Every year at this time, I look back at the books that I have reviewed during the year on this blog. I’ll take them in chronological order.
José Tapia had a new book on the world economy. In his Six crises of the world economy, he offers the reader a ‘big picture’ analysis of the world capitalist economy since the 1970s. Tapia identifies six crises in capitalist economies since the 1970s. The first crisis occurred in the mid-1970s and the sixth crisis occurred in 2020, at the time of the COVID-19 pandemic.
Tapia draws heavily on previous work by non-Marxist economists Wesley Mitchell and Jan Tinbergen who, in his view, although mainstream economists, developed a theory of endogenous recurring capitalist crises from empirical studies. Tapia’s Six Crises is essential reading for the evidence supporting Marx’s view that crises are endemic to capitalism and are now generalised through the world. Major economic crises occur at least once per decade and “the mostly failed attempt to create institutions of “global governance” show quite clearly that the ability of the market economy to regulate itself and produce efficient social outcomes is just a myth”.
https://thenextrecession.wordpress.com/2024/02/28/six-crises-of-capitalism/
In contrast, British Labour MP Liam Byrne in his book Inequality of Wealth offers a reformist approach to dealing with the extreme inequalities of wealth and income engendered in modern capitalism.
He looks to find ‘a middle way’ to rectify things between the view that nothing can be done and the view that some revolutionary transformation of the economic structure was needed, which the electorate would not accept. To do this, a government should give every young person £10,000 to kick their careers off; the government should establish a sovereign wealth fund to build up funds (what for Byrne did not explain); and there should be fairer taxation. Moreover, all these ‘radical’ measures to reduce inequality of wealth would have to be slowly introduced over “three parliaments” (I make that 15 years!), so that electorate gradually got used to the policies!
https://thenextrecession.wordpress.com/2024/03/04/inequality-the-middle-way/
We returned to a Marxist perspective with The State of Capitalism, an ambitious work, written by the NAMe Collective with the lead from Professor Costas Lapavitsas from SOAS University, London.
The Collective reminds the reader of the aim of the book: to develop a clear analysis of capitalism today in order to see the way towards replacing it with socialism. What do they advocate? Democratic planning “with the state and the broader public sector taking a commanding role in production, consumption, and distribution. The balance of power in economic decision making must be altered accordingly, creating social foundations to confront the ecological crisis in a coherent and socially aware way, something that private capital is incapable of doing.” The State of Capitalism is an exercise in hard analysis and there is much to learn and debate. In that sense, the book is a must read, even if I have disagreements on the Collective’s view on the causes of crises in capitalism, the nature of imperialist exploitation and the role of finance.
https://thenextrecession.wordpress.com/2024/03/28/the-state-of-capitalism/
There is a fundamental contradiction in capitalist investment between reducing costs through higher productivity and slowing investment because of falling profitability. This is the key message from yet another excellent book by Brett Christophers, The Price is Wrong – why capitalism won’t save the planet.
Christophers argues that it is not the price of renewables versus fossil fuel energy that is the obstacle to meeting the investment targets to limit global warming. It is the profitability of renewables compared to fossil fuel production. Christophers concludes “if private capital, circulating in markets, is still failing to decarbonize global electricity generation sufficiently rapidly even with all the support it has gotten and is getting from governments, and even with technology costs having fallen as far and as fast as they have, it is surely as clear a sign as possible that capital is not designed to do the job.” Instead, Christophers argues that if we are ever to achieve rapid reductions in carbon emissions, “extensive public ownership of renewable energy assets appears the most viable model.” I would add that must also require public ownership of the fossil fuel producers to ensure any rapid transition.
https://thenextrecession.wordpress.com/2024/06/23/fixing-the-climate-it-just-aint-profitable/
Grace Blakeley is a columnist for the British left-wing journal, Tribune, and a regular panellist on political debates in UK broadcasting – often the only spokesperson on the left advocating socialist alternatives. In her new book, Vulture Capitalism she seeks to debunk the longstanding concept of mainstream neo-classical economics that capitalism is a system of ‘free markets’ and competition.
If capitalism ever did have ‘free markets’ and competition among companies in the struggle to obtain profits created by labour (and Blakeley doubts that it ever did), then it certainly does not now. Capitalism now, she argues, is really a planned economy, controlled by big monopolies and backed by the state. Blakeley argues that crises in capitalism are no longer resolved by what Joseph Schumpeter (and Marx for that matter) called ‘creative destruction’ . Crises in capitalism ie slumps that lead to the liquidation of companies; mass unemployment and financial crashes, have been increasingly overcome through ‘planning’ by the big monopolies and the state.
Blakeley dispenses with the ‘out of date’ Marxist explanation of crises that Marx argued for, between the profitability of capital and productivity of labour that leads to regular and recurring crises of investment and production. For Blakeley, capitalism can actually avoid or at least resolve such crises by ‘planning’ and by getting handouts from the state. Monopolies can avoid ‘creative destruction’ and can continue to motor on at the expense of small businesses and the rest of us.
It’s not a thesis I agree with. Capitalism has not overcome international crises through state monopoly planning. Crises continue to occur at regular intervals, caused by the contradiction between the striving for more profit and the increasing difficulty of realizing that profit. Crises are still inherent to the capitalist accumulation process and not the result of ‘bad choices’ made by politicians doing the bidding of monopolies. Only the ending of private capital and the law of value through public ownership and planning can stop such crises.
https://thenextrecession.wordpress.com/2024/05/08/vulture-capitalism/
There are also confusions, if not the same as with Blakeley, in Joseph Stiglitz’s new book, The Road to Freedom.
For Stiglitz, the enemy of human freedom is not capitalism as such, but ‘neoliberalism’ which has bred soaring inequality, environmental degradation, the entrenchment of corporate monopolies, the 2008 financial crisis, and the rise of dangerous right-wing populists like Donald Trump. These baleful outcomes weren’t ordained by any laws of nature or laws of economics, he says. Rather, they were “a matter of choice, a result of the rules and regulations that had governed our economy. They had been shaped by decades of neoliberalism, and it was neoliberalism that was at fault.”
Stiglitz has argued before in previous books that it is not capitalism that is at fault but the decisions of governments and their corporate backers to ‘change the rules of the game’ that had existed in the post-war period of managed capitalism. The rules were changed to deregulate; to privatise; to crush labour unions etc. But Stiglitz never explains why the ruling elite felt it necessary to change the rules of the game. What happened to swing the post-war rules into the neoliberal ones? ‘Progressive capitalism’ is an oxymoron in the 21st century. And even Stiglitz doubts that it is possible to achieve.
https://thenextrecession.wordpress.com/2024/05/13/joseph-stiglitz-and-progressive-capitalism/
A much more important and insightful book is by Brazilian Marxist economists Adalmir Antonio Marquetti, Alessandro Miebach and Henrique Morrone. Entitled Unequal development and Capitalism, the authors argue that unequal development has been a defining characteristic of capitalism.
“Throughout history, countries and regions have exhibited differences in labor productivity growth – a key determinant in poverty reduction and development – and although some nations may catch up with the productivity levels or well-being of developed economies at times, others fall behind.” What they show is that Global South countries will never ‘bridge the gap’ on labour productivity and thus on living standards because the profitability of capital in the Global South will quickly dissipate compared to the Global North.
Without strong state intervention, the contradiction between a falling rate of profit and increasing the productivity of labour cannot be overcome. As the authors put it “This issue is observed in many middle-income trap countries. In these cases, state intervention becomes essential, expanding investment even as the profit rate declines, as in China.” Exactly. China’s success in catching up, which so frightens US imperialism now, is down to state-led investment overcoming the impact of falling profitability on capital investment.
https://thenextrecession.wordpress.com/2024/07/17/catching-up-and-falling-behind/
Meanwhile, the advanced capitalist economies are steadily coming to an end in any significant development as finance capital squeezes the productive sector.
This is graphically revealed for the UK by a new book, in his recent book, Vassal State – how America runs Britain, Angus Hanton shows the dominant role that US companies and finance play in owning and controlling large sections of what remains of British industries. This US takeover was accepted and even encouraged by successive British governments from Tory Thatcher to Labour’s Blair.
Hanton shows that in Thatcher’s second full year in office, 1981, only 3.6 per cent of UK shares were owned overseas. By 2020 that number was more than 56 per cent. Of all the assets held by US corporations in Europe, over half of them are in the UK. US corporations have more employees in the UK than the number they have in Germany, France, Italy, Portugal and Sweden combined. The largest US companies sell more than $700 billion of goods and services to the UK, which amounts to over a quarter of the UK’s total GDP.
https://thenextrecession.wordpress.com/2024/11/19/private-equity-vampire-capital/
The next books reviewed return us to Marxist economic theory. In the Tracks of Marx’s Capital: Debates in Marxian Political Economy and Lessons for 21st Century Capitalism is an important new book by two well-known Marxist economists from Turkey.
Ahmet Tonak and Sungur Savran bring together a series of works written by them over the last 40 years that ‘track’ the development and relevance of Marx’s analysis of the capitalist mode of production to the present day. Tonak and Savran show convincingly that Marx’s Capital remains the bedrock for understanding the laws of motion of capitalist production despite fashionable attempts to revise and refute Capital’s analysis. It still provides the only searchlight for guiding us towards a new social formation for humanity that is not based on exploitation of the many by the few, but brings human beings and nature together in a world of cooperation and freedom.
https://thenextrecession.wordpress.com/2024/10/12/tracking-marxs-capital/
Ascension Mejorado and Manuel Roman have authored a book that analyses the US economy from a Marxist perspective and in so doing provides yet more empirical support for Marx’s law of profitability and its essential relevance to crises in capitalist production.
Entitled Declining Profitability and the Evolution of the US Economy: A Classical Perspective, Mejorado and Roman take the reader on a journey through Marxist crisis theory using the latest data from the US economy. Most important, Mejorado and Roman show that it is the movement in the rate and mass of profits that leads to an investment collapse and a hoarding of cash, with the subsequent collapse in ‘effective demand’, not vice versa. “For Marx, an increase in the demand for idle money, at the aggregate level, takes place when the capitalist class as a whole is induced to regard investment and production as not profitable. In this way, Marx linked the analysis of effective demand to the analysis of the fundamental factors underlying capitalist production and growth.”
The authors refer to a ‘silent depression’ in the period from 2012 to 2020 when there was a stagnation of the mass of nonfinancial corporate real profits from 2012 to 2020. So Mejorado and Roman do not expect the ‘silent depression’ to end. “Given the extended path of secular stagnation, low capital accumulation trends in the real sectors, and the build-up of financial fragility in the banking scaffold that fueled asset bubbles, the depression “is likely to persist.”
https://thenextrecession.wordpress.com/2024/12/20/profitability-investment-and-the-silent-depression-a-new-book/
Greek Marxist economists, Nikolaos Chatzarakis; Persefoni Tsaliki and Lefteris Tsoulfidis look at long cycles and economic growth with the latest data and seek to identify these long cycles in capitalism. In their book, Economic growth and long cycles, the authors critically evaluate the existing mainstream growth models and offer an alternative approach to the theory of economic growth based on what they call classical political economy, but in essence is a Marxist approach.
They argue that capitalist development takes the form of “long periods of expansion characterized systematically by accelerating growth rates and other periods of similar longevity during which growth decelerates and sometimes becomes negative.” The authors provide us with new evidence of the existence of long cycles and in so doing offer us an important indicator of the long-term ‘health’ of capitalism in the 21st century. According to the authors’ analysis, the fifth K-cycle should end by the end of this decade.
https://thenextrecession.wordpress.com/2024/12/24/long-cycles/
And finally two very useful easy educators: one on capitalism; and one on socialism. First in Capital Condensed, Colin Chalmers has written a clear, easy to read, short version of the three volumes of Capital.
Step by step, he takes the reader through Marx’s categories and definitions and how they build into the complex web of modern capitalism. I think it is a good educator for activists who are not familiar with economics – something that is very difficult to achieve.
And second, there is Simon Hannah’s, Reclaiming the Future: A Beginner’s Guide to Planning the Economy.
Hannah takes readers on a transformative journey towards a radically democratic society, where the power and control over our lives are firmly in our hands. Hannah lays the building blocks for a grassroots economy that aligns our economy within human needs and environmental limits, presenting a convincing case for socialist democratic planning as the only way to meet the needs of billions of humans without destroying the planet.
Be the first to comment