structural necessity of the stagnation-prone economy” in which the relationsbetween the “real” and the “financial”economy are “inverted” (84; 77-88).
PART II: CONSEQUENCESCh. 5: The Financialization of Capitaland the Crisis.
[April 2008] The crisistouched off by the collapse of thesubprime mortgage market in July 2007“signals a new phase” of monopoly-finance capital (92; 91-93). The realestate bubble after the 2000 marketcrash followed the classic pattern of novel offering, credit expansion,speculative mania, distress, and crashand panic (93-99). Unlike conventionalanalyses focusing on greed, addiction tohigh consumption, etc., which tend topresent stagnation as a
of stalledfinancialization, Foster and Magdoff connect what is happening tocapitalism’s unresolved problem of thedisposition of capital accumulation andpresent it as a
Ch. 6: Back to the Real Economy.
[December 2008] In the financial crisisfrom July 2007 to December 2008, theFed acted to avoid debt deflation anddepression by monetary means,confining itself to acting as the lender of last resort (111-20). Understandingfinancialization as a response tostagnation of capital accumulation helpsunderstand the situation, as somemainstream sources acknowledged in themidst of the crisis (120-27). Butstagnation is the normal condition in thephase of monopoly capital, and accountsfor other features like growing inequality,the growth of indebtedness (128-33). Acrisis of financialization only accentuatesthe problem of stagnation, with globaleffects (133-34). Historically, the studyof
has beendepoliticized for ideological purposes andtransformed into supposedly class- andstate-free discipline of
butthis veil “has been partly torn aside andthe reality of class power exposed”; it istime to turn away from orthodoxneoclassical economics to contrary views(134-37). Progressive forces need toeducate the public about the non-naturalnature of the crisis and the need to holdthose at the top responsible andaccountable; there is a need for “aradical movement from below” with as itsaim “replacing the present system of capitalism with something amounting toa real political and economic democracy;what the present rulers of the world fearand decry most—as ‘socialism’” (140;137-40).
About the Authors.
is professor of sociology at theUniversity of Oregon and author manybooks, among them
TheTheory of Monopoly Capitalism
(1986),and (with Brett Clark and Richard York)
Critique of Intelligent Design
taught at the Universityof Vermont in Burlington, is a director of the Monthly Review Foundation, and isco-editor (with John Bellamy Foster andFrederick Buttel) of
Hungry for Profit: The Agribusiness Threat to Farmers, Food,and the Environment
The Great Financial Crisis,
John Bellamy Foster
TheEcological Revolution: Making Peace withthe Planet.
Foster was born on Aug. 19,1953. He was already an antiwar activistwhen he enrolled at The Evergreen StateCollege in 1971. There he met RobertMcChesney. Foster earned his Ph.D. inpolitical science at York University in Toronto. He began collaborating withPaul Sweezy of
in theearly 1980s. He taught at Evergreen in1985-1986, then found a tenure-track job