Capitalism, Imperialism, and Crises

Abstract

What is now called a ‘business cycle’ or a periodic revisiting of crises, each marked by sudden spurts of bankruptcies and sharp descents in market prices, has been a regular feature of the history of capitalism, even in its mercantilist and early colonial phase—its beginning marked, for example, in England, by the ‘South Sea bubble’ of 1720. With the onset of the Industrial Revolution in England in the latter half of the eighteenth century, the periodic crisis became one of production, that is, of a huge apparent mismatch between excessive supply and receding demand. This chapter attempts to place the recurring economic crises that have occurred during the history of modern capitalism in the changing contexts of capital accumulation and investment, and changing forms of imperialism. It discusses the work of several economic theorists, including Adam Smith, David Ricardo, Karl Marx, J. A. Schumpeter, Rosa Luxemburg, V. I. Lenin, and Arghiri Emmanuel. The chapter suggests a theoretical question: Would a socialist economy, if fully industrialized, also be subject to fluctuations resembling capitalist trade cycles?