Labour Research May 2004


The boom and the bubble

Robert Brenner, Verso, 332 pages, paperback, £11.00

Between 1950 and 1973 the world economy grew at an unprecedented rate, only to fall into a long downturn for the next 30 years. The US boom in the 1990s led some to believe a new take-off was about to occur, but it turned into a stock market bubble, and then the bubble burst.

Brenner explains this prolonged period of stagnation by intense competition between leading manufacturers, leading to over-capacity and over-production in the global economy. He believes the same mechanism continues to depress profit rates and hence the prospects for a new upturn.

He demonstrates that the 1990s boom was always fragile, buoyed by absurd levels of debt and stock market overvaluation. And he punctures the myth that the "new economy" of information technology could act as an engine of economic upturn.