Why can’t anybody say ‘depression’?

Image from The Guardian, interactive version here: http://bit.ly/Jzajpn

This is a short blog inspired by the news that the UK is officially in ‘double-dip’ recession (as predicted by pretty much everyone on the left).

So everybody’s taking perverse pleasure in celebrating the return to recession as proof that 'austerity isn’t working'.1 Setting aside the armchair-Keynesianism behind much of this, the main thing that struck me is how nobody's talking about the fact we're in a longer depression than the Great Depression, and nearly as deep, with no end in sight (I'm using the only non-arbitrary definition of a depression I'm aware of as the period in which output remains below its pre-recession high).

The only exception I'm aware of – and not a minor one to be fair – is FT editor Martin Wolf, who back in September wrote that "the current UK depression will be the longest since at least the first world war. Without a dramatic surge in growth, it is also quite likely to generate a bigger cumulative loss of output than the 'great depression'."

But the D-word is conspicuous by its absence in most of the economic commentary. We're living through the second great depression and nobody can utter the words. Is this, as Slavoj Zizek has suggested, a case of Wile E. Coyote having run over the edge of the cliff, but only falling when he looks down and acknowledges his predicament?

In other words, the absence of the D-word from most of the economic discourse raises a more general question of the relationship between discourse and the material world, between the intersubjective and the objective. A typical materialist view sees discourse as the ideological rationalisation of the underlying social forces. And often it is. But to what extent is the relationship reciprocal? In other words, if all the commentators started calling the economic situation it what it is – a depression – what would happen? Would that cause stock markets to tumble, banks to collapse and the material ‘basis’ to wobble on account of a single word?

  • 1. This assumes a rapid return to growth is the objective, rather than tearing up the post-war social contract, smashing the remnants of organised labour, privatising everything in sight and getting even more ridiculously minted.

Posted By

Joseph Kay
Apr 25 2012 17:42


  • We're living through the second great depression and nobody can utter the words.

    Joseph Kay

Attached files


Apr 25 2012 18:35

It was interesting to see business figures trying the find fault in the methodology from the ONS. Looking on The Guardian live bloggy thingy it had quotes from some of those leader-of-the-free-world banker types that basically said, "reporting that there had been a downturn in the economy and we are now in recession is dangerous because it may cause a downturn in the economy."

So maybe a change in language may just cause markets to tumble and banks to collapse but of course not because of any change in the economy itself but through a realization of the deep hole those that pull the levers are in. Austerity and those that campaign for it are interesting, mainly because it won't work but also because it is a FAITH position much like a lot of conservative ideology involving BELIEF in an omnipotent and omnibenevolent market.

So I guess the economy being in depression is not the important thing, its when the central faith in what they are doing is shaken that things begin to crumble.

Apr 25 2012 19:08

I think discourse has to have some material effect, at least on this particular issue, as financial markets rely on capitalists having the confidence to invest.

If I recall correctly a few months ago when Greece was on the verge of defaulting, all the news was focused on the prospect of bond yields hitting 7%, as this was the point the IMF were considered likely to be 'required' to bail them out. And all the talk of this 7% meant confidence was lost and this figure was promptly reached (and surpassed). Now this may have happened anyway of course, but the speculation is certainly likely to have had an effect.

In light of this I suspect there's a fear of using the word depression, as the vocal recognition may make the actualisation of it self-fulfilling - once the word is uttered it becomes more 'real'.

Joseph Kay
Apr 25 2012 19:50

The other recent example of something like this would be the fuel crisis, where there wasn't a crisis at all until the government told people to start hoarding fuel but 'not to panic'. Naturally, people surmised that if a politician was telling them not to panic, there was probably something serious going on, so they headed out to the petrol stations and inadvertently made the problem real.

Apr 25 2012 21:32

If I may, I don't think the fuel thing is a good example but you caught if right with Zizek analogy and the talk of depression. These are things that ARE actually happening and are being ignored. Like the bankers saying talk of recession will make things worse. What do they mean? Recognition of recession will bring recession? The figures you show state that this is a Depression. So outside of the media narrative and the leaders of the world types there is an objective fact of a depression. So rather than fueling that something doesn't exist they ignore something that does.

This is done for ideological reasons of course but these facts can't be ignored for too long.

Apr 25 2012 21:36

Paul Mason agreeing with basic thrust of this on Newsnight as we speak, and using the D word.

Apr 25 2012 21:51

Interesting post. I wonder if part of it is tied to your footnoted point. You said that the point of austerity is not "a rapid return to growth" but rather "tearing up the post-war social contract, smashing the remnants of organised labour, privatising everything in sight and getting even more ridiculously minted." I think that's true, but I think the justification is that this will turn things around. The big wealth grab and rollback that's going on isn't called straightforwardly a wealth grab and rollback, it's called something that benefits everyone, yeah? So maybe the stuff about how talk of an economic downturn is irresponsible is partly about preserving the trickle upward of wealth?

Ray Jovana
Apr 25 2012 21:58

The lifecycle of euphemisms is interesting. "Depression" is a bad thing because it makes people think of all the bad stuff associated with the Great Depression, but really the word was chosen because it sounded nonthreatening and temporary as opposed to "crisis" or "panic". What's a "depression" - just a little bit of something pushed down a bit. "Recession" was chosen because it makes you think of the beach, with waves coming in and then receding in a gentle, relaxing, and perfectly natural cycle.

If we were to try to come up with an appropriate clinical euphemism, I don't think "depression" fits the bill. Past depressions sometimes took a while to recover and sometimes involved a double-dip recession, but did they ever just stall out the way things have for the past couple of years?

I guess the big difference is what's mentioned in the footnote - that this unique situation we find ourselves in is manufactured and that the usual political forces that keep the austerity forces in check seem to be absent or at least in retreat. But if that is what defines the situation, and if it's unique, then we need a new word that means "recession that turned into a manufactured depression due to a lack of political will or power from the usual political forces that have historically succeeded in fighting off austerity in order to return quickly to economic growth".

Maybe "The Great Economic Rout" is more fitting than "depression".

Ray Jovana
Apr 25 2012 22:22

Yes, Nate, I think there are a couple things at work here. It's true that recessions can be caused, prolonged, and fixed by changes in confidence. So, all else being equal(*), avoiding public airing of bad news is a practical way to help return to growth.

But all else isn't equal. The austerity crowd sees that holding the economy hostage is an effective way to achieve their objectives, as long as the economy doesn't completely tank. And an honest public debate is seen by the anti-austerity wing of the establishment as too risky, both politically and due to the economic fallout from people learning the truth.

The democrats and republicans end up a bit like the interrogator and the doctor. Neither wants the captive to die, but the interrogator feels free to push things to the limit knowing that the doctor feels compelled to keep the captive alive.

Apr 27 2012 12:14

Hasnt down playing the shit out of this depression been a feature right from the outset? I remember a few years ago my mum trying to tell me that its all the fault of the media - i.e. if they would only stop talking about being in a re/depression then spending would resume = all good again. This was a common opinion at the time i recall.

Anyone got a link to why exactly austerity wont work?

Apr 29 2012 14:51

It's not a depression for everyone:

The UK's richest people have defied the double-dip recession to become even richer over the past year, according to the annual Sunday Times Rich List.

The newspaper's research found the combined worth of the country's 1,000 wealthiest people is £414bn, up 4.7%.

It means their joint wealth has passed the level last seen in 2008, before the financial crash, to set a new record.


Joseph Kay
May 2 2012 17:38

looks like someone at the economist reads libcom wink

Call it a depression

May 2 2012 17:54

So now everything will be crashing down ?

May 2 2012 18:18

Nice piece. Reminds me of one of Christian Marrazzi's thesis in Capital and Language - that financial markets are linguistic and performative.

May 12 2012 02:59

Sort of related - anyone know of a decent introduction to how finance works in the present? I've been reading a bit recently about the railroad and steel industries in the US in the late 1800s and early 1900s and some of that gets into finance (role of financiers and stock markets in helping gather the money needed for investing in fixed capital, and in rearranging companies in terms of mergers and stuff), but I still feel like I don't get much about all this.

Joseph Kay
May 12 2012 05:16

Sam Knafo's stuff is meant to be good, though I haven't got around to reading any.

Joseph Kay
Jul 26 2012 09:22

Now the longest depression on record:

The interesting thing is the rich are getting richer through all this, so is it a problem for them? Have they shifted from 'accumulation by production' to what David Harvey calls 'accumulation by dispossession'? What happens in a shrinking/stagnant capitalism when wealth is concentrating in fewer hands? Is this the distinction between wealth and value - wealth can be redistributed and hoarded, but capital/value needs to be produced (i.e. only exists in motion)?

Jul 26 2012 10:13

I don't really know what we're looking at here Joseph; is this just a UK graph? The 'ONS' on the bottom would imply it is. Where did this come from?

It's certainly one in the eye for all those (many many) people who claimed that this crash in 2008 (or was it 2007? Whenever...) wasn't as bad as the '30s.

Joseph Kay
Jul 26 2012 10:41

Yeah, it's UK GDP relative to the pre-recession peak for 5 different recessions. It's from the Independent here. UK GDP is still below the the 2008 peak, so it's the longest depression on record (i think). However, output in absolute terms is still massively higher than any previous recession (e.g. the 1930s), and probably GDP today is still bigger than in say, 2005.

Jul 26 2012 12:28

Small point. The Zizek metaphor "a case of Wile E. Coyote having run over the edge of the cliff, but only falling when he looks down and acknowledges his predicament?" is actually nicked from Raoul Vaneigem: "The history of our times calls to mind those Walt Disney characters who rush madly over the edge of a cliff without seeing it, so that the power of their imagination keeps them suspended in mid-air; but as soon as they look down and see where they are, they fall." I just can't stand Zizek, so I thought I'd point this out.

Joseph Kay
Jul 26 2012 12:34

fair point!

Jul 26 2012 17:36

hey JK, apologies if I've mentioned this already, my memory's not veyr good, I think you'd be interested in some work being done in the 'social structures of accumulation' school of marxist economics. I think it's social democratic in character but it's pretty strongly empirically grounded. This piece gives an overview (I've only skimmed it, to be honest) http://tinyurl.com/burlsxc

These folk distinguish between versions of capitalism that have what they call a 'liberal institutional structure' (LIS) which is much more 'let the market do its work' and a 'regulationist institutional structure' (RIS) which is more about state intervention etc. The SSA stuff suggests, and they say they have empirical data to support it (I've not really dug into the evidence) that LISes are good for individual capitalists who get much richer much more quickly, but that they don't support long-term accumulation/the growth of the economy as a whole in the long run as effectively as RISes.

That piece also lists a few factors that have gone with transitions from liberal to regulationist arrangements in the past and they include economic crises and political challenges. Historical precedents don't determine what happens in the present of course but it's useful for stuff to look out for. I think that's relevant to the conversation on here a while back about whether or no reform is possible.

By the way part of the reformist side of this SSA stuff,I think, is that it largely amounts to an argument for state regulation and doesn't seem to have much more to say politically, but that doesn't mean the arguments are otherwise wrong about the productivity of these different arrangements. (There's also an argument that each version is still prone to breakdown and crisis, but that these crisis tendencies are somewhat different/manifest differently depending on institutional arrangements. This gets into some of that and again I've not read it closely - http://tinyurl.com/cyll5zj )

Part of the take-away of all this for me is that capital accumulation isn't automatic but has to be politically organized. The capitalists aren't necessarily class conscious and don't necessarily do what's in their individual, group/fraction/industry/whatever, or class interests. And those interests (individual, group/fraction, class as a whole) can conflict with each other. I think that's also relevant to the 'there's a massive depression but the rich still get richer' issue - whether the very rich think long term and in more collective terms (a depression is about the economy as a whole) or just about themselves/their groupings, is political and cultural and ideological. As are their responses to the problems that follow from whatever route gets selected. (Currently the implied consensus seems to be coast along as things are going and use the cops to respond to unrest.) There's a few redistributionist calls like that from Warren Buffet and probly a lot more that we're not seeing, and there's also the organized voices for not caring about that and just continuing with the superrich getting super richer, like that 'plutonomy' memo put out by one of the big investment firms a while back.

Aug 29 2012 16:04
Part of the take-away of all this for me is that capital accumulation isn't automatic but has to be politically organized.

Capital accumulation is automatic. The political organization you speak of just directs and parses the way it accumulates. Few people correlate the macro-economic with their own personal economics, but they are just as related as the moon is to the sun, even though the moon orbits the earth. Money flows up, all by itself.

I think that part of the reason the word depression isn't used, and has no well defined definition is that a depression occurs for no damn good reason. If you read a lot of the classical, and contemporary works on the great depression, you begin to realize that there is no good understanding of why it happened, unlike the modern equivalent that can be squarely laid at the doors of real estate speculation. Either that, or they don't want to believe it was just as simple as borrowing on margin. Come to think of it, that's pretty much the same thing.

What i find interesting, sad, or whatever, is the complete lack of dialogue about the current state of affairs. I listen to say, Robert Reich or Paul Krugman, and i would imagine the UK have their equivalent, you know the Keynesians, and i hear them talk about 'when growth resumes', as if there is some magical growth genie waiting in the wings. In fact both the conservative and the liberal economists seem to believe in this growth genie, they just disagree about how it is invoked. The conservatives believe the magic lamp is activated by austerity, and the liberal ones believe the genie appears randomly, and we just need to keep things going until it does.

At least, that's the way i hear the rhetoric. What's going on behind the scenes, is, well, to me, behind the scenes. But the fact is, there is not a lot out there to base these claims of future growth on. Most of the resources to base growth on are already owned. I don't even see much of the so-called growth of the past 40 years as growth, so much as a reshuffling or restructuring of capital to make it appear that growth was still happening. So we have the stock market bubble, the internet bubble, the real estate bubble, all in response to capital having nowhere good to go anymore. Now the financial market is the main game, where participants make money off of the rates of exchange, and other esoteric means, as if money were as magical as the aforesaid growth genie.

But, as we've seen, there is another resource to be exploited, and in order to do that with a minimum of resistance, several things need to take place. First, it needs to be seen as incompetent, and inefficient, and generally not worth the trouble to keep it around, and it has to stop providing the essential services it once did, in order to reinforce that perception. In the US, the Republicans even talk about 'hiring or firing' a president. As if all we're doing is hiring another middle manager. Which of course, he would be.