The Great Canadian Slump, 1990–92

A Classical Marxian Analysis

in Historical Materialism
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After examining the character of the downturn and existing explanations for it, the article provides an alternative classical Marxian account based upon the methodological and theoretical framework developed by Henryk Grossman. This article investigates the long- and short-run dynamics of capital accumulation in Canada leading up to and culminating in the economic downturn of 1990–2.

The Great Canadian Slump, 1990–92

A Classical Marxian Analysis

in Historical Materialism

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References

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1

Output grew by 4.5 per cent in 1988. See cansim Table 379-0023.

2

Kozak 1991a.

3

Kidd 1990.

5

Langan 1990b.

7

Milner 1990.

10

Walsh 1991.

11

Fortin 1996p. 783.

12

Walsh 1991.

13

Fortin 1996p. 761.

15

Lewis 2003p. 147.

16

Fortin 1996p. 783.

17

Caulfield 2010p. 133.

18

Fortin 1996.

24

American Bankruptcy Institute 2012.

26

Siklos 2006p. 317.

28

The Economist 2003p. 95.

30

Dowling 1991.

31

Donner 1990.

33

Yakabuski 1990.

35

Milner 1990.

36

Fortin 1996pp. 762–73.

37

Fortin 1996p. 781.

38

Lewis 2003pp. 132–4.

39

Stanford 1999p. 211 emphasis added.

40

Stanford 1999pp. 195–6.

43

Laidler and Robson 2004pp. 10–12.

44

Freedman and Macklem 1998pp. 646–65.

45

Freedman and Macklem 1998p. 662.

46

Freedman and Macklem 1998p. 651.

47

Fortin 2001p. 118.

49

Urquhart 1991 and Blinch 1990.

51

Cited in Fortin 2001emphasis added.

54

Armstrong Glyn and Harrison 1991.

55

Sweezy and Baran 1966.

56

Harvey 2006p. xxiii.

57

Kuhn 2009p. 7.

60

Grossman 1992p. 61.

62

Tsoulfidis 2010p. 112.

63

Marx 1991p. 179.

64

Marx 1991p. 338.

65

Rinehart 2006p. 154.

66

See Marx 1991pp. 317–75.

67

Grossman 1992pp. 102–3.

68

Marx 1991p. 360.

69

Grossman 1992p. 76.

70

Grossman 1992p. 115.

71

Grossman 1992pp. 114–15.

72

Marx 1991p. 489.

74

Kuhn 2007p. 135.

75

Saad-Filho 2000pp. 345–46.

76

Saad-Filho 2000pp. 347–9.

85

Rusk 1990.

86

McGillivray 1991.

87

Cook 1991emphasis added.

88

Lewis 2003p. 68.

89

Lewis 2003p. 76.

91

Stanford 1999pp. 199–200.

92

Stanford 1999p. 201.

93

Lewis 2003p. 147.

95

Lewis 2003p. 76.

97

Lewis 2003p. 5.

98

Lewis 2003pp. 3 39.

99

Lewis 2003p. 11. On p. 145 he notes: ‘Experiencing deep economic insecurity people felt their economic situations to be precarious; people conceptualized the state and particularly its welfare functions as the problem; and people supported parties that promised to restore control over their economic lives by eliminating the deficit and retrenching the state.’

100

Stanford 2001.

101

Lewis 2003pp. 133–4.

102

Lewis 2003p. 132.

104

Yalnizyan 2009p. 14.

105

Lewis 2003p. 148.

107

Fortin 2001p. 116.

109

Stanford 2001p. 153. Canada was the first G7 country to balance its budget in this period.

110

Lewis 2003p. 135.

113

Stanford 1999p. 211.

123

Lewis 2003p. 147.

125

Lewis 2003p. 147.

130

Langan 1990a.

131

Shaikh 2011p. 45.

133

Siklos 2006p. 440.

135

Kozak 1991b.

136

Corcoran 1990.

137

Bank of Canada 1995p. 24.

140

Lewis 2003p. 133.

141

Blinch 1990.

142

Fung and Yuan 1999p. 260.

144

Laidler and Robson 2004p. 13.

Figures

  • View in gallery
    Real gdp indices (1984 Q1 = 1)

    SOURCE: CANSIM TABLES 380-0001, 326-0020 AND BEA NIPA TABLE 1.1.3
  • View in gallery
    Bankruptcy indices (1987=1)

    SOURCE: CANSIM TABLE 177-0004 AND ABI QUARTERLY BUSINESS FILINGS24
  • View in gallery
    Employment-to-population indices

    SOURCE: CANSIM TABLES 282-0001, 282-0009 AND BLS TABLE A-1
  • View in gallery
    Rate of return indices, 1962–2010

    SOURCE: CANSIM TABLE 176-0043, 380-0020; BEA NIPA TABLE 1.14, 7.11 AND FA TABLE 6.1
  • View in gallery
    Profit magnitude indices, 1987–92

    SOURCE: CANSIM TABLE 380-0005 AND BEA TABLE 6.16C
  • View in gallery
    Final demand indices (1987=1)

    SOURCE: CANSIM TABLE 381-0010
  • View in gallery
    Output-to-capital ratio

    SOURCE: CANSIM TABLE 031-0003 AND 380-0017
  • View in gallery
    Wages and profits as shares of gdp

    SOURCE: CANSIM TABLE 380-0001
  • View in gallery
    Real interest rate for three-month T-Bills

    SOURCE: TABLE 176-0043 AND 326-0021
  • View in gallery
    Rate of profit governs magnitude of interest payments, Canada, 1961–2011

    SOURCE: CANSIM TABLE 380-0020 AND 031-0003
  • View in gallery
    Rate of inflation increases after 1988

    SOURCE: CANSIM TABLE 326-0021
  • View in gallery
    Businesses take on more debt

    SOURCE: CANSIM TABLE 187-0005
  • View in gallery
    Money-growth outpaces output-growth

    SOURCE: CANSIM TABLE 176-0025 AND 379-0024
  • View in gallery
    Beginning in 1988, corporations and goverment business enterprises increased borrowing

    SOURCE: CANSIM TABLE 380-0005
  • View in gallery
    The effects of the Gulf War on inflation in Canada (Jan-90 = 1)

    SOURCE: CANSIM TABLE 326-0020

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