Capital Resurgent

Capital Resurgent: Roots of the Neoliberal Revolution (Harvard University Press, 2004), by the French economists, Gerard Dumenil and Dominique Levy, sets out systematically the transformation of capitalism known as neoliberalism in the seventies and eighties. As they point out, by 1999 the top fifth of the world's people in the highest income countries had 86% of world GDP. (It's worse now). So, what happened? What happened at the end of the 1970s? Dumenil and Levy have a straightforward explanation:

In the 1970s the rate of capital profitability had significantly declined. In this proposition each term should be underlined. The nature of the occurrence--a decline in the rate of capital profitability. Where and when?--in the most advanced capitalist countries, in the 1970s. Why was this phenomenon so important?--because it determined the action of the dominating classes in the following decades. Why is that shocking?--because the fight against unemployment, against social exclusion, and against destitution did not fit in with the approach of these classes, who in fact were making use of unemployment in this situation.

They further clarify their answer by emphasizing that the change was initiated by a particular fraction of the dominating classes, the one in which financial interests predominate and which has seen its revenues and power eroding in the 1970s.

Finance reasserted its power and interests in relation to workers, company managers, those responsible for economic and social policies in governments, and public and semipublic institutions, both national and international. Prioritizing the fight against inflation, the new course of events refocused economic activity on capital profitability and payments to creditors and stockholders.

Comments

[Joseph]

Check out David James' A Brief History of Neoliberalism for a similar take. I'm reading that now and it's quite enlightening.

[Jodi]

Do you mean David Harvey? I read his book, A Brief History of Neoliberalism and learned a lot. In fact, I decided to read Capital Resurgent because he cites them and I wanted to understand the underlying analysis, which is the same.

[Rob]

sounds like a must-read

thanx for the heads-up, Jodi :)

[joseph]

Yep, sorry, I meant David Harvey. I'm reading both his book and David James' (also a Marxist scholar, but in film)The Most Typical Avant-Garde at the same time and screwed up the names.

[mattcalarco]

Jodi, I've read Harvey's book--what an admirable volume. So clear, so well-argued! Would you recommend reading _Capital Resurgent_, too, or is it largely the same narrative that Harvey gives?

[Edie]

How much emphasis should be placed on the abandonment of the Bretton Woods era gold standard? I'm interested in what these authors say about it. It seems to me that this was a prime expression of finance asserting its interests and power over the rest of us.

[Jodi]

Matt--I would recommend it because of the detail. I also plan to run a series of little chapter summaries.

Edie--they do talk about the shift from the gold standard, but I don't recall the details. I'll look for them and post something about that.

fyi--this won't be a for few days because I have to go to FL to give a lecture.