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The Crisis Of '08 Reading List
The best books to help you make sense of Marx, Keynes, the Great
Depression, and how we got where we are now.
John B. Judis, The New Republic Published: Wednesday, December 24, 2008
Every few years, someone urges me to do a Christmas book list, and while
protesting my ignorance and incompetence, I gladly comply. This year's
subject is the current global recession, which threatens to become a
global depression. This is a layman's list, because I am strictly a
layman on the subject of economics. You don't have to know anything
about string theory to read any of the books I recommend.
I learned most (or what little I know) of economics from reading on my
own or from study groups we used to hold in the fading days of the new
left. I read all three volumes of Capital in a study group organized by
the late Harry Chang, a Korean immigrant to the Bay Area who was a
computer programmer by day (in the keypunch era) and a Marxist scholar
by night. I read Keynes under sporadic supervision of economist Jim
O'Connor, the author of The Fiscal Crisis of the State, and a fellow
member of the collective that published Socialist Revolution (which in
1978 became Socialist Review). And I got my introduction to economic
history from historian Marty Sklar, who was also a member of that
collective.
A decade ago, I might have been embarrassed to admit that I was raised
on Marx and Marxism, but I am convinced that the left is coming back.
Friedrich Hayek is going to be out; Friedrich Engels in. Larry Kudlow
out; Larry Mishel in. And why is that? Because a severe global recession
like this puts in relief the transient, fragile, and corruptible nature
of capitalism, and the looming contradiction between what Marx called
the forces and relations of production evidenced in unemployed engineers
and boarded up factories and growing poverty amidst a potential for
abundance. As capitalism itself--or at the least the vaunted miracle of
the free market--becomes problematic, the left is poised for an
intellectual comeback. So here are four topics and some books to read
about them, plus a few articles, from someone who learned economics by
reading and rereading Paul Baran and Paul Sweezy's Monopoly Capital.
1. The current crisis. I was warning my colleagues of an encroaching
disaster a year ago, because I was reading the columns and articles of
Paul Krugman, Nouriel Roubini, Larry Summers, and Dean Baker. They were
on top of this when Hank Paulson and Ben Bernanke were still telling
everyone not to worry. Of the current books I've read (and I haven't
read many), I'm very high on Financial Times columnist Martin Wolf's
Fixing Global Finance, George Cooper's The Origin of Financial Crises,
Jamie Galbraith's The Predator State, and Dean Baker's Plunder and
Blunder. Wolf is terrific on the international currency mess--and the
Financial Times is the paper to read--Cooper is first-rate on the
irrationality of money and finance, Galbraith has a good explanation of
how we got to where we are, and how to get out of it, and Baker is the
expert on the housing bubble. I also liked Krugman's The Return of
Depression Economics when it appeared almost ten years ago (Short take:
If it could happen to Japan, it could happen to us). There is a new
edition that incorporates some material about 2008, but I haven't read it.
2. John Maynard Keynes. Keynes is back in vogue, and rightly so. One
economist--I can't remember who it was--recently warned against reading
The General Theory of Employment, Interest, and Money because it was
written strictly for economists. I don't agree at all. It's a very hard
book, especially some of the middle sections, but worth reading and
rereading. If you don't have energy for the whole thing, read the first
three chapters, some of the middle chapters (7, 10, 16, and 18 are my
suggestions) and the last three. I suggest, however, a guide. The best
I've found is Dudley Dillard's The Economics of John Maynard Keynes,
which, to my amazement, is still in print after sixty years. I also like
Hyman Minsky and Paul Davidson's guidebooks to Keynes. But you've got to
read Robert Skidelsky's three-volume biography of Keynes, Hopes
Betrayed, The Economist as Savior, and Fighting for Freedom (also now
available in an abridged one-volume edition). Believe me, this is one of
the great biographies. The way he brings together Keynes, the gay
aesthete of Bloomsbury, and Keynes, the economist and man of worldly
affairs, is something to behold. Skidelsky's second volume is also the
best introduction to Keynes's economics, because you learn that exactly
those ideas you found mystifying or most difficult in Keynes were hotly
debated between him and his colleagues.
3. The Great Depression. There have been a lot of books on this subject,
but most of what I read I read decades ago, so I'm sure I'm going to
overlook worthy choices. Still, there are two older books that continue
to stand up. George Soule was an editor of The New Republic during the
1930s. He was also an economist and in 1947 published a study of the
American economy from 1917 to 1929 entitled Prosperity Decade. Soule
shows that well before 1929, there were rumblings of trouble in the
American economy--not only in the stock market bubble, but in
overcapacity in key industries like auto, and in the rise of
technological unemployment. You'll see the surprising resemblance to our
own decade, including an anticipatory recession in 1926 like the one in
2001. On the international crisis of the 1930s, I like Charles P.
Kindleberger's The World in Depression, which I reread two months ago
when I was writing about the current international imbroglio. I want
also to mention an essay by Sklar in The United States as a Developing
Country. In chapter five, "Some Political and Cultural Consequences of
the Disaccumulation of Capital," Sklar puts forward the idea that during
the 1920s, capitalism shifted from the accumulation to disaccumulation
of capital. That's Marxist jargon, but what it means is that goods
production began to expand as a function of the reduction rather than
increase in labor-time and in the labor force. That created an enormous
opportunity, but also a potential crisis. The depression of the 1930s,
Sklar argues, was the first "disaccumulationist" depression. One of his
former students, historian Jim Livingston from Rutgers, has put forward
a similar analysis of the current recession.
4. Marx and Marxism. Marx, like Keynes, is best read in his own words.
There are a lot of brilliant shorter works, but I'd put the first volume
of Capital up there with The Origin of Species, The Interpretation of
Dreams, and The Philosophical Investigations on my list of great books
of the last two hundred years. It's not a guide to starting your own
business and really doesn't have a theory of crises. Some of that is in
the other unfinished volumes. What volume one does is establish
capitalism as a phase, and perhaps a passing phase, in world history
whose very nature has consisted in disguising that fact from worker and
capitalist alike. You read Capital to understand the historical
underpinnings, not the mechanics of capitalism. Marx's theory of history
has obvious deficiencies--he didn't foresee, certainly, the rise of
corporate capitalism and of corporate liberalism. His trademark theory
of the falling rate of profit, which you can find in volume three, is
also unpersuasive. But these failings pale beside his portrayal of
capitalism as mode of production based upon labor power as a commodity
and on the accumulation of capital. I wish I could recommend guides to
Marx's thought. The economic guides often err by trying to justify his
works as modern economics. G. A. Cohen's book, Karl Marx's Theory of
History, is a little academic, but of all the books I've read in the
last twenty or thirty years, it's the best.
Have a good, if grim, read of these books--if you have some better
ideas, include them in the comments below--and let's hope that the next
year brings some better economic news than this one.
John B. Judis is a senior editor at The New Republic.
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