Malthus, Marx and Capitalist Crises

Liege

Congreso; 26th Annual ESHET Conference; 2023

ESHET

The word crisis has various applications in economics. It is often used to indicate a specific phase or stage of the business cycle, but also to indicate a sudden and unexpected economic downturn.Throughout history, there have always been economic crises, but until the end of the 18th century, most of them were reflections of supply constraints, a certain inability of these societies to further expand goods production. They were generally agrarian crises, which resulted in severe food shortages and famines that were tragic for humanity.With the consolidation of capitalism, the phenomenon took on different and particular characteristics, opening a debate as to whether or not crises are an intrinsic feature of the system.Since then, various authors have offered multiple explanations of the nature of crises. These explanations can be classified into two groups: those that maintain that crises are an inevitable consequence of the capitalist economic system and those that believe that they are events that lie outside the dynamics of capitalism.This last group of theories maintain that the capitalist system has automatic adjustment mechanisms that, when working unimpaired, prevent gross misallocations of resources. In their view therefore, crises are the result of exogenous factors, like the negative economic impact of the COVID-19 pandemic or the Russian invasion of Ukraine.In contrast, the first group of theories of crises see their origin in the intrinsic characteristics of the capitalist economic system, and in turn require economic action to overcome them. In this vision of crises as a phase of the capitalist economic cycle, there are obviously multiple approaches. On the one hand, there are those who argue that economic policy can effectively contribute to smoothing out the cycle and tapering crises, and those who believe that in the end, and despite measures to prevent it, the system will succumb to its own internal contradictions.The objective of this article is to review the ideas and explanations of the early capitalist crises of two great thinkers and economists of this last group: Thomas Robert Malthus and Karl Marx. The work does not pretend to present a profound formulation of the ideas of both, but to show how two very different visions (clearly ideologically opposed) have a point in common: the capitalist system has the impossibility of overcoming poverty.