Crisis : an aspect of capitalist development
Degree GrantorUniversity of Canterbury
Degree NameMaster of Arts
This thesis puts forward the idea that crisis is a 'natural' aspect of capitalist development. It thus locates the causes of the current crisis in the structure of the post-war economy and exhonerates individuals - workers, management and politicians - whose actions are seen as responses to economic conditions, and not their ultimate cause, Why doesn't the economy do its job properly? In the history of economics almost all the answers to this question sit on the continuum between 'too much free-trade' and 'too much state intervention'. The argument here attempts to transcend this controversy by demonstrating that the free-trade economy leads 'naturally' to both monopoly and crisis, and so eventually necessitates intervention, which itself cannot alleviate either tendency. A model is developed to show the situation under which balanced growth could conceiveably follow an uninterrupted path. When the model is applied to capitalist reproduction in a capitalist environment, however, economic expansion is seen to entail factors which become the causes of crisis. These include: underconsumption, over-accumulation of capital, disproportionality, and the tendency of the rate of profit to fall. This multifactor causal model of crisis is then applied to explain the regular oscillations in the rate of accumulation - or the industrial cycle. Finally, the task of explaining why the current series of industrial cycles is articulated in a continuing downward trend is begun, This involves an account of the role of the movements of finance capital and of inflationary credit expansion in disenabling a proper recovery in the period after 1974-75.