Monday April 21st, 2014, 12:36 am (EDT)

Economics

Political Economy

The Tendency to Privatize

A key feature of neoliberal economic policies in both poor and rich nations is the mania for the privatization of socially-owned assets and services. The shift from publicly to privately-produced goods and services is designed to phase out public programs and to repudiate governmental responsibility for social welfare. Socially-owned land, infrastructure, and enterprises are to be sold to private investors. Or, in a less direct approach, advocated commonly in the United States, there is partial privatization. Instead of directly producing public services (such as highway construction and education), the state finances their provision either by purchasing the services from private vendors (contracting out), or else by providing vouchers to individuals, agencies, or corporations to purchase the services. Although the two forms of privatization are not the same, privatizers of all stripes have always made it clear that their ultimate goal is to eliminate the base of political support for government spending for social purposes… | more |

Global Capitalism and Israel

Jonathan Nitzan and Shimshon Bichler, The Global Political Economy of Israel (London and Sterling, Virginia: Pluto Press, 2002), 407 pages, cloth $75.00, paper $24.95.

One of the characteristics of much academic writing is an obsession with theory at the expense of empirical investigation. It is rare to find a book that combines genuinely novel theoretical exploration with rigorous empirical study, the more so in fields such as political science where abstraction seems to have become the norm. It is for this reason that The Global Political Economy of Israel is such a gripping read. A remarkable investigation into the concrete workings of the Israeli and U.S. economies that avoids the fatuous generalities of much of the globalization literature, it presents a challenging theoretical framework that not only clarifies the past but also seeks to understand the present… | more |

Neoliberal Myths

A Critical Look at the Mexican Experience

Representatives of the established order were unprepared for the mas- sive 1999 demonstrations in Seattle against the World Trade Organziation (WTO) and remain on the defensive in the face of the inter- nationally coordinated actions against neoliberal globalization that have followed. On an ideological level, they have responded by seeking to undermine the legitimacy of antiglobalization activists, especially those in the developed capitalist world, by claiming that these activists oppose the very policies and institutions that are in the best interest of the poor in the third world. One example: the former head of the WTO, Mike Moore, declared that “The people that stand outside and say they work in the interests of the poorest people …they make me want to vomit. Because the poorest people on our planet, they are ones that need us the most.”… | more |

Post-Apartheid South Africa

Reply to John S. Saul

John Saul has had an extensive and committed involvement with Southern Africa. His analyses are taken seriously in left circles in South Africa. Sadly, perhaps understandably, his most recent extended visit to this country has left him feeling deeply disappointed (“Cry for the Beloved Country: The Post-Apartheid Denouement,” Monthly Review 52, no. 8, January 2001, pp. 1–51). This sense of disappointment is rooted, I would guess, partly in the intellectual, organizational and even emotional energies that Saul, like many others, invested in the solidarity struggle against apartheid, and in legitimate expectations for a post-apartheid South Africa. There is also, and I want to underline my own empathy with his irritation on this score, a hint of personal hurt: “The most startling thing I personally discovered about the New South Africa is just how easy it has become to find oneself considered an ultraleftist!” (p. 1) This sense of disappointment, even of betrayal, is also present in many progressive circles within South Africa, and indeed among many cadres of our movement. Despite all of this there is, I believe, something seriously off-beam in Saul’s analysis… | more |

Starting from Scratch?

A Reply to Jeremy Cronin

It is interesting that, on one of the two main fronts of inquiry opened up in my original essay, Jeremy Cronin professes—despite the wounded tone he adopts throughout and for all his talk about my “frozen penultimates,” “sneers,” and “derision”—to be in considerable agreement with me. This concerns my reading of the overall trajectory of socioeconomic policy that the African National Congress (ANC) government has adopted since 1994. As he puts the point, “Saul goes on to argue that the ANC liberation front has erred seriously on two critical fronts—the choice of economic policies, and the relative demobilization of our mass constituency (except during electoral campaigns). I agree with Saul on both counts.” Indeed, he adds, “I agree substantially with the broad analysis of the last twelve years or so in South Africa that Saul makes in his pessimism of the intellect mode,” including, it would appear, my criticisms of the “government’s macroeconomic policy (the Growth Employment and Redistribution framework—GEAR), privatization policies, excessive liberalization measures, the failure to mobilize our mass base, or concerns about the growing bureaucratization and the influence of an emerging black bourgeois stratum on policy” … | more |

September 2002, Volume 54, Number 54

September 2002, Volume 54, Number 54

» Notes from the Editors

The growth and eventual bursting of financial bubbles is an inherent feature of capitalist accumulation, as can be seen in the long history of such crises from the South Sea Bubble of the early eighteenth century to the financial blowouts of the present day. In the first half of the summer a dramatic bubble-bursting decline in the U.S. and European stock exchanges wiped out the stock market gains of the previous five years—a period characterized by manic speculation… | more |

The New Face of Capitalism: Slow Growth, Excess Capital, and a Mountain of Debt

For a long time now, the U.S. economy and the economies of the advanced capitalist world as a whole have been experiencing a slowdown in economic growth relative to the quarter-century following the Second World War. It is true that there have been cyclical upswings and long expansions that have been touted as full-fledged “economic booms” in this period, but the slowdown in the rate of growth of the economy has continued over the decades. Grasping this fact is crucial if one is to understand the continual economic restructuring over the last three decades, the rapidly worsening conditions in much of the underdeveloped world to which the crisis has been exported, and the larger significance of the present cyclical downturn of world capitalism… | more |

The Argentine Crisis

Historically, monetary crises have been related to hyperinflation, from which Argentina has often suffered. Hyperinflation is generally viewed as a calamity leading to the destruction of the capitalist monetary system of circulation. In the present Argentine crisis, however, there has been a complete implosion of economic and monetary relations due to hyperdeflation. This is the strangulation of the economy by the requirement to pay an unsustainable debt… | more |

Argentina: An Alternative Proposal to Overcome the Crisis

Against the background of Argentina’s dramatic economic downfall, a meeting was held in January 2002 at the Faculty of Economic Sciences of the University of Buenos Aires. The focus of the meeting was the need to work on alternative proposals to deal with the crisis… | more |

Japan’s Stagnationist Crises

In this article we will argue that the Japanese economic crisis is connected to a process of oligopolistic accumulation and to Japan’s role as the regional economic hegemon in East Asia. The combination of these two factors generates a classic Baran-Sweezy-Magdoff perspective on the crisis in Japan… | more |

Monopoly Capital and the New Globalization

We live at a time when capitalism has become more extreme, and is more than ever presenting itself as a force of nature, which demands such extremes. Globalization-the spread of the self-regulating market to every niche and cranny of the globe-is portrayed by its mainly establishment proponents as a process that is unfolding from every- where at once with no center and no discernible power structure. As the New York Times claimed in its July 7,2001 issue, repeating now fash- ionable notions, today’s global reality is one of “a fluid, infinitely expanding and highly organized system that encompasses the world’s entire population,” but which lacks any privileged positions or “place ofpower.” … | more |

September 2001, Volume 53, Number 4

September 2001, Volume 53, Number 4

» Notes from the Editors

The Economist (June 23, 2001) contained an item that we thought would interest and amuse MR readers. Under the title “More Tomatoes, Please,” it humorously observed: … | more |

Mergers, Concentration, and the Erosion of Democracy

A new surge of corporate concentration is in process in the United States and abroad, driven in large measure by a restruc- turing of global markets through mergers and acquisitions (M&A~). Announced worldwide merger deals reached $3.4 tril- lion in 1999, an amount equivalent to 34 percent of the value of all industrial capital (buildings, plants, machinery and equip- ment) in the United States in 1999. Of this total, nearly a third were cross-border transactions that involved companies based in different countries, up from an average of one-fourth of all mergers during most of the 1990s… | more |

The New Economy

Myth and Reality

In the last few years the idea of a “New Economy” has gained wide currency, almost rivaling “globalization” as a neologism that characterizes our era. Thus The Economic Report of the President, 2001, begins: “Over the last 8 years the American economy has transformed itself so radically that many believe we have witnessed the creation of a New Economy.” This New Economy is seen, first and foremost, as consisting of those firms and economic sectors most closely associated with the revolution in digital technology and the growth of the Internet. The rapid convergence of information technologies—including computers, software, satellites, fiber optics, and the Internet—has, it is believed, fundamentally altered the economic landscape. Since the mid-1990s, these revolutionary technological developments have, it is argued, spilled over into the wider economy, generating higher productivity growth, a sustained acceleration of economic growth, lower unemployment, lower inflation, and an attenuation of the business cycle… | more |

New Economy…Same Irrational Economy

What can we say about the assertion that there is a “New Economy”? That depends on what we mean by this term. It is nonsense to claim, and few do any more, that the business cycle has been eliminated or that the contradictions of capitalism have been resolved. In 2000 we witnessed a massacre of technology and Internet stocks ending what many considered the country’s biggest financial mania of the past hundred years. The NASDAQ lost over half of its value, a paper loss of 3.33 trillion dollars, the equivalent of a third of the houses in the United States sliding into the ocean, as one Wall Street wag tells us. While only a few months ago, all we heard about was the magic of the market and that crises are the result of bad government policies, whether “crony” capitalism or simply failure to make information available to markets in a full and timely fashion, and that the new information technology now makes markets even more efficient; all of this talk is now shown to be the usual exaggeration we find in the up stage of most long expansions. As in the past it disappears as the economy weakens. Indeed as inventories pile up the nature of capitalism becomes clear to even the financial press and the politicians… | more |

The “New” Economy and the Labor Movement

A New Economy? Today, we hear a lot of talk about the New Economy, much of it unsubstantiated and hyperbolically stated. In the United States, for example, consumers are supposedly concerned, as never before, with high-quality goods and services tailored specifically to their individual needs. Rapidly changing technology continually creates new, high-quality products, so consumer needs are perpetually changing as well. This rapid change places new demands on businesses. They must be maximally flexible, capable of changing product lines quickly, and able at all times to meet discerning and highly individualized consumer needs. Everything must be geared to customer satisfaction; a firm that does not quickly and consistently please its customers will lose business sooner than at any time in the past. The tremendous range of choices available means that customers will not be loyal to any company that cannot offer speedy gratification. Recently an Internet book company opened that promised same-day delivery! … | more |

The “New Economy” and the Speculative Bubble

an Interview with Doug Henwood

Doug Henwood, author of Wall Strr£t:How It Works andfur lWIom (Verso, 1997) and publisher and primary author of the newsletter Left Business Observer; is a fre- quent contributor to Munthly Review. Doug was interviewed earlier this year for the San Francisco Ba:y Guardian by another good friend of ours, Christian Parenti-author of 1.JxiuJnam Ameriaz (Verso, 1999), reviewed in last month’s MR At the end of February we asked a few additional questions of Doug. The composite interview follows… | more |

Refuting the Big Lie

Hugh Stretton, Economics: A New Introduction (Pluto Press, 1999), 864 pages, $90 hardcover, 35 paper.

Capitalism was first firmly established in Britain in the eighteenth century and it was then and there that economics was born, in Adam Smith’s Wealth of Nations (1776). Economists have served capitalism ever since, but only in the past quarter-century has capitalism needed—and gotten—so much from them… | more |

December 2000, Volume 52, Number 7

December 2000, Volume 52, Number 7

» Notes from the Editors

Praise for Karl Marx—albeit of a somewhat mocking kind—comes from the strangest places nowadays. In their new book Future Perfect: The Challenge and Hidden Promise of Globalization, John Micklethwait and Adrian Wooldridge, bestselling business authors and correspondents for the adamantly procapitalist Economist magazine, declare that, “as a prophet of socialism Marx may be kaput; but as a prophet of ‘the universal interdependence of nations,’ as he called globalization, he can still seem startlingly relevant. His description of globalization remains as sharp today as it was 150 years ago” (pp. 332-333). The same thing has been noticed in a quite different way in colleges and universities, as demand for courses on Marx, Marxism, and political economy appear once again to be on the rise … | more |

November 2000, Volume 52, Number 6

November 2000, Volume 52, Number 6

» Notes from the Editors

Dissatisfaction with what has happened to the study of economics is producing a rapidly growing revolt among economics students in France, Britain, the United States, and elsewhere. Within a matter of months, this new movement has made considerable inroads in exposing the meaninglessness of orthodox economics in contemporary capitalist societies. Students are eagerly looking for answers about the issues of the day, such as expanding globalization, growing dominance of international finance, increasing polarization between the rich and poor nations and between the rich and poor of each nation. But orthodox economics has no meaningful answers to any of these questions—a fact that has fed the widening rebellion among economics students in numerous countries. Before reporting on this new discontent, we need to provide some background on how economics has been transformed, since its classical period, into a study that is becoming more and more irrelevant … | more |