Re: [OPE-L] Crashes, adjustment, and the long-run

From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Tue Mar 21 2006 - 04:01:30 EST


What I want to ask, though, is: *how do you define a 'long time'?*


Clearly, your prediction of a crash is related to the assertion that

"disequilibrium can not remain for a long time."  So, how long 

_in years_ is a long-time (approximations are OK, but I really 

think this question has to be answered, since otherwise one 

could say 3, 5, 10, 20, 50, or 100, etc. years and hence the

prediction becomes meaningless.)


I think this is a general question which Marxians should be able

to answer:  how do we define long-run?;  is our definition 

different than that used in mainstream economic theory?

 (I think it is.)



To answer with another question:

How many years would it take at the current rate of deficit

for the entire fixed capital stock of the USA to pass into the

hands of overseas investors?


Would this point not act as a limit?



> [...] there are many different ways of adjustment: a crash, or 

> several recessions in few years, or stagnation during several 

> years, as in Japan happened. 


Well, yes, but there is quite a difference between predicting a


a) crash;


b) recessions;


c)  multi-year period of stagnation.


If the prediction is going to be meaningful, I think that one has

to be more specific.  


*What determines whether a), b) or c) will occur?*


*What determines whether the 'adjustment' will occur this year,

next year, 5 years from now, 10 years from now, 20 years from now,



> Even a great crash like 1929 have not  occurred yet; it do not 

> mean a great crisis can not happen again.  


Indeed.  Neither does it necessarily mean that a "great crisis"

will occur in the foreseeable future.  


There is another issue as well: *even if* there is a crash/recession/

stagnation, what will be the cause?  For instance, the reasons offered 

by Loren Goldner  or the "prudent bear" are quite different -- it seems 

to me -- from the reasons offered by Anwar Shaikh, Dimitri  

Papadimitriou,  Claudio do Santos and Gennaro Zezza  in "How 

Fragile is the US Economy"

(can be downloaded at ).


In solidarity, Jerry

This archive was generated by hypermail 2.1.5 : Wed Mar 22 2006 - 00:00:03 EST