Capitalist Cycle

Capitalist Cycle


the continually repeating movement of capitalist production from one economic crisis to another. It includes the phases of crisis, depression, revival, and boom. In the development of each phase, the conditions are created for the transition to the next phase of the cycle. “As the heavenly bodies, once thrown into a certain definite motion, always repeat this,” wrote Marx, “so is it with social production, as soon as it is once thrown into this movement of alternate expansion and contraction. Effects, in their turn, become causes, and the varying accidents of the whole process, which always reproduces its own conditions, take on the form of periodicity” (K. Marx and F. Engels, Soch., 2nd ed., vol. 23, p. 647–8). The cyclical course of reproduction of social capital is conditioned by the basic contradiction of capitalism—the contradiction between the social nature of production and the private capitalist form of appropriation.

The decisive phase of the capitalist cycle is the crisis of overproduction. In it the cycle reaches its culmination and ends, and the prerequisites for the development of a new cycle take shape. The material basis for movement through the cycle is the massive renewal of fixed capital. Although the periods of intensive capital investment are different and do not by any means coincide with each other, as Marx noted, a crisis always creates a starting point for a new large-scale investment of capital. In this connection, ever since large-scale industry became consolidated, the average period over which machinery is renewed has been one of the important features in explaining the long-term cycle through which industrial development passes” (ibid., vol. 29, p. 237).

The first crisis of general overproduction, which initiated the first capitalist cycle, broke out in Great Britain in 1825. By the mid-19th century, the triumph of large-scale machine industry in a number of countries, the deepening of the international division of labor, and the development of worldwide economic ties created conditions under which the capitalist cycle became international in nature. At about that time, the approximate ten-year duration of the capitalist cycle was distinctly manifested. Subsequently, in the 1870’s, the development of productive forces and the associated exacerbation of the antagonistic contradictions of capitalism resulted in a decrease in the duration of the capitalist cycle to seven or eight years; the destructive force of the cyclical crises of overproduction increased.

Under the conditions of the general crisis of capitalism—in the context of the struggle between two social systems, the growth of state-monopoly capitalism, and the militarization of the economy—certain changes in the mechanism of the capitalist cycle take place. The financial oligarchy uses a far-reaching system of state-monopoly anticrisis measures. The effects of the sharply increased economic might of the largest monopolies and their attempts to regulate production and sales in order to obtain higher profits are seen in the manifested forms of the capitalist cycle. At the same time, the intensification of the struggle of the working people against the oppression of monopoly capital exerts an increasingly substantial influence on the course of the capitalist cycle.

As early as the 19th century, Marx, analyzing the development of the capitalist cycle, noted that in the course of accumulation the periodic phases of the cycle are interrupted by irregular fluctuations that follow one another with increasing frequency. The development of the scientific and technical revolution and the processes of structural reorganization of the economy under the conditions of contemporary capitalism inevitably lead to the more frequent appearance of partial, intermediate and supplementary crises. The subsequent period of economic stagnation and a gradual “slipping” into crisis becomes the constant concomitant of the cyclical boom.

As a result of changed conditions in the development of the capitalist cycle, the phases of revival and boom in many capitalist countries have been more intensive and the crisis drops in production have been less profound since World War II. However, the operation of capitalism’s characteristic laws of cyclical development of production can be clearly traced in the course of the postwar economic development of the imperialist countries.

After World War II, international economic ties were weakened; as a result, the “synchronization” of the cycle’s phases in the various capitalist countries was disrupted. Thus, the schedule of phases in the USA differed substantially, for example, from those in Japan or France. Nonetheless, the entire course of development of the processes of reproduction makes it possible to trace in an increasingly exact manner the general laws of development of the international capitalist cycle. Thus, the world economic crisis of 1957–58, which initiated the second postwar cycle, brought a decline in production not only in the USA, but also in Great Britain, Sweden, Belgium, the Netherlands, and Norway. The rate of growth of industrial production abruptly slowed down in the Federal Republic of Germany, Italy, and France.

The cyclical fluctuations of capitalist production increase the instability of the material situation of working people. During crisis years, the industrial reserve army grows constantly, and a large number of industrial and office workers find themselves unemployed. Invariably, capitalism seeks the way out of the crisis by further increasing the exploitation of the workers. One characteristic of the development of the contemporary capitalist cycle is the reduction of the role of cyclical factors in the behavior of prices, especially prices on consumer commodities: if previously crises of overproduction were always accompanied by substantial decreases in prices, in the 1950’s and 1960’s the increase in the high cost of living in most cases did not stop even under crisis conditions. These processes inevitably lead to the further aggravation of the contradictions of bourgeois society. The capitalist cycle and particularly the economic crises serve as an expression of the historical limitations of the capitalist mode of production; they show the inability of the bourgeois system to cope with the productive forces that have been called into being.


Marx, K. Kapital, vol. 1. In K. Marx and F. Engels, Soch., 2nd ed., vol. 23, chs. 3, 6, 23, 24.
Marx, K. Kapital, vol. 2. Ibid., vol. 24, chs. 2–6, 12–16, 20–21.
Marx, K. Kapital, vol. 3. Ibid., vol. 25, chs. 6, 14–18, 27, 48, 51.
Marx, K. “Teorii pribavochnoi stoimosti” (vol. 4 of Kapital). Ibid., vol. 26, part 2.
Engels, F. Anti-Dühring. Ibid., vol. 20, sec. 3, ch. 1.
Lenin, V.I. “K kharakteristike ekonomicheskogo romantizma.” Poln. sobr. soch., 5th ed., vol. 2.
Lenin, V.I. “Razvitie kapitalizma v Rossii.” Ibid., vol. 3.
Lenin, V.I. “Uroki krizisa.” Ibid., vol. 5.
Lenin, V.I. “Marksizm i revizionizm.” Ibid., vol. 17.
Programma KPSS. Moscow, 1971.
Materialy XXIV s”ezda KPSS. Moscow, 1971.
Mirovye ekonomicheskie krizisy, 1848–1935, vol. 1. Moscow, 1937.
Iakovlev, A. Ekonomicheskie krizisy v Rossii. Moscow, 1955.
Sovremennoe ekonomicheskoe polozhenie kapitalisticheskikh stran. Moscow, 1959.
Trakhtenberg, I. Kapitalisticheskoe vosproizvodstvo i ekonomicheskie krizisy Moscow, 1959.
Varga, E. Sovremennyi kapitalizm i ekonomicheskie krizisy. Moscow, 1962.
Kuz’minov, I. Poslevoennyi kapitalisticheskii tsikl. Moscow, 1962.
Mendel’son, L. Teoriia i istoriia ekonomicheskikh krizisov i tsiklov, vols. 1–3. Moscow, 1959–64.
Sovremennye tsikly i krizisy. Moscow, 1967.


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