BOOK REVIEW/Seth Sandrosky

Fault Lines Explored in Great Recession

Beware the recovery from the downturn of 2007-2008, as tens of millions of people hang on and fall down. Chinese women assembling goods for export face labor conditions that female Wal-Mart “associates” stateside don’t.

But they share similar relations with bosses and capitalist-friendly governments that back lower wages as a lever for higher profits in a worldwide system.

People experience hardship in an era of turmoil for all but a wealthy few. To this end, David McNally, in Global Slump: The Economics and Politics of Crisis and Resistance (PM Press), sheds useful light on what is at stake and why.

McNally’s first chapter surveys the 2008 panic that radiated shock waves around the world. As he documents, the financial damage began in early 2007 with HSBC Holdings losing $11 billion in home mortgage investments.

The author explains how the blowing of an $8 trillion US housing bubble hammered private-sector demand and led to a government bailout of big Wall Street banks mostly, with the Obama stimulus package also flowing, too little, to Main Street. Crucially, with increased deficit spending from rescuing major financial players (“too big to fail”), governments worldwide, from Greece to Ireland, the UK and the US, are trying to exit the 2008 crisis with cuts to government spending.

According to McNally’s narrative, there is a bipartisan move (i.e., US GOPsters and Democrats, Labor and Tories in the UK) to cut such deficits.

This is how in part the system, with a visible hand from the governments upon which it relies to grow, purges excess production in goods and services. The aim is to create the conditions for improved return on investment.

McNally writes on behalf of those who are the least at fault for the crash and are in the cross-hairs of a “decade of pain,” thanks to government policies, e.g., austerity that will reduce their living and working standards, unless, of course, they can organize and mobilize for alternate policies. Such actions, he writes, involves “understanding the mechanisms capitalism uses to get out of crisis ... an intellectual task of the greatest urgency.”

Think that Marxists such as McNally sing in the same voice about capitalism’s tendencies to crisis? Well, think again. He parts ways with, for example, Robert Brenner, over the end of postwar prosperity in the 1970s, and the next quarter-century before the Great Recession, or the era of neo-liberalism. In contrast to Brenner who holds that the word capitalism entered a “long downturn” in the early 1970s, McNally maintains that industries maintained profitable growth when that postwar period ended in part through workplace restructuring like “lean production.”

Take US steel industrialists. They used technological means along with anti-union approaches and work speed-ups to wring profits and growth from their work forces. To be sure, capital flight to the Global South was and is part of that changing economic structure.

McNally, following Marx, has a two-fold definition of capital. It is the means of production, or factories, offices and machinery. At the same time, capital is a social relation of waged-laborers and their bosses.

In the Global North, workers would get credit lines instead of wage raises over the next 25 years.

In brief, this toxic brew sparked social inequality. In the history of capitalism, this gap breeds systemic instability.

McNally focuses closely on the gender and racial oppression built into capitalism. This is a major strength of his book.

Further, he surveys popular resistance movements, from China to Mexico, Guadeloupe, Martinique, France and the US.

The role of the US military in enforcing the economic rule of American capital is sparse. Yet McNally has, concisely, delivered a radical description of a crippled and crippling social system.

His prescription for a way of living that puts people first is clear-eyed, and thus empowering for readers.

Seth Sandronsky writes in Sacramento. Email

From The Progressive Populist, May 1, 2011

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