Internal pages
|
Economy
|
Latest International NewsLatest British NewsLatest Trade Union NewsWellred featured books
Send us reports!Send us your letters, articles or workplace and trade union reports! Please get in touch and wherever possible we will publish submitted articles on our website or in our monthly paper Socialist Appeal. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Last month 100,000 American private sector workers lost
their jobs. This is the third monthly rise in the unemployment figures in a
row. Capitalism is out of control. It’s
not delivering the goods. And it’s not just in the USA. Across the world alarm has greeted every bit of bad news from the States. Even if capitalism doesn’t fall
over and crush you this time, it will always be a threat to the welfare and
happiness of workers all over the world.
Now Gordon Brown has handed over the reins as Chancellor to
Alistair Darling it transpires that for the past ten years Gordon has been
displaying the fiscal prudence of a drunken sailor. The British government has
the biggest hole in their finances in Europe, a whopping £43bn – and it could
get up to £50bn. Where has it all gone?
The government has a good scam going on rising prices. They're trying to hold public sector pay down to 2.1%, which is the rate of inflation measured by the Consumer Prices Index. But if you measure inflation by the Retail Prices Index (another official government index) prices have gone up by more than 4% over the past year.
It emerges from the Parliamentary debate on the
nationalisation of Northern Rock that billions of pounds are to be diverted
away from the intended purpose of preventing a banking collapse, into the
pockets of the Rock's management. The directors set up a financial institution called Granite, allegedly a charity for handicapped children. Not one handicapped child has seen the colour of their
money. The real purpose of Granite was to act as a scam for
tax-dodging.
In 2006 a report from the UN showed
that the world's richest two percent of adults owned more than half the
global wealth, while half the world's population own only one percent.
Inequality has been increasing, particularly over the last decade, with
the rich getting richer, the mega rich getting richer quicker than the
rich, and the poor getting even poorer, with the number of people
living on less than $2 a day increasing.
How do you lose £3.7 billion? Down the back of the sofa? Meet Jerome Kerviel. He lost £3.7 billion of
his employer’s money, Societe Generale, a French
bank. Is it actually a good argument for
capitalism that the whole world can be screwed up because of a solitary rogue
trader? Is the system really so precarious that one crook can send world
financial markets into freefall?
With a world recession looming, slides in the stock market
and capitalism generally entering a period of crisis you would expect the first
day of the World Economics Forum to be the site of a serious discussion and
plans for the future; not so.
Everything now clearly indicates that the
advanced capitalist world is headed for recession. The only question is when
and how deep that recession will be. In fact Merrill Lynch says the US economy
is already in recession. And that’s bad news for all of us. Here Mick Brooks at
what is really going on in the world economy.
Gordon Brown and Chancellor Darling are trying to cut public sector pay and impose three year pay deals, despite the price of basic goods rising. In effect the deals the are trying to impose are pay cuts. Why? 
We have seen the sharpest falls in stock markets around the
world for almost a decade. Billions have been wiped off share prices worldwide.
As we have predicted, fear mounted among the financial authorities that the
panic could lead to a full-blown recession.
This article was originally written on the occasion of the seventieth
anniversary of the 1929 Wall
Street Crash. It was not intended purely as a
commemorative or historical piece. It was written because, to Marxists, all the
signs were then apparent that another stock price ‘correction’ was in
preparation.
Andrew Glyn died from a brain tumour on 22 December 2007. He was 64 years old. A fellow of Corpus Christi College
in Oxford since
1969, he was a leading socialist economist for all that time.
Everywhere the cry is: credit crunch!
The final part of this extended article on Marx's theory of crisis focuses on the tendency for the rate of profit to fall, with reference to the generalised world-wide crash of 1974. The tendency for the rate of profit to fall manifests itself in practice through the development of internal contradictions, as part of a cycle and not, as over-production
theorists would have it, as a crash coming out of a clear blue sky.
