Farrar, Straus and Giroux

Across the three volumes of Capital, Marx describes several forms of crisis. The first is an overproduction crisis, when too many commodities are chasing too little demand, leaving the profits generated in the production process unable to be realized by selling the goods. Marx also expected crises to emerge from the inefficient flow of capital between sectors: he lived through numerous crises where heavy industry had grown out of step with the consumer goods producing sector, leading to a recession until they rebalance. Then there is crisis triggered by the failure of the counteracting tendencies listed above, leading to a tangible collapse in the profit rate, an investment freeze, layoffs and falling GDP.
Finally, in volume III of Capital, Marx describes how financial crisis happens: credit becomes massively overextended, and then speculation and crime drive it to unsustainable limits where the bust inevitably overcorrects the boom – pushing the economy into a multi-year depression.

This was the upswing of the third Kondratieff Wave. You can ‘read’ the results in the cityscapes of New York, Shanghai, Paris and Barcelona: the most enduring and beautiful public buildings – libraries, pubs, offices, even bath houses – are usually from the period between 1890 and 1914. The story they tell is clear: during the time we call the belle époque or the Progressive Era – a time of rapid growth, liberalization and cultural uplift – the world prospered not through the market but by the controlled suppression of it.

In the USA, Britain and France, the stock market and investment banks drove the process. In 1890 there were ten industrial companies quoted on Wall Street; by 1897 more than 200.11 In Japan and Germany, where industrial capitalism had been created ‘from above’ under authoritarian governments, finance was mobilized not so much through the stock market but via the banks, and even the state itself. Russia – the latecomer – would adopt a hybrid model, with much of its industry foreign-owned.
The Anglo-Saxon model and the German-Japanese model, therefore, looked very different, and that would provoke a 100-year-long debate over which was best.* But within each lay a variant of the same basic idea: finance took a controlling stake in industry, carving out monopoly positions where possible, suppressing market forces – and the state was directly allied to the whole project.