Unending Hard Times

The secular decline of decadal average annual real gross domestic product (GDP) growth rates of the Triad economies (the United States (US), West Europe and Japan) from the 1970s to the present—with those of the first decade of this century, and well into the second, the slowest since the 1930s—has resurrected the words “Depression” and “stagnation,” long gone into disuse, from the mainstream economics lexicon. Accompanied as the dismal growth rates are, by stagnant or declining real wages, massive unemployment, growing inequality and a general deterioration in the quality of life of the vast majority of the people of the Triad countries, an endless crisis seems to have befallen them.

The Great Financial Crisis of 2007–09 was itself linked to this stagnation, the latter, reflecting, in Keynesian terms, a chronic deficiency of effective demand. Given a continuing weak propensity to invest (in the economic sense of the word), a gravitational shift of economic activity from the production of goods and non-financial services to finance—the process of financialisation—has been underway, entailing the deployment of money capital in the financial markets and in speculation, more generally, to make more money, bypassing the route of commodity production, and this has been one of the main ways of counteracting stagnation. But each time a financial crash has occurred, it has led to the resurfacing of stagnation.