Catastrophe or Revolution?

Abstract

Before and during a debate with one of the authors of this paper, the former chief economist of the IMF Olivier Blanchard argued that a Keynesian "revolution" is needed to avert a future "catastrophe". We critically examine this statement through an analysis of the historical process that we call "law of reproduction and tendency towards capital centralisation". This method leads to a grim prediction: freedom of capital and the connected tendency of capital to centralise jeopardise all the other freedoms and even threaten today's liberal-democratic hegemonic institutions. In the face of this prospect, neither Keynesian policy nor a basic income seem to be enough. The only revolution that may avert a future catastrophe is a redefinition of the most powerful tool in the history of political struggles: a collective planning, subversively regarded as a factor of development of the free social individuality and a new, liberated, human being.We thank the editor of this journal and two anonymous referees for their comments and suggestions. We also thank

Convergence in solvency and capital centralization: A B‐VAR analysis for high‐income and euro area countries

“…Instead, the empirical results described here seem to provide some elements suggesting a peculiar declination of the Marxian “historical trajectories” of capitalism (Dumenil & Levy, 2003). In particular, our evidence seems to give support to an interpretation of the tendency towards capital centralization, which takes into account the possible interdependencies between this tendency, the solvency conditions in the economic system and the related economic policy lines (Brancaccio, 2010; Brancaccio et al., 2020; Brancaccio & Fontana, 2013, 2016; Brancaccio & Suppa, 2012; Brancaccio & Veronese Passarella, 2021).…”

“…Finally, more stringent solvency conditions can fuel bankruptcies such as to favor liquidations, mergers, acquisitions and controls of weak capital by the strongest capital, resulting in an acceleration of the centralization of capital in fewer and fewer hands (Brancaccio & Fontana, 2016; on the relations between financial distress and mergers see also Shaut & Mili, 2011). Capital centralization, in turn, can change the structure of social relations of production and related political power, and in this way it can influence economic policy lines and in particular the "solvency rule" of the central banker (Brancaccio & Veronese Passarella, 2021).…”

“…Finally, capital centralization can change the structure of social relations of production and related political power. In this way, it can influence economic policy lines, particularly the central banker's “solvency rule” (Brancaccio & Veronese Passarella, 2021). This paper provides further empirical validation of this theoretical literature.…”