The Rise And Demise Of The Postwar Social Structure Of Accumulation By David M. Gordon Et

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In the article, Power, Accumulation, and Crisis: The Rise and Demise of the Postwar Social Structure of Accumulation by David M. Gordon et.al, the authors introduces capitalists’ economies and the crisis an economy can face. The two main reasons for crisis can be a capitalist class which is too powerful or too fragile. In Keynesian conditions, a powerful capitalist class will create several changes in aggregate demand (AD decreases). In a fragile capitalist class, the worker income will decrease the rate of exploitation, profits and investments will be minimized. Karl Marx, definition about the crisis was different from Keynesian terms. Marx argued that the first crisis refers to the comprehension of surplus and the second crisis refers to the manufacture of surplus value, all these crises are characterized by demand and supply side. Demand side refers to the activity causing short-term fluctuations in the demand of goods and services. Supply side refers to efficiently growth created by dropping out barriers for people to produce goods and services and at the same time it creates invest in capital. The effect of these crises was similar, in both crises there will be a failure in the rate of profit, a decrease in the level of investment, a reduction in the rate of growth in demand and output (Gordon et.al, 1996). The United States faced a demand side crisis during the Great Depression of 1930. These crises brought negative effects to the capitalist economy, some of these

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