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October 09, 2019



So we are really talking about two distinct things when we use the word ”crisis” -
i) crises as cyclical, almost routine oscillations between boom and slump, between inflation and recession, the cycles which are systemic and take approximately a decade to run,; and
ii) the tendency, played out over decades and centuries, for life under capitalism to become more and more untenable and for the economic model itself to become unsustainable for ecological and economic reasons?

Yes, Ravi Jagannathan could well be right: some crises of the ‘real’ economy are actually symptoms of the economic model's inability to deal with them, and therefore its terminal decline.

The inevitability of the economy’s need to develop alternatives that do not require, or which do not produce, the ‘contradictions’ of capitalism (i.e. the features of it which cause it to be non-sustainable and untenable to its 'stakeholders (i.e. customers and workers))is, hopefully, progressing nicely and is developing new robust models and viable alternatives.

Ralph Musgrave

If Grace Blakeley is so keen to cut banks and financialisation down to size, it's a bit odd that she makes no mention of one of the biggest privileges enjoyed by banks, namely their right to print / create money out of thin air and lend it out at interest.

Davy Jones

"Bashing workers – by raising unemployment and cutting labour’s share of GDP – does not, in itself, raise profits if workers cut their spending. As Michal Kalecki said, “a reduction of wages does not constitute a way out of depression”."

But according to Marx, it might, if by reducing wages, all other things being equal, aggregate profits increase. There's no reason in principle that profits have to be realised through consumption goods.


This makes me think of Andrew Kliman’s point that capitalist production has never really overcome the crisis of “real” production in Chris’ (and my) Napoleonic youth. I agree too that it’s plausible that “financialisation” via credit to the working class and low interest rates generally is a stop gap that’s now run out out of room.

I guess we will see what’s next. With growth in China slowing, perhaps the “savings glut” will dry up. What then for the “mortgage machine”.

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