BOOK/Donald McCarthy

Capitalism on the Rocks

When I was an undergraduate at Adelphi University, I had Paul Mattick as a professor for a number of classes. When Business as Usual: The Economic Crisis and the Failure of Capitalism by Mattick (Reaktion Books, 126 pp., paperback) came out I was eager to read it, especially when, as he had informed me while he was writing it, that it would be aimed at people like me: someone who has an understanding of the current economic situation but is not necessarily acquainted with all areas of economic history. Mattick takes a look at the capitalist economy and manages to explain it in a way that even those who know little about the economy will still be able to grasp his main ideas.

Take for example the first chapter which is titled “What Happened?” In it Mattick discusses not just the recent recession but also goes on to explain various economic theories that attempt to explain the recent recession. When he brings up Adam Smith he does not automatically assume the reader knows every inch of Smith’s work; instead, Mattick quotes from Smith and explains his own interpretation of Smith’s quote. As Mattick is a big proponent of Karl Marx, he makes sure that the reader has an adequate understanding of Marxist theory as it relates to the book’s thesis.

The key point that Mattick is trying to get across is that, as Marx predicted, capitalism is heading down a disastrous path, a path that probably could not have been avoided once capitalism was fully embraced as an economic system. He points to the business cycle as an example of how the capitalist mode of economy is inherently flawed. He explains that the business cycle practically demands depressions and in all likelihood they cannot be avoided. The only problem with Mattick’s analysis of the business cycle is that it is relegated to just four pages of discussion, which is a pity because his ideas about the way the business cycle operates are interesting and could have easily been a chapter unto itself. If there is one aspect of his explanations on the causes of the current crisis that feels underdeveloped, it is this.

The book takes aim at many of the economic policies that conservatives have put into place, or attempted to put into place, such as deregulation and lower taxes but it also questions whether Leftist policies, such as increasing government spending, will actually help in the long run. Mattick gives examples of how in the past economic stimulus packages have often not worked out.

I cannot argue with the examples he gives but I do wonder if one can veto the idea of stimulus packages as easily as he does because, if done in accordance with raising taxes and reducing spending in other redundant areas, such as the defense budget, the economic stimulus can end up allowing for a cash flow towards the working people while not running the government into debt. That said, whether or not current governments are capable of walking such a tightrope remains to be seen.

The only truly problematic part of the book comes at the end when Mattick makes predictions for the future, predictions that are a little too abstract and tend to become fairly extreme.

While the system of capitalism is obviously flawed, Mattick’s predictions tend to read as too dire and alarmist. Despite this, the book is incredibly worthwhile for anyone who wants to read more into the history that led up to the current state of the economy. Whether you agree or disagree with Mattick’s final conclusions, you will undoubtedly find the book thought provoking.

Donald McCarthy is a freelance writer whose work has appeared on, and

From The Progressive Populist, December 1, 2011

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