Today the capitalist economies of the world are in deep trouble. Some economists have theorized that the linkages between the United States and the rest of the world had been weakened as other nations gained more economic autonomy. A decoupling thesis was presented claiming that a crisis in one part of the system (say, North America) would not affect other major parts (say, Europe and Asia). We now know this is not true. Toxic assets were sold around the world, and banks in Europe, Asia, and Japan are in trouble too. Housing bubbles have burst in Ireland, Spain, and many other countries. In Eastern Europe, homes were bought with loans from Swiss, Austrian, and other European banks, payable in European currencies. As the economies of Hungary and other nations in the region, which financed their explosive growth with heavy borrowing from Western banks, have gone into recession, their currencies have suffered a sharp deterioration in exchange rates. This means that mortgage payments have risen sharply, as it now takes many more units of local currency to buy the Swiss francs or euros needed to pay the loans. In some cases, mortgage payments have doubled.
In a recent article entitled “The Penal State in an Age of Crisis” (Monthly Review, June 2009), Hannah Holleman, Robert W. McChesney, John Bellamy Foster, and R. Jamil Jonna sought to account for the surprising stability of civilian government spending (non-defense government consumption and investment) as a percentage of GDP during a period, roughly 1970 to the present, when the power of capital over labor increased, inequality grew, and cuts in government programs for the poor and working class continued more or less without abatement. One solution to the paradox, the authors persuasively argued, was the growth in spending for “the penal state,” a political regime marked by the mass incarceration of the poor and the vulnerable who posed risks to the stability of the prevailing economic and social order.
Something is wrong with our agricultural and food systems.1 Despite great progress in increasing productivity in the last century, hundreds of millions of people remain hungry and malnourished. Further hundreds of millions eat too much, or consume the wrong sorts of food, and it is making them ill. The health of the environment suffers too, as degradation of soil and water seems to accompany many of the agricultural systems we have developed in recent years. Can nothing be done, or is it time for the expansion of an agriculture founded more on ecological principles and in harmony with people, their societies, and cultures?
Adrienne Rich is the author of more than sixteen volumes of poetry and five nonfiction prose books, the most recent being A Human Eye: Essays on Art in Society (Norton). She is the recipient of numerous awards and prizes, including a MacArthur Fellowship and the 1999 Lannan Foundation Lifetime Achievement Award.
We recently received a very thoughtful letter from Ted Trainer, an Australian ecological socialist (author of Abandon Affluence! and Saving the Environment) who teaches at the University of New South Wales, asking us about the “surplus problem” and its relation to borrowing in the present economic crisis. We wrote a short reply with our answers. —Eds.
At the time of this writing (late August), the business news in the United States is full of discussions of “recovery” from the worst economic crisis since the Great Depression. Yet, while the economy appears to have bottomed out and a recovery of sorts may be in the works, this is in many ways misleading. Although a technical or formal recovery seems quite likely by the end of the year — with a small increase in economic growth mainly due to inventory restocking — it is unlikely to feel like a recovery to most individuals in the society. This is because official unemployment is projected to rise to the low double-digits by the end of this year or the beginning of next year — with the numbers of those dropping out of the labor market due to discouragement, or seeking part-time work because they are unable to obtain a full-time job, also growing. All of this points to a “jobless” and “wageless” recovery. As New York University economist Nouriel Roubini wrote in an August 13 column for Forbes.com, “It is very difficult to argue that the U.S. economy is not still in a recession while the labor market is still weak.” Indeed, what is really at issue is not simply recession and recovery but the longer-term structural crisis of capitalism. This is the subject of the Review of the Month, which seeks to place the current crisis in the context of the long-term development of capital accumulation and crisis.
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.
The following essay is adapted from the concluding chapter of the new edition of Nancy Rose’s Put to Work, just published by Monthly Review Press. The book is an examination of the various work programs implemented by the New Deal during the Great Depression. This second edition is especially appropriate, as we are now experiencing the most severe economic crisis since the 1930s, what some are calling the “Great Recession,” and there is once again much talk about putting people to work.
Nothing before or after the 1930s has matched the magnitude of the FERA, CWA, and WPA-programs that provided work each month for several million people, paid decent wages, and developed innovative projects in construction, the arts, and the production of consumer goods.
Eduardo Galeano, who was born in Uruguay in 1940, has written big, thick books. Open Veins of Latin America (1973), which Hugo Chávez of Venezuela handed to Barack Obama in May, hoping it would teach him history, is more than 300 pages. Then there’s Galeano’s Memory of Fire Trilogy: Genesis, Faces & Masks, and Century of the Wind that adds up to nearly 1,000 pages. More recently, he has written shorter books, and practiced a kind of ecology of the word. Mirrors, his newest work, contains more than one hundred short entries about almost everything — from salt to maps and money, and almost everyone, from Cleopatra to Alexander Hamilton and Che Guevara. None of the entries is longer than a single page. Not surprisingly, Galeano’s answers to the questions in this interview are pithy, poetic, humorous, and sometimes oblique. “I’m fighting word inflation, which in Latin America is worse than monetary inflation,” he says. “I try to say more with less — because less is more.” -J.R.