Video: June 23 NYC Meeting in Series on “Confronting Capitalism’s Economic Crisis”
Posted: July 3rd, 2009 | Author: A | Filed under: Economic Crisis, Events, News, Organization | Tags: confronting capitalisms economic crisis, crisis, Economic Crisis, economy, Events, marx, Organization | 5 Comments »Here is a video of the first meeting in the on-going series. It includes talks by Andrew Kliman: “The economic crisis and left responses,” and by Anne Jaclard: “A new organization for a time of crisis,” and discussion with the audience.
Check out information for rest of the seminars in this series. Andrew Kliman’s charts for the presentation in this movie are posted below the jump for reference.
The first four graphs are from “A Tale of Two Depressions” by Barry Eichengreen and Kevin H. O’Rourke, located at http://www.voxeu.org/index.php?q=node/3421
US Industrial Output
World Industrial Output
World Stock Markets
Volume of World Trade
Case-Shiller Home Price Index
S&P 500 Profits
Rates of Profit
I would like to pose a question to Andrew Kliman.
In your article “The destruction of capital…” (and elsewhere) you claim that until capital is destroyed (in value terms) to a sufficient extent, there can be no recovery in profitability, and thus no sustained recovery in terms of general economic growth.
Do you think that what has happened so far represents a “sufficient” destruction of capital, or is it way too little to restore profitabilty?
A lot of paper wealth has been wiped out (there are various estimates), and a lot of capital assets in the auto industry (and other industries as well) are being devalued, right? The collapse of housing prices is also (or can be) a sort of devaluation of constant capital. (Of course, these are mostly residential houses, but the prices of office buildings, malls etc. is also falling, which can be regarded as the devaluation of “C”, correct?)
Is that enough, in your opinion?
Thanks.
(I havent’t yet watched the video, so sorry if you already answered my question there.)
thanks a lot for uploading. I hope you will do the same with the lectures on underconsumptionism ant the profit rate.
To TTT: You’re welcome. The seminar sessions won’t be uploaded, since they will contain a lot more discussion among participants (who are entitled to remain anonymous) and a lot less lecturing.
To Mihaly: Hi again. In my view, far too little capital has been destroyed at this point to permit a sustainable recovery of profitability and growth of a magnitude anywhere similar to the recovery that followed the Great Depression and World War II.
This doesn’t mean that capitalism can’t recover from the current financial crisis or the current slump in the “real” economy. I think such a recovery is more likely than not.
But what’s happening is that prices and asset values are being propped up by covering over a lot of bad debt with new debt. Thus the recovery, if it does taken place (which is far from a sure thing), will be artificially induced and unsustainable, in my opinion, unless a lot more capital is destroyed.
The underlying question is this, I think: Imagine that there were no artificial stimulus, bailouts, credit expansion, and government guarantees taking place; would asset prices recover or even stabilize at current levels without significant further destruction of capital (physically and in terms of value) first taking place? I don’t think a “yes” answer is very credible.
If you answer “no,” and if you think that a recovery that’s artifically induced by papering over bad debt with more debt is unsustainable (and the record indicates that this has been the case up until now), then you have to conclude that the conditions aren’t yet in place for a sustainable boom.
I agree with you that “a lot of paper wealth has been wiped out . . . and a lot of capital assets in the auto industry (and other industries as well) are being devalued.” But it’s not enough to give rise to a sustainable boom, in my opinion. I also agree with you that “the collapse of housing prices is also (or can be) a sort of devaluation of constant capital,” mostly because this affects the (fictitious) values of mortgage-related securities and other securities that are part of the capital of businesses. Assets don’t have to be physical in order to be part of capital, since all that “being part of capital” means is that they are part of the base against which profits are measured. Owners care about getting a sufficient return on all of the capital they’ve invested, whether it is productive capital or not.
Thanks for your answer.
We published a Hungarian translation of your article “The ‘destruction of capital’ and the current…”: on indymedia :
http://indy.media.hu/node/12886
(Hope we didn’t “infringe upon” any copyright stuff, your homepage is credited at the end of the article as the original source.)
Thanks, kmb! That was unexpected.
I’ve put a link to the Hungarian translation on my website.