Michael Heinrich versus the crisis-mongers

Michael Heinrich

After having waded through Rosa Luxemburg, Henryk Grossman and various lesser figures in the course of a discussion of “crisis theory” on the Introduction to Marxism class, I was curious to see what Michael Heinrich had to say in an article titled “The Current Financial Crisis and the Future of Global Capitalism” on MRZine. I know next to nothing about Heinrich except that his work is highly touted by a Marxmail and LBO-Talk subscriber from Germany who uses the tag Angelus Novus. Heinrich has something of a following there apparently.

The thrust of Heinrich’s article is to make the case that Marxists are wrong to speak in terms of crisis leading to the downfall of capitalism. Not only is it theoretically incorrect, there is nothing in Marx’s writings to support such an idea—at least in their most mature phase. Marx supposedly expected the European-wide financial crisis of 1858 to unleash revolutionary movements, but was somewhat surprised to see that the capitalist system came out of the crisis “greatly strengthened”, to use Heinrich’s words. Heinrich writes:

Marx learned a lesson: in capitalism, crises function as brutal acts of purification. The destruction wreaked by crises removes previous impediments to accumulation and frees up new possibilities for capitalist development.

Joseph Schumpeter

This formula, of course, found its most refined expression in Joseph Schumpeter’s writings, a highly esteemed bourgeois economist who had read his Marx and who postulated the theory of “creative destruction” in “Capitalism, Socialism and Democracy”:

Every piece of business strategy acquires its true significance only against the background of that process and within the situation created by it. It must be seen in its role in the perennial gale of creative destruction; it cannot be understood irrespective of it or, in fact, on the hypothesis that there is a perennial lull. . . .

Even though Marx dispensed with the notion that capitalist crisis could lead to the collapse of the system, his followers remained wedded to this unsupportable idea. Heinrich writes:

The fact that Marx, with good reason, bid farewell to theories of capitalist collapse did not prevent many Marxists from remaining loyal to such ideas. In the “Marxist” Social Democracy before the First World War as well as in the Communist Parties of the 1920s, it was regarded as a foregone conclusion that capitalism would perish as a result of the increasingly strong crises it generated. Every recovery was interpreted as a last rearing up before the final and inevitable collapse, which frequently led to grotesque political misjudgments.

It is hard to make much sense of this rather terse historical account especially since Heinrich does not bother to name names. Before the First World War, there was no consensus in the Social Democracy that capitalism “would perish as a result of the increasingly strong crises it generated.” If that was the case, Rosa Luxemburg would have not felt the need to write “The Accumulation of Capital” which defended what amounted to a dissident perspective of capitalism being prone to collapse. Probably most social democrats agreed with Karl Kautsky who believed that “super-imperialism” was a stabilizing force. With respect to the Communist Parties of the 1920s, that covers a lot of terrain. Could Heinrich be referring to the “Third Period”, which was marked by millenarian lunacy? It certainly wasn’t Lenin’s view who urged the adoption of the united front strategy in light of the obvious recovery of capitalism following the stormy period in the immediate aftermath of WWI.

Heinrich then skips ahead 80 years to once again polemicize against unnamed ideological adversaries:

In the early 1990s, the theory of capitalist collapse celebrated a joyful resurrection in the newly-united Germany, furnished with the pretence of being a new idea. The crises that followed — the East Asian crisis of 1997/98, the stock market crash that heralded the collapse of the “New Economy” bubble in 2000/2001, and the crisis in Argentina in 2001/2002 — were interpreted each and every time as a sure sign of the final crisis of capitalist collapse. But all these crises were over relatively quickly. They led to processes of enormous immiseration (particularly the crises in East Asia and Argentina), but the capitalist system, contrary to all prognostications of collapse, emerged rather strengthened from these crises.

Once again, I have no idea who he is referring to. The Ted Grant-Alan Woods ortho-Trotskyist current that is distinguished by predictions of capitalist collapse that appear like clockwork? David Harvey? Patrick Bond? There have, of course, been ongoing debates involving contributors to Socialist Register over these questions for 20 years at least. Even at his most millenarian, Patrick Bond has never written anything that smacks of the notion that crisis leads to collapse and the inexorable rise of a revolutionary movement. To put it bluntly, Heinrich has created a straw-man that is all too easy to knock down.

Next Heinrich analyzes the real estate/credit crisis that has been so much in the news lately. There is nothing particularly objectionable in it nor is there anything particularly groundbreaking.

In some ways debating “crisis theory” serves the same kind of purpose as “the transformation problem” or “the transition to capitalism question.” It allows Marxist academics to sink their teeth into a weighty theoretical problem in the same way that Jane Austen novels provide fodder for sessions at the yearly Modern Language Association conferences. No matter how many words are expended, there will always be a new interpretation.

Despite its reputation for “doom and gloom” prognostications, classical Marxism has really paid little attention to predicting the future. When a crisis occurs, the main emphasis is always on trying to draw political conclusions about what has to be done.

Furthermore, I doubt if any serious harm can come from “the sky is falling” projections as long as the strategy and tactics flow from the current situation. For example, nobody knew in 1929 whether the stock market crash would usher in 10 years of global capitalist collapse or whether it would be like the 1858 financial crisis that Heinrich alluded to in his MRZine article. How one came down on this question hardly mattered so long as the direct and immediate questions of the class struggle were confronted intelligently. They involved:

1. How to build industrial unions.

2. How to resist fascism.

3. How to prevent imperialist war.

The same thing is true today. When people come together politically, the question of the depth and length of the current real estate/credit crisis hardly matters. What relevance does it have for defending immigrant workers? Or pushing for immediate withdrawal from Iraq?

As somebody who has been reading Michael Heinrich’s occasional interventions on MRZine and elsewhere with a mixture of curiosity and bemusement, I have to ask myself why such questions seem to matter so little to him. In the course of building a new revolutionary movement worldwide, it will be correct answers to such questions rather than the battle against crisis-mongering that will have decisive importance.