Five years ago, in the immediate aftermath of the global financial crisis of autumn 2008, I spoke to Andrew Gamble, professor of politics at Cambridge, about a book he’d just published. “The Spectre at the Feast: Capitalist Crisis and the Politics of Recession” was an anatomy of crisis in which Gamble distinguished between genuine crises of capitalism, which are structural, and mere economic recessions, which are not. The present crisis, which began in 2008, is the third such structural crisis to have befallen the international market order, following those of the 1930s and the 1970s. Back in 2009, Gamble told me that a crisis of capitalism is a “prolonged period of political and ideological impasse.” Understanding the current impasse is the aim of Gamble’s new book, “Crisis Without End? The Unravelling of Western Prosperity“.
I spoke to Gamble again recently and began by asking him about a feature of this crisis that was absent from those of the 1930s and 1970s, namely deflation. Why, in his view, is deflation today a “symptom of disorder”, rather than inflation, as was the case in the 1970s?
AG: This is one of the things that has struck me very forcibly in the last two or three years. Deflation poses a quite different set of political challenges than inflation did. And we’re only just beginning to understand what deflation could mean for established political systems. There was the experience of Japan in the 1990s. People tended to bracket that off and say it was just something peculiar to Japan. But now I think we can see that there is a risk of what happened to Japan happening in other developed economies, particularly in Europe.