Robert Brenner's Thesis on the End of the Long Boom

Discussion

Aaron Benanav:

"Is there something more in Bidenomics than Brenner and Riley aver, perhaps even a turn towards a new era of state-led economic development and green growth? In a recent article for Jacobin, J. W. Mason uses the occasion of Riley’s recent Sidecar piece on the collapse of Silicon Valley Bank to attempt a critique of Brenner’s account of postwar capitalism’s long downturn, which also underlies the Riley–Brenner theses.footnote6 Mason, a Left Keynesian who teaches economics at John Jay College, nyc, claims that Biden’s Inflation Reduction Act (ira) deserves a cautious welcome from the Left, on the grounds that it directs spending towards productive enterprise, rather than into the accounts of financial asset-holders. There is no hard external constraint in supply or demand for decarbonization technology or renewable energy, he argues. The profit motive can be harnessed by the state to ‘meet human needs’ via green industrial policy. The ira should be seen as a step towards this, although public investment in private enterprise should be ‘managed’ to avoid destructive competition and mass unemployment. The logic here is that fiscal spending—on a large enough scale, and with a green-growth orientation—should be sufficient stimulus for the economy to achieve take-off and generate a lasting economic boom.

Brenner’s account of the end of the long boom, an account which also provides an explanation of why another such boom is highly unlikely, presents a serious intellectual obstacle for Mason’s proposal. At the heart of Brenner’s analysis is the notion of chronic overcapacity: too many producers are trying to sell in the same markets, leading to lower prices, lower profit rates, reduced investment and falling rates of economic growth. Taking Riley’s summary of the state of play as a good proxy for Brenner’s analysis, Mason argues that Riley, ‘following Brenner—talks as if there was a fixed amount of demand out there that producers must compete for’. Hence, Mason speaks about the ‘Brenner paradigm of a zero-sum competition for shares of a fixed market’, and argues that such an account has extremely limited explanatory power, or even none at all.

This is a complete misinterpretation. Brenner’s is not, as Mason believes, a static theory, in which there is a ‘fixed amount of demand’ that producers fight a zero-sum game to capture. Brenner’s theory of overcapacity is dynamic. He charts the conditions of increasing, system-wide economic stagnation, in which demand stimulus does issue in productivity and income growth, but with declining returns to stimulus over time.footnote7 In that vein, he explores the failures of successive attempts at Keynesian demand stimulus to revive the self-sustaining, high-growth economic engine that revved between 1947 and 1973—starting with the direct, public stimulus era of the 1970s and 80s and ending in the indirect, asset-price stimulus era of the 1990s to 2010s. But at no point does he argue that demand stimulus is wholly ineffective. On the contrary, much of his corpus is about the partial effectiveness of that stimulus."

(https://newleftreview.org/issues/ii140/articles/aaron-benanav-a-dissipating-glut)