Photo courtesy life.com
Paul Mattick, The Chronicle
A remarkable feature of the commentary on today’s economic troubles is that, despite constant reference to the Great Depression of the 1930s, as well as to the many downturns since World War II, there has been little mention of the fact that business depressions have been a recurrent feature of the capitalist economy since the Industrial Revolution. But even the briefest attention to history makes recent events appear far from unusual.
From the early 1800s to the late 1930s, in fact, capitalism spent between a third and a half of its history in depressions (depending on how they are dated by different authorities), which increased steadily in seriousness up to the Big One in 1929. It was only the relative shallowness of the recessions since World War II that gave rise to the idea that capitalism would no longer undergo the ups and downs characteristic of its first 150 years as the dominant social form.
The choice in economic theory seemed to be between the neoliberal idea of capitalism as a self-equilibrating system and the Keynesian conception of the economy as controllable by government manipulation. The inadequacy of both views demonstrated by current economic events calls for another look at the long-term dynamic of the capitalist system.
While today’s capitalism is in many ways a much-transformed version of its 19th-century self, this transformation has not brought an abatement of the systemic problems diagnosed by its critics in that century. It presents them, instead, in new forms.
