Category: 2008 financial crisis

2008 financial crisis, crisis theory

why krugman is wrong

Duvinrouge says many ‘socialists’ have got pleasure from seeing Krugman expose the prejudices and flaws in those advocating austerity as a solution to the crisis. He is right that austerity won’t work and is mainly being pursued for ideological purposes. However, he is wrong to believe that Keynesian fiscal stimulus can solve the crisis. He is wrong because he misdiagnoses the crisis and misunderstands the nature of value.

For Keynesians like Krugman, the problem is a lack of demand because the private sector is not investing. Without a surge in exports they argue that it is the government’s job to take up the slack and restore effective monetary demand. This would have some merit if the problem was just a lack of demand due to producers not investing and instead hoarding their money. But this ignores the mountain of debt and the reasons why there is so much debt.

Continue reading “why krugman is wrong” →

2008 financial crisis, crisis theory

interview with andrew kliman

Duvinrouge: Can you tell me what the key message of your new book, The Failure of Capitalist Production, is?

 

Andrew Kliman: The Great Recession was waiting to happen. There were unresolved problems in the system of capitalist production that had been building up over a third of a century. The rate of profit fell and never recovered in a sustained manner, which resulted in persistently sluggish investment and economic growth, which in turn resulted in rising debt burdens. And these problems induced governments to solve them or paper them over with policies that made the debt build-up even bigger.

DVR: Your book is full of statistics and as we know interpretations of statistics can be very different. It would appear that your choice of historical cost as opposed to current cost is crucial. Please can you explain the difference?

 

Accountants can value assets at their current cost or at their original cost when they were acquired. The latter is usually called their “historical cost.” Both methods have their place. But one thing you can’t do is compute the rate of profit, i.e., the rate of return on investment, by dividing profit by the current cost of the capital assets. It’s not wrong to do this; it’s impossible. What you wind up with just isn’t a rate of return on investment. What the assets are currently worth is simply not the same thing as the amount of money that has actually been invested in them. To measure the latter, you have to take their historical cost and subtract depreciation.

Continue reading “interview with andrew kliman” →

2008 financial crisis

three myths about the crisis

Conrad Russell challenges common left myths about the meaning of the crisis

This article is designed to question a number of theoretical assumptions implicit in much Marxist – including autonomist or left communist – writing on the crisis. In particular, I want to question assumptions around capitalist contradictions, capitalist decline, and the role assigned to financial and ‘fictitious’ capital.

much left analysis of the crisis leans on a shallow understanding of the financial sector

My argument is that these assumptions paint a model of a decaying ‘collapsing’ capitalism (hence my term ‘collapsism’). They also fetishise the mechanics of capitalist functioning at the expense of the real social relation underlying them – the class struggle.  It is class struggle, not some quasi – mystical ‘debt meltdown’ or ‘falling rate of profit’, which constitutes capitalism’s permanent crisis. Continue reading “three myths about the crisis” →

2008 financial crisis, cuba, workers' management

democracy and self-management in cuba

Guillermo Almeyra outlines an alternative to the Cuban government’s plans to slash 20% of the workforce and privatise parts of the economy in order to deal with the crisis.

Predictably, the global crisis – together with the criminal US economic blockade – is now taking an even heavier toll on Cuba, reducing levels of tourism and remittances sent home by Cubans abroad.The growing difficulties of the Venezuelan economy, as well as the aggravation of climactic disasters, are also factors we have to consider when looking at how to save the island from economic abyss.

Cuba is a country which has been in deep crisis for more than 20 years – a whole generation – and which has no real change nor encouraging signs on the horizon, merely a hard struggle for survival, which besides is led by the same system and the same leaders who have helped create the current disastrous situation and do not know how to escape it. Continue reading “democracy and self-management in cuba” →

2008 financial crisis, beyond resistance

beyond resistance 19th june: ‘capitalist crisis’ and other session details

Our ‘Beyond Resistance’ summer school is now just two weeks away. The event takes place from 11am-6pm on Saturday 19th June at 96-100 Clifton St, London EC2. All welcome. Click here for a new page listing session and ticketing information.

We have confirmed more details of the session on the capitalist crisis, which will feature speakers David Harvie (Turbulence; The Free Association; Lecturer in Finance and Political Economy, University of Leicester) and Alan Freeman (International Working Group on Value Theory; Co-editor, Critique of Political Economy).

The current crisis has been the worst since the Great Depression. And just as with the great depression it caught the left largely unprepared. The need to understand the current crisis and the nature of crisis under capitalism has never been greater. Continue reading “beyond resistance 19th june: ‘capitalist crisis’ and other session details” →

2008 financial crisis, marx

david harvey: the enigma of capital

Sharon Borthwick reports on Marxist geographer David Harvey’s recent talk in London

The Great Hall at King’s College London was packed to capacity and beyond on 28th April, with people standing at the sides and sitting in the aisles. It put me in mind of Nathan Coombs surmising on where all the numbers of the left attending academic conferences were the rest of the time.

How can we, maybe, capture and utilise the level of interest shown on these occasions? This particular audience was made up of SWPers and Kings College and other students. The usual papers were sold outside. Continue reading “david harvey: the enigma of capital” →

2008 financial crisis, the commune, unemployment, welfare state

the deficit! the deficit! but what about unemployment?

by Oisín Mac Giollamóir

Listening to the debate in the media today you would conclude that there is consensus amongst economists that the key problem of the UK economy is the deficit. And the key question is how to cut it. And the key election issue therefore should be how to cut spending. This is not the case.

Working backwards, perhaps the most ridiculous issue here is the notion that the only way of cutting the deficit is by cutting spending. Fraser Nelson of The Spectator goes so far as to say, “Cameron should ban the word ‘deficit’ and simply say ‘overspend’ instead.” It would seem that some right-wing commentators can’t add. A deficit arises when revenue is less than expenditure. An equally good way of cutting the deficit is by increasing revenue, i.e., by raising taxes. Saying the deficit is an ‘overspend’ is as idiotic as calling the deficit an ‘undertax’. Continue reading “the deficit! the deficit! but what about unemployment?” →

2008 financial crisis, greece, strikes

lightning strikes twice in greece

by David Broder

On 12th February the Evening Standard boards in London proclaimed “Brown: we won’t pay for Greece bailout”, almost as if darkly parodying the left’s slogan “we won’t pay for their crisis”. But much as the Greek government plans harsh austerity measures to appease its European counterparts, millions of workers are refusing to capitulate.

Yesterday a general strike brought Greece’s planes, trains and buses to a standstill; left schools quiet and government offices empty; and brought thousands of raucous demonstrators into the streets of Athens. Not only was this the second nationwide strike against the budget cuts plan in two weeks, but also marked continued defiance against the new social-democratic PASOK government, just over a year after the December 2008 struggle against the right-wing New Democracy administration. Continue reading “lightning strikes twice in greece” →

2008 financial crisis, obama, unemployment, usa

crisis ploughs on in united states

by Dennis Marcucci
from Philadelphia

Worst than expected economic reports and job cut announcements show that the prospects for working people in the USA and around the world are going to worsen. After all, most of the world is capitalist, and most of the world is poor. So what does that tell you about this canker sore of an economic system?

Wall Street economists had said that unemployment claims would fall below 450,000. They were wrong. There was only a slight decrease to 470,000. Any reports have to be viewed with suspicion. I was speaking to an “expert” economist on a radio talk show two weeks ago who was telling the audience how claims for unemployment fell. I said that what is not being reported is (i) workers who exhausted their benefits and are now off the rolls and are viewed as employed. (ii) workers who were collecting benefits and found part time minimum wage employment and (iii) workers working temp jobs or contract work. Continue reading “crisis ploughs on in united states” →

2008 financial crisis, bristol, events, marx, notices, reading group

bristol communist discussion group, this sunday

The first of The Commune’s Bristol reading group sessions will be on Sunday 24th January at 6pm in Cafe Kino on Ninetree Hill, Bristol.

The series of sessions is entitled “Alternatives to capitalism”. The first session is called “Capital and capitalism”. A brief look at the features of capitalism. Capital, wage-labour, profit, capital accumulation and its effect on our lives.This first session sets the scene and will allow us to contast proposed alternatives. Continue reading “bristol communist discussion group, this sunday” →

2008 financial crisis, dubai

the burj khalifa: capital excess and worker exploitation

by Nancy LaPlante

The Burj Dubai, the world’s tallest building was opened with impressive light and sound shows as well as a breath-taking fireworks demonstration. This structural marvel was renamed the Burj Khalifa for Sheikh Khalifa bin Zayed who had provided an $80 billion bailout for Dubai, the United Arab Emirate state which had been heavily in debt. While the current economic crisis stalls the sucking out of any immediate and enormous profits from this tower of capitalist overindulgence, the brutality in its history of construction puts directly side-by-side the lavish gluttony of the bourgeoisie against the expendable lives of the workers who built it. While there are many incredible details about the Burj Khalifa only a few are named here, followed by a brief tip-of-the-iceberg list of the examples of worker exploitation and their attempts to fight back against their severe exploitation. Continue reading “the burj khalifa: capital excess and worker exploitation” →

2008 financial crisis, the commune

an alternative to the age of austerity

by Chris Ford

The new decade began with The Times predicting an “age of austerity” in the UK which will last for years. We can expect, they said, cuts in public spending to offset the Treasury budget deficit of £178 billion, caused to a large extent by the bank bailouts after the September 2008 crisis.

The view that the financial sector is at the roots of our current predicament is not restricted to the bourgeois papers like The Times. This view is common amongst liberal, Labour Party and socialist opinion. John Cruddas and a hundred other MPs are campaigning for a High Pay Commission, arguing our current predicament was caused by “greed”, as banking and executive salaries grew excessively. There is certainly widespread bitter resentment amongst working class people that we are paying for a loan to rescue the banks. Cruddas appears like a philanthropist from a Dickens Christmas story coming along to help the poor, making the rich share the pain of the recession. But state controls on high pay would only scratch the surface of the crisis: we need something far more fundamental. Continue reading “an alternative to the age of austerity” →