The crisis last time
This fascinating book attempts to apply Karl Marx's theory of economic crisis to the US in the midst of the depression of the 'thirties.
Written in 1934 by one of the early leaders of the Commuinist Party of the USA who had become alienated from the organisation and entered academia, the book marshalls a wealth of empirical detail from Government and business sources to argue that US capitalism was in terminal decline.
With the benefit of hindsight we can see that this was obviously not the case. Indeed the US was about to enter its longest ever boom stimulated by massive arms spending during World War Two and the Cold War. That was not at all clear at the time, however, with nearly half the workforce unemployed, production and trade in meltdown and Germany and all the other major world economies in a similar plight.
Professor Corey argues that the cause of the crisis can be found in the Marxist theory of the tendency of the rate of profit to fall and the imbalance between production and consumption. Infortunately for the author, the statistics he quotes on the rate of profit do not fully bear out his analysis, showing a rise until the eve of the crash in 1929.
However, with the US economy today experiencing a credit crunch and recession, by showing the over heated nature of the US economy between 1927 and 1929 with a stock market bubble and consumer credit artificially sustaining a boom that had run its course, the book reveals frightening parallels with the situation in early 2008.
