[Zzlist-deux] The Chronic Crisis, with Worse to Come?

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A new posting -
The Chronic Crisis, with Worse to Come?
<http://zzs-blg.blogspot.com/2014/09/the-chronic-crisis-with-worse-to-come.html>
- from Zoltan Zigedy is available at:
http://zzs-blg.blogspot.com/


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 Looking back on the ten years following the 1929 stock market crash,
Marxist economist and *Science and Society* co-editor, Vladimir D.
Kazakevich, wrote of the “chronic crisis” that persisted throughout the
nineteen thirties in the US (“The War and American Finance,” *Science and
Society*, Spring 1940). Kazakevich drew attention to the stagnation that
lasted over the decade, noting that after World War One, the United States
became the most dominant economy in the world. Yet “[a]s the most powerful
capitalist country, the United States developed particularly glaring
financial weaknesses, attributable, for the most part, precisely to its
foremost place in a capitalist world torn by economic contradiction and
frustration.”
 Kazakevich, a good Marxist instead of a born-again Keynesian, reflected on
the collapse of growth of the capital goods sector through the New Deal
decade: “These figures show how enormously capitalist activity had shrunk
in the thirties as compared to the twenties. Most of the Federal
expenditures of the New Deal period were directed towards sustaining the
demand for consumers' goods rather than for capital or producers' goods...
Although widely advocated, 'priming of the pump' from the end of consumers'
goods alone, has proved a complete failure as an economic measure for
resuscitation of the capitalist organization harassed by a chronic crisis.”
 Economic commentators today are increasingly nervous about a similar slump
in capital goods accompanying our own “chronic crisis.” Because the growth
of capital spending (and capital equipment spending) is running well below
its long-term average of 8% (growing just 3% in 2013), the average age of
industrial machinery and equipment in the US has surpassed 10 years, the
highest average age since 1938 when Kazakevich was painting his dire
picture! (*The Wall Street Journal*, 9-3-14) Thus, the slug-like motion of
the US economy during the last seven years mimics in an important way the
stagnation following the great crash initiating the Great Depression.
While capital spending *may* not now play quite the decisive role it played
in the US economy during the 1930s... to read more, go to:
http://zzs-blg.blogspot.com/
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