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Posts Tagged ‘Gerard Dumenil’

Marxist Academic Error 101: “A term is undefined and has no properties”

March 29, 2012 1 comment

As part of my continuing occupation of the Marxist Academy, I have been looking at various Marxist theories of the crisis of neoliberalism. This is the final part of my critique of Andrew Kliman’s “Neoliberalism, Financialization, and the Underlying Crisis of Capitalist Production” (PDF).

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As can be seen in the chart above, most bourgeois economists look at fascist state economic data and conclude we are experiencing nothing like the sort of economic event that occurred in the Great Depression. The Great Depression was just that — a depression — while what we are experiencing is perhaps a more severe than normal recession generated in the aftermath of a financial crisis. For the bourgeois economist this description of the situation may or may not be entirely satisfactory.

For anyone attempting to understand the fascist state economic data using Marx’s theory of the capitalist mode of production it is less than worthless — it can turn Marx’s theory into a useless glob of shit that describes nothing — least of all what is occurring within the capitalist mode of production.

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Marxist Theories of the Current Crisis: Andrew Kliman and the curious case of the missing Capitalist Boom

March 27, 2012 3 comments

Next up in my survey of academic Marxist theories of the current crisis is Kliman’s “Neoliberalism, Financialization, and the Underlying Crisis of Capitalist Production” (PDF).

Kliman’s argument is by far the most interesting explanation for the present crisis I have read so far. Far from seeking to merely explain the present crash, Kliman is essentially asking another and for more provacative question:

“What the fuck happened to the capitalist boom period after the last crisis?”

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Dumenil, Levy and FDR’s Fascist Revolution

March 17, 2012 Leave a comment

As part of my continuing occupation of the Marxist Academy, I have been looking at various Marxist theories of the crisis of neoliberalism. This is the final part of my critique of “The Crisis of Neoliberalism” (PDF) by Gerard Dumenil and Dominique Levy,  first published in 2009. I am using the 2011 version of the book.

Since I am getting bored with Dumenil and Levy, this will be the last post on them.

I tried to show in my last post (Speculation, Greed and Chart Porn for Fun and Profit) even based on their own data Dumenil and Levy can’t explain how the 1930s is similar to today’s crisis. They argue the Great Depression, like the present one, resulted from causes other than a fall in the rate of profit. But, the chart they offer clearly shows a pronounced fall in the rate of profit even exceeding that leading into the depression of the 1890s.

The data is not mine — it is theirs. And it shows the profit rate, as they calculate it, fell from about 15-20 percent to about 2 percent. The fall in the profit rate to 2 percent is more severe even than the fall to 9 percent that occurred in the 1890s depression. Further, if you look at the data series back to 1870 there is a clear down slope both in terms of highs and lows in the profit rate. A series high is established in 1880 and the series low is established in 1933. Fluctuations in the rate of profit are a succession of lower highs and lower lows between 1880 and 1933. Any day trader would argue the series up to 1933 shows a clear downward trend in the profit rate.

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Speculation, Greed and Chart Porn for Fun and Profit

March 16, 2012 1 comment

As part of my continuing occupation of the Marxist Academy, I have been looking at various Marxist theories of the crisis of neoliberalism. In this current post I will be spending some time critiquing “The Crisis of Neoliberalism” by Gerard Dumenil and Dominique Levy, first published, it appears, in 2009. I am using the 2011 version of the book. This is part two of my critique.

Dumenil and Levy open Part VIII of their book, “The Crisis of Neoliberalism” (PDF) by asserting a striking similarity between the Great Depression and the present crisis:

If there is a precedent to the contemporary crisis, it is, unquestionably, the Great Depression.

The core proposition of the book is that an historical pattern is being played out in this crisis similar to that experienced in the period beginning with the Great Depression and ending with World War II. Moreover, the writers go on to argue this pattern is part of an even larger historical pattern beginning more or less with the depression of the 1890s and ending with the emergence of neoliberalism by the end of the 1970s. The larger pattern is the emergence of a financial hegemony which dominates society until its twin social determinants — the owners of capital and their management team — bring themselves to ruin in an orgy of speculation and greed. At the end of this outbreak of license, the state is forced to step in, regulate the financial oligarchy, repair the inequalities generated by the excessive greed, and assume management of the macro-economy.

I will show in this post how Dumenil and Levy are offering an argument that is not only significantly at odds with Marx’s labor theory of value, and a mere rehash of the sort of pop culture economics you might find on CNN, FOX News and MSNBC, but also, how even by their own standards, their argument is questionable and at odds with their own data.

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At best it sometimes rhymes: Dumenil’s and Levy’s “The Crisis of Neoliberalism”

March 14, 2012 2 comments

As part of my continuing occupation of the Marxist Academy, I have been looking at various Marxist theories of the crisis of neoliberalism. In this current post I will be spending some time critiquing “The Crisis of Neoliberalism” by Gerard Dumenil and Dominique Levy, first published, it appears, in 2009. I am using the 2011 version of the book. This is part one of my critique.

“Everything that needs to be said has already been said. But since no one was listening, everything must be said again.”

André Gide

In part one of their book, “The Crisis of Neoliberalism”, Dumenil and Levy argue neoliberalism is a new phase in the evolution of capitalism. So what is a phase of capitalism? I am not altogether clear on this, but, apparently, neoliberalism is the third such phase of capitalism in the 20th Century. These three “social orders” “jointly constitute modern capitalism, that is, capitalism since the turn of the twentieth century.”

Each phase is dated by a major crisis.

The authors tell us dating the emergence of the neoliberal social order is all very very complex:

Neoliberalism is a multifaceted phenomenon, the outcome of a whole set of converging historical determinants, and it is difficult to precisely determine its beginnings. Actually, the earliest expressions of the new trends were evident from the end of World War II when the basic features of the postwar society and economy were defined. Various developments surrounding the crisis of the dollar in the early 1970s, such as the floatation of exchange rates, or the policies enacted during the dictatorships in Latin America in the 1970s, can be considered early manifestations. Simplifying to some extent, one can contend, however, that neoliberalism was first established in the United States and the United Kingdom at the end of the 1970s, a crisis decade, a few years later in continental Europe, and then around the globe. The year 1979, when the Federal Reserve decided to raise interest rates to any level allegedly required to curb inflation, is emblematic of the entrance into the new period.

Okay so the dating thing may be a little shaky, so let’s switch back to the definition thingy:

…the overall dynamics of capitalism under neoliberalism, both nationally and internationally, were determined by new class objectives that worked to the benefit of the highest income brackets, capitalist owners, and the upper fractions of management. The greater concentration of income in favor of a privileged minority was a crucial achievement of the new social order. Income statement data make this apparent. In this respect, a social order is also a power configuration, and implicit in this latter notion is “class” power. National accounting frameworks add to this observation that a large and increasing fraction of U.S. capital income comes from outside of the United States. Not only class relations are involved, but also imperial hierarchies, a permanent feature of capitalism.

Yes, that’s it, “new class objectives”. Mo’ money for the rich and well-to-do was “a crucial achievement of the new social order.” And, we can prove this with our chart porn — the rich got richer! This just goes to demonstrate neoliberalism is also a “power configuration“. (Yes, that sounds all dialectical and shit.) And, implicit in this “power configuration” is “Class power.” And, don’t ya’ know, more and more of this increased income comes from outside the United States. So not only is “class power” involved here, “but also imperial hierarchies, a permanent feature of capitalism.”

Okay, so sometime between the end of World War II and Reagan’s elections we experienced the birth of a new social order” which was a power configuration involving class power and imperial hierarchies, producing “mo’ money, mo’ money, mo’ money” for rich folks. In addition to the above well stated thesis we must add the US was running everything not flying a red flag — then the Soviet Bloc died. So, somehow, the upshot of all this is the dollar is the world reserve currency. Thus globalization was imposed throughout the world at the cost of severe crises using economic violence, corruption, subversion and war.

Well, I don’t know about you folks but I am pretty much all learned up after reading this.

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