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New Year same old crisis

Marxist Analysis · 2026-05-13

Here is the structured analytical summary of the article "New Year, same old crisis" by Adam Booth.

Core Argument

The central thesis is that the relative calm in the global economy during 2013 was not the beginning of a genuine recovery, but a temporary lull within a single, ongoing crisis of overaccumulation. The article argues that the fundamental contradictions of capitalism—primarily the tendency towards overproduction and the rising exploitation of labour—remain entirely unresolved. The "recovery" in the US and UK is portrayed as anaemic and artificial, based on inflated asset prices and depleted household savings rather than productive investment. The article claims that the ruling class is trapped in an impasse: every measure taken to stabilise the system (austerity, quantitative easing) merely deepens the underlying contradictions, preparing the ground for a return of the crisis on a higher level and for inevitable social explosions.

Theoretical Grounding

The analysis is grounded in the Marxist theory of crisis, specifically the concept of overaccumulation. The article identifies the core problem as a lack of profitable investment opportunities for capital, leading to vast "cash hoards of idle money" and speculative activity. This is explicitly linked to the tendency of the rate of profit to fall, as the article notes that a larger share of national income is going to profits at the expense of wages, yet this surplus cannot be productively re-invested due to massive excess capacity. The piece also draws on the Marxist understanding of fictitious capital, explaining Quantitative Easing (QE) as a policy that inflates credit bubbles and asset prices without resolving the crisis in the "real economy" of production. The argument sits firmly within the tradition of Marxist crisis theory that rejects Keynesian and reformist notions of a managed recovery, insisting that capitalism cannot escape its internal contradictions. It echoes the work of theorists who analyse the current period as one of "permanent depression" or secular stagnation, but grounds this in the Marxist law of value rather than bourgeois economic theory.

Conjunctural Relevance

The article is written from the vantage point of early 2014, but its analysis is directly relevant to the long arc of the post-2008 conjuncture. It correctly identifies the following dynamics that have defined the subsequent decade:

  • The "Taper Tantrum" and its aftermath: The article predicts that the tapering of QE by the US Federal Reserve would cause "structural problems and imbalances" to resurface. This was borne out by the 2015-2016 global market turmoil and the emerging market debt crises.
  • The Eurozone's "Chronic Phase": The piece argues that the acute phase of the euro crisis was over but a "chronic phase" of stagnation and high unemployment had begun. This accurately foresaw the decade of low growth, political instability, and the rise of far-right movements in Southern Europe.
  • China's "Hard Landing" Risk: The article highlights the dangers of China's credit-fuelled stimulus, pointing to local government debt and "ghost towns." This analysis remains central to understanding the fragility of the Chinese economy and its reliance on continued debt expansion.
  • Stagnant Wages and Rising Inequality: The article correctly identifies the long-term trend of a falling wage share of GDP as the root cause of the crisis, a phenomenon that has only intensified with the rise of automation and the gig economy.

Where the Argument Continues

This article is a snapshot of a recurring theme in the IDOM corpus. The argument is developed further in several directions:

  • The "Permanent Depression" Thesis: The concept of a long-term epoch of stagnation is explored in greater theoretical depth in other IDOM articles, particularly those discussing the work of Marxists like Henryk Grossman and the concept of the "tendency of the rate of profit to fall" as a structural, not cyclical, feature of late capitalism.
  • The Political Consequences: The article's final section on social unrest is a prelude to a vast body of IDOM analysis covering the rise of Syriza in Greece, Podemos in Spain, the Corbyn movement in the UK, and the Sanders campaign in the US. The argument continues by analysing these movements as expressions of the same crisis, but also by critiquing their reformist limitations.
  • The Critique of Keynesianism: The article's dismissal of state spending as a solution is a constant theme. Later articles and Against the Current episodes develop this into a detailed critique of Modern Monetary Theory (MMT) and other "left-Keynesian" proposals, arguing they cannot overcome the law of value.

Connections

This article should be read alongside:

  • Trotsky's "The Death Agony of Capitalism and the Tasks of the Fourth International" (The Transitional Program): For the theoretical framework of understanding an epoch of crisis and the tasks of revolutionaries within it.
  • Other IDOM articles from the 2013-2015 period: Specifically those analysing the Greek crisis, the rise of Syriza, and the Scottish independence referendum, as these were the key political battlegrounds where the economic trends described in this article played out.
  • The work of Michael Roberts: A contemporary Marxist economist whose blog and books (e.g., The Long Depression) provide the rigorous empirical data on the rate of profit and global stagnation that underpins the analysis in this article.
  • David Harvey's The Enigma of Capital: For a broader theoretical exploration of the relationship between the circulation of capital, fictitious capital, and crisis, which provides the conceptual vocabulary for the article's critique of QE.

Key Quotes

  1. "The relative peace at the present time is merely the calm before the storm; a temporary lull before the crisis returns on a new higher level."
  2. "But with huge excess capacity – i.e. overproduction – on a world scale, businesses have nowhere to invest. Instead, cash hoards of idle money pile up and speculative activity to make a quick profit increases..."
  3. "The real source of growth under capitalism is investment; more specifically, the re-investment of profits by the capitalists in search of new, greater profits."
  4. "...the issue of stagnant and declining real wages is part of a longer term trend, going back long before the current crisis, in which a larger share of the wealth in society is going to profits instead of wages – i.e. to the capitalists instead of the workers; to Capital instead of Labour."
  5. "The reality is that the capitalists, in order to restore stability to the economy, have no option but to attack the living standards of the working class. Everything they do to restore economic equilibrium merely destroys the social and political equilibrium. Whichever option they choose is wrong, reflecting the impasse of the capitalist system as a whole."
  6. "The acute phase of the crisis may be over but the chronic phase may only have begun." (Quoting The Economist)