ABSTRACT
According to Karl Marx, crises are part of the DNA of capitalism; and they get increasingly worse over time. The mainstream neo-classical economists thought that markets were rational and self-correcting. The Great Recession showed how wrong these classical economists were. Marx realized that stagnation occurs despite workers' need for goods; the goods they cannot afford on their squeezed wages. According to Marx, the whole form of the movement of modern industry depends upon the constant transformation of a part of the labouring population into unemployed or half-employed hands, which is an ever-growing reserve army of unemployed people. Jobless recoveries and the wage paradox lead inevitably to the financialization, speculation, and debt crises that are a key element of all serious capitalist crises. The 2008 Wall Street implosion was the inevitable end-result of a financial scheme to prop up profits, which was itself the inevitable result of Main Street stagnation.
