The crisis of neo-liberal capitalism

Abstract

Neo-liberal capitalism brings about a de-segmentation of the world economy whereby wages in the “north” remain subdued by being linked to the massive labor reserves of the “south”, even while these reserves themselves swell despite relocation of activities from the “north” to the “south”. At the same time labor productivity rises everywhere; the net result is a rise in the share of surplus in total output in the world as a whole, which creates an ex ante tendency towards over-production. This tendency, kept in check for a while by asset-price bubbles in the U.S., has now manifested itself in the form of a secular stagnation of the world economy which cannot be overcomewithin the neo-liberal regime itself and which is now producing a world-wide tendency towards fascism.