Books in Brief: Capitalism in Crisis

Capitalism in Crisis, by A. Glyn and B. Sutcliffe (Pantheon, 286 pp., $8.95). This is a beguiling attempt to shore up archaic Marxist dogma with some of the trappings of economic theory and statistics. A lengthy introduction, by an obscure American professor, generalizes wildly about “a new stage” of U.S. capitalism on the basis of some incredibly deceptive graphs (they cover only a few atypical years, and have no numbers at all on the vertical axes). Glyn and Sutcliffe’s British version is equally devious. Their central thesis is that union wage demands and international competition (read: unrealistic fixed exchange rates) squeeze profits and destroy the incentive to invest. Socialism, of course, also needs profits to finance investment, so this seems less an indictment of capitalism than an argument for Soviet-style prohibition of effective unions. A neglected but crucial fact is that the share of after-tax employee income in Britain has fallen steadily from 60 per cent of national income in 1955-57 to 55.9 per cent in 1971. True, the profit share has fallen too, but the problem is that the state is taking an ever larger share of Britain’s resources, leaving less for both labor and capital. Glyn and Sutcliffe inadvertently show that Britain’s sluggish growth is the result of too much union and government power, yet their idea of a “solution” is to make those powers absolute, through total socialism. It’s like prescribing cobra venom for a bad case of snake bite.

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A. Reynolds

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Capitalism in Crisis, by A. Glyn and B. Sutcliffe (Pantheon, 286 pp., $8.95). This is a beguiling attempt to shore up archaic Marxist dogma with some of the trappings of economic theory and statistics. A lengthy introduction, by an obscure American professor, generalizes wildly about “a new stage” of U.S. capitalism on the basis of some incredibly deceptive graphs (they cover only a few atypical years, and have no numbers at all on the vertical axes). Glyn and Sutcliffe’s British version is equally devious. Their central thesis is that union wage demands and international competition (read: unrealistic fixed exchange rates) squeeze profits and destroy the incentive to invest. Socialism, of course, also needs profits to finance investment, so this seems less an indictment of capitalism than an argument for Soviet-style prohibition of effective unions. A neglected but crucial fact is that the share of after-tax employee income in Britain has fallen steadily from 60 per cent of national income in 1955-57 to 55.9 per cent in 1971. True, the profit share has fallen too, but the problem is that the state is taking an ever larger share of Britain’s resources, leaving less for both labor and capital. Glyn and Sutcliffe inadvertently show that Britain’s sluggish growth is the result of too much union and government power, yet their idea of a “solution” is to make those powers absolute, through total socialism. It’s like prescribing cobra venom for a bad case of snake bite.