Connections in Political Economy - The Subprime Crisis and Marxian Economics

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Name and Link Type of Resource Description

John Bellamy Foster and Fred Magdoff
The Great Financial Crisis: Causes and Consequences
Monthly Review Press U.S. Feb 2009
Available Here Book REVIEW: "“John Bellamy Foster and Fred Magdoff’s book on ‘The Great Financial Crisis’ is an excellent example for the usefulness of studying Marx’s works and that of other Marxist political economists, e.g. the writings of Paul M. Sweezy and Harry Magdoff, in order to better grasp the dynamics and contradictions of the financial turmoil and its implications for social conflict. The disastrous contemporary financial crisis cannot be understood as the consequence of a ‘wrong regulation’ of the world of finance. It is an emanation of the ‘real’ accumulation process of financialized monopoly capital.”
— Elmar Altvater, Otto-Suhr-Institute of the Free University of Berlin

John Bellamy Foster
The Financialization of Capital and the Crisis
Monthly Review 2007 58(11) 1-14
Available here Article EXTRACT: ".....What Paul Sweezy just over a decade ago called “the financialization of the capital accumulation process” has been the main force lifting economic growth since the 1970s.3 The transformation in the system that this has brought about is reflected in the rapid growth since the 1970s of financial profits as a percent of total profits (see chart 1). The fact that such financialization of capital appears to be taking the form of bigger and bigger bubbles that burst more frequently and with more devastating effect, threatening each time a deepening of stagnation—i.e., the condition, endemic to mature capitalism, of slow growth, and rising excess capacity and unemployment/underemployment—is thus a development of major significance......"

Marxist economists analyse the crisis
Workers Liberty Website
Available here Links to numerous articles

Chris Harman
From the credit crunch to the spectre of global crisis
International Socialism Issue: 118 31 March 08
Available here Article Extract: "Simply blaming the avarice and short-sightedness of bankers does not explain how they found it so easy to get the funds that they gambled so heavily. It also avoids asking what shape the world economy would have been in without such lending. "

Beitel, Karl
Understanding the Subprime Debacle
Monthly Review, May 08.
Available here Article Extract: "As has been noted many times in these pages, in a capitalist system characterized by industrial maturity and markets dominated by large oligopolistic corporations, there are no endogenous mechanisms that insure that capitalists will collectively invest at a level required to keep the system humming along at anywhere near full capacity. This points to one of the system’s most fundamental, and ultimately irreconcilable, contradictions: mature capitalism has no endogenous means to guarantee an adequate level of private investment, yet by the same token it cannot tolerate any rise in wages that would erode the profits of the owning class. This has left the system dependent upon debt-fueled consumption. The internal contradiction shows up in the form of subpar growth and economic stagnation, or credit-driven booms and bubbles followed by crisis once the expansion of financial claims on earnings collides with the realities of wage stagnation for the majority of the U.S. working class."

William K. Tabb
Four Crises of the Contemporary World Capitalist System
Monthly Review Oct 2008
Available here Article

Nick Beams
The World Economic Crisis: A Marxist Analysis
Lecture delivered in November and December 2008.
Available here Lecture transcript "The following is the lecture delivered by Nick Beams, national secretary of the Socialist Equality Party (Australia) and a member of the International Editorial Board of the World Socialist Web Site, to audiences in Perth, Melbourne and Sydney in November and December, 2008."

Interview with David Harvey on the G20, the Financial Crisis and Neoliberalism
Democracy Now April 2nd 2009

Available here Audio and transcript "For some analysis on the G20 summit and the financial crisis, we speak to a leading thinker on the global economy. David Harvey is a Marxist geographer and distinguished professor of anthropology at the Graduate Center of the City University of New York. He is the author of several books, including The Limits to Capital and A Brief History of Neoliberalism."

Paul Craig Roberts
Dead Labor Marx and Lenin Reconsidered
Counterpunch October 7, 2009
Available here Article Extract "If Karl Marx and V. I. Lenin were alive today, they would be leading contenders for the Nobel Prize in economics. Marx predicted the growing misery of working people, and Lenin foresaw the subordination of the production of goods to financial capital’s accumulation of profits based on the purchase and sale of paper instruments. Their predictions are far superior to the “risk models” for which the Nobel Prize has been given and are closer to the money than the predictions of Federal Reserve chairmen, US Treasury secretaries, and Nobel economists, such as Paul Krugman, who believe that more credit and more debt are the solution to the economic crisis. "

Ageing capitalism from the Marxist perspective
Letter to Editor, by Dr John Ure, Financial Times,Dec 31 2009
Available Here (Subscription required for repeated access)) FT Letters page

Economic Crises, Marx's Value Theory, and 21st Century Capitalism:
An Interview with Cyrus Bina
Radical Notes, 11th May 2010
Available Here Online Interview Transcript EXTRACT: "I would attempt, at the outset, to identify the meaning and universality of capitalist crises from the standpoint of Marx's value-theoretic framework. It goes without saying that I am sceptical about any version of the crisis that is being displayed in ad hoc improvisation by the left and the right; an "inventiveness" that correspondingly may have pedigree in tautological reading of "finance capital" and the "infallibility of human nature." "...."while no one should deny the ample opportunism, if not the criminality, of a sizeable segment of finance capital, which conspired so blatantly with notorious market fundamentalists - such as the former Chairman of the US Federal Reserve Alan Greenspan - within the US government, the real focus should be on assessment of the crisis within worldwide accumulation of capital across the landscape. Such an assessment must inevitably include the dynamics of capital accumulation, necessity of the crisis, and the renewal and rejuvenation of the system with respect to redistribution of wealth and, especially, nature of class polarisation across the global economy."

Alex Callinicos
Marxism 2010: fixing a broken system
guardian.co.uk, Thursday 1 July 2010 Available Here Newspaper Article

Ismael Hossein-Zadeh,
Holes in the Keynesian Arguments against Neoliberal Austerity Policy—It Is not “Bad” Policy, It Is Class Policy
July 22nd 2010 Available Here Online article Extract: "......Viewing the savage class war of the ruling kleptocracy on the people’s living and working conditions simply as “bad” policy, and hoping to somehow—presumably through smart arguments and sage advice—replace it with the “good” Keynesian policy of deficit spending without a fight, without grassroots’ involvement and/or pressure, stems from the rather naļve supposition that policy making is a simple matter of technical expertise or the benevolence of policy makers, that is, a matter of choice. The presumed choice is said to be between only two alternatives: between the stimulus or Keynesian deficit spending, on the one hand, and the Neoliberal austerity of cutting social spending, on the other. Experience shows, however, that economic policy-making is not independent of politics and policy-makers who are, in turn, not independent of the financial interests they are supposed to discipline or regulate. Economic policies are often subtle products of the balance of social forces, or outcome of the class struggle......."

Leo Panitch, Sam Gindin and Gregory Albo
In and Out of Crisis, The Global Financial Meltdown and Left Alternatives
PM Press/Spectre May 2010
Available Here
For full synopsis and links to other material on this book click Here Book Extract from synopsis: "With an unparalleled understanding of the inner workings of capitalism, the authors of In and Out of Crisis provocatively challenge the call by much of the Left for a return to a largely mythical Golden Age of economic regulation as a check on finance capital unbound. They deftly illuminate how the era of neoliberal free markets has been, in practice, undergirded by state intervention on a massive scale. With clarity and erudition, they argue persuasively that given the current balance of social forces – as bank bailouts around the globe make evident – regulation is not a means of fundamentally reordering power in society, but rather a way of preserving markets. "

Michael Hudson
From Marx to Goldman Sachs: The Fictions of Fictitious Capital, and the Financialization of Industry
Critique: Journal of Socialist Theory,Volume 38, Issue 3, 01 August 2010
Available Here Published article Extract: "Classical economists developed the labor theory of value to isolate economic rent, which they defined as the excess of market price and income over the socially necessary cost of production (value ultimately reducible to the cost of labor)..... In keeping with his materialist view of history, Marx expected banking to be subordinated to the needs of industrial capitalism..... But as matters have turned out, the rentier interests mounted a Counter-Enlightenment to undermine the reforms that promised to liberate society from special privilege..... today’s economy is burdened with property and financial claims that Marx and other critics deemed “fictitious” – a proliferation of financial overhead in the form of interest and dividends, fees and commissions, exorbitant management salaries, bonuses and stock options, and “capital” gains (mainly debt-leveraged land-price gains)..... "

Name and Link	Type of Resource	Description

John Bellamy Foster and Fred Magdoff The Great Financial Crisis: Causes and Consequences Monthly Review Press U.S. Feb 2009 Available Here	Book	REVIEW: "“John Bellamy Foster and Fred Magdoff’s book on ‘The Great Financial Crisis’ is an excellent example for the usefulness of studying Marx’s works and that of other Marxist political economists, e.g. the writings of Paul M. Sweezy and Harry Magdoff, in order to better grasp the dynamics and contradictions of the financial turmoil and its implications for social conflict. The disastrous contemporary financial crisis cannot be understood as the consequence of a ‘wrong regulation’ of the world of finance. It is an emanation of the ‘real’ accumulation process of financialized monopoly capital.” — Elmar Altvater, Otto-Suhr-Institute of the Free University of Berlin
John Bellamy Foster The Financialization of Capital and the Crisis Monthly Review 2007 58(11) 1-14 Available here	Article	EXTRACT: ".....What Paul Sweezy just over a decade ago called “the financialization of the capital accumulation process” has been the main force lifting economic growth since the 1970s.3 The transformation in the system that this has brought about is reflected in the rapid growth since the 1970s of financial profits as a percent of total profits (see chart 1). The fact that such financialization of capital appears to be taking the form of bigger and bigger bubbles that burst more frequently and with more devastating effect, threatening each time a deepening of stagnation—i.e., the condition, endemic to mature capitalism, of slow growth, and rising excess capacity and unemployment/underemployment—is thus a development of major significance......"
Marxist economists analyse the crisis Workers Liberty Website Available here	Links to numerous articles
Chris Harman From the credit crunch to the spectre of global crisis International Socialism Issue: 118 31 March 08 Available here	Article	Extract: "Simply blaming the avarice and short-sightedness of bankers does not explain how they found it so easy to get the funds that they gambled so heavily. It also avoids asking what shape the world economy would have been in without such lending. "
Beitel, Karl Understanding the Subprime Debacle Monthly Review, May 08. Available here	Article	Extract: "As has been noted many times in these pages, in a capitalist system characterized by industrial maturity and markets dominated by large oligopolistic corporations, there are no endogenous mechanisms that insure that capitalists will collectively invest at a level required to keep the system humming along at anywhere near full capacity. This points to one of the system’s most fundamental, and ultimately irreconcilable, contradictions: mature capitalism has no endogenous means to guarantee an adequate level of private investment, yet by the same token it cannot tolerate any rise in wages that would erode the profits of the owning class. This has left the system dependent upon debt-fueled consumption. The internal contradiction shows up in the form of subpar growth and economic stagnation, or credit-driven booms and bubbles followed by crisis once the expansion of financial claims on earnings collides with the realities of wage stagnation for the majority of the U.S. working class."
William K. Tabb Four Crises of the Contemporary World Capitalist System Monthly Review Oct 2008 Available here	Article
Nick Beams The World Economic Crisis: A Marxist Analysis Lecture delivered in November and December 2008. Available here	Lecture transcript	"The following is the lecture delivered by Nick Beams, national secretary of the Socialist Equality Party (Australia) and a member of the International Editorial Board of the World Socialist Web Site, to audiences in Perth, Melbourne and Sydney in November and December, 2008."
Interview with David Harvey on the G20, the Financial Crisis and Neoliberalism Democracy Now April 2nd 2009 Available here	Audio and transcript	"For some analysis on the G20 summit and the financial crisis, we speak to a leading thinker on the global economy. David Harvey is a Marxist geographer and distinguished professor of anthropology at the Graduate Center of the City University of New York. He is the author of several books, including The Limits to Capital and A Brief History of Neoliberalism."
Paul Craig Roberts Dead Labor Marx and Lenin Reconsidered Counterpunch October 7, 2009 Available here	Article	Extract "If Karl Marx and V. I. Lenin were alive today, they would be leading contenders for the Nobel Prize in economics. Marx predicted the growing misery of working people, and Lenin foresaw the subordination of the production of goods to financial capital’s accumulation of profits based on the purchase and sale of paper instruments. Their predictions are far superior to the “risk models” for which the Nobel Prize has been given and are closer to the money than the predictions of Federal Reserve chairmen, US Treasury secretaries, and Nobel economists, such as Paul Krugman, who believe that more credit and more debt are the solution to the economic crisis. "
Ageing capitalism from the Marxist perspective Letter to Editor, by Dr John Ure, Financial Times,Dec 31 2009 Available Here (Subscription required for repeated access))	FT Letters page
Economic Crises, Marx's Value Theory, and 21st Century Capitalism: An Interview with Cyrus Bina Radical Notes, 11th May 2010 Available Here	Online Interview Transcript	EXTRACT: "I would attempt, at the outset, to identify the meaning and universality of capitalist crises from the standpoint of Marx's value-theoretic framework. It goes without saying that I am sceptical about any version of the crisis that is being displayed in ad hoc improvisation by the left and the right; an "inventiveness" that correspondingly may have pedigree in tautological reading of "finance capital" and the "infallibility of human nature." "...."while no one should deny the ample opportunism, if not the criminality, of a sizeable segment of finance capital, which conspired so blatantly with notorious market fundamentalists - such as the former Chairman of the US Federal Reserve Alan Greenspan - within the US government, the real focus should be on assessment of the crisis within worldwide accumulation of capital across the landscape. Such an assessment must inevitably include the dynamics of capital accumulation, necessity of the crisis, and the renewal and rejuvenation of the system with respect to redistribution of wealth and, especially, nature of class polarisation across the global economy."
Alex Callinicos Marxism 2010: fixing a broken system guardian.co.uk, Thursday 1 July 2010 Available Here	Newspaper Article
Ismael Hossein-Zadeh, Holes in the Keynesian Arguments against Neoliberal Austerity Policy—It Is not “Bad” Policy, It Is Class Policy July 22nd 2010 Available Here	Online article	Extract: "......Viewing the savage class war of the ruling kleptocracy on the people’s living and working conditions simply as “bad” policy, and hoping to somehow—presumably through smart arguments and sage advice—replace it with the “good” Keynesian policy of deficit spending without a fight, without grassroots’ involvement and/or pressure, stems from the rather naļve supposition that policy making is a simple matter of technical expertise or the benevolence of policy makers, that is, a matter of choice. The presumed choice is said to be between only two alternatives: between the stimulus or Keynesian deficit spending, on the one hand, and the Neoliberal austerity of cutting social spending, on the other. Experience shows, however, that economic policy-making is not independent of politics and policy-makers who are, in turn, not independent of the financial interests they are supposed to discipline or regulate. Economic policies are often subtle products of the balance of social forces, or outcome of the class struggle......."
Leo Panitch, Sam Gindin and Gregory Albo In and Out of Crisis, The Global Financial Meltdown and Left Alternatives PM Press/Spectre May 2010 Available Here For full synopsis and links to other material on this book click Here	Book	Extract from synopsis: "With an unparalleled understanding of the inner workings of capitalism, the authors of In and Out of Crisis provocatively challenge the call by much of the Left for a return to a largely mythical Golden Age of economic regulation as a check on finance capital unbound. They deftly illuminate how the era of neoliberal free markets has been, in practice, undergirded by state intervention on a massive scale. With clarity and erudition, they argue persuasively that given the current balance of social forces – as bank bailouts around the globe make evident – regulation is not a means of fundamentally reordering power in society, but rather a way of preserving markets. "
Michael Hudson From Marx to Goldman Sachs: The Fictions of Fictitious Capital, and the Financialization of Industry Critique: Journal of Socialist Theory,Volume 38, Issue 3, 01 August 2010 Available Here	Published article	Extract: "Classical economists developed the labor theory of value to isolate economic rent, which they defined as the excess of market price and income over the socially necessary cost of production (value ultimately reducible to the cost of labor)..... In keeping with his materialist view of history, Marx expected banking to be subordinated to the needs of industrial capitalism..... But as matters have turned out, the rentier interests mounted a Counter-Enlightenment to undermine the reforms that promised to liberate society from special privilege..... today’s economy is burdened with property and financial claims that Marx and other critics deemed “fictitious” – a proliferation of financial overhead in the form of interest and dividends, fees and commissions, exorbitant management salaries, bonuses and stock options, and “capital” gains (mainly debt-leveraged land-price gains)..... "