Secular Stagnation: Keynesianism and the Demographic Theory of Crisis

13 December 2018

 Please join us for the keynote addresses at the Historical Materialism Sydney 2018 conference. All parts of the conference are free and open to all. 

The second keynote address will be given by Associate Professor Melinda Cooper. 


Among those who pushed the Keynesian “panic button” in the aftermath of the global financial crisis was Larry Summers, the former World Bank Chief Economist and Secretary of the Treasury under Clinton who has now become an unlikely advocate of big public spending. But although Summers’ conversion experience had distinctly Keynesian overtones, it is significant that in terms of historical sources, Summers chose to invoke the work of the American Keynesian, Alvin Hansen, rather than Keynes himself. It was Hansen who in the late 1930s suggested that America’s inability to recover from the Great Depression could be attributed to a series of external drivers, including the closing of the frontier, the slow-down of technological innovation — and most important, declining birth rates. This he referred to as a state of secular stagnation.

The fact that Summers chose to invoke a specifically demographic theory of crisis to characterize the lingering stagnation of the post-GFC era has been inexplicably lost in the controversy that has followed. I would suggest, however, that it is key to understanding both the significance of Hansen’s contribution and the limits of Keynesianism more generally. In his late work, Keynes himself appears to have wavered between two incommensurable theories of crisis, without ever acknowledging or attempting to explain their obvious contradictions. Thus, while the General Theory advances a distributional theory of crisis which attributes the deflationary tendencies of the 1930s to the growing inequality of incomes and wealth, in the same text, Keynes also contemplates the idea that population decline might provide an alternative explanation for faltering demand. The practical consequences of opting for one or the other theory are profound: while the first perspective opens up the possibility of radical redistribution between and within classes – between wealth-holders and workers, women and men, citizens and non-citizens – , the other subordinates redistribution to the imperatives of national reproduction and as such imposes a set of “natural” limitation clauses on the claims of women and non-citizens in particular.

I will argue that the demographic theory of crisis is necessary to Keynesianism, which must somehow limit the scope of redistribution if it is to broker a durable consensus between capital and labour. The idea that national demographic and economic trends were fatally intertwined — captured most succinctly by Hansen’s theory of secular stagnation — authorized Keynesians to dampen the scope of post-war wage reflation and to place specifically gendered and racial limits on the promise of redistribution, without apparently derogating from the principles of social democracy. Informed as it was by ambient fears of population decline, the welfare state provided a practical solution to the Keynesian dilemma: how much redistribution is possible without upsetting the terms of consensus between labour and capital? 


Melinda Cooper graduated from the University of Paris VIII in 2001 and is Associate Professor in the Department of Sociology and Social Policy at the University of Sydney. Her research focuses on the broad areas of social studies of finance, biomedical economies, neoliberalism and new social conservatisms. She has recently completed a manuscript Family Values: Between Neoliberalism and the New Social Conservatism, which has been published in Zone Book’s Near Futures series. She is one of the editors of the Journal of Cultural Economy and (with Martijn Konings) of the Stanford University Press book series Currencies: New Thinking for Financial Times. You can consult the book series here.

Please find the original event page for the entire conference here

Event details

  • When: 6.00pm - 7.30pm
  • Where:

    ABS Case Study Lecture Theatre 2080
    The University of Sydney  

  • Cost: Free
  • Contact:

    Gareth Bryant
    T: +61 2 9351 3070  

  • Speaker/ Performer: Associate Professor Melinda Cooper 

Secular Stagnation: Keynesianism and the Demographic Theory of Crisis


ABS Case Study Lecture Theatre 2080
The University of Sydney  


13 December 2018

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