3rd GAPE Web Seminar. A. Mejorado & M. Roman: “From Secular Stagnation to Depression: The Legacy of Neoliberalism”
In May 14, 2021, Ascension Mejorado from New York University and Manuel Roman from New Jersey City University will deliver the third and last GAPE web seminar for Spring 2021 titled as “From Secular Stagnation to Depression: The Legacy of Neoliberalism”.
Meeting Information
Date: May 14, 2021. Time: 19:30 (12:30 New York Time)
Meeting link:
https://uoa.webex.com/uoa/j.php?MTID=m656766108b8ef623abe1a340ddacc007
Meeting number: 121 368 7314
Abstract of the seminar
The main argument of this presentation, based on our forthcoming book (Secular Stagnation and the Prospect of Depression) is that falling profitability throughout the Golden Years paved the way for the unravelling of the capital-labor accord, deindustrialization, the dismantling of labor unions, the flight of capital overseas and the consolidation of neoliberalism after the mid-1980s. We provide empirical evidence for the following propositions. The extent to which the average profit rate declined is best appreciated when estimated on gross capital stock (using the procedure created by Anwar Shaikh in his Capitalism magnum opus). But even estimates based on the net capital stock fixed asset tables published by the Bureau of Economic Analysis show significant decline between the period 1947-1981 and 1982-2019. We argue in this book that falling profitability caused ‘secular stagnation’ when the profit rate level failed to rise in the neoliberal period extending from the mid-1980s to the present. Since the 1990s a growing number of nonfinancial corporations, rising to around 20% of the whole sector became insolvent ‘zombie companies’ unable to even meet their interest obligations without piling up debt. Sharp sectoral bifurcations emerged in the wake of the neoliberal structure of capital accumulation. Increasingly the labor displaced from the relatively small and technologically advanced sector found employment in a relatively large and stagnant service sector characterized by low productivity and low wage rates currently employing nearly 50 % of the private labor force. The characteristics of this laggard sector strengthen the stagnation tendencies of the system as a whole. Under these conditions, the system’s recovery of strong growth and the reversal of its profitability path would require the disappearance of ‘zombies’ and the cheap credit facilities that have kept ‘zombie’ corporations viable. Before the pandemic devastated the service sector Federal Reserve monetary policies sought to avoid such an outcome. Fiscal policies today seek to prop-up support for the financial markets. Hence, the prospect of depression, albeit of a new ‘silent’ variety cannot be discarded.
