Crisis stories

An article by Dariush Sokolov originally published by Libcom explores four dominant ‘stories’ attempting to explain the financial and economic crisis.

Overview and comparison of different theories about the crisis – Keynesians, stagnationists, Marxists, globalisation.

crisis stories
These notes come from the reading I’ve done recently trying to understand the causes of the current economic crisis. There are thousands of books, essays and articles out there now, but they all work within a few basic explanations or underlying “stories”. Here I outline and compare four of the main ones.

I’m not trying to present a new “anarchist interpretation of the crisis”, or to say anything particularly original. Just, hopefully, to help clarify some of the theoretical and ideological background to all the punditry, and bring some ideas and links together so that people can dig further for themselves.

Number one is the mainstream “Keynesian” story. Basically, corrupt and/or stupid politicians and regulators took the leash off greedy and/or irrational bankers. The more sophisticated version traces things back to problems of market psychology – as Keynes put it, the “animal spirits” of investors.

According to alternative left (mainly Marxist) theories, crises come from deeper “structural” flaws in capitalist production. There are two main variants to look at: underconsumptionist or “stagnation” theories (e.g., the “Monthly Review” school); and falling rate of profit theories (e.g., some Marxist academics, and basically any Trotskyist party line.)

All of these stories are about troubles in the developed markets of the US and the rest of the “first world”. But could the root causes lie in global economic shifts away from US dominance to a world where production is elsewhere? This is the fourth and last story.

Continue reading the article here.


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