[OPE] Interview with Robert Brenner on the current crisis

Prof. Brenner makes a good point in the interview:

"Since Keynesianism could barely move the economy during the expansion, what can we expect from it in the worst recession since the 1930s?" http://www.hani.co.kr/arti/society/society_general/335869.html

The "stimulus" is effectively mainly a redistribution of wealth which compensates part of the private investors for their loss of capital, and helps to conserve some jobs, but it does not create many new jobs.

However, Prof. Brenner also gets it wrong:

"The idea of a finance led-capitalism is a contradiction in terms, because, speaking generally - there are significant exceptions, like consumer lending - sustained financial profit making depends on sustained profit making in the real economy." http://www.hani.co.kr/arti/society/society_general/335869.html

The point here is that, within certain limits, finance capital can grow within the USA, if the real economy grows external to the USA. That is precisely what happened previously in various "emerging economies".

The empirical support for Prof. Brenner's profit theories is rather weak, although he is correct about depressed average profit rates in industry - he bases himself on NIPA categories which do not reflect the real organisation of business finance and revenue-receipts, and he thinks wrongly that what happens in US manufacturing can determine what happens in the world economy. It's an Americano-centric theory.

His idea of "only the crisis can resolve the crisis" isn't really very interesting - all that says, is that somehow business profits have to increase, and that until they do, there is little that can be done. Unfortunately the Marxists fall in the same trap as the Post-Keynesians: they mainly look at what happens to commerce, and not at social relations. The structural problem is not lack of capital, but social breakdown. Take for example a country like Pakistan - if inflation increases to 15%, GDP growth is cut in half or more, and unemployment increases to near 10%, then all the political problems get even worse.

What is the conclusion of Prof. Brenner's analysis? Nothing much can be done. Reformist strategies are unlikely to be successful, and revolutionary strategies cannot succeed either, because are no mass organisations pursuing them, and insofar as such mass organisations do exist, they have no viable organisational alternative for the economy, other than a Marxist state bureaucracy (a new Marxist exploiting class).

So it seems we get a very complex analysis, which demonstrates only that very little can be done.

The most important macro-economic outcome of the economic crisis, as I have argued before, is simply a durable increase in the unemployment level, which is precisely why most bourgeois analysts aren't talking about that. The reason for the silence is, that workers themselves cannot be blamed for unemployment this time. The ILO now forecasts a net increase in unemployed workers of up to 50 million, with an extra 200 million workers, mainly in developing countries, pushed into extreme poverty. This is the biggest attack on workers in seventy-five years - a workforce the size of Germany is being put out of work in the space of two years.

If you look at IMF global output growth estimates for the last 1.5 years, you will see that they have been revised downwards from circa 3.7% to 0.5%.

Jurriaan

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Received on Sun Feb 1 07:32:38 2009