This will give this crisis distinct dynamics. This time, the trigger appears to be Trump’s trade war with China. The latter, of course, was triggered by a meltdown in financial markets tied to real estate.īut triggers are not fundamental causes they simply arrive at a tipping point. That was the scenario in the Great Depression of the 1930s, just as it was in the Great Recession of a decade ago.

Factories close, workers are laid off, banks collapse. They produce buildings and machines far in excess of what the actual level of profits can justify.Īs profits per dollar of investment fall, a great contraction takes place. The end result of frenetic investment is that capitalists massively overshoot. In a nutshell, competition for markets and profits induces corporations to invest frenetically in order to get an edge on their rivals.Įach one attempts to purchase new machines and technologies, build new structures - from factories to shopping malls - and expand their operations, all with an eye on seizing market share. As I have argued elsewhere, capitalism undergoes regular crises because of its in-built tendency toward over-accumulation. But, at the same time, it will have a number of unique features. This crisis is the logical outcome of the last one. The emerging global slump, and the intensified social conflict it engenders, represent a moment of danger as well as radical opportunity. All the problems that have dogged them throughout the “lost decade” since the Great Recession of 2008–9 - poverty, insecurity, precarious employment, and deteriorating conditions of life - are likely to worsen dramatically. Not surprisingly, ruling class circles are panicked about an impending collapse.Īnd for working-class people around the world, already suffering through the weakest economic expansion since the Second World War, the implications are ominous. Just before Labor Day, Argentina defaulted on $100 billion of its debts, a harbinger of turmoil in world financial markets.

Meanwhile, “emerging economies” like Mexico, Turkey, and Argentina have already plunged into deep slumps. In the United States, corporate profits - always the key to growth in a capitalist economy - are sliding. Manufacturing industries in China, the United States, Japan, Germany, and Britain are in recession. World trade is contracting - down more than 3 percent since last October. The global economy is skidding to a jarring halt at the moment.

Blood and money book david mcnally