“Capitalism unleashed – finance, globalisation and welfare”

In his new book, Capitalism Unleashed, Andrew Glyn attempts to explain how capitalism moved from the crisis of the 1970s to recovery in the 1980s and 1990s. However, although full of interesting information, the book fails to provide an overall analysis and misses some essential aspects of Marxist theory.

by Andrew Glyn, published by Oxford University Press at £16.99 or $29.95

A review by Michael Roberts

Andrew Glyn is an economist at Oxford University. He has always been on the side of the angels. A doughty fighter for the cause of the labour movement, he has written and acted extensively for the interests of the working class and for the ideas of socialism. He was at one time an economic advisor to the National Union of Mineworkers, the organisation that led the struggle against the imposition of the most ruthless policies of capitalism that were unleashed in the UK under the leadership of Margaret Thatcher in the 1980s.

Certainly, when I knew him personally, he considered himself a Marxist, resting his ideas on the shoulders of Karl Marx and fighting for those ideas in the labour movement. As far as I know he still does.

In his most well known book, written back in 1973 with Bob Sutcliffe (British capitalism, workers and the profits squeeze), Andrew explained how the Golden Age of modern capitalism came about from 1948 to 1973 and gave an analysis of why it came to an end and capitalism started to exhibit the symptoms of chronic crisis in the 1970s.

The analysis then of why capitalism fell into a period of crisis, or revolution and counter-revolution, was that the profitability of capitalist accumulation had begun to deteriorate to levels that created the conditions for crisis. Glyn and Sutcliffe's profitability thesis was not Marx's, however, but one that relied primarily on the argument that full employment in the late 1960s meant that workers could organise to raise wage levels, while international competition did not allow capitalists to raise prices to compensate. Thus the share and mass of profits in the economy were squeezed and this forced down profitability.

This explanation of the fall in capitalist profitability in the UK (and elsewhere) at that time was broadly wrong, in my view. But be that as it may - at least it was an analysis. What is lacking in this latest book by Andrew is just that.

In Capitalism Unleashed, the reader is given, in Andrew's own words, "a short history of how this transformation" from the crisis of capitalism of the 1970s turned into a successful capitalism of the 1980s and 1990s, with fewer economic slumps, rising profitability, a significant weakening of the labour movement and the end of the Soviet Union and its replacement by capitalism.

A series of chapters describes how capitalist leaders adopted new policies that rejected accommodation with the labour movement and the working class, crushed the trade unions, reduced state spending on unproductive and unprofitable social welfare, and privatised and emasculated the state sector.

Also, in one of the most interesting sections of the book, Andrew shows how capitalism was launched on a new phase in its history as it became truly global with the emergence of the economic powerhouses of China and India and the widening of "free trade". This globalisation coincided with the introduction of new technology and the extension of the influence and role of finance capital globally.

All this is a very useful (if in parts opaque) account of the history of capitalism in the last 25 years. But the weakness of the book, in my view, is revealed in Chapter Six entitled Growth and Stability. Here Andrew asks the question: if capitalism managed to remove most of the shackles of the labour movement and state regulation over its workings in the 1980s and 1990s, why did it fail to grow as fast as, or faster than, in the Golden Age of the 1960s? Capitalism had been unleashed, but it had not proved more dynamic. "Output per head has been growing more slowly since 1990 than it did in the turbulent period of 1973-9, never mind the Golden Age" (p151).

But Andrew's answer to his own question is not really forthcoming, except to suggest that maybe the economic dynamism has simply shifted from the more mature capitalist economies of the OECD to China and the emerging world.

Also, because there is no analysis of why capitalism managed to turn things round and begin a period of rising profitability and success (in capitalist terms) after the crisis period of the 1970s, there is no insight on where capitalism is going now.

Indeed, Andrew concludes, productivity growth in the last 25 years has been pretty "typical of most developed capitalist countries since 1870" and "performance over recent decades is within the ‘normal' range" with no compelling evidence that there will be any decisive change from these long-run norms over the next decade or so (p151).

So slightly slower (but more stable) economic growth under capitalism in the last 25 years hardly constitutes a crisis for capitalism in the rich countries, Andrew admits. As a result, he seems to conclude that there is no reason why the current scenario for capitalism will ever change, except for a few thoughts on China breaking down, a lack of resources and environmental problems or the collapse of America's consumer boom somehow.

Andrew seems somewhat at a loss on the direction of capitalism from here..."trying to work out more or less likely long-term scenarios is just peering into a highly uncertain future" (p155). Indeed it is, but that is part of the theoretical task, is it not? Perhaps, if he had returned to the approach of his book in the 1970s, which presents a theory of capitalist accumulation based on a law of profitability, he might have found some answers.

In my view, the last 25 years of capitalist success has been based on a recovery in profitability for the very reasons that Marx explained could happen. However, the next couple of decades will see a reversal of that process because Marx's most important law of the motion of capitalism will exert itself. Thus, falling profitability will turn capitalism back into crisis.

Instead Andrew prefers to try and answer what he calls "the more immediate question": namely what can the labour movement and presumably leftist governments do to improve welfare now for the working-class in the environment of global capitalism. In his final chapter he outlines the inequalities, poverty and lack of welfare that continue to exist in large doses. He argues for less inequality, less poverty and more welfare, in particular pressing for a policy of a Basic Income for all, to free people from the misery of toil.

These are worthy objectives, but how can they be possible if an unleashed capitalism shows little real sign of weakening? As such, this last chapter of policy aims is no substitute or compensation for the lack of a convincing theory or analysis of why, how or when capitalism might yet falter.