From the mid-1980s, investors in the US increasingly directed capital towards the financial sector at the expense of non-financial sectors, lured by the perception of higher profits. This flow of capital inflated asset prices, creating the stock market and housing bubbles which burst when the imbalance between stagnant incomes and rising debts triggered the banking meltdown. Profitability and the Great Recession analyses these trends in profitability and capital accumulation, which the authors identify as the root cause of the financial crisis, in the context of the US and other major OECD countries. Drawing on insights from Adam Smith, David Ricardo, John Stuart Mill and Karl Marx, the authors interpret the relationship between capital accumulation and profitability trends through the conceptual lens of classical political economy. The book provides extensive empirical evidence of declining rates of US non-financial corporate accumulations from the mid-1960s and profitability trends in that sector falling from post-war highs. In contrast to this, it is shown that there was a vigorous rise of profitability in the financial sector from a 1982 trough to the early part of the twenty-first century, which led to the bloating of that sector. The authors conclude that the long-term falling accumulation trend in the non-financial corporate sector, highlighted by the bankruptcy of major automobile corporations, stands out as the underlying force that transformed the financial crisis into a fully-fledged Great Recession. This book will be of interest to students and researchers in the areas of economics, political economy, business and finance.

The 1970s were a pivotal decade for the US economy: deindustrialization broke the power of the labor unions and made possible the redistribution of income in favor of corporate profits; globalization and offshore investments opened alternatives to domestic nonfinancial capital accumulation; domestic productivity growth declined; and labor-saving technology empowered superstar corporations to rapidly gain market share. This book argues that the persistent fall in profitability, leading to the stagflation crisis, was a direct result of the transition from the Fordist phase of capital accumulation, based on large-scale manufacturing, to the neoliberal phase and the rising power of finance. Neoliberalism restored the power of rentiers but not the profit rates of nonfinancial corporations. Falling accumulation rates weakened the growth capacity of nonfinancial corporate firms and secular stagnation became the norm. Neo-Keynesian economists, Larry Summers and Paul Krugman, explained the persistence of secular stagnation with arguments borrowed from Alvin Hansen in the 1930s, such as the declining birth rate or the falling relative prices of investment goods, hence a shortfall of demand. In the Classical paradigm, profitability drives capital accumulation and falling profitability slows down growth. As the accumulation rate declined and the capacity growth diminished, breakdowns in supply links, due to the COVID-19 pandemic, prevented large infusions of purchasing power to find matching levels of supply, hence the stagflation crisis returned. The book will be a great asset to researchers and scholars interested in the development of Classical Political Economy concerning issues related to inflation, stagnation, growing inequality, and the next phase of neoliberalism.

There is enormous inequality between the income and wealth of the richest 1 percent and all other Americans. While the top 1 percent own 42 percent of all wealth in America, the lower half on the income ladder has only 2 percent of all of the wealth. This book develops a viewpoint contrary to the prevailing conservative paradigm, setting out both reasons for this inequality and the impact of this. To explain inequality, conservative economists focus on individual characteristics such as intelligence and hard work. This book puts forward new evidence to show that changes in economic inequality are primarily due to characteristics inherent in the standard operation of capitalist institutions. Furthermore, the authors seek to explain the cycle of boom and bust by considering political and social factors often overlooked by conservative economists. This book also explores how wealth influences political policies in a way that increases economic inequality even more than its present level. Through analysis of American political and economic institutions, Inequality, Boom, and Bust presents concrete steps for an activist, progressive policy to greatly reduce inequality through free healthcare, free higher education, and reduced unemployment.

The Great Recession was the largest crisis of capitalism since the Great Depression and the largest crisis in neoliberalism to date, sending shockwaves throughout the global economy. States scrambled to right the sinking capitalist ship in order to maintain high levels of accumulation. In Canada, as in so many other countries, the state introduced austerity measures aimed at organized labour and the broader working class. This volume explores the political economy of The Great Recession in Canada, and focuses on how labour has responded to the crisis, neoliberalism, and austerity measures. Table of Contents: 1. From Crisis To Austerity: An Introduction/Tim Fowler 2. The Canadian State and the Crisis: Theoretical and Historical Context/ Stephen McBride & Heather Whiteside 3. From the Great Recession of 2008-2009 to Fiscal Austerity: The Role of Inequality/Akhter Faroque and Brian K. MacLean 4. Neoliberalism, Capitalist Crisis, and Continuing Austerity in the Ontario State/Tim Fowler 5. Collective Bargaining in a Time of Austerity: Public-Sector Unions and the University Sector in Ontario/Mathew Nelson & James Meades 6. "We Will Fight This Crisis" Auto Workers Resist an Industrial Meltdown/ Bill Murnighan & Jim Stanford 7. The Decline of the Labour Movement: A Socialist Perspective/ Murray E.G. Smith & Jonah Butovsky 8. Labour's Response to the Crisis and the Future of Working-Class Politics/ David Camfield Endorsements: "...[a] thought-provoking collection on contemporary austerity and the attack on labour reveals how divergent interpretations of capitalist crisis frame different understandings of the contemporary crisis of the workers' movement." - Bryan D. Palmer is Canada Research Chair at Trent University, author of James P. Cannon and the Origins of the American Revolutionary Left, 1890-1928 and Editor of Labour/Le Travail. "...a big-picture look at how Canadian governments and business sought solutions favouring the wealthy at the expense of an ever more constrained labour movement. The collection will be a critical read for anyone seeking a comprehensive account of the crisis and how Canada's politics of austerity have affected unions and workers across the country." - John Peters teaches labour studies at Laurentian University and is editor of Boom, Bust, Crisis: Labour, Corporate Power, and Politics in 21st Century Canada

The world financial crisis of 1997-99 was the most important international economic event since the oil shocks of the 1970s and the associated debt crisis of the 1980s. What were its political causes and consequences? In particular, how did interest group coalitions and political institutions affect pre-crisis economic policies and post-crisis responses? This book focuses on how policymaking coalitions are formed and how political institutions mediate the pressure of rival coalitions. This approach is applied to 13 countries drawn from the main crisis-affected regions of the world economy East Asia, Southeast Asia, Latin America and Eastern Europe."

This collection of articles from Challenge magazine and other sources surveys the key questions of monetary policy, financial instability the legacy of stagflation and international relations. An examination of how regulatory reform has combined with Reaganomics is also discussed.