The Long Wave Revisited

Mark Jones Jones_M at
Thu Sep 10 07:46:57 PDT 1998

Carl Remick wrote:
> Thought this was an interesting quote from today's Wall Street Journal
> article, "Many Economists Think Japan Is in a 'Liquidity Trap,' And
> Breaking Out Will Require More Than Cutting Rates": "One reason the
> world has gone so long without a liquidity trap, says [Berkeley economic
> historian Barry] Eichengreen, is the tight financial regulation that
> followed the Great Depression, controls that have since been eased
> around the world. 'The possibility of a large-scale banking crisis was
> suppressed for decades after World War II,' he says. 'We've reaped many
> of the benefits of liberalization, but those benefits come with a dark
> side, and we're now seeing that in Japan.'"
> Carl Remick

But as Rakesh's truly marvellous writings on Grossman and Brenner show or imply (thanks, Rakesh, we are all in your debt) the Bretton Woods system could only have served to promote the unrestrained development (or rather, development without the usual cyclical vents and interrupts) of the contradictions 'within the abode of production' which was the reality of the postwar long boom: ie the stoking of the furnace of class struggle. The idea that liberalisation is the enemy (taken to an extreme here by Chris Burford) and that precisely a return to the postwar halcyon era is indicated, now being heard even in the rockribbed WSJ, is really an important one to address: it is the question of questions. Can a return to the conventions of Bretton Woods renew accumulation? Or is the bust here to stay? Actually it is only necessary to take a slightly longer views, say the 'short C20' to answer this question. Keynesianism has never and can never work. Bretton Woods was all illusion: the reality is one of an ascedning spiral of historical crises of accumulation which began in the late C18 and is now reaching an apogee.

Mark --

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