Conceptual Issues—Depressions, Recessions, Crisis Cycles , Business Cycles

Tapia, José A.

doi:10.1007/978-3-031-38735-7_4

José A. Tapia²

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Abstract

This chapter reviews the terminology that has been used in the past two centuries for the phenomenon of economic crisis, which in mainstream economics is either glossed over or subsumed under the discussion of the so-called business cycle, boom-and-bust cycle, macroeconomic fluctuations, and even other terms. The notion of economic crisis as proposed by Marx, who saw them as temporary and sudden periods of major financial, industrial, and commercial disarray, lasting months or few years, was largely modified by Engels and the Marxists who used the term to mean long periods lasting many years, or even decades. The Keynesian notion of economic crisis as presented in The General Theory evolved in the post-World War II, modified by Paul Samuelson and others, into the concept of a mild business cycle that would be avoidable by the application of smart economic policy. This notion proved inconsistent with economic realities in the 1970s and thereafter, and the three decades before the Great Recession were marked by a kind of nihilistic attitude of mainstream economics toward the phenomenon of economic crises, which were either ignored or considered phenomena of undefined nature and causes.

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Notes

1.
Kenway 1998 [1987], “Crises”, in Eatwell, Milgate & Newman, eds., The New Palgrave: A Dictionary of Economics, 724–726.
2.
Ammer & Ammer (1977), Dictionary of business & economics; Bannock, Baxter & Davis (1998), The Penguin dictionary of economics; Pass et al. (1991), The Harper-Collins dictionary of economics; remarkably, with three volumes and an advisory board including Nobelists James Buchanan and Janos Kornai, The New Palgrave dictionary of economics and the law (Newman, ed., 1998) includes entries neither for “crisis” nor “economic crisis” nor “financial crisis” nor “recession” nor “business cycle”.
3.
For instance, Krugman & Wells (2006), Economics; Gordon (2009), Macroeconomics; Blanchard (2006), Macroeconomics.
4.
The Princeton encyclopedia of the world economy, ed. by K. A Reinert and R.S. Rajan, Princeton University Press, Princeton, NJ, 2009.
5.
Mankiw (2010), “A call for humility: Trying to tame the unknowable”, New York Times, March 26, B6.
6.
An example of it is The risk of economic crises, edited by Martin Feldstein (1991), a collection of short papers and commentaries from a roundtable in which quite disparate views were exposed. In one commentary Hyman Minsky complained that the three background papers of the roundtable [by Benjamin Friedman, Paul Krugman, and Larry Summers] were “on financial, not economic, crisis; furthermore, the papers are not clear on how financial and economic crisis are related” (p. 161).
7.
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8.
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9.
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10.
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11.
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12.
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13.
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14.
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15.
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16.
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17.
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18.
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19.
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20.
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21.
The three quoted letters of 1858 in MECW 40, 278–284.
22.
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23.
Mattick (1981), Economic crisis and crisis theory, Chapter 2.
24.
According to Burns & Mitchell (1946), Measuring business cycles, vary from more than one year to ten or twelve years”.
25.
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26.
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27.
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28.
MECW 47, 23. I saw this letter cited in T. Kuczyinsky. “Marx and Engels on long waves”, in Vasko, ed. (1987), The long-wave debate, 35–47.
29.
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30.
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31.
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32.
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33.
The financial assets destroyed worldwide by the 2008 crisis are estimated by Rickards (2012, Currency wars—The making of the next global crisis, 211) in $6 trillion, while McNally (2010, Global slump—The economics and politics of crisis and resistance, 13–17) estimate is much higher, $35 trillion.
34.
Mattick (1969), Marx and Keynes.
35.
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36.
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37.
Anonymous (1991), “Review of the month—Where are we going?” Monthly Review 42(10), 1–15.
38.
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39.
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40.
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41.
Shaikh (2011), “The first great depression of the twenty-first century”, Socialist Register, 47.
42.
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43.
Kliman (2012), The failure of capitalist production—Underlying causes of the Great Recession, 11, 24, and 48.
44.
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45.
Ticktin (2017), “The permanent crisis, decline and transition of capitalism,” Critique 43(3), 359–386.
46.
Clegg & Benanav (2011), “The economic crises in fact and fiction: Paul Mattick,” Brooklyn Rail, June.
47.
McNally (2010), Global slump—The economics and politics of crisis and resistance, 36.
48.
McNally (2010), Global slump, 26, 31.
49.
Astarita (2009), El capitalismo roto, 224–225.
50.
Keynes (1936), The General Theory of Employment, Interest and Money, ch. 22.
51.
Ch. 18, italics in the original.
52.
Bowless & Edwards (1985), Understanding capitalism, 355.
53.
Bernanke (2004), Remarks on The Great Moderation by Governor Ben S. Bernanke at the meetings of the Eastern Economic Association, Washington, DC, February 20.
54.
Knoop, Recessions and depressions, 173.
55.
Cassidy (2010), “After the blowup,” The New Yorker, January 11.
56.
Cited by Gorton (2012), Misunderstanding financial crises, vii–ix.
57.
Solow (2014), “Thomas Piketty is right: Everything you need to know about Capital in the twenty-first century”, The New Republic, April 22.

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Drexel University, Philadelphia, PA, USA
José A. Tapia

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Tapia, J.A. (2023). Conceptual Issues—Depressions, Recessions, Crisis Cycles, Business Cycles. In: Six Crises of the World Economy. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-031-38735-7_4

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DOI: https://doi.org/10.1007/978-3-031-38735-7_4
Published: 28 December 2023
Publisher Name: Palgrave Macmillan, Cham
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Conceptual Issues—Depressions, Recessions, Crisis Cycles, Business Cycles