> Philip Pilkington wrote:
>
> I think that you may be painting an over-simplistic view of the
>> structure of Brenner's argument.
>>
>
> We're talking about two different things here. You're talking about
> Brenner's basic argument, first laid out in Economics of Global Turbulence,
> where he said we were in the midst of a Long Downturn whose roots lay in
> chronic overcapacity and a resulting profitability crisis, and whose
> symptoms were various.
>
> I'm talking about Brenner's recent effort (in the interview I cited) to
> depict the aforementioned profitability plight as the *cause* of the
> *current* financial/economic crisis. (Actually, the effort is not so new,
> since he also said the same thing about the 1998 financial crisis, which was
> happening around the time he published EoGT.)
>
> In order to get from (a) long-term crisis-of-profitability to (b) today's
> insolvent-banks-and-consumers, Brenner had to put together some chain of
> causation, and he did. He constructed the four-step chain I summarized:
>
> (1) There was a crisis of profitability due to overcapacity
>> (2) The profitability crisis forced capitalists to cut wages and social
>> spending
>> (3) The wage cuts led to insufficient aggregate demand
>> (4) To address the demand problem, the authorities engineered or permitted
>> a series of bubbles which allowed the growth of household credit to
>> compensate for workers' declining wages
>>
>
> Now, I happen to find the general idea of lower-80% workers borrowing
> (against the backdrop of asset bubbles) to make up for declining wages, thus
> setting up a debt bomb, to be perfectly plausible. But if their declining
> wages were not caused by capitalists cutting their wages to boost profits
> that were under pressure from overcapacity - then in what way is the current
> crisis connected with the alleged overcapacity problem? It isn't.
>
>
Well, I don't really believe that you can take any of Brenner's statements outside of his overall theoretical framework. You can't simply take them at face value without understanding the theoretical framework supporting them. That would be like reading some of Marx's letters to Engels post-Capital without reading Capital.
As for how the current crisis is connected to the alleged overcapacity problem - and again, I'm only defending Brenner from the point of view of his own theories - I would say how: is it NOT connected? If Brenner's central idea is that the overcapacity problem is causing pretty much EVERY major economic problem then the two must be connected in a multitude of different ways. Brenner clearly states, and I mentioned this above, that the overcapacity/profit problem was the central determinate in ALL of the economic "tactics" deployed in the past few decades. These include wage suppression, outmaneuvering labour, the move toward finance, the breaking down of trade barriers etc. etc. etc. It seems to be his "grand narrative" as the postmodernists would say and thus every piece of empirical data is read "through" this lens.