Many people were deeply saddened at the end of last year to hear of the untimely death of Andrew Glyn, an economist at Oxford University. Andrew (as I shall refer to him henceforth) was a widely respected figure on the left. He was a deeply committed socialist, a superb teacher and, not least, and by all accounts, an immensely warm and well-rounded human being. My aim here, however, is not to add to the obituaries of Andrew, or at least not to write an obituary of the normal kind. Rather, my aim is to clarify what Andrew's contribution to the thinking of the left was and is. I want to identify what his main ideas were, to pinpoint the strengths and weaknesses in his thought, and to consider his lasting contribution.
Andrew was an economist and he was a Marxist. He took both of these things very seriously. By this I mean, first, that his work as an economist was empirically and theoretically rigorous. He was not a hostage to the dogmas of Marxism and he certainly never allowed ready-made formulae to substitute for the uncluttered 'concrete analysis of a concrete situation'. I also mean, second, that his approach to the data before him was consistently informed by a Marxist conception of capitalism as: a dynamic, highly creative, yet volatile and in many ways brutal system; a system based on class division and conflict in which capital faces the perpetual problem of finding ways to extract labour from 'labour-power'. Not least, Andrew had a fundamental belief in the moral imperative of creating a much more egalitarian society.
The profit squeeze
Andrew's early book, co-authored with Bob Sutcliffe, British Capitalism, Workers and the Profit Squeeze (1972), sets out one of the core ideas of Andrew's economics: that British capitalism - indeed, the entire advanced capitalist world - entered, in the late 1960s and 1970s, into a crisis of profitability. Indeed, if it were not out of step with Andrew's character, one might summarise his basic point, insistently pursued over the decades, simply as: 'It's profitability, stupid!' The rate of profit, according to Marx, is the motive force of the capitalist system. It drives accumulation which, in turn, drives growth. If profitability declines too much, then accumulation ceases and the economy enters into a crisis.
The argument set out in British Capitalism was that the profit rate was falling in British capitalism and that this meant there was an incipient economic crisis which, in turn, had precipitated a growing political crisis. Indeed, in a sense, according to Andrew, the economic crisis was itself at base a political crisis. For if one looked at what was causing the decline in profitability one found that it had its roots in the power of organised labour, buoyed by full employment and tight labour markets, and welfare state protections. Organised labour was using its bargaining power to steadily increase wages and, in the process, was causing labour's share of output to increase at the expense of capital. Capital could not fully win back what it had lost in wage negotiations by price increases because the increase in trade competition also associated with the post-war boom meant that there was less room for price increases. Hence the idea of the 'profit squeeze'. Drawing on the insights of the economist Michal Kalecki, Andrew saw the crisis of profitability as reflecting an unresolved political problem in the post-war social democratic settlement: how to reconcile, over the long-run, the strengthening of labour through full employment with the maintenance of the profit which capitalism requires (Kalecki, 1990 ). Marx had argued that capitalism worked by periodically increasing the 'reserve army' of the unemployed in order to discipline workers' demands. If social democracy aspired to abolish the reserve army, could capitalism itself survive?
It is not difficult to use this theory to explain the phenomenon of 'stagflation', the (to many conventional economists of the time) unexpected combination of rising unemployment and high and rising inflation, which afflicted the British and most other advanced capitalist economies in the 1970s, particularly after the rise in oil prices in 1973-74. …