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Capitalism Hits the Fan: The Global Economic Meltdown and What to Do About It
"With unerring coherence and unequaled breadth of knowledge, Rick Wolff offers a rich and much needed corrective to the views of mainstream economists and pundits. It would be difficult to come away from this... with anything but an acute appreciation of what is needed to get us out of this mess."
--Stanley Aronowitz, Distinguished Professor of Sociology and Urban Education, City University of New York Capitalism Hits the Fan chronicles one economist's growing alarm and insights as he watched, from 2005 onwards, the economic crisis build, burst, and then dominate world events. The argument here differs sharply from most other explanations offered by politicians, media commentators, and other academics. Step by step, Professor Wolff shows that deep economic structures--the relationship of wages to profits, of workers to boards of directors, and of debts to income--account for the crisis. The great change in the US economy since the 1970s, as employers stopped the historic rise in US workers' real wages, set in motion the events that eventually broke the world economy. The crisis resulted from the post-1970s profit explosion, the debt-driven finance-industry expansion, and the sequential stock market and real estate booms and busts. Bailout interventions by the Federal Reserve and the US Treasury have thrown too little money too late at a problem that requires more than money to solve. As this book shows, we must now ask basic questions about capitalism as a system that has now convulsed the world economy into two great depressions in 75 years (and countless lesser crises, recession, and cycles in between). The book's essays engage the long-overdue public discussion about basic structural changes and systemic alternatives needed not only to fix today's broken economy but to prevent future crises.
--Stanley Aronowitz, Distinguished Professor of Sociology and Urban Education, City University of New York Capitalism Hits the Fan chronicles one economist's growing alarm and insights as he watched, from 2005 onwards, the economic crisis build, burst, and then dominate world events. The argument here differs sharply from most other explanations offered by politicians, media commentators, and other academics. Step by step, Professor Wolff shows that deep economic structures--the relationship of wages to profits, of workers to boards of directors, and of debts to income--account for the crisis. The great change in the US economy since the 1970s, as employers stopped the historic rise in US workers' real wages, set in motion the events that eventually broke the world economy. The crisis resulted from the post-1970s profit explosion, the debt-driven finance-industry expansion, and the sequential stock market and real estate booms and busts. Bailout interventions by the Federal Reserve and the US Treasury have thrown too little money too late at a problem that requires more than money to solve. As this book shows, we must now ask basic questions about capitalism as a system that has now convulsed the world economy into two great depressions in 75 years (and countless lesser crises, recession, and cycles in between). The book's essays engage the long-overdue public discussion about basic structural changes and systemic alternatives needed not only to fix today's broken economy but to prevent future crises.
262 pages, Paperback
First published January 1, 2009
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920 people want to read
About the author
Richard D. Wolff
46 books850 followersRichard D. Wolff is an American economist, well-known for his work on Marxian economics, economic methodology, and class analysis. He is Professor of Economics Emeritus, University of Massachusetts, Amherst, and currently a Visiting Professor in the Graduate Program in International Affairs of the New School University in New York. Wolff has also taught economics at Yale University, City University of New York, University of Paris I (Sorbonne), and The Brecht Forum in New York City. In 2010, Wolff published Capitalism Hits the Fan: The Global Economic Meltdown and What to Do About It, also released as a DVD. He will release three new books in 2012: Occupy the Economy: Challenging Capitalism, with David Barsamian (San Francisco: City Lights Books), Contending Economic Theories: Neoclassical, Keynesian, and Marxian, with Stephen Resnick (Cambridge, MA, and London: MIT University Press), and Democracy at Work (Chicago: Haymarket Books).
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Displaying 1 - 12 of 12 reviews
July 31, 2014
This book is a collection of Wolff's short, topically focused articles written from 2005 to 2009 for an internet column. Though tied quite specifically to that time and economic crisis, the message is intended to be timeless. Wolff's narrative centers around describing the significant problems of capitalism, suggesting an alternative, and exhorting the believers to action.
The bulk of the book discusses the shortcomings of capitalism and the resulting problems of it. Wolff argues that the recent financial crisis was merely a symptom of capitalism, an economic system that weaves implacable and destructive conflict into the production and distribution of goods and services, makes adversaries of employers and employees, and locks businesses into endless struggle against each other. The result: continuous conflict and ongoing, cyclical crises. Wolff is specific and detailed in his analysis - flat wages starting in the 1970s resulted in more family members entering the workforce, longer working hours per person, and more borrowing and debt in pursuit of "The American Dream". In turn, the resulting personal stress, exhaustion and anxiety has led to divorce, family breakdown, loneliness, and drug dependencies. With consumption rising and real wages frozen, surpluses and profits were distributed in ways that were cumulatively unsustainable and led to another economic crisis with its resulting pain and personal loss. Not an isolated incident that can be corrected with better reforms and controls, the recent meltdown is simply the latest boom & bust in a fundamentally crisis-prone system.
Whether you find yourself persuaded by Wolff's argument about capitalism or not, whether you are a defender of capitalism or critic, this book's ideas should be understood and considered. And that, sadly, is the rub. The issues raised by Wolff should be grappled with by all of us living in this economic system, but Wolff's language and strong affinity to one side of the argument will not promote that universal consideration. By allowing indignation to creep into his work, Wolff prompts those who may not agree with his conclusions to meet him with their own indignation rather than thoughtful consideration.
While I am one who is strongly persuaded by Wolff's arguments against capitalism, I was sadly disappointed and left unconvinced by his briefer discussions of an alternative system. He advocates replacing elite boards of directors answerable to shareholders to extract profits, control workers, and dominate politics and culture with democratized collectives of workers' self-directed enterprises; subjecting these new workers/directors to a social system of checks and balances governing their economic decisions; and sharing decision-making powers over community affairs between community members and enterprise workers. While this democratization and melding of the economic and political spheres of our society sounds quite appealing as an ideal, I cannot see how it will practically address the problems of capitalism. How do we address the issue of attaining the resources needed to fund an enterprise, and how avoid enterprises being beholden then to the suppliers of those resources? How do you run an organization by a committee of dozens or thousands of people? How do you overcome human nature and not quickly revert back to a handful of people who wield power - now in the name of the workers? And most importantly, how do you address the grossly materialistic American dream of rising consumption that lies behind so many aspects of our current society?
The bulk of the book discusses the shortcomings of capitalism and the resulting problems of it. Wolff argues that the recent financial crisis was merely a symptom of capitalism, an economic system that weaves implacable and destructive conflict into the production and distribution of goods and services, makes adversaries of employers and employees, and locks businesses into endless struggle against each other. The result: continuous conflict and ongoing, cyclical crises. Wolff is specific and detailed in his analysis - flat wages starting in the 1970s resulted in more family members entering the workforce, longer working hours per person, and more borrowing and debt in pursuit of "The American Dream". In turn, the resulting personal stress, exhaustion and anxiety has led to divorce, family breakdown, loneliness, and drug dependencies. With consumption rising and real wages frozen, surpluses and profits were distributed in ways that were cumulatively unsustainable and led to another economic crisis with its resulting pain and personal loss. Not an isolated incident that can be corrected with better reforms and controls, the recent meltdown is simply the latest boom & bust in a fundamentally crisis-prone system.
Whether you find yourself persuaded by Wolff's argument about capitalism or not, whether you are a defender of capitalism or critic, this book's ideas should be understood and considered. And that, sadly, is the rub. The issues raised by Wolff should be grappled with by all of us living in this economic system, but Wolff's language and strong affinity to one side of the argument will not promote that universal consideration. By allowing indignation to creep into his work, Wolff prompts those who may not agree with his conclusions to meet him with their own indignation rather than thoughtful consideration.
While I am one who is strongly persuaded by Wolff's arguments against capitalism, I was sadly disappointed and left unconvinced by his briefer discussions of an alternative system. He advocates replacing elite boards of directors answerable to shareholders to extract profits, control workers, and dominate politics and culture with democratized collectives of workers' self-directed enterprises; subjecting these new workers/directors to a social system of checks and balances governing their economic decisions; and sharing decision-making powers over community affairs between community members and enterprise workers. While this democratization and melding of the economic and political spheres of our society sounds quite appealing as an ideal, I cannot see how it will practically address the problems of capitalism. How do we address the issue of attaining the resources needed to fund an enterprise, and how avoid enterprises being beholden then to the suppliers of those resources? How do you run an organization by a committee of dozens or thousands of people? How do you overcome human nature and not quickly revert back to a handful of people who wield power - now in the name of the workers? And most importantly, how do you address the grossly materialistic American dream of rising consumption that lies behind so many aspects of our current society?
May 8, 2013
useless
May 30, 2020
This book is a collection of articles and short essays written between 2005 and 2009 - i.e. right before and right after the global financial crisis of 2008. The author is a Marxist economist, and views the neoliberal socioeconomic transformations in the USA and the world during that period through an anticapitalist lens. The book is divided into three main parts which explain why the crisis happened, looking into how big business interests managed to capture the State in the neoliberal era and effectively dismantled welfare policies and regulations and oversight over financial institutions (whose "freedom" from regulations allowed them engage in wild financial speculation and cause the economic and financial meltdown). The pieces written prior to the crash (2005, 2006) are particularly illuminating as they showcase that the author had firmly grasped what was wrong in the USA economy at the time, and that he was aware that a crash was going to occur - despite the fact that the economy was supposedly "doing great" as pundits in the mainstream media were clamoring at the time.
The author's ultimate goal behind this book is to critique capitalism as a system, and its neoliberal format in particular, and trigger debates and conversations over the real causes behind the 2008 crash (away from the surface-level, superficial and flawed analyses provided by mainstream media outlets or economists deeply entrenched in the neoliberal dogma). More importantly, the author offers a concrete way to counter such crises and to challenge capitalism at its core: democracy in the workplace. Put shortly, corporations are governed by Boards of Directors appointed by shareholders who determine what happens with the surplus produced by workers; such a situation renders workplaces into quasi-authoritarian settings whereby workers have no say in decision-making and whereby shareholders and directors only care about maximizing profits (with little regard to the well-being of the workers or the communities in which they live in). The author proposes radically transforming the workplace whereby corporations become worker-owned (e.g. cooperatives), and provides ample evidence to demonstrate how such a transformation would have the utmost beneficial consequences to society at large.
Even though the articles and essays comprising this book are well over a decade old, they are still highly relevant, as the "economic recovery" policies of the Obama administration bluntly bailed out the crooks behind the crash and put all the costs of the crisis on the shoulders of the poor, working and middle classes. In addition, the decade of the 2010s was riddled with graver and more severe neoliberal economic transformations, with increases in obscene socioeconomic inequalities throughout the world. "Democracy in the workplace" is necessary now more than ever.
The author's ultimate goal behind this book is to critique capitalism as a system, and its neoliberal format in particular, and trigger debates and conversations over the real causes behind the 2008 crash (away from the surface-level, superficial and flawed analyses provided by mainstream media outlets or economists deeply entrenched in the neoliberal dogma). More importantly, the author offers a concrete way to counter such crises and to challenge capitalism at its core: democracy in the workplace. Put shortly, corporations are governed by Boards of Directors appointed by shareholders who determine what happens with the surplus produced by workers; such a situation renders workplaces into quasi-authoritarian settings whereby workers have no say in decision-making and whereby shareholders and directors only care about maximizing profits (with little regard to the well-being of the workers or the communities in which they live in). The author proposes radically transforming the workplace whereby corporations become worker-owned (e.g. cooperatives), and provides ample evidence to demonstrate how such a transformation would have the utmost beneficial consequences to society at large.
Even though the articles and essays comprising this book are well over a decade old, they are still highly relevant, as the "economic recovery" policies of the Obama administration bluntly bailed out the crooks behind the crash and put all the costs of the crisis on the shoulders of the poor, working and middle classes. In addition, the decade of the 2010s was riddled with graver and more severe neoliberal economic transformations, with increases in obscene socioeconomic inequalities throughout the world. "Democracy in the workplace" is necessary now more than ever.
March 23, 2017
Overall a good book, but the format is a hindrance.
The book is a collection of short essays that critique the performance of capitalism in the years preceding the run up to the banking crisis and recession of 2007-2008. The author focuses on the fact that crisis is built into the system of capitalism itself and that these crisis happens with great regularity. He highlights that competition between workers and managers within the corporation will always make this system ultimately disadvantageous to the workers. Which end up leading to disastrous results for the workers that can manifest themselves in several different ways. An example would be the recent increase in drug use in the once former industrial towns of the Midwest as factory jobs have moved overseas and unemployment has increased. He points out that this latest recession is different from previous ones by the economic trends of wage stagnation in the US of the last 40 years. Several essays explore the social ramifications of economic downturns
within a community.
The authors strengths are his plain spoken style and his ability to breakdown difficult economic topics that are easy for layman to understand. It would seem that he goes to great lengths to reduce the complexity for the reader. Weaknesses of the book would be the repetition of topics and that the book is simply a large collection of blog posts. Although I knew the format of the book before reading, once halfway through, I was looking for more depth from the author. The short essay format enhanced the lack of cohesive narrative.
While I don't find much to disagree with the author's assessment on the state of capitalism in the US and abroad, I felt that a more standard book with chapters would be a better way to dig deeper into the topic. Also, as another reviewer has stated, I find his solution to the problems with capitalism interesting and worth exploring, but that they could use more examination and a bit more fleshing out. Since I generally agreed with premise of author's work, perhaps one of his other books would be more of what I was looking for. There was enough interest here to give some of his other titles a try.
The book is a collection of short essays that critique the performance of capitalism in the years preceding the run up to the banking crisis and recession of 2007-2008. The author focuses on the fact that crisis is built into the system of capitalism itself and that these crisis happens with great regularity. He highlights that competition between workers and managers within the corporation will always make this system ultimately disadvantageous to the workers. Which end up leading to disastrous results for the workers that can manifest themselves in several different ways. An example would be the recent increase in drug use in the once former industrial towns of the Midwest as factory jobs have moved overseas and unemployment has increased. He points out that this latest recession is different from previous ones by the economic trends of wage stagnation in the US of the last 40 years. Several essays explore the social ramifications of economic downturns
within a community.
The authors strengths are his plain spoken style and his ability to breakdown difficult economic topics that are easy for layman to understand. It would seem that he goes to great lengths to reduce the complexity for the reader. Weaknesses of the book would be the repetition of topics and that the book is simply a large collection of blog posts. Although I knew the format of the book before reading, once halfway through, I was looking for more depth from the author. The short essay format enhanced the lack of cohesive narrative.
While I don't find much to disagree with the author's assessment on the state of capitalism in the US and abroad, I felt that a more standard book with chapters would be a better way to dig deeper into the topic. Also, as another reviewer has stated, I find his solution to the problems with capitalism interesting and worth exploring, but that they could use more examination and a bit more fleshing out. Since I generally agreed with premise of author's work, perhaps one of his other books would be more of what I was looking for. There was enough interest here to give some of his other titles a try.
March 25, 2018
This book was interesting but the author’s decision to limit it to re-prints of columns previously written kept the book from being better. One of the drawbacks of writing articles for a newspaper or magazine is that they usually kept too short. Thus, a book-length discussion of a topic is more appropriate when the goal is to explore a subject deeper. Wolff’s articles, published during the 2007 recession, serve to show that they view that “no one saw it coming” is plainly wrong. They also sharing the author’s critique of the conversations that were not had, i.e., is it time for a more radical change to our economic system. However, what the articles did not do is expand on the author’s alternative to the oscillations of state-control and free market capitalism. While he alludes constantly to an economic model that would eliminate the conflicts between labor and capital, by requiring the workers of each industry to also serve as its board of directors, he does not flesh this concept out. I found this quite disappointing because, as the author himself notes, there are few books that seek to defend alternatives to capitalism instead of merely trying to placate capitalism’s unsavory aspects.
December 18, 2022
Highly readable account of the Crash. Wolff does a great job of laying out the doom loop established when wages stopped rising in the 70s, leading to increasing levels of household debt and extra cash for investors to pour into exotic instruments like CDOs on newly deregulated markets. Anyone who is familiar with Dr Wolff's work will know of his advocacy for cooperative enterprises, an he reiterates this commitment in every essay. I personally hadn't considered the impacts that the wage crunch had on investment levels, but it puts the whole thing in a really different light. For interested readers I'd also recommend Yanis Varoufakis's "And the Weak Suffer What They Must," which explains international conditions like the Oil Shock, the end of Bretton Woods, and the trade deficit that allowed the assault on working conditions during the 70s.
August 14, 2019
The end is near! And you are entitled to anything you see and desire because NEED. Pay careful attention to the noises and demand to take what's yours because of NEED. The capitalists are those quick ones with the machetes, the ones that were not bit.
October 4, 2012
The central message of this book seems solid: capitalism, whether private sector or state-run, won't solve our long-term economic problems. This is because the surplus profits of big business fall solely into the hands of a small number of individuals (boards of directors) who then have the means to buy government and shape economic policy according to their desire. I buy this for the most part, but I'm no economist so I'm trying to be cautious. I agree with Wolff that the labor force needs to play a much bigger role in making decisions about how profits of labor are used, and I like that he's willing to champion Marxist ideology in a way that seems responsible. He makes some suggestions about what this new economic landscape might look like, but doesn't put forth anything very detailed or compelling.
Three stars because Wolff is not much of a writer, and also because many of these essays, while concise and accessible, are basically rewritten copies of one another.
Three stars because Wolff is not much of a writer, and also because many of these essays, while concise and accessible, are basically rewritten copies of one another.
February 6, 2013
An excellent review of the economic trends that led up to the 2007 financial crash, and the ways in capitalism's inherent contradictions work. This was my first exposure to Marxian theory and class analysis.
December 21, 2023
Made me stop to about think the issues we're battling now that were so clearly presented 15 years ago. The best way to preserve capitalism is to make sure it's working for the greatest number of people possible, not just the shareholder class who have twisted the system to their benefit.
Read
December 6, 2013Very good commentary on the economic crisis. I recommend it highly along with Wolff's Democracy At Work: A Cure for Capitalism
November 12, 2016
This book had some interesting ideas, and ones that were new to me. But it was highly redundant. It cold have gotten the point across in a third to a quarter of its length.
Displaying 1 - 12 of 12 reviews