Is a Marxist explanation of the current crisis possible?

Abstract

The object of the paper is to explore whether, or to what extent, a Marxian explanation of the current capitalist crisis is possible. The answer is that, although Marx's theory offers important insights to understanding the ultimate causes of capitalist crises, it is not able to provide a fully satisfactory explanation of typical crises of contemporary capitalism.In particular, Marx's analysis cannot account for the long periods of stagnation following the eruption of financial and economic crises. In Marx's analytical context, crises are followed by recovery and growth in a relatively short span of time. It is argued that the main reason for Marx's inability to explain crises of contemporary capitalism is that he developed his analysis by considering free-competitive economies, whereas modern economies are characterized by monopolistic competition. A more satisfactory explanation of the current crisis requires going beyond Marx's original contributions.