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Abstract
The recent collapse of the banking system and instability in the financial markets has dramatically shaken confidence in the global economic order. Is the current variant of 'free market' capitalism really sustainable? The Trouble With Capitalism - originally written, with remarkable prescience, in 1998 - anticipates such a development and explains the underlying economic fragility it has revealed. Rather than being merely a temporary blip in the march of capitalism, Shutt argues forcefully that the on-going crisis has arisen as a result of fundamental economic problems, stemming from the growing redundancy of both labour and capital since the 1970s. In doing so, he exposes the sham of the laissez faire prospectus, showing that state power and capital are increasingly being used to prop up capital while pretending that the aim is to roll back the frontiers of the state.
The implications of the author's startling conclusion (re-examined in a new foreword) - that the maximisation of profit must cease to be the main basis for allocating resources - are profound.
'Identifies an impressive array of potential problems.'
The Christian Science Monitor
'Shutt is one of the few to expose capitalism’s lies and imperfections, faults that critically threaten our democratic survival.'
Publishers Weekly
'In this thoughtful treatment of the current economic scene, one feels convinced that the collapse of Western civilization as we know it is at hand.'
Library Journal
'Offers no easy answers, but suggests the West is going to have to face the fact that profit-maximising capitalism has run its course.'
Tribune
'Based on wide knowledge, well documented source material and sharp analysis, everyone who reads it will learn from it...'
Liberation
'This has been the most interesting discussion with an economist I have ever had in my life'
George Galloway, Press TV
'Shutt [has] a message for every saver and investor: a crash of 1929 proportions is almost inevitable'
Dan Atkinson in The Guardian (on the first edition of this book)
Harry Shutt was educated at Oxford and Warwick Universities. He worked for six years in the Development and Planning Division of the Economist Intelligence Unit. He then moved to the Research Department of the General and Municipal Workers' Union (1973-76) and subsequently became Chief Economist at the Fund for Research and Investment for the Development of Africa (1977-79). Since then he has been an independent economic consultant. His books include 'The Myth of Free Trade: Patterns of Protectionism Since 1945', (1985), 'The Trouble with Capitalism: An Inquiry into the Causes of Global Economic Failure', (Zed 1999), 'A New Democracy: Alternatives to a Bankrupt World Order' (Zed 2001) and 'The Decline of Capitalism: Can a Self-Regulated Profits System Survive (Zed 2004).
Table of Contents
Section Title | Page | Action | Price |
---|---|---|---|
About the author | ii | ||
Foreword: Apocalypse Now? | vii | ||
Notes | xiv | ||
Introduction | 1 | ||
1 | The Origins of Modern Capitalism: A Brief History to World War II | 5 | ||
Notes | 17 | ||
2 | The Post-1945 Economic Dispensation in the West | 19 | ||
The Proactive State | 20 | ||
Figure 1 Total government expenditure (% of GDP), OECD countries | 21 | ||
International Collaboration | 24 | ||
Emerging Contradictions | 29 | ||
Notes | 33 | ||
3 | The End of the Boom and the Neo-classical Reaction | 34 | ||
Market Saturation | 35 | ||
More Limited Investment Opportunities | 37 | ||
Table 1 OECD: variations in rate of change in output, private consumption, fixed investment and consumer prices | 38 | ||
Ambivalence on Inflation | 41 | ||
Notes | 44 | ||
4 | The Illusion of Orthodoxy | 46 | ||
‘Monetarism’ | 46 | ||
The Pursuit of Fiscal Rectitude | 49 | ||
Privatisation | 50 | ||
Figure 2 OECD: the pattern of production and fixed investment growth since the 1950s | 57 | ||
A Policy of Desperation | 57 | ||
Figure 3 OECD: gross public debt, 1970–97 | 60 | ||
Notes | 61 | ||
5 | Incurable Addiction to State Support | 63 | ||
The Interventionist Tradition | 66 | ||
Lenders of Last Resort | 68 | ||
The Fiscal Crisis: Threat and Opportunity | 73 | ||
Notes | 76 | ||
6 | Globalisation and the Power Vacuum | 77 | ||
Banking Deregulation | 78 | ||
Speculative Excesses | 80 | ||
Anarchy in the Foreign Exchange Markets | 82 | ||
Offshore Financial Centres | 84 | ||
The Triumph of Short-termism | 85 | ||
Notes | 91 | ||
7 | Technological Nemesis | 92 | ||
1. Labour Devalued | 93 | ||
2. Capital: Devaluation Resisted | 97 | ||
Revolutionary Implications | 104 | ||
Notes | 108 | ||
8 | Coping with the Capital Glut | 110 | ||
Expanding the Outlets for Investment | 111 | ||
Maintaining the Return on Investment | 124 | ||
Notes | 131 | ||
9 | Wider Symptoms of Disintegration: I – The Wreckage of Soviet Communism | 133 | ||
The Relative Success of Eastern Europe | 141 | ||
China: The Great Exception | 143 | ||
Notes | 147 | ||
10 | Wider Symptoms of Disintegration: II – Third World Catastrophe | 149 | ||
The Failure of ‘Reform’ | 159 | ||
A Common Thread | 164 | ||
Notes | 164 | ||
11 | A Crisis of Legitimacy | 166 | ||
The Spread of Lawlessness | 167 | ||
Loss of Accountability | 175 | ||
Notes | 180 | ||
12 | Can the Profits System be Saved? | 182 | ||
Patterns of Demand | 184 | ||
Portents for the Future | 187 | ||
A Rebirth of Consumption? | 188 | ||
Environmentalism: Less Opportunity than Threat | 190 | ||
Illusory Potential of the Third World and the Former Communist Bloc | 191 | ||
Retreating to Determinism | 194 | ||
Conclusion: No Way Out | 195 | ||
Notes | 196 | ||
13 | Political Paralysis | 198 | ||
The Trauma of the Left | 198 | ||
Rebound of the Right | 201 | ||
Forced Unanimity | 204 | ||
Popular Red Herrings | 208 | ||
Strategies of Desperation | 210 | ||
An Ideological Impasse | 211 | ||
Notes | 212 | ||
14 | Essential Features of a Sustainable World Order | 214 | ||
An End to Growth-Dependency | 217 | ||
A New Collectivism | 217 | ||
A New Democracy | 219 | ||
A New Globalism | 222 | ||
An Inescapable Choice | 229 | ||
Notes | 230 | ||
Index | 231 |