Economics

Work, time, and the working class

Moishe Postone, a Marxist writer based at the University of Chicago and author of Time, Labour, and Social Domination, and Critique du fétiche-capital: Le capitalisme, l’antisémitisme et la gauche, was in London in May, and discussed capital and labour with Martin Thomas from Solidarity . MT: Your book Time, Labour, and Social Domination proposes a Marxist theory focused on the critique of labour (as labour is defined in capitalist society), and you contrast that to a critique of capitalist society from the point of view of labour. Logically, therefore, you discuss chapter 15 of Capital, where...

Don’t blame migrants, blame the bosses!

Free movement across borders gives individual freedom, and makes cultures more diverse and richer. Migrants have rights; and migrants are a boon, not a burden. To win democratic control against the rapacious profit-drive of the capitalist multinationals and the global financial markets requires joint action by many countries. Socialism cannot be built in one country alone. The working class, to win gains, must unite across borders. The lower the borders, the easier it is to unite. Social levelling-up across borders is better than unchecked competition between capitalist states to offer the...

Two cheers for neo-liberalism?

Jonathan Ostry, an IMF economist with a long record of arguing that extreme income inequality harms capitalist growth, has published a new article on the theme with two IMF colleagues, Prakash Loungani and Davide Furceri. Capitalist crises generally come through sudden shutdowns of investment and luxury spending by the rich which then snowball through the economy. The poor are less apt to go in for sudden bouts of holding on to our cash. The greater the proportion of spending controlled by the rich, the more unstable. That is the basic idea behind Ostry's argument (bit.ly/ostry-eq). Extremely...

Brexit would mean free rein for capital

88% of six hundred economists surveyed for the Observer newspaper (29 May) reckon that Brexit would reduce economic growth in Britain. Economists often get things wrong, and the gist of the economists' opinion is that Brexit would disrupt the regular flows of the global capitalist economy, thus pushing down trade and investment into Britain. Most enlightening is what the pro-Brexit minority of economists say. The "Economists for Brexit" group led by veteran Thatcherite Patrick Minford has produced a report. As ardent free-market ideologues, they argue that a capitalist Britain outside the EU...

Varoufakis’ plan to change Europe

During the Peloponnesian War between Athens and Sparta, the Athenians captured the small island of Melia, considered to be friendly to their rival city state. The Melians, powerless before the might of Athens, pleaded for mercy but to no avail. The Athenians stated that justice belonged to the strong, they would do as they pleased “and the weak suffer what they must” (note that the original quote is a statement, not a question — a subtle but important difference). And so it turned out. The Athenians put much of the population to the sword and enslaved the survivors. However, the story doesn’t...

A Schäuble road to socialism?

A long article in the Socialist Economic Bulletin (15 February) and on the Labour Left website Left Futures argues that the “centrepiece” of Labour Party economic policy should be a national investment bank. This would be a publicly-owned bank, able to borrow more cheaply than commercial banks because of its government backing, and lending for infrastructure and industrial projects. The model is the KfW, the German state’s federal investment bank, set up under the Marshall Plan in the 1940s and still going strong. A safe, conservative model, maybe a useful capitalist technique, but in no way...

The world economy since 2008

Since the immediate recovery from the great 2008-9 economic crisis, world economic growth has been slow and troubled. Major areas have slipped back into recession. Now a “third leg” of the crisis, or even a new crash, are possibilities for 2016. Martin Thomas surveys the path, the causes and the sequels of the crisis. The story started in finance. In June 2005 mortgage interest rates in the USA started rising sharply. They levelled off and declined after July 2006, but in the meantime house prices had reversed their giddy rise of previous years. House prices would continue to fall until...

The other gougers

I enjoyed Ira Berkovic’s review ( Solidarity 390, 20 January 2016), but he may have short changed the big shortcoming of The Big Short. The Michael Lewis source material gives too much hero status to the subjects of this movie (and book) who created a far wider crisis by creating yet another, and hitherto nonexisting, market to short the worst of the subprime securities. These outliers didn’t just enrich themselves, but enriched themselves at the expense of the very same people that the movie argues were fleeced entirely by other gigantic, too big to fail, Wall Street firms and their rating...

The people who gambled with our future

In a scene fairly early on in the The Big Short two financial traders visit a Florida housing estate where, they’ve discovered, most of the homeowners are well behind with mortgage repayments. They break the news to one of the tenants (he’s working-class: we can tell because he’s fat, wears a stained tank top, is covered in tattoos, and looks and sounds a bit Latino), who asks whether he’s going to lose his home. “Has my landlord not been paying the mortgage?” he asks, stunned. “But I been paying my rent!” On their way out of the estate, the traders are frightened by an alligator lurking in a...

The shape of the coming crisis

While the Eurozone is embarking on a very moderate period of recovery, alarmist predictions are multiplying about the overall trajectory of the world economy: “Chinese growth slows, world economy suffers”, was, for example, a headline in Le Monde of 20 October 2015. “On the economic front, there is also reason to be concerned” says Christine Lagarde [1], and Jacques Attali [2] announces that “the world is approaching a great economic catastrophe”. Click here to get article as pdf Let us begin with a brief overview: world growth is slowing, mainly in the emerging economies with the exception of...

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