1`Distinguish between general and partial crisis faced by capitalism.

2.1 Explain the differences between the Marxian and post-Marxian perspectives
on crisis in capitalism.
2.2 Differentiate between necessity and possibility theories of crisis in
capitalism.
2.3 Critically analyse the role of state intervention in influencing the basic
dynamics of capitalist system.
2.4 Economic contradictions of capitalism can not be solved by politics.Comment.
3. 1.
Explain how Underconsumption version of possibility theory argues that internal
economic logic of capitalist economy predisposes it to stagnation? Page 139.
Explain how presence of monopoly capitalism can not fundamentally alter the
scenario.
3.2 Monopoly capitalism increases the tendency of capitalism to stagnation
-Explain
3.3 How does possibility theorists counter Kensian solution to unemployment
problem?
3.4 How does state and monopoly capitalists produce stagnation?
Let us start with Marxian perspectives on the issue of crisis of capitalism. He
distinguishes between the dominant and various subordinate counterveiling
tendencies within a system. The very nature of a system produces the dominant
tendencies, providing a powerful momentum. These subordinating tendencies
may well conflict with the dominant tendencies present in a system. While they
begin by opposing the dominant tendency, they ultimately end being
subordinated by the dominant tendency. Thus, according to Marx, they have
limited potential to impact the basic nature of the system and makes crisis
inevitable in a capitalist economy. In other words, crisis necessarily occurs in
capitalism. Such a view of crisis in capitalism is called necessity theory. Falling
rate of profit is the dominating tendency in capitalism and other countervailing
tendencies in capitalism include structural reforms and state intervention, which
can not ultimately impact the basic dynamics of the capitalist system. The
problems within capitalism arise from capitalist accumulation itself and not from
any other factor like insufficient competition or excessive wages, they can not
be managed by state intervention, no matter how progressive is its intent. Marx
argues that state does not have the capability to manage the capitalist system.
Politics can not command the capitalist system. The economic contradictions of
the capitalist system can not be resolved in the political sphere. Economic
intervention by the state, in principle, can
not strengthen and direct
expansionary forces in order to overcome the threat of stagnation created by
forces operating within capitalism.
Marxian scholars do not agree with Marx on this issue. While they also agree that
dynamics of capitalism is subject to a set of conflicting tendencies, they argue
that the balance of forces operating in diverse directions at a particular

historical juncture determines the final outcome of capitalism. They view

structural reforms and state intervention to contain significant potential to tip
the balance and regulate the outcome under appropriate conditions. Hence crisis
need not necessarily occur in capitalism. Occurrence of crisis, far from being
inevitable, reduces to a mere possibility. Hence such a view goes by the name
possibility theory. Possibility theorist assume that economic contradictions of
capitalism can be resolved in the political sphere, provided sufficient pressure is
brought to bear on the state. Economic intervention by the state, in principle,
can strengthen and direct expansionary forces in order to overcome the threat
of stagnation created by forces operating within capitalism.
Thus there exists two main kinds of theories of crisis, corresponding to two
different methodological approaches to capitalist history. One approach gives
rise to possibility theories. It is based om a otion of law as a result of conflicting
tendencies. In such a scenario general crisis will occur if and when there is a
certain conjunction of historically determined factors. On the other side, we have
necessity theories, based on a notion of law as an expression of intrinsic
dominant tendency which subordinate countervailing ones. In such a scenario,
crisis emerges as an inevitable phenomen
There are two varieties of possibility theory of crisis. One version is called
Stagnation or underconsumption theory.In simple words, the final motion of the
system depends