This book analyzes in a new way the causes of the current crash by showing how such events derive from real estate bubbles and their interactions with banks and other lenders. It explains the current crisis, but in the process, the author develops a general theory of capital (drawing on Wicksell) showing how excessive investing in durable capital of slow payback can destabilize and then freeze up a modern economy, which requires constant circulation and renewal of capital to function. Combining that analysis with observed cycles of land speculation, Gaffney shows how a 'perfect storm' formed and now has overwhelmed the economy.
Mason Gaffney has been a professor of economics at the University of California, Riverside for the past 33 years. He is the author of The Corruption of Economics, an explanation of how land became excluded from neoclassical economic models. He has also written extensively on various aspects of resource economics, urban economics, tax policy, and capital theory.