The failure of capitalist production: underlying causes of the great recession - Andrew Kliman

Kliman presents an empirical analysis of US firms' profit rates, arguing that contrary to popular belief and neoliberal mythology, these never recovered from the previous crisis of the 1970s. Rather, persistently low profits were the underlying, if indirect, cause of the present crisis.

Kliman turns to Marx's Law of the Tendential Fall in the Rate of Profit to explain the situation. For Kliman, Marx's theory doesn't predict a smooth, long-run trend of falling profits, but rather recurrent crises in which sufficient capital is destroyed - either physically or by devaluation - to allow profitable capital accumulation to resume.

Failure to destroy sufficient capital - as Kliman argues happened in the 1970s - means the profit rate cannot be restored. However, the reason policymakers avoided such widespread destruction of capital was to avoid a repeat of the 1930s depression, with its mass radicalisation and class struggle.

For Kliman then, capitalism is caught between stagnant profits and confrontation with the working class, raising again the spectre of social revolution.