Theory and Practice of Crisis in Political Economy: The Case of the Great Recession in Spain

Abstract

This paper addresses Marx’s theory of crisis in order to analyze the Great Recession in Spain, a peripheral economy within the Eurozone. It demonstrates that underlying the problem of the “housing bubble” is an incapacity to generate surplus value, which in turn explains certain particularities related to capital composition, productivity, wages, and finance. The article further carries out a critique of both orthodox and heterodox approaches that focus on (1) profit squeeze caused by labor market rigidities, (2) underconsumption due to stagnant wages, and (3) finances, interest rates, and indebtedness JEL classification: B14, E11, E20, E43, J30

False self-employment and bogus internships in Spain

“…In fact, the profitability problem explains the macroeconomic dynamics that led up to the crisis: investment declined, and GDP fell (negative growth rates appeared in the third quarter of 2008). 4 Although the speculative boom is linked with the crisis, it represents a symptom of the stress on profitability, not the trigger factor (Mateo, 2022).…”

“…From this theoretical perspective, it is possible to follow the logic underlying the sequence that has dominated the world economy through recent decades. Faced with the outbreak of a crisis resulting from declines in profitability, capital deployed a strategy of wage devaluation to improve the rate of surplus value and thus counteract the structural pressure that hangs over profitability (Arrizabalo, 2014;Mateo, 2022). The generalisation of job insecurity is, therefore, nothing more than a mechanism that guarantees the wage devaluation that capitalist accumulation requires.…”