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3 of 3 people found the following review helpful
5.0 out of 5 stars Kliman's 'Failure of Capitalist Production',
This review is from: The Failure of Capitalist Production: Underlying Causes of the Great Recession (Paperback)This was a book of intense scholarship as regards the data and gives a powerful analysis of capitalist development through historical economic crisis. Kliman has based his study primarily on US economic statistics as these are the most complete. I think he satisfactorily explains that the current crisis has its roots in the economic slump of the 1970's and not with the advent of neo-liberalism in the 1980's and 90's. Data is carefully marshalled which shows that there has been no recovery of the rate of profit under neo-liberalism despite intensified exploitation. The tendency of a fall in the rate of profit has been consistent, with minor upward spikes, from the 1970's onwards. Kliman argues that it is the tendency for the rate of profit to fall which underlies the crisis of 2008 and subsequent crises. Hence the 2008 financial meltdown was a symptom, but not the cause, of it. Left critics who point to the globalization of finance and its unfettered growth as causing the crisis are, fundamentally, false.
Kliman also challenges well held assumptions of some on the left regarding investment and income. His data show that there has not been a decline in capital investment nor has there been a perceptible decline in the working class's share of GDP in the USA. Not that he denies a huge growth in inequality. Therefore attempts to point towards underinvestment or underconsumption causing the great recession are misplaced.
Rather the crisis is intrinsic or 'organic' to capitalism itself after the post war golden age. Kliman produces compelling statistical and empirical evidence mapping out the falling rate of profit and its impact on capital accumulation. He is a proponent of the Temporal Single System Interpretation (TSSI) of Marx's theory of the tendency of the rate of profit to fall and applies his interpretation to the data. He has built on his theoretical work from Reclaiming Marx's Capital: A Refutation of the Myth of Inconsistency (Kliman, 2007) which also deserves to be read.
This is the strong heart of the book with four of its nine chapters devoted to the rate of profit. He then follows with a critique of underconsumptionist alternatives which he argues are both wrong headed but also logically fallacious.
I do not agree with all the conclusions of the book. This, however, does not detract from the logic of the book's arguements. All the more reason for buying it.
8 of 9 people found the following review helpful
5.0 out of 5 stars A great work of Marxist political economy,
This review is from: The Failure of Capitalist Production: Underlying Causes of the Great Recession (Paperback)Andrew Kliman and his few associates have for a long time been the Cassandras of Marxist political economy. Against the general trend of today, Kliman has systematically argued for the validity of Marx's original analysis of capitalism, including the reproduction schema, the tendency of the rate of profit to fall, and the locus of capitalist crisis in production rather than distribution. All of these are fundamentals of Marxist economic theory, but have even by many Marxists been abandoned in favor of a more popular medley of Marxist and Keynesian elements, such as can be found in the works of many from Hyman Minsky to Paul Sweezy and even David Harvey. In "The Failure of Capitalist Production", however, Kliman makes good on the more theoretical promise of his earlier works on economic theory, and applies his insights to the current capitalist crisis.
As this book systematically sets out, using all available data from the Bureau of Labor Statistics, the Bureau of Economic Analysis, and other such 'neutral' sources of information, the current crisis is emphatically one that can be understood in Marxist terms. More importantly however, as Kliman notes, is not whether or not we apply Marxist terminology to the event, but to comprehend the immediate and more underlying causes in whatever terminology one wants. In order to do so, it must be possible to explain the same phenomena without particular reference to a prior acceptance of Marxist theory as such, and in this book Kliman demonstrates that both of these levels of analysis can be done.
The argument is particularly detailed and systematically supported with graphs and data, and I could not retrace it here without burdening the reader with a text as long as the book itself. But the important conclusions are clear and unmistakable, and to my view entirely right. They are that first, the TSSI interpretation of Marx's value theory voids the Okishio theorem objection to the tendency of the rate of profit to fall; which sounds more technical than it needs to, since the rate of profit falling as a result of overall price reductions due to technological change is a matter of common sense. That said, Kliman then systematically and unrelentingly demonstrates that, adjusted for inflationary factors and using 'property income' as a proxy for Marxian value terms, the rate of profit has gone down since the early 1970s in the United States, and has never since recovered. This was briefly masked by the period of high inflation that marked the end of Keynesianism, as well as the frequent blips of higher apparent profit rates that precede serious crises (like the dot-com boom and the current bubble). But as a trend, the result is unmistakable.
Equally significantly, Kliman refutes the explanations of the current capitalist crisis as being the result of the regime of neoliberalism as such, if understood in terms of wage repressions, anti-union measures and so forth, as a way to restore profits but bring down wages to a level that causes a crisis of underconsumptionism. Kliman not only argues empirically that neither the wage share of income nor total compensation for non-managerial workers has declined over the neoliberal period (although he admits they have been stagnant), but more importantly makes the essential logical point that underconsumptionist arguments fundamentally mistake the nature of capitalist production, and therefore capitalist crisis. After all, underconsumptionism rests on the premise that for capitalist profitability to be sufficient, there must be enough effective demand on the part of the working class. But this assumes in the first place that, as Kliman puts it, 'what is good for the working class is good for capitalism'; whereas of course it should be familiar to all that the real relationship between wages and profits is the exact opposite! If neoliberalism successfully reduces wages, this ought to restore profitability, and thereby in fact obviate crisis. The underconsumptionist argument has then been that the crisis is purely a crisis of financialization. But in reality, the financialization and the debt bubble is in the first place an effect, not a cause, of the underlying crisis of profitability. As Marx pointed out in his reproduction schema, there is no inherent need for capitalism to have an increase in worker demand in order to obtain economic growth indefinitely; the improvements in productivity in the sector producing for other capitals can be sufficient to obtain such growth, entirely independently of working class demand. Capitalism does not work for needs, but for accumulation, and therefore underconsumptionism is wrong.
As Kliman convincingly argues, it is in fact the failure of capitalism to restore the rate of profit that underlies the current crisis, and all previous crises - with ever increasing intensity - since the 1970s. As Marx argued, for capitalism to restore the rate of profit, it must destroy a very large amount of existing value, so as to restructure itself sufficiently that the rate of profit on remaining capital investment will be high enough to get accumulation going again. In businessmen's terms, this means that capitalism must go entirely and completely through the troughs of depression, with the attendant deflation, bankruptcies, and unemployment, for the remaining capitalists to be able to buy up the deeply devalued assets at fire-sale prices and thereby obtain a rate of profit on such investment that will make investment demand sufficiently high. This is what happened during and after the Great Depression, when the crisis was almost entirely allowed to work itself out before organized working class demands forced the Roosevelt government to alleviate the severe burdens on the general population this produced. However, such crises produce such immediate challenges to capitalism as such - exactly as Marx expected they would - that all capitalist governments since have tried to find various means of avoiding their consequences. This is where the Keynesian policies and subsequently the debt-fuelled expansionism of neoliberalism comes from: they are, in Kliman's persuasive reading, attempts to have the good aspects of capitalist conjuncture without their downsides. But such a thing cannot be had, precisely because of the lawlike nature of capitalist social phenomena as Marx described them. And therefore, all such measures do in the longer run is delay the full effect of crisis, but make it worse when it actually hits. The current international response to crisis has been to add a very vast amount of extra debt-fuelled expansion on top of the pre-existing one that led to crisis: so we must expect an even worse and and more extended one in the future.
Does all of this mean then that 'resistance is futile'? Not so, says Kliman. Working class organization and backlash against the capitalist market results not only in real gains for the majority of people, by forcing capitalist governments to make concessions in order to stave off fundamental challenges to capitalism; but more importantly, every time they happen they call into question this very inhumane logic of capital itself, the logic of capitalism as a way of organizing our society. However, it remains also the case that this logic is immanent to all forms of capital, and cannot be overcome without organizing production differently. No amount of left-Keynesian solutions can alleviate this in the long term, nor can worker-owned cooperatives, communes, or any such structures. Kliman criticizes even the Soviet and Maoist experiences here, because of their involvement in international competition and the way this forced them to think in terms of capitalist logic; this is unfortunately too cursory to fully produce an argument to engage with. But it is certainly essential for all who want to understand capitalism and its crises to locate them in production, not distribution, and in profit, not demand; only then does it become *politically* clear that the only long-term solution is not redistribution, nor regulations, nor taxation, but a revolution against the logic of capitalism itself.
1 of 1 people found the following review helpful
4.0 out of 5 stars Essential reading on the current crisis.,
This review is from: The Failure of Capitalist Production: Underlying Causes of the Great Recession (Paperback)I'll start with a confession - I find economics difficult. I've never studied it but feel that I ought to read some, especially as we are into the fifth year of a crisis of capitalism. I've read Marx's `Capital V 1' and books by Paul Mason and David Harvey and various other articles by figures such as Fred Moseley and John Bellamy Foster on the crisis and neo-liberalism and seen videos of Harvey where he argues against the idea of the current crisis of capitalism being due to the classic formulation offered by Marx of the tendency of the rate of profit to fall. And I've thought `Okay, sounds feasible'....but had a nagging doubt. Now I've read Andrew Kliman's `The Failure of Capitalist Production', I feel that my nagging doubts were sound but, most importantly, why.
For Kliman argues against the `under-consumptionist' analysis of the current crisis and in favour of the more orthodox law of the tendency of the rate of profit to fall, not as the direct cause of the crisis but as the underlying condition which enabled the crisis to occur. More than that, he brings large amounts of empirical evidence to the table in order to support his argument and this is what makes his case all the more convincing.
Kliman shows that all the key elements of the under-consumptionist case cannot be true. For example, the `compensation' that workers receive has not gone down significantly, which is a key component of the under-consumptionist case, and that the shortfall has been made up by an increase in personal debt. This view is now almost taken for granted on the Left and I have argued in favour of it on many occasions. The logical result of such an argument can be that better pay for workers would, thus, be good for capitalism and Kliman avoids descending into abstract ultra-leftism by supporting such trade unionist demands while pointing out that they will not work long term because capitalism is still innately prone to crisis.
For those who like their algebraic formulas, Kliman provides those as well as he also lays out his methodology. I couldn't comment on those!
Kliman finishes with a call to struggle but also with a call for vision on the part of socialists to lay out an idea of what socialism might look like and Kliman seems to be promising a book on precisely that - which will be interesting.
I am still left with some doubts though. I am not sure that Kliman makes a link between the immediate trigger of the crisis, the bursting credit bubble, and the falling rate of profit nor how neo-liberalism and its associated policies of privatisation and the promotion of free markets is of service to capital as it attempts to move out of the current crisis.
Still, anyone on the Left and, especially any Marxists, need to read Kliman's book.
5.0 out of 5 stars Good book,
5.0 out of 5 stars Great book, worth a read.,
I would love to see more books by this author. But 'The failure of capitalist production' is certainly a must read for everyone!
4.0 out of 5 stars Necessary reading for those who ponder the causes of the current crisis,
4.0 out of 5 stars The Failure of Capitalist Production:Underlying Cause of the Great Recession.,
Parts of Capital Volume two are briefly explained which is quite useful because although this volume is the smallest of the four volumes of Karl Marx's great work; volume two is a notoriously difficult read.
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The Failure of Capitalist Production: Underlying Causes of the Great Recession by Andrew Kliman (Paperback - 7 Nov 2011)