Relative Surplus Value: The Class Struggle Intensifies

By Mazda Majidi

Republished from Liberation School.

Toward the end of our earlier introduction to surplus value, the heart and motor of the class struggle, we wrote that:

The rate of surplus value for the capitalist is the rate of exploitation for the worker. By merely prolonging the working day, the capitalist accrues more (absolute) surplus value. Increasing the working day from eight to 10 hours results in two more hours of surplus value for the capitalist and of exploitation for the worker.[1]

For any working period—whether it be a day, an hour, or five minutes—part of the period is “necessary labor” and another part is “surplus labor.” The former is when the worker produces the value of their own wage, and the latter is when the worker produces surplus value for the capitalist. The ratio between the two is the rate of surplus value for the capitalist and the rate of exploitation for the worker.

Absolute surplus value, Marx says, is “produced by prolongation of the working-day” [2]. In other words, if the ratio between necessary and surplus labor is fixed, then prolonging the working day will result in more surplus value for the capitalist and a greater degree of exploitation for the worker.

Capital’s entire reason for being is to produce surplus value, to increase the exploitation of the working class. As a result, there’s a logical impulse for each capitalist to extend the working day as much as possible. Yet not only might this produce problems for capitalism as a whole (in that it could exhaust the supply of labor-power available), but the working class fights back against exploitation, and at times is able to force limits to the length of the working day.

What happens, then, when political legislation limits the working day to, say, eight hours? This is obviously a limit to capitalist accumulation. For capital, however, “every limit appears as a barrier to be overcome” [3]. Relative surplus value is capital’s strategy for overcoming this limit.

Relative surplus value

If absolute surplus value is produced by lengthening the working day, then relative surplus value is produced by “the curtailment of the necessary labour-time, and from the corresponding alteration in the respective lengths of the two components of the working-day” [4]. Let’s say the working day was previously 10 hours, and that 10 hours was divided between four hours of necessary labor and six hours of surplus labor. If the working day is reduced to eight hours and wages remain the same, capital will lose two hours of surplus value. The only way to overcome this barrier and to reclaim those two hours of surplus labor is to reduce necessary labor by two hours.

How can this happen?

Remember that necessary labor time is variable capital, or the value of labor power. The value of labor power is, like all values, determined by the socially-necessary labor time required for its production and reproduction, which as we saw in the last part was largely the product of class struggle. The value of labor power can be represented by the bundle of commodities that go into the worker’s production and reproduction, like the value of housing, clothing, education, child-rearing, electricity, and so on.

If the conditions are right, the capitalist can—and sometimes does—merely decrease workers’ wages in this scenario. The state can also step in and provide some of the basic commodities that factor into the value of labor power. However, in Capital, Marx sets these aside because he wants to show us how it can happen within the very logic of a “perfectly” functioning capitalist system.

Two interrelated forms of relative surplus value

There are two interrelated ways that capitalists drive down necessary labor. One way it happens is by decreasing the value of the commodities that factor into the value of labor power:

Whenever an individual capitalist cheapens shirts, for instance, by increasing the productiveness of labour, he by no means necessarily aims at reducing the value of labour-power and shortening, pro tanto, the necessary labour-time. But it is only in so far as he ultimately contributes to this result, that he assists in raising the general rate of surplus-value.[5]

The second form explains the reason the capitalist producing shirts ends up raising the rate of surplus value even though they don’t intend to.

To understand this, we have to distinguish between two values: individual value and social (or real) value. Remember that part of the reason Marx calls value socially-necessary labor time is because it’s the average labor time required to produce some useful good or service “under the normal conditions of production, and with the average degree of skill and intensity prevalent at the time” [6]. This is the social or real value: the average of all production times.

The individual value is the labor time required for production in a particular factory or under a particular capitalist.

Capitalists are always in competition with each other. They’re subjected to “the inherent laws of capitalist production” the “external coercive laws having power over every individual capitalist” [7]. Each capitalist is always seeking to gain an edge over their competitors, and as a result, they’re trying to produce more (and sometimes better) commodities faster.

If the socially-necessary labor time required to produce a commodity is two hours, then every capitalist wants to find a way to produce it in less time. If a capitalist can, by employing some new method or technology, produce the same commodity in one hour, then the individual value of the commodity is half of the social value. As Marx writes:

“If therefore, the capitalist who applies the new method, sells his commodity at its social value… he sells it… above its individual value, and thus realizes an extra surplus-value” [8]. Suppose the social value of a shirt is $4 but a capitalist’s individual value is $2. In this case, they can gain an extra $2 in surplus value.

However, whereas previously a working day of eight hours was represented by two shirts, it’s now represented by four shirts. In order to sell the extra shirts, the market needs to be twice as large or the capitalist will sell the shirt at, say, $3—above its individual value but below its social value. In this case, necessary labor is shortened, and the capitalist captures more relative surplus value.

The contradictions of relative surplus value production

Just as capital sees barriers as obstacles to overcome, each new limit it surpasses only creates new contradictions and intensifies existing ones. There are several contradictions that arise from the pursuit of relative surplus value.

The first contradiction is that the capitalists are producing more commodities in terms of use values, yet each commodity contains less value (and therefore exchange-value). This can potentially benefit workers. If wages remain the same, they can either spend less on shirts or purchase more shirts than before. Such a scenario will depend on the class struggle, of course.

This drive to decrease necessary labor can also contribute to a crisis of overproduction. All capitalists are trying to decrease necessary labor time, which means more and more commodities are produced in a given time frame. For the commodities to be realized (sold), there must be an expansion of the market. But at some point, there will be a glut in the market, and there will be more commodities than can be sold at a profit.

The third contradiction is that the “external coercive laws of competition” compel competing capitalists to decrease their own production times, and “this extra surplus-value vanishes, so soon as the new method of production has become general, and has consequently caused the difference between the individual value of the cheapened commodity and its social value to vanish” [9]. Consequently, the overall rate of surplus value also declines, and the need for even faster production re-emerges. Moreover, the competing capitalists don’t only want to match the new innovation and production time but they want to beat it, thereby exacerbating the above contradictions.

Initial methods of producing relative surplus value

There are two initial methods of producing relative surplus value that don’t entail capitalism revolutionizing the means of production. These take place when capital “formally” subjects production to its command, meaning that it takes existing production processes but without fundamentally altering their nature.

One is cooperation, which is a quantitative distinction that leads to a qualitative change. Merely by bringing workers together in one place, capitalists help facilitate the cooperation of workers. “Even without an alteration in the system of working, the simultaneous employment of a large number of labourers effects a revolution in the material conditions of the labour-process. The buildings in which they work, the store-houses for the raw material, the implements and utensils used simultaneously or in turns… in short, a portion of the means of production, are now consumed in common” [10].

Cooperation results in “an increase in the productive power of the individual” worker as well “the creation of a new power, namely, the collective power of masses” [11]. A collective of workers “working in concert has hands and eyes both before and behind and is, to a certain degree, omnipresent” [12]. Importantly, this doesn’t cost capital anything, although it looks like it’s a power of capital itself.

This is the beginning of the collectivization of labor or the production of the collective laborer, which is another contradictory process because “as the number of the co-operating labourers increases, so too does their resistance to the domination of capital” [13]. Workers can more easily agitate and organize, distribute literature and build class consciousness when we’re together in one place.

The other is the division of labor. Capitalism also, without revolutionizing the production process, produces relative surplus value by increasing the division and specialization of labor. When the worker is no longer producing the entire commodity but merely performing one action in the production process, the productivity of labor increases. In other words, “a labourer who all his life performs one and the same simple operation, converts his whole body into the automatic, specialized implement of that operation” and “takes less time in doing it” [14].

Taken together with cooperation, it also decreases any gaps in the labor process: the worker doesn’t have to get up and move to different stations, sit back down, use different tools, and so on.

Capitalism encounters a crucial limit to these methods of relative surplus value production, namely that it is still the workers who are the active agents in production or who serve as the “regulating principle of social production” [15]. The production processes above still rely on the workers’ bodies, skills, knowledges, and so on. Living labor still had the upper hand over dead labor, or the means of production.

Real subjection: Machinery

Marx says capitalists first take existing production processes as they find them and “formally subject them” by, for example, lengthening the working day or instituting cooperation. In order for capitalism to come into its own, it had to totally or really subject labor to its command, and it could only do so by taking the skill and knowledge of the worker and absorbing it into machinery, so that machinery, and not the workers, would drive production; so that dead labor dominates living labor.

Thus is born the industrial factory:

An organized system of machines, to which motion is communicated by the transmitting mechanism from a central automation, is the most developed form of production by machinery. Here we have, in the place of the isolated machine, a mechanical monster whose body fills whole factories, and whose demon power, at first veiled under the slow and measured motions of his giant limbs, at length breaks out in the fast and furious whirl of his countless working organs.[16]

The worker becomes, Marx says, “a mere living appendage” to the machine [17].

As constant capital, the machine can’t produce new value; it can only transfer its existing value to the finished product. However, machinery can produce relative surplus value by decreasing necessary labor time for the individual capitalist and lowering the value of labor-power.

Yet again, this is never finished. It’s only when the capitalist employs new labor-saving technologies that they can produce relative surplus value.

During this transition period… the profits are therefore exceptional, and the capitalist endeavours to exploit thoroughly ‘the sunny time of his first love’.[18]

The love doesn’t last, as other capitalists match or beat the new technologies with more productive ones. The overall rate of surplus value is driven down and, moreover, there are fewer workers engaged in production. The capitalist ends up investing more in machinery and less in labor-power and, overall, surplus value decreases (this is also tied to the tendency of the rate of profit to fall).

This explains why, as Marx and Engels wrote in The Manifesto of the Communist Party, “the bourgeoisie cannot exist without constantly revolutionizing the instruments of production, and thereby the relations of production, and with them the whole relations of society” [19]. The search for relative surplus-value in the face of the limits imposed on capital by the class struggle compel the constant revolutionizing of productive forces like technologies and machinery.

Contradictions intensify

There are numerous other key impacts technological transformations have on capitalism, workers, the class struggle, colonialism, imperialism, and more. Marx addresses many of these, some of which previous Liberation School articles cover [20]. For this introductory article, we want to touch on just a few more issues.

In their ruthless search for surplus value, capitalists work to increase the productivity of labor and the mass of commodities in the world. They produce unemployment and induce crises of overproduction. As Marx puts it:

The enormous power, inherent in the factory system, of expanding by jumps, and the dependence of that system on the markets of the world, necessarily beget feverish production, followed by over-filling of the markets, whereupon contraction of the markets brings on crippling of production. The life of modern industry becomes a series of periods of moderate activity, prosperity, over-production, a crisis and stagnation[21].

The expansion and intensification of capitalism’s command over life and work is accompanied by an enlargement and escalation of its internal contradictions. The capitalist system produces ever more and ever greater misery and destruction.

At the same time, this destruction of the worker, the earth, and its inhabitants produced by modern industry—which is spurred on by the search for relative surplus value—can lay the foundations for socialism: “By maturing the material conditions, and the combination on a social scale of the process of production, it matures the contradictions and antagonisms of the capitalist form of production, and thereby provides, along with the elements of the formation of a new society, the forces for exploding the old one” [22].

There’s nothing deterministic or mechanistic about this argument. Marx isn’t saying it will automatically happen or that it will only or universally happen after a certain level of technological development takes place. It’s important to remember that Marx’s case study in Capital is England, where the capitalist mode of production was most developed [23].

Absolute and relative surplus value as tactics

Absolute and relative surplus value are dialectically related. On the one hand, Marx says, they’re the same in that relative surplus value is absolute in the sense that it lengthens the part of the working day that the worker works for the capitalist (by reducing necessary labor time), and absolute value is relative because it compels an increase in the productiveness of labor.

On the other hand, when we look at the matter practically, they’re distinct. The difference between the two, he writes, “makes itself felt, whenever there is a question of raising the rate of surplus-value” [24]. In other words, sometimes capital will try to get absolute surplus value, and other times it will try to get relative surplus value.

They are each class tactics in its arsenal of exploitation. If workers can limit the working day, capitalists will go back to relative surplus value. But if capital can lengthen it, either by peeling back legislation or by destroying the entire concept of the working day, like it’s done with the “gig economy,” then it will pursue absolute surplus value.

For the working class, it’s imperative to know the tools in capital’s arsenal. When we fight for a normal working day and a living wage, we can make gains by limiting absolute and relative surplus value, but capital can change tactics and exploit us in different ways. If capital can’t increase absolute surplus value by lengthening the work day due to the united struggle of the workers, it will try to increase relative surplus value by increasing the intensity of work through introducing new technologies to the productive process. Conversely, when capital is unable to overcome the workers’ resistance to increase relative surplus value, it will look for ways to extend the workday. For example, capital might increase the number of salaried workers, whose wages do not increase when they work longer workdays.

Class struggle is conducted in many spheres–political, ideological, cultural, and of course the most easily observable, economical. The economic struggle between workers and capitalists over the rate of absolute and relative surplus value, and hence the rate of exploitation, is yet one more facet of class struggle between labor and capital.

Notes:

[1] Ford, Derek and Mazda Majidi. (2021). “Surplus value is the scass Struggle: An introduction,”Liberation School, March 30. Availablehere.
[2] Marx, Karl. (1967).Capital: A critique of political economy (vol. 1): The process of production of capital, trans. S. Moore and E. Aveling (New York: International Publishers), 299.
[3] Marx, Karl. (1993).Grundrisse: Foundations of the critique of political economy (rough draft), trans. M. Nicolaus (New York: Penguin Books), 408
[4] Marx,Capital, 299.
[5] Ibid., 299-300.
[6] Ibid., 47.
[7] Ibid., 257.
[8] Ibid., 301.
[9] Ibid., 302.
[10] Ibid., 307.
[11] Ibid., 309f1. In a footnote, he quotes John Bellers, who writes “As one man cannot, and ten men must strain to lift a ton of weight, yet 100 men can do it only by the strength of a finger of each of them.”
[12] Ibid., 310.
[13] Ibid., 313.
[14] Ibid., 321.
[15] Ibid., 347.
[16] Ibid., 360.
[17] Ibid., 398.
[18] Ibid., 383.
[19] Marx, Karl and Friedrich Engels. (1848/1967).The communist manifesto, trans. S. Moore (New York: Penguin), 222.
[20] Hernandez, Estevan, John Prysner, and Derek Ford. (2019). “A Marxist approach to technology,”Liberation School, December 9. Availablehere.
[21] Marx,Capital, pp. 425-7.
[22] Ibid., 472.
[23] In fact, later on he wrote that the Russian “rural commune” can “by developing its basis, the common ownership of land… become a direct point of departure for the economic system towards which modern society tends.” Marx, Karl. (1881). “First draft of letter to Vera Zasulich,” trans. A. Blunden. Availablehere.
[24] Marx,Capital, 479.

Profitability, Investment, and the Pandemic

[Photo Credit: REUTERS]

By Michael Roberts

Originally published at the author’s blog.

Last week’s speech by US Federal Reserve Chair Jay Powell at the Peterson Institute for International Economics, Washington was truly shocking.  Powell told his audience of economists that “The scope and speed of this downturn are without modern precedent”. One shocking fact that he announced was that, according to a special Fed survey of ‘economic well-being’ among American households, “Among people who were working in February, almost 40% households making less than $40,000 a year had lost a job in March”!!!

Powell went on to warn his well-paid audience sitting at home watching on Zoom that “while the economic response has been both timely and appropriately large, it may not be the final chapter, given that the path ahead is both highly uncertain and subject to significant downside risks”. Indeed, if the continual downgrading of forecasts of global growth are anything to go by, then the number of optimists about a V-shaped recovery are beginning to dwindle to just the leaders of governments and finance.

Another study projects that US GDP will decline by 22% compared to the pre-COVID-19 period and 24% of US jobs are likely to be vulnerable. The adverse effects are further estimated to be strongest for low-wage workers who might face employment reductions of up to 42% while high-wage workers are estimated to experience just a 7% decrease.

And Powell was worried that this collapse could leave lasting damage to the US economy, making any quick or even significant recovery difficult.  “The record shows that deeper and longer recessions can leave behind lasting damage to the productive capacity of the economy.”, said Powell, echoing the arguments presented in my recent post on the ‘scarring’ of the economy.

Powell reckoned the main problem in achieving any recovery once the pandemic was over was that “A prolonged recession and weak recovery could also discourage business investment and expansion, further limiting the resurgence of jobs as well as the growth of capital stock and the pace of technological advancement. The result could be an extended period of low productivity growth and stagnant incomes.”  See here.

And there was a serious risk that the longer the recovery took to emerge, the more likely there would be bankruptcies and the collapse of firms and eve n banks, as “the recovery may take some time to gather momentum, and the passage of time can turn liquidity problems into solvency problems.”

Indeed, last week, the Federal Reserve released its semi-annual Financial Stability Report, in which it concluded that “asset prices remain vulnerable to significant price declines should the pandemic take an unexpected course, the economic fallout prove more adverse, or financial system strains re-emerge.”  The Fed report warned that lenders could face “material losses” from lending to struggling borrowers who are unable to get back on track after the crisis. “The strains on household and business balance sheets from the economic and financial shocks since March will probably create fragilities that last for some time,” the Fed wrote.  “All told, the prospect for losses at financial institutions to create pressures over the medium term appears elevated,” the central bank said.

So the coronavirus slump will be deep and long lasting with a weak recovery to follow and could cause a financial crash.  And working people will suffer severely, especially those at the bottom of the income and skills ladder. That is the message of the head of the world’s most powerful central bank.

But the other message that Jay Powell wanted to emphasise to his economics audience was that this terrifying slump was not the fault of capitalism.  Powell was at pains to claim that the cause of the slump was the virus and lockdowns and not the economy. “The current downturn is unique in that it is attributable to the virus and the steps taken to limit its fallout. This time, high inflation was not a problem. There was no economy-threatening bubble to pop and no unsustainable boom to bust.  The virus is the cause, not the usual suspects—something worth keeping in mind as we respond.”

This statement reminded me of what I said way back in mid-March when the virus was declared a pandemic by the World Health Organisation. “I’m sure when this disaster is over, mainstream economics and the authorities will claim that it was an exogenous crisis nothing to do with any inherent flaws in the capitalist mode of production and the social structure of society.  It was the virus that did it.”  My response then was to remind readers that “Even before the pandemic struck, in most major capitalist economies, whether in the so-called developed world or in the ‘developing’ economies of the ‘Global South’, economic activity was slowing to a stop, with some economies already contracting in national output and investment, and many others on the brink.”

After Powell’s comment, I went back and had a look at the global real GDP growth rate since the end of the Great Recession in 2009.  Based on IMF data, we can see that annual growth was on a downward trend and in 2019 global growth was the slowest since the GR.

And if we compare last year’s 2019 real GDP growth rate with the 10yr average before, then every area of the world showed a significant fall.

The Eurozone growth was 11% below the 10yr average, the G7 and advanced economies even lower, with the emerging markets growth rate 27% lower, so that the overall world growth rate in 2019 was 23% lower than the average since the end of the Great Recession.  I’ve added Latin America to show that this region was right in a slump by 2019.

So the world capitalist economy was already slipping into a recession (long overdue) before the coronavirus pandemic arrived.  Why was this?  Well, as Brian Green explained in the You Tube discussion that I had with him last week, the US economy had been in a credit-fuelled bubble for the last six years that enabled the economy to grow even though profitability has been falling along with investment in the ‘real’ economy.  So, as Brian says, “the underlying health of the global capitalist economy was poor before the plague but was obscured by cheap money driving speculative gains which fed back into the economy”.  (For Brian’s data, see his website here).

In that discussion, I looked at the trajectory of the profitability of capital globally. The Penn World Tables 9.1 provide a new series called the internal rate of return on capital (IRR) for every country in the world starting in 1950 up to 2017. The IRR is a reasonable proxy for a Marxian measure of the rate of profit on capital stock, although of course it is not the same because it excludes variable capital and raw material inventories (circulating capital) from the denominator.  Despite that deficiency, the IRR measure allows us to consider the trends and trajectory of the profitability of capitalist economies and compare them with each other on a similar basis of valuation.

If we look at the IRR for the top seven capitalist economies, the imperialist countries, called the G7, we find that the rate of profit in the major economies peaked at the end of the so-called ‘neoliberal’ era in the late 1990s.  There was a significant decline in profitability after 2005 and then a slump during the Great Recession, matching Brian’s results for the US non-financial sector.  The recovery since the end of the Great Recession has been limited and profitability remains near all-time lows.

The IRR series only goes up to 2017.  It would be possible to extend these results to 2019 using the AMECO database which measures the net return on capital similarly to the Penn IRR.  I have not had time to do this properly, but an eye-ball look suggests that there has been no rise in profitability since 2017 and probably a slight fall up to 2019.  So these results confirm Brian Green’s US data that the major capitalist economies were already significantly weak before the pandemic hit.

Second, we can also gauge this by looking at total corporate profits, not just profitability.  Brian does this too for the US and China.  I have attempted to extend US and China corporate profit movements to a global measure by weighting the corporate profits (released quarterly) for selected major economies: US, UK, China, Canada, Japan and Germany.  These economies constitute more than 50% of world GDP.  What this measure reveals is that global corporate profits had ground to a halt before the pandemic hit.  Marx’s double-edge law of profit was in operation.

The mini-boom for profits that began in early 2016 peaked in mid-2017 and slid back in 2018 to zero by 2019.

That brings me to the causal connection between profits and the health of capitalist economies.  Over the years, I have presented theoretical arguments for what I consider is the Marxian view that profits drive capitalist investment, not ‘confidence’, not sales, not credit, etc.  Moreover, profits lead investment, not vice versa.  It is not only the logic of theory that supports this view; it is also empirical evidence.  And there is a stack of it.

But let me bring to your attention a new paper by Alexiou and Trachanas, Predicting post-war US recessions: a probit modelling approach, April 2020. They investigated the relationship between US recessions and the profitability of capital using multi-variate regression analysis.  They find that the probability of recessions increases with falling profitability and vice versa.  However, changes in private credit, interest rates and Tobin’s Q (stock market values compared with fixed asset values) are not statistically significant and any association with recessions is “rather slim”.

I conclude from this study and the others before it, that, although fictitious capital (credit and stocks) might keep a capitalist economy above water for a while, eventually it will be the profitability of capital in the productive sector that decides the issue. Moreover, cutting interest rates to zero or lower; injecting credit to astronomical levels that boost speculative investment in financial assets (and so raise Tobin’s Q) and more fiscal spending will not enable capitalist economies to recover from this pandemic slump.  That requires a significant rise in the profitability of productive capital.

If we look at investment rates (as measured by total investment to GDP in an economy), we find that in the last ten years, total investment to GDP in the major economies has been weak; indeed in 2019, total investment (government, housing and business) to GDP is still lower than in 2007. In other words, even the low real GDP growth rate in the major economies in the last ten years has not been matched by total investment growth.  And if you strip out government and housing, business investment has performed even worse.

By the way, the argument of the Keynesians that low economic growth in the last ten years is due to ‘secular stagnation’ caused by a ‘savings glut’ is not borne out.  The national savings ratio in the advanced capitalist economies in 2019 is no higher than in 2007, while the investment ratio has fallen 7%.  There has been an investment dearth not a savings glut.  This is the result of low profitability in the major capitalist economies, forcing them to look overseas to invest where profitability is higher (the investment ratio in emerging economies is up 10% – I shall return to this point in a future post).

What matters in restoring economic growth in a capitalist economy is business investment.  And that depends on the profitability of that investment.  And even before the pandemic hit, business investment was falling.  Take Europe. Even before the pandemic hit, business investment in peripheral European countries was still about 20 per cent below pre-crisis levels.

Andrew Kenningham, chief Europe economist at Capital Economics, forecast eurozone business investment would fall 24 per cent year on year in 2020, contributing to an expected 12 per cent contraction in GDP. In the first quarter, France reported its largest contraction in gross fixed capital formation, a measure of private and public investment, on record; Spain’s contraction was also near-record levels, according to preliminary data from their national statistics offices.

In Europe, manufacturers producing investment goods — those used as inputs for the production of other goods and services, such as machinery, lorries and equipment — experienced the biggest hit to activity, according to official data. In Germany, the production of investment goods fell 17 per cent in March compared with the previous month, more than double the fall in the output of consumer goods. France and Spain registered even wider differences

Low profitability and rising debt are the two pillars of the Long Depression (ie low growth in productive investment, real incomes and trade) that the major economies have been locked into for the last decade.  Now in the pandemic, governments and central banks are doubling down on these policies, backed by a chorus of approval from Keynesians of various hues (MMT and all), in the hope and expectation that this will succeed in reviving capitalist economies after the lockdowns are relaxed or ended.

This is unlikely to happen because profitability will remain low and may even be lower, while debts will rise, fuelled by the huge credit expansion.  Capitalist economies will remain depressed, and even eventually be accompanied by rising inflation, so that this new leg of depression will turn into stagflation.  The Keynesian multiplier (government spending) will be found wanting as it was in the 1970s.  The Marxist multiplier (profitability) will prove to be a better guide to the nature of capitalist booms and slumps and show that capitalist crises cannot be ended while preserving the capitalist mode of production.