Giving The Economist More Grief

Yesterday I left this comment on this article from The Economist: A “new normal” for the world economy: After the storm

I love how for years Economist decried any sort of government intervention as the macro-economy deteriorated, but as soon as the capitalist status-quo was threatened fell all over themselves to contradict their neo-liberal philosophy and all but demand intervention.

This once-haughty now-humbled publication Economist didn’t see the storm coming and have zero credibility, mirroring capitalism. The promises of growth through privatization and increasingly open flows of capital have not been realized. Marx however, called it:

“…these three necessary conditions [capitalism is growth oriented, growth in real values rests on exploitation of labor, and it is necessarily technologically and organizationally dynamic] of a capitalist mode of production were inconsistent and contradictory and that the dynamic of capitalism was necessarily, therefore, crises-prone. There was, in his analysis, no way in which the combination of these three necessary conditions could produce steady and unproblematic growth. In particular, the crisis tendencies of capitalism would produce periodic phases of overaccumulation, defined as a condition in which idle capital and idle labour supply could exist side by side with no apparent way to bring these idle resources together to accomplish socially useful tasks. A generalized condition of overaccumulation would be indicated by idle productive capacity, a glut of commodities and an excess of inventories, surplus money capital (perhaps held as hoards), and high unemployment. The conditions that prevailed in the 1930s and have emerged periodically since 1973 have to be regarded as typical manifestations of the tendency towards overaccumulation.

The Marxist argument is, then, that the tendency towards overaccumulation can never be eliminated under capitalism. It is a never-ending and eternal problem for any capitalist mode of production. The only question, therefore, is how the overaccumulation tendency can be expressed, contained, absorbed, or managed in ways that do not threaten the capitalist social order. We here encounter the heroic side of bourgeois life and politics, in which real choices have to be made if the social order is not to dissolve into chaos. [devaluation of commodities, of money value, of productive capacity perhaps coupled with outright destruction; Macro-economic control through institutionalization of some system of regulation – see today, absorption of overaccumulation through temporal and spacial displacement]”

– David Harvey, in 1990 in The Condition of Postmodernity, notes paraphrased by myself.

Not much has changed since Marx’s day, and never will, unless we change our economic philosophy.

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