In an interview with The Commune, Andrew Kliman, author of The Failure of Capitalist Production: Underlying Causes of the Great Recession, outlines his expectations for the direction of the global economy in the next decade:
My educated guess is that the world economy will not start expanding rapidly. There’s too much uncollectable debt, and there’s little prospect that profitability will rebound in a sustainable way, because accumulated investment is too great in relation to the profit it can generate. And artificial government stimulus of the economy has basically reached its limits. So we’re likely to have more of the same: high unemployment, foreclosed homes, bankruptcies, debt and banking crises, etc. I don’t think there will be a new boom under capitalism without large-scale destruction of value (including write-downs of uncollectable debt and other forms of fictitious value) that sets the stage for a restoration of profitability.
The main question is then whether policymakers in the major countries will be able to engineer a very long soft landing, in which the destruction of value occurs gradually, without truly major crises and/or social upheavals and/or wars. They’ve been pretty successful for decades, and recently, at kicking the can down the road by papering over bad debt with even more debt. But this strategy might well be approaching its limit as government debt ratios mount. And the persistent economic malaise, rising debt, and the 70%-plus “haircut” that some of Greece’s creditors recently had to take have to be eroding creditors’ confidence that monies owed to them will in fact be repaid. This makes financial crises on the scale of the 2007–2008 crisis, or even worse ones, more likely.
Kliman finds grounds for optimism in the emerging global struggles against austerity:
The most hopeful things happening are the acceleration of class struggles taking place in various forms throughout the world, and the fact that they’re learning from and solidarizing with one another. I think a socialist way out of the crisis is a real historical possibility now, but only if these struggles are met halfway with a very sober, very rationalist politics that says, “the solutions that have been tried to fix capitalism aren’t working, but we don’t really know yet what must be changed in order to transcend the system. So the only solution is you. It’s up to you to take control of the process of figuring this out. Once you know what you’re doing, you’ll be able to do more than express your anger and appeal to leaders to help you. You can take charge.”
Visit The Commune to read the interview in full.
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