Over the last fifty year, the trajectory of household debt has undergone several transformations in some jurisdictions, especially in advanced capitalist countries such as the United States and the United Kingdom, where household debt has risen to historically high levels. This phenomenon appeared in tandem with the end of Fordist salaries and the unresolved crisis of over-accumulation, leading to massive losses of profitability in manufacturing.
The central argument put forth in this thesis is that the rise of household debt has not been a spontaneous balancing act of the markets in general, but a concrete political strategy of capital to restore the collapsing rate of profit in the real economy by way of financial speculation, especially household debt speculation.
In this context, the study examines, in a historically and theoretically informed manner, the unequal relationship of capital-labour relations and how this has intensified since the collapse of the Bretton Woods system in 1971. This period saw the liberalisation of the exchange rate and credit was unleashed, empowering financial capital at the expense of labour, thereby placing financial services and banks at the centre of national and global political economies.
The analysis provides both a concrete historical and contemporary perspective into underlying factors, causes and consequences that surround the growth of household debt in the United Kingdom and the fictitious levels of debt-led economic growth experienced, not just in the United Kingdom, but in many other countries in the world.
Lastly, the empirical analysis into the rise of household debt reveals that the housing market and the financial market have often been identified to be the causal agents at the root of most financial crises. The ARDL method was employed to investigate the presence of cointegrating relationships between the individual regressor. The evidence confirms that declining rate of profit, end of high Fordist wages and house price movements contributed significantly to the rise of household debt in the United Kingdom.
The operation of financial institutions to extract rent and profits from over-indebted households, especially in the 1990s and 2000s, eventually blew up during the global financial crisis of 2007-08, the consequences of which are felt to the present day.

Financialisation, profitability and the rise of household debt in the United Kingdom, 1971-2015

The ultimate cause of crises in capitalism is lack of profitability. The Keynesian and Austerians (the supporters of austerity measures), deny this. So their solutions to crises do not work. Keynesian state-induced stimulus programs (redistributive, monetary, and fiscal) cannot overcome the underlying tendency for profitability to fall. The same holds for the policies of "austerity," which are designed to reduce debt and raise profitability. These conclusions are particularly relevant for the weaker Eurozone economies in the midst of the euro crisis. In a case study of Argentina, we argue that it was not competitive devaluation that restored growth after the 2001 crisis, but default on state debt caused by the previous destruction of productive capital.

http://resistir.info/livros/carchedi_roberts_2013.pdf

The long roots of the present crisis: keynesians, austerians, and marx's law

This article reconceptualizes the history of the capitalist world-ecology through the enclosure of the Great Frontier. Conceptualizing capitalism as a world-ecology of power, profit and life, the author argues that the underlying source of capitalism’s success has been its capacity to “put nature to work” — as cheaply as possible. This Cheap Nature strategy combines capitalization (the logic of capital) with extra-economic appropriation, including the socially-necessary unpaid work of humans. At the core of every great wave of capitalist development has been the Four Cheaps: labor, food, energy, and raw materials. Those Cheap Natures were appropriated — through the dynamics of imperialism and militarized accumulation — through great waves of planetary enclosure, what I call the Great Frontier. These enclosures allowed imperial bourgeoisies to win the worldwide class struggle; to reduce the costs of production and therefore to advance the rate of profit; to resolve the surplus capital problem; and to sustain labor productivity growth. Today, the continuation of these four great bourgeois accomplishments are in question.
The climate crisis represents the biospheric contradiction of the worldwide class struggle in the web of life. The enclosure of the atmospheric commons is a pivotal moment in the epochal crisis of capitalism — understood through the dialectic of planetary life and world accumulation. The more that capital and the imperialist forces seek to subordinate the biosphere to the logic of endless accumulation, the more that webs of life find creative and non-linear ways to defy and resist the planetary dictatorship of capital.
This dialectic prefigures the Great Implosion. The Great Implosion thesis contends that the dynamics of non-linear change attributed to the climate crisis apply also to capitalism’s unfolding epochal crisis. The geohistorical transition now underway is an epochal inversion of capitalism’s defining relation with and within the web of life. This is the transition from the web of life as a cost-reducing and productivity-advancing dynamic to a cost-maximizing and productivity-reducing one. Its early signs are now widely grasped as the Great Stagnation. But this is only the beginning; we might call it a signaling crisis. The Great Stagnation signals the first moments of the Great Implosion.
The author constructs the rise and ongoing demise of the Great Frontier in three parts, focusing successively on environmental history, Civilizing Projects, and today’s climate crisis. In Part I, I reprise the historical-geographical outlines of the Great Frontier in the rise of capitalism. The author revisits core elements of the commodity frontier argument, developed to interpret the epochal shift in world environmental history after 1492.
From this historical-geographical sketch of the rise of capitalism, I unpack a twofold argument. One is that commodity frontiers are not strictly about commodities or commodification. They are about imperialism, which is always the world bourgeoisie’s favored mode of class formation. Imperialism is the world politics of the tendency (and countertendency) of the rate of profit to fall. It is premised not only on armed force but also on the geocultural hegemony and violence of Civilizing Projects. This is the focus of Part II. To be sure, commodification is in play; but to reduce the story to market forces replays a neo-Smithian error. It fails to grasp the centrality of imperialism and its mechanisms of class power in forging capitalism’s major commodity frontiers. Capitalist relations of Nature — I use the uppercase to underscore the real abstraction — are always politically-mediated by states that pursue the creation and reproduction of a “good business environment.” The (geo)political project of managing and securing webs of life for capital depends upon a geocultural project that makes possible the practical violence of commodity fetishism on the Great Frontier. This is civilizational fetishism. Its expressions are found the successive and overlapping Christianizing, Civilizing, and Developmentalist Projects of great empires, given intellectual expression over the longue duree by figures ranging from Francisco de Vitoria to Walt W. Rostow. These projects reproduce and reinvent the ruling abstractions of Civilization and Savagery. After 1949, this was President Truman’s “Point Four” declaration on the divide between the “developed” and “undeveloped world.”
A second argument foregrounds the connective tissues binding our historical-geographical assessments of capitalist frontier-making and today’s climate crisis. In Part III, I frame the planetary crisis as joining two fundamental moments: an unfolding crisis in life-making, registered widely in the climate and biodiversity literatures; and an unfolding crisis in profit-making, registered widely in the Great Stagnation discourse. Those two moments are unevenly combined in the geohistorical character of climate crisis, one in which the geophysical turning point finds expression in the destabilization of a trinity born in the seventeenth century: the climate class divide, climate patriarchy, climate apartheid. The seventeenth-century’s climate crisis hothoused the Great Frontier as accumulation strategy, assuming its modern form between 1550 and 1700 as a climate fix to the era’s “general crisis”: an era of interminable war, endemic political crisis, and economic instability. In this era we find the maturation of capitalism’s Planetary Proletariat, joining socially necessary “paid” and “unpaid” work by humans and the rest of nature: the differentiated unity of Proletariat, Femitariat, and Biotariat
The blossoming of the Great Frontier as a full-fledged productivist revolution — the Plantation Revolution — inaugurated the Great Cheapening, a long-run secular decline in the price (value composition) of the Big Four inputs: labor-power, food, energy, and raw materials. A specifically capitalist historical nature was born, and its epoch-making service to world accumulation was to allow the systematic reduction of re/production costs for capital.
Today we are witnessing that strategy’s implosion. The web of life is rapidly moving from a source of Cheapness to an unavoidable vector of rising costs. The Biotariat is in open revolt. In place of the “limits to growth,” the world-ecological alternative offers an alternative: Not only is “Another world possible” — the unofficial slogan of the World Social Form — but: Another class struggle is possible. We have in the Great Stagnation the revolt of the Biotariat — whose contribution to the revolutionary destabilization of capitalism has been underestimated by Environmentalists and Marxists alike. Although easily romanticized, grasping the web of life through the oikieos — the creative, generative, and multilayered pulse of life-making — asks us to reexamine human solidarity with the rest of nature in ways that challenge the Promethean domination of life and that explore the communist possibilities for liberation: “the creatures too should become free.” Foregrounding the oppressive and exploitative dynamics of work, life, and power, Planetary Justice prioritizes the abolition of the Proletarian-Biotarian-Femitarian relation created through the Great Frontier after 1492. This is the challenge of the planetary class struggle in the last days of the Holocene.

/pdf/del-gran-abaratamiento-a-la-gran-implosion-clase-clima-y-la-1nijz19y49.pdf

Del gran abaratamiento a la gran implosión. Clase, clima y la Gran Frontera

A caracterizacao do alimento enquanto mercadoria surge por meio de um sistema alimentar cada vez mais concentrado e determinado por poucas empresas transnacionais, sendo essa uma das consequencias da crise estrutural do capitalismo. Entender como a alimentacao esta dominada pela logica privada do capital e como o alimento virou mercadoria e uma das chaves para explicar o atual cenario produtor de doencas e de desigualdades economicas e sociais. A metodologia utilizada neste artigo partiu da perspectiva teorica marxista determinada pela concepcao critica-dialetica e de outras abordagens heterodoxas sobre a fase atual do capitalismo. Propoe-se uma discussao sobre o contexto recente do sistema alimentar global e o processo de massificacao do alimento em mercadoria, sobre os tracos gerais da dinâmica do capitalismo contemporâneo e sua crise com impactos sobre o sistema alimentar e sobre como esse novo contexto constrange o Estado brasileiro na garantia da Seguranca Alimentar e Nutricional e no Direito Humano a Alimentacao Adequada, impondo desafios importantes no campo da saude publica e na garantia de direitos humanos.

/pdf/o-indigesto-sistema-do-alimento-mercadoria-4xz36pq6d3.pdf

O indigesto sistema do alimento mercadoria

This thesis examines social responsibility within a capitalist economy by investigating socially responsible investing and, tangentially, corporate social responsibility. These concepts have been at the heart of economic and legal debates for hundreds of years, with no clearly defined consensus regarding how to account for multistakeholder welfare inside the market system. This point is brought to life by analyzing two dominant twentieth-century economic periods, 1945-1975/79 and post-1980, through the deliberations of Keynesian economics and Milton Friedman. This thesis postulates that since the 2008 global financial crisis, a new (i.e. third) economic period is taking shape, ushered in by both the ill-effects of late twentiethcentury policies and changing societal norms regarding for what and to whom a capitalist economy can and should be responsible. By utilizing the concept of ‘voice,’ as developed in the writings of economist Albert O. Hirschman, greater inclusiveness in economic development is being considered inside the market system through suggested qualitative parameters beyond the current quantitative measurement criteria of GDP. This thesis thus claims that the rules of the game are changing, with shareholders having both economic and legal precedent to influence, through voice, market behavior toward multi-stakeholder concerns.

/pdf/changing-the-rules-of-the-game-can-voicing-for-social-o773hqvgd8.pdf

Changing the Rules of the Game: Can Voicing for Social Responsibility Influence Market Behavior Toward Greater Inclusiveness in Economic Development?

The financial crisis that erupted in 2007 and the subsequent crisis of the euro have received enormous attention both in the media and in specialized journals One of the features of the recent literature is that the relation between Marx's law of the tendential fall in the rate of profit and the earthquake that has stricken the euro zone has been, with a few exceptions, overlooked The basic reason for this failure is that it has become almost a matter of common sense to regard Marx's law as internally inconsistent and empirically disproved What follows submits empirical material supporting the validity of the law It then proceeds to sketch the basic lines of Marx's analysis of crises Finally, it relates this analysis to the present financial turmoil and to the euro crisisKey words: falling profitability; financial crises; euro crisis; competitive devaluationIIn Marx's theory, technological innovations increase efficiency, ie the effect on output of science and technology as incorporated in the means of production1 Efficiency is measured by the number of laborers working with a certain quantity of means of production (or assets)2 This is the Labor/Assets (L/A) curve, the dotted line in Figure 1 It shows that the laborers working with means of production worth $1 million (deflated figures) dropped from 75 in 1947 to 6 in 2010Efficiency is the basic determinant of productivity, ie output per laborer This is the broken line in Figure 1 It shows that output per laborer climbs from $30 million in 1947 to $235 million in 2010 Productivity rises relatively moderately from the end of World War II to the middle of the 1980s But it jumps from then to the present This great increase, however, is deceitful In fact, output per laborer depends upon not only efficiency but also the rate of exploitation Figure 1 shows the movement in the rate of exploitation This is the continuous line It falls up to 1986 and rises since then Thus, between 1947 and 1986, falling rates of exploitation dampen the effect of rising efficiency on productivity From 1986 onwards, rising exploitation rates overstate that effectThe replacement of labor by means of production causes average profitability to fall The reason is as follows If only labor produces value (a point substantiated below), the more efficient capitalists replace labor with more efficient means of production and thus generate less (surplus) value The average rate of profit (ARP) falls But their own rate of profit rises In fact, due to their higher productivity, they produce a greater output (use values) per unit of capital invested than the laggard capitalists do By selling a higher output at the same price as that of the lower output of the low-productivity capitalists, they appropriate a share of the latter's surplus value Their rate of profit rises while that of the laggards falls As more and more capitalists introduce the new technologies, increasingly less labor is employed and less surplus value relative to the capital invested is generated Many go bankrupt while a few prosper This movement is summarized by the fall of ARP Generalized bankruptcies and unemployment, ie the crisis, follow3The reverse of L/A is the A/L ratio If L is expressed in wages rather than in labor units, we obtain the organic composition of capital, the ratio of constant capital (invested in means of production) to variable capital (invested in labor power) In Figure 2, C and V are constant capital and variable capital respectively and C/V is the organic composition This is the way Marx relates the rising efficiency (the substitution of labor power by means of production) to profitabilityThree conclusions follow from Figures 1 and 2 First, since the end of World War II, the trends of the ARP on the one hand and those of the organic composition, efficiency, and productivity on the other move in opposite directions This confirms Marx's theory that the ARP falls because the organic composition rises …

https://www.jstor.org/stable/10.13169/worlrevipoliecon.3.3.0288

From the Crisis of Surplus Value to the Crisis of the Euro

There are many misconceptions, some very old and some new, about Marx's law of the tendency of the rate of profit to fall. The paper attempts to show that Marx's law is not indeterminate but is logical and its conclusions are consistent from its premises. And the law can be tested empirically and shown to have substantial predictive power in explaining the regular occurrence of crises in capitalism.

Guglielmo Carchedi

Papers

The long roots of the present crisis: keynesians, austerians, and marx's law

From the Crisis of Surplus Value to the Crisis of the Euro

Marx's Law of Profitability: Answering Old and New Misconceptions