The Crisis Of '08 Reading List
Source Dave Anderson
Date 08/12/25/06:54
The Crisis Of '08 Reading List
by John B. Judis
The best books to help you make sense of Marx, Keynes, the Great
Depression, and how we got where we are now.

EVERY FEW years, someone urges me to do a Christmas book list, and
while protesting my ignorance and incompetence, I gladly comply. This
year's subject is the current global recession, which threatens to
become a global depression. This is a layman's list, because I am
strictly a layman on the subject of economics. You don't have to know
anything about string theory to read any of the books I recommend.

I learned most (or what little I know) of economics from reading on my
own or from study groups we used to hold in the fading days of the new
left. I read all three volumes of Capital in a study group organized
by the late Harry Chang, a Korean immigrant to the Bay Area who was a
computer programmer by day (in the keypunch era) and a Marxist scholar
by night. I read Keynes under sporadic supervision of economist Jim
O'Connor, the author of The Fiscal Crisis of the State, and a fellow
member of the collective that published Socialist Revolution (which in
1978 became Socialist Review). And I got my introduction to economic
history from historian Marty Sklar, who was also a member of that

A decade ago, I might have been embarrassed to admit that I was raised
on Marx and Marxism, but I am convinced that the left is coming back.
Friedrich Hayek is going to be out; Friedrich Engels in. Larry Kudlow
out; Larry Mishel in. And why is that? Because a severe global
recession like this puts in relief the transient, fragile, and
corruptible nature of capitalism, and the looming contradiction
between what Marx called the forces and relations of production
evidenced in unemployed engineers and boarded up factories and growing
poverty amidst a potential for abundance. As capitalism itself--or at
the least the vaunted miracle of the free market--becomes problematic,
the left is poised for an intellectual comeback. So here are four
topics and some books to read about them, plus a few articles, from
someone who learned economics by reading and rereading Paul Baran and
Paul Sweezy's Monopoly Capital.

1. The current crisis. I was warning my colleagues of an encroaching
disaster a year ago, because I was reading the columns and articles of
Paul Krugman, Nouriel Roubini, Larry Summers, and Dean Baker. They
were on top of this when Hank Paulson and Ben Bernanke were still
telling everyone not to worry. Of the current books I've read (and I
haven't read many), I'm very high on Financial Times columnist Martin
Wolf's Fixing Global Finance, George Cooper's The Origin of Financial
Crises, Jamie Galbraith's The Predator State, and Dean Baker's Plunder
and Blunder. Wolf is terrific on the international currency mess--and
the Financial Times is the paper to read--Cooper is first-rate on the
irrationality of money and finance, Galbraith has a good explanation
of how we got to where we are, and how to get out of it, and Baker is
the expert on the housing bubble. I also liked Krugman's The Return of
Depression Economics when it appeared almost ten years ago (Short
take: If it could happen to Japan, it could happen to us). There is a
new edition that incorporates some material about 2008, but I haven't
read it.

2. John Maynard Keynes. Keynes is back in vogue, and rightly so. One
economist--I can't remember who it was--recently warned against
reading The General Theory of Employment, Interest, and Money because
it was written strictly for economists. I don't agree at all. It's a
very hard book, especially some of the middle sections, but worth
reading and rereading. If you don't have energy for the whole thing,
read the first three chapters, some of the middle chapters (7, 10, 16,
and 18 are my suggestions) and the last three. I suggest, however, a
guide. The best I've found is Dudley Dillard's The Economics of John
Maynard Keynes, which, to my amazement, is still in print after sixty
years. I also like Hyman Minsky and Paul Davidson's guidebooks to
Keynes. But you've got to read Robert Skidelsky's three-volume
biography of Keynes, Hopes Betrayed, The Economist as Savior, and
Fighting for Freedom (also now available in an abridged one-volume
edition). Believe me, this is one of the great biographies. The way he
brings together Keynes, the gay aesthete of Bloomsbury, and Keynes,
the economist and man of worldly affairs, is something to behold.
Skidelsky's second volume is also the best introduction to Keynes's
economics, because you learn that exactly those ideas you found
mystifying or most difficult in Keynes were hotly debated between him
and his colleagues.

3. The Great Depression. There have been a lot of books on this
subject, but most of what I read I read decades ago, so I'm sure I'm
going to overlook worthy choices. Still, there are two older books
that continue to stand up. George Soule was an editor of The New
Republic during the 1930s. He was also an economist and in 1947
published a study of the American economy from 1917 to 1929 entitled
Prosperity Decade. Soule shows that well before 1929, there were
rumblings of trouble in the American economy--not only in the stock
market bubble, but in overcapacity in key industries like auto, and in
the rise of technological unemployment. You'll see the surprising
resemblance to our own decade, including an anticipatory recession in
1926 like the one in 2001. On the international crisis of the 1930s, I
like Charles P. Kindleberger's The World in Depression, which I reread
two months ago when I was writing about the current international
imbroglio. I want also to mention an essay by Sklar in The United
States as a Developing Country. In chapter five, "Some Political and
Cultural Consequences of the Disaccumulation of Capital," Sklar puts
forward the idea that during the 1920s, capitalism shifted from the
accumulation to disaccumulation of capital. That's Marxist jargon, but
what it means is that goods production began to expand as a function
of the reduction rather than increase in labor-time and in the labor
force. That created an enormous opportunity, but also a potential
crisis. The depression of the 1930s, Sklar argues, was the first
"disaccumulationist" depression. One of his former students, historian
Jim Livingston from Rutgers, has put forward a similar analysis of the
current recession.

4. Marx and Marxism. Marx, like Keynes, is best read in his own words.
There are a lot of brilliant shorter works, but I'd put the first
volume of Capital up there with The Origin of Species, The
Interpretation of Dreams, and The Philosophical Investigations on my
list of great books of the last two hundred years. It's not a guide to
starting your own business and really doesn't have a theory of crises.
Some of that is in the other unfinished volumes. What volume one does
is establish capitalism as a phase, and perhaps a passing phase, in
world history whose very nature has consisted in disguising that fact
from worker and capitalist alike. You read Capital to understand the
historical underpinnings, not the mechanics of capitalism. Marx's
theory of history has obvious deficiencies--he didn't foresee,
certainly, the rise of corporate capitalism and of corporate
liberalism. His trademark theory of the falling rate of profit, which
you can find in volume three, is also unpersuasive. But these failings
pale beside his portrayal of capitalism as mode of production based
upon labor power as a commodity and on the accumulation of capital. I
wish I could recommend guides to Marx's thought. The economic guides
often err by trying to justify his works as modern economics. G. A.
Cohen's book, Karl Marx's Theory of History, is a little academic, but
of all the books I've read in the last twenty or thirty years, it's
the best.

Have a good, if grim, read of these books--if you have some better
ideas, include them in the comments below--and let's hope that the
next year brings some better economic news than this one.

John B. Judis is a senior editor at The New Republic.

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