Writing on his blog The Next Recession, Michael Roberts, who worked in the City of London for 30 years, argues that Andrew Kliman’s The Failure of Capitalist Production: Underlying Causes of the Great Recession is “essential reading” in order to understand the current economic crisis:
By measuring profitability on historic costs of capital, the explanation of the crisis becomes clear, says Kliman. US profitability falls and capital accumulation is resultingly weak. It is not slowing because profits are being switched into unproductive financial sectors, but simply because profitability is falling. Eventually, the crisis is reached when profitability falls so low as to provoke a major investment crisis, enhanced by overextended debt and unregulated financial sector speculation. This can only be resolved by a major destruction of capital values i.e. a slump. Also Kliman argues that the evidence does not justify a sharp fall in wage share in the US economy after 1982. If you measure income going to labour properly, there has been no significant decline in employee income (wages plus other benefits). Thus the underconsumptionist view that the Great Recession is the product of a collapse of consumer demand is not justified by the wage share argument or by that of growing inequality. Kliman then provides a devastating rebuttal of the underconsumptionist alternative (chapter 8).
The Failure of Capitalist Production is essential reading for all Marxists and lefts interested in what caused the Great Recession. It debunks the fads and fashionable arguments of neoliberalism, underconsumption and inequality with a battery of facts. It restores Marx’s law of profitability to the centre of any explanation of capitalist crisis with compelling evidence and searching analysis. It must be read.
Visit The Next Recession to read the review in full.
Click here to listen to Andrew discuss his book on Diet Soap Podcasts.
Underlying Causes of the Great Recession
Distinctive and detailed account of the current economic crisis, identifying it as a crisis of capitalism caused by long-term falling profit rates
“One of the very best of the rapidly growing series of works seeking to explain our economic crisis. … The scholarship is exemplary and the writing is crystal clear. Highly recommended! “ – Professor Bertell Ollman, New York University, author of Dance of the Dialectic
“Clear, rigorous and combative. Kliman demonstrates that the current economic crisis is a consequence of the fundamental dynamic of capitalism, unlike the vast bulk of superficial contemporary commentary that passes for economic analysis.” – Rick Kuhn, Deutscher Prize winner, Reader in Politics at the Australian National University
£17.99 only £16.00 on the Pluto site