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Negative Interest Rates: Capital's Reproduction Problem

The Great Financial Crisis lingers. The fact that the world economy continues to grow does not change that fact. There are different lenses from which one can view the crisis and seek to understand its implications.

We are drawn to a lens that was central to the political economic discourse from the middle of the 19th century through the Great Depression. It was the idea that capitalism was so terribly successful that it generated a surplus in excess of what it could profitably invest.

Charles Conant, a journalist-cum-presidential adviser in the late-1800s, and early 1900s recognized a limited range of possibilities. Anticipating Mad Men by half a century, Conant understood that increased consumption could absorb the surplus. There was a certain plasticity to consumer desires. Still wedded to the character-building concept of scarcity, Conant saw limitations to this course.

Conant realized the surplus could be redistributed. He accepted… Read More …