The Failure of Capitalist Production: Underlying Causes of the Great Recession

by Andrew Kliman

The recent financial crisis and Great Recession have been analyzed endlessly in the mainstream and academia, but this is the first book to conclude, on the basis of in-depth analyses of official U.S. data, that Marx's crisis theory can explain these events.

Marx believed that the rate of profit has a tendency to fall, leading to economic crises and recessions. Many economists, Marxists among them, have dismissed this theory out of hand, but Andrew Kliman's careful data analysis shows that the rate of profit did indeed decline after the post-World War II boom and that free-market policies failed to reverse the decline. The fall in profitability led to sluggish investment and economic growth, mounting debt problems, desperate attempts of governments to fight these problems by piling up even more debt - and ultimately to the Great Recession.

Kliman's conclusion is simple but Short of socialist transformation, the only way to escape the "new normal" of a stagnant, crisis-prone economy is to restore profitability through full-scale destruction of existing wealth, something not seen since the Depression of the 1930s.

Genres: Economics, Nonfiction, Politics, Theory

256 pages, Hardcover

First published November 7, 2011

Reviews

[C · Rating 5 out of 5]

Andrew Kliman has been popping up on my radar for two years now. People who delve heavily into Marxist economics know Marx presumably left us with two problems in his theory: 1) The conversion of value into price (i.e., the transformation problem), and The Law of the Tendency of the Rate of Profit to Fall (LTRPF), after the Okishio theorem that supposedly demonstrated that increasing productivity via machines, while laying off labor (the source of surplus value), can still generate an increased profit, thus disproving Marx's LTRPF. Kliman has addressed both critiques, retaining Marx's legitimacy, for over a decade now. He answers the first critique with his TSSI solution (Temporal Single System Interpretation), and applies the same model to the LTRPF (I believe...).

That is how Kliman popped up on my radar, but digressing, this book is hardly about those two issues, albeit they are brought up momentarily. In this book Kliman is presenting a very iconoclastic view of the causes of the recession, one that flies directly in the face of David Harvey, John Bellamy Foster, and any variation of disciples who favor the neo-liberal, under consumptionist, and/or monthly review critique and cause of the crisis. Most people believe that since the Reagan era, when a new regime of neo-liberal policies were employed (i.e., cutting wages, dissolving unions, increasing the share of profits to the top, decline or stagnation in real wages, etc), people were unable to consume the extreme surplus imposed by such cost saving measures, and this has led to a huge financial crisis, that we are still trying to get out of.

Kliman rejects the entire neo-liberal, Keynesian, underconsumptionist thesis. He says that if we accept Marx's theory of LTRPF, and he gives us good reason too, we can see that the crisis really began around 1970-1973. Since around that time, according to overwhelming statistical analysis, corporations have been suffering from an decrease and/or stagnation in the rate of profit. Profit, post WWII, peaked around 1970-73, and since then has never returned. Since 1973, and especially under the Reagan years, neo-liberalism has been a response to, not a cause, of all the problems neo-liberals typically see in the economy. Instead, all these responses, and increases in domestic, and treasury debt, are applying specious, and tendentious, resolutions, to the declining rate of profit. Debt on top of more debt, and more securities and packaged insurance plans, are used to mask the underlining problem that corporate profits have yet to recover, for going on 40 years now. He also rejects claims that the crisis was caused by greed, ineptitude, or a particular version of financial profit. Instead, the crisis has been, and will continue to be, related Marx’s analysis of the LTRPF, contradictions in the capitalist system, and the inability, or lack of will, of the capitalist, and the state, to offer the only real solution of the underlining problem: the destruction of value. Instead of using debt to maintain a momentary profit, value needs to be destroyed, and the economy needs to boom again from a fresh start (at least, if you want capitalism to survive). This is how most crises before WWII were handled. Anything of value, be it assets, various commodities, debt or credit on the books, etc, had their value destroyed (often physically), and then the capitalist cycle began afresh. Instead, since 1970, we have been papering over declining or stagnant profit, with more and more debt, trying to salvage, instead of destroy, value. The most recent recession, and attempt to save it (TARP), have only been attempts to restore the CONFIDENCE in the capitalist mode of production, and the treasury and Fed, have been buying debt, and reissuing it at lower interest rates, thus prolonging the LTRPF. This means the next crises will be even worse than the one we just experienced.

Kliman also deserves recognition for executing logic tantamount to Bertrand Russell. He can spot the contradiction in any argument, and resolve it with ease. This might be really annoying to most left(ist) leaning readers, but Keynesianism, and the general view of what caused the crisis, and what will get us out, are simply not logically sound arguments. They might offer momentary solutions to some of the miseries caused by a recession, but they will not increase the rate of profit. Kliman employs a brilliant response to underconsumptionist employing Marx’s analysis of the circulation of capital, via two contesting departments, and shows that the rate of profit can actually increase, alongside the stagnation and/or degradation of the standard of living the working class. Obviously the working class wouldn’t desire this outcome, but it is possible. And capitalist have been trying to pull off this strategy for a while now.

There are dozens and dozens of sound, and cogent arguments in this book to justify Kliman’s iconoclastic claims, too many to mention in a review. But if you read this summary, and find – like I did – that your entire view of the crisis is under assault, trust me when I say, read Kliman, and see if your logic and rationale still holds weight.

Finally, I look forward to reading his other book Reclaiming Marx's Capital, where he demonstrates the validity of his TSSI theorem, and refutation of the Okishio theorem.

[tara bomp · Rating 5 out of 5]

A convincing refutation of conventional "left" wisdom about the economic crisis that focuses on it as a structural, capitalist phenomena. It rejects the notion that it was somehow uniquely "neoliberal" and that neoliberal politics have been responsible for all capitalist problems of the last 30 years, as well as rejecting the idea that simple redistribution or Keynesian policies are a good solution - with implicit rejection of all right wing ideas which refuse to tackle the plain facts of capitalist operation. It's an excellent and stats-heavy defence of Marxism without compromise.

Some of his main points (excuse me if I mess up a lot):
- Neoliberal policies didn't cause a return to increasing profitability, signs of an increasing "profit rate" were to a large extent fueled by huge increases in debt
- Recovery from the Great Depression was caused to a large extent by a "destruction of capital" where dramatic reduction in prices of property allowed take-overs of property to restore profitability (much lower capital cost but same value produced)
- No such destruction of capital happened in the 70s, preventing a return to high levels of profitability (related to the law of the tendency of the rate of profit to fall)
- The "profit rate" used by many economists to show recovery from neoliberal policies is a poor measure of actual profit that obscures the reality, making their analysis meaningless to reality
- Increases in inequality of wages are nowhere near as significant when total compensation (including Social Security, healthcare etc) is taken into account - total compensation for workers has not stagnated
- Bailouts were designed to save the *system* of capitalism rather than benefit individual capitalists, making talk about how they benefited the rich misleading because things like TARP often stuffed individual capitalists
- Saving capitalism by redistributing wealth downwards would actually reduce profitability further and induce further crises - the "underconsumption" theory by which the crisis is caused by workers not being able to spend as much mixes up cause and effect and is based on logical and statistical errors (most notably the idea that making goods for consumption is the ultimate goal of capital - it's quite possible for production of invested goods to increase near indefinitely and in fact the % of goods produced for further investment has increased at about 4x the rate of goods produced for consumption)
- Programs from the left focused on "saving capitalism" are therefore inherently wrong and ignore the problems experienced in the past with such policies as well as the real world situation now - they can only lead people away from meaningful revolutionary change

All is explained way way better in the book but yeah it's a great read

[Lorién Gómez · Rating 5 out of 5]

Brutal, muy recomendable.

[John · Rating 5 out of 5]

The Failure of Capitalist Production” is essential reading for the left— from liberal to Stalnist. Responding to the recent resurgence of advocates for Keynesian style “fixes” to capitalism, Kliman presents the case that papering over problems with state intervention delays, but actually intensifies the inevitable crisis. Kliman empirically deconstructs the arguments which blame the 2007-2008 crisis of capitalism on “greed” rather than inevitable structural flaws in capitalist production— in his words “Blaming the crisis on greed is like blaming a plane crash on gravity”. His scholarly rigor is impeccable, processing slowly and deeply how statistics are manipulated by the left and right to affirm reformist solutions to stabilizing capitalism. Analytically reviewing the economic trouble of the 70’s, he comes to the conclusion (against his own intuition as he explains) that Keynesian policies, coupled with the tendency of the rate of profit (LTRPF) to fall, began a period of stagnation that we have never recovered from. In fact, nearly all of the problems we try to pin to the unique policies of neo-liberalism (unemployment, wealth inequality, low investment in infrastructure, borrowing out of proportion to GDP growth) began in the Keynsian 70’s The main thrust of the book is to explain how the LTRPF can hold water against generally excepted framework from the Okishio theorem, and the claims of dogmaticism by other Marxists, with the implication that turning toward neo-liberalism or the welfare state are equally untenable.

The tendency in Marxist advocated by Kliman and others is called “TSSI”, the “Temporal Single-System Interpretation” that points to the LTRPF as a latent, but persistent cause of crisis, rather than some holy grail that can provide ready-made analysis when things go wrong. The “temporal” in TSSI measures the rate of profit arguably in the way Marx himself did, by looking at the aggregate of total investment in the initial purchase of the means of production, and then measuring this number (historically adjusted for inflation and the like) against produced surplus. This is counter to the tendency of Marxists and some bourgeois economists to measure the rate of profit merely as a relationship between surplus and the portion of constant capital that one is replacing. “Single-System” refers to the correlation between value (socially necessary labor time for production) and price(market variance of value): the relationship is single but irreducible. These points may seem semantic or obscure, but the implications are crucial for a strong analysis, and also for politics. Kliman uses the TSSI as an interpretive tool to combat modern left economic trends, as well as defend Marx from charges of inconsistency that have become orthodox.

The fashionable jargon around “financialization”, the move to a primarily consumer based economy, and the concept of “deindustrialization” are all put through the ringer; Kliman asserts in fact that between 1981 and 2001 corporations invested more in production than in 1947 to 1980. It is perhaps most boldly stated when he explains “The data therefore fail to support the notion that “finance” has become uncoupled from the “real” economy. No neo-liberal shift away from productive investment in favor of portfolio investment took place. The entire fall in the rate of accumulation is therefore attributable to the fall in the rate of profit.” Coupled with the statistic that the global proletariat has actually doubled since the 1970’s, the alleged paradigm shift argued for by post-Marxist/communization theory celebrities like Hardt and Marazzi become rather weak. Marazzi’s contention that “The extraction of value[…] enters directly into the sphere of the circulation of capital” through debt is countered effectively by Kliman, who argues that “ Sales activities, labor performed in financial, real-estate, and insurance industries, and legal activities transfer ownership of already-existing value; the labor of security personnel and some managerial activity protects already-existing value; and the labor of accountants and bookkeepers and some other managerial labor keeps track of already-existing value.” (my emphasis)

Now this may seem counter-intuitive to some, as debt makes up an increasing portion of the GDP, and most of us work in the service sector, or know someone who does. This doesn’t alter the fact that industrial production is at an all time high, and that the debt and securities “explosion” does nothing to fundamentally alter the way value (not to be confused with wealth) is created. Kliman elucidates to the contrary: “Production Investment spending has increased 5 times faster since 1933 than consumption spending. Capitalism doesn’t produce for human need, it is production for productions sake.” Segmenting financialization as the new paradigm over classic production, regardless of the degree to which the two are intertwined, masks capitalisms “dirty little secret” of surplus-value, and has the political ramifications of shifting our analysis away from the working class as the fulcrum for mobilizing and defeating the capitalism. It is pure commodity fetishism to believe that the mere circulation of wealth can stimulate its own surplus-value: the reality of this comes to light when the bubbles burst, and serious liquidity issues arise in regard to these immaterial assets. Debt and financialization are responses to cope with the underlying contradictions of capitalism itself.

Kliman also argues against Harvey and Luxembourg that surplus can increase indefinitely, and that attempting to explain imperialism by claiming capitalism needs to expand outward to find markets for realizing overproduced commodities is misguided. The faulty framework is the assumption that all production is slated for consumption by persons, whereas the majority of value is realized immanently among capitalists. “Let us consider businesses’ productive consumption demand— in other words, their investment demand. It consists of spending by businesses to build structures (factories, malls, offices, and so on), as well as purchases of machinery, other equipment, and software. If investment demand rises, and the rise is large enough to offset the fall in personal consumption demand, a decline in wages or workers’ share of income does not lead to a decline in total demand. It therefore does not lead to an economic crisis or recession. ” The fallacy of assuming that production need be geared toward human consumption stems from the idea that capitalism is a system designed to meet human needs in some way, whereas in reality capitalists would be (and mostly are) wholly content with selling amongst each-other. Kliman goes into great detail on the way the surplus is internally realized, ending with some equations that are a bit above my head, but from following the logical argument, I can see the consistency with Marx’s analysis in Capital volume 2. The evidence to back this claim is partly in relation to the 2008 crisis: “In the 65 years from 1943 to 2007, real personal consumption spending in the U.S. declined only twice, in 1974 and 1980, while there were 23 years in which real gross private domestic investment spending declined. Moreover, the percentage decline in consumption spending in 1974 and 1980 was on average just 7 percent of the percentage decline in investment spending. ” Further evidence emerges when a direct comparison is made: “In the case of the U.S., there is also very good evidence that the share of income devoted to investment rose, and the share devoted to consumption fell, during the three-quarters of a century following 1933, the trough of the Great Depression. ” (investment here referring to investment in the Means of Production)

The most controversial thesis of the book, especially for those of us on the left, is that equal wealth redistribution does not promote a healthy economy. This is of course the political conclusion of underconsumption theory: that people are unable to buy the products they make because of the increasing exploitation and wage depression. The unfortunate reality is that taking a portion of profit from capitalists, who primarily are trading amongst themselves, is actually a detriment to the profit rate, which is at the end of the day the fundamental underpinning of a healthy economy. This isn’t a call to abandon the fight for living wages, or universal health-care, or any of that good stuff; it is a warning that there is no solution within the capitalist economic relationship. To escape perpetual crisis and poverty for the vast majority of people, a revolution must eliminate these perpetuating institutions. The revolution is essential not merely as a measure of vengeance, justice, and morality— the revolution is a necessity to unburden our world from its massive debt by the direct destruction of capital value, and to assure that our new world is unfettered from value creation entirely. No reform or limitation to capitalism can succeed, as capital cannot abide a barrier, and will do it has done since day one: find a way through any fences we build to restrain it. Communism is not a utopian concept, it is the only realistic solution. Kliman elaborates: “Such risk exists only because lenders and borrowers are separate and opposed entities; it would not exist in a communal society. Indeed, the very notion of credit would be meaningless in such a society. Just as an individual or household cannot obtain credit from itself, repay itself, or default on its obligation to repay itself— it simply decides whether to use its resources or hold on to them— neither could a communal society. ”


The excitement around now cliché concepts like “prefigurative politics”, “building a new world within the old”, and other reformist garbage like Hakim Bey’s “Temporary autonomous zone” are also regarded contemptuously by Kliman: “This brings me to the notion of developing socialism within capitalism, enlarging the space of the commons or whatever. Unfortunately, it cannot be done. It has been tried (for instance, in the Israeli kibbutzim) and it does not succeed. The economic laws of the larger system will not allow it. If you buy from the capitalist world “outside,” you also have to sell to it in order to get the money you need to buy from it, and you will not sell anything if your prices are high because your costs of production are high. And if you have debts, you have to repay them.” (my emphasis) The seeds of Stalin’s “socialism in one country” are sown in the conception of creating a community or society that functions in capitalism, yet against it. This is important to firmly lay into anyone and everyone that believes we can overcome this system without a revolution, or that this revolution cannot succeed without an internationalist basis. By “revolution” I don’t mean inter-personally, or temporarily, in art, or the latest Apple product— I mean the working people, the wretched of the earth, rising up, smashing the capitalist social relation, and implementing global systematic oppression of the ruling class and their cohorts. As Kliman says “It seems utopian, but we have no alternative”; We have a lot of work to do.

[Kyle · Rating 5 out of 5]

the kind of book you need a pen and paper for sometimes. and other times you need a comprehensive data set and a R console.

[Joseph · Rating 4 out of 5]

Kliman's book is a powerful defense of Marx's law of the tendency for the profit rate to fall and its role in the 2008-2009 financial crisis and recession. He lays everything out systematically and the writing is as clear as possible for such a dense subject, and often even entertaining with his quips. He lays out Marx's law and its role in producing crises: falling rates of profit lead to greater fragility among enterprises because they don't have as far to fall to hit bankruptcy, but they also lead capitalists to fill the gaps in profitability with more and more debt. This worsens the magnitude of the crises that do hit once the debt goes bad, and the problem is exacerbated by moral hazards in finance (capitalists passing the buck to one another by selling their debts, and ultimately hoping the state will back them up if everything else goes sour). Speculation in areas outside of the productive economy grows as money chases an easier return. Meanwhile, rates of accumulation decrease as businesses have less available to invest. As growth falls, mounting debts become harder to repay. Marx is quoted saying that finance stretches the system to its "extreme limits", which is as good a description as I have ever heard.

When capital value is destroyed (physically, or massively devalued by losing its "use" in production of value) and can be bought on the cheap, the rate of profit recovers, as it did after Depression and war in 1945. But the cost of this is truly massive and devastating, and historically resulted in mass working class radicalization. State intervention can help in the short run, Kliman argues, but in some forms simply delays the crisis and worsens it when it does occur. In the recent recession's case, the proximate cause, Kliman argues, seems to be a Fed "easy money" policy of lowering interest rates after the dot-com bust to avoid a "lost decade" in the fashion of Japan.

Kliman rehearses the set of morbid economic symptoms that have appeared since the 1970s, including more financial crises, lower growth of industrial production, longer times spent unemployed, slower growth, larger gaps between actual and potential GDP (which assumes full employment), etc. He does this to demonstrate that these symptoms arrived on the scene before the neoliberal policies of Reagan and Thatcher did, and therefore their policies could not be the cause of these symptoms but rather something deeper. I didn't need much convincing of this fact (the 70s slump is well acknowledged, and if there weren't problems before the arrival of neoliberalism there would have been no reason for it to arrive) but it's a nice overview anyhow.

My quibbles with Kliman are in his framing of economic inequality and state debt. He convincingly shows that the US debt would actually have decreased rather than exploding if corporate profits had stayed at prior levels and had been taxed at prior rates (while cautioning that higher tax rates may have weakened the economy by harming corporations' ability to invest). But what is the meaning of this debt? Kliman is one of those Marxists who seems convinced that someday investors will lose "confidence" in it and we will be forced to try to pay it all back. But this is the US, and in this country there is much more "fiscal space" than in peripheral states. Debt is ultimately about power, and the US is the most sovereign of all states; where will this power to force repayment come from? Will Wall Street marshal its own private army?

My other quibble is his discussion of inequality. He uses GINI statistics here, which are rather opaque compared to income shares. He also doesn't really address where this inequality came from and it seems out of place among his other statistics. It seems implausible it came from falling profitability directly since this was redistribution from workers to capitalists and managers (etc), rather than to corporate profits. The 1970s hardly lacked for class struggle on the part of the capitalist class even though neoliberalism had not yet transformed the state, and this trend starting here gels with the narrative of Harvey and others that neoliberalism was an effort to restore class power rather than an attempt to restore growth. (In the context of falling profitability, it's also clear that it was an attempt to reclaim a larger share of a shrinking pie -- or at least a pie growing at a decreasing rate).

The crux of the book is an intense and heavily technical section on the falling rate of profit. Kliman uses BEA statistics and a "historic cost" measure of profitability that places total profit over the historic cost of purchasing fixed capital (fixed because circulating capital like wages has a high turnover rate which is not measured). He adjusts this figure over and over again, using different measures of profit and different techniques to compensate for inflation (the more standard CPI and a method that tries to deflate money prices by hours of productive labor time). Over and over again he finds that the rate of profit has decreased more or less consistently since the 1970s. He defends his historic cost measure against critics who use present costs and shows that high rates of "moral depreciation" with information technology might actually be biasing the rate upwards in the 1990s. The profit figures he uses are both before-tax, though, so these figures do not capture how cuts in the corporate income tax rate have enabled partial recoveries of profitability. (It would have been nice to see figures that clarify how much neoliberal state intervention has kept it on life support).

I'm no expert economist but I was quite convinced. For me the biggest bombshell in this book is when Kliman demonstrates the link between falling profitability and falling growth rates. His historic cost measure of the profit rate (surplus value over capital advanced) correlates extremely strongly with the rate of accumulation (net investment over capital advanced), with an R-squared of over 80% and extremely high statistical significance. In all the econ classes I've taken I've had it pounded in just how low the explanatory power and statistical significance figures often are in testing for relationships between economic variables. This is not even close. Kliman also presents figures showing that the share of profit invested productively (net investment over profit) has remained more or less unchanged since 1970, countering arguments that it has simply been appropriated by finance or monopoly. The only major decrease in the share occurs in 2002-2007 when corporations were booming again after the crash and didn't know what to do with all the money. I hadn't seen figures presented directly assessing the relationship between profit and economic growth before, so these were extremely enlightening. The rate of accumulation isn't the same as GDP growth, but it means more and better productive capacity which usually translates to this.

There's a whole chapter explaining why the historic cost rate is far superior to its current cost competitor but I was already pretty convinced. After this, Kliman decomposes the rate of profit into the rates of exploitation (s/v) and the value composition of capital (c/v), showing an increase in the latter which is consistent with Marx's law. The postwar rate of profit was extremely high, but new investments dragged down the average with a much lower rate. The technical composition (raw quantities of workers and means of production, rather than dollar costs) rises continuously, and adjusting for inflation shows an even higher increase in the value composition because inflation affects wage figures far more than the historic cost of fixed capital.

The one odd thing about this section is that the rate of exploitation remains more or less constant in Kliman's figures. One guess I had is that this is because he uses BEA figures on corporate employee compensation for v, which lump together compensation for supermanagers with regular workers and also do not include cuts to the "social wage" of public benefits programs (as his later chapter on underconsumption does, but when assessing shares of national income rather than growth rates). He compares salaries for managers and regular employees, showing little difference in their growth rates over time, but my issue is his comparison of occupational categories rather than distributional units like deciles -- surely the latter would show the increase in inequality much more clearly, reflecting surplus value that goes to the capitalist class (broadly defined) rather than profits. (On looking back later I considered that maybe this was due to a decline in s as other countries in the world market outcompeted the US, driving down the socially necessary labor time to produce manufactured goods and thereby depressing prevailing US prices even as technology remained stagnant. Kliman does not address this though, which might have been good to state since the US economy is not a closed system). This discussion would have also benefited from some discussion of what these technological changes actually looked like materially rather than in just statistics, but it's still quite strong.

The discussion on underconsumptionist arguments was also super interesting and gave me a window into what it is that this school actually argues while also showing its inadequacies. Underconsumptionists hold that slowing growth rates are the result of reduced workers' compensation. Kliman refutes them first by presenting statistics showing that, while including benefits and the "social wage" under workers' share of income, this share has actually ticked up slightly. Further, there isn't strong evidence of a decline in the average hourly wage.

But there has been a relative stagnation for most in comparison to top earners, which Kliman seems loath to point out, even though he himself presents statistics showing that at the very minimum, incomes in the top quintile have grown twice as fast as they have for the bottom -- though he does this only in the context of attacking Saez and Piketty for supposedly "overstating" inequality. He seems strangely wedded to the idea that upward redistribution of wealth can only account for very little of the last decades' immiseration of the working class, even stating at one point that this is not a "distributional" phenomenon but one of slow growth across the board. Yet if there were no distributional dynamics at play, there would certainly not be such dramatic changes in the distribution.

But this is adjacent to the main point of this chapter, which is whether underconsumption is the cause of the 2009 crisis. The main argument of this chapter enters in when Kliman describes underconsumptionst theories: at their most sophisticated, they argue that even as profit from exploitation is the fuel of capitalism, capitalists depend on workers buying their products to ensure the full realization of their value. A redistribution of income from workers to capitalists (from v to s) is dangerous because workers spend a much greater share of their income on consumer goods, but capitalists can get by just fine without spending (slower growth of v in comparison to s might have similar effects).

But class redistribution is just one side of the issue. Underconsumptionists like Paul Sweezy argue that redistribution from spending on labor to spending on investment goods will be unsustainable (even if it is logically possible for a full cycle of production to occur among firms which produce means of production but no consumption goods) because it will provoke "unbounded" growth, and excess capacity in the means of production will discourage further investment. With a little calculus, Kliman shows that this is no logical necessity, because the investment share can always increase at a decreasing rate towards a certain limit, which results in a bounded rate of growth. But has investment spending accounted for an increasing share of the new demand in the last several decades? Kliman shows that it has, increasing more than 60x from 1933-2009 while consumption has only increased 15x. Using volatile net investment figures can result in figures as low as 4x and as high as 93x, and nominal gross investment can reduce this to around 2-3x, but the result of an enlarging investment share holds. The Great Recession failed to provoke a full collapse of this figure. Capitalists have been more than happy to plow more and more money into capital for each other's use, and seem to require labor only to produce -- but not to absorb -- it.

I would, however, have liked to have seen more consideration of the class distribution aspect here -- as usual, it is mostly ignored -- to see if there is any contribution at all in play. Additionally, it would have been nice to see Kliman try to decompose s, c, and v shares of aggregate demand to see if they actually do match up with his hypothetical chart's results of increasing investment spending at a decreasing rate. This would provide some clues as to whether a significant fraction of the investment boom really may have been unsustainable. The results presented in this chapter are compelling evidence that 2009 was not primarily an underconsumption crisis, but to me they are not conclusive that this played no role whatsoever.

The final chapter is primarily political and advocates for socialism, cautioning that leftists must not let themselves be co-opted by arguments that we can help the working class and preserve capitalism at the same time. Sounds right to me. He also cautions that class struggle will contribute to the breakage of capitalism as the rate of profit is cut away, helping to usher in new crises. I'm quite persuaded of the falling rate of profit, but not yet convinced that distributional struggles for fair compensation will result in the breakage of the system. Kliman's distributional analysis is too weak to confirm that there's simply no money in the bank for the working class to take, and at present it certainly seems like there's a lot left up for grabs being hoarded by the very top class strata even if it's not classified as profit. There is also the issue of the expanding mass of profit -- while profit may have increased at decreasing rates, what matters to workers is what they can buy with money to meet their needs, not their share of abstract value, and it doesn't cost much to feed people in comparison to what companies today are making. I guess only time will tell! But this is still a very compelling read and a great introduction to (and argument for) one of Marx's most provocative and powerful claims, and its application to the present day state of capitalism. And I would not have guessed a book as technical as this could be such a bracing read, but this really felt like a tour de force.

[Ezri · Rating 4 out of 5]

The definitive account of the 2008 economic crisis for the "falling rate of profit" tendency in Marxian economics. The book is a massive empirical undertaking and some less quantitatively-minded readers may want to read selectively, but the real heart of the book comes in the last two chapters where Kliman takes aim at the other major contending Marxian crisis theory tendency: "underconsumptionism". After demonstrating logical and empirical flaws in the underconsumptionist theory of crisis, Kliman does some well-earned extrapolation from his results, starting with the notion that making capitalism fairer will make it weaker and invite reaction. Another is that the "law of value" subverts almost all conceivable attempts to replace capitalism, which forces us to seriously consider exactly what socialists should be trying replace capitalism with.

[Julesreads · Rating 5 out of 5]

Compromising on the essentials of Marx’s theories is the way contemporary Marxists shoot themselves in the foot. Here, Kliman, in a book I hold in as high regard as Leo Huberman’s “Man’s Worldly Goods,” illustrates why Marx’s LTFRP is correct, and, more importantly, how all the ways economists have tried to work within the system of capitalism are going to prove ineffective in the long run. Read this book.

[YHC · Rating 3 out of 5]

当今，以2007年美国爆发的次级抵押贷款危机、2008年的大恐慌及由它们导致的大衰退为主题的诸多研究著作已问世。与这些研究成果相比，克莱曼的《大失败——资本主义生产大衰退的根本原因》一书着力关注为危机和衰退搭建舞台的长期而根本的条件，这些条件使金融危机能够引发一场尤为深重、长久并具有持续后遗症的衰退，而不是在现象层面上做简单的因果分析。本书认为，这一长期而根本的条件（或原因）就是：马克思资本有机构成变化而引起的一般利润率下降趋势规律所揭示的道理。为危机创造条件的利润率下降，无须持续到危机爆发的时刻，而只需要造成一个极低的利润率就可以了。这一极低的利润率作为危机和衰退的根本条件通过两个中间环节实现其作用，这就是低盈利能力和信用制度。利润率下降引起积累率的下降，进而造成一个或长或短的投机热和大量无法偿付的债务，最终导致危机的爆发。而这一切都符合马克思在《资本论》中的分析。
　　在西方学界，关于大衰退根本原因的争论分为马克主义者和激进经济学家对立的两派。而这一对立的焦点在于是否承认利润率下降趋势规律对危机与衰退的解释力。传统左派中的新自由主义，对危机的解释基于资本主义新的发展阶段的理念，即新自由主义。这个阶段总体上被定义为两种机制：工资在国民收入中所占份额的挤压及之后收入不平等的增大；信贷的急剧增长促动经济的增长，从而扩展了金融业在经济中的作用。消费不足论者（约翰?贝拉米?福斯特和弗雷德·马格多夫，2008）认为，大量的消费不足和之后需求的下降是危机的根本原因。所有这些分析都否认大衰退的根本原因是利润率下降趋势。关于利润率变化趋势在当前危机分析中的重要地位和“分水岭”作用，早在2009年安德鲁﹒克莱曼在阿根廷的一次学术讲座中就已经激烈地表达了出来。2012年，克莱曼在其新著《大失败——资本主义大衰退的根本原因》一书中，采用大量的官方数据及一系列的逻辑推论，通过实证研究，剖析了占统治地位的各种传统左派观点，指出了其非科学性，从而恢复了马克思主义利润率下降趋势规律（LTFRP）在解释最近危机与衰退问题上的核心地位。
　　在本书第一章导论部分，克莱曼阐明了在关注危机与衰退根本原因的研究中自己与以往传统左派的不同；这种差异集中体现在方法论和理论上。克莱曼是马克思价值理论的单一分期体系解释（Temporalsingle-systeminterpretation，TSSI）的支持者；以此理论为基础，克莱曼发展了自己以历史成本衡量的利润率。长久以来，在西方学界，价值理论和以之为基础的最重要的规律——即作为马克思资本主义经济理论核心的利润率下降趋势规律（LTFRP）——两者之间一直被认为存在着内在的矛盾，因而它们必须加以修正或拒绝。他们把马克思的理论中指称的随时间决定的利润率替换成了一个非时间的“利润率”（现期成本或重置成本率），经过这一替换他们发现马克思的规律不再成立。接受了这些论证的人也接受了这些论证以现期成本这一错误方式衡量的利润率。这样，当他们发现在1980年代早期非时间的“利润率”具有上升趋势时，就把这一现象当做是资本主义生产仍然具有合理性的决定性证据，因此危机与大衰退的真正的根本原因则是新自由主义、金融化和强化了的剥削；那么，资本主义生产体系就不具有脆弱性。克莱曼在第一章中继续指出，这一争论具有深远的政治意义。如果危机与衰退的长期原因是不可还原的金融的危机，我们就能够通过废除新自由主义和“资本主义金融化”来防止这种危机的再次发生，而没有必要废除资本主义生产体系——即由“价值”或抽象财富无休止的扩张这一目标所驱动的生产体系。这样，被危机提上日程的就不是社会经济体系的根本特征的转变，而是需要这样一些政策，即诸如金融监管、积极的（“凯恩斯主义的”）财政、货币政策或许还有金融部门的国有化等等政策。
　　……

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作者以一句話為本書作結：「前途充滿了危險，清醒面對未來的時刻已經到來。」這句話同樣適合在此處重提，在資本主義將人類文明再度拖進泥沼以前，受薪階級能不能形成獨立的、基進的反資本主義力量和對策，如今已成為決定局勢的關鍵。然而，究竟該用什麼組織和制度替代資本主義的生產關係？目前仍然是個開放的問題，沒有人有現成的答案，但是我們也不該坐等答案或樂觀的認為只要左派政黨取得權力，一切難題便會迎刃而解，更多具體討論是必要的，對資本主義的經濟分析充其量只是指出了起點，該是清醒面對未來的時候了。

[Roberto Yoed · Rating 2 out of 5]

Better read Michael Roberts 'The Long Depression' for a clear exposition of the tendency of profit to fall and a more complete scope/scale of the historical conditions that precede the 2008 crisis.

Kliman does a relative good job, but on contrast, Roberts is a much better option for this topic.

[Ietrio · Rating 1 out of 5]

If ignorance would run from tap, like the water, in the homes all over the world, the population would be reduced to billions of Kilmans.

[Klas · Rating 5 out of 5]

Great book facts and basic marxism that all in the left should understand.