Crisis opening in 2007

"The Economy in a World of Trouble" — Robert Brenner on the Crisis

Brenner

Author: 

Robert Brenner

Songjin Jeong: Most media and analysts label the current crisis as a “financial crisis.” Do you agree with this characterization?

In an interview first published in a Korean newspaper, Robert Brenner argues that "the basic source of today’s crisis is the declining vitality of the advanced economies since 1973 [due to]... a persistent tendency to overcapacity in global manufacturing industries".

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Marxist Theory and History: 

G20 summit: whose fightback starts here?

Slump

Author: 

Editorial

Any working-class person who looked to the capitalist world leaders for protection against the economic and social catastrophe that looms before us all will be disappointed. The G20 economic summit in London on 2 April was a triumph for the spin-doctors rather than the economists.

Even Tory papers were full of praise: "The fightback starts here", said the Daily Telegraph. The Daily Mail had the same headline as the Guardian: "Brown's New World Order".

The G20 economic summit in London on 2 April was a triumph for the spin-doctors rather than the economists.

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Shaping up for the crisis

AWL

Author: 

Editorial
The crisis opens tremendous possibilities for us, but the left is not ready for the great crisis of capitalism that is now upon us.

If you tell a man that he’s going to be hanged in the morning, then, as someone once said, it concentrates his mind wonderfully. The British National Party is expected to make serious electoral gains in a number of different elections over the coming period. It will most likely win more council seats.

It may win a seat in the European Parliament. It may gain representation in Parliament in the next General Election, a year or so from now. It already has a seat in the London Assembly. The serious left needs to sound the political alarm bells.

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What's at stake in the fourth "Great Depression"?

Slump

Author: 

Martin Thomas

We are probably in the first stages of the fourth international "great depression" in the history of capitalism.

We must expect big social and political convulsions to follow from the economic crisis. The outcome of those convulsions depends on struggles, and therefore partly on us.

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What “quantitative easing” means

Author: 

Martin Thomas

The Bank of England’s move in early March to a new monetary tactic — “quantitative easing” — came alongside much economic-disaster news.

The banks “bailed out” so lavishly last year still need more bailing out. Lloyds TSB, which was supposed to be a “strong” bank capable of saving HBOS by buying it out with Government aid, turns out to be as much a basket case as any other.

In the USA, giants like Citigroup are in deep trouble, and conservative politicians talk about nationalisation.

The Bank of England’s move in early March to a new monetary tactic — “quantitative easing” — came alongside much economic-disaster news.

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“Bankers” occupy the DWP

Twenty-five activists dressed as bankers staged an occupation at the Department for Work and Pensions on Monday 9 March.

Taking over the lobby of the Department for Work and Pensions’ Adelphi House they leafleted staff throughout the building. Carrying banners saying “Target the rich not the poor” and “Stop the Welfare Abolition Bill”, sat in front of the entry barriers and refused to leave.

Twenty-five activists dressed as bankers staged an occupation at the Department for Work and Pensions on Monday 9 March.

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"Making sense of the global financial crisis" blog

Sydney Workers' Liberty has initiated a blog to carry discussion material from the reading group it is organising on the subject of the global financial crisis. Click here.

Sydney Workers' Liberty has initiated a blog to carry discussion material from the reading group it is organising on the subject of the global financial crisis.

Marxist Theory and History: 

Lower inflation? Not in the supermarkets

Author: 

Colin Foster

Food prices are still rising at a rate of 10% per year, according to official figures reported in the Financial Times on 18 February.

For months now, economists and the press have been predicting outright deflation - a fall in the average price level - for 2009. Prices of some staple industrial inputs - oil, gas, wheat, metals - have already gone down a lot, and the "70% off", "50% off", and "30% off" signs in shop windows do indicate some falling prices.

Clothing and footwear prices, for example, went down 10% between January 2008 and January 2009.

Food prices are still rising at 10% per year.

Marxist Theory and History: 

Has New Labour moved left?

Author: 

Rhodri Evans

Government economic policy has shifted drastically. But it is not a shift to the left. Today’s capitalism is, as the Financial Times writer Martin Wolf has put it, a machine for “privatising gains and socialising losses”. The change is that, in the crisis, the focus has shifted from the private gains (currently more meagre) to socialising big losses.

A genuine left-wing response to the crisis requires a workers’ plan — a drive to mobilise the working class to take control of the huge accumulated gains of capitalist production, currently monopolised by the rich elite.

Government economic policy has shifted drastically. But it is not a shift to the left.

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Marxist economists comment again on the crisis: 6. Costas Lapavitsas - The debacle of financialised capitalism

Author: 

Costas Lapavitsas

What sort of new shape of capitalism do you think might emerge from the shake-out of this crisis?

The world economic crisis took a sharp turn for the worse in September 2008. Some of the Marxist economists who had discussed the crisis in our first series of interviews, March-July 2008, have commented again. This contribution is from Costas Lapavitsas.

Marxist Theory and History: 

Crisis: the impact on women. The pressures and the fightback

Author: 

Rebecca Galbraith

Beyond boob jobs — how might the credit crunch affect women? is a recent article on The F-word (a feminist blog) by Carolyn Roberts. The writer makes an observation that I found true when researching this topic — that there is pretty much nothing written on the potential impact of the crisis on women.

At the time of writing the London socialist feminist reading group on this topic came up first on an entire google search — great, but pretty depressing.

We need to prepare for a fight against reactionary politics that may gain popularity, and an increase in reactionary politics could certainly lead to an attack on women’s rights.

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£20 billion more "socialism for bosses and bankers" shows market breakdown

Author: 

Martin Thomas

First, the Government semi-nationalised the banks. Now, it is quarter-nationalising the everyday process of trade credit, with the announcement on 14 January of Government guarantees for some £20 billion on loans made by banks to firms for "working capital", i.e. the cash they need to be able to pay wages and bills before their sales income comes in.

First, the Government semi-nationalised the banks. Now, it is quarter-nationalising the everyday process of trade credit.

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Marxist Theory and History: 

Marxist economists on the crisis, 2nd round: 5. David Laibman - The Onset of Great Depression II: Conceptualising the Crisis

Author: 

David Laibman

At this writing (January 2009), firms in all sectors of the U. S. economy are cutting their payrolls; unemployment and homelessness are soaring; and the working class is taking the biggest hit to living standards in several generations, raising deep doubts about the capacity of our capitalist society in the near term to ensure overall social reproduction.

The world economic crisis took a sharp turn for the worse in September 2008. David Laibman is the fifth contributor to our second round of comment from Marxist economists.

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Marxist economists on the crisis, 2nd round: 4. Andrew Kliman - The level of debt is astronomical

Reclaiming Marx's Capital

Author: 

Andrew Kliman

Do you think a markedly new regime of capitalism is going to emerge out of this crisis?

The world economic crisis took a sharp turn for the worse in September 2008. Andrew Kliman is the fourth contributor to our second round of comment from Marxist economists.

Marxist Theory and History: 

What the money supply figures show

Author: 

Martin Thomas

The Financial Times of 05/01/09 surveys the US money supply figures for 2008. The "monetary base", M0, doubled during 2008. That's the stock of notes and coins in circulation plus bank reserves held at the central bank.

Lots of things are paid for by debit cards or cheques, of course, so the economists also measure M1 - currency (notes and coins in circulation) plus funds held in demand or current accounts plus travellers’ cheques.

The banks' reserve accounts at the Federal Reserve are stuffed full of cash, but workers' pockets and bank accounts are empty.

Marxist Theory and History: 

Marxist economists comment again on the crisis: 3. Leo Panitch - The chain broke at the weakest link

Leo Panitch

Author: 

Leo Panitch

The world economic crisis took a sharp turn for the worse in September 2008. Some of the Marxist economists who had discussed the crisis in our first series of interviews, March-July 2008, have commented again. No.3: Leo Panitch.

The world economic crisis took a sharp turn for the worse in September 2008. Some of the Marxist economists who had discussed the crisis in our first series of interviews, March-July 2008, have commented again. No.3: Leo Panitch.

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Marxist economists comment again on the crisis: 2. Fred Moseley - The bondholders and the taxpayers

Fred Moseley

Author: 

Fred Moseley

The world economic crisis took a sharp turn for the worse in September 2008. Some of the Marxist economists who had discussed the crisis in our first series of interviews, March-July 2008, have commented again. No.2: Fred Moseley.

The world economic crisis took a sharp turn for the worse in September 2008. Some of the Marxist economists who had discussed the crisis in our first series of interviews, March-July 2008, have commented again. No.2: Fred Moseley.

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Marxist Theory and History: 

Marxist economists comment again on the crisis: 1. Michel Husson - The crisis of neo-liberal capitalism

Michel Husson

Author: 

Michel Husson

The world economic crisis took a sharp turn for the worse in September 2008. Some of the Marxist economists who had discussed the crisis in our first series of interviews, March-July 2008, have commented again. No.1: Michel Husson.

1. Do you think that the recent nationalisations and big bail-outs signify a major change in the configuration of capitalism? What sort of new regime could result from the crisis?

The world economic crisis took a sharp turn for the worse in September 2008. Some of the Marxist economists who had discussed the crisis in our first series of interviews, March-July 2008, have commented again. No.1: Michel Husson.

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Lessons from three workers' struggles in the USA

Author: 

Adam Fischer

Every now and again, American workers issue a blunt reminder to the bosses, and to themselves, that the steady and moderate tone transmitted by their nation's great public-relations dream-machine can never fully lull them to sleep.

Adam Fischer, an American revolutionary, reports on recent class struggles in the United States: Republic Windows & Doors, Smithfield Foods and Stella D'Oro

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Around the world: 

Taxpayer-aided banks pay huge bonuses

Author: 

Chris Reynolds

Solidarity and Workers' Liberty have argued for sacking all the top bank bosses, nationalizing the finance sector without compensation for the big shareholders, and reorganizing it as a public banking, mortgage, and pension service.

The case for this has been made again by a report in The Observer (21 December): "City bankers at four major firms shared in an estimated £6.4bn of bonuses last week".

The Observer further reports that Goldman Sachs, which is paying out a bonus pot of $2.6bn (£1.73bn), has taken $10bn of taxpayer funds to help it in the crisis.

Some City firms are paying big bonuses to top bankers after taking government loans to bail them out, or while making many lower-rank workers redundant.

Marxist Theory and History: 

Sack the bank bosses! Bring finance under democratic social control

Author: 

Gerry Bates

Bank of England and government support for the banks so far totals something like the equivalent of £18,000 for every child, woman, and man in the UK.

The Bank of England's Financial Stability Report of 27 October 2008 gives the figures: a total of £1107 billion.

It can’t be right? After all, the average household in the UK is about 2.4 people. That average household doesn't have £43,000 (£18,000 times 2.4) to give to the banks, even if it wanted to.

Bank of England and government support for the banks so far totals something like the equivalent of £18,000 for every child, woman, and man in the UK. The Bank of England's Financial Stability Report of 27 October 2008 gives the figures: a total of £1107 billion.

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Marxist Theory and History: 

Don’t pay for the bosses’ crisis!

Author: 

Daniel Randall

The sharp increase in oil prices, and now the credit crunch, has led to sales of large cars and people-carriers falling by 30% in Europe. SUV sales have fallen by 45%.

The industry giants have responded to the crisis with massive layoffs. Volkswagen, for example, has announced 25,000 job losses; Rolls Royce, Peugeot and Chrysler are also making swingeing cuts. The first instinct of most socialists will be to defend workers' jobs; that instinct is correct, but the situation calls for a far more thoroughgoing response that isn't limited to defending the pre-crisis status quo.

The sharp increase in oil prices, and now the credit crunch, has led to sales of large cars and people-carriers falling by 30% in Europe. SUV sales have fallen by 45%. The industry giants have responded to the crisis with massive layoffs.

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The one they won’t bail out

Author: 

Dale Street

Two years ago the Christmas savings club Farepak went bust. Its 150,000 customers — predominantly low-income and female — have still not received a penny of compensation for the £40 millions which they lost.

Farepak customers deposited money with the savings club from January to October each year. In November they would be issued with the equivalent value in the forms of vouchers, provided by Choice Gift Vouchers (CGV).

Two years ago the Christmas savings club Farepak went bust. Its 150,000 customers — predominantly low-income and female — have still not received a penny of compensation for the £40 millions which they lost.

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Economist arrested for being too pessimistic (true story)

Author: 

From the Wall Street Journal

The Wall Street Journal of 1 December reported that the government of Latvia, beset by economic crisis, sent its Security Police to arrest university economics lecturer Dmitrijs Smirnovs... for being too pessimistic.

How to Combat a Banking Crisis: First, Round Up the Pessimists

Latvian Agents Detain a Gloomy Economist; 'It Is a Form of Deterrence'

By ANDREW HIGGINS

The Wall Street Journal of 1 December reported that the government of Latvia, beset by economic crisis, sent its Security Police to arrest university economics lecturer Dmitrijs Smirnovs... for being too pessimistic.

Marxist Theory and History: 

City greed may cost you your health!

Author: 

Alison Brown

Alistair Darling is seeking £5 billion spending cuts in the public sector, and he seems to have the National Health Service in sight to provide the majority of these cuts.

Despite saying that the bail out of the banks would not be at the cost of public services, Darling is pressing ahead with a programme of “cost savings”. That means the NHS must prepare for a substantial cut in planned funding from 2010.

Alistair Darling is seeking £5 billion spending cuts in the public sector, and he seems to have the National Health Service in sight to provide the majority of these cuts.

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Do the economists know how to fix the crisis?

Puzzled

Author: 

Martin Thomas

Economists, and the governments advised by them, are pulling all they can out of the books and research papers in order to tame the current economic crisis. What have they learned, and what are its limits?


This version of the article is longer than the one in the printed paper.
Bail-outs, nationalisations

The most spectacular bit of recent crisis policies, the huge nationalisations and bail-outs of banks and other financial firms, is the least new, and the one owing least to economic theory.

Economists, and the governments advised by them, are pulling all they can out of the books and research papers in order to tame the current economic crisis. What have they learned, and what are its limits?

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Marxist Theory and History: 

New corporate debt calculations suggest downturn may go further

Author: 

Martin Thomas

No-one knows how big the downturn will be in trade and production set going by the financial crisis. But one factor pointing towards a more limited, rather than a bigger, downturn has been the figures for the debt burden of non-financial corporations.

New figures on the debt burden of non-financial corporations point to a deeper downturn.

Marxist Theory and History: 

Stop these job cuts! Cut work hours, Expand public services!

Author: 

Gerry Bates

According to the bosses’ Confederation of British Industry unemployment will reach 2.9 million by 2010 — an unemployment rate of about 9 percent — up from 1.8 million now. That is nearly as high as the figure reached under the Tories in 1982 and 1992.

Bosses predict three million jobless by 2010. Stop these job cuts.

Marxist Theory and History: 

Trade Unions: 

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The unions must channel the anger

Author: 

Joe Marino

It is very clear that the political consensus put forward by the major parties over the last 20 years has been blown out of the water and has been shown to be a sham. And I think that will be seen to be the case far and wide. People know if they can find the money for the banks they can find it for pensioners and other social concerns. People will have questions.

It is the role of the trade unions to channel the anger, and we now have a great opportunity to do that.

By Joe Marino, General Secretary Bakers’ Union

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Two other “workers’ plans”

Author: 

Sacha Ismail

In the first two articles of this series, we looked at how, after the Russian revolution, the Communist International developed the concept of “transitional demands”. Many socialists in the international movement before the First World War had instead operated with a combination of “minimum programme” (minimal demands, enough for now and for the foreseeable future) and “maximum programme” (the goal of socialism, put off indefinitely). Transitional demands meant, as the Third Congress of the Communist International put it in 1921:

Discussion of the "workers' plans for the crisis" proposed by the SWP and Socialist Appeal

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