Coping with the “Great Recession”—Some Mainstream Accounts of the Crisis

Abstract

This article reviews Gillian Tett's Fools Gold: How Unrestrained Greed Corrupted a Dream Shattered Global Markets and Unleashed a Catastrophe (2009), Paul Krugman's, The Return of Depression Economics (2008), and Joseph Stiglitz's Free Fall: America, Free Markets and the Sinking of the Global Economy (2010). The author's central arguments are elaborated when these three mainstream accounts of the current economic crisis were critiqued from a Marxist perspective. Gillian Tett's work has the merit of unpacking various financial phenomena that are often invoked by economic commentators without being fully explained. However, this narrow focus ultimately proves her undoing as the underlying structural causes of the crisis are left completely unexamined. Paul Krugman works from the other extreme, attempting to fit the current crisis into the vicissitudes of globalisation. As a primer in mainstream macroeconomics, Depression Economics works tolerably well. As an analysis of the current crisis it fails absolutely. Stiglitz's book is much better in this regard, as it actually attempts to engage with the destructive nature of neoliberalism. However, his failure to look beyond capitalism renders his analysis shallow and his prescriptions uninspiring. In the end only a socialist transformation will be sufficient and the paper ends with a brief account of the crisis from a Marxist perspective.

Keywords:

• Marxism
• Keynesianism
• capitalism
• neoliberalism
• economic crisis

Acknowledgements

The author would like to thank Alex Callinicos and Joseph Choonara for useful comments on an earlier draft.

Notes

¹This comes from the subtitle of the book.

²Buffet (2003) made these comments in the Berkshire Hathaway Annual Report 2002.

³The idea that globalisation has fundamentally changed the rules of capitalism has been effectively challenged by Chris Harman (1996).

⁴According to Moseley (1997) the ration of unproductive to productive labour increased by 83% in the years between 1947 and 1977. The composition of capital (ratio of capital to productive labour) increased by 41% over the same period.

⁵See Harman (2009, 231–32) for more information on the relatively sluggish accumulation of the neoliberal period.

⁶See O' Boyle (2012) for a fuller account of these issues.