The Crises of Capitalism: A Different Study of Political Economy

The Crises of Capitalism: A Different Study of Political Economy

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For nearly 300 years, capitalism propelled the world's most successful economies to new heights of development. But a spate of global environmental disasters and severe economic crises compels thinkers to question whether the system continues to function. Leveraging historical perspective, extensive research, and case studies, The Crises of Capitalism builds a compelling argument that challenges the most fundamental assumptions of prevailing economic theory.

Saral Sarkar exposes capitalism's flaws through the lens of ecosocialism, a philosophy that asserts that natural resources drive production and development. Keynes, Schumpeter, Marx, and Engles had no reason to believe that there would ever be a shortage of oil, minerals, water, or food—and that technological innovation could surmount any obstacle. But oil extraction has peaked, food is harder to come by, and the cost to maintain what natural resources remain has increased exponentially. Capitalism requires constant innovation to create growth—but as Sarkar establishes, even computers wouldn't exist without copper, gold, and zinc.

The Crises of Capitalism exists at the intersection of environmental awareness and economic theory. Sarkar challenges predominant explanations for catastrophic events like the 2008 global economic crisis, revises the classic paradigm of growth, and points to evidence of systemic economic failure. In this provocative, revolutionary criticism, Sarkar suggests that like other long-abandoned economic theories, capitalism has reached its limits.

Product Details

ISBN-13: 9781619021877
Publisher: Counterpoint Press
Publication date: 03/18/2014
Edition description: First Trade Paper Edition
Pages: 368
Product dimensions: 5.50(w) x 8.50(h) x 1.10(d)

About the Author

Saral Sarkar was a lecturer at the Goethe Institute, Hyderabad, and is a leading proponent of ecosocialism. He has published several works including Green-Alternative Politics in West Germany and Eco-Socialism or Eco-Capitalism?: A Critical Analysis of Humanity's Fundamental Choices.

Table of Contents

Note on the English Edition xi

Preface xiii

I Marxist Theories of Crisis 3

1 The Tendency of the Rate of Profit to Fall 5

2 Dissatisfaction with the Law of the Tendency of the Rate of Profit to Fall 9

3 The Marxist Under-Consumption Theory of Crisis 13

4 Dissatisfaction with the Under-Consumption Theory of Crisis - The Disproportionality Theory of Crisis 16

5 So Where Is the Final Crisis of Capitalism? 19

6 The Controversy over the Breakdown Theory 24

a The Pauperization Theory 26

b Rosa Luxemburg: Limits to Accumulation 27

c Critique of Luxemburg's Theory 30

II The Great Crash and the Great Depression 35

1 The 1920s 35

2 The Boom and the Delirium 37

3 The Crash 42

4 The Great Depression 45

5 Explanations 49

III The Saviors of Capitalism 55

1 Keynes and the Keynesians 55

a Crisis of Orthodox Economics 56

b The Non-Marxist Crisis Management 57

c The Keynesian Revolution 60

d Keynes versus Marx 74

e The Rise of Keynesianism 76

2 Schumpeter's Transfiguration of Crises: Creative Destruction 83

a Schumpeter's Theory of Business Cycles 84

b The Long Waves 88

c Demise of Capitalism 90

d Schumpeterian Economic Policy 92

IV Stagflation-The Decline of Keynesianism and the Rise of Neo-Liberalism 95

1 Stagflation 96

2 The Neo-Liberal Counterrevolution 99

3 The Theoretical Foundation of Neo-Liberal Policies - Monetarism versus Keynesianism 103

4 Monetarist Economic Policy 110

5 Neo-Liberalism and Supply-Side Economics 112

V Why Keynesianism Failed-Explanations of Professional Economists 115

1 A Political Decision 115

2 Is Inflation a Major or Rather a Minor Evil? 119

3 Public Campaigns 123

4 Some More Objective Explanations 124

5 The Objective Compulsion to Restructure the Economy-Why Keynesianism Had to be Buried 126

6 Macro-Politics 127

VI The Crises in Globalized Neo-Liberal Capitalism 131

1 From the 1970s to the End of the 1980s 132

a The Debt Crisis of the Developing Countries 132

b The Stock Exchange Bubble and the Crash of 1987 140

2 The Turbulent 1990s 146

a The Neo-Liberal Democrats in the USA 146

b Recession and Stagnation in Japan 150

c Rescue Effort for Japan; About-Turn in the USA 152

d Crises in the "Emerging Markets" 155

e The Great Crisis in East Asia 159

f Russia 171

g Latin America 171

h Japan and the USA after the East Asian Crisis 173

3 A Long-Drawn-Out Crash and a Collapse in the New Millennium 177

a A Great Crash in Installments 177

b The Collapse in Argentina 180

VII Can Keynesianism Solve the Problems This Time? 191

1 Inflation 192

2 Had Keynesianism Really Been Buried? 195

3 Recipes of German Keynesians Against the Stagnation 199

4 My Doubts 202

5 Global Keynesianism? 211

6 Keynesians Do Not Know Any Limits to Growth 215

7 A Half-Socialism Cannot Function 218

VIII Why Globalization Should Be Criticized 221

1 The Theory of Comparative Advantage and the Arguments for Globalization 222

2 The Assumptions of the Theory and the Reality 226

a The Political Reality 227

b The Economic Reality 228

3 The Sustainability Criterion 234

IX Aspects of the Crisis of Capitalism 239

1 Instability of the International Financial System 240

2 Mass Unemployment and Workers' Discontent 245

3 Unfulfilled Promises of Innovations 249

4 The Crisis of the Welfare State 253

5 The Crisis of Social Democracy 255

6 Economic Compulsions, Limitations, and Temptations 260

7 Crisis of Capitalism in the Third World 263

8 Growing Defensive and Compensatory Costs 267

X Where Does the Surplus Come From? 275

1 The Secret of Rising Labor Productivity 276

2 Sustainable Growth? 283

3 Entropy, Low Entropy, and the Economic Process 286

4 Perspectives 290

5 The Pincer-Grip Crisis 295

XI The Future of Capitalism 301

1 Harry Shutt's Vision of a Regulated, Egalitarian, and Global Capitalism 302

2 A Few Success Stories 308

3 Can Capitalism Survive in a Contracting Economy? 314

a Herman Daly's Steady-State Capitalism 314

b Elmar Altvater's Mutually Supportive Economy 318

4 Conclusion - Perspective on the Future 322

XII The Global Economic Crisis of 2008-2010 327

1 The Course of the Crisis to Date 328

2 The Immediate Causes of the Crisis 335

3 Superficial Explanations 337

4 Why Did the Housing Bubble Burst? 340

5 The Real, Deeper Cause of the Crisis - Limits to Growth 341

6 Short-Term Perspective 347

Notes 355

References 357

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