Friday, September 3, 2010

Rasmus's "Epic Recession"

Mayday has in stock Jack Rasmus's "The Epic Recession: Prelude to Global Depression" (I bought my own copy at Mayday). For some weeks I've been thinking of writing my own amateurish and bungling review of this important book but have been saved from the effort by this one here, written by Suzi Weissman, which is far superior to any pathetic effort on my part. As a caveat, the book is heavy going and not for the faint of heart. I may yet write something on another important book along (roughly) the same lines: "The Great Credit Crash," edited by Martijn Konings, with contributions, inter alia, from the likes of Peter Gowan, Thomas Ferguson, Michael Hudson, Walden Bello, and Leo Panitch. This, too, I bought at Mayday. And this, too, is a taxing book that makes demands on the reader. In defence of the two books above it has to be said that economic and political reality is complex, and to acquire perspective and insight -- historical or otherwise -- into the present quagmire takes careful study.

An excerpt from Weissman's review:

Rasmus recognizes the theoretical debt he owes to three economic thinkers: John Maynard Keynes, whose work is more about how to recover than what produced the crisis; Irving Fischer, who identified debt and deflation as the main mechanisms that drive a downturn into a depression; and Hyman Minsky, the theorist who wrote about the role of speculative investment, showing how the accumulation of debt can destabilize the entire financial system and provoke the kind of financial meltdown we have just experienced. Although Minsky died in 1996, his thinking is so pertinent to the crises of 2007-10 that financial journalists and academics have called it a "Minsky moment."

Rasmus tries to take the work of these theorists further in order to understand the nature of the current crisis and he pledges to do this more fully in subsequent volumes as this crisis unfolds. His analysis is also aided by a thorough grounding in Marxist economic theory. Missing in Keynes, Fischer, and Minsky, he writes, is "...the consideration of the price for labor and its relationship to product and asset pieces: how wage deflation is related to product and asset deflation."

It's a pity there's no book club in the Twin Cities to discuss worthwhile books like this. There was a Marxist book club, organised by Dean Gunderson; that, however, seemingly folded about a year or so back.


Red Frog said...

Some folks at Mayday have brought up a book club before. I'd do it, but the books I want to read have to be relatively recent, and I do not want to invest massive amounts of time that I do not have.

Reading ancient history or reading relatively long, dense works I think should be left to the souls alone, as they do not work in a book group.

AA said...

Oh, I heartily agree. It has to be recent and topical. I don't want to discuss Jack London's "The Iron Heel." Plus participants have to have read the book under discussion and be able to understand abstract ideas. But perhaps this is asking too much of the Twin Cities. I feel I'm living among yahoos.