A Marxist analysis of the crisis
Andrew Fisher, Left Economic Advisory Panel co-ordinator, reviewed Mick Brooks’ new book Capitalist Crisis: Theory and Practice in theOctober 2012 issue of Labour Briefing, the voice of the Labour Representation Committee, representing the left wing of the Labour Party.
The economic crisis that began in 2008, and through which we are still living, is a complex thing to analyse. Many books have been written to explain the crisis – some have been very good at explaining the complexity of the financial system and why it failed, but few have attempted to provide a comprehensive historical account of why this crisis occurred and how it fits with previous crises.
“Any real capitalist crisis involves a complex interaction of factors. The Great Recession showed that clearly”, says Brooks and his book exemplifies that contrast of complexity and clarity.
Reading Brooks’ book is not easy, it is not a light read. But that is a strength, not a weakness. The subject matter is complex, detailed and multi-faceted, and requires the reader to stop, digest and consider what they have read. Just as a fine wine is best sipped slowly, so this Marxist analysis is best enjoyed gradually.
The loyalty to the Marxist framework is not without risk. In the introduction, Brooks describes the current crisis as “a classic crisis of capitalism”. I feared that was ‘case closed’ and what would follow would be a Marxist “I told you so”, treating the long-dead German polymath, as so many do, like a divinity whose words should be treated like tablets of stone passed down through the ages. But such fears are unfounded.
Capitalist Crisis does though sometimes suffer from over-quotation of Marx, which is disappointing when Brooks himself has often put the same point across in more modern and accessible language. But these long excerpts – often from Capital – would be easily skipped by a reader not interested in Brooks’ nineteenth century inspiration.
However, this book is a forensic study of the capitalist crisis – drawing in previous crises, analyses of the crisis in individual nations, and testing alternative theories at each stage. In doing so it seeks to explain and educate on every page. Along the way he busts some of the mainstream myths like that of the ‘Keynesian moment’ in late 2008 / early 2009. As Brooks concludes, “The intention was to bail out the banks – nothing more or less. It was not Keynesianism in action.”
Its particular skill is in successfully rehabilitating some of the oft-doubted tenets of Marxist economic theory: the tendency of the rate of profit to fall and the labour theory of value. Brooks explains these and – crucially – all the caveats and reservations that Marx himself wrote into explaining them, but have often been lost in the intervening century and a half. This is important because the readers feels like they are taking part in an honest appraisal of a complex crisis rather than having ready-made answers welded onto their questions.
Some of the welcome elements for socialists is the clear-headed section on the financial crisis – explaining the role of finance capital, explaining precisely ‘fictitious capital’ and more practically (this is theory and practice after all) nailing the myth that this was the fault of a few irresponsible banks. Instead, as Brooks explains, “Their assets were melting away. The crisis was one of solvency. They were actually broke”. ‘They’ not one or two, but collectively: the system.
One of the strengths of the book is the ease and logical order with which it switches from practice (like the practices of the banks that inescapably led to the crash) to theory – explaining what is capitalism, how it emerged and why it endured. As such this book explains not only the current crisis, but the more fundamental questions necessary to effect change on the system.
On that latter point, one fact that should give all socialists hope is that, “There are now more than a billion wage workers. They, together with their families, outnumber the peasantry for the first time in the history of the world.”
This book is in the best traditions of the “scientific socialism” that Marx advocated and deserves close and patient study and discussion.