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The Boom and the Bubble: The US in the World Economy
A sustained period of significant growth in the US, however, seemed to save the day against all the odds. So impressive was the surface appearance of this rescue mission that all manner of commentators proclaimed—once again—that a ‘new economy’ or ‘new paradigm’ of unlimited and harmonious growth had been forged.
Today, as recession looms, the babble about Internet start-ups is exposed as vapid. Yet the pundits are no nearer an understanding of how or why the boom turned into a bubble, or why the bubble has burst. In this crisp and forensic book, Robert Brenner demonstrates that the boom was always a fragile phenomenon—buoyed up by absurd levels of debt and stock-market overvaluation—which never broke free from the fundamental malady of overcapacity and overproduction which continues to afflict the global economy.
Carefully dismantling the myths and hype that surround the US boom in terms of profitability, investment, and productivity, Brenner restores the properly international context to the process. He portrays the ‘zero-sum’ character of the American success, which presupposed the relative weakness of its main German and Japanese a strategy that has laid huge obstacles in the path of a ‘soft landing’ to end the current phase of growth.
A substantial new Postscript provides and up-to-date analysis of the Bush economic debacle—the crisis of manufacturing, the telecom bust, the record twin deficits, plummeting employment, and the real estate bubble.
Today, as recession looms, the babble about Internet start-ups is exposed as vapid. Yet the pundits are no nearer an understanding of how or why the boom turned into a bubble, or why the bubble has burst. In this crisp and forensic book, Robert Brenner demonstrates that the boom was always a fragile phenomenon—buoyed up by absurd levels of debt and stock-market overvaluation—which never broke free from the fundamental malady of overcapacity and overproduction which continues to afflict the global economy.
Carefully dismantling the myths and hype that surround the US boom in terms of profitability, investment, and productivity, Brenner restores the properly international context to the process. He portrays the ‘zero-sum’ character of the American success, which presupposed the relative weakness of its main German and Japanese a strategy that has laid huge obstacles in the path of a ‘soft landing’ to end the current phase of growth.
A substantial new Postscript provides and up-to-date analysis of the Bush economic debacle—the crisis of manufacturing, the telecom bust, the record twin deficits, plummeting employment, and the real estate bubble.
318 pages, Paperback
First published June 1, 2002
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423 people want to read
About the author
Robert Brenner
8 books37 followersLibrarian Note: There is more than one author by this name in the Goodreads database.
Robert P. Brenner is a Professor of History and Director of the Center for Social Theory and Comparative History at UCLA, editor of the socialist journal Against the Current, and editorial committee member of New Left Review.
He is also Visiting Professor in the Department of Economics at the New School University and author of many books and papers on the early development of capitalism and the current economic crisis. His research interests are Early Modern European History; economic, social and religious history; agrarian history; social theory/Marxism; and Tudor–Stuart England.
Robert P. Brenner is a Professor of History and Director of the Center for Social Theory and Comparative History at UCLA, editor of the socialist journal Against the Current, and editorial committee member of New Left Review.
He is also Visiting Professor in the Department of Economics at the New School University and author of many books and papers on the early development of capitalism and the current economic crisis. His research interests are Early Modern European History; economic, social and religious history; agrarian history; social theory/Marxism; and Tudor–Stuart England.
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Displaying 1 - 8 of 8 reviews
March 4, 2024
Robert Brenner is the leading theorist of the ‘bubble’ thesis which accounts for the surge of growth in the global economy which lasted from the early part of the 1990s until the turn the millennium, when turbulence at the heart of the system began to manifest itself. His argument as to how these conditions developed begins with an analysis of the factors which brought about the end of the ‘long boom’ in global capitalism, which had lasted in the west from the late-1940s until the early 1970s, and which then led into a two decade-long period of stagnation.
His analysis hinges on the role that the rate of profit had played in securing the boom of the post-war period, and its subsequent displacement of the valuation of assets as a driving force investment. In between these two points is the episode of global Keynesianism during the years of the Reagan presidency, which shored-up the value of assets denominated in dollars even as the productivity of the US economy collapsed. Ownership of larger parts of the productive assets of the country switched to the Asian powers which added further impetus towards globalisation of financial markets.
It was out of these conditions that the boom of the 1990s took place, ostensibly driven by new opportunities to invest in media, technology and communication-based industries. An investment boom between 1995-99 increased productivity at double the rates achieved in the preceding two decades. Much of these gains had come about through wiping out wage growth and the decline in the value of the dollar, which had promoted greater opportunities to export.
The snake in the woodpile was the failure of the so-called ‘New Economy’ to produce viable business that could sustain growth in the profit rate and thereby provide the accumulated resources for further investment. Much of what had come into being during the boom years had been the product of a ‘wealth effect’, which had the buoyancy of over-optimistic stock markets at its heart rather than business plans which embodied realistic strategies supporting capital accumulation. By earlier 2000 a string of e-businesses began to run out of money leading to a carnage of company collapses which lasted until mid-2001. For Brenner, “…the seemingly endless supply of almost costless capital, made possible via stock issues of over-valued equities and borrowing backed up by inflated assets…” produced a ‘reverse wealth effect’ and the rapid bursting of the bubble.
Five years on from the crisis of the New Economy and more bubbles began to pop as over-valued assets in the sub-prime housing markets led to the credit crunch and the wholesale collapse of the banking sector. The state rescue of the industry has required measures of deep austerity in order to generate fresh capital for a banking system which remains largely unreformed. Subsequent economic growth, to the extent that it has happened, has once again depended on a further round of indebtedness and the real prospect of further rounds of crisis.
This is a statistically dense book which has a political message at its heart. The days of a capitalism which promoted growth through the genuinely virtuous circle of investment- raised productivity –higher profits-more investment seems to be long gone and what we are left with is the prospect of yet more bubbles and more bursting indefinitely into the future. Not a happy prospect.
His analysis hinges on the role that the rate of profit had played in securing the boom of the post-war period, and its subsequent displacement of the valuation of assets as a driving force investment. In between these two points is the episode of global Keynesianism during the years of the Reagan presidency, which shored-up the value of assets denominated in dollars even as the productivity of the US economy collapsed. Ownership of larger parts of the productive assets of the country switched to the Asian powers which added further impetus towards globalisation of financial markets.
It was out of these conditions that the boom of the 1990s took place, ostensibly driven by new opportunities to invest in media, technology and communication-based industries. An investment boom between 1995-99 increased productivity at double the rates achieved in the preceding two decades. Much of these gains had come about through wiping out wage growth and the decline in the value of the dollar, which had promoted greater opportunities to export.
The snake in the woodpile was the failure of the so-called ‘New Economy’ to produce viable business that could sustain growth in the profit rate and thereby provide the accumulated resources for further investment. Much of what had come into being during the boom years had been the product of a ‘wealth effect’, which had the buoyancy of over-optimistic stock markets at its heart rather than business plans which embodied realistic strategies supporting capital accumulation. By earlier 2000 a string of e-businesses began to run out of money leading to a carnage of company collapses which lasted until mid-2001. For Brenner, “…the seemingly endless supply of almost costless capital, made possible via stock issues of over-valued equities and borrowing backed up by inflated assets…” produced a ‘reverse wealth effect’ and the rapid bursting of the bubble.
Five years on from the crisis of the New Economy and more bubbles began to pop as over-valued assets in the sub-prime housing markets led to the credit crunch and the wholesale collapse of the banking sector. The state rescue of the industry has required measures of deep austerity in order to generate fresh capital for a banking system which remains largely unreformed. Subsequent economic growth, to the extent that it has happened, has once again depended on a further round of indebtedness and the real prospect of further rounds of crisis.
This is a statistically dense book which has a political message at its heart. The days of a capitalism which promoted growth through the genuinely virtuous circle of investment- raised productivity –higher profits-more investment seems to be long gone and what we are left with is the prospect of yet more bubbles and more bursting indefinitely into the future. Not a happy prospect.
August 18, 2012
When scandal rocked the US economy in 2009, I decided to heal my ignorance of economics in some way, so I went to Borders, asked for help in finding something for my trouble, and was pointed toward Brenner's book by one of the customer service representatives.
I was not in the least disappointed, because Brenner really does reveal quite a few insights about the inside workings of the US economy, especially in relation to the world economy. For me, this book was an initiation into Keynesianism and its implications and provided some hints as to the why and wherefores of the dollar's consistent devaluation. It also offered a description of the problems the US faces in the world economy, feeling obliged to win the political support of other countries by sharing technology and other resources, yet by so doing being deprived of potential markets in those areas. It was interesting, heady, and (for me) difficult reading. Still, there was a decided payoff, and I'm glad I went through the trouble.
Of course I recommend this book to all who desire a sounder understanding of where we are financially. The edition I read does date from 2003, so it is no longer quite current, yet some of the same issues, I am sure, are still at work.
I was not in the least disappointed, because Brenner really does reveal quite a few insights about the inside workings of the US economy, especially in relation to the world economy. For me, this book was an initiation into Keynesianism and its implications and provided some hints as to the why and wherefores of the dollar's consistent devaluation. It also offered a description of the problems the US faces in the world economy, feeling obliged to win the political support of other countries by sharing technology and other resources, yet by so doing being deprived of potential markets in those areas. It was interesting, heady, and (for me) difficult reading. Still, there was a decided payoff, and I'm glad I went through the trouble.
Of course I recommend this book to all who desire a sounder understanding of where we are financially. The edition I read does date from 2003, so it is no longer quite current, yet some of the same issues, I am sure, are still at work.
October 12, 2008
Brenner on Aug. 10, 2003:
"the inexorable rise of US obligations to the rest of the world (ROW) enables the ROW to grow through exports at the expense of US productive power and therefore of the capacity of the US to honor those obligations. . . opening the way to rising interest rates, falling asset prices, and a plummeting dollar that would undercut a US and global recovery."
"the inexorable rise of US obligations to the rest of the world (ROW) enables the ROW to grow through exports at the expense of US productive power and therefore of the capacity of the US to honor those obligations. . . opening the way to rising interest rates, falling asset prices, and a plummeting dollar that would undercut a US and global recovery."
April 29, 2025
Ekonomi üzerine yazılmış çok iyi bir kaynak . Yazar detaya fazla girmiş ama konuya çok uzak kişilerin bile anlayabileceği dilde yazılmış . Çevirmeni bilge arkadaşım olması da ayrı bir ❤️ konusu .
August 11, 2015
A evolução do sistema economico global desde de o surgimento de BWS tem sido marcada por disputas políticas e econômicas. Com a restauração das economias Europeias e Japonesas o pacto de cooperação econômica dos anos dourados chegava ao limite. O questionamento do USD por economias com uma base industrial mais nova e portanto mais produtiva que o parque industrial americano, gera crescentes desequilíbrios comerciais contra os EUA. O sistema BW pavimentou o caminho para consolidação do sistema financeiro americano globalmente. Um dólar fortalecido contribuiu para o desenvolvimento do setor de não-manufaturados americano prejudicando o setor manufatureiro cuja a produtividade caia frente a ascensão industrial de Japão e Alemanha. Após o Acordo de Plaza as moedas desses países, em especial o Japão, são levados a uma valorização o que compromete o dinamismo do setor manufatureiro, induzindo o Japão a uma bolha e exportação de capitais sobretudo para o Leste Asiático. Com a Crise do México em 1994 os EUA são obrigados a interromper a desvalorização do USD e a partir de 1995 os EUA voltam a permitir valorização do USD. Isso é prejudicial para economias asiáticas cujas moedas estavam pegged ao USD, países como Thailand verão seus investimentos manufatureiros caírem dando lugar a especulação imobiliária e finalmente a Crise de 1997. Mesmo com a Crise da Rússia e do Brasil o Mercado de Capitais americanso em especial as ações da Nasdaq (Nova Economia) geram efeito prosperidade tanto para o investimento como para consumo, assim o boom da nova economia fortalace as exportações de tecnologia proveninetes da Asia. Mas com o Price/Earning cada vez mais astronomico e uma economia descolada da realidade forjam o estouro da bolha. Em 2001 a Economia americana vê-se uma encruzilhada sem um Japão próspero para comprar títulos e permiti-la continuar se financiando (como feito no crash 1987). A solução será um defícit keynesiano com a Guerra do Iraque 2.0, maior financeirização e contar com a China para suprir a demanda por Treasuries. Os EUA confiam que ainda são porto seguro da economia e por isso continuam usufruindo do privilégio exorbitante, mas o surgimento de alternativas ao USD podem trazer sérias ameaças para economia americana continuar se financiando. O desafio é que a demanda dos EUA é determinante para a demanda global, portanto, uma crise naquele país tem alto poder de contaminação para economia global.
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June 20, 2007apocalpyse now: contrary to one reviewer, i found this book truly engrossing. brenner powerfully summarizes how the rate of profit of world manufacturing fell (with its many implications). to rectify this problem, greenspan made borrowing easier. as an aside, he notes how ceo's then used their corporations to borrow and buy the very stocks on which their options were based, thereby enriching themselves in a speculative frenzy. however, this is hardly the story: brenner's analysis explains the crushing attacks on social spending as well as our current war drive--suggesting how this too will fail, leaving only the historic capitalist method for eliminating overcapacity, the elimination of enterprises by economic crisis.
July 26, 2016
Boring and dry but very useful book that helps to explain the economic crises. Robert Brenner's The Boom and the Bubble explains the U.S.'s influence on the world economy, and there are some good bits in here, but I would recommend The Economics of Global Turbulence, also by Brenner, if you're to read any book by him. This book is highly repetitive in light of the other book. Nevertheless, this is a good reference book.
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September 25, 2013highly recommended. should have read this earlier.
Displaying 1 - 8 of 8 reviews