Age of Austerity
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- Published on Tuesday, 15 March 2016 22:30
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A Socialist Project e-bulletin .... No. 1233 .... March 16, 2016
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Age of Austerity:
Capital, the Financial Crisis and the State in Canada
Geoffrey McCormack and Thom Workman interviewed by Robin Chang
The financial and economic crisis of 2008 has left a continuing legacy on social welfare, showing up in slow economic growth, unemployment and underemployment, and increasing social conflict. In the debate over the future of the world economy, many foresee a long depression, and the intensification of neoliberal austerity. Geoffrey McCormack and Thom Workman's new book is concerned with Canada's unique economic and social history over the period of neoliberalism, including the financial and economic crisis of 2008. In The Servant State: Overseeing Capital Accumulation in Canada (Fernwood 2015), McCormack and Workman present a classical Marxist perspective, and intervene into a range of... theoretical and empirical debates on the course of the Canadian economy over this period.
Many of the accounts on the crisis focus on: (1) the character of the crisis in Canada given an over-reliance on "super-cycles" related to resource exports, now worsened by the collapse of oil prices; and (2) how the crisis originated in the particularities of predatory financial capitalists and the expansion of credit in Canada. McCormack and Workman argue that capitalists in Canada had been enjoying relatively strong rates of corporate profitability since the early 1990s, leading up to 2005. Investment up to 2008 was also strong. These two things together produced both a healthy financial sector and a healthy industrial sector while in the U.S, Western Europe, and elsewhere saw declining output, layoffs of workers, and financial instability. They conclude that economic policy in Canada cannot be credited for Canada's economic durability since 2008.
McCormack and Workman advance an analytical framework building on themes found in Marx's Capital. In it, understanding the "laws of motion of capital" that govern the evolution of capitalism is key to understanding Canada's economic history. These laws provide a foundation for a theoretical explanation as to why there is a tendency for capitalist economies to have recurring major crises, if each still has its particularities in their formation and the form their resolutions takes is not easily predicted. These are a result of social struggles.
