In and Out of Crisis

The Global Financial Meltdown and Left Alternatives

Leo Panitch, Sam Gindin, Greg Albo

• Publisher: PM Press
• Year: 2010
• Print ISBN: 9781604862126
• eBook ISBN: 9781604863475
• Topic: Economics
• Subtopic: Political Economy
• Index: Economics

Our world is in the grips of the most calamitous economic crisis since the Great Depression—and its epicenter is the imperial United States, where hallowed investment banks have disappeared overnight, giants of industry have gone bankrupt, and the financial order has been shaken to the core.

While many around the globe are increasingly wondering if another world is indeed possible, few are mapping out potential avenues – and flagging wrong turns – en route to a post-capitalist future. In this groundbreaking analysis of the meltdown, renowned radical political economists Albo, Gindin, and Panitch lay bare the roots of the crisis, which they locate in the dynamic expansion of capital on a global scale over the last quarter century—and in the inner logic of capitalism itself.

With an unparalleled understanding of the inner workings of capitalism, the authors of In and Out of Crisis provocatively challenge the call by much of the Left for a return to a largely mythical Golden Age of economic regulation as a check on finance capital unbound. They deftly illuminate how the era of neoliberal free markets has been, in practice, undergirded by state intervention on a massive scale. With clarity and erudition, they argue persuasively that given the current balance of social forces—as bank bailouts around the globe make evident—regulation is not a means of fundamentally reordering power in society, but rather a way of preserving markets.

Contrary to those who believe US hegemony is on the wane, Albo, Gindin, and Panitch contend that the meltdown has, in fact, reinforced the centrality of the American state as the dominant force within global capitalism, while simultaneously increasing the difficulties entailed in managing its imperial role.

In conclusion, the authors argue that it's time to start thinking about genuinely transformative alternatives to capitalism—and how to build the collective capacity to get us there. We should be thinking bigger and preparing to go further. In and Out of Crisis stands to be the enduring critique of the crisis and an indispensable springboard for a renewed Left.

NOTES

[1] Thomas Edsall, “Alan Greenspan: The Oracle or the Master of Disaster?” http://www.huffingtonpost.com/2009/02/19/alan-greenspan-the-oracle_n_168168. html.

[2]Ben S Bernanke, “Four Questions about the Financial Crisis,” speech at Morehouse College, April 14, 2009, http://www.federalreserve.gov/newsevents/speech/bernanke20090414a.htm.

[3]Paul Mason, Meltdown: The End of the Age of Greed (London: Verso, 2009) vii, x.

[4] Rick Wolff has particularly analyzed this aspect of the crisis on MRZINE. See, for example, “Class War,” September 16, 2009; “Capitalism’s Crisis Through a Marxian Lens,” December 14, 2008.

[5] The theme of capitalist decay can in fact be dated back to Karl Kautsky’s drafting of The Erfurt Programme in the late 19th century and V.I. Lenin’s Imperialism: The Highest Stage of Capitalism at the beginning of the 20th century. It was a theme then applied to American capitalism in the writings of Paul Baran and Paul Sweezy, Monopoly Capital (New York: Monthly Review Press, 1966) and Ernest Mandel, Marxist Economic Theory (London: Merlin Press, 1962).

[6] Most notably in this respect have been Michael Perelman, The Pathology of the U.S. Economy (1993); Giovanni Arrighi’s The Long Twentieth Century (1994); David Harvey’s The New Imperialism (2003): Robert Pollin, Contours of Descent (2003), and Robert Brenner, The Economics of Global Turbulence (2006).

[7] A debate particularly carried on in the pages of The Nation and American Prospect over the last two years. More critical stances can be found in the pages of Monthly Review,Against the Current and International Socialist Review.

[8] The foremost examples of this contention being: Sam Bowles, David Gordon and Thomas Weisskopf, After the Wasteland: A Democratic Economy for the Year 2000 (Armonk: M.E. Sharpe, 1990); Robert Reich, The Work of Nations (New York: Knopf, 1991). An updated version of this theme is Joseph Stiglitz, Freefall: America, Free Markets, and the Sinking of the World Economy (New York: Norton, 2009).

[9] Krishna Guha, “Ten Years of Cuts and Tax Rises Lie Ahead, IMF Says,” Financial Times, November 4, 2009.

[10] These struggles have been covered at the following websites: Reclaiming Spaces at www.reclaiming-spaces.org/crisis/archives/category/housing-the-crisis ; Socialist Project at www.socialistproject.ca ; and Labor Notes at www. labornotes.org.

[11] The Lexus and the Olive Tree (New York: Anchor Books, 2000), 86–7.

[12] Ibid., 86–7.

[13] The best of these is Kevin Phillips, Bad Money (New York: Penguin, 2009).

[14]For defenses see: Daniel Yergin, “A Crisis in Search of a Narrative,” Financial Times, October 21, 2009; Institute of International Finance, Reform in the Financial Services Industry: Strengthening Practices for a More Stable System (Washington: IIF, 2009). For a critique see: James Crotty, “Structural Causes of the Global Financial Crisis,” Cambridge Journal of Economics 33 (2009).

[15] Karl Marx, The Grundrisse (Middlesex: Penguin, 1973), 623.

[16] Irving Fisher, “The Debt-Deflation Theory of Great Depressions,” Econometrica 1 (October 1933).

[17] Niall Ferguson, Too Big to Live: Why We Must Stamp Out State Monopoly Capitalism (Surrey: Centre for Policy Studies, 2009), 16.

[18] See Hyman Minsky’s Stabilizing an Unstable Economy (New York: McGraw Hill, 1986) and Doug Henwood, Wall Street (New York: Verso, 1997).

[19] Paul Krugman, The Return of Depression Economics and the Crisis of 2008 (New York: W.W. Norton, 2009); Joseph Stiglitz, Making Globalization Work (New York: W.W. Norton, 2007).

[20] Paul Mason, Meltdown (London: Verso, 2009); Robert Wade, “From Global Imbalances to Global Reorganizations,” Cambridge Journal of Economics 33 (2009).

[21] J.B. Foster and Fred Magdoff, The Great Financial Crisis (New York: Monthly Review Press, 2009); Andrew Glyn, Capitalism Unleashed: Finance, Globalization and Welfare (Oxford: Oxford University Press, 2007); Giovanni Arrighi, Adam Smith in Beijing (London: Verso, 2007); Robert Brenner, The Boom and Bubble (London: Verso, 2002).

[22]Peter Gowan, “Crisis in the Heartland,” New Left Review 55 (2009); David Harvey, Limits to Capital (Chicago: University of Chicago Press, 1982), Chapters 9–10.

[23] Karl Marx and Friedrich Engels, The Communist Manifesto (1848) (London: Verso, 1998), 41–2.

[24] Karl Marx, Capital, vol. 3 (1894) (London: Penguin, 1981), 357.

[25] Karl Marx, Capital, vol. 1(1867) (New York: International Publishers, 1967), 592.

[26] Leo Panitch and Sam Gindin, “Superintending Global Capital,” New Left Review 35 (2005); Simon Clarke, “Class Struggle and Global Overaccumulation” in Phases of Capitalist Development, ed. Robert Albritton, et al. (New York: Palgrave, 2001).

[27] Among the various significant analyses of the financial crisis of 2007–09, see L. Panitch et al., “The Political Economy of the Subprime Crisis” in American Empire and the Political Economy of Global Finance, 2nd ed., eds. Panitch and Martijn Konings (London: Palgrave, 2009); David McNally, “From Financial Crisis to World Slump,” Historical Materialism 17 no. 2 (2009); Robin Blackburn, “The Subprime Crisis,” New Left Review 50 (2008); Julie Guard and Wayne Antony, eds., Bankruptcies and Bailouts (Halifax: Fernwood Books, 2009); Graham Turner, The Credit Crunch (London: Pluto, 2008).

[28] Robert Rubin and Jacob Weisberg, In an Uncertain World: Tough Choices from Washington to Wall Street (New York, Random House: 2003), 297.

[29] Willem Buiter, “The Fed as the Market Maker of Last Resort: Better Late Than Never,” Financial Times, March 12, 2008.

[30] Peter Baker, “A Professor and a Banker Bury Old Dogma on Markets,” New...

Table of contents

• PRAISE FOR IN AND OUT OF CRISIS
• PREFACE
• SURVEYING THE CRISIS:IS NEOLIBERALISM OVER?
• NEOLIBERALISM, FINANCE, AND CRISES
• FINANCE, REGULATION, AND THE AMERICAN STATE
• CRISIS MANAGEMENT FROM BUSH TO OBAMA
• FROM FINANCE TO INDUSTRY: THE CRISIS IN AUTO
• LABOR’S IMPASSE AND THE LEFT
• ANOTHER WAY OUT OF THE CRISIS? STRATEGIC CONSIDERATIONS FOR THE NORTH AMERICAN LEFT
• TEN THESES ON THE CRISIS
• SUGGESTED READINGS
• NOTES
• ABOUT PM PRESS
• FRIENDS OF PM PRESS
• Capital and Its Discontents: Conversations with Radical Thinkers in a Time of Tumult
• Global Slump:The Economics and Politics of Crisis and Resistance