Maturity and Stagnation in American Capitalism

Why was the Great Depression of the 1930s so much deeper and longer than any previous depression in the history of capitalism? Why did the recovery which began in 1933 fizzle out a few years later with unemployment in the United States still 15 percent of the labor force?

These are questions with which economists were much concerned during the 1930s. Keynes, Hansen, and Schumpeter, to name only the most famous, propounded theories and engaged in debates in earnest efforts to explain the riddle of the Great Depression. But no consensus had been reached when the Second World War intervened and diverted attention to other matters. In the different conditions which prevailed after the war, most economists were happy to forget the whole problem. They comforted themselves with the thought that whatever may have caused the debacle of the 1930s it need never happen again: the “new economics” provided the key to a future of permanent prosperity. It is not surprising therefore that when Dr. Josef Steindl’s pioneering work, Maturity and Stagnation in American Capitalism, appeared in 1952, it was almost totally ignored.

Now, decades later, we know better. The much vaunted instruments of control supposedly provided by the “new economics” have proved illusory. Permanent prosperity has turned out to be permanent inflation, with unemployment stubbornly remaining at levels of five percent or more. The economics profession, having renounced any attempt to probe the underlying forces which govern the function of monopoly capitalism, has nothing to offer by way of either explanation or remedy. Despite all its elaborate mathematical models and computerized statistics, its failure is complete.

In these circumstances it is only natural that there should be a revival of interest, especially among younger economists, in a different kind of economics, one which seeks to lay bare what Marx called capitalism’s “laws of motion.” Dr. Steindl’s work lies squarely in this tradition, and it is being increasingly if belatedly recognized as one of the most original and important contributions to the understanding of capitalism in its monopoly stage.

Josef Steindl (1912-1993) was born in Vienna and emigrated to England in 1938. He was Research Lecturer at Balliol College, Oxford, and subsequently a research worker in the Oxford Institute of Statistics, where he met Michal Kalecki who had a lasting and decisive influence on him. In 1950 he returned to Vienna to work at the Austrian Institute of Economic Research. He was also an honorary professor at the University of Vienna and visiting professor at Stanford University. His other books include Small and Big Business and Random Processes and the Growth of Firms.