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The U.S. Economic Crisis

Author

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  • Fred Moseley

    (Mount Holyoke College, South Hadley, MA, USA)

Abstract

This paper argues that the fundamental cause of the current economic crisis in the U.S. economy was a significant long-term decline in the rate of profit from the 1950s to the 1970s. Capitalists responded to this profitability crisis by attempting to restore their rate of profit by a variety of strategies, including: wages and benefit cuts, inflation, “speed-up†on the job, and globalization. These strategies have largely restored the rate of profit, but have resulted in stagnant real wages for workers for decades. As a result, household indebtedness has increased to unprecedented levels and must be substantially reduced in order to make possible a sustainable recovery.

Suggested Citation

  • Fred Moseley, 2013. "The U.S. Economic Crisis," Review of Radical Political Economics, Union for Radical Political Economics, vol. 45(4), pages 472-477, December.
    • Handle: RePEc:sae:reorpe:v:45:y:2013:i:4:p:472-477
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    More about this item

    Keywords

    current crisis; falling rate of profit; household indebtedness; debt reduction;
    All these keywords.

    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles

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