An apologist with insightsIssue: 122
Posted: 31 March 09
A review of Martin Wolf, Fixing Global Finance: How to Curb Financial Crises in the 21st Century (Yale University, 2009), £18.99
The great global economic crisis has put many institutions brutally to the test and destroyed them. One of these that has yet to come under sufficient scrutiny is mainstream economics. When the queen visited the London School of Economics in December 2008 she did ask, “Why did no one see it coming?”. Alas, none of the culprits were hauled off to the Tower.1 But plotting the course of a crisis that has undergone such dramatic twists and turns is a hazardous business even for those not intellectually imprisoned in the theoretical assumptions of neoclassical economics. For example, Leo Panitch and Martijn Konings, introducing a valuable collection of essays written from a broadly Marxist perspective about finance and American imperialism and published last autumn, rather unwisely expressed “some scepticism” about “strong claims concerning the disastrous outcome of the current liquidity crunch for the global system of finance and America’s position in it”.2 They add, “The main upshot of the current situation is that the American state finds itself with a peculiar and unanticipated problem of imperial management”.3 I think it’s fair to say the problem lies a bit deeper than one of “imperial management”.
A charitable response might stress that any reading of the situation written before the collapse of Lehman Brothers on 15 September 2008—described by George Soros as “a game-changing event with catastrophic consequences”—would be liable to be similarly embarrassed.4 There is some truth in this: financial markets function chaotically, in the scientific sense. In other words, it’s helpful in studying them to draw on the understanding of complex systems developed by chaos theory: according to this, a quite small change in the initial conditions governing a system can unleash a qualitative transformation of that system.5
Moreover, the sheer complexity of the capitalist economic system (of which, of course, financial markets are a subsystem) and the interaction of different tendencies that drive it reinforce this propensity for sudden flips in the overall state of the system, particularly at a time of acute crisis. Consider, for example, the dramatic shift from the preoccupation of policy makers and economic actors with accelerating inflation as late as the summer of 2008 to, by the autumn, increasing fears that the powerful recessionary forces that became evident after the financial crash precipitated by the Lehman collapse would generate a deflationary spiral—a flip reflected in the remarkable fall of the oil price by over $100 a barrel in the space of a few months.6
But simply to appeal to complexity would be a cop-out. A crisis on the present scale is a major test of different theoretical perspectives on contemporary capitalism. So Panitch and Konings haven’t simply been caught out by events. They were misled by an analysis of imperialism that overstates both the global power of American capitalism and its success in overcoming the economic crises of the 1970s and early 1980s.7 What about more mainstream approaches? Martin Wolf’s new book, Fixing Global Finance, is a case in point. Wolf is one of the intellectual swells of neoliberalism. Chief economic commentator of the Financial Times, he went into the lists a few years ago to produce a wide-ranging defence of neoliberal globalisation.8
But, although Wolf is undoubtedly one of what Karl Marx called “the hired prize-fighters” of international capitalism,9 he is very far from being a fool. He has consistently been highly critical of the euphoria surrounding the successive bubbles blown up by the financial markets in the past couple of decades. On the eve of the present crisis Wolf acknowledged that financial deregulation could lead to disaster.10 And he was relatively quick to recognise the potential scale of the crisis once it hit. Thus he warned in February 2008 that the American economy was facing “the mother of all meltdowns”: “The connection between the bursting of the housing bubble and the fragility of the financial system has created huge dangers, for the US and the rest of the world”.11
So what Wolf has to say repays attention. Moreover, Fixing Global Finance isn’t a polemical intervention like his previous book, but a more reflective work, developed from various academic lectures and seeking to address what he regards as tensions in the system that he so strongly defends. It seems to have been finished in the summer of 2007, on the eve of the present crisis, and has not been significantly updated, though there are passing references to what is (rather inadequately) described as “the subprime crisis”. Given its vulnerability to the hazards of publishing schedules in volatile times, how well does Wolf’s book stand up to the test of events?
The answer is mixed. Wolf’s starting point was potentially valuable, in that he acknowledged that “the age of financial liberalisation was…an age of crises”. He cited a study that estimates there were 139 financial crises between 1973 and 1997, twice the level of the era before 1914 that is often described as that of the “first globalisation”, of a liberal world economy in which, under British hegemony, money flowed freely across national borders. There were, moreover, a mere 38 financial crises between 1945 and 1971, a period when capitalism was more nationally regulated.12
The problem is that Wolf went on to develop an analysis of the dynamics of financial crisis that presented it as largely something that afflicts so-called “emerging market economies”—that is economies in the Global South and in the former Soviet bloc that have over the past few decades been seeking integration into the world market by adopting (often partially and selectively) the distinctive institutions and practices of liberal capitalism. Hence the typical financial crisis is, according to a study by Frederic Mishkin that Wolf cited approvingly, “the product of at least one and often two errors: mismanaged liberalisation…and fiscal indiscipline”.13 The normal course of such a crisis involved increasing pressure on the currency of the state concerned until panic set in and capital fled the country, generating a deep recession.
This diagnosis is the intellectual equivalent of the generals who are always fighting the last war. It is a framework that was developed on the basis of the study of the financial crises of the 1980s and 1990s, which mainly affected Latin America, East Asia and Russia. In other words, financial crises happen somewhere else, outside the core of the system. It is true that Wolf occasionally mentioned cases that occurred closer to home, for example, the Savings and Loan crisis in the United States at the end of the 1980s. But his focus was on the “emerging markets”. One might say in his defence that this was a reasonable inductive generalisation from the evidence to hand but this simply shows the inadequacy of induction as a way of providing theories with empirical support. The best theories are those that allow us, at least in broad terms, to anticipate future developments; this is the rational kernel of Karl Popper’s philosophy of science.
The net effect is that Wolf provided an explanatory framework that is little use in understanding a financial crisis that started at the very core of the system, in the US itself, the state whose rulers have offered their own institutions and practices as the paradigm of neoliberalism that others should copy—a crisis, moreover, in which currency movements have been the symptoms of the larger forces at work rather than the precipitants of crisis. Nor will it do to say in Wolf’s defence that he was overtaken by events. He had extraordinarily little to say about the collapse of Japan’s bubble economy at the beginning of the 1990s and the resulting deflation and paralysis of the banking system. This was the most serious financial crisis to afflict an advanced capitalist state since the Great Depression (until, of course, the present one).14
Moreover, there has been widespread debate—provoked by, for example, semi-popular works such as Robert Shiller’s Irrational Exuberance$_5_$for at least a decade over whether the US was heading towards a major speculative bust. Wolf’s focus on “emerging market economies” whose crises can be put down to their failure to confirm to neoliberal norms (in the way that the East Asian crisis of 1997-8 was blamed on local “crony capitalism”) allowed him to evade the really tough theoretical questions. Is it true, as neoclassical orthodoxy claims, that financial markets, when operating properly (ie without excessive state interference), are self_equilibriating, as is affirmed by the efficient market hypothesis, stated by George Gibson in 1883: “When shares become publicly known on an open market, the value which they acquire may be regarded as the judgement of the best intelligence regarding them”?15 Or are financial markets inherently unstable, and hence liable to speculative cycles of euphoria and panic, as, for example, the “post-Keynesian” economist Hyman Minsky argued?16 I leave out of the discussion Marxist analyses of money and finance, since Marx seems to figure in Wolf’s vocabulary only as a swear-word.
So Wolf isn’t much use in helping us to understand the general dynamics of financial markets under capitalism, even as the problem is posed within the framework of bourgeois economics. Where his book is valuable is in identifying one of the main dimensions of the present crisis. He pointed to the “puzzle” that, at the height of the mid-2000s boom, real interest rates were very low, despite the fact that the United States was running a huge balance of payments deficit, which should, in the normal course of things, have pushed global interest rates up because of the American need to borrow abroad. What made this state of affairs possible, Wolf argued, was that a global “savings glut” had developed. More precisely, several key regions—China and the rest of “developing Asia”, Japan, the oil exporting countries, and the Euro-zone—had been running a surplus of savings over investments. In the US the reverse was true, reflecting growing government borrowing and a very low level of saving by households. As a result, “the United States has been absorbing about 70 percent of the surplus savings of the rest of the world”.17
Wolf argued that the key element in this story was provided by the East Asian economies—Japan, South Korea, Taiwan and, above all, China. The lesson these countries’ rulers drew from the crisis of the late 1990s was that they must never again allow themselves to run up big balance of payments deficits and thereby to become vulnerable to the kind of rapid inflows and outflows of foreign capital that proved so destructive then. So they pursued managed exchange rate policies whose aim was to prevent their currencies from rising too far against the US dollar and hence to keep their exports relatively cheap. One consequence of this policy was that the East Asian states had to buy foreign currencies (above all the dollar) to prevent their own from rising. So they accumulated, from the millennium onwards, vast foreign exchange reserves: “By March 2007 the total global stock of foreign-currency reserves had reached $5.3 trillion. China alone had $1.2 trillion and Japan had another $890 billion. Both Taiwan and South Korea held more reserves than the entire Eurozone. Asia held $3.3 trillion in all—just over three fifths of the global total”.18
Much of this money was then lent back to the US, allowing it to finance its balance of payment deficit. The dollar makes up about two thirds of foreign exchange reserves, though Wolf suggested, “It would not be surprising if the proportion of Chinese reserves held in dollars was not substantially higher, given that the reserve accumulations are the by-product of an exchange rate target against the US currency”.19 Some economists have called this setup Bretton Woods Mark II, after the system of currencies fixed against the dollar that was established under the Bretton Woods Agreement of 1944 which collapsed in the early 1970s. They see it as a relatively benign and stable arrangement, in which developing economies are able to grow fast by fixing their exchange rates against the currency of the biggest developed economy, and then lend back to the US the dollars they earn in the process, allowing it to continue buying their exports.20
Wolf’s position is more nuanced. In his book he was admirably brisk with various practitioners of voodoo economics who have tried to explain away the American deficit. (My favourites among these are two Harvard academics who claim that the official payments figures fail to take into account financial “dark matter”: once this is added in, they claim, the US turns out to be a net creditor.) He also pointed out that, at the end of 2006, “almost two thirds of the foreign holdings of US assets (other than financial derivatives) took the form of debt”. But the real return on American private and public debt held by foreigners was, over the period 1973 and 2004, a mere 0.32 percent.21
“Thus”, Wolf observed, “the signal—and for the United States, very favourable—characteristic of foreign ownership is that a high proportion of foreign capital is invested in assets with low returns, denominated—even better for the United States—in depreciated dollars”.22 Indeed, he calculated that America’s net financial liabilities—what it owes to foreigners minus its assets abroad (the foreign investments of US firms and citizens)—has risen much more slowly than the influx of capital required to finance the deficit. Simply on the basis of the cumulative current account deficits, “the US should have had net liabilities equal to 44 percent of GDP [gross domestic product] at the end of 2006. As it was, according to the Bureau of Economic Analysis, the net liability position was only 16 percent of GDP, down from 23 percent at the end of 2002”.23 This is partly because of the fall of the dollar against other major currencies (in the 1970s, the late 1980s and early 1990s, and 2002-8), but mainly because the prices of US-held assets abroad have risen relative to those of the assets held by foreigners in the US.
Wolf concluded that “the best argument for the view that high current account deficits are indefinitely sustainable is that Americans are ‘savvy investors’, fleecing the naive”.24 Indeed, quoting the former French president Valéry Giscard d’Estaing, who described “the ability of the United States to borrow cheaply and apparently without limit in its own currency as an ‘exorbitant privilege’”, he went on to write, “The United States (as is true also of the United Kingdom) has been a vast and hitherto very profitable hedge fund”.25 This is an interesting analysis because it seems to dovetail with the argument of various Marxist and radical scholars that the US derives massive advantages from its dominance of the financial system (though they often stress the strength of the dollar, whereas, according to Wolf, it has been the successive episodes of dollar devaluation that have been a key mechanism in boosting the relative price of US foreign assets).26
This state of affairs allows the US to play what critics of American imperialism would call a hegemonic role:
The United States accommodates and offsets whatever the rest of the world throws at it because, as issuer of the world’s key currency, it suffers from no external constraint: it has been able, at least up to now, to borrow as much as it wishes in its own currency, at modest interest rates… The result is that the Federal Reserve [the US central bank] is free to pursue policies that balance the US economy and, in doing so, also balance the world’s, by absorbing the excess savings and so the surplus of goods and services, at given real exchange rates, of the rest of the world.27
This analysis of the financial imbalances particularly between the US and East Asia is important for two reasons. First, it highlights a crucial presupposition of the credit boom of the mid-2000s: it was the flood of lending from East Asia that made it so cheap to borrow and blow up the speculative bubble that developed in the American housing market and sucked in (via a cobweb of financial derivatives) much of the global banking system. Second, Wolf believed the US’s role as “borrower and spender of last resort” was a positive one: “the US current account deficit is protecting the world from recession”.28 But he was ambivalent. On the one hand, this situation “is far better than the repeated financial crises that preceded it”.29 On the other hand, he was queasy about “a more liberal global financial system” that “generates a huge surge of capital that flows ‘uphill’—not from the world’s most advanced economy, as happened in the 19th century under British hegemony, but toward it”.30
Wolf accordingly favoured a cautious and phased process of adjustment, in which the US would gradually save more and consume less, and China save less and consume more. In its final chapters the book descended into not very interesting Davos boilerplate about the reform of the International Monetary Fund and the like. Here it has most visibly been overtaken by events. Far from representing a break from “repeated financial crises”, the pattern Wolf analysed has led to the biggest crash since 1929. Not that the global imbalances directly caused the present financial crisis, but that, in making possible “an apparently ongoing free banquet” for American capitalism,31 they facilitated the credit boom whose collapse in 2007 has now paralysed the international banking system.
The resulting crisis has also underlined the pivotal role of the US in sustaining global demand. The American recession that started in early 2008 has now sent the great manufacturing and trading economies of the world—Germany, Japan and China—into a tailspin as their main export market has dried up. The fantasy that Asia could somehow “decouple” from the US and keep the world economy growing despite the financial crisis, a view still influential in the markets in the winter of 2007-8, has been demolished.32 As Wolf has recently emphasised, “the US, it is clear, remains the core of the world economy”.33
In the face of this spectacular reversal, Wolf has moved to the left somewhat. He now declares that “Keynes offers us the best way to think about the financial crisis”, and praises Minsky for his critique of the efficient market hypothesis. Consistent with the stress on the necessity of massive state intervention to prop up the banking system that has been one of the main themes of his Financial Times column since the onset of the crisis, he calls for measures, in the short term, “to sustain aggregate demand, as Keynes would have recommended”, and, in the longer term, “to force a rebalancing of global demand”.34 This second theme is more or less a cliche of contemporary policy discussion. “There is no longer any choice for Asia,” pontificates Clyde Prestowitz of the Economic Strategy Institute. “Asia has to start consuming more… The export-led model has outlived its usefulness”.35
The trouble with such pronouncements is that they ignore the concrete interests that sustain different economic models. Worse still, they ignore class. Concepts such as savings and investment that Wolf uses in his analysis of global imbalances refer to macroeconomic aggregates, the analysis of which Keynes helped to pioneer. Despite their undoubted usefulness, these concepts grasp the behaviour of capitalist economies at a relatively superficial level. To go deeper we need the Marxist concept of capitalist relations of production and the understanding of antagonistic class relationships that this allows. Thus it isn’t “Asia” that will decide to consume more or less. Patterns of consumption reflect deeply entrenched class relations. At one point Wolf acknowledged these realities:
Chinese households save enormously. But the core of the Chinese savings story over the past five or six years has been the rise in corporate savings… The Chinese government told state enterprises to become profitable, and they have done what they were told. The corporate sector has become profitable by disposing of surplus workers, yet the government has not taken some of the increased profits as dividends on the assets it owns, even to finance a safety net for displaced workers. Remarkably (and shockingly), the government has left the money with enterprise insiders. But the government itself is also a large saver. China has about 800 million poor people, yet the country now consumes less than half of GDP and exports capital to the rest of the world. This is highly peculiar. It is also why the country has such a huge current account surplus.36
So what is generally presented as “China” not consuming “enough” is really intensified exploitation via the extraction of relative surplus-value—fewer workers are producing a growing output. Low consumption by Chinese workers is matched by high profits for Chinese capital. But the same realities govern the other end of the circuit that has sustained the world economy, namely the US. Analysing the American balance of payments deficit, Wolf points to:
A startling contrast between business and the household sector… The business sector moved into a large deficit during the investment boom triggered by the bubble economy of the late 1990s and 2000. It then cut back sharply on investment and, after a short period of squeeze, built up profits again. More important, it also avoided any repeat of the investment surge of the 1990s. As a result, the business sector ran a financial surplus from the fourth quarter of 2001 to the first quarter of 2007.37
So the gap between savings and investment is to be found in the US business sector. I will return to this shortly. Let us first note that, as Wolf observed, “the household sector is quite a different story. It has been running historically unprecedented financial deficits, consistently spending more than its income on consumption and residential investment”.38 The obvious way of interpreting this is that ordinary Americans have been engaged in a high-consumption splurge. Such a view informs all the chatter about the crisis being “our” fault because we’ve been so busy borrowing and spending.
The trouble is that this doesn’t fit with another important piece of the economic puzzle. As Edward Luce puts it:
Between 2000 and 2006, the US economy expanded by 18 percent, whereas real income for the median working household dropped by 1.1 percent in real terms, or about $2,000… Meanwhile, the top tenth saw an improvement of 32 percent in their incomes, the top 1 percent a rise of 203 percent and the top 0.1 percent a gain of 425 percent. Part of this was because the latest period of economic growth failed to create jobs at nearly the same rate as in previous business cycles and even led to a decline in the number of hours worked for most employees. Unusually for a time of expansion, the number of participants in the labour force also fell. But mostly it was because the fruits of economic growth and soaring productivity rates went to the highest income earners.39
One does not have to look much further than these figures to understand the deep anger in American society that has been directed against the Wall Street bankers. But, from a scientific point of view, it represents, once again, a higher rate of exploitation thanks to an increase in relative surplus-value.40 Workers at both ends of the circuit have been squeezed. The difference is that Chinese workers, at a much lower standard of living than their counterparts in the US, are pressured to save in order to provide the security against illness, unemployment and old age that the Chinese state no longer offers them. American workers, by contrast, have been encouraged to borrow in order to sustain their basic consumption at a time when their real wages have actually fallen. This both helped to maintain effective demand and thereby to keep the American and world economies growing after the collapse of the dotcom boom in 2000 and to provide profits for the banks that lent them the money. It is the bursting of the resulting bubble that precipitated the present crisis.41
But there is one final piece to the puzzle. As we have seen, Wolf argued that American firms were hanging onto their profits rather than investing them. But he also noted that this is a general phenomenon in the “aftermath of what we may now confidently call the global stock market bubble of 1999-2000”:
In most economically significant countries, corporations are very profitable but cautious about investing… The shift on income from labour to capital is an important phenomenon across high-income economies. Interestingly and significantly, the biggest shift from labour income has not been in the United States and other Anglo-Saxon countries, but in Japan and the Eurozone.42
So one key dimension of the “savings glut” is that capitalists in the advanced economies during the 2000s increased their profits through wage repression but then not invested these profits in expanded production. There are various ways of explaining this phenomenon. The one I prefer is that, on the evidence available, capitalists may have succeeded in increasing the rate of surplus-value, the mass of profits relative to wages, but they have failed to push up the rate of profit, the mass of profits relative to total investment (in means of production as well as in labour-power), to a level where they feel confident enough to invest on a large scale. If this explanation is correct, then it puts the credit bubble in another perspective, where we can see it as an effort (engineered especially by the Federal Reserve while Alan Greenspan was its chairman) to allow the US economy (and hence, thanks to its central role in maintaining global demand, the world) to continue to grow, despite its failure to overcome a chronic crisis of profitability that dates ultimately back to the 1960s.43
Where does this leave Wolf’s book? It contains, as the foregoing analysis indicates, important elements for an explanation of the present crisis. But these are present in a fragmentary way. This is partly a consequence of the—to be frank—apologetic framework in which Wolf approaches the specific issue of financial crisis, but more fundamentally because of his reliance on the concepts of neoclassical orthodoxy, which are completely incapable of identifying the real mechanisms governing capitalist economic relations. Therefore, for all the intelligence of the author and the value of the material that he provides, I couldn’t recommend Fixing Global Finance as a way into the present crisis. From this point of view, it is inferior to Graham Turner’s The Credit Crunch,44 which, though written from a theoretical perspective closer to Irving Fisher’s theory of debt deflation than to Marxist political economy, has a much better sense of the dynamics of the crisis, particularly through the relationship that Turner posits between wage repression and financial speculation. At a time such as the present, those who remain within the boundaries of mainstream thinking are lost.
1: For this anecdote, and the general embarrassment of mainstream economics, see Chris Giles, “The Economic Forecasters’ Failing Vision”, Financial Times, 16 December 2008.
2: Panitch and Konings, 2008, p10.
3: Panitch and Konings, 2008, p238.
4: George Soros, “The Game Changer”, Financial Times, 28 January 2009.
5: On chaos theory, see especially Prigogine and Stengers, 1984.
6: Indeed, so volatile is the state of capitalist animal spirits that, at the time of writing, bond markets seem to be switching again to reflecting expectations of increased inflation rather than of a deflationary spiral. See Krishna Guha, “Market Fears Of Deflation Abate”, Financial Times, 15 February 2009.
7: See Callinicos, 2005; Panitch and Gindin, 2006; Callinicos, 2006. In a recent interview Panitch, while now acknowledging the scale of the crisis, simply reaffirms this analysis-see Panitch, 2009.
8: Wolf, 2004.
9: Marx, 1976, p97.
10: Martin Wolf, “Risks and Rewards of Today’s Unshackled Global Finance”, Financial Times, 26 June 2007.
11: Martin Wolf, “America’s Economy Faces Mother Of All Meltdowns”, Financial Times,
19 February 2008.
12: Wolf, 2009, p31.
13: Wolf, 2009, p34.
14: Wolf has, however, now woken up to the possibility that the US may be experiencing a version of the same kind of crisis. See, for example, Martin Wolf, “Japanese Lessons For A World Of Balance-Sheet Deflation”, Financial Times, 18 February 2009.
15: Quoted in Shiller, 2001, p172.
16: Minsky, 2008.
17: Wolf, 2009, p76.
18: Wolf, 2009, p87.
19: Wolf, 2009, p95.
20: For example, Dooley, Folkerts-Landau and Garber, 2004.
21: Wolf, 2009, p124.
22: Wolf, 2009, p124.
23: Wolf, 2009, p126.
24: Wolf, 2009, p137.
25: Wolf, 2009, p112.
26: Two of the best examples of this kind of analysis are Wade, 2003, and Gowan, 2009.
27: Wolf, 2009, p100. Herman Schwartz argues the position of a hegemonic state is underpinned economically by it acting as the main market for other participants in the world economy-Schwartz, 2000, chapter 3.
28: Wolf, 2009, p110.
29: Wolf, 2009, p150.
30: Wolf, 2009, p113.
31: Wolf, 2009, p112.
32: These illusions are recorded in Sundeep Tucker, Joe Leahy and Geoff Dyer, “Asia’s Continued Rise Spurs ‘Decoupling’ Debate”, Financial Times, 1 November 2007.
33: Martin Wolf, “Japanese Lessons For A World of Balance-Sheet Deflation”, Finanical Times, 18 February 2009.
34: Martin Wolf, “Keynes Offers Us The Best Way To Think About The Crisis”, Financial Times, 24 December 2008. Compare his much more even-handed response to the death of Milton Friedman, the founder of monetarism: “Keynes v Friedman: Both Can Claim Victory”, Financial Times, 21 November 2006.
35: David Pilling, “Unlucky Numbers”, Financial Times, 13 February 2009.
36: Wolf, 2009, p69.
37: Wolf, 2009, p104.
38: Wolf, 2009, p104.
39: Edward Luce, “Stuck In The Middle”, Financial Times, 28 October 2008.
40: One note of caution about simply extrapolating, as I do in the text, from national-income statistics: naturally the concepts used in these statistics do not correspond to those of Marxist value theory, with potentially misleading consequences. For example, part of what is classified as labour income-the earnings of senior corporate executives-should probably be understood as a portion of surplus-value, which is redistributed to this layer of employees in order to ensure their loyalty and efficiency. Doing so wouldn’t contradict the point made in the text, since it would mean that the rise in the rate of exploitation (profits relative to wages) is even higher than the official statistics indicate because the mass of surplus-value would then comprise these “earnings” in addition to profits, interests, and rent, but the rate of profit (profits relative to investment) would then also turn out to be higher. I owe this point to Gérard Duménil.
41: Costas Lapavitsas has rightly highlighted the significance of the increasing extension of the credit system to lending to workers, but his suggestion that this has led to the “direct exploitation” of workers by the banks doesn’t seem particularly helpful-Lapavitsas, 2008.
42: Wolf, 2009, p64.
43: The question of whether the rate of profit has been falling is a matter of great controversy even among Marxist economists. For recent analysis and discussion, see Brenner, 2006, Harman, 2007, and the discussion inspired by the latter article-Kincaid, 2008, Harman, 2008, and Moseley, 2008. Brenner traces the relationship between low profitability and successive bubbles in Brenner, 2002, and Brenner, 2004.
44: Turner, 2008.
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