|
Economy
|
Pamphlet: What We Stand For
Latest International NewsSocialist Appeal Fighting Fund appeal 2010
Unison GS election: Support Paul HolmesLatest news on the campaign for Paul Holmes to be the Left candidate for the unison GS election
London Demo: April 10th Latest British NewsNew Book - 'Reformism or Revolution' - now available
Latest Trade Union NewsMarxist International Review
School Students' Union
Wellred featured booksIn Defence Of MarxismLeon Trotsky's classic work "In Defence Of Marxism" Now available from Wellred at a special price
The Communist Manifesto
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 items on our website or in our monthly paper Socialist Appeal. E-Mail: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it Post: PO Box 50525, Poplar, London, E14 6WG, United Kingdom.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Some economic commentators and financial journalists have divined the ‘green shoots’ of economic recovery’ growing out of the present crisis. Perhaps the wish is father to the thought. Are they right? Most obviously stock exchanges in Britain and all over the world have been booming since the beginning of March. We have to be careful here. Remember there were four 20% or more rallies on the NYSE between 1929-32, when the overall trend for share prices was definitely down. These are often described as suckers’ rallies that take place in a ‘bear market’.
General Motors, the largest car manufacturer in the United States of America, which employs nearly a quarter of a million people world wide, has filed for bankruptcy. This has initiated the largest industrial insolvency the world has ever seen with debts of £105 billion! The firm, which owns Vauxhall and its European sister Opel, employs 5,500 workers here in the UK. The future of the British employees have entered into uncertainty with sale of the European arm of General Motors to a consortium led by Canadian car parts manufacturer Magna, backed by Russian investment bank Sberbank.
Nearly fifty years ago, Ted Grant wrote a major article called 'Will there be a slump?' in which he outlined the nature and underlying reasons for capitalist crisis and why it would keep happening - a controversial statement given that it was made during the period of the post-war boom. This article from 1960 remains as relevant today as ever - if not more so given the world recession which has thrown the global economies into chaos. Here we see a real explanation for the failures of capitalism and why they want the working class to pay for their mess.
Alongside
the waste of resources from capitalist slumps comes inequality and
injustice. Michael Roberts goes beyond the facts and figures to see how capitalism in the 21st Century has ensured that the rich have got richer and the poor... well you can quess Our economics correspondent takes a closer look at some of the facts
The 1920s were good years for the world economy. They were years of boom. Boom and speculation go together like strawberries and cream, and there was speculation aplenty as well. In such a period of ‘irrational exuberance’ the illusion spreads that the good times will go on for ever. Sound familiar? In a 'bull market' as in 1925-29 nearly all share prices go up and up. Over those years US industrial shares trebled in price! We all know what happened next. What are the parallels with today?
It makes your blood boil! The only good news to come out of the UK budget announced by New Labour Chancellor Alastair Darling last week was the slight increase in tax rate that would now be levied on those earning more than £100,000 a year. The rate was being raised from 40% to 50% to help raise a little more money from those who have benefited most from the credit binge that has now gone bust around the world.But what a barrage of criticism and rage has erupted from the great and good and from the news media on Darling’s action.
After a budget speech that might as well have ended with Alistair Darling announcing to the speaker of the house that it was goodnight and goodbye from the Labour government it seems that the way is being paved for a Tory government and a bosses’ offensive. In Scotland the repercussions from the budget are already having an accentuated effect due to the different political set up of the country; namely the impact of this budget on that of the SNP administration’s at Holyrood.
Alan Greenspan has just turned 83 years old. He was Chairman of the US Federal Reserve Bank for over 19 years before he stepped down in January 2006, just before the great boom turned into the awful credit crunch and brought global capitalism to its knees. Greenspan presided over the biggest credit boom in capitalist history and the largest rise in property prices that the US had ever seen. He was praised to the heights during those years and as the helmsman of capitalist success globally and in America. Bob Woodward, one of the journalists who exposed the Nixon Watergate scandal back in the 1970s, wrote a book about Greenspan in the year 2000, in which he described him as ‘the maestro’.
'So far, we have observed the drive towards the extension
of the working day, and the werewolf-like hunger for surplus labour, in an area
where capital’s monstrous outrages, unsurpassed, according to an English
bourgeois economist, by the cruelties of the Spaniards to the American
red-skins.' Karl Marx Capital Vol. 1
The holy trinity of ideological concepts for the modern capitalist age
are neoliberalism, globalisation and financialisation. Of these three concepts
financialisation occupies a position akin to that of the holy ghost, as the
least understood and least discussed of the three. Financialisation is a
reality under modern capitalism. Marxists need to examine how much it has
changed capitalism, and how far the system remains fundamentally the same.
As I write, the New York stock exchange index fell to its lowest level in six years as the big financial institutions and investors in company stocks slipped into the depth of despond about the state of the world capitalist economy. And these investors have every reason to feel depressed. The world economy, by most estimates from the major international institutions, will contract this year for the first time since the 1940s. And by the world, they mean everywhere, not just in the advanced capitalist economies.
Stock exchanges in Britain and the USA have
been on the slide over the past few days. The reason is not hard to seek. The
FTSE has been spooked by bank shares collapsing. Barclays, for instance, saw
25% of its share price shaved off in one hour last Friday (16.01.09).
This was the day after the bank announced 2,100 job losses.It’s starting to look like the time back in
October when it seemed that banks such as Barclays and the Bank of Scotland
(now HBOS) that had been in existence for hundreds of years would be destroyed
by a share collapse in a matter of hours.
Keynesianism is the only serious economic theory that contends it
can do away with the tendency of capitalism to move from boom to bust by stimulating
the economy. If it could really perform that miracle and eliminate the
contradictions of capitalism, then it could provide a sound platform for
reformism and ever-improving living standards for the mass of workers under
capitalism. If Keynesianism works, then reformism is practical politics.
Click here to make an online donation to Socialist Appeal
