A very well written review. As an American and having just finished reading, “The End of Normal”, I am surprisingly more sympathetic to the potential of a Marxian steady-state economic policy for the 21st Century. I would say that the unmentioned undercurrent of Dr. Galbraith’s thesis appears to be Malthusian in nature as an anecdote to the current Darwinian-Capitalistic environment of today. A thought occurred to me while I was reading the book; What if the missing variable to the magic equation used by economists to formulate success is food itself. We take it for granted that the industrial revolution has solved the problem of availability of foodstuffs but what if in a very near future when the people-o-meter reads 10 billion, As was hinted by Dr. Galbraith, that the old environmental, fixed resources of arable land and water and human inability to control weather problems which have plagued farmers since the beginning of agriculture shows up in the 21st Century with a vengeance? I would say as a pessimist that when that day comes, and I am positive it will, a concerted Marxist approach is the only way to save the human race from annihilation.
風蕭蕭_Frank
以文會友正常的終結, 大危機和增長的未來
The End of Normal, The Great Crisis and the Future of Growth
https://www.simonandschuster.com/books/The-End-of-Normal/James-K-Galbraith/9781451644944
掠奪者國家
這是當代最受尊敬的經濟思想家和作家之一對經濟增長的曆史和未來的精彩論述。
自 2008 年大危機以來的幾年裏，經濟增長緩慢、失業率高企、房價下跌、長期赤字、歐洲災難加劇——以及兩種錯誤解決方案之間的陳舊爭論，一邊是“緊縮”，另一邊是“刺激”。到目前為止，雙方和幾乎所有對這場危機的分析都理所當然地認為，從 20 世紀 50 年代初到 2000 年的經濟增長（隻被困難重重的 20 世紀 70 年代所中斷）代表著正常的表現。從這個角度來看，這場危機是一種中斷，是由糟糕的政策或糟糕的人造成的，如果原因得到糾正，就可以期待全麵複蘇。
《正常的終結》挑戰了這種觀點。加爾布雷斯從宏觀角度看待這場危機，他認為 20 世紀 70 年代已經結束了輕鬆增長的時代。20 世紀 80 年代和 90 年代隻出現了不平衡的增長，國家內部和國家之間的不平等加劇。21 世紀甚至連這種情況都結束了——盡管人們拚命努力通過減稅、戰爭支出和金融放鬆管製來保持增長。當危機最終來臨時，刺激和自動穩定能夠為經濟崩潰奠定基礎。但它們無法帶來高增長和充分就業的回歸。在《正常的終結》中，“加爾布雷思將他的悲觀主義置於一個引人入勝、可信的框架中。他的觀點值得所有經濟學家和政治領域嚴肅金融人士的關注”（《出版商周刊》，星級評論）。
書 評 評論者：漢斯·德斯潘
漢斯·德斯潘是馬薩諸塞州尼科爾斯學院的經濟學教授兼係主任。他鼓勵您來信：hans.despain@nichols.edu
詹姆斯·K·加爾布雷思最近出版的《正常的終結》是政治經濟學領域的一項重大成就，它對經濟學實踐和公共政策進行了哲學批判，對全球壟斷金融資本主義進行了全麵而全麵的解釋。
加爾布雷思的主要關注點有三個。首先，加爾布雷思解釋了美國和全球企業資本主義體係的矛盾及其深層的金融弱點。其次，加爾布雷思對穩定的“正常”資本主義概念進行了批判。根據加爾布雷思的說法，“正常”穩定概念使主流經濟學家無法預見 2007 年之前金融安排的根本不穩定。第三，加爾布雷思認為，左右兩派都未能理解當代公司金融資本主義的製度結構轉變。[我的《正常的終結》是高級電子版，因此為了避免頁麵錯位，我提供了章節引文]。
加爾布雷思認為，蘇聯體製崩潰的原因之一是社會理論家對該體製的理解不夠。同樣，2007-8 年的金融崩潰令大多數經濟學家和政治家如此意外的原因之一是人們對美國公司資本主義的理解不夠（結語）。
主要的理論障礙是教條地堅持“正常”的經濟表現，以及“淡水經濟學家”（即親市場經濟學家，其中許多人居住在美國大湖地區）的信念，即“正常”是通過市場價格調整實現的，或“鹹水經濟學家”（即親市場凱恩斯主義經濟學家，其中許多人居住在美國沿海地區）的信念，即“正常”是通過經濟管理、市場調整和適當的公共政策實現的（第 4 章）。
加爾布雷思認為這兩種信念都是虛幻的。根據加爾布雷思的說法，2007-8 年的金融危機是一次“決定性的”製度轉變。淡水經濟學家的模型從未適用於資本主義的現實，而鹹水經濟學家的模型不再適用。 “[經濟崩潰] 之後沒有出現戰後正常模式的正常商業周期好轉，這並不令人意外”（第 9 章）。凱恩斯主義刺激無法解決當代企業資本主義的問題。“凱恩斯主義複興的製度、基礎設施、資源基礎和心理基礎已不複存在”（第 9 章）。[有關更多凱恩斯主義失敗的案例，請參閱第 8、9 和 14 章]
正確的比喻
加爾布雷斯認為，發動機的行為就是發動機的行為（第 6 章）。發動機在接近極限時才能達到最佳性能。如果超出極限，發動機就會過熱、燒壞或熔化，在這種情況下，必須重建發動機才能重新啟動。我們的經濟汽車“遭遇了傳動故障。熔化了。發動機中再多的 [凱恩斯主義] 汽油也無法讓它運轉”（第 9 章）。通過在現有的破損係統上投入更多資金，無法恢複就業。有了更多的錢，消費者就會償還債務，企業會投資於節省更多勞動力的技術，銀行也會設置超額準備金。凱恩斯主義的刺激措施不再有效（第 8 章）。“金融係統更像是核反應堆，而不是汽車。”我們需要清理和重建。
盡管“常態”（或係統平衡或均衡）的概念“非常強烈”，但結構性製度轉變已使這些概念既過時（序言），又“危險”（第 9 章）。在戰後經濟中，經濟增長變得可取、可預期、永久和“正常”。資本主義“黃金時代”的爭論關注的是需要多少政府幹預才能實現“正常”經濟增長（第 1 章）。
到 20 世紀 70 年代，幾條“蛇”進入了“增長花園”。越南戰爭標誌著國際製度偏離布雷頓森林協議。由於“國內石油峰值”生產和石油卡特爾組織 OPEC 的崛起，石油價格大幅上漲。然後是 20 世紀 70 年代的深度衰退。加爾布雷思認為，這些都是真正的地理資源和製度變革的預兆，而不僅僅是暫時的“衝擊”或“管理不善和政策失誤”（第 2 章）。
國際政治經濟和美國企業資本主義的製度生理發生了變化。加爾布雷思試圖向受過教育的大眾聽眾闡明這一點，但低估了他所提出的深刻的哲學論點。這是一種本體論批判。加爾布雷思認為，無論是新古典主義、凱恩斯主義還是馬克思主義的經濟學模型，都未能充分理解新製度秩序的爆炸性和不穩定性（第 4 章）。保守的市場原教旨主義理論將主導經濟理論和政策（第 3 章）；他們從根本上誤解了當代企業資本主義的本體論。
市場原教旨主義占主導地位，很大程度上是由於凱恩斯主義政策未能管理該體係。但與主流理論相反，凱恩斯主義的失敗並沒有帶來“大緩和”和危機的結束（第 3 章）。相反，全球化、金融化、蘇聯體製的垮台、中國的崛起、伊朗革命以及巨大的係統性不平等都表明這個體係高度不穩定。
加爾布雷思認為，新新工業國家（我的術語，指的是加爾布雷思的製度發展，遠離約翰·肯尼斯·加爾布雷思 1967 年的新工業國家概念，但深深植根於這一概念）必須被理解為主要是金融的。加爾布雷思對金融化的解釋很少，但他卻認為已故的海曼·明斯基的分析很好地抓住了這個新金融體係的本質。明斯基以他的比喻而聞名：“穩定產生不穩定”。 “明斯基思想的激進之處在於，它始於金融體係，終於金融體係，從未超越金融體係”（第 5 章）。在明斯基的模型中，政府“金融監管”發揮著明確而具體的作用（第 5 章）。加爾布雷思沒有提到明斯基進一步強烈支持財政和就業政策以消除貧困（明斯基 2013 年）。盡管如此，加爾布雷思的強項是，任何嚴肅的分析診斷都必須接受新新工業國家的激進金融性質。正如明斯基（2013 年，177）所言，資本主義公司製度“存在缺陷”，因為“市場機製無法實現和維持充分就業”，而且它“天生（在金融上）目光短淺，需要政府才能擁有的長遠眼光不斷補充”。
《正常的終結》論證的核心是構成第二部分“增長終結的四騎士”的四章。如果新新工業國家始於金融化的製度表現，那麽加爾布雷思認為，金融化不僅會產生巨大的不平等和不穩定（見 Galbraith 2012），還會為巨大的欺詐行為創造機會。加爾布雷思認為，我們必須“明確指出，大金融危機的根源在於一場巨大的金融欺詐計劃”（第 9 章）。馬克思主義者傾向於低估欺詐的作用，以強調無論有沒有欺詐，係統性不穩定。加爾布雷思認為這是一個錯誤。他有一個重要的觀點。用更馬克思的語言來說，欺詐
是一種權力關係，允許在生產過程之前、期間和之後進行超級剝削或剝削。
許多經濟學家認為技術是“拯救我們擺脫經濟停滯的最大希望”（第 8 章）。加爾布雷斯認為這不太可能。這是因為技術創新往往是節省勞動力的技術變革，而不是新的工作和消費模式。“新技術的明顯結果是失業”（第 8 章）。更糟糕的是，技術變革不僅取代了工人，而且破壞了商業活動。廉價燃料、與之相輔相成的工業技術、家庭收入消費、消費、消費以及推動這一切的金融基礎等“重大偶然事件” “發生過一次。[然而]沒有令人信服的理由期望[它]會再次發生”（第 8 章）。技術變革現在對就業、消費和投資的拖累與當時的促進作用一樣大。
加爾布雷思進一步認為，國際力量平衡可能有利於美國，但不利於資本主義（大型企業主導）貿易。軍事產生的秩序不再能維持。全球經濟停滯和數百個國家普遍存在的欠發達“無法通過軍事手段解決”。因此，軍事維持了全球秩序，而“我們所知道的”戰爭似乎已經結束。“在現代條件下，戰爭和軍事全球管理的遊戲是沒有利潤的”（第 7 章）。
加爾布雷思論點的基本要素是四騎士中的第一個。具體來說，資源成本及其產生的全球動態（與金融化相結合）正在產生巨大的經濟不穩定和政治反複無常。加爾布雷思認為，我們麵臨的通脹威脅不是來自預算赤字或高就業率，而是來自能源價格和成本。中央銀行和國際經濟機構根本沒有能力和能力有效地管理這些“大規模殺傷性武器”（WMD）及其造成的不穩定和危機。
基本論點是，全球大型企業資本主義存在“高固定”成本結構，增加了石油等經濟資源的需求和價格。每當總需求增加（例如來自中國）時，資源價格就會上漲，金融壟斷和金融投機開始預期能源價格上漲，從而進一步提高資源和能源的價格。簡而言之，需求的增加（來自家庭、企業或政府）會刺激金融投機，提高能源價格和生產成本。因此，能源價格通過增加生產成本和降低企業利潤（第 6 章）對增長和充分就業起到了“扼殺”作用。用更馬克思的語言來說：一個簡單的壟斷-金融資本矛盾。這並不一定會阻止價格上漲，企業壟斷業務和壟斷金融活動可能會在能源價格高企的情況下繼續進行，從而進一步助長投機行為。這會導致價格連續飆升，投機泡沫不可避免地破裂，造成“鞭笞”效應（第 14 章）和嚴重的不穩定性和不確定性（第 6 章）。
政策前進的方向很少被理解（第 10 章），因為金融化的製度轉變（第 5 章）、資源成本和“扼殺”和“鞭笞效應”（第 6 章），以及國際政治和經濟機構的巨大轉變、軍事強製國際秩序的無能（第 7 章）、現代技術創新的勞動力節約和商業不穩定性質（第 8 章）以及欺詐與金融化的共生關係（第 9 章）尚未被理解為在結構上體現新新工業國家的整體。
“瘋狂”的經濟推理誤解了危機，並開出了注定會失敗的政策（例如緊縮政策）（第 11 章）。歐洲國家停滯不前，原因是貨幣製度框架僵化，缺乏有效的內置機構在經濟衰退期間“自動”重新分配。然而，重要的是要明白歐洲正在應對同樣的“一場”危機（加爾布雷斯認為，這場危機是美國造成的）。PIGS 的首字母縮略詞通常代表“葡萄牙、冰島、希臘、西班牙”，更確切的意思是“黃金高盛的主要煽動者”（第 13 章，注 1）。然而，歐洲國家的製度結構非常不同，這往往會削弱政策反應（第 13 章）。
凱恩斯主義政策或刺激性支出最終不會有效，因為本書第二部分的“四騎士”以及現代金融不再是增長的動力（第 14 章）。相反，我們可以遵循 Costas Lapavitsas (2013) 的觀點，即銀行已經成為“金融掠奪”的機構，
過度剝削的深層製度根源（另見 Despain 2014）。
Galbraith 認為我們正在進入一個緩慢增長的時期。唯一的出路是經濟規劃（結語）。目前，“規劃”是由企業為了自己的利益而進行的。規劃可以通過由公共部門實施，為更多公民和社區提供更大的利益（Galbraith 2014 深深植根於 Galbraith 1973 和 1967）。Galbraith 認為，公共赤字不會限製計劃經濟中的支出（第 12、5 章）。可以管理利率以限製赤字的增長（第 12 章）。
Galbraith 的政策處方包括支持麵向公共目的的公共銀行。他堅持保護和擴大社會保險計劃的重要性，包括提前退休以騰出空間給年輕工人。他支持保障（生活）個人收入（也曾得到極端保守的經濟學家米爾頓·弗裏德曼的支持）。他強調“大幅提高最低工資”的緊迫性，這確立了實際生活工資，並強調了增加國民收入中流向勞動力的份額、減少國民收入中流向資本的份額的稅收政策。加爾布雷思進一步堅持對掠奪性尋租活動征收高額稅款。
我們當然可以在原則上支持這些政策。但明顯缺乏的是，人們認識到資本主義不是替代方案：CINA（Despain 2013a），加爾布雷思當然知道，但完全忽略了現有的解放替代方案：EASE（Despain 2013a）。此外，還有“務實”的就業政策，為忍受剝削性企業資本關係並走向 EASE 的個人提供工作和尊嚴（參見 Despain 2012，作為對加爾布雷思政策建議的重要補充而撰寫）。
加爾布雷思對“馬克思主義觀點”的批評是愚鈍和誤導的。加爾布雷思認為，“馬克思-巴蘭-斯威齊-鮑爾斯-金蒂斯的立場（奇怪的混合！）是資本主義是不穩定的，危機不可避免。這一主題將危機的風險根植於資本、壟斷資本和金融資本的特定屬性。它開放甚至鼓勵人們認為，不同的社會製度可能不那麽不穩定，也不容易發生危機”，根據加爾布雷思的說法，這是一個曆史弱點（第 4 章）。如果這裏的論點是馬克思主義政治經濟學通常低估了製度，我會承認這一點。然而，暗示巴蘭和斯威齊、鮑爾斯和金蒂斯以及馬克思低估了製度，這很奇怪。
加爾布雷思對《每月評論》傳統的批評不僅奇怪，而且具有誤導性。加爾布雷思直接引用了《每月評論》理論家約翰·福斯特和羅伯特·麥克切斯尼（2012）以及德斯潘（2013b）的觀點，他斷言：“嚴格來說，他們所認定的危機並不是金融危機”（第 4 章）。加爾布雷思在這一傳統的其他觀點上完全錯了，“馬克思主義者的問題在於，金融本身並不能解釋任何事情。在他們看來，金融的作用基本上是表麵文章”（第 4 章）。福斯特和麥克切斯尼（以及他們之前的巴蘭和斯威齊）對明斯基的見解表示了極大的欽佩，並吸收了明斯基的見解。對於這些理論家來說，金融化是經濟停滯和壟斷資本的表現，但一旦出現，金融就會擁有自己的生命和活力。福斯特和麥克切斯尼的優勢在於，金融化理論認為其根植於社會生產關係，而不是從不涉足金融之外（第 5 章），而不是明斯基的優勢。
加爾布雷思缺乏對金融化及其對家庭、非金融企業、金融企業、公共政府、教育機構和機構間辯證關係（後者是 Lapavitsas 2013 的主題）的影響的製度分析。這裏的文獻非常豐富，其中大部分都深深植根於馬克思主義政治經濟學。然而，加爾布雷思沒有提供任何引文，而是嚴格依賴對明斯基的引用。
加爾布雷思的《正常的終結》將因其深刻的批評、原創的理論見解、政策導向，尤其是其語氣和目的的緊迫性而受到高度推崇和讚譽數十年。
2014 年 8 月 10 日
參考文獻
Despain, Hans G. 2014 評論 Costas Lapavitsas 所著的《不生產而獲利：金融如何剝削我們所有人》，《馬克思與哲學書評》，2 月 13 日。https://marxandphilosophy.org.uk/reviewofbooks/reviews/2014/956
Despain, Hans G. 2013a 這是愚蠢的製度：結構性危機和對資本主義替代方案的需求《每月評論》65(6)：39-44 http://monthlyreview.org/2013/11/01/its-the-system-stupid/
Despain, Hans G. 2013b 評論 John Bellamy Foster 所著的《無休止的危機：壟斷金融資本如何從美國到中國製造停滯和動蕩》
和 Robert McChesney，1 月 30 日 https://marxandphilosophy.org.uk/reviewofbooks/reviews/2013/694
Despain, Hans G. 2012 務實就業政策後凱恩斯主義經濟學論壇 11 月 16 日 http://pke-forum.com/2012/11/16/pragmatic-employment-policy/
Foster, John Bellamy 和 McChesney, Robert W. 2012 無休止的危機：壟斷金融資本如何從美國到中國造成停滯和動蕩 紐約：每月評論出版社。
Galbraith, James K. 2012 不平等和不穩定：大危機前世界經濟研究 牛津大學出版社，牛津。
Galbraith, John Kenneth。1973 經濟學與公共目的 波士頓：霍頓·米夫林公司。
Galbraith, John Kenneth。 1967 [2007] 工業國家普林斯頓和牛津：普林斯頓大學出版社。
Lapavitsas，Costas。2013 不生產而獲利：金融如何剝削我們所有人倫敦和紐約：Verso。
Minsky，Hyman P. 2013 消除貧困：工作，而不是福利 Annandale-on-Hudson，NY：Levy Economics Institute。
URL：https://marxandphilosophy.org.uk/reviews/7923_the-end-of-normal-review-by-hans-g-despain/
本評論根據 Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License 許可
一條評論
Goofus 說： 2014 年 12 月 25 日下午 2:07
一篇寫得很好的評論。作為一名美國人，我剛剛讀完《正常的終結》，我驚訝地發現，馬克思主義穩定經濟政策在 21 世紀的潛力更大。我想說，加爾布雷斯博士論文中未提及的暗流似乎是馬爾薩斯主義的，是當今達爾文資本主義環境的一個軼事。我在閱讀這本書時想到：如果經濟學家用來製定成功的神奇方程式中缺少的變量是食物本身，那會怎樣？我們理所當然地認為工業革命已經解決了糧食供應問題，但如果在不久的將來，當人口計量表讀數達到 100 億時，正如加爾布雷斯博士所暗示的那樣，自農業開始以來一直困擾農民的舊環境、固定的耕地和水資源以及人類無法控製的天氣問題在 21 世紀以複仇的方式出現，那會怎樣？作為一個悲觀主義者，我想說，當那一天到來時——我確信它一定會到來——采取協調一致的馬克思主義方法是拯救人類免於滅絕的唯一途徑。
The End of Normal
The Great Crisis and the Future of Growth
https://www.simonandschuster.com/books/The-End-of-Normal/James-K-Galbraith/9781451644944
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From one of the most respected economic thinkers and writers of our time, a brilliant argument about the history and future of economic growth.
The years since the Great Crisis of 2008 have seen slow growth, high unemployment, falling home values, chronic deficits, a deepening disaster in Europe—and a stale argument between two false solutions, “austerity” on one side and “stimulus” on the other. Both sides and practically all analyses of the crisis so far take for granted that the economic growth from the early 1950s until 2000—interrupted only by the troubled 1970s—represented a normal performance. From this perspective, the crisis was an interruption, caused by bad policy or bad people, and full recovery is to be expected if the cause is corrected.
The End of Normal challenges this view. Placing the crisis in perspective, Galbraith argues that the 1970s already ended the age of easy growth. The 1980s and 1990s saw only uneven growth, with rising inequality within and between countries. And the 2000s saw the end even of that—despite frantic efforts to keep growth going with tax cuts, war spending, and financial deregulation. When the crisis finally came, stimulus and automatic stabilization were able to place a floor under economic collapse. But they are not able to bring about a return to high growth and full employment. In The End of Normal, “Galbraith puts his pessimism into an engaging, plausible frame. His contentions deserve the attention of all economists and serious financial minds across the political spectrum” (Publishers Weekly, starred review).
Reviewed by Hans G Despain
About the reviewer
Hans G Despain is Professor of Economics and Department Chair at Nichols College, Massachusetts. He encourages your correspondence: hans.despain@nichols.edu
James K Galbraith's The End of Normal, recently published, is a spectacular achievement in political economy generally, as a philosophical critique of the practice of economics and public policy in particular, and for its comprehensive and totalizing explanation of global monopoly-finance capitalism.
Galbraith’s primary focuses are threefold. Foremost, Galbraith explains the contradictions of the American and global corporate capitalistic system and its deep financial weaknesses. Second, Galbraith develops a critique of the conception of a stable “normal” capitalism. The conception of a “normal” stability according to Galbraith precluded the mainstream economists from foreseeing the radical instability of the financial arrangements prior to 2007. Third, Galbraith contends that the right and left have failed to understand the institutional structural shifts of contemporary corporate-finance capitalism. [My copy of The End of Normal is an advanced electronic copy, thus to avoid page misalignment, I provide chapter citations].
Galbraith contends one reason the Soviet system collapsed was that the system was insufficiently understood by social theorists. Likewise, one reason that the financial collapse of 2007-8 was such a surprise to the majority of economists and politicians is that American corporate capitalism is insufficiently understood (Epilogue).
The primary theoretical blockage is the dogmatic commitment to a sense of “normal” economic performance and the belief by “freshwater economists” (i.e., pro-market economists, many of whom are located around the U.S. great lakes region) that “normality” is achieved by market adjustment of prices, or “saltwater economists” (i.e. pro-market Keynesian-inspired economists, many of whom are located on the ocean coasts of the U.S.) who believe “normality” is achieved with economic management, market adjustment, and proper public policy (Chapter 4).
Galbraith contends that both beliefs are illusionary. The financial collapse of 2007-8 was, according to Galbraith, a “definitive” institutional shift. The models of freshwater economists never applied to the reality of capitalism, and the models of saltwater economists no longer apply. “That [the collapse] was not followed by a normal business cycle upturn on the model of postwar normality should not come as a surprise” (Chapter 9). Keynesian stimulus cannot cure the problems of contemporary corporate capitalism. “The institutional, infrastructure, resource basis, and psychological foundation for a Keynesian revival no longer exist” (Chapter 9). [for more Keynesian failures see Chapters 8, 9 and 14]
The proper metaphor according to Galbraith is the behavior of an engine (Chapter 6). Peak performance is achieved near the limits of an engine. Pushed past their limits, engines overheat, burn out, or melt down, in which case they must be rebuilt before they can be restarted. Our economic car “has suffered a transmission failure. A meltdown. More [Keynesian] gas in the engine will not make it go” (Chapter 9). Jobs cannot be retrieved by spending more money on the existing broken systems. Given more money, consumers pay down debt, businesses invest in technologies that save yet more labor, and banks have been setting on excess reserves. Keynesian stimulus is no longer effective (Chapter 8). “And a financial system is more like a nuclear reactor than it is like a car.” We need to clean up and rebuild.
In spite of the “very strong” notion of “normality” (or systemic balance, or equilibrium), structural institutional shifts have made such notions both obsolete (Prologue) and “dangerous” (Chapter 9). In the post-war economy economic growth became desirable, expected, perpetual, and “normal”. The debates during the “Golden Age” of capitalism were concerned with how much government intervention was needed to achieve “normal” economic growth (Chapter 1).
By the 1970s several “snakes” entered the “growth garden.” The Vietnam War would come to mark an institutional international shift away from the Bretton Woods agreement. The price of oil would rise significantly due to “domestic peak oil” production and the rise of the oil cartel OPEC. Then rose the deep recession of the 1970s. Galbraith contends these are harbingers of real geographical resource and institutional transformations, not merely temporary “shocks,” or “bad management, and policy mistakes” (Chapter 2).
The institutional physiology of the international political economy and American corporate capitalism shifted. Galbraith’s attempt to articulate this to an educated popular audience understates the profound philosophical argument he is lodging. This is an ontological critique. Models of economics, whether they be neo-classical, Keynesian, or Marxian have failed, according to Galbraith, to fully understand the explosive and unstable nature of the new institutional order (Chapter 4). Conservative market fundamentalist theories would come to dominate economic theory and policy (Chapter 3); they fundamentally misunderstand the ontology of contemporary corporate capitalism.
Market fundamentalism predominates largely due to the failures of Keynesian policy to manage the system. But the failures of Keynesianism did not, contrary to mainstream theories, usher in a “great moderation” and an end of crisis (Chapter 3). Instead, globalization, financialization, the fall of the Soviet system, the rise of China, the Iranian revolution, and the massive systemic-generated inequalities were indications of a highly precarious and unstable system.
Galbraith contends that the New New Industrial State (my term, in reference to Galbraith’s institutional development away from, but deeply rooted in, the notion of the New Industrial State of John Kenneth Galbraith 1967) must be understood as primarily financial. Galbraith explains very little of financialization, but instead contends the late Hyman Minsky’s analysis well captures the essence of this new financial system. Minsky is quite (in)famous for his metaphor: “stability generates instability”. “[W]hat is radical about Minsky’s thought is that it begins and ends within the financial system and never ventures outside of it” (Chapter 5). In Minsky’s model there is a specific and clear role of government “financial regulation” (Chapter 5). Galbraith fails to mention that Minsky further strongly supported fiscal and employment policy to end poverty (Minsky 2013). Nonetheless Galbraith’s strong point is that any serious analytical diagnoses must come to terms with the radical financial nature of the New New Industrial State. As Minsky (2013, 177) argued, the capitalist corporate system is “flawed” in that within it “the market mechanisms cannot achieve and maintain full employment” and it is “inherently [financially] myopic and needs to be permanently supplemented by the long view that government alone can have.”
The heart of the argument in The End of Normal is the four chapters constituting Part Two “The Four Horseman of the End of Growth.” If the New New Industrial State begins with the institutional manifestation of financialization, Galbraith contends that not only does financialization generate massive inequality and instability (see Galbraith 2012), but generates opportunities for colossal fraud. Galbraith contends we must “stipulate that the Great Financial Crisis was rooted in a vast scheme of financial fraud” (Chapter 9). Marxists tend to underplay the role of fraud so as to emphasis the systemic instability with or without fraud. Galbraith maintains this to be a mistake. He has an important point. In more Marxian language, fraud is a type of power-relation and allows superexploitation, or exploitation before, during, and after the production process.
Many economists believe technology stands “as our best hope for rescue from economic stagnation” (Chapter 8). Galbraith argues this is very unlikely. This is because technological innovation has tended to be labor-saving technical change and not new modes of jobs and consumption. “The plain result of the new technology is unemployment” (Chapter 8). Worse still, the technological shifts not only displace workers but destabilize business activity. “The great contingent events” of cheap fuel, along with the industrial technology to complement it, household income to consume, consume, consume, and the financial basis to propel it all “happened once. [However] there is no compelling reason to expect [it] to happen again” (Chapter 8). Technological change is now as much a drag on employment, consumption and investment as it was then a boost.
Galbraith further contends that the international balance of power may favor the U.S., but it does not favor capitalistic (megacorporate-dominated) trade. Military generated order can longer be maintained. The global economic stagnation and ubiquitous underdevelopment of hundreds of countries “have no remedy by military means.” Thus, the military maintained global order and war as ‘we knew it’ appear to have ended. “Under modern conditions there is no profit in the game” of war and military global management (Chapter 7).
The essential element of Galbraith’s argument is the first of the four “horseman.” Specifically, resource costs and the global dynamic they generate (in conjunction with financialization) are generating tremendous economic instability and political capriciousness. Galbraith maintains the inflation threat we face does not come from budget deficits or high employment, but from energy prices and costs. Central banks and international economic institutions simply do not have the capacity and competence to effectively manage these ‘wonders of mass destruction’ (WMDs) and instability and crises they generate.
The essential argument is that there is a “high-fixed” cost structure in global mega-corporate capitalism, increasing the demand and prices of economic resources such as oil. Each time there is an increase in aggregate demand (e.g., from China) the prices of resources increase, financial-monopolies and financial speculation begins to anticipate the rise in energy prices, increasing prices of resources and energy still more. In short, an increase in demand (from households, businesses, or governments), excites financial speculation, raises energy prices and production costs. Thus, energy prices are functioning as a “choke-chain” on growth and full-employment by increasing the costs of producing and decreasing business profits (Chapter 6). In more Marxian language: a simple monopoly-finance capital contradiction. This does not necessarily stop prices from rising, corporate monopoly business and monopoly financial activity may proceed in spite of high energy prices, fueling speculation even further. This generates a sequence of spiking prices and the inevitable bursting of the speculation bubble, causing a “whiplash” effect (Chapter 14) and significant instability and uncertainty (Chapter 6).
The policy-way forward has been little understood (Chapter 10), because the institutional shifts of financialization (Chapter 5), resource costs and the “choke-chain” and “whiplash effects” (Chapter 6), along with the tremendous shifts in international political and economic institutions, the inability of military-forced international order (Chapter 7), the labor-saving and business destabilizing nature of modern technological innovation (Chapter 8), and the symbiotic relationship between fraud and financialization (Chapter 9) have not been appreciated as a totality that has structurally manifested a New New Industrial State.
“Crackpot” economic reasoning has misunderstood the crisis and prescribes policy (e.g. austerity) that is sure to fail (Chapter 11). European countries stagnate due to a rigid monetary institutional framework and lack of effective built-in institutions to “automatically” redistribute during a recession. However, it is important to understand Europe is dealing with same “one” crisis (generated in the U.S. Galbraith contends). The PIGS acronym, usually standing for “Portugal, Iceland, Greece, Spain” is more true in meaning as “Principal Instigator Gold Sachs” (Chapter 13, note 1). However, European nations have very different institutional structures that have tended to weaken policy responses (Chapter 13).
Keynesian policy or stimulant spending ultimately will not be effective because of the “four horseman” of Part II of the book and because modern finance is no longer a motor of growth (Chapter 14). Instead we can follow Costas Lapavitsas’s (2013) argument, that banks have become institutions of “financial expropriation” and the deep institutional source of superexploitation (see also Despain 2014).
Galbraith contends we are entering a period of slow growth. The only way forward is economic planning (Epilogue). Currently the “planning” is being performed by corporations for their own enrichment. Planning can be aimed to provide greater benefits to more citizens and communities by being carried out by the public sector (Galbraith 2014 is deeply rooted in Galbraith 1973 and 1967). Galbraith argues public deficits are no constraint on spending in a planned-economy (Chapters 12, 5). Interest rates can be managed to put an upper limit on the growth of deficits (Chapter 12).
Galbraith’s policy prescriptions include support for public banks geared towards public purposes. He insists on the importance of the protection and extension of social insurance programs, including early retirement to make room for young workers. He supports a guaranteed (living) personal income (also once supported by ultra-conservative economist Milton Friedman). He stresses the urgency of “a large increase in minimum wage,” which establishes a real living wage, and tax policies that increase the share of national income going to labor and decreases the share of national income going to capital. Galbraith further insists on a large tax upon predatory rent-seeking activities.
We can certainly support these policies in principle. But conspicuously absent is the recognition that capitalism is no alternative: CINA (Despain 2013a) and Galbraith is certainly aware of, but completely ignores the Existing Alternatives to Start Emancipation: EASE (Despain 2013a). Moreover, there are “pragmatic” employment policies to provide work and dignity to individuals enduring exploitive corporate capital relations and bridging toward EASE (see Despain 2012, written as a critical complement to Galbraith’s policy proposals).
Galbraith’s critique of “The Marxian View” is obtuse and misleading. Galbraith contends that the “Marx-Baran-Sweezy-Bowles-Gintis position [strange conflation!] has been that capitalism is unstable and crisis inevitable. This theme roots the risk of crisis in specific properties of capital, monopoly capital and finance capital. It leaves open, and even encourages, the thought that a different social system might be less unstable and less prone to crisis,” which according to Galbraith is a historical weakness (Chapter 4). If the argument here is Marxian political economy has generally underemphasized institutions, I would concede the point. However, to suggest that Baran and Sweezy, Bowles and Gintis, and Marx underemphasize institutions is strange.
Galbraith’s critique of the Monthly Review tradition is not only strange but misleading. In direct reference to Monthly Review theorists John Foster and Robert McChesney (2012) and also to Despain (2013b), Galbraith asserts: “the crisis that they identify is not, strictly speaking, a financial crisis” (Chapter 4). Elsewhere on this tradition, Galbraith is simply wrong, “The problem for Marxians is that finance explains nothing on its own. In their vision, the role of finance is substantially cosmetic” (Chapter 4). Foster and McChesney (and Baran and Sweezy before them) express the utmost admiration for, and have incorporated the insights of, Minsky. For these theorists financialization is a manifestation of economic stagnation and monopoly capital, but once emergent finance takes on a life and dynamic of its own. It is to Foster’s and McChesney’s, and not Minsky’s, advantage that financialization is theorized to be rooted in social relations of production, rather than never venturing outside of finance (Chapter 5).
Galbraith lacks his own institutional analysis of financialization and the effects it has on households, non-financial enterprises, financial enterprises, public governments, educational institutions, and dialectical relationships between institutions (the latter is the subject of Lapavitsas 2013). The literature here is vast, and the bulk of it is deeply rooted in Marxian political economy. Yet Galbraith provides not one citation, strictly relying on reference to Minsky.
Galbraith’s The End of Normal will be highly esteemed and celebrated for many decades for its penetrating critiques, original theoretical insights, policy-minded orientation, and especially for the urgency of his tone and purpose.
10 August 2014
References
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Despain, Hans G. 2014 Review of Profiting without Producing: How Finance Exploits Us All by Costas Lapavitsas,” Marx and Philosophy Review of Books, February 13. https://marxandphilosophy.org.uk/reviewofbooks/reviews/2014/956
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Despain, Hans G. 2013a It’s the System Stupid: Structural Crises and the Need for Alternatives to Capitalism Monthly Review 65(6): 39-44 http://monthlyreview.org/2013/11/01/its-the-system-stupid/
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Despain, Hans G. 2013b Review of The Endless Crisis: How Monopoly-Finance Capital Produces Stagnation and Upheaval from the USA to China by John Bellamy Foster and Robert McChesney, January 30 https://marxandphilosophy.org.uk/reviewofbooks/reviews/2013/694
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Despain, Hans G. 2012 Pragmatic Employment Policy Post-Keynesian Economics Forum November 16 http://pke-forum.com/2012/11/16/pragmatic-employment-policy/
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Foster, John Bellamy and McChesney, Robert W. 2012 The Endless Crisis: How Monopoly-Finance Capital Produces Stagnation and Upheaval from the USA to China New York: Monthly Review Press.
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Galbraith, James K. 2012 Inequality and Instability: A Study of the World Economy Just Before the Great Crisis Oxford University Press, Oxford.
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Galbraith, John Kenneth. 1973 Economics and the Public Purpose Boston: Houghton Mifflin Company.
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Galbraith, John Kenneth. 1967 [2007] The Industrial State Princeton and Oxford: Princeton University Press.
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Lapavitsas, Costas. 2013 Profiting without Producing: How Finance Exploits Us All London and New York: Verso.
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Minsky, Hyman P. 2013 Ending Poverty: Jobs, Not Welfare Annandale-on-Hudson, NY: Levy Economics Institute.
URL: https://marxandphilosophy.org.uk/reviews/7923_the-end-of-normal-review-by-hans-g-despain/
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