- Paperback ISBN: 9781552663950
- Paperback Price: $14.95 CAD
- Publication Date: Aug 2010
- Pages: 144
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In and Out of Crisis
The Global Financial Meltdown and Left Alternatives
While many are wondering if another world is possible, few are mapping out avenues to a post-capitalist future. In this groundbreaking analysis of the meltdown, renowned political economists Albo, Gindin and Panitch locate the roots of the crisis in the inner logic of capitalism itself and illuminate how the era of neoliberal free markets has been undergirded by massive state intervention. The authors argue that it’s time to start thinking about transformative alternatives to capitalism — and how to build the collective capacity to get us there. In and Out of Crisis stands to be the enduring critique of the crisis.
“Once again, Panitch, Gindin, and Albo show that they have few rivals and no betters in analyzing the relations between politics and economics. ... At once sobering and inspiring, this is one of the few pieces of writing … that’s essential to understanding the sources and uses of crisis. Splendid and essential.”
— Doug Henwood, Left Business Observer, author of After the New Economy and Wall Street
Preface • Surveying the Crisis: Is Neoliberalism Over? • Neoliberalism, Finance, and Crises • Finance, Regulation, and the American State • Crisis Management from Bush to Obama • From Finance to Industry: The Crisis in Auto • Labor’s Impasse and the Left • Another Way out of the Crisis? Strategic Considerations for the North American Left • Ten Theses on the Crisis Suggested Readings; Notes.
About the Authors
Greg Albo is a professor of Political Science at York University in Toronto.
Sam Gindin is a Canadian academic and intellectual who served as research director of the Canadian region of the United Auto Workers (UAW) union and later as chief economist and Assistant to the President of the Canadian Auto Workers (CAW) union after the latter became independent from its American parent organization.
Gindin is a graduate of the University of Manitoba. He worked as a research officer for the New Democratic Party of Manitoba and later taught at the University of Prince Edward Island. He obtained his MA in economics from the University of Wisconsin-Madison, but while working on his PhD dissertation in 1974, he took up the position of first director of research for what was then the Canadian section of the UAW. He rose within the union and served as an assistant to both Bob White and Buzz Hargrove, where he participated in major collective bargaining, the formation of union and social policy, and strategic discussions on the structure and direction of the union. He also wrote a book on the history of the CAW entitled The Canadian Auto Workers: The Birth and Transformation of a Union.
In 2000, Gindin retired from the CAW. He joined the faculty of York University in the Political Science department as Packer Visitor in Social Justice, where he continues to teach.
Leo Panitch is a Distinguished Research Professor, renowned political economist, Marxist theorist and editor of the Socialist Register. He received a B.A. (Hons.) from the University of Manitoba in 1967 and a M.Sc.(Hons.) and PhD from the London School of Economics and Political Science in 1968 and 1974, respectively. He was a Lecturer, Assistant Professor, Associate Professor and Professor at Carleton University between 1972 and 1984. He has been a Professor of Political Science at York University since 1984. He was the Chair of the Department of Political Science at York from 1988-1994. He was the General Co-editor of State and Economic Life series, U. of T. Press, from 1979 to 1995 and is the Co-founder and a Board Member of Studies in Political Economy. He is also the author of numerous articles and books dealing with political science including The End of Parliamentary Socialism (1997). He was a member of the Movement for an Independent and Socialist Canada, 1973-1975, the Ottawa Committee for Labour Action, 1975-1984, the Canadian Political Science Association, the Committee of Socialist Studies, the Marxist Institute and the Royal Society of Canada. He is currently a supporter of the Socialist Project.
Among the many books on the contemporary economic crisis, In and Out of Crisis is in a class of its own. Three prominent scholar-activists have teamed up to provide an insightful and provocative analysis of the crisis and its implications for the future of neoliberalism, the American empire and the North American Left. In doing so, this new book picks up themes common to Panitch and Gindin’s on-going work on the American empire and Albo’s research on neoliberalism.
This is a concise, relatively accessible book, which presents a robust political intervention into current political economy and strategic debates on the Left. It begins with a concise history of the history of financial crises, state management of crises, the rise of neoliberalism and financialization. It then moves on to provide a detailed history and analysis of the current financial crisis and the American state’s role in managing and containing the crisis. Along the way, the authors also provide a chapter focused on the sweeping restructuring in the North American auto industry. Overall, Albo et al. argue that some key points which the Left has historically tended to poorly theorize (such as the relation between state and market, deregulation and neoliberalism, and American imperialism) have weakened the Left’s analysis and response to the current crisis.
To appreciate the specificity of their approach to theorizing the crisis, it is useful to carefully identify what is distinct, if not necessarily unique, and notable in their analysis. First, the authors argue that the crisis was primarily a crisis within the American financial system. The dramatic growth of securitized sub-prime mortgages, which comprised 60% of the American market for asset backed securities, meant that the whole financial system became extremely vulnerable to the volatility in this segment of the market. This financial crisis, unlike some stock market crashes, became a general economic crisis because of its specific locus in the housing sector and the centrality of that to consumer spending. The global reach of the crisis was due to both the global circulation of complex financial assets based on consumer mortgages but also due the global importance of the American consumer market. The authors insist that this was not a crisis rooted in a profitability decline in the sphere of production. However, as they outline in chapter five, the North American auto sector (the big three, if not the foreign transplants) was the one sector of the economy that was in crisis before the recession.
Second, in a related point and contrary to some other Left theorists, Albo et al. argue that neoliberalism had succeeded, at least on its own terms (generating modest economic growth while maintaining low inflation thus reviving corporate profitability) after the crisis of the 70s. They refer to the dynamic nature of capitalism under neoliberalism (unlike those, such as Robert Brenner, who refer to a long downturn or depict the period since the 70s as one largely of stagnation and financial speculation). In part, this dynamism was due to the very success of financial capitalism, unstable as it is. Again contrary to many on the left, these authors argue that financial innovation was a key part of capitalist dynamism over the past 30 years or so, rather than being mere speculation, or working at cross purposes to the “real” economy. This new age of finance played a central role in disciplining and integrating labour into markets as workers, consumers, investors (particularly of pension funds), borrowers, and home-owners.
Third, they argue that the massive budget stimuli, state bailouts of financial and manufacturing, and talk of re-regulation do not represent a shift away from neoliberalism. Albo et al. forcefully insist that many on the left have misunderstood neoliberalism as the withdrawal of the state. This is a misunderstanding of the relationship between states and markets. Instead, they explain that “capitalist markets and capitalist states are deeply intertwined in the class and power structures of global capitalism” (10). The fundamental relationship between capitalist states and financial markets cannot be understood in terms of how much or little regulation the former puts upon the latter. It needs to be understood in terms of the guarantee the state provides to property. “Neoliberalism should be understood as a particular form of class rule and state power that intensifies competitive imperatives for both firms and workers, increases dependence on market in daily life and reinforces the dominant hierarchies of the world market, with the U.S. at its apex” (28). The authors point out that “Neoliberalism brought a change in the mode of regulation, but there wasn’t less regulation. Moreover, freer markets often require more rules” (35).
Fourth, just as reports of the death of neoliberalism have been greatly exaggerated, the crisis does not represent the end, or significant weakening, of the American empire. Albo et al. go so far as to suggest that the crisis “confirms U.S. imperial leadership” (86). The imperial relationships that built today’s global capitalism have persisted through the crisis.
Finally, Albo et al. paint a particularly bleak picture of the contemporary North American left as weak, defensive, defeated, marginalized, and lacking organizational coherence. As they note, “Competition…fragmented the working class. It eroded their one ultimate strength – solidarity” (79). The various challenges currently facing the Left are analyzed critically and comprehensively. The decline in trade union membership due to the neoliberal offensive as well as sectoral change of economy has put the trade union movement on the defensive. They place the labour movement at the centre of left politics analysis but in doing so they stress the need for the renewal of the labour movement. Unions need to reinvent themselves by adopting various tactics like “living wage” struggles in alliance with community organizations (96). Arguing that the labour movement can not lead the struggle for social transformation, the authors remain supporters of the need for a socialist political party. On the policy front, among other bold declarations, they call for the nationalization of the banking sector and its transformation into a public utility.
Perhaps not all readers will be convinced by their arguments about the continuing strength of neoliberalism and American economic leadership but their evidence is compelling and provides a useful reminder not to, once again, prematurely pronounce the end of American hegemony. The authors’ arguments and analysis are nicely summarized in the “Ten Theses on the Crisis” in the concluding chapter. With all its propositions the book could be considered a manual for the contemporary Left. An economic crisis combined with wishful thinking is insufficient to defeat neoliberalism. The missing variable is an organized, visionary and militant working-class movement.
—Reviewed by Kanchan Sarker
The University of British Columbia, Okanaga
Socialist Studies 6(2) Fall 2010
Throughout the counter-globalization movement and into the era of the Bush Administration, I tried to wrap my head around a way to simply explain what is meant by the term “Neoliberalism”. I would say to classes, friends, and fellow activists that my take was that “Neoliberalism is characterized by privatization, deregulation of labor and trade and the commodification of more intimate and complex aspects of life than previous eras of capitalism had produced.” But then there was the hassle of explaining the “Neo” part, the confused definitions of “liberal” popularly used in the U.S.,the difference between its theory and its practice (often involving a much deeper and more integral role for government than my simple summary could capture). And then comes the “Great Recession”, also known as the financial crisis of 2007-2010, and everything changes.
It is no longer difficult to plainly see the contradictions of the Neoliberal policies of the last thirty years. Especially the role of the United States government in facilitating the maintenance and consolidation of industrial and financial power despite rhetoric of “deregulation and privatization.” The bail-out plan alone makes it hard to deny and easy to understand that the U.S. State is integral and necessary to the recovery and perpetuation of this global financial mess. Canadian political economists Leo Panitch, Sam Gindin, and Greg Albo explain this in wonderfully clear terms in their latest book In and Out of Crisis: The Global Financial Meltdown and Left Alternatives out last spring on PM Press/Spectre Imprint (the imprint is coordinated by Sasha Lilley of the wonderfully insightful podcast Against the Grain).
This short book compiles several essays, many of which were developed for or inspired by the work of the Socialist Project, an independent socialist network based in Ontario. It is easy to tell that all three authors are educators (they all teach at York University in Toronto) because of their methodical approach to communicating their ideas. Key passages from the book are broken down in the final chapter as “Ten Thesis on the Crisis” which reviews and simplifies the history and analysis presented in chapters like “Surveying the Crisis: Is Neoliberalism Over?”; “Crisis Management from Bush to Obama”; and “Labor’s Impasse and the Left” to name a few. It was written as an educational and organizing tool.
What makes this book stand out besides it’s post-crisis analysis of Neoliberalism is its belief in the renewal of the Left and its deep connection to actually existing social movements. So many Marxist historians and philosophers write as if there is no social movement worth engaging or if there is a shout-out to an organizing effort, it reads as if it was pulled from a hat. These authors have put time and energy through the years in supporting organized labor throughout North America, particularly with the Canadian Auto Workers Union where Gindin was research director. The book presents the clearest explanation of the “Defeat of Labor” which has occurred in recent decades, going beyond simplistic descriptions of deindustrialization to elaborate on the interconnectedness between off-shoring, automation, free-trade policies like NAFTA, stagnant wages, and the integration of workers into the financial sector through pensions and real-estate investments. The trio’s focus is not limited to an exclusively Union way forward, and they repeatedly call for the need to connect organized labor to other social movements to renew working class culture and politics as a step towards creating Left political alternatives to capitalism.
The short 129 pages of In and Out of the Crisis make it a useful tool that could be directed towards busy organizers and activists who literally don’t have the time to dig into anything else. And it’s clearly articulated descriptions of the crisis and possible ways forward make it the most generally useful book to come out of this economic crisis. I hope that it can get used to its fullest potential.
- Daniel Tucker, miscprojects.com July 19,2010