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December 2008 (Volume 60, Number 7)

December 2008 (Volume 60, Number 7)

The historic testimony by former Federal Reserve Board chairman Alan Greenspan before the House Committee of Government Oversight and Reform on October 23, 2008, represented such a startling turnaround for an individual previously given such nicknames as “Maestro” and “Oracle,” that it might well have been entitled “The Education of Alan Greenspan.” Taken to task for the enormous and still growing economic disaster, Greenspan acknowledged that he was “shocked and dismayed” by the emergence of what he called a “once-in-a-century credit tsunami.” In his effort to account for the complete failure of foresight at the Fed, Greenspan explained that the supposedly sophisticated asset pricing models that he and others in the financial community had relied on had been based almost exclusively on the experience of the last two decades during a period of rapid financial expansion, and had failed to incorporate the negative shocks visible from a longer-term historical perspective. As Greenspan himself put it… | more |

Financial Implosion and Stagnation

“The first rule of central banking,” economist James K. Galbraith wrote recently, is that “when the ship starts to sink, central bankers must bail like hell.” In response to a financial crisis of a magnitude not seen since the Great Depression, the Federal Reserve and other central banks, backed by their treasury departments, have been “bailing like hell” for more than a year. Beginning in July 2007 when the collapse of two Bear Stearns hedge funds that had speculated heavily in mortgage-backed securities signaled the onset of a major credit crunch, the Federal Reserve Board and the U.S. Treasury Department have pulled out all the stops as finance has imploded. They have flooded the financial sector with hundreds of billions of dollars and have promised to pour in trillions more if necessary—operating on a scale and with an array of tools that is unprecedented.… | more |

America Right or Wrong: Anglo-American Relations Since 1945

British subordination to the United States, the so-called special relationship as it is optimistically known in London, is so taken for granted that it is seldom subjected to critical scrutiny. Why is it that the British ruling class and its agents have since 1945 come to embrace a junior partnership in the U.S. empire so wholeheartedly? Most recently, the “special relationship” has seen the New Labor government actively support and take part in the invasion and occupation of Iraq in the face of a hostile public opinion. Indeed, the largest demonstration in British history, on February 15, 2003, was against British participation in this unprovoked war of imperialist aggression. The lying, dishonest pretext for the invasion together with… | more |

Braddock, Pennsylvania Out of the Furnace and into the Fire

Braddock, Pennsylvania Out of the Furnace and into the Fire

As far as scenic ruins go, the Pittsburgh metropolitan area sets a high standard. The natural beauty of the Monongahela Valley and the built legacy of deindustrialization make gorgeous scenery out of blue-collar defeat. Beauty is no compensation for lost jobs though. The old steel towns of this region have been imploding for decades. No place has lost a greater share of its population than Braddock, Pennsylvania, just outside Pittsburgh. This ravaged, near-empty stretch of abandoned homes, storefronts, and buildings was once a storied cornerstone of the industrial age. After losing 90 percent of its peak population, today it looks more like the nightmare at the end of the American Dream… | more |

Happening upon the Exploding Sand Sculpture Competition on TV

Denise Bergman is the author of Seeing Annie Sullivan, poems based on the early life of Helen Keller’s teacher (2005), which was translated into Braille and made into a Talking Book. Her poems have been widely published. She conceived and edited City River of Voices, an anthology of urban poetry, and she was the author of Keyhole Poems, a sequence that combines the history of twelve specific urban places with the present. An excerpt of her poem “Red” is permanently installed as public art in Cambridge, Massachusetts… | more |

The Human Costs of Economic Growth

Amiya Kumar Bagchi, Perilous Passage: Mankind and the Global Ascendancy of Capital (Lanham, MD: Rowman & Littlefield, 2005), 395 + xxiv pages, hardcover, $76, paper, $34.95.

The great debate of social science for the last two centuries at least has been how to account for the extraordinary economic growth of the modern world. We all know the basic picture. The overwhelming majority of authors have argued that the story is that of the rise of the West. There have been, however, two opposing versions of this narrative. One is the Whig interpretation of history, which argues that it has been a story of steady social, intellectual, and moral progress whose explanation lies in some particular characteristic of the West (often just of England). In this version, the world is reaching its summit of progress today. The second version is Marxism, which has argued that the rise of the West is part of a larger story of steady dialectical and conflictual historical development. In this version, the present West-dominated world order will inevitably be superseded by another phase of historical development, in which capitalism will be replaced by communism… | more |

Why Orthodox Economics Fails

Reviewed: Michael Perelman, Railroading Economics: The Creation of the Free Market Mythology (New York: Monthly Review Press, 2006), 238 pages, paperback, $20.00.
Paul Krugman in Development, Geography, and Economic Theory contends that the reason some economic theories are not widely engaged by economists is because they cannot be modeled mathematically. He goes on to highlight many good ideas that cannot be modeled mathematically. Michael Perelman in Railroading Economics: The Creation of the Free Market Mythology argues that there is another reason that economists do not accept these theories: some theories are rejected for ideological reasons because in economics, the orthodoxy is the free market. Perelman quotes Francis A. Walker, the first president of the American Economic Association, who said that laissez-faire “was not made the test of economic orthodoxy, merely. It was used to decide whether a man were an economist at all” (102). In other words, to be an economist, especially in the post-Soviet era, requires one to agree with the free market—that is, to believe that the market allocates resources efficiently, and that the job of the economist is to get the prices right… | more |

November 2008 (Volume 60, Number 6)

November 2008 (Volume 60, Number 6)

In the Notes from the Editors for the September issue of Monthly Review (written in late July) we asked why, with the United States bailing out the financial sector of the economy to the tune of hundreds of billions of dollars, there was no public outrage. As we observed at that time, “In the end there seems to be no satisfactory explanation for lack of popular protest over a series of ad hoc grants showering hundreds of billions of dollars of public money on the masters of finance, collectively the richest group of capitalists on the planet. And that raises the question: Is this outrage present nonetheless, growing underground, unheard and unseen? Will it suddenly burst forth, like some old mole, unforeseen and in ways unimagined?” The collapse of Lehman Brothers on September 15, the resulting freezing up of credit markets, U.S. Secretary of Treasury Henry Paulson’s emergency plan for a $700 billion bailout of financial firms, offering “cash for trash,” i.e., proposing to buy up the toxic waste of virtually worthless mortgage-backed securities at taxpayer expense—quickly answered our question. When the U.S. Treasury got into the act with its bailout proposal, requiring Congressional authorization (previously the Federal Reserve had led the way in bailouts, to the point that treasury securities had sunk to just over half of the Fed’s assets, as we explained in September), all hell finally broke loose. Suddenly, the public outrage that had been growing beneath the surface burst forth. The U.S. capitalist class was abruptly confronted with a major political as well as economic crisis… | more |

Ecology and the Transition from Capitalism to Socialism

The transition from capitalism to socialism is the most difficult problem of socialist theory and practice. To add to this the question of ecology might therefore be seen as unnecessarily complicating an already intractable issue. I shall argue here, however, that the human relation to nature lies at the heart of the transition to socialism. An ecological perspective is pivotal to our understanding of capitalism’s limits, the failures of the early socialist experiments, and the overall struggle for egalitarian and sustainable human development… | more |

Rifts and Shifts: Getting to the Root of Environmental Crises

Humans depend on functioning ecosystems to sustain themselves, and their actions affect those same ecosystems. As a result, there is a necessary “metabolic interaction” between humans and the earth, which influences both natural and social history. Increasingly, the state of nature is being defined by the operations of the capitalist system, as anthropogenic forces are altering the global environment on a scale that is unprecedented. The global climate is rapidly changing due to the burning of fossil fuels and deforestation. No area of the world’s ocean is unaffected by human influence, as the accumulation of carbon, fertilizer runoff, and overfishing undermine biodiversity and the natural services that it provides. The Millennium Ecosystem Assessment documents how over two-thirds of the world’s ecosystems are overexploited and polluted. Environmental problems are increasingly interrelated. James Hansen, the leading climatologist in the United States, warns that we are dangerously close to pushing the planet past its tipping point, setting off cascading environmental problems that will radically alter the conditions of nature… | more |

Capitalist and Socialist Responses to the Ecological Crisis

The global ecological crisis sprang forth full-blown at roughly the same historical moment that global capital—welcoming the collapse of the Soviet bloc and the decay of the revolutionary process in China—was claiming a definitive victory over socialism. The irony of this historic convergence lies in the fact that there could be no more decisive a refutation of capitalist precepts than their long-term incompatibility with species-survival… | more |

Liquefied Natural Gas and Fossil Capitalism

The contemporary ecological crisis places a new spin on the notion of the “resource curse,” evoking widespread concerns regarding hydrocarbon dependency. Whether environmental, in the form of global warming, or socio-political, through wars over oil, “fossil capitalism” is now understood as a global problem. The development of a global market in natural gas, heavily dependent on the development of the Liquefied Natural Gas (LNG) industry, offers an example of a corporate-endorsed solution to the simultaneous ecological and economic “crises” associated with fossil capitalism. Yet, since 2004 a cross-continental mobilization against the development of LNG terminals in North America has successfully challenged the installation of some LNG infrastructure on the West Coast. These movements stress that the investment required to build the global gas industry displaces investment in renewables.… | more |

Ecological Crises and the Agrarian Question in World-Historical Perspective

We are here to talk about the Agrarian Question, or rather, Agrarian Questions. The plural is important. We live in a modern world-system of unprecedented unevenness and complexity. This much, we all know. At the same time, it is no less important, I should add, to see this diversity from what Lukács once called the “point of view of totality.”1 The Agrarian Questions are not exclusive but rather mutually constitutive. However, they are not constitutive of each other in the fashion that has gained such widespread circulation these days within critical social science—that the local shapes the global no less than the other way around. Yes, local-regional transformations have always generated powerful contradictions that shaped in decisive ways the geography and timing of world accumulation and world power. The parts shape the whole. The whole shapes the parts. But never equally so… | more |

October 2008 (Volume 60, Number 5)

October 2008 (Volume 60, Number 5)

The United States in the opening decade of the twenty-first century is dominated by a new imperial project that is affecting all aspects of its society. The most obvious manifestation of this (see this month’s Review of the Month) is the expansion of the military-industrial complex. However, another, in some ways even more insidious, manifestation, as Rich Gibson and E. Wayne Ross pointed out in a February 2, 2007, Counterpunch article entitled, “No Child Left Behind and the Imperial Project”, is the current assault on the nation’s public schools through the No Child Left Behind law enacted by the Bush administration with broad bipartisan support. As Gibson and Ross explained, “Any nation promising perpetual war on the world is likely to make peculiar demands on its schools…and its teachers and youth….NCLB [No Child Left Behind] is the result of three decades of elites’ struggles to recapture control over education in the U.S., lost during the Vietnam era when campuses and high-schools broke into open-rebellion and, as a collateral result, critical pedagogy, whole language reading programs, inter-active, investigatory teaching gained a foothold.”… | more |

The U.S. Imperial Triangle and Military Spending

he United States is unique today among major states in the degree of its reliance on military spending, and its determination to stand astride the world, militarily as well as economically. No other country in the post–Second World War world has been so globally destructive or inflicted so many war fatalities. Since 2001, acknowledged U.S. national defense spending has increased by almost 60 percent in real dollar terms to a level in 2007 of $553 billion. This is higher than at any point since the Second World War (though lower than previous decades as a percentage of GDP). Based on such official figures, the United States is reported by the Stockholm International Peace Research Institute (SIPRI) as accounting for 45 percent of world military expenditures. Yet, so gargantuan and labyrinthine are U.S. military expenditures that the above grossly understates their true magnitude, which, as we shall see below, reached $1 trillion in 2007… | more |

An Alternative Worth Struggling For

“We are sinking in the Devil’s excrement,” wrote a close observer of Venezuela’s adventures in oil. Was Venezuela’s deep culture of corruption, crime, and clientalism imaginable in the absence of the oil rents which became the supreme object of desire? Was the truncation of industry and agriculture and the vast chasm between a privileged oligarchy and an impoverished mass inevitable-given the effects of oil wealth upon a poor, developing country?… | more |

Marx’s Critique of Heaven and Critique of Earth

In recent years the intelligent design movement, or creationism in a more subtle guise, has expanded the attack on the teaching of evolution in U.S. public schools, while promoting an ambitious “Wedge strategy” aimed at transforming both science and culture throughout society. As explained in our book Critique of Intelligent Design: Materialism versus Creationism from Antiquity to the Present (Monthly Review Press, 2008), this has reignited a 2,500-year debate between materialism and creationism, science and design. The argument from design (the attempt to discern evidence of design in nature, thereby the existence of a Designer) can be dated back to Socrates in the fifth century BCE. While the opposing materialist view (that the world is explained in terms of itself, by reference to material conditions, natural laws, and contingent, emergent phenomena, and not by the invocation of the supernatural) to which Socrates was responding also dates back to the fifth century BCE in the writings of the atomists Leucippus and Democritus. The latter perspective was developed philosophically into a full-fledged critique of design by Epicurus in the third century BCE, which later influenced the scientific revolution of the seventeenth century… | more |

Four Crises of the Contemporary World Capitalist System

This essay examines aspects of the global political economy that I hope will inform progressive governments and movements for social change. It evaluates the constraints and opportunities presented in the current conjuncture of world capitalist development by analyzing four areas of crisis in the contemporary world capitalist system. These are not the only contradictory elements in the contemporary conjuncture, but they are, in my view, the most salient… | more |

A Nation Built on the Hierarchy of Race A Practical Guide to Beating White Supremacy

Chip Smith, The Cost of Privilege: Taking On the System of White Supremacy and Racism (Fayetteville, NC: Camino Press, 2007), 466 pages, paper $19.95.

In The Cost of Privilege: Taking On the System of White Supremacy and Racism, Chip Smith has written a historical treatise on white racism in the United States. He provides a well researched, detailed account of the cause and effect of white privilege in the United States. The book effectively examines the influence of racial privilege on a broad range of social relations from an international to a personal level. It targets progressive white people who are consciously anti-racist and provides insights for individual self-reflection and organizational change… | more |

September 2008 (Volume 60, Number 4)

September 2008 (Volume 60, Number 4)

Just over a year since the beginning of the worst U.S. financial crisis since the Great Depression, and only six months after the federal bailout of Bear Stearns, the seizing up of credit markets continues. The failure of eight U.S. banks this year, including IndyMac, and the recent instability that struck the two government-sponsored mortgage giants, Fannie Mae and Freddie Mac, requiring a special government rescue operation, has had the entire financial world on edge. Mortgage-related losses by themselves “could cause a trillion dollars in credit to vaporize,” according to a special July 28, 2008,Business Week report. The downside effects of financial leveraging (the magnification of results associated with borrowed money) mean that each dollar lost by financial institutions could lead to reductions in lending of fifteen dollars or more, creating a shockwave so massive that it could reveal structural weaknesses throughout the economy. Already the economy is reeling, with faltering growth, a deep slump in housing, massive job losses, rapidly rising oil and consumer goods prices, and a falling dollar… | more |

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