In ‘Towards a Theory of Capitalist Crisis’ you describe a deep structural conflict within capitalism, in which you differentiate between crises that are caused by too high a rate of exploitation, which lead to a realization crisis because of insufficient effective demand, and those caused by too low a rate of exploitation, which cuts into demand for means of production. Now, do you still hold to this general distinction, and if so would you say that we are now in an underlying realization crisis, masked by expanding personal indebtedness and financialization, due to the wage repressions that have characterized capitalism over the last thirty years?

Yes. I think that over the last thirty years there has been a change in the nature of the crisis. Up to the early 1980s, the crisis was typically one of falling rate of profits due to intensifying competition among capitalist agencies, and due to circumstances in which labour was much better equipped to protect itself than in the previous depressions—both in the late nineteenth century and in the 1930s. So that was the situation through the 1970s. The Reagan–Thatcher monetary counter revolution was actually aimed at undermining this power, this capacity of the working classes to protect themselves—it was not the only objective, but it was one of the main objectives. I think that you quote some adviser of Thatcher, saying that what they did was …

… to create an industrial reserve army; exactly …

… what Marx says they should do! That changed the nature of the crisis. In the 1980s and 1990s, and now, in the 2000s, we are indeed facing an underlying overproduction crisis, with all its typical characteristics. Incomes have been redistributed in favour of groups and classes that have high liquidity and speculative dispositions; so incomes don’t go back into circulation in the form of effective demand, but they go into speculation, creating bubbles that burst regularly. So, yes, the crisis has been transformed from one of falling rate of profit, due to intensified competition among capitals, to one of overproduction due to a systemic shortage of effective demand, created by the tendencies of capitalist development.