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Global Crisis and Reproduction of CapitalPrivate Consumption, Wage Share of GDP and Reproduction Schemas

Global Crisis and Reproduction of Capital: Private Consumption, Wage Share of GDP and... [The financial system of the neoliberal period has allowed the massive “transfer” of future demand by wage earners to the present time through rising debt, whose servicing has increasingly undermined the disposable part of their wages for consumption. Marx’s schemas of extended reproduction are modified to show that borrowing stimulates consumption, which has a positive effect on investment and employment, thus leading to greater production. However, these reproduction schemas are structurally unstable and from the outset have an expiration date. They collapse, once the so-called markets begin to doubt whether the accumulated rights on future wages will be redeemed. Thus, the economic crisis manifests itself initially in its financial dimension, as an accumulation of unsustainable private debts.] http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png

Global Crisis and Reproduction of CapitalPrivate Consumption, Wage Share of GDP and Reproduction Schemas

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Publisher
Springer International Publishing
Copyright
© The Editor(s) and The Author(s), under exclusive licence to Springer Nature Switzerland AG 2019
ISBN
978-3-030-05724-4
Pages
29 –44
DOI
10.1007/978-3-030-05725-1_3
Publisher site
See Chapter on Publisher Site

Abstract

[The financial system of the neoliberal period has allowed the massive “transfer” of future demand by wage earners to the present time through rising debt, whose servicing has increasingly undermined the disposable part of their wages for consumption. Marx’s schemas of extended reproduction are modified to show that borrowing stimulates consumption, which has a positive effect on investment and employment, thus leading to greater production. However, these reproduction schemas are structurally unstable and from the outset have an expiration date. They collapse, once the so-called markets begin to doubt whether the accumulated rights on future wages will be redeemed. Thus, the economic crisis manifests itself initially in its financial dimension, as an accumulation of unsustainable private debts.]

Published: Jan 29, 2019

Keywords: Reproduction schemas; Future demand; Private debt; Debt service; Disposable income

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