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Economics

Political Economy

January 2012, Volume 63, Number 8

January 2012, Volume 63, Number 8

» Notes from the Editors

In a little more than two months at this writing (December 3, 2011) the Occupy Wall Street movement has ushered in a new dialectic of world revolt. Occupy movements now exist in more than 2,600 cities across the globe. The response of the system has been increased repression. Yet, everywhere the movement has come up with new means of revolt. Had we tried in early October to predict how things would be at the start of November we would never have succeeded. Likewise we cannot predict now at the start of December how things will look even at the start of January. And it is precisely this quality of emergence, i.e. of not being predictable from the current state of affairs, which suggests that we are at a turning point. This global rip in the cloth of imperial capital’s supposed inevitability is irreversible; that we are fully ready to predict. Looking back it will be clear that as of late 2011, we are much closer to the start of a great global revolt against the plutocracy, the “one percent,” than to its end.… | more |

Contradictions of Finance Capitalism

Over the last thirty years, capital has abstracted upwards, from production to finance; its sphere of operations has expanded outwards, to every nook and cranny of the globe; the speed of its movement has increased, to milliseconds; and its control has extended to include “everything.” We now live in the era of global finance capitalism.… Financialization has involved increasingly exotic forms of financial instruments and the growth of a shadow-banking system, off the balance sheets of the banks. The repeal of the Glass-Steagall Act in 1999 symbolized the almost complete deregulation of a financial sector that has become complex, opaque, and ungovernable.… Although these are useful ideas, they only begin a full analysis of finance capitalism. Where did finance capitalism come from? Did neoliberal policy create finance capitalism? Does finance capital exploit differently from industrial capital? And, most importantly, what are the central contradictions that generate crises in finance capitalism?… | more |

November 2011, Volume 63, Number 6

November 2011, Volume 63, Number 6

» Notes from the Editors

It is a sign of the seriousness of the current economic malaise that more and more establishment commentators today are turning to Marx for answers. Thus a September 14, 2011, article in Bloomberg Businessweek, entitled “Marx to Market,” acknowledged: “The Bearded One has rarely looked better. The current global financial crisis has given rise to a new contingent of unlikely admirers. In 2009 the Vatican’s official newspaper, L’Osservatore Romano, published an article praising Marx’s diagnosis of income inequality. In Shanghai, the turbo-capitalist hub of Communist-in-name-alone China, audiences flocked to a 2010 musical based on Capital, Marx’s most famous work. In Japan, Capital is now out in a manga version. Consider the particulars.… Marx predicted that companies would need fewer workers as they improved productivity, creating an “industrial reserve army” of the unemployed whose existence would keep downward pressure on wages for the employed. It’s hard to argue with that these days. The condition of blue collar workers in the U.S. is still a far cry from the subsistence wage and ‘accumulation of misery’ that Marx conjured. But it’s not morning in America, either.” Bloomberg Businessweek seems unaware that Marx viewed the reserve army of labor as applicable not just to developed countries like the United States, but also to labor throughout the globe.… | more |

The Global Reserve Army of Labor and the New Imperialism

In the last few decades there has been an enormous shift in the capitalist economy in the direction of the globalization of production. Much of the increase in manufacturing and even services production that would have formerly taken place in the global North—as well as a portion of the North’s preexisting production—is now being offshored to the global South, where it is feeding the rapid industrialization of a handful of emerging economies. It is customary to see this shift as arising from the economic crisis of 1974–75 and the rise of neoliberalism—or as erupting in the 1980s and after, with the huge increase in the global capitalist labor force resulting from the integration of Eastern Europe and China into the world economy. Yet, the foundations of production on a global scale, we will argue, were laid in the 1950s and 1960s, and were already depicted in the work of Stephen Hymer, the foremost theorist of the multinational corporation, who died in 1974.… | more |

Samir Amin at 80: An Introduction and Tribute

Samir Amin was born in Cairo in 1931, and studied within the French educational system in Egypt.… He is currently president of the World Forum for Alternatives.… Amin’s wide-ranging work can be most succinctly described in terms of the dual designation of The Law of Value and Historical Materialism—the title of one of his books, now in a new edition as The Law of Worldwide Value. Marx’s intellectual corpus, he notes, appears to be divided into writings on economics and writings on politics.… For Amin, this basic division of Marxist theory is not to be denied. Nevertheless, he insists that the economic laws of capitalism, summed up by the law of value, “are subordinate to the laws of historical materialism.” Economic science, while indispensable, cannot explain at the highest level of abstraction, as in mathematical equations, the full reality of capitalism and imperialism—since it cannot account either for the historical origins of the system itself, or for the nature of the class struggle.… | more |

September 2011, Volume 63, Number 4

September 2011, Volume 63, Number 4

» Notes from the Editors

In this issue of MR we are reprinting Stephen Hymer’s classic essay, “Robinson Crusoe and the Secret of Primitive Accumulation,” which first appeared forty years ago in the September 1971 issue of MR. It represents, in our view, one of the most important articles produced by a whole generation of radical political economists associated with the revolt against mainstream economics in the 1960s, and the creation of the Union for Radical Political Economics in 1968.… [Hymer's] final article, “International Politics and International Economics: A Radical Approach,” published posthumously in MR in March 1978, started off with the words: “To be a radical, or to be a scientist, is the same thing; it is a question of trying to go to the root of the matter.”… | more |

The Ecology of Marxian Political Economy

It is no secret today that we are facing a planetary environmental emergency, endangering most species on the planet, including our own, and that this impending catastrophe has its roots in the capitalist economic system. Nevertheless, the extreme dangers that capitalism inherently poses to the environment are often inadequately understood, giving rise to the belief that it is possible to create a new “natural capitalism” or “climate capitalism” in which the system is turned from being the enemy of the environment into its savior. The chief problem with all such views is that they underestimate the cumulative threat to humanity and the earth arising from the existing relations of production. Indeed, the full enormity of the planetary ecological crisis, I shall contend, can only be understood from a standpoint informed by the Marxian critique of capitalism.… | more |

Robinson Crusoe and the Secret of Primitive Accumulation

The solitary and isolated figure of Robinson Crusoe is often taken as a starting point by economists, especially in their analysis of international trade. He is pictured as a rugged individual—diligent, intelligent, and above all frugal—who masters nature through reason. But the actual story of Robinson Crusoe, as told by Defoe, is also one of conquest, slavery, robbery, murder, and force. The contrast between the economists’ Robinson Crusoe and the genuine one mirrors the contrast between the mythical description of international trade found in economics textbooks and the actual facts of what happens in the international economy.… But international trade…is often based on a division between superior and subordinate rather than a division between equals; and it is anything but peaceful. It is trade between the center and the hinterland, the colonizers and the colonized, the masters and the servants…Because it is unequal in structure and reward it has to be established and maintained by force, whether it be the structural violence of poverty, the symbolic violence of socialization, or the physical violence of war and pacification.… | more |

Education and the Structural Crisis of Capital

The U.S. Case

Today’s conservative movement for the reform of public education in the United States, and in much of the world, is based on the prevailing view that public education is in a state of emergency and in need of restructuring due to its own internal failures. In contrast, I shall argue that the decay of public education is mainly a product of externally imposed contradictions that are inherent to schooling in capitalist society, heightened in our time by conditions of economic stagnation in the mature capitalist economies, and by the effects of the conservative reform movement itself. The corporate-driven onslaught on students, teachers, and public schools—symbolized in the United States by George W. Bush’s No Child Left Behind (NCLB) legislation—is to be explained not so much by the failure of the schools themselves, but by the growing failures of the capitalist system, which now sees the privatization of public education as central to addressing its larger malaise.… | more |

Another Education Is Happening

The mainstream media has created the myth that community people are waiting for Superman, the White House, or state-appointed Emergency Financial Managers to resolve the escalating crises in our schools.… The following article by Julia Pointer Putnam tells the story of how the deindustrialization of Detroit has made Dewey’s more democratic view of education an idea whose time has come. —Grace Lee Boggs

The Internationalization of Monopoly Capital

In a 1997 article entitled “More (or Less) on Globalization,” Paul Sweezy referred to “the three most important underlying trends in the recent history of capitalism, the period beginning with the recession of 1974-75: (1) the slowing down of the overall rate of growth; (2) the worldwide proliferation of monopolistic (or oligopolistic) multinational corporations; and (3) what may be called the financialization of the capital accumulation process.”… The first and third of these three trends—economic stagnation in the rich economies and the financialization of accumulation—have been the subjects of widespread discussion since the onset of severe financial crisis in 2007-09. Yet the second underlying trend, which might be called the “internationalization of monopoly capital,” has received much less attention.… the dominant, neoliberal discourse—one that has also penetrated the left—assumes that the tendency toward monopoly has been vanquished… [In contrast,] we suggest that renewed international competition evident since the 1970s was much more limited in range than often supposed… In short, we are confronted by a system of international oligopoly.… | more |

The Jobs Disaster in the United States

The Great Recession in the United States, which lasted eighteen months, the longest downturn since the 1930s Depression, was declared over and done as of July 2009. The economy has been growing, albeit slowly, since then, and the output of goods and services (Gross Domestic Product or GDP) has returned to pre-recession levels. U.S. corporate profits have soared, and most of the big banks, after being bailed out, have been making piles of money. However, rising production and profits have not been accompanied by the return to work of millions of unemployed people, many of whom have been out of work for numerous months and have little prospect of future employment.… This essay will focus on the jobs disaster in the United States, although the problem is global. The United States is where the crisis began, and it is still the world’s richest and most powerful nation. What happens here has serious repercussions for everyone in the world. In addition, the disconnect between economic reality and the propaganda of recovery is greatest in the United States. So a close examination of what is happening in this country is instructive, not just for those of us who live here, but for those in the rest of the world as well.… | more |

The Rise of the Working Class and the Future of the Chinese Revolution

In July 2009, workers at the state-owned Tonghua Steel Company in Jilin, China organized a massive anti-privatization protest. Then, in the summer of 2010, a wave of strikes swept through China’s coastal provinces. These events may prove to be a historic turning point. After decades of defeat, retreat, and silence, the Chinese working class is now re-emerging as a new social and political force.… How will the rise of the Chinese working class shape the future of China and the world? Will the Chinese capitalist class manage to accommodate the working-class challenge while maintaining the capitalist system? Or will the rise of the Chinese working class lead to a new Chinese socialist revolution that could, in turn, pave the way for a global socialist revolution? The answers to these questions will, to a large extent, determine the course of world history in the twenty-first century.… | more |

The Emperor Has No Clothes But Still He Rules

Moshe Adler, Economics for the Rest of Us: Debunking the Science that Makes Life Dismal (New York: The New Press, 2009), 224 pages, $24.95, hardcover; David Orrell, Economyths: Ten Ways That Economics Get It Wrong (Mississauga, Ontario: John Wiley & Sons Canada, Ltd., 2010), 288 pages, $27.95, hardcover; Yanis Varoufakis, Joseph Halevi, and Nicholas J. Theocaratis, Modern Political Economics: Making Sense of the Post-2008 World (New York: Routledge, 2011, forthcoming), 536 pages, $165.00, hardcover, $65.00, paperback.

Science is often thought to proceed from a theory to experiments that test its predictions. If new data are discovered that cannot be explained by the theory, eventually a new theory arises to replace it. If the new theory can explain everything the old one did plus the new phenomena, sooner or later every scientist will adhere to the new paradigm.… Neoclassical economics is taught in every college classroom in the United States and in almost every country in the world. Graduate students learn no other approach to economics. They are taught that neoclassical economics is a science, on a par with physics and the other natural sciences. There is even a joke that when good neoclassical economists die, they are reincarnated as physicists, but bad ones come back as sociologists.… | more |

On the Laws of Capitalism

In February 2011, while I was drafting what was to become “Monopoly and Competition in Twenty-First Century Capitalism,” written with Robert W. McChesney and R. Jamil Jonna (Monthly Review, April 2011), I decided to take a look at Paul Sweezy’s copy of the original 1942 edition of Joseph Schumpeter’s Capitalism, Socialism, and Democracy, which I had in my possession. In doing so, I came across a folded, two-page document, “The Laws of Capitalism,” tucked into the pages. It was written in ink in Sweezy’s very compact handwriting. In the upper-right-hand corner, Sweezy had jotted (clearly much later) in pencil: “(A debate with J.A.S. before the Harvard Graduate Students’ Economics Club, Littauer Center, probably 1946 or 1947.)” The document consisted of a detailed outline, in full sentences, of a contribution to a debate. I immediately realized that this was Sweezy’s opening talk in the now legendary Sweezy-Schumpeter debate. Until that moment, I, along with everybody else, assumed that no detailed records of the actual talks had survived… | more |

April 2011, Volume 62, Number 11

April 2011, Volume 62, Number 11

» Notes from the Editors

This year marks the forty-fifth anniversary of the publication of Paul Baran and Paul Sweezy’s classic work, Monopoly Capital: An Essay on the American Economic Order (Monthly Review Press, 1966). Three years before the publication of their book, in the July 1963 issue of Monthly Review, Baran and Sweezy published two chapters of Monopoly Capital in MR, together with an introduction. (The publication of the actual book was delayed by Baran’s death in 1964.) Today MR editor John Bellamy Foster and Robert W. McChesney are currently completing a book, entitled Monopoly-Finance Capital: Politics in an Era of Economic Stagnation and Social Decline, to be published by Monthly Review Press early next year. The purpose of this new work is to bring the analysis of Monopoly Capital up to date, addressing the changes that have occurred in the capitalist system in the last half-century. We have therefore decided to follow the example of Baran and Sweezy and publish a number of the core chapters of this book, in early form in the magazine, in advance of the book itself. The March 2011 Review of the Month, “The Internet’s Unholy Marriage to Capitalism,” was one such chapter. This issue’s Review of the Month, “Monopoly and Competition in Twenty-First Century Capitalism”…is another.… | more |

Monopoly and Competition in Twenty-First Century Capitalism

A striking paradox animates political economy in our times. On the one hand, mainstream economics and much of left economics discuss our era as one of intense and increased competition among businesses, now on a global scale. It is a matter so self-evident as no longer to require empirical verification or scholarly examination. On the other hand, wherever one looks, it seems that nearly every industry is concentrated into fewer and fewer hands. Formerly competitive sectors like retail are now the province of enormous monopolistic chains, massive economic fortunes are being assembled into the hands of a few mega-billionaires sitting atop vast empires, and the new firms and industries spawned by the digital revolution have quickly gravitated to monopoly status. In short, monopoly power is ascendant as never before.… | more |

Cluster Munitions and State Terrorism

For decades, major global and regional powers have waged war against those they accuse of fighting immorally—that is, those who use terrorism to harm civilians at home and abroad. Paradoxically, these righteous “wars on terror” are being fought in an era in which the distinction between war waged only against soldiers, and war against soldiers as well as civilians has virtually collapsed. The technological development, stemming from the Industrial Revolution, of aerial bombardment and weapons of mass destruction has made it more difficult to separate citizen from soldier.… [but] it is imperative that this distinction hold. In waging wars on terror, [upholding the soldier/citizen distinction] permits globally powerful nations to rally public opinion under the assertion that what separates us (self) from them (other) is that civilian life is paramount for us and not for “the terrorists.”… | more |

Asia and the Great Financial Crisis

Michael Lim Mah Hui and Lim Chin, Nowhere to Hide: The Great Financial Crisis and Challenges for Asia (Singapore: Institute of Southeast Asian Studies, 2010), 200 pages, $39.90, paperback.

Nowhere to Hide by Michael Lim Mah Hui and Lim Chin is another book on the financial crisis, although with added attention to Asia. In addition to the regional implications of the crisis for Asia, what makes this volume different from so many others is its critical perspective.… The book thus reflects an insider’s view of the banking system that is informed by a critical, political-economic perspective. As such, Nowhere to Hide makes a good companion to Monthly Review’s own The Great Financial Crisis by John Bellamy Foster and Fred Magdoff. Indeed, there is a close connection between these works, symbolized by the incorporation of Foster and Magdoff’s title into the subtitle of Nowhere to Hide.… | more |

What Every Environmentalist Needs To Know about Capitalism

What Every Environmentalist Needs To Know about Capitalism

There is a growing consensus that the planet is heading toward environmental catastrophe: climate change, ocean acidification, ozone depletion, global freshwater use, loss of biodiversity, and chemical pollution all threaten our future unless we act. What is less clear is how humanity should respond. The contemporary environmental movement is the site of many competing plans and prescriptions, and composed of a diverse set of actors, from militant activists to corporate chief executives.… | more |