The Great Recession has ended, unlike slow/no growth. For a deeper sense of why, get a copy of The Endless Crisis: How Monopoly-Finance Capital Produces Stagnation and Upheaval from the USA to China by John Bellamy Foster and Robert W. McChesney.
The duo of scholars and professors connect the dots in a radical critique of modern-day capitalism. Theirs is a rigorous analysis, empirical and theoretical, of the twin trends of slowing growth and growing tumult.
With charts and tables, a preface, introduction, six chapters, notes and an index, Foster and McChesney provide a primer on the global system’s crisis that helps readers to get a handle on how and why things are falling apart, economically and environmentally. To this end, they break new ground with their insights on financial markets, and corporate monopolies and investment.
According to the authors: “An economy in which decisions on savings and investment are made privately tends to fall into a stagnation trap; existing demand is insufficient to absorb all of the actual and potential savings (or surplus) available, output falls, and there is no automatic mechanism that generates full recovery.” These processes proceed as the conventional economic wisdom holds that government spending is what ails the system.
Foster and McChesney provide an in-depth look at the evolution of monopoly capital to monopoly-finance capital. In this way, they provide fresh analysis about financial bubbles and their centrality to economic woes.
How did financial speculation overtake industrial production as the main motor of capital accumulation? Their second chapter sheds much light on the question, writing in the tradition of Marxist theorists Paul Baran, Harry Magdoff and Paul Sweezy.
Further, Foster and McChesney review the relevant work of Marx and Keynes. In this way, the authors highlight the forces and factors behind slow growth and corporate control over economic activity that reduces outlets for profitable investments that, ultimately, flow into financial services.
Wonder why the role of small business in the US economy was center stage in the recent presidential debates? For Foster and McChesney, this emphasis inverts reality.
As they show in chapter three, big corporations dominate global industries, from aircraft and auto to banks, computers, media, pharmaceuticals and retail now. Foster and McChesney’s supporting evidence makes clear this rising tendency of monopolization (sales, shipments, revenue and gross profits), and its role in the rise of the financial realm of the economy.
According to the authors, there is a lack of clarity about the current monopoly stage of capitalism. Why?
In part they cite the “ambiguity of competition.” Conservatives and some radical critics misuse this concept; false assumptions spur flawed conclusions.
Chapter four covers monopoly capital’s drive to span the globe. Foster and McChesney drill down on vital factors of this trend, such as corporate monopolies’ subcontracting to lower production costs, along with controlling raw materials and leveraging credit and debt.
It is axiomatic that capital’s growth requires the working class to grow. This nexus underpins chapter five on the dramatic changes in the global economy with the integration of China and the former Soviet bloc nations into the capitalist system.
Foster and McChesney contextualize labor market trends within Marx’s critical writings on imperialism. Foster, who edits the Monthly Review, an independent socialist publication, and McChesney, a past editor and current contributor to it, highlight corporate monopoly’s pitting of workers in the Global South and Global North against each other to push their wages down via exploitative strategies such as subcontracting and outsourcing.
The book wraps up with in-depth analysis of China and stagnation there and around the world. Contradictions of capitalism sport Chinese characteristics, from a migrant peasantry to socially worsening inequality.
With its role as a “final production platform” in a global supply chain for multinational corporations, China’s working class occupies a pivotal role in resisting capitalist exploitation. Workers in the Global North, themselves facing downward mobility via policies of austerity that shift national income away from wages to profits, can and should seek linkages with Chinese workers to cooperatively resist monopoly-finance capital’s drive to depress living and working standards.
Not to overstate the urgency of a world economic crisis without apparent end, Foster and McChesney, following Marx, make a convincing case for reconstituting society based on human needs. For informed and intelligent work on resurrecting the radical actions and visions of past movements and thinkers in the face of an accumulation-financialization-stagnation nightmare now, The Endless Crisis is a book to read.
Seth Sandronsky lives and writes in Sacramento. Email firstname.lastname@example.org.
From The Progressive Populist, December 1, 2012
Blog | Current Issue | Back Issues | Essays | Links
About the Progressive Populist | How to Subscribe | How to Contact Us