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40 Новые исследования по региональной экономике

6. Explosive in the making. (2013, June 7). Bibow J &Terzi А. (Eds). Euroland and the World Есоnоmу: Global Player or Global Drag? Basingstoke, Palgrave Macmillan: 43-S2. New-York Times. 7. Bibow, J. (2012). Thе Eurо Debt Crisis and Germany’s Euro Trilemma. Levy Institute of Bard College, Annandale- on-Hudson, NY. Working Рареr Nо.721. Available at: http://www. levyinst. 8. United Nations Conference on and Development. (2012). The Trade and Development Report. Available at: 9. URL: http://unctad.org/en/Pages/Home.aspx. 10. The UN. The Economic and Social Council. Review. (2014). New-York, 5 11. Krugman, P. (2013, September 23). Yaponiya. Ne isportite khoroshuyu ideyu [Japan. Do not spoil a good idea]. Nezavisimaya Gazeta [Independent newspaper]. Available at: http://www.ng.ru/krugman/2013-09-23/5_japan.html. Information about the author Khasbulatov Ruslan Imranovich (Moscow, Russia) — Corresponding Member of the RAS, Doctor of Economics, Professor, Head of the Global Economy Department, Plekhanov Russian University of Economics (36, Stremyanny Side St., 117997 Moscow, Russia; e-mail: [email protected]).

doi 10.17059/2015-2-3 UDK 330. 33. 01 V. T. Ryazanov а) а) Saint Petersburg State University DEVELOPMENT OF THE THEORY OF CAPITALIST CRISES: TRADITIONS AND MODERNITY1

The article discusses the development history of the theory of economic crises under condi- tions. The author believes that economic science is being developed in two directions. The first direction is represented by science schools that deny any objective grounds for crises of in the economy and develop new models of crisis-free growth. The opposite direction is supported by science schools acknowledging the existence of objective causes of crises, which is of practical significance for development of effective anti-crisis measures. The study is summarized by the conclusion about actualization of the politi- cal economy approach to analysis of the recent global crisis and its consequences. Its implementation antici- pates special attention to different versions of of which played a key role in the or- igin of crisis processes in the world economy. Keywords: economic crisis, causes of crisis, economic schools and crises, accumulation of capital, current crisis and political economy

Economic science addressed to the special and received the title of Say’s law. According to study of cycles and crises of overproduction in the him, supply constitutes its own demand, because period when its foundations had been formed. The income is equal to the cost of output in the pro- first such crisis took place in England in 1825. It duction process. If a part of income is transformed should be noted that thereafter, numerous repre- into , but not used directly to purchase sentatives of different science schools denied any , it automatically turns to be objective grounds for crises of overproduction and and, thus, goes back to the process en- linked the probability of their occurrence to fail- suring the equilibrium of savings and . ures, wars, political events, and natural disasters. This, in principle, eliminates the problem of sales, This approach was based on the key assumption and hence the possibility of crises of overproduc- that the market mechanism was able to equilibrate tion. If it still occurs, then the cause is in the effect demand and supply automatically. Initially, the of external and accidental factors. idea of automaticity in the supply-demand equi- One could consider Sismondi (1773–1842) to be librium was substantiated by J. B. Say (1767–1832) the first -theorist who tried to discover the objective preconditions for crises of overpro- duction. In 1819, even before the first crisis of over- 1 The article is reprinted with the permission of “The Journal of production, he proposed “the theory of undercon- Economic Theory, 2014, №4” and Ryazanov V. © Ryazanov V. Text. 2015. sumption” as a reason and argued against the au-

ЭКОНОМИКА РЕГИОНА № 2 (2015) WWW.ECONOMYOFREGION.COM V. T. Ryazanov 41 tomatic equilibrium in the nascent capitalist econ- ward trend. Here, for example, as D. Ricardo ex- omy [1]. In turn, the Swiss economist explained plained the reason for equalization of rates: by the fact that the techni- “...This restless desire on the part of all the em- cal progress pushed workers out of the production ployers of stock, to quit a less profitable for a more process and forced them to work for a lower . advantageous business, has a strong tendency to Its reduction is also caused by the growth of work- equalize the rate of profits of all ...” [2, p. 81]. ing population resulting in . As Although it should be noted that Smith and a result, consumer demand falls down, while en- Ricardo gave close interpretations of profit rate trepreneurs continue to expand production which equalization, but they were not similar in terms of generates the crisis of overproduction. their content. Smith stated that “The increase of In this case, the reference to Sismondi is justi- stock, which raises , tends to lower profit” [3, fied by the fact that the relationship between the p. 210]. In turn, Ricardo also argued that “whilst , consumer market capacity and then general profits are falling, and gradually set- demand size actually exists, and its breakdown de- ting at a lower level in consequence of the rise of termines one of the specific possible causes of the wages, and the increasing difficulty of supplying crisis of overproduction and its scale. Today many the increasing population with necessaries” [2, link the crisis prevention options to p. 105]. So, his interpretation of drop in the rate growth in demand, for which different patterns of of profit was linked to the effect of falling labor credit expansion periodically occur, apart from or- efficiency in agriculture (or decreasing -produc dinary cash payments made to population in var- tivity in agriculture) leading to increased ious forms. for its products and, therefore, requiring higher The first economist, who developed the funda- wages for laborer, which reduces the profits of mental theory of crisis, was . Although entrepreneurs. he did not manage to prepare a separate paper de- Having identified the reason for decrease in scribing the theory of crisis, he made great pro- the general as consequence of po- gress in its establishment within the common tential rapid growth of wages, Smith and Ricardo concept of contradictory flow of the capitalist re- left it at that, not raising an issue of possible cri- production process. 1 This problem ranked high in sis of overproduction. They considered that crisis his interpretation of future of capitalist economy to be the natural state of economy with its inher- through history. ent, but overcomable limitations. Therefore, they Marx alleged that crises were inevitable un- have not expressly discussed the issue of crisis. It der capitalism conditions and explained this by should be taken into account that actually the first their dependence not only on lack of demand cyclical crisis of overproduction happened after and underconsumption of workers, but primar- their major papers had been published. The ten- ily on deeper causes acting in the sphere of re- dency that was de facto discovered by the found- production (accumulation) of capital. The aggre- ers of classical political economy constituted a gate demand is characterized by the unity of its static and abstract-theoretical explanation for the consumer and investment elements, i.e. demand existence of interdependence while distributing generated by consumers (population) and entre- income between profits and wages, which reflect preneurs (investors). And this is the simplest ex- shifts in the supply-and-demand balance. Smith planation. It is more difficult is to determine this believed that the effect of this tendency was gen- unity as mutually reinforcing and, at the same erally positive, because in the process of economic time, contradictory. development of prosperous countries “the low What is at the heart of this inconsistency? In rate of profit may, in the of many commodi- other words, what exactly differentiates the role ties, compensate the high wages of labor, and en- of consumer demand in the process able those countries to sell as cheap as their less from investment demand? thriving neighbors, among whom the wages of la- As it was discovered by A. Smith and D. Ricardo, bor may be lower” [3, p. 221]. In other words, the the market competitive mechanism and regulari- fall in the rate of profit is compensated by an in- ties of economic development objectively lead to crease in its quantity due to expansion of effective the process of averaging the profit rates with down- demand which supports the stimulatory potential of capitalist production. 2 1 It is known that, according to the initial idea of Capital, the final sixth volume of research had to be devoted to the world market and crises. Note that the views of Karl Marx as to the na- 2 Ricardo also argued that the fall in the rate of profit was “nat- ture, causes and consequences of crises of overproduction un- ural” and might be blocked, particularly by technical improve- der capitalism most fully presented in his Capital. ments. Besides, as he explained, “the fall of the general rate of

ЭКОНОМИКА РЕГИОНА № 2 (2015) 42 Новые исследования по региональной экономике

But if to associate the fall of the rate of profit , which is “in that the develop- with substantiation of the crisis of overproduction ment of the productivity of labor creates out of the demonstrating the accumulation of excess capac- falling rate of profit a law which at a certain point ity, then it is formally possible to identify a di- comes into antagonistic conflict with this devel- lemma that seems insoluble, some kind of “cap- opment and must be overcome constantly through italist swings” in the system of social reproduc- crises” [4, p. 283]. tion. The faster growth of wages expands the ag- If to add the limited consumer demand incon- gregate demand, and this eliminates one of the sistent with the absorptive ability of the market obstacles in maintaining economic growth. But at to this characteristic of capitalist production, we’ll the same time, the rise of wages diminishes the get a concept of two-factor explanation of eco- profits of entrepreneurs, deprives capitalist pro- nomic crisis under capitalism conditions. This ap- duction of incentives to further increase with cor- proach to determination of the nature and causes responding negative consequences (for example, of economic crises can be rightly treated as the stagnation of production or inflationary rise). In recognized contribution of Marx’s economic the- case of faster growth in profits which forms incen- ory. In this case we shall refer to V.V. Leontiev, who tives to increase the production rate, pay pegging wrote “Two main variants of how Marx explains or slow growth leads to limited demand and a cri- the business cycles, or, more precisely, “economic sis of overproduction. crises”, are well known. One is the theory of un- The logic of Marx stands out from abstract rea- deraccumulation based on the famous law of the soning provided by Smith and Ricardo. His logic is rate of profit to fall, the second — the theory of un- notable for informative and clear explanation of derconsumption” [5, p. 102-103]. the origin of the tendency for decreasing the av- Although Marx analyzed the crises of overpro- erage profit rate and the consequences of - itsef duction as periodic (repeated) events, and, on this fect. Marx explained the emergence of this ten- part, they fell within the framework of cyclical dency not with diminishing fertility of the land processes characterizing one of the phases of the and the need to give a part of the created industrial cycle. But they must not be narrowed to landlords in the form of rent, but with the fact down to the variant of normal business cycles that is constantly encouraging entre- which is widely used at the present time. In fact, preneurs to increase the productive power of la- the cyclical manifestation of crises, according to bor, and it, in turn, indicates the process of con- Marx, has systemic background based on internal stant and rapid growth of the contradictions peculiar to capitalist reproduction. in comparison with the involvement of workforce For him, the systemic nature of crisis explains the as a result of scientific and technical progress and historical doom of the capitalist mode of produc- leads to the growth of technical and value (or- tion. However, the economic practice has shown ganic) composition of capital with subsequent re- another possible way to resolve a systemic crisis, duction in the rate of profit. 1 Thus, the fall in the when transformation of a cyclical crisis into a sys- rate of profit does not exclude an increase in the temic one determines the turnaround point in the absolute mass of profit, and this faces the counter- next change of models of capitalist economy. active factors transforming it into a tendency. It is The initial formulation of the theory of cri- also important to take into account the fact that ses under capitalism, which had been most thor- “the rate of profit of an individual capital is not oughly elaborated by Marx, was diversely devel- determined by the market-price of a , oped in subsequent periods. The course involving but rather by the difference between market-price the denial of objective causes of crises was pre- and cost-price” and only then “these different served and continued, particularly in the neoclas- rates of profit can strike a balance...” [4, p. 405]. sical mainstream. Based on still alive “Say’s law”, However, the effect of the average profit rate con- modern macroeconomic theorists fall for search- sisting of decline in certain periods breeds “over- ing a model of crisis-free development. A good il- production, speculation, crises, and surplus-capi- lustration of this situation is the fact that the cri- tal alongside surplus-population” [4, p. 265]. And sis occurred in 2008–2009 was a surprise to most this occurs due to limitations of the capitalist economists of the neoclassical school. Several years ago, many of its prominent representatives profit is not incompatible with a partial increase in profits in thought that capitalist crises disappeared without certain industries [2, с. 105]. a trace 2. 1 “…The increasing tendency of the general rate of profit to fall, — Marx argued, — is only an expression of progressive develop- ment of the social of labor, an expression pe- 2 So, for example, Chicago Professor Robert Lucas (who re- culiar to the capitalist mode of production” [4, p. 233]. ceived the Nobel Memorial Prize in Economic Sciences in

ЭКОНОМИКА РЕГИОНА № 2 (2015) WWW.ECONOMYOFREGION.COM V. T. Ryazanov 43

This prognostic error was not accidental and solve the problem of demand limitation as the explained by the initial interpretation of the na- cause of crises of overproduction. The focus was ture of economic growth. In the context of neo- on the unprecedented expansion of mortgage and classical versions of , the major consumer lending in the USA and other advanced growth factors are resources (labor, capital, tech- capitalist countries from the late twentieth cen- nology, information), efficient use of which is able tury. Such course was considered to be a prom- to provide an acceptable rate of profit and im- ising and finally found “medication” able to cure prove dynamic characteristics of production. This capitalism of inevitable crises and push it to reach approach underlies the basic neoclassical macroe- a new peak of “society of general consumption” — conomic growth models interpreting and compli- “unlimited consumption” (or overconsumption)” cating the production function that describes the phase. This magical tool is supposed to rely on the influence of two key growth factors — labor and so-called “wealth effect” when the savings of peo- capital. ple are generated not by income from participa- Such models aim to quantify the impact of fac- tion in economic activity, but formed due to own- tors on production output (supply), by consider- ership of “wealth” (first of all, real estate). Savings ing their combined value and weight of individual from assets arising primarily from real estate and production factors. In this case, the model-build- from receiving different types of pay- ing turns into a goal in itself going away from real ments were interpreted as the source of future de- processes. Mathematization becomes a certain velopment that had no obstacles. After all, wealth way to subordinate the economic life to the rules can expand forever. of absolute rationality. Therefore, the predictive There was a belief that the accumulated wealth power of these models and equations is relatively and its further extension due to credit expansion low because they are detached from the real eco- would make it possible to maintain the steady de- nomic processes. In this regard, it is worth look- mand in the U.S. economy, block and ing at the quote of one sophisticated macroecono- provide the high economic dynamics in the coun- mist, N. Mankiw: “...The sad truth is that the mac- try. Another important moment is that the “soft” roeconomic research of the past three decades has of the Federal Reserve System had only minor impact on the practical analysis of served as an extra incentive, especially in the pe- monetary or ”. This means, that “mod- riod of 2001–2003 Also it should be emphasized ern macroeconomics research is not widely used that this model is self-maintained (crisis free) in practical policymaking”, that’s why “it is of lit- economic growth was based not on the previously tle use for this purpose” [6, p. 101]. worked-out variant of increased wages, the real No doubt, the modern macro models are use- value of which demonstrated a tendency to de- ful for uncovering the stationary state of econ- crease in the last decade, but on increase in value omy based on the supply-and-demand equilib- of residential property of people being purchased rium, but they ignore the role of under more and more attractive mortgage credit which is a key one in times of crisis. Moreover, the programs. capitalist market economy is actually not so much The remarkable thing is that relying on the resource-constrained as demand-constrained, wealth effect is a new formula for development of which is especially evident in times of crisis when the long-standing idea about the so-called cap- the problem of capital underuse intensifies dra- ital-generating function of loans and financial matically and overproduction occurs. Therefore, institutions (banks and other financial institu- not a lack of effective production capacity restricts tions). In his time, J. Schumpeter argued that a the crisis recovery, but rather a surplus capacity loan, by its nature, is “creation of the purchas- with its overaccumulation of capital and reduction ing ability for the entrepreneur” (The Theory in demand. of Economic Development, 1912). The purchas- However, it should be noted that, within the ing ability, in its turn, “characterizes the way of modern mainstream, an attempt was made to re- development of open economy” [7, p. 179]. From here, the role of credit expansion as a measure to 1995), when speaking at the annual meeting of the American block a crisis. Economic Association in 2003, stated that the central issue of Note, however, that implementation of the ex- “depression prevention” was taken off the table, “if we talk about pansion policy aimed to promote access to credit it from a practical standpoint.” This was followed by the conclu- opportunities, but carried out without proper con- sion that it was time to deal with the more important problem trol, will result in credit expansion with the inev- — long-term economic growth. B. Bernanke, who later became itable relending (i.e. formation of a credit bubble) the Chairman of the Board of Governors of the Federal Reserve System, wrote about the same thing. and a logical crisis collapse that happened in USA

ЭКОНОМИКА РЕГИОНА № 2 (2015) 44 Новые исследования по региональной экономике in 2008 with the subsequent spread of the crisis 3. January 1910 — January 1912 (25 months) throughout the global economic space. 4. January 1913 — December 1914 (24 months) Why, in the end, there were deceived hopes 5. August 1918 — March 1919 (8 months) as to the ability of “wealth effect” to remove the 6. January 1920 — July 1921 (19 months) problem of circularity in development of the cap- 7. May 1923 — July 1924 (15 months) italist economy? 8. October 1926 — November 1927 (14 months) Primarily, this is due to the fact that real wealth 9. August 1929 — March 1933 (44 months) is created through production activities. Its actual 10. May 1937 — June 1938 (14 months) source — productive work based on the achieve- 11. February 1945 — October 1945 (9 months) ments of scientific and technical progress, im- 12. November 1948 — October 1949 (12 months) provement of professional skills of workers, organ- 13. July 1953 — May 1954 (1 month) ization of production, management, etc. Wealth 14. August 1957 — April 1958 (9 months) accumulated in the form of housing and property, 15. April 1960 — February 1961 (11 months) as business practices demonstrate, may serve as a 16. December 1969 — November 1970 (12 specific way of its increase. However, this method months) is based on redistributive relationship and that’s 17. November 1973 — March 1975 (17 months) why its limits are linked to the possibility — eco- 18. January 1980 — July 1980 (7 months) nomic and noneconomic — to derive profit from 19. July 1981 — November 1982 (17 months) producing countries. Anyway, we have to consider 20. July 1990 — March 1991 (9 months) that such redistributive processes inevitably lead 21. March 2001 — November 2001 (9 months) to extensive imbalances in the global economy 22. December 2007 — June 2009 (19 months) disguising the growing conflicts and contradic- tions in the current global economic world. They The theories involving further work on the cri- can’t be reproduced on an ongoing basis and had sis agenda characterize the second and more real- to be resolved through a crisis. istic course in the development of economic sci- In addition, the economies banked on economic ence with its focus on analysis of causes of cri- growth through the “wealth effect” have their own ses, as well as elaboration of protection systems internal limits of its use. Uncontrolled expansion and ways to overcome them. It is typical for them of credit availability sooner or later leads to a dra- to address the general problem of cyclical fluctu- matic increase in uncollectable debts. If this pol- ations in the market economy, which crisis pro- icy of deregulation and liberalization of financial cesses were investigated, as the main object of activities is supported by deindustrialization, as in analysis. Thereby, the crisis (recession) served the USA and other advanced capitalist economies, as a manifestation and a part of the pure eco- development of the credit derivative market natu- nomic cycle. A variety of concepts and multifacto- rally results in formation of a bubble and its sub- rial analytical models explain the nature and spe- sequent burst. cific causes of capitalist cycles from different per- Failure of another attempt to find a model of spectives by focusing on their application in crisis crisis-free development once again confirms the management practices. significance of those theories that continued to Although the comprehensive study of cycle focus on problems of cyclicality and crises in eco- theories conducted by G. Haberler does not in- nomic development. Frequency of crisis reces- clude any direct analysis of the Marx’s Theory of sions makes clear what things are important not Crisis, it turns out that a significant proportion of only for theory, but also for business practices. them addressed different versions of the general Thus, according to the U.S. National Bureau of concept of capital overaccumulation [8]. Moreover, Economic Research (NBER) that analyzes the mar- it should be noted that modern developers give ket processes in the US economy since the first cri- very ambiguous interpretation of the nature and sis in 1857, this country has already outlived 33 re- causes of overaccumulation, which is different cessions, two of which occurred in XXI century 1. from the clear characteristics of Marx. There are Twenty-two occurred in the 20th — be- two approaches. One of them elaborates a mon- ginning of the 21st century: etary version of overaccumulation, where great 1. 1902 — August 1904 (24 months) emphasis is placed on banks (loans) to cause im- 2. May 1907 — June 1908 (14 months) balances in the structure of production upon the failure of the financial system to continue credit expansion. Another approach presents non-mon- 1 The National Bureau of Economic Research (NBER) etary theories of overaccumulation that underline [Electronic resource]. URL: http://www.nber.org/cycles/cycles- main.html, date of address: 07/19/2014. the significance of technical and technological

ЭКОНОМИКА РЕГИОНА № 2 (2015) WWW.ECONOMYOFREGION.COM V. T. Ryazanov 45 changes in production. However, when substan- neurship and competitive mechanism of the mar- tiating their anti-crisis policy recommendations, ket that conducts the pre-screening of ineffec- both versions focus mainly on the necessity to in- tive entrepreneurs. Hence M. Rothbard concludes tensify investment activity, not to expand the con- that the market economy does not produce de- sumer demand. It can be considered that, in prac- pression, the latter is “the unpleasant but neces- tical terms, this approach does not contradict the sary reaction to the distortions and excesses of the Marx’s theory of crisis. previous boom” [11, p. 159]. He was echoed by F. It should be said that Soviet political economy Shostak, contending that recession is “the elimi- traditionally paid great attention to study of eco- nation of errors caused by the previous loose mon- nomic crises under capitalism and even have suc- etary policy” [11, p. 7-8]. ceeded in analyzing their history [9; 10]. Its short- The clew of excluded occurrence of such criti- coming was a relatively simplified class approach cal mass in the business environment can be found to explain the causes of crises with excessive em- in ways to reach an economic boom before a crisis. phasis put on the basic contradiction of capital- Advocates of the believe that its ar- ism. It was formulated by Marx when he was de- tificial nature is caused by the inflationary expan- scribing antagonism of the social character of pro- sion of bank loans supported with government and duction and the private form of appropriation cre- intervention. Mises formulates this ating a contradiction between production and conclusion using the as an exam- consumption and leading to aggravation of class ple as follows: “The artificial “boom” was caused by struggle in bourgeois society. credit expansion and lower interest rates as a result With regard to modern ideas about the na- of bank intervention” [11, p. 108]. “Banks can only ture and causes of capitalist crises, special fo- expand comfortably in unison when a Central Bank cus should be on two alternative approaches de- exists, essentially a governmental bank, enjoying veloped by Austrian monetarist schools and a of government business, and a privi- Keynesian schools. leged position imposed by government over the en- The interest excited by the approach of the tire banking system” [11]. Austrian School with respect to its interpretation If the main originators of crises are state au- of crisis and ways to overcome it stirred up by the thorities interfering with the self-adjusting mar- fact that its leaders (L. Mises, F. Hayek) warned of ket mechanism of economic management, in this an impending economic danger before the Great case, it seems logical that there is absolute rejec- Depression was started, except for the most econ- tion of practicality of state economic regulation. omists of that period, including Keynes. This L. Mises, the consistent defender of free entre- school is distinguished by consistent defense of preneurship, formulated his uncompromised con- free market and entrepreneurship ideas with ab- clusion that “there is simply no other choice than solute non-acceptance of state intervention in the this: either to abstain from interference in the free economy and, consequently, the uncompromising play of the market, or to delegate the entire man- criticism of Keynes and Keynesianism. agement of production and to the The benchmark of analysis conducted by Mises government. Either capitalism or : there and Hayek, and then by their modern followers, exists no middle way” [12, p. 87]. is the assumption that there is no objective rea- In this regard, one of the most - son for inevitability of crises in the market econ- ary ideas of the Austrian School is the proposal omy, because the market is perfect. One possible to abandon the state monopoly over is- explanation suggested by M. Rothbard is as fol- sue with the transition to a competitive issue, i.e. lows: the market economy, by its nature, acts as private competing . It is argued that a a profit/loss economy and, in that context, “has a monetary system with the Central Bank is unable built-in mechanism of natural selection of good to conduct effective monetary policy and becomes entrepreneurs”, and therefore you “should not ex- one of the essential factors in the formation of the pect that too many businesses incur losses” [11, p. pro- economy. The government’s partici- 154-155]. In other words, the crisis is interpreted pation in the monetary economy does only thing: from the point of view. The mi- it undermines stability and reliability of the cur- croeconomic version of crisis suggests that either rencies. It is believed that pulling the state out of immediately all entrepreneurs will be unsuccess- the credit and financial system is becoming the ful or a certain critical mass of unprofitable busi- most important condition to exclude the possibil- nesses should be formed, which can drag the en- ity of economic crises in the capitalist economy. tire economy down. But this situation is almost Some representatives adhering to the mone- impossible because of the nature of entrepre- tarist direction in the economy also say about the

ЭКОНОМИКА РЕГИОНА № 2 (2015) 46 Новые исследования по региональной экономике need to reform the financial system of the mod- gence of surplus capital without profitable invest- ern market economy from the perspective being ments, thereby causing the crisis of overproduc- close to the Austrian School’s theoretical posi- tion. In one case, this involves the objective side tions. However, they do not share the negative at- of this process, in another — the subjective-psy- titude of the “Austrians” to the Central Bank and chological one. government interference in the economy, but the An important characteristic of the marginal ef- monetary approach to interpretation of cycles and ficiency of capital is that it is determined in the emerging crises bring them together. context of “expected proceeds and the current To protect the capitalist market economy from supply for capital” [15, p. 200]. In other words, it crises, monetarists propose to develop a model is about the marginal efficiency of future invest- for conducting the efficient state monetary pol- ments. In this definition, the key word is “expecta- icy, which they interpret as maintenance of price tion” that means the expected profit (or loss) gen- stabilization through retention of stabil- erated by an entrepreneur with regard to future ity to be achieved by regulation of . economic situation. It is formed, to some extent, It is designated as the “monetary rule” [13]. Note under the influence of rational consideration, just that in modern business practices, this approach as of its own experience and subjective feelings is implemented in the policy of “inflation target- (intuition, conventional wisdom, etc.). That’s why ing” aimed to ensure sustainability and stability of investments are the most unstable part of aggre- the economy. gate demand in comparison with consumer de- But J. M. Keynes and his modern followers up- mand. Therefore, manipulation of the rate of in- hold the opposite position concerning the nature terest, especially under deteriorating or unstable and causes of capitalist crises. Like Marx, Keynes market conditions, is not able to stop the collapse acted as an opponent to scientific schools (clas- in the marginal efficiency of capital, which has sical and neoclassical) developing the ideas about been confirmed once again by the modern busi- built-in stabilizers in the market economy that ness practices. automatically returns it to the state of equilibrium This means that Keynes proposed a new inter- (full employment). and Keynesianism pretation of the limiter (or limit) in the entrepre- has been predicted to go into oblivion for many neurial economy. Whereas, economists-classicists times. Moreover, the most intransigent opponents and neoclassicists believe that limited resources have included his “General Theory” in the list of play this role, and Marx thought it was the con- ten most harmful books of the 19th-20th cen- tradictory nature of the self-expansion of capital turies, together with Hitler’s “Mein Kampf” and (in other words, the contradiction between the so- Marx’s “Capital” [14, p. 138]. cial character of production and private form of The Keynesian theory considers the phenome- appropriation), Keynes considered is was uncer- non of crisis to be a “sudden and dramatic” change tainty of future, which takes the form of “faith” from upward to downward trend, while the re- in economic activity. It is easy to lose, but hard to verse process commonly does not have such radi- restore. cal swing. The most important features “relate to When explaining the causes of crisis, it should the fluctuations in the marginal efficiency of cap- be especially highlighted the fact that Keynes, like ital”. That’s why “the predominant explanation of the Marxist school, referred, first of all, to capi- the crisis”, according to Keynes, “is not primarily a tal as the central category of this method of pro- rise in the rate of interest, but a sudden collapse in duction, seeing the origins of the problems in its the marginal efficiency of capital”. And this is be- functioning particularities. Assuming that the ac- cause the collapse can be so massive, that “no pos- cumulation of capital is based on the principle of sible reduction in the would be suffi- profitability, then two scientific schools have the cient” [15, p. 386-389]. identical approach that generally determines the Then, what is the “marginal efficiency of capi- causes of crisis as chronic contradiction between tal” and why is it prone to a sudden collapse? the production capacity and consumption oppor- The interpretation of this category (it also tunities. The difference between these two ap- can be interpreted as the specific profitability of proaches is that, for Marx, the problem of capital “capital property”’ accumulation — capital stock) is the overall process of self-expansion (accumula- shows identical elements of positions upheld by tion), but for Keynes, it is instability of expansion Marx and Keynes. The fact is that, essentially, the (growth) of productive assets at the capital mar- downward trend in the average rate of profit and ket, which is determined by market characteristics fall in the marginal efficiency of capital character- of such self-expansion. At the back of this is the ize the two sides of the same process — the emer- emerging acute problem of capital flow into the fi-

ЭКОНОМИКА РЕГИОНА № 2 (2015) WWW.ECONOMYOFREGION.COM V. T. Ryazanov 47 nancial and speculative sector, which has become and depressions” [17]. Therefore, the transition to a key one for modern capitalism. 1 the model of economy relaying upon promotion of Thus, the interpretation of causes of capi- the effective demand with active involvement of talist crises, as proposed by Keynes, has a suffi- a state remains to be the main recipe in the fight cient number of interconnections and overlaps against recession and stagnation. with the approach of Marx. The most fundamen- Let’s summarize all this. The fact that Keynes’s tal difference between them lies in the interpre- theory as to substantiation of the anti-crisis policy tation of consequences of cyclical development of was effective in the past and may be useful at the the economy. For Marx, invincibility of capitalist present stage, confirms reasonability and reality crises and inevitability of escalation of inherent of the political economy approach. The Keynesian contradictions — all this determines the conclu- concept is quite organically inscribed into the po- sion as to its historical hopelessness and the need litical economy tradition. Despite of its original- to change this method of production in the end. ity, the selected object of analysis, i.e. the process With regard to the position of Keynes, his theoret- of social reproduction with raising the key issue ical framework and a set of practical recommenda- (full employment), solution of which is in the abil- tions, unlike Marx, were aimed to protect the capi- ity of economy to expand production, — all this is talist mode of production and its reformation. in line with the political economy method. In turn, This discrepancy in estimates of the historical the developed macroeconomic theory returned perspectives of capitalism lays in the fundamen- economists to the main object of study in the clas- tal difference between two approaches. Whereas sical political economy, the national economy as a Marx connected the cause of crisis with fall in whole. The neoclassical school originally consid- profits of all productive capital as “new capital”, ered the microeconomic level to be the object of Keynes linked reduction in the marginal efficiency study, on which it is possible to implement the ba- of capital to the decline in profitability (or -mar sic principle of methodological individualism. ginal efficiency) of “future investments” that can- Finally, in contrast to the neoclassical school, not find the good investment sectors, i.e. not pro- Keynes was based not on behaviors of any abstract ductive, but incremental capital. Therefore, Marx (“homo economicus”), but on behavior psychol- excluded any historical perspective of capitalism ogy formed in society and large groups of people as a system of economy; Keynes placed his bet on (mass layers of consumers, entrepreneurs, inves- its potential and self-renewal. Whereas Marx re- tors, etc.). So despite the psychological burden, vealed deeper and fundamental limits of capitalist these categories allow us to connect, in some way, development, Keynes found its weak link appeared mass psychology and study of economic relations due to the flow of surplus capital not used for prof- arising between business entities in the course of itable investments in production to the finance their reproductive activities. sector with deployment of speculative activities. These arguments provide sufficient grounds Strengthening the role of financial sector and fi- to consider the scientific school of Keynes in the nancial capital in the emergence of crisis collapses context of development of the political economy has been proved by real history of capitalism. In tradition. In this regard, its interpretation as the future, the role of credit-debt economy in crises “Keynesian system of political economy” is fully was described in works of post Keynesians (espe- justified, as it was formulated by R. Skidelsky, the cially H. Minsky). authoritative scholar of Keynes [18, p. 208]. It is not surprising that the current global cri- Such characterization of Keynesianism allows sis and complexity of the ways out of it promoted me to conclude this discussion with comments on the ideas and recommendations of the Keynesian the theoretical and practical importance of the school to be returned to scientific discourse. They political economy method and, in this case, with have taken the important place in discussion of regard to study of crisis processes [19]. The return variants of the anti-crisis policies [16]. His to- of large-scale crises to economic life of the cap- day’s follower, P. Krugman, is not afraid to say italist countries to an even greater degree testi- that “Keynesian view is the only plausible game fies that the political economy tradition of identi- in town” and ultimately its realism and depth al- fying essential and, therefore, cause-consequence lows us to consider this theory now as “the best and contradictory foundations of the reproductive framework we have for making sense of recessions process as a whole, is essential not only for un- derstanding the nature of crises, but also for de- 1 In this connection, Keynes concluded the following: “When velopment of effective anti-crisis measures. Focus the capital development of a country becomes a by-product of on study of surface and functional relationships in the activities of a casino, the job is likely to be ill-done” [15, p. 224]. economy is of little use.

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If now we address to the evaluation of the cur- This explanation actually means that the cri- rent global economic crisis relying upon the po- sis is caused not by the market, but by people tak- litical economy approach, it is critically impor- ing wrong and ill-advised decisions. This is the tant to interpret its systemacity in the context of standard explanation of crisis collapses offered negation of capital, while the way out of it is pre- by representatives of various orthodox neoliber- determined by resolution of contradictions gen- alism schools. Especially the government and na- erated by it. The main knot of contradictions is tional central banks responsible for management connected with the key problem of capital over- of the economy fell to their lot. Of course, the hu- accumulation in the mechanism of reproduction man factor in explaining crisis events must be of the entire global economy and the particu- taken into account. However, it should be under- larities of its cyclical development. In this case, stood that standards of conduct of economy par- it should be again emphasized that the essence ticipants do not occur completely independently; of the political economy approach to economic they are laid by the dominant system of economic capitalist crises is determined by posing the the- relations. It contains the fundamental origins of ory of as their fundamen- crisis and its characteristics. tal causes. The major contradictions and limita- In this regard, special focus will be on the tradi- tions of the capitalist mode of production arise tional way of mitigating the crisis of capital overac- in the process of capital accumulation. They re- cumulation, which until recently has been occurred fer to the capital (reflected in declining profita- through penetration into new markets, expansion bility) and external interactions (between labor of capital into developing countries, and then in- and capital, production and consumption, supply clusion of the post-socialist world in its orbit. This and demand, good organization of production allowed an increase in the export of goods and cap- and anarchy of the market economy, the need to ital to the periphery of the world capitalist system maintain proportionality and disproportionality, with simultaneous solution of the sales problem etc.). This is all that forms a complex of prerequi- and maintenance of acceptable production profit- sites and causes that objectively give rise to eco- ability. The modern post-crisis situation is charac- nomic crises under capitalism conditions. At the terized by considerable limitation of possibilities to same time, due to mitigation of these contradic- use this traditional method. Today, the world has tions and their temporal resolution, the capital- become capitalist everywhere in term of geograph- ist production overcomes recurring cyclical re- ical parameters and institutional subordination to cessions, and until recently — even more danger- capital in the most areas of social work — educa- ous systemic crises. tion, culture, sports, etc., which were previously de- It is not fortuitous that neoclassical orthodoxy veloped mainly out of the market. In addition, some has no substantiated insights of crisis problemat- significant shifts are being formed, i.e. the shifts in ics because it has “no theory of capital accumula- interaction between the existing center that loses tion”. At the same time, please note that econo- its leading role and the periphery of the world mists, who study economic processes based on the economy that strengths its position. In any case, method of political economy, achieve serious pro- there are serious limitations in resolution of prob- gress in their substantiation of the nature of mod- lems of overaccumulation with the use of methods ern capitalist crises. The theoretical and compar- that have already proved their efficiency. ative analysis of the global economy in the post- Another important aspect refers to the global war period held R. Brenner may serve as an exam- crisis occurred. It concerns the growing problem ple of the above stated [20]. His approach is based of overaccumulation of capital in a globally or- on study of the trajectory of profitability as reflec- ganized economy, which is coincident with the tion of the processes taking place in the sphere of end of the long cycle of credit and financial mar- capital accumulation. ket expansion. Cheap money and unprecedented The political economy interpretation of the na- access to credit funds has created the situation of ture of 2008–2009 global crisis is counteracted by a universal boom. It will happen sooner or later. various estimates that propose specious features, This situation is of “man-made” nature not cor- which are at least incomplete. So, one of the re- responding to the fundamental conditions of eco- spected creators of modern crisis, A. Greenspan, nomic development and relying mainly upon un- who headed the U.S. Federal Reserve for many restrained optimism of economic agents and years, believes that the “fundamental cause” of households, which lead to underestimation of as- crisis is “in the global underestimation of risk — sociated risks and produces irresponsibility. anomaly that was slowly growing for several years It can be assumed that, in the conditions of approaching its historic maximum” [21, p. 479]. modern global capitalism, the problem of overac-

ЭКОНОМИКА РЕГИОНА № 2 (2015) WWW.ECONOMYOFREGION.COM V. T. Ryazanov 49 cumulation of capital aggravating the process of nomic potential. In addition, it was assumed that overproduction was supplemented by its severe the increased size of the global market and trans- manifestation in the financial sector. In this se- of economic activity would help to ries of crisis metamorphosis, the most illustrative resolve the inherent contradictions of capitalism. fact is the return of the traditional crisis of cap- However, such hopes have not become true. In the italism — the crisis of overproduction. Although end, massive overaccumulation of fictitious capi- in this case it is necessary to consider its current tal disconnected from real assets transformed the specifics. In the period of industrial capitalism, crisis into a structural system event with very se- the problem of overproduction mainly related to vere consequences. Such is the political and eco- the sphere of production of goods. This brought nomic picture of the recent global economic crisis. to the forefront the problem of their sales un- Thus, the current phase of development of the der the conditions of excess capacity. This prob- world economy represents its entry into a difficult lem seemed to be put aside and even partially dis- stage of cleaning it of a variety of accumulated im- mantled at the expense of consumer lending. But balances and large-scale disequilibrium. All this this method resulted in the widespread debt over- distinguished cycles can be consolidated by one hang which turns debt into an insolvable problem thing: they can be considered in terms of com- at the present post-crisis stage. States, companies, pleteness of the modern global reproductive cycle households — they all are heavily in debt. and start of another systemic crisis of capitalism. It should be specially noted that the economic Exhaustion of world economy fundamental prin- crisis under capitalism still retains its most im- ciples based on continuous expansion of money, portant feature — to act as a crisis of overproduc- capital, and profit in the global economic space re- tion, as evidenced, on the one hand, by the con- moves the shit of the existing to tinuing problem of involving the excess capacity, agency and speculative financial activities. the extent of which have an impact on the nature Therefore, the way out of crisis requires re- and magnitude of recession. On the other hand moval of inefficient (unprofitable) companies, — a more significant decline in private invest- incompetent businesses, management and gov- ment as compared to other macroeconomic indi- ernment (and maybe countries) using a cleaning cators, which is regularly observed in crisis peri- mechanism of bankruptcy, as well as restoration ods. In fact, such decline in investment is condi- of the economic order on the new structural sys- tional upon the decreased demand and high risks tem basis — technological, economic, financial, because of the uncertain economic situation, and behavioral, etc., being formed in the emerging all this indicates the nature of overaccumulation global space. It also means changes in short-term, of capital not finding the sectors for profitable medium-term and long-term trends in the major investment. fields of economic activity — innovation, financial, Under new conditions, acuteness of the prob- resource, socio-political, etc. lem of overproduction spreads into the sphere of A way to overcome the negative consequences credit, securities and derivatives. In the pre-cri- of the global crisis and restore sustainable eco- sis period, it was an illusion that such financial nomic development in the post-crisis period may redundancy would help to expand demand and be determined through restoration of the real thereby to avoid any fall in profitability of capital economy priority and, on this basis, the change in by continuous reproduction of stimulatory eco- the . References 1. Sismondi, J. S. (1936). Novyye nachala politicheskoy ekonomii ili o bogatstve v ego otnoshenii k narodonaseleniyu [New principles of political economy: of wealth in its relation to population]. Moscow: Sotsekizdat. 2. Ricardo, D. (1955). Nachalo politicheskoy ekonomii i oblozheniya [The principles of political economy and taxation]. Moscow: Gospolitizdat. 3. Smith, A. (1993). Issledovanie o prirode i prichinakh bogatstva narodov [An inquiry into the nature and causes of the wealth of nations], B. 1-3. Moscow: Nauka. 4. Marx, K. (1961). Kapital [Capital]. Vol. 3. 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9. Varga, E.S. (1974). Ekonomicheskie krizisy [Economic crises]. Moscow: Nauka, 504. 10. Mendelson, L. A. (1959-1964). Teoriya i istoriya ekonomicheskikh krizisov i tsiklov [Theory and history of economic crises and cycles], B. 1-3. Moscow: Sotsialno-Ekonomicheskaya Literatura. 11. Ekonomicheskiy tsikl. Analiz avstriyskoy shkoly [Economic cycle. Analysis of the austrian school]. (2005). Chelyabinsk: Sotsium, 78-159. 12. Mises, L. (1994). Liberalizm v klassicheskoy traditsii [Liberalism: in the classical tradition]. Moscow: Nachala-Press, 87. 13. Friedman, M. (1998). Esli by dengi zagovorili [If money could talk]. Moscow: Delo, 160. 14. Krugman, P. (2013). Vykhod is krizisa est! [End this depression now!]. Moscow: Azbuka Biznesa, 138. 15. Keynes, J. M. (1978). Obshchaya teoriya zanyatosti, protsenta i deneg [The general theory of employment, interest, and money]. Moscow: Progress, 200-389. 16. Ryazanov, V. T. (2014). Ekonomicheskaya politika posle krizisa. Stanet li ona snova kesianskoy? [ after Crisis. Will it again Keynesian?]. Ekonomika Ukrainy [Economy of Ukraine], 5, 4-27. 17. Krugman, P. How Did Economists Get It So Wrong? Available at: http://www.nytimes.com/2009/09/06/magazine/ (date of access: 07.19.2014). 18. Skidelsky, R. (2011). Keyns. Vozvrashchenie mastera [Keynes. The return of the master]. Moscow: United Press, 208. 19. Ryazanov, V. T. (2012). Politicheskaya ekonomiya. Iz proshlogo v buduscheye [Political economy. From the past to the fu- ture]. Problemy Sovremennoi Economiki [Problems of Modern Economy], 2. 81-98. 20. Brenner, R. (2014). Ekonomika globalnoy turbulentnosti: razvityye kapitalisticheskie ekonomiki ot dolgogo buma do dolgogo spade, 1945-2005 [The economics of global turbulence: the advanced capitalist economies from long boom to long downturn, 1945- 2005]. Moscow: Publishing House of the Higher School of Economics, 552. 21. Greenspan, A. (2010). Epokha potryaseniy. Problemy i perspektivy mirovoy finansovoy sistemy [The Age of Turbulence. Problems and Prospects of the World Financial System]. Moscow: United Press, 479. Information about the author Ryazanov Viktor Timofeyevich (Saint Petersburg, Russia) — Doctor of Economics, Professor, Head of the Department of Economic Theory, Saint Petersburg State University (62, Chaikovsky St., 191123 Saint Petersburg, Russia; email: et @econ.pu.ru).

doi 10.17059/2015-2-4 УДК 330.1:332.1 Г. Б. Клейнер а) а) Центральный экономико-математический институт РАН ГОСУДАРСТВО — РЕГИОН — ОТРАСЛЬ — ПРЕДПРИЯТИЕ: КАРКАС СИСТЕМНОЙ УСТОЙЧИВОСТИ ЭКОНОМИКИ РОССИИ Часть 1 1

В статье с системных позиций исследуются факторы устойчивости российской экономики как многоуровневой, многосубъектной и многоаспектной социально-экономической системы. Формулируется концепция системной устойчивости экономики как способности сохранять пред- посылки развития за счет поддержки и эффективного использования системной структуры эконо- мики. Показывается ведущая роль совокупности экономических субъектов разных уровней (включая государство как субъект международных отношений, регионы как субъекты Федерации, предприя- тия как хозяйствующие субъекты) в устойчивости экономики. Подчеркивается необходимость «до- стройки» сети субъектов за счет укрепления субъектности отраслей экономики. Исследование вну- тренней базовой системной структуры экономического субъекта и внешней структуры его бли- жайшего окружения в социально-экономическом, административно-управленческом и рыночном пространствах с использованием результатов новой теории экономических систем приводит к вы- воду о подобии этих структур. Показывается, что каждый из этих системных комплексов вклю- чает (вместе с самим субъектом) четыре системы различных типов — объектного, средового, про- цессного и проектного. Такую же структуру имеет и системное окружение субъекта в админи- стративно-управленческом пространстве межуровневых взаимодействий. Это дает возможность свести проблему устойчивости субъектов к вопросу о сбалансированности системных структур комплексов, образующих внутреннее наполнение и внешнее окружение субъектов. Приводится ме-

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