Heinrich proceeds at length to deny the validity of the falling rate of profit as the specific underlying premise of Marx’s crisis theory, going so far to deny that Marx actually had an internally consistent crisis theory. Heinrich’s counterarguments, themselves tired old chestnuts, are curiously incompatible with that conclusion. What occurs during a crisis according to Heinrich (and anyone else who has given the matter an iota of consideration)? “( C )apital is devalued or even completely wiped out…workers are laid off and wages decline with the rise of unemployment” until the unity between spheres is “violently restored.” Now, one might ask, if a declining rate of profit is not the underlying cause of crises, why then should crises be overcome and accumulation restored by eliminating excess claims on surplus value and forcibly redistributing the division of the working day towards capital? That is, why should raising the rate of profit be the specifically appropriate cure for the crisis if the falling rate of profit was not its underlying cause?
What exactly is the meaning of the “over-accumulation of capital” that Heinrich blithely trots out as a description of the crisis precipitant? Over-accumulation of capital relative to what, if not profits? And what are we to make of the “over-production of commodities” “relative to buying power”? Commodities are the form that capital takes in the process of circulation; “buying power” is the rate of capital formation out of surplus-value. Buying power (the market) expands to the extent that capitalists add to their stock of means of production (constant capital) and hire additional workers (variable capital). So when Marx speaks of the over-accumulation of commodities relative to purchasing power, he simply means that the motivation to accumulate has dissipated owing to dismal profit expectations. Ordinarily, the crisis tendencies of the falling rate of profit can remain latent insofar as capital compensates for a fall in the rate of profit by increasing the mass of profits. When this is no longer seen as feasible because the expected rate of return is too feeble, capital fails to expand purchasing power (accumulate) sufficiently to clear the markets. Inventories build up. The relative “overproduction of commodities” becomes an absolute over production; the relative overproduction of capital becomes an absolute over production. Surplus value cannot be realized and the circuits of capital cannot be completed.
The problem with Heinrich is that he cannot convince himself that the argument for a falling rate of profit is internally consistent and logically compelling. At the same time he does not or cannot situate a framework for crises that can be constructed in any other context.