Ten views on the causes of the crisis

The URPE has now kindly sent me the ten contributions that it invited from radical economists of 1000 words or less on the causes and nature of the current economic crisis, including my own (see my post, The rate of profit is key, 26 July 2012).  These were presented to the URPE/Occupy summer conference last week in New York state.  I thought readers of this blog might like to take a look.  So here is a pdf of the contributions.  CrisisSummaries

A brief glance puts the contributions of Kliman, Moseley and Shaikh closest to mine.  A small debate among the contributors has followed, mainly between the girls and boys of the rate of the profit as the main or underlying cause of capitalist crisis and those who reckon that it’s a problem of ‘realisation’ of value.  I may comment  on this debate in a future post if it can advance our understanding of where the capitalist economy is going – and even on what to do!

2 thoughts on “Ten views on the causes of the crisis

  1. Hi Robert,

    There is something interesting in Steve Keen’s graphs. In v.1 of The Capital Marx argued in XXIII (Portuguese, but XXXI in English)):

    “The public debt becomes one of the most powerful levers of primitive accumulation. As with the stroke of an enchanter’s wand, it endows barren money with the power of breeding and thus turns it into capital, without the necessity of its exposing itself to the troubles and risks inseparable from its employment in industry or even in usury. The state creditors actually give nothing away, for the sum lent is transformed into public bonds, easily negotiable, which go on functioning in their hands just as so much hard cash would. But further, apart from the class of lazy annuitants thus created, and from the improvised wealth of the financiers, middlemen between the government and the nation – as also apart from the tax-farmers, merchants, private manufacturers, to whom a good part of every national loan renders the service of a capital fallen from heaven – the national debt has given rise to joint-stock companies, to dealings in negotiable effects of all kinds, and to agiotage, in a word to stock-exchange gambling and the modern bankocracy.”

    In the last 30 years, we’ve seen the capitalization of what was, up to then, rural and subsistence within what was then the underdeveloped world, specially in Asia. So, now the debt is, perhaps, representative of the growth of foreign branches of more capitalized contries, which may translate in the fixation of productive capital in what was up to then under developed countries.

    Such transfer of capital with the creation of debt is unlike of other cycles, where the debt was located in the countries where capital is due to be built. The evolution of telecommunications, makes it easier to control capital at a distance, which makes debt grow where the head quarters is located.

  2. Many thanks to Michael Roberts for circulating Crisis Summaries. This is a valuable service.

    At first reading I broadly agree with his assessment in respect of the contributions of Kliman and Moseley (along with his own), though I find Shaikh -aside from rejecting profit – is still too fixated on the current model based on employment creation (and implicitly growth). For the same reason I would commend Kotz, who explicitly rejects growth. He is also seemingly the only contributor to mention environmental constraints and technological change as key factors both requiring drastic change to the present model and opening possibilities for a more humane economic system based on more equitable income distribution and dignity for all.

    In my view this should lead us to focus on the need for a universal basic income as the basis for more regulated income distribution in a world where further expansion of aggregate demand / output will be neither feasible nor desirable. This idea is related to that of the Commons as the basis of our collective wealth – without suggesting the total suppression of private property. On that basis the debate should now focus on how these concepts could be worked out in practice as we emerge from the wreckage of the current collapse.

    See my website (and books) for further background.

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