Understanding the Capitalist Economic Crisis

John Bellamy Foster: Economic crises are functional to the system in that a crisis helps capital readjust its imbalances, disproportions, as Marxian theories often say, and it sets the basis for a renewed period of expansion.  So, regular business-cycle crises . . . help the system. . . .  But, in addition to cycles . . . there are also trends, long-term trends in the economy. . . .  There’s been a slow decline, decade by decade, since the 1960s.  So, the trend rate of growth is going down. . . .  The problem is that in the advanced capitalist economies now, in the United States, Europe, and Japan, it’s getting pretty close to a 1% rate, so their economies would double in size every seventy years or so at this.  This is impossible for the capitalist system. . . .  Of course, the capitalist class is not going to accept their capital only doubling every seventy years.  What are they gonna do?  If the pie isn’t growing, the only way you can have bigger slices for some is by having smaller slices for others. . . .  Another world war is not a way out.  Little wars in Afghanistan, Libya, Iraq, even if you add them all up, we would need fifteen wars like that to even get started in terms of stimulating the economy.  So, they can’t stimulate it that way.  They need to re-financialize the economy — that’s all they can do.  What they need to do in order to do that is . . . neoliberalism on stilts. . . .  Meanwhile, the biggest worry is not the euro, it’s not the dollar, it’s not the US, Japanese, and European economies, that’s not their biggest worry.  The biggest worry is China because China’s economic growth is now slowing down. . . .  China is slowing down because . . . there’s not going to be the kind of export markets that there were before because of what’s happening in the center of the capitalist world. . . .  The growth of what they now call “precariat” is really everywhere. . . .  It’s now creating a basis for some kind of revolt.  I think it’s inevitable that if this continues people will fight.

John Bellamy Foster is the editor of Monthly Review.  He is the author of What Every Environmentalist Needs to Know about Capitalism(with Fred Magdoff), The Ecological Rift, The Ecological Revolution, The Great Financial Crisis, Marx’s Ecology, Ecology against Capitalism, and The Vulnerable Planet.  Video by Jill Hickson and John Reynolds.  The text above is an edited partial transcript of his keynote speech at the “Climate Change Social Change” conference, Melbourne, Australia, 30 September 2011.

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