‘Global Crisis and the Reproduction of Capital’ by Stavros Tombazos reviewed by Brendan Harvey

Global Crisis and the Reproduction of Capital

Palgrave Pivot, Cham, Switzerland, 2019. 90 pp., £49.99 hb
ISBN 9783030057244

Reviewed by Bo Harvey

About the reviewer

Bo Harvey is a writer residing in New York City. He received an MPhil from the Centre for Research …


English language readers may know Stavros Tombazos for his Time in Marx: The Categories of Time in Marx’s Capital, a reading of the core concepts of all three volumes of Capital as falling under categories of time – the ‘linear time’ of production of Vol I, the ‘circular time’ of circulation of Vol II, and the ‘organic time’ of their unity in Vol III (Tombazos 2015). While framed as a Marxian analysis of the 2008 financial crisis and slow recovery, Global Crisis and Capitalist Reproduction is a more empirically oriented investigation into the economic dynamics of the deflationary, recessionary and austerity tendencies of global capitalism since the 1970s, of which the 2008 crisis was an expression. At a general level, Tombazos draws on his conception of economic crisis as outlined in Time in Marx; namely, that in each case, capitalist crisis is an instance of ‘organic arrhythmia’. ‘Healthy growth’, as it were, presupposes a relative equilibrium between the rhythms of the three circuits of money capital that make up Marx’s ‘reproduction schemas’ in Capital Vol II, where the circuit of money capital pertains to the rhythm of valorization, the circuit of productive capital pertains to the rhythm of accumulation, and the circuit of commodity capital pertains to the rhythm of the realization of value.

Insofar as 1.) Tombazos’s analysis of 2008 is inextricable from his analysis of a broader structural obstacle in value augmentation since the 1970s and 2.) the 2008 crisis is a crisis in the realization of value (an arrhythmia in the circuit of commodity capital) while the crisis of the 1970s is a crisis of decreased profitability (an arrhythmia in the circuit of productive capital), the thrust of Global Crisis and the Reproduction of Capital can be summarized as an analysis of the ongoing crisis in the realization of value that is a resulting negative externality of capital’s own relative success in solving a crisis in profitability, but at the expense of the social development traditionally associated with capitalist growth.

Methodologically, Tombazos isolates three specific sections of Capital as having particular explanatory value: the first four chapters of Vol II (containing the analysis of industrial capital), the chapters of the same volume analyzing the ‘reproduction schemes of capital’, and the analysis of the relationship between industrial capital and money capital developed in Vol III. Indeed, Global Crisis serves as a kind of corrective to the seemingly eternal return to the first chapter of Vol. and the section on the fetish-character of commodities, which dominates English-language scholarship on Marx’s Capital.

The core empirical arguments in chapters two and three (‘Profitability, Accumulation, and Industrial Capital’ and ‘Private Consumption, Wage Share of GDP and Reproduction Schemas’) leverage the threefold distinction between circuits of industrial capital in Vol. II (i.e. money capital, production capital, and circulation capital) while chapter four (‘Money Capital, Fictitious Capital, and ‘Toxic Capital’) draws on Marx’s analysis of money capital as distinct from industrial capital in Vol. III. Chapter five (‘Economic Policies and Economic Perspectives’) focuses on policy responses to the conjuncture and in particular, on negative rates as an attempt to save the Euro. ‘Economic policies prevented the collapse of the financial system and in Europe saved the Euro,” he writes, “but did not lead to an exit from the crisis’ (61). This is the case globally insofar as 2008 is ‘the most serious episode of the same long-term downward wave that began in the 1970s. It is the crisis of the capitalist reaction and the neoliberal response to this crisis of the 1970s’ (84). These middle chapters are likely navigable only by those familiar both with mainstream and Marxian political economy. They are however book-ended by a more approachable introduction and conclusion, as well as helpful ‘abstracts’ that summarize the contents of each chapter. In an extension of the theoretical presupposition of Palgrave’ Insights Into Apocalypse Economics series – which takes as its premise the thesis that neoliberal economic policy dating from the 1980s has not only failed to rejuvenate the prosperity of the post-WWII ‘golden age’ economy, but has generated a widening spectrum of pathologies threatening humanity – Tombazos describes contemporary world capitalism as, fundamentally, ‘trapped in the same fundamental contradiction since the late 1960s: It refuses to offer what society is asking for’ (83). Institutions deviate from neoliberalism in the present only as much as needed to ensure the neoliberal horizon is the only future. This ‘colonization of the future’ is – as we will see – not merely operative at the level of some collective imagination, as the Jameson-inspired Utopian Studies of the last decade might suggest.

Marxist debates on crisis have historically been dominated by discussions about the falling rate of profit. Setting the value and legitimacy of that debate aside, what is clear is that, for Tombazos, this singular focus has obscured a dynamic fundamental to an understanding of the specificity of capitalist social reproduction in the neoliberal era; namely, the increasing divergence of the rate of profit and the rate of capital accumulation, where the sorts of long-term investments in fixed capital that have usually constituted the boom and bust nature of the ‘business cycle’ are increasingly less sensitive to increases in profitability. This phenomenon is, for Tombazos, reflected in the upward trend in the ratio of surplus value/net investment in fixed capital (alternatively expressed as an increase in the ratio of the net operating surplus of a given total economy to the net investment in fixed capital). The standpoint of capital is of course aware of this, so surplus is decreasingly invested in fixed capital searching for other outlets for value augmentation. The key transition in the argument is therefore the question of what becomes of all the surplus capital no longer invested in long-term fixed capital investments.

Starting from the empirical observation that in the US, Japan and EU there is an increase in the ratio of private consumption to wage share of GDP, Tombazos argues that the excess surplus not invested in fixed capital ends up largely as easy loans to working class households borrowing to consume; i.e., as debt. Adjusting Marx’s expanded reproduction schema to account for the borrowing of workers, Tombazos shows how borrowing at low interest rates – in the short term – proves an effective outlet for surplus value unable to be realized through investment in fixed capital. Borrowing of course stimulates consumption and consumption has a positive effect on investment and employment. Yet this is only a solution to the problem of the realization of value in the short-term. Tombazos describes this expansion of money capital as ‘structurally unstable and from the outset has an expiration date.’ This instability is grounded in the fact that the borrowed amount increases not simply due to the excess of surplus value diverted from longer-term fixed capital investment to working class debt, but due to the interest that accrues on a loan, thus causing debt servicing to rise as a share of wages. As he puts it, ‘the financial system of the neoliberal period has allowed the massive “transfer” of future demand by wage earners in the present time through the rising of debt, whose servicing increasingly undermined the disposable part of their wages for consumption’ (7). Insofar as debt is simply a claim on the value of future wages (and government bonds therefore a claim on the value of future taxation) the ‘expiration date’ rapidly approaches as soon as markets begin to doubt whether the accumulated rights on those wages will ever be redeemed. Thus the financial aspect of the crisis appears as an accumulation of private debts.

Tombazos goes on to describe the extent to which financial derivatives and other instruments of securitization made possible by various policies of deregulation facilitate the easy transfer of surplus formerly invested in longer-term fixed capital investments into loan capital. These instruments were originally conceived as risk management tools, wherein the sale of securities consisting of different types of loans decreases the risk profile of the riskiest loans (i.e. the non-servicing loans) through the distribution of these loans (and their risk) to a ‘generalized Other;’ i.e., to the financial system writ large. This facilitation of the spread of such ‘toxic’ capital has the effect of increasing the opacity and complexity of the global financial system. The spread of risk has made risk more difficult to detect insofar as risk assumed by creditors reappears systemically. The shifting around of risk is of course not synonymous with its disappearance. We have moved ‘from a system where the granting of a loan meant the assumption of the underlying risk […] to a system that ostensibly decouples the loan from that risk through the sale in the form of a financial derivative product’ (7). Importantly, the only way to reduce the ‘toxicity’ of the accumulated rights over future wages – i.e. to guarantee the horizon of increased profitability through loan capital, usually through the issuance of government debt – is essentially to dismantle the welfare state, insofar as states, through their interventions to rescue the financial system, undertake to rescue these ‘toxic’ values by transferring the cost to the taxpayer as much as possible. This is the political level at which, for Tombazos, ‘class struggle’ is operative. Neoliberalism does not only ‘refuse to offer what society is asking for,’ it turns against society to save itself.

Peter Osborne has pointed out how Marxist crisis theory – which itself, probably not coincidentally, found a renaissance in the 1970s – is haunted by a disjunction between the general-historical character of the concept of crisis in its modern form (which includes the notion of crisis as a condition of possibility of transition to a new mode of production) and the conjunctural and comparatively narrow focus of Marx’s own ‘theory of crisis’ as a theory primarily of periodic crises (Osborne 2010). This is a disjunction Tombazos seems well aware of when he opens his book by distinguishing between ‘periodic’ and ‘structural’ crises. ‘Marx himself dealt only with periodic crises, since the discussion on long-term economic waves, which presupposes a relatively long capitalist history, began after Marx’s death’ (2). Yet insofar as ‘permanent crises do not exist’ (Marx 1989: 497), one wonders whether ‘crisis’ is the relevant term for the so-called post 1970 ‘structural crisis’. If the ‘historic nature’ of the crisis is precisely due to that fact that ‘exiting the crisis cannot be achieved by deepening neoliberalism or partially revising it, a policy “summed up” by a relatively tighter supervision of the banking system’(69) – if there are, in other words, no policy solutions other than social regression to the structural crisis of neoliberal capitalism that can, on the one hand, untangle the web of ‘toxic’ capital while, on the other, avoid the crisis in the falling rate of profit that subtends it – one wonders wonders if the crisis is really capitalism’s at all. The crisis, it seems – if that is the relevant term – is a crisis of society.

Global Crisis and the Reproduction of Capital of course entirely predates the coronavirus crisis – which is straightforwardly a crisis of the ‘real economy’. Yet it is one that has occurred in the context of the increase of private consumption/wage share as described by Tombazos. If you imagine the whole economy is like a bank, with assets that generate income and working people whose income streams valorize those assets, 30% of those incomes streams are about to disappear, thus exacerbating the very same wage share problem. It is difficult to imagine a scenario in which the exogenous coronavirus crisis does not intensify the endogenous ‘structural crisis’ he identifies, thus pouring more than a little cold water on the hopes for some social democratic rebirth in its aftermath.

22 April 2020


  • Marx, Karl 1989 Theories of Surplus Value Amherst, MA: Prometheus Books
  • Osborne, Peter 2010 An Increasing Topicality Radical Philosophy 160 (March/April)
  • Tombazos, Stavros 2015 Time in Marx: The Categories of Time in Marx’s Capital Chicago: Haymarket Books

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