Thursday April 17th, 2014, 8:21 pm (EDT)

John Bellamy Foster

Monopoly-Finance Capital and the Paradox of Accumulation

This month marks the eightieth anniversary of the 1929 Stock Market Crash that precipitated the Great Depression of the 1930s. Ironically, this comes at the very moment that the capitalist system is celebrating having narrowly escaped falling into a similar abyss. The financial crash and the decline in output a year ago, following the collapse of Lehman Brothers, was as steep as at the beginning of the Great Depression. “For a while,” Paul Krugman wrote in the New York Times in August, “key economic indicators — world trade, world industrial production, even stock prices—were falling as fast or faster than they did in 1929-30. But in the 1930s the trend lines kept heading down. This time, the plunge appears to be ending after just one terrible year.” Big government, through the federal bailout and stimulus, as well as the shock-absorber effects of the continued payouts of unemployment and Social Security benefits, Medicare, etc., slowed the descent and helped the economy to level off, albeit at a point well below previous output.… | more |

The Penal State in an Age of Crisis

As a rule, crime and social protest rise in periods of economic crisis in capitalist society. During times of economic and social instability, the well-to-do become increasingly fearful of the general population, more disposed to adopt harsh measures to safeguard their positions at the apex of the social pyramid. The slowdown in the economic growth rate of U.S. capitalism beginning in the late 1960s and early 1970s—converging with the emergence of radical social protest around the same period—was accompanied by a rapid rise in public safety spending as a share of civilian government expenditures. So significant was this shift that we can speak of a crowding out of welfare state spending (health, education, social services) by penal state spending (law enforcement, courts, and prisons) in the United States during the last third of a century.… | more |

Capitalism in Wonderland

In a recent essay, “Economics Needs a Scientific Revolution,” in one of the leading scientific journals, Nature, physicist Jean-Philippe Bouchaud, a researcher for an investment management company, asked rhetorically, “What is the flagship achievement of economics?” Bouchaud’s answer: “Only its recurrent inability to predict and avert crises.”1 Although his discussion is focused on the current worldwide financial crisis, his comment applies equally well to mainstream economic approaches to the environment — where, for example, ancient forests are seen as non-performing assets to be liquidated, and clean air and water are luxury goods for the affluent to purchase at their discretion. The field of economics in the United States has long been dominated by thinkers who unquestioningly accept the capitalist status quo and, accordingly, value the natural world only in terms of how much short-term profit can be generated by its exploitation. As a result, the inability of received economics to cope with or even perceive the global ecological crisis is alarming in its scope and implications.… | more |

The Sales Effort and Monopoly Capital

On the eightieth anniversary of the 1929 Stock Market Crash that led to the Great Depression, the United States is once again caught in a Great Financial Crisis and deep downturn of an order of magnitude comparable to the 1930s. At the center of this crisis is plunging consumer spending, caused by the destruction of household finance as a result of decades of wage stagnation and the piling up of debt.1 Consumer spending in today’s economy, dominated by giant firms, is significantly dependent on the sales effort, i.e., marketing as a whole, with advertising as its most conspicuous form. But the sales effort is also ebbing in the crisis, contributing to the general decline. So integral is the sales effort to the regime of monopoly capital that one cannot be understood without the other.… | more |

A Failed System: The World Crisis of Capitalist Globalization and its Impact on China

In referring in my title here to “A Failed System” I do not of course mean that capitalism as a system is in any sense at an end. Rather I mean by “failed system” a global economic and social order that increasingly exhibits a fatal contradiction between reality and reason—to the point, in our time, where it threatens not only human welfare but also the continuation of most sentient forms of life on the planet. Three critical contradictions make up the contemporary world crisis emanating from capitalist development: (1) the current Great Financial Crisis and stagnation/depression; (2) the growing threat of planetary ecological collapse; and (3) the emergence of global imperial instability associated with shifting world hegemony and the struggle for resources. Such structural weaknesses of the system, as Joseph Schumpeter might have said, are the product of capitalism’s past successes, but they raise catastrophic problems and failures in the present nonetheless.1 How we choose to act today in response to this failed system is therefore the most critical question that humanity has ever faced.… | more |

A New New Deal under Obama?

With U.S. capitalism mired in an economic crisis of a severity that increasingly brings to mind the Great Depression of the 1930s, it should come as no surprise that there are widespread calls for “a new New Deal.” Already the new Obama administration has been pointing to a vast economic stimulus program of up to $850 billion over two years aimed at lifting the nation out of the deep economic slump.… | 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 |

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 |

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 |

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 |

Ecology: The Moment of Truth—An Introduction

It is impossible to exaggerate the environmental problem facing humanity in the twenty-first century. Nearly fifteen years ago one of us observed: “We have only four decades left in which to gain control over our major environmental problems if we are to avoid irreversible ecological decline.”1 Today, with a quarter-century still remaining in this projected time line, it appears to have been too optimistic. Available evidence now strongly suggests that under a regime of business as usual we could be facing an irrevocable “tipping point” with respect to climate change within a mere decade.2 Other crises such as species extinction (percentages of bird, mammal, and fish species “vulnerable or in immediate danger of extinction” are “now measured in double digits”);3 the rapid depletion of the oceans’ bounty; desertification; deforestation; air pollution; water shortages/pollution; soil degradation; the imminent peaking of world oil production (creating new geopolitical tensions); and a chronic world food crisis—all point to the fact that the planet as we know it and its ecosystems are stretched to the breaking point. The moment of truth for the earth and human civilization has arrived… | more |

Peak Oil and Energy Imperialism

The rise in overt militarism and imperialism at the outset of the twenty-first century can plausibly be attributed largely to attempts by the dominant interests of the world economy to gain control over diminishing world oil supplies1. Beginning in 1998 a series of strategic energy initiatives were launched in national security circles in the United States in response to: (1) the crossing of the 50 percent threshold in U.S. importation of foreign oil; (2) the disappearance of spare world oil production capacity; (3) concentration of an increasing percentage of all remaining conventional oil resources in the Persian Gulf; and (4) looming fears of peak oil… | more |

Sweezy in Perspective

Paul M. Sweezy was, in the words of his contemporary John Kenneth Galbraith, “the most distinguished of present-day American Marxists.”1 A Harvard-trained economist, his writings spanned some seven decades from the early 1930s to the closing years of the twentieth century. For more than half a century he was coeditor of Monthly Review, subtitled An Independent Socialist Magazine, which he founded along with Leo Huberman in 1949. Although first and foremost an economist, Sweezy was also a social scientist in a much broader sense. His impact on political science, sociology, history, and other disciplines was profound. He took the entire globe as his field of analysis, helping to enlarge our understanding of imperialism and of the necessity of revolution, particularly in the third world…… | more |

The Financialization of Capital and the Crisis

With the benefit of hindsight, few now doubt that the housing bubble that induced most of the recent growth of the U.S. economy was bound to burst or that a general financial crisis and a global economic slowdown were to be the unavoidable results. Warning signs were evident for years to all of those not taken in by the new financial alchemy of high-risk debt management, and not blinded, as was much of the corporate world, by huge speculative profits. This can be seen in a series of articles that appeared in this space: “The Household Debt Bubble” (May 2006), “The Explosion of Debt and Speculation” (November 2006), “Monopoly-Finance Capital” (December 2006), and “The Financializ-ation of Capitalism” (April 2007). In the last of these we wrote…… | more |

Rachel Carson’s Ecological Critique

Rachel Carson was born just over 100 years ago in 1907. Her most famous book Silent Spring, published in 1962, is often seen as marking the birth of the modern environmental movement. Although an immense amount has been written about Carson and her work, the fact that she was objectively a “woman of the left” has often been downplayed. Today the rapidly accelerating planetary ecological crisis, which she more than anyone else alerted us to, calls for an exploration of the full critical nature of her thought and its relation to the larger revolt within science with which she was associated.… | more |

Rediscovering the History of Imperialism: A Reply

The Research Unit for Political Economy’s (RUPE’s) brief historical account here of the origins of the Marxist theory of imperialism constitutes a crucial corrective to common errors regarding that history. In my article, “The Imperialist World System: Paul Baran’s Political Economy of Growth After Fifty Years” (Monthly Review, May 2007), I began by pointing out that Baran’s book was an outgrowth of classical Marxist thought—the ideas of Marx, Lenin, and Luxemburg. At the same time it represented a sharp departure from the rigid orthodoxy of linear development that had come to characterize so much of socialist (as well as bourgeois) thought—often presented in terms of Horace’s phrase, quoted by Marx, “the tale is told of you.” Baran’s treatment of the imperialist world system was a startling contribution at the time that his book appeared, challenging the conventional assumptions of both the right and an increasingly calcified left… | more |

A New Stage in Capitalism’s War on the Planet

The introduction to this book, the last part to be completed, was sent to the printer in New York City only days before the attacks on the World Trade Center on September 11, 2001, and was first published in October 2001 in Monthly Review. Since then the world has witnessed a continuing war by the United States for control of the oil-rich Middle East and an acceleration of the global ecological crisis—symbolized above all by global warming. The opening years of the twenty-first century can therefore be viewed as marking a new stage in the war of capitalism on the planet… | more |

The Latin American Revolt: An Introduction

The revolt against U.S. hegemony in Latin America in the opening years of the twenty-first century constitutes nothing less than a new historical moment. Latin America, to quote Noam Chomsky, is “reasserting its independence” in an attempt to free itself from centuries of imperialist domination. The gravity of this threat to U.S. power is increasingly drawing the attention of Washington. Julia Sweig, Latin American program director at the Council on Foreign Relations, argues that the twenty-first century is likely to be known as the “Anti-American Century,” marking a growing intolerance of the “waning” U.S. empire. Outweighing even the resistance to the U.S. war machine in Iraq in this respect, Sweig suggests, is the political realignment to the left in Latin America, which, in destabilizing U.S. rule in the Americas, offers a “prophetic microcosm” of what can be expected worldwide… | more |

The Imperialist World System

Paul Baran’s Political Economy of Growth After Fifty Years

The concept of the imperialist world system in today predominant sense of the extreme economic exploitation of periphery by center, creating a widening gap between rich and poor countries, was largely absent from the classical Marxist critique of capitalism. Rather this view had its genesis in the 1950s, especially with the publication fifty years ago of Paul Baran’s Political Economy of Growth. Baran’s work helped inspire Marxist dependency and world system theories. But it was the new way of looking at imperialism that was the core of Baran’s contribution. A half-century later it is important to ask: What was this new approach and how did it differ from then prevailing notions? What further changes in our understanding of imperialism are now necessary in response to changed historical conditions since the mid-twentieth century?… | more |

The Financialization of Capitalism

Changes in capitalism over the last three decades have been commonly characterized using a trio of terms: neoliberalism, globalization, and financialization. Although a lot has been written on the first two of these, much less attention has been given to the third.* Yet, financialization is now increasingly seen as the dominant force in this triad. The financialization of capitalism-the shift in gravity of economic activity from production (and even from much of the growing service sector) to finance—is thus one of the key issues of our time. More than any other phenomenon it raises the question: has capitalism entered a new stage?… | more |