Jack Rasmus Epic Recession: Prelude to Global Depression, Pluto: London, 2010, 340 pp: 9780745329997, 22.50 [pounds sterling] (pbk); 9780745329994, 67.50 [pounds sterling] (hbk)
Jack Rasmus's book is not just another chronological account of the current economic crisis or a simplistic denunciation of financial 'animal spirits'. Nor does it replicate superficial discourses of business analysts and the financial press, which put ali the blame for the crisis on abusive bank practices and the violation of market mechanisms. Instead, in a counterpoint to neoliberal discourse and financial jargon, Rasmus's book offers readers an illuminating and developed theoretical framework that adds to our understanding of specific contours of the current crisis, and its difference from earlier crisis experiences.
Dissatisfied with atheoretical explanations of the crisis attached to quantitative parameters and alphabetical (L, U, V, W) metaphors, Rasmus introduces a new concept of 'epic recession'. This describes an unstable economic conjuncture in which financial and real economic cycles overlap and feed back upon each other, producing strong deflationary and default tendencies. In contrast to normal recessions produced by certain external shocks, epic recessions are precipitated by prolonged processes of the building-up of systemic financial and consumption fragility through rising income inequality, speculation, consumption debt and financial leveraging. Unlike normal recessions that quickly reverse into a new upward economic cycle, the trajectory of the economy in an epic recession is undetermined: it may lead either to depression, or to stagnation. In developing his concept, Rasmus constantly links the current crisis back to the crisis experience of the Great Depression, the 1920-1921 'false' depression, and the recessions of 1966, 1973-1975, 1981-1982 and 1987-1990 in the USA, tracing similarities and differences between them. In an interesting theoretical move in the introductory chapter, Rasmus compares the 2007-2010 'epic recession' to the 1929-1931 'epic' stage of the Great Depression, leaving readers curious as to whether the current crisis will transform into depression or stagnation. The indeterminacy of the present historical moment adds a kind of cinematographic suspense to the gradual exposition of Rasmus's concept.
The theoretical development of the 'epic recession' concept in the first chapter of the book builds on a clear distinction between its quantitative, qualitative and dynamic characteristics and their comparison with normal recessions. The chosen theoretical framework seems appropriate, for it allows for...