Economics 710 Prof.

David Kotz
Political Economy III Spring, 2013
Advanced Topics in Political Economy: Marxist Crisis Theory
Office: 1026 Thompson
Office Telephone: 545-0739
Home Telephone: 584-2547
Email address: dmkotz@econs.umass.edu
Class Meeting Time: Mondays 6:15 PM to 8:45 PM
Class Location: Thompson Hall 9
th
Floor Seminar Room
Requirements
1) One class report on a particular crisis tendency or theory, in Section 5 of the course outline.
Each class report, including presentation and discussion, will take up approximately one class
meeting. A written version of the report will be due after the class presentation.
2) Either of the following:
a) A take-home final exam.
b) A term paper due by the end of the semester, on a topic approved by the instructor. The term
paper must have broader coverage than the single crisis tendency or theory for the class report.
Grades
Class report -- written: 40%
Class presentation and leadership of discussion following presentation: 10%
Final exam or term paper: 50%
Course Outline
1. Introduction (J an. 28)
2. History of Marxist Crisis Theory (J an. 28, Feb. 4)
3. General Approaches to Crisis Theory (Feb. 11)
4. Specific Crisis Tendencies, or Theories (Feb. 11, 19)
5. Class Reports on Specific Crisis Tendencies, or Theories (Feb. 25 to April 17)
A. Underconsumption
B. The Reserve Army Crisis Tendency (or Profit Squeeze)
C. The Tendency of the Rate of Profit to Fall due to the Rising Organic Composition of Capital
D. Over-Investment in Fixed Capital
E. Money and Credit theories of Crisis
F. Rising Unproductive Expenditures: State Spending, Unproductive Labor
G. Regulation Theory
H. Social Structure of Accumulation Theory
6. Applications to particular crises (April 22, 29)
A. The Great Depression of the 1930s
B. The Crisis of the 1970s
C. The Current Crisis
2 Economics 710, Spring 2013
Readings
An asterisk (*) indicates required reading for all students.
Abbreviations for journals:
CJE Cambridge J ournal of Economics
MR Monthly Review
NLR New Left Review
RRPE Review of Radical Political Economics
S&S Science and Society
Finding the Sources:
1) Sweezy, Paul M. Theory of Capitalist Development, can be ordered from various websites,
if you do not already have a copy.
2) Other required readings in books: either on reserve at the library or selected pages available
on course website, indicated by "R" for reserve or "W" for website.
3) Required readings from journals: link or actual article on course website.
4) Readings not required for all students: books and journal articles should be available at the
library but are not on reserve.
Course Website: http://courses.umass.edu/econ710/
For Access to Readings Folder on Course Website: contact instructor
Readings for Sections 1-4
*Marx, Karl, selections from Capital and Theories of Surplus Value (W)
*Sweezy, Paul M. Theory of Capitalist Development ch. 6, 8-12
*Itoh, Makoto, Value and Crisis, ch. 4, 5. (W)
*Wright, Erik Olin, "Historical Transformations of Capitalist Crisis Tendencies," in Class,
Crisis, and the State. (W)
*Harvey, David, The Limits to Capital, updated edition 2006, ch. 7; ch. 10 section 9; ch. 13
sections 5-6. (W)
J acoby, Russell, "The Politics of Crisis Theory," Telos No. 23, Spring 1975.
Readings for Section 5
5A. Underconsumption
*review Sweezy, Theory of Capitalist Development, ch. 10-12 (from sections 1-4)
*review Wright, "Historical Transformations...," pp. 138-147 (from sections 1-4)
*Baran, Paul, and Paul M. Sweezy, Paul M. and Paul Baran, Monopoly Capital ch. 3-7. (R)
*Shaikh, Anwar, "An Introduction to the history of Crisis Theories," US Capitalism in Crisis,
URPE reader, 1978, pp. 222-231. (W)
Sherman, Howard, "A Marxist Theory of the Business Cycle," RRPE 11:1, 1979, 1-23.
Foster, J ohn Bellamy, "Monopoly-Finance Capital," Monthly Review 58:7, December 2006.
Luxemburg, The Accumulation of Capital, ch. 25 & 26.
3 Economics 710, Spring 2013
5B. The Reserve Army Crisis Tendency
*Marx, Capital, vol. I, ch. 25, section 1. (R)
*review Sweezy, Theory of Capitalist Development, ch. 9 (from sections 1-4)
*review Itoh, Value and Crisis, ch. 4-5 (from sections 1-4).
*review Wright, "Historical Transformations...," pp. 147-154 (from sections 1-4)
Kotz, David M., "Inflation, Depression, and the Working Class," Leviathan, September 1969.
Glyn, Andrew and Bob Sutcliffe, British Capitalism, Workers and the Profit Squeeze [American
Edition Capitalism in Crisis], 1972.
*Boddy and Crotty, "Class Conflict and the Political Business Cycle," RRPE, Vol. 7, No. 1,
1975.
*Weeks, J ohn, "The Process of Accumulation and the 'Profit-Squeeze' Hypothesis," S&S, 43:3,
1979.
*Itoh, Makoto, "On Marx's Theory of Accumulation: A Reply to Weeks, S&S, 45:1, 1981.
Goldstein, J onathan P., "The Empirical Relevance of the Cyclical Profit Squeeze: A
Reassertion," RRPE 28:4, December 1996, 55-92.
Weisskopf, T., "Marxian Crisis Theory and the Rate of Profit in the Postwar U.S. Economy,"
CJE, Dec. 1979.
Kotz, David M., "Economic Crisis and Institutional Structures," Heterodox Macroeconomics:
Keynes, Marx, and Globalization, ed by J on Goldstein and Michael Hillard, ch. 13 pp.
176-188.
5C. The Tendency of the Rate of Profit to Fall
*Marx, Capital, volume III, part III. (R)
Dobb, Maurice, "Economic Crises," in Political Economy & Capitalism, pp. 79-126.
*review Sweezy, Theory of Capitalist Development, ch. 6 (from sections 1-4).
*review Wright, "Historical Transformations...," pp. 126-138 (from sections 1-4)
Okishio, Nubuo, "Technical Change and the Rate of Profit," Kobe University Economic Review,
1961.
Shaikh, Anwar, "An Introduction to the history of Crisis Theories," US Capitalism in Crisis,
URPE reader, 1978, pp. 232-237. (W)
*Shaikh, Anwar, "Political Economy and Capitalism: Notes on Dobb's Theory of Crisis," CJE 2,
1978.
*Roemer, J ohn, "Continuing Controversy on the Falling Rate of Profit: Fixed Capital and Other
Issues, CJE, 3, 1979, 379-398. (W)
Steedman, Ian, "A Note on the 'Choice of Technique' under Capitalism," CJE 4, 1980, 61-61.
Shaikh, Anwar, "Marxian Competition vs Perfect Competition," CJE, 4, 1980, 75-83. (W)
*Van Parijs, Philippe, "The Falling-Rate-of-Profit Theory of Crisis: A Rational Reconstruction
by Way of Obituary," RRPE, 12:1, Spring 1980, 1-16.
Reuten, Geert, "Accumulation of Capital and the Foundation of the Tendency of the Rate of
Profit to Fall," CJE 15, 1991, 79-93.
Skott, Peter, "Imperfect Competition and the Theory of the Falling Rate of Profit," RRPE 24:1,
spring 1992, 101-13.
Michl, Thomas, "Three Models of the Falling Rate of Profit," RRPE 26:4, Dec. 1994, 55-75.
Thompson, Frank, "Technical Change, Accumulation and the Rate of Profit," RRPE 27:1, March
1995, 97-126. See also response article by David Laibman in RRPE 28:2, J une 1996, 33-
52; reply by Thompson in RRPE 30:1, Winter 1998, 90-107; and reply by Laibman in
RRPE 30:2, spring 1998, 87-101.
Kliman, Andrew J ., "The Okishio Theorem: An Obituary," RRPE 29:3, Summer 1997, 42-50.
4 Economics 710, Spring 2013
5D. Over-Investment in Fixed Capital
Gordon, R.A., Business Fluctuations, 2
nd
edition, 1961, pp. 406-418.
Devine, J ames N., "Underconsumption, Over-Investment and the origins of the Great
Depression," RRPE 15:2, 1983, 1-28.
*Brenner, Robert, "The Economics of Global Turbulence," Ch. 1, NLR No. 229, May/J une 1998,
10-38. (W)
*Crotty, J ames, "Turbulence in the World Economy, by Robert Brenner," book review,
Challenge, May-J une 1999, 108-119, and reply by Robert Brenner, 119-130.
*Brenner, Robert, and reply by Brenner in same issue, 119-130
Foster, J ohn Bellamy, "Is Overcompetition the Problem?," MR 51:2, J une 1999.
McNally, David, "Turbulence in the World Economy," MR 51:2, J une 1999.
Brenner, Robert, "Competition and Class: A Reply to Foster and McNally," MR 51:7, December
1999.
*Kotz, David M., "The Current Economic Crisis in the U.S.: A Crisis of Over-Investment,"
unpublished conference paper, 2012.
5E. Money and Credit Theories of Crisis
*Crotty, J ames, "The Centrality of Money, Credit, and Financial Intermediation in Marx's Crisis
Theory," in Resnick and Wolff (eds.), Rethinking Marxism, 1985. (W)
de Brunhoff, Suzanne, Marx on Money, 1967, pp. 107-123.
Foley, Duncan, Money, Accumulation, and Crisis, 1986 (optional).
*Harvey, David, The Limits to Capital, ch. 9, 10. (R)
*Kotz, D., "Accumulation, Money, and Credit in the Circuit of Capital," Rethinking Marxism
4:2, 1991, 119-133.
5F. Rising Unproductive Expenditures
*review Wright, "Historical Transformations...," pp. 154-163 (from sections 1-4)
*O'Connor, J ames, The Fiscal Crisis of the State, 1973, pp. 1-63. (W)
*Mosley, Hugh, "Monopoly Capital and the State: Some Critical Reflections on O'Connor's
Fiscal Crisis of the State," RRPE 11:1, Spring 1979.
Moseley, Fred, "The Rate of Surplus-Value in the Postwar US Economy: A Critique of
Weisskopf's Estimates, CJE, 1985, 9:1.
*Moseley, Fred, "The Rate of Profit and the Future of Capitalism", RRPE, 1997, 29:4.
5G. Regulation Theory
Aglietta, M., A Theory of Capitalist Regulation, 1979.
*Lipietz, Alain, Mirages and Miracles: The Crisis of Global Fordism, ch. 1-2. (W)
Boyer, Robert, "Technical Change and the Theory of 'Regulation'," no. 8707, CEPREMAP,
Paris, March.
*Kotz, David M., "A Comparative Analysis of the Regulation Theory and the Social Structure of
Accumulation Theory," S&S v. 54 n. 1, spring 1990, 5-28.
Brenner, Robert, and Glick, Mark, "The Regulation Approach: Theory and History," NLR 188,
1991, 45-119.
Aglietta, M., "Capitalism at the Turn of the Century: Regulation Theory and the Challenge of
Social Change," NLR 232, November/December 1998, 41-90.
Mavroudeas, Stavros, "Regulation Theory: The Road from Creative Marxism to Postmodern
Disintegration," S&S 63:3, fall 1999, 310-37.
5 Economics 710, Spring 2013
5H. The Social Structure of Accumulation Theory
Gordon, David, "Up and Down the Long Roller Coaster," in US Capitalism in Crisis, URPE
reader, 1978, pp. 22-35.
________, "Stages of Accumulation and Long Economic Cycles," in Processes of the World
System, ed. T. Hopkins and I. Wallerstein, 1980, pp. 9-45.
*Gordon, David, Richard C. Edwards and Michael Reich, Segmented Work, Divided Workers,
1982, ch. 2. (W)
*Kotz, David M., "Long Waves and Social Structures of Accumulation: A Critique and
Reinterpretation," RRPE v. 19 n. 4, 1987, 16-38.
McDonough, Terrence, "Social Structures of Accumulation, Contingent History, and Stages of
Capitalism," in Social Structures of Accumulation, ed. by Kotz, McDonough, and Reich,
1994, ch. 4.
___________, "The State of the Art of Social Structure of Accumulation Theory," in
Contemporary Capitalism and its Crises, edited by McDonough, Reich, and Kotz, 2010,
ch. 1.
Mandel, Ernest, Long Waves of Capitalist Development: A Marxist Interpretation, 2
nd
Rev. Ed.,
1995, preface, ch. 1-2, 6.
*Wolfson, Martin H., and David M. Kotz, "A Reconceptualization of Social Structure of
Accumulation Theory," in Contemporary Capitalism and its Crises, ed. by McDonough,
Reich, and Kotz, 2010, ch. 3. (W)
Readings for Section 6
6A. The Great Depression of the 1930s
*Baran, P., and Sweezy, P., Monopoly Capital, ch. 8.
*review Devine, J ames, "Underconsumption, Over-Investment and the Origins of the Great
Depression," Review of Radical Political Economics, 15:2, Summer 1983, pp. 12-21.
*Dumenil, Glick, & Rangel, "Theories of the Great Depression: Why Did Profitability Matter?",
Review of Radical Political Economics, 19:2, Summer 1987.
*Gordon, R.A., Economic Instability and Growth: The American Record, ch. 2-3
Corey, Lewis, The Decline of American Capitalism.
Galbraith, J .K., The Great Crash.
6B. The Crisis of the 1970s
*Bowles, Gordon, and Weisskopf, "The Arithmetic of Economic Decline," from After the
Wasteland, 1990, ch. 4.
*Sweezy, Paul M., "Why Stagnation," Monthly Review J une 1982, 1-10.
*Shaikh, Anwar, "The Falling Rate of Profit and the Economic Crisis in the U.S.," in Robert
Cherry et. al. (eds), The Imperiled Economy: Book 1 Macroeconomics from a Left
Perspective, 1987, 115-126.
*Gordon, Weisskopf, and Bowles, "Power, Accumulation, and Crisis: The Rise and Demise of
the Postwar Social Structure of Accumulation,: in Robert Cherry et. al. (eds), The
Imperiled Economy: Book 1 Macroeconomics from a Left Perspective, 1987, 43-57.
*Moseley, Fred, "The Rate of Surplus-Value in the Postwar US Economy: A Critique of
Weisskopf's Estimates, CJE, 1985, 9:1.
Bowles, Gordon, and Weisskopf, After the Wasteland, 1990, ch. 5-7.
Szymanski, Al, "Productivity Growth and Capitalist Stagnation,"Science and Society, v. 48 n. 3,
Fall 1984, 295-322.
[Readings for Section 6B continued on next page]
6 Economics 710, Spring 2013
Weisskopf, Bowles, and Gordon, "Two Views of Capitalist Stagnation: Underconsumption and
Challenges to Capitalist Control," Science and Society, v. 49 n. 3, Fall 1985, 259-286.
Glynn, A., and Sutcliffe, B., "The Critical Condition of British Capital," New Left Review 66,
1971.
6C. The Current Crisis
*Foster, J ohn Bellamy, and Fred Magdoff, "Financial Implosion and Stagnation," Monthly
Review 60:7, December 2008, pp. 1-29
*Crotty, J ames, "Structural Causes of the Global Financial Crisis: A Critical Assessment of the
'New Financial Architecture'," Cambridge J ournal of Economics, Vol. 33, No. 4, J uly
2009, pp. 563-580.
*Kotz, David M., "The Financial and Economic Crisis of 2008," Review of Radical Political
Economics 41:3, summer 2009, 305-317.
*__________, "What Can Cause a System-Threatening Crisis of Capitalism?," Science and
Society, 74:3, J uly 2010, 362-279.
*__________, "A Circuit of Capital Approach to Explaining the Current Economic Crisis,
unpublished conference paper, October 2012.
Shaikh, Anwar, "The First Great Depression of the Twenty-First Century," in Socialist Register
2011, 2010, pp. 44-63.
Foster, J ohn Bellamy, and McChesney, Robert, "Monopoly-Finance Capital and the Paradox of
Accumulation," Monthly Review 61:5, October 2009, pp. 1-20.