Sam Gindin and ‘the cause of every crisis is different'

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Michael Roberts blog | Click HERE to read article

Let me summarise an alternative explanation to Gindin’s. Even though there was a rise in the rate of profit in the US from the early to mid 1980s, this peaked in 1997. The subsequent sharp rise in profitability from 2002 to 2006 was mainly fictitious in character, just delaying the oncoming slump that would be engendered by the squeeze in profitability in the productive sectors of the economy and indeed making the eventual slump, a Great Recession.

I am not arguing that each crisis of capitalism does not have its own characteristics. . .The trigger in 2008 was the huge expansion of fictitious capital that eventually collapsed when real value expansion could no longer sustain it, as the ratio of house prices to household income reached extremes.  I do not say that such triggers are not ‘causes', but argue that behind them is a general cause of crisis: the law of the tendency of the rate of profit to fall.