet looking into the future with sharp eyes and perceiving much more than ordinary human beings, he never was a prophesier, and when Messieurs Kinkel, Ledru Rollin and other revolution-makers announced in every appeal to their folks in partibus the typical, ‘To-morrow it will start,’ none was so merciless with his satire as Marx.

Only on the subject of ‘industrial crises’ he fell a victim to the prophesying imp, and in consequence was subjected to our hearty derision which made him grimly mad. However, in the main point he was right none the less. The prophesied industrial crises did come—only not at the fixed time.” (Liebknecht 1901: 59–60).

Actually, even here Liebknecht is being somewhat dishonest about Marx supposedly not making predictions about when the final revolution would come.

In reality, with the failure of 1848 revolutions in Europe, Marx started to rethink the nature of the proletarian revolution, and from 1850 he thought such a workers’ revolution would happen after a cyclical crisis in capitalism (Sperber 2014: 274).

In these years right up until the 1860s, Marx thought that the final revolutionary outbreak that would lead to the proletarian revolution would begin in France (Sperber 2014: 289).

It seems that from the early 1850s Marx was predicting a very bad industrial crisis that would turn into the “final” proletarian revolution. Unfortunately, even the industrial crisis Marx was predicting failed to materialise, and Marx was subject to ridicule even by his own supporters like Liebknecht.

Finally, there was a recession in 1857 (which Liebknecht seems to refer to above), and Marx did indeed think it would be the prelude to the proletarian revolution he was constantly predicting (Sperber 2014: 320–323). He was disappointed again, however, when the revolution failed to materialise – and would suffer disappointment time and again as other recessions did not turn into revolutions.

Of course, Liebknecht – like other Marxists – thought that Marx’s economic theory really did properly explain and predict economic crises. Needless to say, this is false.

It is obvious that modern capitalism is subject to regular and cyclic business cycles, and anyone who claims that there will be a new business downturn at some point in the future will almost certainly be correct, and can then naively claim that they have been proven right.

But neither Marxism nor (to give another relevant example) Austrian economics has the correct economic theory that explains business cycles. Both theories are deeply flawed and have long since morphed into quasi-religious cults.

BIBLIOGRAPHY
Liebknecht, Wilhelm. 1901. Karl Marx: Biographical Memoirs. C. H. Kerr & Co., Chicago.

Sperber, Jonathan. 2014. Karl Marx: A Nineteenth-Century Life. Liveright Publishing Corporation, New York.