Verso: 288 pages, £8.99
Reviewed by Patrick Scott
Originally published in 2009, this updated version of Paul Mason’s book provides the reader with an overview of the global financial crisis from the start of the credit crunch in August 2007 through to the present. Even though he is a BBC journalist working for Newsnight from reading this book it is clear that Mason is on the left politically but it is unclear what part of the left he belongs to.
One of the most important points Mason highlights is that from the 1990s onwards many “Third Way” politicians such as Blair and Brown in Britain and Clinton in the US championed financial deregulation alongside the traditional right. He reminds us that as late as June 2007, then Prime Minister Gordon Brown proclaimed that banking deregulation would open up a new golden age for Britain. But within two months we were into the credit crunch. This ‘financialisation’ of both the British and US economies initially saw an increase in the profits of the financial sector as a percentage of overall corporate profits within both countries. This of course though was all before the US subprime mortgage crisis which took the international banking system to virtual meltdown.
One of a number of influences on his thinking is the early 20th Century Russian economist Nicolai Kondratiev (of Kondratiev wave fame). Mason argues that on the one hand we have a new wave of capitalist development based on the information revolution, shown by the exponential rise in little more than a decade of people globally with internet access and mobile phones. But this new capitalist wave started before the old wave originating in the post World War II long boom has finally come to an end. In other words we are in a period where two economic waves are overlapping. This is an intriguing argument but whether right or wrong is one that he fails to develop fully. What Mason though certainly fails to take up adequately is the question of the looming environmental crisis, the global capitalist economy remains tied to fossil fuels and nuclear power and will continue to do so.
The political conclusions outlined by Mason are clear. Neoliberalism as an ideology is dead as is the so called Third Way. The future of capitalism certainly in the strongest economies will see the state taking a much more pro active role in the economy. This though is not a return to old style Keynesian interventionism, rather it represents the socialisation of risk as shown by the financial bailout of the banking system in the US, Britain, and elsewhere. Or socialism for the bourgeoisie as some have described it, coupled of course with monetarist austerity for the working class. Mason could though have outlined more explicitly what he considers to be a left or socialist response to the current crisis. There is much more weighty material written about the crisis, both politically and theoretically and much more will be written. Nevertheless this book does provide the reader with a useful introduction to the background of what is an ongoing crisis.