Contours of Descent: U.S. Economic Fractures and the Landscape of Global Austerity

The US economy faced the prospect of a serious recession even prior to the September 11 terrorist attacks. The afflictions that had deepened under both Bill Clinton and George W. Bush—wage stagnation, rising inequality, wildly inflated stock markets—sharpened further. The highly unstable conditions that Clinton handed Bush were hardly noticed amid the near-universal praise for the economic stewardship of Clinton and his supposed policy maestro, Federal Reserve Chair Alan Greenspan.

Contours of Descent reveals how these variants of neo-liberal economics, which lavish favors on multinationals and capitalists while allowing living standards for ordinary people to fall, operate in the US and less developed countries, and explores policies for economic growth with increased equality.

---

All Customer Reviews
Average Customer Review:
0 of 0 people found the following review helpful:

Good But Already Dated, 2008-07-09
"Contours of Descent" is a critical re-examination (from a left/Keynesian perspective) of economic policy under Bill Clinton. The book also looks at the American economy during Bush's first term, and sizes up the impact of neo-liberalism on the developing world. The broad aim is to identify trends -- such as globalization and financial deregulation -- that are reducing growth and generating inequality in the U.S. and elsewhere. Among the findings:

-- Real wages of American workers have been stagnant since the 1970s, despite large productivity gains. The gap between rising productivity and flat real wages has generated higher returns to capital, thus fueling inequality in the U.S.

-- Wage stagnation is a result of the declining power of American workers, who have been undermined by anti-union policies at home and by competition from newly industrializing countries in Asia. In effect, globalization has increased the size of capitalism's "reserve army of the unemployed."

-- The short-lived economic "boom" of the late 1990s had nothing to do with the internet. It was caused by an artificial and unsustainable stock market bubble that boosted consumer spending and (eventually) investment. When the bubble collapsed, the American economy slid into recession.

-- Growth rates in the developing world dropped after neo-liberal reforms were imposed on/adopted by developing countries in the 1980s and '90s.

"Contours of Descent" is intelligent, thought-provoking, and jargon-free. The analysis of the stock market bubble of the late 1990s is eerily reminiscent of the recent housing bubble. which emerged only after the book was written. However, no issue is discussed in depth, and the chapter on the developing world -- a huge topic -- is laughably superficial. The book is also seriously dated, having been written in 2003.




3 of 3 people found the following review helpful:

Solid left-Keynesian critique, falters on broad social vision, 2007-12-10
I studied at the University of Massachusetts Amherst, where Robert Pollin teaches and works at the Political Economy Research Institute, and I am generally sympathetic to his work on such topics as living wages and financial market regulation. I've used this book as a text for my introductory macroeconomics course.

The book is well-written; beginning each chapter with a hook, often taken from a popular source, such as an article, editorial, or political speech, Pollin proceeds to demolish conservative arguments about the `ideal' 1990's economy. The tone of the book is evenhanded and reasonable, yet makes a solid, persuasive case.
The basic argument of the book is two-fold: first, the neoliberal policies pursued during the Clinton years (and the first two years of the Bush administration) have led to an increase in economic inequality, both in the US and elsewhere in the world, through institutions and agreements such as the IMF, the World Bank, the WTO, and NAFTA. Second, the prosperity of the Clinton years and the slump of the Bush years are simply two sides of the same coin, for both result from the increased economic volatility that results from neoliberal policies of deregulated financial markets, and the lack of effective government action to stabilize aggregate demand, as well as a basic antipathy towards worker's rights.

As should be clear from the summary above, the main theoretical apparatus of the book is quite close to what Keynes argues in The General Theory and elsewhere, and what left-leaning economists who followed Keynes have developed since the 1930's. Pollin makes his approach clear in the first chapter, where he addresses what he considers three major problems with unregulated market capitalism, associated with three great figures in economics, which Pollin dubs "The Marx Problem", "The Keynes Problem", and "The Polanyi Problem". Now, before delving into these problems, I should say, it takes a certain amount of verve to summarize the entire work of these great minds in a few paragraphs, and by doing so, one is certainly setting oneself up for a critique.

Let's start with where Pollin is the strongest, which is with his argument on "The Keynes Problem". Here Pollin delivers a wonderfully concise treatment of one of Keynes' arguments, which is that because business ventures are uncertain, financial markets developed to enable firms to have more flexibility and to manage risk. However, these
markets not only provide a means for turning society's savings into productive investment, they provide venues for speculation, which leads to a great deal of instability. Keynes argues that investment is the most volatile part of aggregate demand. Thus, if we want a more stable economy, in which destructive business cycles are minimized, effective regulation of financial markets and other government intervention in the economy are essential.

Pollin is also on solid ground with his treatment of "The Polanyi Problem", in which he argues that free markets tend to produce outcomes which are quite unfair. To solve this problem, markets must be "embedded in social norms and institutions that promote broadly accepted notions of the common good." This argument, which many New Deal
liberals, including Keynes himself, shared, brought about many reforms, labor laws, minimum wage and strong wage growth, and welfare state policies. To implement these, strong growth was needed in the government. According to Pollin's figures, government spending as percentage of GDP went from 8% in 1913 to 38% in 1992. Unfortunately,
Pollin is not as clear as he might have been in this section. He mentions that markets generate `inequitable' outcomes, but there is no real discussion of what this means in a concrete way.

However, it is when Pollin turns to Marx that he falters, arguing that "The Marx Problem" is that workers have less power than employers when it comes to bargaining for wages. As a result, international competition and pressure from unemployed and underemployed workers tends to bring wage levels down. That's "The Marx Problem"?Shouldn't an old dynamic of capitalism that was discussed by many other economists, including William Petty in the 17th century and Adam Smith in the 18th century, be attributed to someone else besides Marx? Surely one of Marx's more original contributions to economics should be given such an impressive title.

How can we explain Pollin's anemic treatment of Marx? After all, Pollin studied with Paul Sweezy, and even wrote a nice retrospective on Sweezy recently. (See http://www.counterpunch.org/pollin03062004.html)

There is no mention of exploitation, or the tendency of competition to lower the rate of profit, perhaps precipitating a crisis, nor of anything like `dialectical materialism', themes which loom large in the Marxian literature. One is tempted to conclude that Pollin has not read much beyond "The Communist Manifesto", and perhaps not even to the end of that.

Indeed, Pollin goes into considerable detail in discussing the rate of productivity growth in the U.S., showing that for substantial periods of time, including much of the 1980's and 1990's, the rate of productivity growth was increasing, while wages were in fact falling. Pollin notes that rising productivity does not guarantee higher wages.
This is all especially interesting in the context of what Marx calls `the rate of surplus value', which is frequently called simply the rate of exploitation: e = s/v, the surplus value divided by the value of labor power which the worker receives as a wage. This rate of surplus value is similar to the rate of productivity used in the mainstream
economics literature (let us hold aside for the moment the price / value distinction and other esoteric points). It is clear from the above that the rate of exploitation may rise even as wages fall -- indeed, Marx argues that this is a major tendency of the capitalist class process. However, the rate of exploitation may rise when wages remain constant, if there is an increase in the intensity of labor. The rate of exploitation may rise even if wages rise, if the increase in the intensity of labor outweighs the effect of the wage increase.

Even when discussing third world sweatshops, Pollin does not use the concept of surplus, nor discuss exploitation, except in the most general of terms, and always to mean wages that are `too low', never to mean the problem of someone who did not produce surplus value who appropriates that surplus value -- Marx's definition of
exploitation. The lack of understanding of class and exploitation seriously impairs Pollin's ability to clearly explain the sources of inequality in the U.S. economy in relation to globalization.

Pollin is quite good when he discusses and critiques mainstream economists' glowing treatment of the economic performance of the 1990's. His discussion of the causes of the stock market boom, which, as he notes, is heavily influenced by the work of Lawrance Evans' "Why the Bubble Burst", is also quite good. But do not expect more than
a liberal view of how to reform capitalism.

Pollin ends by discussing what we need, in the words of Robert Heilbroner: `a slightly imaginary Sweden' -- meaning, of course, a highly-regulated market economy overseen by a democratic government. The reader cannot help but wonder, are there no new ideas? Are we completely out of fresh perspectives? If one is searching for something that could perhaps revitalize popular movements across the globe with a new vision of how to create a better society, my advice is, keep looking, but if one is searching for a solid liberal critique of the excesses of the roaring 90's, this is it.


3 of 3 people found the following review helpful:

Settling Accounts, 2006-12-22
Clinton boosters have not been shy about touting the Arkansas playboy's economic record while in office. After all, didn't he balance the budget after years of stunning deficits. And didn't unemployment stats fall to near record lows, with negligible inflation, no less. Wasn't capital also included, with equity prices rising to record highs. Yeah, good times for everyone, courtesy our 42nd president. Maybe his zipper had occasional problems, but the economy didn't.

Anyone looking to get beyond the hype with a real take on those years should pick up Pollin's nifty little scorecard. Sure, it's filled with graphs and stats, but how else can the hype be debunked without them. They put the record in historical perspective, and what comes out is not nearly so impressive as what went in. If you feel that somehow you were no better off in 2000 than you were in 1993, don't feel alone. In fact, the Clinton yacht left most of us behind, as the big picture shows. One thing for sure, Pollin will not be on the DLC's list of 2007 must-read's.


5 of 8 people found the following review helpful:

Not much new information or analysis, 2006-05-12
Most leftists will be familiar with almost all of the information in Robert Pollin's book. From the rightist nature of Clinton's policies, to the fact that most people's standard of living didn't improve much in the 1990s, to the failure of neoliberalism in India, Argentina, and other nations.

Some bits are interesting. He refutes various circular explanations of why a large bubble developed in the 1990s and provides a good interpretation. The information on the farmer suicides in India will be new to most readers.

At the outset he outlines the "Marx Problem" the "Keynes Problem" and the "Polanyi Problem" but these concepts are hardly used throughout the book.

This book is only recommended for young leftists (or foreigners, since most of the book is on the U.S.) who have not yet learned much about the U.S. economy and international neoliberalism. To all others it will be redundant.


6 of 6 people found the following review helpful:

Forest and trees problem, 2006-05-03
Good book, well written, highly literate, worth the effort to wade through, just a few problems. The first is he ignores a series of fairly astute +170 year-old observations by Alexis de Tocqueville. Next, he misses the lessons of classical history.

When Tocqueville looks at the future of America he is troubled not by the macro-economic policies of the Clintons, but with the fundamental materialism of American life. The seeds of the current problems have always been there, since at least 1831. Tocqueville thinks greed is mostly good, he just thinks you have to have the sense (his control mechanism is religion) not to take it too far. This is actually what Pollin is writing about.

Next, the lessons of classical history would suggest that there is a perpetual tension in republics between democrats and oligarchs. Sadly, this will be dismissed by some as neo-Marxist. It isn't; Marx reported a phenomenon, he didn't create it.

What Tocqueville feared, and Marx observed, is best summed by Napoleon's observation that if you abolished the aristocracy of the nobility, you ended up recreating it in the houses of the upper-class. It would seem that we are there, except that somehow it is now unacceptable to talk in terms of class warfare (a prohibition that does not seem to be of much benefit to the non-aristocrats).

What Pollin is reporting is how the oligarchy has gone about extending its power in the modern era. Sadly, it usually takes a pretty severe crisis to reverse that trend. Some analysis of history (classical Athens, the Roman Republic) suggests that if you go far enough over the edge you can never make it back.

Price is accurate as of the date/time indicated. Prices and product availability are subject to change. Any price displayed on the Amazon website at the time of purchase will govern the sale of this product.