Foley, D. K.

While the Depression of the eighteen-nineties and the Stagflation of the nineteen-seventies appear to be manifestations of Marx’s tendency for the rate of profit to fall, the Great Depression of the nineteen thirties and the Great Recession of the two-thousands appear to be the rooted in rising rates of exploitation. Mainstream macro-economics represents the watershed changes in world capitalism in the nineteen seventies as technical improvements in economic theory and policy, thereby obscuring their underlying political economy. Globalized financial capitalism eliminated upward wage pressures, and created an enormous engine for the appropriation of surplus value, which has led to a chronic stagnation of aggregate demand and unsustainable stress on the world financial system. The lack a coherent solution to the problem of aggregate demand at the world level threatens to exacerbate conflicts among the capitalist nations and challenges U.S. hegemony.