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Customer Review

on 29 May 2011
Perhaps like other readers, the dramatic failings of the established free market system in recent years has led me to make an excursion into this area of radical left wing or Marxist type writing, where previously I have not ventured. In reading this book I was glad that I did venture, although I am afraid I am far from totally converted. In summary I would conclude that in my opinion the critique of recent economic events put forward in this book is very good, (hence the four stars) but for me the extra linkages which attempt to tie these economic events together with the obscure Georgian conflict and the long term capitalist crises of profitability and accumulation of capital predicted by Marx don't quite hold together.

As mentioned above, one of the strongest Marxist punches the author attempts to land on the analysis of the lead up to the crisis, was that the reason why banks and the financial system in general piled into creating and profiting from the property bubble can be explained by a crisis in accumulation and profitability inevitable in capitalism. This maybe where my limited understanding of Marxist theory lets me down, but I cannot see exactly how these concepts directly contributed to the situation. Yes there was too much cheap money sloshing around chasing too few high interest opportunities (a lot of the cheap money originating from nominally Communist China), and yes at that time speculating in a property bubble was more profitable than doing proper bank stuff like lending to productive enterprises. But I don't see a crisis in profitability of the non property sector now or at that time, just that being involved with a bubble was MORE profitable and the actors involved were greedy reckless and stupid, while governments and regulators were naive, deluded ... and also stupid.

If there was a problem of over accumulation, was it the Chinese who over accumulated US dollars? If over accumulation and declining profitability are traits of capitalism in its final stages, how does this square with the source of this cheap money being a developing country like China? The international dimension to recent and current financial imbalances are explained well by the author, but it seems to me that the international origin of the problems are in conflict with the national analysis of over accumulation and crisis in profitability, which seems to be intended to apply to wealthy developed nations in isolation.

The fact that many nation states have had to underwrite and bailout the private mistakes of the finance sector is obviously a fundamental point to the left and embarrassment to the right when the final scores are taken. Also the author makes many sound and interesting points about the future of international relations based on the changing economic fortunes and linkages of the future. But I do not feel that the flexing of Russian military muscle in tiny Georgia to be as game changing as he proposes. For me the massive economic growth and semi colonial activities of China seem much more paradigm changing than a regional squabble in an ethnically mixed slither of an unfamiliar part of the world.

The thinkers of the left can smell blood at present, as rarely in history have established right wing capitalist theories appeared so tarnished and vulnerable. For me this book did illuminate a new more cutting attack on the well worn issues surrounding the recent crisis, but it did not really set anything on fire for me.
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