Capitalism and crises by demandside

From Paul Bowles and Henry Veltmeyer (eds). The Essential Guide to Critical Development Studies. London: Routledge, 2022

Capitalism and crises

Radhika Desai

Capitalism is having a bad 21st century. The East Asian nancial crisis of 1997–1998 heralded it, the stock market crash of 2000 inaugurated it, and the 2008 nancial crisis nearly destroyed it. However, capitalist classes retained political power and neoliberal nancialised capitalism, the result of the still-unresolved Long Downturn dating back to the 1970s, malingered on. While neoliberalism ideology continued celebrating capitalism, it clocked ever-lower growth, generated ever-greater inequality, and inicted evermore ecological damage. Millions of young people began striking school to demand governments and corporations act to halt the climate emergency, only to be interrupted by another disastrous result of capitalism’s dysfunctional relation to nature, the 2020 novel coronavirus pandemic. The concatenation of public health, economic, nancial and ecological crises that accompanied it threatens complete social and political breakdown. So, what is it with capitalism and crises? Capitalism’s proneness to crises was apparent from its earliest days. Businessmen bemoaned glutted markets and falling prots, fearfully contemplated the social and political consequences of rising unemployment or bank failures, and hatched schemes to reform monetary and nancial systems to prevent the over- or under-supply of money. They also plotted with governments to manage and, if necessary, crush workers’ resistance and either colonise foreign territories or otherwise open them up to export surplus commodities and capital, import or export labour, and access cheap inputs to avert crises. Classical political economy, which emerged to comprehend the novel social form, openly acknowledged this. It registered capitalism’s paradoxes—its equally prolic production of riches and misery, its booms and slumps—but combined its insights—only labour produced value, capitalism was prone to gluts—with confusion and conundrum. Only capitalism’s greatest critic and analyst, Karl Marx, working with Friedrich Engels, resolved them in his unrivalled analysis (Desai, 2018; Dobb, 1973; Meek, 1973). Marx’s critique of political economy (Marx, 1867/1977) portrayed capitalism as a system aiming to produce not the goods and services people needed, but value itself, its single commandment, ‘Accumulate!’ Such value or capital accumulation was a quixotic and contradictory enterprise, involving unjust exploitation and anarchic competition. However, Marx’s work remained incomplete. He recognised and discussed but did not fully develop another point: capitalism required practically impossible social arrangements that were perpetually close to failing or breaking down and burdened sociality itself to breaking point while also involving societies in competition and conict. The mass of contradictions stemming from capitalism’s fragility, injustice, and anarchy regularly produced crises. Agencies outside the circuit of capital, usually the state, managed them. This modied capitalism’s workings but could not eliminate capitalism’s crises: they were DOI: 10.4324/9781003037187-10

The Essential Guide to Critical Development Studies, edited by Henry Veltmeyer, and Paul Bowles, Taylor & Francis Group, 2021. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/umanitoba/detail.action?docID=6691016. Created from umanitoba on 2023-01-07 23:43:30.