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  • The Endless Crisis: How Monopoly-Finance Capital Produces Stagnation and Upheaval from the U.S.A. to China by John Bellamy Foster and Robert W. McChesney
  • Bill Dunn
John Bellamy Foster and Robert W. McChesney, The Endless Crisis: How Monopoly-Finance Capital Produces Stagnation and Upheaval from the U.S.A. to China (New York: Monthly Review Press 2012)

The authors, eminent representatives of the Monthly Review or monopoly capital school, argue that giant corporations, not free or efficient markets, dominate the economy. We live in a perverse world where powerful firms extract high profits but this becomes an economic problem as core national economies suffer from weak final demand, industrial overcapacity, and lack of investment. Foster and McChesney also challenge nationalist perspectives, insisting the economy should be conceived as a global whole. At least implicitly, they therefore reject simple policy fixes to what are profound structural problems. They end with Marx [End Page 417] and the stark alternatives of “the revolutionary reconstruction of society at large, or … the common ruin of the contending classes.” (183)

The book begins by introducing the perspective of what the authors now term “monopoly-finance capitalism” and by outlining the transformation, particularly of the US economy, since the 1960s. The next three chapters flesh out the analysis and the narratives of monopoly power and the turn towards financialized accumulation. The general analysis follows that pioneered by Paul Sweezy, in particular, drawing on Marx but incorporating insights from other traditions, notably from Keynes. Capitalism is divided into three periods; an early mercantilist or state-led phase, roughly to the industrial revolution, a competitive or free-market phase in the middle half of the 19th century, particularly in Britain, and since then monopoly capitalism. In this last period, large oligopolies dominate. They are not the passive “price-takers” depicted by orthodox economic models but more or less consciously collude. By eliminating price competition, they achieve a mark-up on their sales and higher profits. Surpluses tend to rise. But this leads to persistent difficulties reabsorbing these surpluses back into the economy. Final demand is limited and it pays firms not to raise production, so there is chronic overcapacity and a disincentive to invest. The economy tends to stagnate.

Most recently, monopoly capital fed growing inequality and surplus profits flowed particularly to finance, a sector that itself became hugely oligopolized. The economy takes another twist on its inexorable downward spiral. The book’s last three chapters discuss international dimensions, turning to corporate expansion, the exploitation of labour on a global scale, and finally to China’s contradictory growth and the plight of its workers. Both the rich empirical detail and the conceptual arguments about corporate power are invaluable.

However, I think that both the general argument about monopoly-finance capital and the account of the current crisis needed a bit more to be really persuasive. In particular, without addition, the understanding of this crisis as capitalism’s “logical end-point” (61) is unconvincing. Hitherto capitalism has found ways out of its difficulties and it remains conceivable that it might do so again, albeit perhaps at devastating human and environmental cost.

At a crude empirical level, the last 140 years have not been characterized by endless stagnation. Of course, Foster and McChesney acknowledge periods of growth. But their explanation abandons theory for “favorable historical factors.” For example the post-World War II boom was fuelled by: (1) the buildup of consumer liquidity during the war; (2) the second great wave of automobilization; (3) a period of cheap energy; (4) the rebuilding of war-torn European and Japanese economies; (5) two regional wars in Asia, and Cold War military spending in general; and (6) a period of unrivalled US hegemony. (13) Much of this rings true but invoking the incidental has troubling echoes of the mainstream attribution of anything that upsets models and predictions of economic harmony to “exogenous shocks.” Moreover, beyond a free-market obsessed orthodoxy, it seems problematic to see things like auto-industry innovation, cheap oil, and state spending as “external” or non-economic.

Nor do the authors tell us how oligopoly works; how concentrated an industry needs be to achieve the alleged price...

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