What causes stress Stress? like a Pandora's box that contains our problems that give these unpleasant sensations. But now we are armed with the right knowledge and we are not afraid to open it, but, on the contrary, by the ear and into the sun?! Dry each one in turn and turn

Blame Causes Guilt and Shame I have worked with many smart, introverted clients who were convinced they had some fundamental defect and were missing some important attribute of intelligence. The situation was exacerbated by feelings of shame and guilt. People

What causes trust and its consequences I think I have discovered a source of respect. It is "embedded" in the belief that one can benefit from disagreement; that arguing with someone who has different views will teach you something new. As if you said "I will

Why Not Knowing Causes Stress Have you ever waited for an important call? It could be an exam result, a job decision, or worse, news from the hospital. The reason that waiting for important information breeds anxiety is that

Question 36.

1. When and where was nuclear weapons first used? What were the military and political implications of this move?

2. What were the reasons for the cooling of relations between the Soviet Union and the allies in the anti-fascist coalition after the Second World War?
"Cold War", the confrontation between the USSR and the USA and the military bloc systems created by them couldn't last forever.

• 
  Crisis Symptoms bipolar models world development have already manifested in the 1950s-1960s
• 
  Quite obvious the crisis thismodels became in the 1970s-1980s

Throughout the Cold War period neither the USSR nor the USA managed to create a superiority of forces, which would give confidence in victory in the event of a direct conflict.

• 
  During the early stages of the Cold War, the United States hadmonopoly on nuclear weapons , although its reserves were then small. The main delivery vehicle for nuclear weapons was heavy bombers, vulnerable to Soviet air defenses.
• 
  In addition, in the possible theaters of military operations in Eurasia, the USSR had an advantage in conventional weapons.

Task 14.Using the text of the textbook and this table, highlight the main stages of the arms race.
In the 1950s the arms race entered a new phase.

1. 
   After the appearance of atomic weapons in the USSR and in the USSR and in the USA almost simultaneously hydrogen bombs were created, much more destructive than atomic ones.
2. 
   There are new means of delivery of nuclear weapons:

• 
  intercontinental ballistic missiles (ICBMs),
• 
  strategic bombers,
• 
  nuclear submarines.

According to scientists, to cause irreparable damage to civilization, it is enough to simultaneously use 300 nuclear weapons. In addition to the death of hundreds of millions of people under the ruins, from radiation, burns and disease, a huge amount of ash and dust would be thrown into the atmosphere. They would have shrouded the Earth for many years in a shroud impervious to sunlight. The temperature even at the equator would drop by tens of degrees, the seas and oceans would freeze, the conditions for the existence of higher forms of life, including humans, would be undermined.

In 1960, the USA had over 4,000 warheads, the USSR - about 500. After 20 years, this ratio was determined by the figures of 15 thousand and 10 thousand.

Thanks to the measures taken in the field of military security, neither the USSR nor the United States had the opportunity to strike first, which would disarm the opponent, depriving him of the means of striking back.

2. Détente in Soviet-American relations [§§22–23 p.1 Zagladin].

The US and the USSR tried to change the balance of power in their favor. At the same time, an understanding was gradually emerging in both countries that there could be no winner in a nuclear war. This prompted the superpowers to observe certain norms of behavior, which were formed spontaneously and were of a contradictory nature.

• 
  Firstly, they assumed that it was necessary to take into account the interests of each other. By seeking concessions through threats of nuclear weapons, ultimatums should not be made , obviously unacceptable to the other side.
• 
  Secondly, it is dangerous if the other side is convinced that it could be struck at any moment by a surprise nuclear strike. This leads to unpredictable actions. Any disputes should be combined with dialogue, the search for compromises, including in ensuring military security.
• 
  Thirdly, necessarylimit the scope of regional conflicts , involving the superpowers or their allies. Do not allow to approach the threshold of the use of nuclear weapons, the escalation of a regional clash into a global war.

• 
  In 1963, an agreement was concluded between the USSR, the USA and Great Britain on the prohibition of nuclear tests in water, air and on land. This reduced the threat of radioactive fallout contamination of the human habitat. A system of direct communication was established between the capitals of the nuclear powers.
• 
  In 1970, an agreement was reached on cooperation on the non-proliferation of nuclear weapons.
• 
  In 1972, the USSR and the USA signed a strategic arms limitation treaty (SALT-1). A ceiling was set on the number of nuclear weapons carriers. The existence was first acknowledged parity(equality) of strategic forces, it was confirmed that its preservation is the basis of sustainable peaceful relations.
• 
  In 1972 The USSR and the USA agreed tolimitation of anti-missile defense (ABM) systems. The ABM agreement was of particular importance - it prevented a new round of the arms race, in which the USSR and the USA would start racing to create hundreds of anti-missile systems and thousands of new nuclear weapons delivery vehicles.
• 
  Treaty of 1972 on the foundations of relations between the USSR and the USA recorded the understanding by the powers of the inadmissibility of the outbreak of nuclear war. They pledged to exercise restraint in their dealings. True, the recognition of parity in strategic arms did not rule out rivalry related to the improvement of nuclear arsenals. Work continued on improving the accuracy of missile guidance, increasing the number of warheads on one carrier, and developing nuclear attack warning systems. However, in terms of the quality of weapons, none of the parties achieved an advantage.
• 
  In 1979 signed a secondtreaty on the limitation of strategic arms (SALT-2) , set limits on the parameters for improving nuclear weapons.

3. European security and the German question [§§22–23 p.3 Zagladin].

Question 37.What was the reason for the construction of the wall that divided Berlin into two parts?
Particularly acute was the question of the "two Germanys"Berlin problem. East Berlin was proclaimed the capital of the GDR, while the position of West Berlin remained uncertain.

• 
  Germany considered it as part of its own territory,
• 
  The USSR and the GDR-as a special state entity.

The next step in conflict prevention was establishment in 1972 of diplomatic relations between the FRG and the GDR that have been adopted by the UN.

The agreement reduced the risk of a conflict in Europe and created the conditions for further improvement of relations between the countries of East and West. The precondition for holding a conference on security and cooperation in Europe arose. It completed its work in 1975 signing in Helsinkifinal act. The document fixed the obligations of the countries of Europe, the USA and Canada:

• 
  respect the integrity of the borders of states existing in Europe, their sovereignty,
• 
  respect basic human rights,
• 
  to take measures to strengthen security and mutual confidence in Europe,
• 
  develop mutually beneficial cooperation.

4. The crisis of the policy of detente [§§22–23 p.4 Zagladin].

Undertaken in the 1970s attempts of the USSR to strengthen influence on some countries of Africa and Asia, were regarded in the United States as contrary to the spirit of détente. The most important reason for its failure was entry of Soviet troops in 1979 into Afghanistan, where the revolutionaries who came to power tried to modernize society based on Soviet assistance. The USSR was involved in an intra-Afghan war, which acquired the character of a liberation war against the presence of Soviet troops in Afghanistan.

Came to power in Washington in 1980 Republican administration of R. Reagan felt that the aspirations of the USSR for expansion cannot be stopped unless resorting to a policy of nuclear deterrence.

• 
  Negotiations on arms limitation were interrupted.
• 
  The line of direct air communication between the USSR and the USA was closed.
• 
  In Europe, the deployment of new medium-range missiles aimed at the territory of the USSR began.
• 
  In 1983, R. Reagan announced the start of work on the Strategic Defense Initiative (SDI) program - a space weapons system, designed to protect the United States from nuclear missiles. Journalists called SDI a "star wars" program.

5. The policy of non-alignment and the anti-war movement [§§22–23 p.5 Zagladin].

superpowers- the term of the Cold War period, denoting the two most powerful militarily powers, which are the centers of two opposing military blocs.

The Crisis of Cold War Politics dividing the world into two camps hostile to each other, appeared long ago. His causes were as follows.

• 
  Firstly, motives for most countries joining the Soviet or American system of alliances was the desire to receive additional security guarantees, economic assistance. As time went on, fears grew in many States that their security is being sacrificed to Soviet-American rivalry, and their territory can become a battlefield, waged in the name of interests alien to them.
• 
  Secondly, with the improvement of relations between the USSR and the USA Allies of the superpowers began to fear that their interests would be the subject of bargaining between the USSR and the USA.
• 
  Thirdly, with the overcoming of the post-war crisis in the states of Western Europe, with the successes in the economies of countries liberated from colonial dependence, intensified them desire to expand foreign economic relations. Meanwhile, in the face of confrontation between the two military bloc systems, there were severe restrictions on trade, economic, scientific and technical ties with potential adversaries.

The Cold War interfered with the international division of labor and the optimal use of the world's resources. The military-bloc confrontation has become a brake on the solution of the main problems of world development, a source of social, political and economic difficulties in many parts of the world.

Symptoms of the crisis of the bipolar model of the world:

1. 
   One of the first symptomscrisis of the bipolar model of the world was the emergence and strengtheningNon-Aligned Movement. India stood at its origins, after gaining independence, it refused to join military blocs. In 1955, at a conference in Bandit, 29 countries of Asia and Africa accepted the principle of Non-Alignment. In the 1970s More than 50 countries considered themselves non-aligned, in the 1980s. - more than 100.

• 
  The Non-Aligned Movement did not give the USSR the opportunity to create a broad bloc of countries with a socialist orientation.
• 
  The attempts of the US and Great Britain to create a solid system of alliances in the Near and Middle East have failed.

1. 
   The trend towards weakening alliance systems also affected the countries that played a significant role in these systems.

• 
  So, relations between the USSR and China since the late 1950s. started to deteriorate. By the end of the 1960s. it came to military clashes on the Soviet-Chinese border.
• 
  Cracks also appeared in the US alliance system.

• 
  From the NATO military organization in the 1960s. France and Greece left.
• 
  In the 1980s most Western European countries did not support the US policy of tightening the regime of restrictions on trade with the USSR.
• 
  The growing influence on the policy of the allies of the United States began to exert anti-war movements.

1. 
   In the 1980s a wave has risen in the worldpacifist movements.

Anti-war, environmental movements in many countries took shape in the party: The Greens in Germany and Sweden, the United Greens in Austria, etc. In many countries they succeeded get more than 5% of the votes in parliamentary elections, providing yourself representation in parliaments.

The ideologists of alternative movements were doctors, teachers, scientists. Schoolchildren and students became activists. The vast majority of voters (55% in the USA) sympathized with them. They have become widespread not only in Western countries, but also in Eastern Europe, and partly in the USSR.

Anti-war ideas began to express and Western European social democracy.
Photo 30.Anti-war demonstration
The continuation of the Cold War undermined political stability in all countries participating in it.

6. Problems of the new world order [§§22–23 p.6 Zagladin].

• 
  The first path promised new rounds of the arms race, great difficulties for the Soviet economy.
• 
  The second path, dialogue, began with meetings leaders of the USSR and the USA - M.S. Gorbachev and R. Reagan in Geneva (1985) and in Reykjavik (1986). They did not culminate in concrete agreements, but made it possible to fix the desire of the parties to eliminate the risk of nuclear war.

• 
  Firstly, it assumed that if nuclear war were to be a catastrophe for all mankind, then the threat to use and possess nuclear weapons ceased to serve reasonable political ends. A foundation has arisen putting forward proposals for the reduction of armaments until the elimination of nuclear weapons by the year 2000.
• 
  Secondly, supreme value new political thinking determined the survival of mankind, which was threatened by the unresolved mass of problems, ranging from the nuclear threat to the complexity of modernizing the economies of the newly-free countries. These problems can only be solved united the efforts of the peoples. The main goal of the policy was securitycooperation states in the international arena creating an atmosphere of trust.
• 
  Thirdly, interaction based on trust required rejection of the ideology of confrontation. The new thinking involved the search for a balance of interests, mutual concessions, strict compliance with international legal norms.

• 
  In 1987 USSR agreed to eliminate medium-range missiles not only in Europe but also in Asia in exchange for the US refusal to deploy missiles of the same class in Europe.
• 
  In 1988 major unilateral reductions in the size of the Soviet armed forces were announced.
• 
  In 1990 Warsaw Pact countries and NATO signed an agreement on the reduction of conventional weapons and armed forces in Europe. The USSR made significant unilateral concessions.
• 
  In 1991 signed a treaty between the USSR and the United States on the reduction of strategic arms (CER).

• 
  In 1989, the USSR withdrew its troops from Afghanistan.
• 
  In 1989 the USSR pledged in practice to respect the freedom of social and political choice of the peoples, which removed the barriers to democratic revolutions in the countries of Eastern Europe, including the GDR.
• 
  The USSR agreed to the unification of Germany and the withdrawal of its troops from the territory of the former GDR without any conditions.

The situation in the world 1990-1991. no longer corresponded to the model of relations between the USSR and the USA during the Cold War period. With the development of democratization processes in the USSR, especially with its collapse, new trends, patterns and contradictions began to form in world development.

Questions and tasks

1. 
   Explain the causes of the arms race that began during the Cold War.
2. 
   Describe the main steps taken by the USSR and the USA to strengthen international security and limit nuclear arms. On what principles were they based? What were the results?
3. 
   Expand the significance of the "Berlin question" for ensuring European security in the 1950s-1970s.
4. 
   What caused the crisis of the bipolar model of the world? In what do you see its most important manifestations?
5. 
   Explain your understanding of the thesis that the military bloc confrontation has become a brake on the solution of the main problems of world development, a source of social, political and economic difficulties in many parts of the world.
6. 
   When and why did the anti-war and other mass movements emerge? Who participated in them? What ideas did they come up with?
7. 
   What ideas underlay the new political thinking? Who put them forward? What role have they played in changing the international climate?
8. 
   Expand the meaning of the concepts: "superpower", "policy of mutual intimidation", the Non-Aligned Movement, "detente".
9. 
   Fill in the table "Chronicle of detente of international tension."

Documentary materials

A H-Bomb War Could Very Likely End the Human Race<...>If a lot of hydrogen bombs are used, there will be universal death - instantaneous only for a minority and slow, painful due to disease and decay - for the majority.<...>

In view of the fact that nuclear weapons will certainly be used in a future world war, and since these weapons threaten the existence of mankind, we insist that the governments of all countries understand and publicly admit that disputes between states cannot be resolved by the outbreak of a world war. We demand that they find peaceful means to resolve all contentious issues.
Task 15.Give the authors' arguments convincing of the inadmissibility of a new world war.
From the resolution of the XIV Congress of the Socialist Parties of the countries of the European Union (1985):

We socialists are not satisfied with the split of Europe into two blocs. We believe in such a concept of relations between East and West, which would contribute to overcoming the split of the peoples of the continent, their rapprochement. European countries should pursue a security policy and help create the conditions for a new stage of détente. This will enable them to live in peace while maintaining their freedom.<...>Socialists of Europe<...>oppose the development of anti-satellite systems by both the Soviet Union and the United States, emphasizing the danger of destabilization posed by the strategic defense initiative of the Reagan administration.

From the Declaration of the Ninth Conference of Heads of State and Government of the Non-Aligned Countries (Belgrade, 4-7 September 1989):

We opposed bloc division and confrontation, which harbored the danger of nuclear annihilation and complicated the peoples' struggle for national liberation. At a time of deep ideological divisions, we have created a movement based on the principles of ideological pluralism and advocating the peaceful coexistence of different countries.
Question 38.How are the main provisions of the resolution and declaration connected with the adoption of the ideas of new political thinking proposed by M.S. Gorbachev?

Marxist analysts generally admit that capitalism creates two qualitatively different types of economic crisis. The first is the intermittent business cycle recession, which is resolved after a relatively short period by the normal mechanisms of a capitalist economy, although since World War II, government monetary and fiscal policies have often been applied to hasten the end of a recession. The second is a protracted economic crisis that requires significant restructuring, that is, institutional changes - provided that the crisis is resolved within the framework of capitalism and the process of capital accumulation is restored. Despite the widespread recognition that these are two different types of crisis, there is still no generally accepted terminology to distinguish between them. Here the term "structural accumulation crisis" will be used for the second type of economic crisis, and "business cycle recession" for the first type.

History shows that structural crises of accumulation can be more or less severe, as will be discussed below. Here our aim is to identify the conditions that give rise to a severe structural crisis of accumulation, since it is this second type of crisis that can play a role in the elimination of capitalism. The Great Depression of the 1930s was, by popular belief, a severe structural crisis of accumulation. Although it is too early to draw conclusions, it seems that the economic crisis that began in 2007-08 may be another severe structural crisis. For clarity, it will be argued below that the structural crisis that occurred in the 1970s was a less severe version of the same type of crisis. This paper will analyze the current crisis by comparing it with the two previous structural crises in order to draw conclusions about the conditions that tend to cause a severe structural crisis of accumulation.

Marxist theory determines the cause of the crisis in the internal mechanisms of the capitalist system, which reflect the contradictory nature of the capitalist process. The literature of Marxist crisis theory offers an analysis of some of the internal mechanisms that can cause a crisis. Such causal mechanisms have traditionally been referred to as "crisis trends," which include underconsumption, a downward trend in the rate of profit, shrinking profits (due to a reduction in the reserve labor force), and overinvestment (or overaccumulation), among other mechanisms.

The traditional crisis tendencies referred to in Marxist literature are a necessary starting point for considering the possible cause(s) of a severe structural crisis. However, the abstraction level of conventional analysis of traditional crisis trends is too high for this purpose. This paper argues that a severe structural crisis tends to arise due to the special institutional form of capitalism. If one analyzes capitalism in general, that is, includes in this analysis only the distinctive features of capitalism, then one can deduce crisis tendencies from them, but one cannot systematically determine whether any particular crisis trend will lead to a mild or severe crisis iii .

Section 2 briefly discusses one of the theories of the capitalist crisis, namely the theory of the social structure of accumulation (SSA), concluding that it is a promising theory of structural crisis, but has not yet provided a satisfactory explanation of the factors that lead to the emergence of severe structural crisis. Section 3 contains an examination of the roots of the current economic crisis, focusing on the US economy that started this crisis. It teaches that the severity of the current crisis comes from the type of institutional structure of capitalism that has prevailed in recent decades, namely the liberal institutional structure. Section 4 compares the current crisis with the structural crises of the 1930s and 1970s, highlighting similarities with the former and differences with the latter. Section 5 contains final comments.

2. Social structure theory and severe structural crises

In the traditional Marxist literature on crisis theory, the analysis of the tendency of a certain crisis, rooted in capitalism in general, is usually supplemented by taking into account a particular political situation or state policy, as a means of explaining the emergence of a severe and prolonged crisis. However, this ad hoc approach seems too close to the “external factor” theory, the crisis theory prevalent among the prevailing economic theories today. But there is an alternative approach that takes into account the fact that capitalism never exists only "in general", but always takes on a specific institutional form.

The accumulation social structure school argues that in individual capitalist countries, and in global capitalism as a whole, a successive series of relatively long-term institutional structures can be identified, each of which lasts for several decades (Gordon, Edwards and Reik, 1982; Kotz, McDonough and Reik, 1994). This institutional structure is called the social structure of accumulation (SSA). This literature proves that each SSA is a cohesive set of institutions that promotes capital accumulation over a long period of time. In fact, the contradictions inherent in each SSA are increasing in such a way that the SSA no longer promotes capital accumulation, thus setting the stage for a new period of crisis. This crisis continues until a new SSA is created.

The SSA theory might seem to explain why severe structural crises of accumulation occur, but historical evidence shows that some of the crises described in the SSA literature, such as in the 1970s, do not seem to fit the definition of a severe structural crisis. . As many analysts have noted, in the high-income capitalist countries, macroeconomic performance worsened after 1973 compared with the period 1948-1973. From the fourth quarter of 1973 to the first quarter of 1975, the US experienced a relatively sharp recession, with GDP falling 2.5% a year for over five quarters. The remaining seventies were characterized by a contraction in economic growth, high inflation and unemployment, as well as instability in the international monetary system, that is, it was a period of relative stagnation and economic instability. It is safe to say that the seventies represented the crisis of the post-war regulated capitalist SSA, which led to its liquidation and replacement with a completely different neo-liberal institutional system in the early eighties. However, GDP and capital formation quickly recovered from the recession of 1974-75. Using the measurement of the peaks of the crisis, during 1973-79 - the main part of the crisis period - identified in the SSA literature - it can be said that the US economy, in fact, even grew. Real GDP grew by an average of 3.0% per annum, while gross private investment grew by 3.4% per annum.

The crisis of the seventies does not seem to have been a severe accumulation crisis like the Great Depression of the thirties. In 1929-33, the US GDP fell by 30.5% over 3.5 years. Ten years later, it recovered only 2.8% above the 1929 level. Fixed business investment, which had fallen to 28.7% of the 1929 level by 1933, was only 57.7% of the 1929 level ten years later, in 1939 (Economic Report of the President, 1967, Table B-2, p. 214). A recent study found that for the global economy, both industrial production and world trade declined at least as quickly in the first year of the current crisis as they did in the first year of the Great Depression (Eikengreen and O'Rourke, 2009). GDP and industrial production have fallen very rapidly in a number of large capitalist countries during the present industrial crisis. In the US, fixed business investment fell by a record 39.2% at an annualized rate in the first quarter of 2009, its fastest rate of fall on large margins since World War II.

The current SSA theory, which treats the structural crises of the thirties and seventies as similar phenomena, does not explain the factor(s) that cause a severe structural crisis of accumulation. However, the fact that SSA theory focuses on the institutional form of capitalism in explaining economic crises points us in the right direction of research. The missing element is still a more concrete analysis of capitalist institutional structures. By examining the way in which the US institutional structure in the neoliberal era led to what appears to be yet another severe structural crisis, it is possible to shed light on the key factors that cause this type of crisis.

3. The current crisis and liberal institutional structures

SSA theory has traditionally held that each new SSA is historically unique. However, Kotz (2003) and Wolfson and Kotz (2010) argue that capitalist institutional structures fall into two types: liberal and regulated. The main distinguishing features of the regulated institutional structure are the following: 1) the state actively regulates the economy, including the regulation of business behavior and finances; 2) the labor-capital relationship in the workplace is an essential element of the compromise between the two parties, especially between big capital and labor; 3) big business adheres to a prudent, restrained form of competition; 4) the dominant ideology emphasizes the benefits of state regulation of business, cooperation between labor and capital, and “civilized” competition. Conversely, the liberal institutional structure has the following main features: 1) there is only limited state regulation of the economy, business and finance; 2) capital, including big capital, tends to completely dominate labor in the workplace; 3) large corporations begin unlimited, aggressive competition; and 4) free market or classical liberal ideology is dominant. It views the state as the enemy of freedom and efficiency and sings of the virtues of unrestricted competition.

Neoliberalism, which arose around 1980, led to the emergence of liberal institutional structures in the US, the UK and many other (but not all) countries, and thus at the global level, where the main economic institutions adopted the neoliberal model. The economic crisis that began in 2007-08 originated originally in the US and emerged from neoliberal institutions in the US and global economies.

An examination of the process that has led to the current one shows why and how the liberal institutional structure tends to cause in practice a severe structural crisis of accumulation. Our study will focus on the US economy, where the current crisis originated. Neoliberalism in the US has led to three processes that have led to the current crisis: 1) growing inequality between wages and profits and between enterprises; 2) a number of large asset bubbles; and 3) the financial sector, which has become heavily involved in speculative and risk-taking activities.

Inequality rose rapidly in the neoliberal era, increasing at an accelerated pace as the neoliberal structure entered its maturity in the last business cycle of the neoliberal era, 2000-07. Over the period 1979-2007, the average hourly earnings of workers decreased slowly, by 1.1%, while output per hour increased by 69.8%, showing that the benefits of this productivity over the period have passed to capital. By the mid-2000s, the degree of inequality among enterprises had reached levels not seen since 1929 (Kotz, 2009a).

Rapidly rising inequality tends to create implementation problems, that is, insufficient aggregate demand relative to output. Rising profits stimulate rapid accumulation and rising output, but stagnant or falling wages limit demand growth. Increasing income concentration also limits demand growth, as the very wealthy do not need to spend large sums of their income on consumption.

However, the neoliberal institutional structure has features that delay the crisis of implementation. Rapidly rising profits stimulate rapidly growing business investment, which is part of the demand for products. This may prolong the expansion for a while, but if this were the only mechanism working to resolve implementation problems, then an imbalance would quickly set in, as means of production would grow too fast relative to output. The neoliberal institutional system has created large asset bubbles that represent a long-term solution to the implementation problem.

An asset bubble is a self-prolonging rise in the price of an asset that comes from the expectation of a future rise in the price of an asset. For example, if financial investors expect the price of real estate to rise rapidly in the near future, then they will have an incentive to buy real estate in order to capitalize on the rising price. This can become a self-sustaining process if the profits made by investors from the rising price of the asset attract more and more investors, whose purchases, in turn, cause the price of the asset to continue to rise. Each of the lasting economic achievements of the neoliberal era in the US has seen a major asset bubble - in commercial real estate in the Southwest in the eighties, in the stock market in the nineties, and in the housing sector in the 2000s.

There were three long economic expansions in the US during the neoliberal era in 1982-90, 1991-2000 and 2001-07. Asset bubbles can prolong this expansion by delaying the realization crisis that tends to stem from rising inequality. It does this by increasing the wealth contained in the securities of those who hold an asset that is in the process of forming a bubble. This growing wealth in securities leads to spending on the part of the consumer that increases relative to income.

Figure 1 shows that the ratio of consumer spending to after-tax income tended to decrease from 1960 until the mid-eighties. Then this ratio went up sharply from the mid-eighties, when the economic recovery began after the depression of the early eighties, and until 2005. The first bubble of the neoliberal era that was big enough to affect the US economy as a whole was the stock market bubble of the 1990s.

As Figure 1 shows, after 1992 The ratio of consumer spending to income rose sharply, reaching 93.8% in 1999. at 89.1% in 1992 When the housing bubble formed after 2002, the ratio continued to rise, rising from 93.9% in 2002 to 93.9% in 2002. to its peak of 95.9% in 2005 vii . Within two decades, neoliberalism has grown by almost 10%, from 86.0% of income in 1984. Relative to GDP, consumer spending has grown from 62.0% in 1981 to 70.5% of GDP in 2008 viii .

Figure 1 - Personal spending by consumers as a percentage of disposable personal income

Source: US Bureau of Economic Analysis, 2009, Table 2.1

However, although an increase in consumer spending relative to the income of the enterprise delays the onset of a sales crisis, it makes this crisis worse. Businesses are responding to a prolonged period of rising consumer spending by heavily investing in fixed assets in order to increase their production capacity. If such a bubble bursts—as every bubble must do—the consequence will be that consumer spending will fall to a more normal ratio to income, and suddenly a large amount of overcapacity will be revealed. This may reduce the incentive to invest for a long period of time, a severe prolonged crisis of overinvestment.

When the US equity bubble burst in 2000, business fixed investment in the US fell 13.0% over the next two years. However, a severe crisis of overinvestment was then averted by another major bubble in 2002, this time in housing construction. After 2002 business investment in fixed assets has rebounded, climbing 29.1% during 2002-07. The housing bubble began to burst in 2007. As Table 1 shows, consumer spending fell rapidly in the second half of 2008, more than 3% annualized. Business investment in fixed assets began to fall very rapidly in the 2008 quarter, falling by almost 40% at an annual rate in the first quarter of 2009, the fall slowed down in the second quarter.

Table 1 - Annual Rate of Change in US GDP, Consumption and Investment

* Investments in non-residential fixed assets.

Source: US Bureau of Economic Analysis, 2009, Table 1.1.1.

The speculative, risky financial sector is the third process that has played a key role in the current crisis, in addition to rising inequality and large asset bubbles. As everyone knows, the US financial sector went into an orgy of speculative activity in the 2000s, mostly in the housing sector. While the housing bubble has been inflating, it has contributed to economic development. By providing a huge volume of mortgage loans to homeowners, including homeowners with poor credit ratings, the financial sector has caused a rapid expansion in consumer spending. If the only way homeowners could spend some of the rapidly rising value of their homes was to sell those homes, then this housing bubble could not continue to grow. Thus, speculative loans from the financial sector made it possible for the bubble to continue to inflate, thus allowing rising housing costs to stimulate increased consumer spending.

However, the result of this process has been an increased fragility of the financial sector. For the US financial sector has not only created trillions of dollars of bankrupt assets that have fallen in value, but it has itself borrowed funds at an increased rate in order to carry out its highly profitable speculative activities. Figure 2 shows the total debt of each of the three major private sectors in the US economy. Non-financial business debt has grown quite modestly during the neoliberal era. Homeownership debt grew rapidly and at an accelerated pace after 2000. From 1980 to 2008, the ratio of homeowner debt to GDP nearly doubled. By 2008, homeowner debt was likely unsupported due to the lack of growth in the housing bubble, which allowed homeowners to continue to withdraw equity from their homes in order to stay afloat. However, during the same period, from 1980 to 2008, the debt of the financial sector grew by almost six times.

Figure 2 - Debt of the main sectors of the US economy as a percentage of GDP

Source: US Federal Reserve, 2009 Statistical Release Z-1

Thus, the speculative, risky financial sector should have collapsed by 2008. The collapse of the financial sector makes the economic crisis worse and more difficult for government control. This is the perspective of the current crisis as well, which has been repeatedly covered in the media, and is an important factor in explaining the severity of the current crisis. However, this is only one of the important factors. All three processes—growing inequality, a series of massive asset bubbles, and a speculative, risk-averse financial sector—worked together to set off what looks like the severe structural accumulation crisis of 2007-08. The main reason is the asset bubble that triggered the overinvestment crisis, aggravated by the severe financial crisis.

These three processes—growing inequality, large asset bubbles, and a speculative, risky financial sector—are not inherent in capitalism at all. For example, in the United States, during the SSA-managed period of 1948-73, wages rose at about the same rate as labor productivity, while inequality in household income distribution became somewhat less (Kotz, 2009a). During this period, there were no asset bubbles, and the main financial institutions were engaged mainly in traditional financial activities - creating and holding loans, selling stocks and bonds, and offering conventional insurance. There were no major bank failures or financial panics during that period.

These three processes are features of the liberal institutional structure of capitalism. The weak position of labor in bargaining with capital under a liberal form of capitalism tends to cause wages to stagnate or fall while profits rise rapidly. The limited intervention of the state in the sphere of the market allows the powerful to acquire and retain a growing share of social output.

The liberal institutional structure causes large asset bubbles for two reasons. First, rising inequality generates profits, and the incomes of wealthy households exceed the available opportunities for profitable investment in productive capacity. Therefore, some of this income is used to purchase assets such as corporate stocks or real estate, which lead to asset bubbles. Second, unregulated financial institutions in a liberal institutional framework are free to make speculative loans, without which the asset bubble cannot continue to grow.

The third process that emerged in the neo-liberal era - the financial sector, which engages in speculative, risky activities - occurred mainly due to the lack of regulation of the financial sector. If financial institutions are free to seek maximum profits without oversight or regulation, they will engage in risky activities that promise them a much higher rate of return than traditional financial functions. At least it lasts as long as large asset bubbles grow and before risky investments backfire.

4. The Roaring Twenties, Postwar SSA, and the Neoliberal Era

According to the conventional view in the SSA literature, in the twenties of the twentieth century, the US had an SSA, which appeared in the nineteen nineties. This SSA was characterized by monopoly power and significant government regulation of business (Gordon et al., 1982, chapter 4; Kotz, 1987). However, after the First World War there were major changes in US capitalism. The new government agencies for regulating economic life that emerged during the Progressive Era of 1900-16 were taken over by business and/or ceased to exercise any oversight. The limited moves of big business towards cooperative relations with unions in the progressive era turned into an attack on labor, launched by the breaking of the steelworkers' strike in 1919. By the mid-twenties, the labor movement was in deep decline. The pattern of cooperative pricing established by J.P. Morgan and other financial capitalists after the 1990s has lost its former strength as Wall Street has lost control of the new financial centers in the Midwest and West, and because new industries have emerged. (such as automobiles) that were out of Wall Street's control (Kotz, 1978, chapter 3). The ideology of extreme individualism began to dominate. In the 1920s, the United States ideally matched the characteristics of a liberal institutional structure.

In the 1920s, the US faced the same three processes that emerged in the neoliberal era. Inequality rose sharply as wages lagged behind productivity growth and as renters' incomes concentrated in the hands of the upper class. In 1920-29, real hourly wages in industry rose by 19.3%, while unit output per hour of labor in industry grew by 62.6%. The share of after-tax income going to the upper 1% of the population rose from 11.8% in 1920 to 19.1% in 1928 (US Census Bureau, 1961, 161). Major asset bubbles emerged - the real estate bubble in Florida in the mid-twenties was followed by a huge bubble in the US stock market in the late twenties. The financial sector has become too involved in speculative, risky activities. Since it started with medium-sized financial institutions, by the end of the twenties, the largest banks of the old style collapsed (Kotz, 1978, chapter 3).

The Great Depression began with the collapse of the US securities bubble at the end of 1929. This was followed by a rapid decline in consumption and investment, leading in fact to the complete collapse of the banking system in 1933. As noted above, there was also a decline in investment in the ten years after 1929. Although conservatives blamed business fear of New Deal reforms for this, it can be concluded that this was due to a severe crisis of overinvestment, and the financial crisis is in many ways similar to today's . Thus, the historical background of the current crisis, together with the historical background of the Great Depression, supports the view that the liberal institutional form of capitalism creates conditions that tend to actually cause a severe structural crisis of accumulation.

The milder and shorter crisis that followed the collapse of the regulated form of capitalism after World War II can be explained by the various dominant crisis tendencies in this form of capitalism. Under regulated capitalism, labor tends to have significant bargaining power. As a result, economic development tends to lead to a profit-cutting type of crisis, as a shrinking reserve army leads to fairly rapid wage increases that cause profits to shrink (Kotz, 2009b; Wolfson and Kotz, 2010). One study (Kotz 2009b) concluded that each recessionary business cycle in the period 1948-73 was driven by a downturn in profits xii .

The most common SSA analysis of the structural crisis of the 1970s sees the appearance of a prolonged, institution-based version of the downward trend in profits as a key factor in the emergence of that crisis (Bowles et al., 1990, part II). According to this argument, during the period of regulated capitalism, there was a continued increase in the relative intensity of labor, as well as other groups, relative to US capitalists. In fact, this led to a series of violent conflicts between US capitalists and workers (and other groups such as Third World raw material suppliers) that destabilized the regulated capitalist SSA and the accumulation process it supported.

Why was that economic crisis less severe than the Great Depression? If the main cause of the crisis was the increased bargaining power of labor and other popular groups, then the "problem" may be solved by a few years of very high unemployment (in 1974-5 and 1981-84) and third world economic punishment (in the early eighties). The neoliberal restructuring, which was completed by a relatively rapid recovery in the strength of capital, the deregulation of business, and a significant reduction in social programs, served to resolve the crisis of regulated capitalism.

Thus, there is a difference in the managerial capacity of the state at the end of these two types of institutional structure of capitalism. When regulated capitalism enters the stage of crisis, the state already has recent experience in managing the economy, which makes it easier to resolve the crisis. However, when liberal capitalism enters the stage of crisis, the state has not managed the economy for a long time and is little capable of managing the economy effectively. Despite the bold programs of the Roosevelt administration, the US economy did not fully recover from the Great Depression until the end of World War II, about fifteen years after 1929. During the current crisis, we have seen the difficulties that the Obama administration had to face due to a lack of recent experience active state management of the economy. The much-discussed stimulus program appears to be moving at a snail's pace, with only a small fraction of the funds that were prepared actually spending about 6 months after the bill went into effect xiii .

5. Final comments

Both theoretical considerations and historical evidence support the view that a liberal form of capitalism tends, in fact, to lead to a severe structural crisis of accumulation, while a regulated form of capitalism ends in a milder crisis. This has several implications.

First, regarding the theory of Marxism. The above analysis suggests that it is necessary to go beyond the analysis of capitalism in general, or the simple application of such an analysis with the ad hoc addition of specific historical processes and state policies. Marxists should strive for a systematic analysis of the specific institutional forms of capitalism that emerge in history in order to determine their properties and tendencies. There seems to be a reluctance to do so, possibly stemming from considerations that focusing on a particular institutional form of capitalism would divert attention from the ills of capitalism itself and the need to replace it entirely. Such an idea is wrong. In order to properly understand and successfully challenge capitalism, we must analyze its specific institutional features with the conditions of time and place.

Secondly, the above analysis presents a paradox for Marxists. A long period of regulated capitalism tends to strengthen the working class. The wave of radical uprisings that swept the world in the late 1960s came after twenty years of regulated capitalism. However, regulated capitalism also tends to raise living standards and expand the provision of public services to the working class, which make the transition to socialism less likely. To these considerations, the above analysis adds the argument that the actual accumulation crisis of regulated capitalism tends to be relatively mild, further reducing the likelihood of a transition to socialism.

Conversely, a long period of liberal capitalism tends to weaken the working class and radical movements. We saw this in the neo-liberal era and a similar trend took place in the US in the twenties. If the liberal form of capitalism tends to cause a severe economic crisis, then it enters a stage of crisis with weak and fragmented labor and radical movements. Thus, it may turn out that during the severe crisis that follows the period of liberal capitalism, which facilitates the transition to socialism, there may not be a force that will be ready to make this transition.

However, against the above considerations, the argument must be made that it is unlikely that the structural crisis that follows a liberal institutional form of capitalism can be easily or quickly resolved. If the current crisis continues for some time, the demobilizing effects of neo-liberalism may be replaced by the radicalizing effects of a long and severe economic crisis. There were some protests in the United States at the start of the Great Depression, but a period of major labor and radical action came in 1933-38. Although any historical analogy is imperfect, we are now in a time similar to 1930-31, that is, the first year or two of the current crisis. It seems incredible that neo-liberal capitalism could be resurgent at this time and that it would take a long period for a new form of state regulation of capitalism to be created. This crisis provides an opportunity, which could last several years, for the left to organize in order to create a real alternative to capitalism.

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