For our latest pamphlet, on the subject of the current economic crisis, we interviewed Andrew Kliman (author of Reclaiming Marx’s Capital) on the crisis of global capitalism, prospects and alternatives. The text is reproduced below. Email firstname.lastname@example.org if you would like to order a hard copy of the pamphlet (£1).
Q. Descriptions of today’s crisis have included headlines proclaiming the “collapse” of the system. How would you characterise the current crisis?
A: There hasn’t been a collapse yet. If there were one, you’d know it. But there’s indeed a danger of collapse-of the financial system, and thus of the capitalist system as a whole. That danger was most acute and severe in mid-to-late September, prior to the U.S. Treasury’s $700 billion-plus bailout measures, but it persists even now [November 2].
The crisis is a crisis of “confidence.” “Confidence” here isn’t some general optimism about the future of capitalism, but lenders’ confidence that the monies owed them will in fact be repaid. When that kind of confidence is shaken, as it has been, lending dries up. But production and trade depend crucially on lending–not only loans to build factories, malls, and offices, and to buy additional equipment–but also loans just to get from today to tomorrow, to pay workers, buy supplies and inventories, etc. So any “credit crunch” has an effect on the so-called real economy. If confidence were to be severely shaken, such that there’s outright panic in the credit markets-we were evidently rather close to that point in September, and the threat of such panic persists-there would be almost no new lending to speak of. The “real” economy would grind to a halt in fairly short order. That’s a collapse. Continue reading “new pamphlet – “the crisis: an interview with andrew kliman””