Hostname: page-component-76fb5796d-zzh7m Total loading time: 0 Render date: 2024-04-27T15:33:42.377Z Has data issue: false hasContentIssue false
  • English
  • Français

A theoretical framework for the analysis of the current global economic crisis: The financial market and the real economy

Published online by Cambridge University Press:  01 January 2023

Özgün Sarımehmet Duman
Özgün Sarımehmet Duman*
Affiliation:
İpek University, Turkey
*
Özgün Sarımehmet Duman, İpek University, Turan Güneş Bulvarı, 648. Cadde, 06550, Oran, Çankaya, Ankara, Turkey. Email: oduman@ipek.edu.tr
Get access Rights & Permissions [Opens in a new window]

Abstract

This article argues that the current global economic crisis is an outcome of the excessive growth of the financial market over the real economy, and hence, of fictitious profits over real profits. In investigating the interrelation between the financial market and the real economy, it makes a comparative inquiry into two key assertions regarding economic crisis within Marxism: the tendency for the rate of profit to fall and overaccumulation of capital. Accepting the claim that economic crisis is inherent to capitalism, this article probes the role of countervailing tendencies in battling the tendency for the rate of profit to fall. While crisis is an outcome of both the extensive growth of fictitious profits and the tendency for the rate of profit to fall, the latter is identified as the fundamental reason for the current crisis. Labour market reforms that were implemented following the emergence of the economic crisis represent the resurgence of countervailing tendencies and are the most explicit evidence that the fundamental reason for the crisis resides in the real economy.

Keywords

D24E44J40Current global economic crisisfictitious profitfinancial marketlabour market reformMarxist theories of crisisoveraccumulationrate of profitreal economyreal profit
Type
Non-Symposium Articles
Information
The Economic and Labour Relations Review , Volume 25 , Issue 2: Symposium - Some Impacts of Neoliberalism , June 2014 , pp. 240 - 252
Copyright
Copyright © The Author(s) 2014

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Bahçe, S, Köse, AH (2010) Krizin teğet geçtiği ülkeden krize bakış: teorinin naifliği gerçekliğin kabalığı [Crisis from the perspective of the country which is merely grazed by it: naivety of theory, crudeness of reality]. Praksis [Praxis] 22: 9–40 (in Turkish).Google Scholar
Bonefeld, W (1996) Monetarism and crisis. In: Bonefeld, W, Holloway, J (eds) Global Capital, National State and the Politics of Money. London: Macmillan Press, pp. 35–68.CrossRefGoogle Scholar
Bonefeld, W (2007) Globalisation and human progress. In: Bonefeld, W, Holloway, J (eds) Money and Class Struggle during the Era of Globalisation. Istanbul: Otonom, pp. 111–131.Google Scholar
Bonefeld, W, Holloway, J (1996) Conclusion: money and class struggle. In: Bonefeld, W, Holloway, J (eds) Global Capital, National State and the Politics of Money. London: Macmillan Press, pp. 210–227.Google Scholar
Bonefeld, W, Brown, A, Burnham, P (1995) A Major Crisis? The Politics of Economic Policy in Britain in the 1990s. Cambridge: Cambridge University Press.Google Scholar
Boratav, K (2009) Uluslararası kriz üzerine birkaç gözlem [Observations on international crisis]. Eğitim Bilim Toplum [Education Science Society] 7(27): 9–15 (in Turkish).Google Scholar
Callinicos, A (2010) Bonfire of Illusions: The Twin Crisis of the Liberal World. Cambridge: Polity Press.Google Scholar
Carchedi, G (2011) Behind and beyond the crisis. International Socialism, issue 132, 11 October. Available at: http://www.isj.org.uk/?id=761 (accessed 26 December 2013).Google Scholar
Clarke, S (1994) Marx’s Theory of Crisis. New York: St. Martin’s Press.Google Scholar
Clarke, S (2009) ‘Yeni solcular’ sınıf vurgusunu geriye atıyor [New leftists repelling the class emphasis]. Birgün Gazetesi [Birgün Newspaper]. Available at: http://www.birgunabone.net/research_index.php?category_code=1252689772&news_code=1252689893&year=2009&month=09&day=11 (accessed 15 March 2013) (in Turkish).Google Scholar
Dumenil, G, Levy, D (2002) The profit rate: where and how much did it fall? Did it recover? (USA 1948–2000). Review of Radical Political Economics 34(4): 437–461.Google Scholar
Federal Reserve System (2008) Flow of funds accounts. Available at: www.federalreserve.gov/ (accessed December 2008).Google Scholar
Fine, B (2009) Looking at the crisis through Marx. International Socialist Review, issue 64, March–April, 40–47.Google Scholar
Giacche, V (2011) Marx, the falling rate of profit, financialization, and the current crisis. International Journal of Political Economy 40(3): 18–32.CrossRefGoogle Scholar
Granados, JAT (2012) Statistical evidence of falling profits as cause of recession: a short note. Review of Radical Political Economics 44(4): 484–493.CrossRefGoogle Scholar
Harvey, D (2006) The Limits to Capital. London and New York: Verso.Google Scholar
Hay, C (2011) Pathology without crisis? The strange demise of the Anglo-liberal growth model. Government and Opposition 46(1): 1–31.Google Scholar
Hay, C (2013) Treating the symptom not the condition: crisis definition, deficit reduction and the search for a new British growth model. British Journal of Politics & International Relations 15(1): 23–37.Google Scholar
Holloway, J (1996) Global capital and the national state. In: Bonefeld, W, Holloway, J (eds) Global Capital, National State and the Politics of Money. London: Macmillan Press, pp. 116–140.Google Scholar
Jessop, B (2005) Hegemonya ve devlet kuramı [Hegemony and theory of state]. In: Yarar, B, Özkazanç, A (eds) Hegemonya, Post-Fordizm ve Küreselleşme Ekseninde Kapitalist Devlet [Capitalist State in Terms of Hegemony, Post-Fordism and Globalisation]. Istanbul: Iletisim, pp. 33–264 (in Turkish).Google Scholar
Jessop, B (2007) The Future of the Capitalist State. Cambridge: Polity Press.Google Scholar
Khatiwada, S (2010) Did the financial sector profit at the expense of the rest of the economy? Evidence from the United States. International Institute for Labour Studies Discussion Paper DP/206/2010. Geneva: International Labour Organisation.Google Scholar
Kliman, A (2010) The Persistent Fall in Profitability Underlying the Current Crisis: New Temporalist Evidence. New York: Marxist-Humanist Initiative.Google Scholar
Kotz, DM (2009) The financial and economic crisis of 2008: a systemic crisis of neoliberal capitalism. Review of Radical Political Economics 41(3): 305–317.CrossRefGoogle Scholar
Marx, K (1991) Capital, vol. III. London: Penguin Books.Google Scholar
Marx, K (1992 [1863–67]) Ökonomische Manuskripte 1863–1867 (Economic Manuscripts). Berlin: The Dietz Press.Google Scholar
Mohun, S (2009) Aggregate capital productivity in the US economy, 1964–2001. Cambridge Journal of Economics 33(5): 1023–1046.CrossRefGoogle Scholar
Moseley, F (2011) The U.S. economic crisis: fundamental causes and possible solutions. International Journal of Political Economy 40(3): 59–71.CrossRefGoogle Scholar
Resnick, S, Wolff, R (2010) The economic crisis: a Marxian interpretation. Rethinking Marxism: A Journal of Economics, Culture & Society 22(2): 170–186.CrossRefGoogle Scholar
Savran, S (1988) Önsöz: bunalım, sermayenin yeniden-yapılanması, yeni-liberalizm [Preface: depression, re-structuring of capital, neo-liberalism]. In: Satlıgan, N, Savran, S (eds) Dünya Kapitalizminin Bunalımı [Depression of World Capitalism]. Istanbul: Alan Yayıncılık, pp. 19–65 (in Turkish).Google Scholar
Savran, S (2008) Marx ne demişti ki? [What did Marx say?] Mavi Defter [Blue Notebook]. Available at: http://www.sendika.org/2008/11/marx-ne-demisti-ki-sungur-savran-mavidefter/ (accessed 15 March 2013) (in Turkish).Google Scholar
Stravelakis, N (2012) Marx’s theory of crisis in the context of financialization: analytical insights on the current Crisis. Journal of Advanced Studies in Finance 2(6): 171–193.Google Scholar
Tonak, AE (2009) Krizi anlarken [Understanding the crisis]. Çalışma ve Toplum [Work and Society] 1: 29–44 (in Turkish).Google Scholar
Tridico, P (2012) Financial crisis and global imbalances: its labour market origins and aftermath. Cambridge Journal of Economics 36(1): 17–42.CrossRefGoogle Scholar
US Bureau of Economic Analysis (2008) National income and product accounts. Available at: www.bea.gov/ (accessed December 2008).Google Scholar