I just received my copy of Andrew Kliman's latest 2 cents on the current crisis and have already started into it. Thoughts from anybody who's read it?
Well for what it's worth, and if anybody cares, the book puts forth a rather straight-forward argument that the current recession is an indirect product of the Law of the Tendential Fall in the Rate of Profit. Kliman argues that a) the post WWII boom was made possible by the massive amounts of capital value destruction that had taken place (this to my knowledge is commonly agreed on by most Marxists) and b) that during/after the last major recession of the 1970s, not enough capital value was destroyed (due to Keynesian interventionist policies) to make way for a new wave of profitability and accumulation. Since then the rate of profit has been ever on the decline, and unless there is another episode such as the Great Depression of the 1930s or World War II which results in the MASSIVE destruction of the value of existing capital assets, capitalism will continue to stagnate.
I will quote a passage early in the book which explains Kliman's main thesis using the above theoretical outlook, as pertains to the current crisis:
"The chain of causation is easy to understand. The generation of profit is what makes possible the investment of profit (accumulation). parenthesis added So, not surprisingly, the relative lack of profit led to a persistent decline in the rate of capital accumulation (new investment in productive assets as a percentage of the existing volume of capital). Sluggish investment has, in turn, resulted in sluggish growth of output and income.
"All this led to ever more serious debt problems. Sluggish income growth made it more difficult for people to repay their debts. The decline in the rate of profit, together with reductions in corporate income tax rates that served to prop up corporations' after-tax rate of profit, led to greatly reduced tax revenue and mounting government budget deficits and debt, And the government has repeatedly attempted to manage the relative stagnation of the economy by pursuing policies that encourage excessive expansion of debt. These policies have artificially boosted profitability and economic growth, but in an unsustainable manner that has repeatedly led to burst bubbles and debt crises. The latest crisis was the most serious and acute of these." (3-4)
Obviously, Kliman focuses on the United States, but this does not undermine the international quality of the crisis, for, as he explains, the US was at the epicenter of the current crisis (i.e. the crisis erupted elsewhere because it first erupted in the US).
Overall, Kliman does a great job explaining his argument in layman's terms, explaining economic concepts, and supporting his argument with LOADS of empirical evidence gathered from numerous official sources. He also spends a good amount of time debunking the claims of other left-wing analyses, particularly those who see the "neoliberal phase" as marking a turning point in the economy as the financial sector broke away from the real economy and ceased investing in productive assets (creating a new wave of "fictitious" profitability). He completely smashes this "financialization" thesis by showing that the decline in the rate of profitability has nearly directly correlated with the decline in investment and that the financial sector is and always has been beholden to the real economy.
Kliman also debunks the "underconsumptionist" position held by MANY on the left (that the problem is a problem of lack of aggregate demand) by revealing their logical flaws and the reformist implications of their theoretical foundations.
I personally think Kliman has the title wrong. It's not capitalist production that fails, but rather the capitalist "relations" of production which fail. The forces of production continue to grow faster than capitalist property rights can keep up, as someone once showed. The latest failure of capitalism is just another in a long line of crises which happen every 7-10 yrs: 1929, 1938, 1948, 1960(?), 1974, 1980, 1982, 1991, 2001, 2007.
Yes, it's the capitalist "relations" of production which fail, which are intimately related to the capitalist "forces" of production. It is ultimately capitalist production, the production of human material existence, which fails because of the irreconcilable antagonisms between "forces" and "relations" of production as such. Why take the discussion to such a semantic meandering on the author's choice of words for the title? Your comment is completely frivolous.
Yes, i read it; its quite good i think, though a bit difficultly written. What i would add, is that the rate of profit is in constant fall, he fails to see this. The Rate of PRofit in the US w 1850 was 50%, in 2010 it was 2%. The rate of profit of course goes up and down, but it is a definite and steady decline.
"It is necessary for Communists to enter into contradiction with the consciousness of the masses. . . The problem with these Transitional programs and transitional demands, which don't enter into any contradiction with the consciousness of the masses, or try to trick the masses into entering into the class struggle, create soviets - [is that] it winds up as common-or-garden reformism or economism." - Mike Macnair, on the necessity of the Minimum and Maximum communist party Program.
"You're lucky. You have a faith. Even if it's only Karl Marx" - Richard Burton