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Economy
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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.
The second part of this extended article on the Marxist theory of Crisis looks at world
capitalism since the Second World War. It deals with Glyn and the profit rate, the tendency of the rate of profit to fall and the increasing organic composition of capital. 
Marx's theory of crisis has been the source of controversy for more than
a century. Many competing schools have been set up, basing themselves on
isolated quotes. This is partly because Marx's key observations are
scattered through his economic writings. This extended article looks
first at the different theories that try to explain capitalist crisis
and at how Marx's own theory of crisis fits in with his broader view of
capitalist development. The next part will apply this analysis to world
capitalism since the Second World War.
The bourgeois economists are incapable of understanding
crises, which are an inescapable result of capitalism. They look for subjective
factors such as "confidence", even "human nature". In reality what we are
witnessing are the real workings of the capitalist system in a period of
decline.
The recent chaos on world stock markets is a
manifestation of the general turbulence that is the most prominent feature of
the present epoch. The crisis that affected the Northern Rock bank in Britain
is but an indication of dramatic
events that are being prepared globally.
Milions of workers came out on strike in defence of their pensions. This was the biggest such action for decades. The fight goes on!
