Capitalism in crisis?

[cockneyrebel]

In terms of the SWP here is a post from the PR website on the topic2:

Socialist Worker from 29 March 2008 contains an article 'Are we going back to the 1930s? The economic similarities' (http://www.socialistworker.co.uk/art.php?id=14475). Although it is question-marked, it is clear that they see considerably more similarities than differences and "We could see a repeat of the dynamic that took place in 1929."

The late 1920s in the US saw a speculative boom on Wall Street and in property, the over-extension of credit and a resulting severe credit crunch with many banks going bust. But...there is one very significant difference that only gets a passing mention in the article; "The huge flows of global investment into the US were concentrated mainly in heavy industry, and this sector was already gripped by a slump two months before the crash hit."

In fact, industrial production across the entire US economy was falling at an annualised 20% two months before the Wall Street Crash of 29 October 1929! And other industrialsed countries, notably Germany, were also gripped by severe economic crisis before the Crash. Chris Harman in his 1984 book 'Explaining the Crisis' makes exactly these points when he argues against the idea that a financial crisis and a breakdown in the flows of credit can cause a generalised crisis that is deep and prolonged as in the 1930s Depression.

Hardly the picture today in the US - notwithstanding a recession - and it could not be more different ouside of the US with continuing strong economic growth in the emerging economies that is gradually restructuring the global economy.

http://www.permanentrevolution.net/?view=entry&entry=2021

 

[Das Uberdog]

All that says is that things have been immediately worse. What does it explain about stagnation? Nothing. Have I ever said social disintegration and the collapse of capitalism are around the corner? No. How does this respond to my points?

Jesus, trying to get a straight response from you is like trying to get blood from a stone.

 

[cockneyrebel]

All that says is that things have been immediately worse. What does it explain about stagnation? Nothing. Have I ever said social disintegration and the collapse of capitalism are around the corner? No. How does this respond to my points?

Jesus, trying to get a straight response from you is like trying to get blood from a stone.

No Harman and the article are trying to suggest that in some way you can compare the current situation to the run up to the 1930s which is of course complete nonsense.

The articles that I have linked to earlier and numerous other articles here (take your pick):

http://www.permanentrevolution.net/?view=category&cat=46

show what a joke the stagnation theory is. It's far better explained than anything I can do in a couple of sentences (that link is currently down but should be up again shortly!)

 

[RhymnRzn]

Shadow market

They've created this incredibly enormous shadow financial system, if you will, that's virtually hidden from investors and analysts and regulators.

The value of the entire U.S. Treasuries market: $4.5 trillion.
The value of the entire mortgage market: $7 trillion.
The size of the U.S. stock market: $22 trillion.

The size of the credit default swap market last year: $45 trillion.

 

[Das Uberdog]

No Harman and the article are trying to suggest that in some way you can compare the current situation to the run up to the 1930s which is of course complete nonsense.

The articles that I have linked to earlier and numerous other articles here (take your pick):

http://www.permanentrevolution.net/?view=category&cat=46

show what a joke the stagnation theory is. It's far better explained than anything I can do in a couple of sentences (that link is currently down but should be up again shortly!)

They show nothing, as they make the same mistake of trying to analyse an insanely complicated financial system without the adequate underlying understand of its processes as anyone else.

You presumed I agreed with Harman.