Wednesday October 22nd, 2014, 2:28 am (EDT)

Review of the Month

Review of the Month

Implosion of the European System

Majority opinion in Europe holds that Europe has all it takes to become an economic and political power comparable to, and consequently independent of, the United States…. I believe that Europe suffers from three major handicaps that rule out such a comparison. First of all, the northern part of the American continent…is endowed with natural resources incomparably greater than the part of Europe to the west of Russia…. Secondly, Europe is made up of a good number of historically distinct nations whose diversity of political cultures…has sufficient weight to exclude recognition of a “European people”… In the third place…capitalist development in Europe was and remains uneven, whereas American capitalism has developed in a fairly uniform way throughout the northern American area, at least since the Civil War. Europe, to the west of historic Russia…is composed of three unequally developed sets of capitalist societies.… | more |

Harmony and Ecological Civilization

Beyond the Capitalist Alienation of Nature

When I consider the concept of harmony in the context of humans, their societies, and the environment I have a particular understanding of the concept. It refers to all people living together peacefully without exploitation of one person by another, each able to reach his or her full human potential, in a society in which everyone has their basic material and nonmaterial needs satisfied, feels secure, safe, happy, and fulfilled as human beings. In addition, the concept also implies harmony between people, the environment, and the other species we share the planet with.… [But] there is an overriding issue when considering harmony as I have briefly described it. Harmony in the world—among its people and between humans and the rest of the ecosystems—is not possible in the context of capitalism. Capitalism…has shown that it fosters interpersonal relations and metabolic interactions with the earth that are detrimental to achieving a harmonious existence.… | more |

The Endless Crisis

The Great Financial Crisis and the Great Recession began in the United States in 2007 and quickly spread across the globe, marking what appears to be a turning point in world history. Although this was followed within two years by a recovery phase, the world economy five years after the onset of the crisis is still in the doldrums…. The one bright spot in the world economy, from a growth standpoint, has been the seemingly unstoppable expansion of a handful of emerging economies, particularly China. Yet, the continuing stability of China is now also in question. Hence, the general consensus among informed economic observers is that the world capitalist economy is facing the threat of long-run economic stagnation (complicated by the prospect of further financial deleveraging)…. It is this issue of the stagnation of the capitalist economy, even more than that of financial crisis or recession that has now emerged as the big question worldwide.… | more |

The Bull Market

Political Advertising

The United States is in the midst of its quadrennial presidential election, a process that now extends so long as to be all but permanent. The campaign is also drenched in more money given by a small handful of billionaires than has been the case in the past. Since the 1970s the amount spent on political campaigns has increased dramatically in almost every election cycle. It has led to the formation of what we term the “money-and-media election complex,” which has a revenue base in the many billions of campaign dollars donated annually, and has effectively become the foundation of electoral politics in the United States. Moreover, the rate of increase in campaign spending from 2008 to 2010, and especially from 2008 to 2012, is now at an all-time high.… | more |

The Great Inequality

Growing inequality of income and wealth have characterized the U.S. economy for at least the past thirty years. Today, this inequality has become a central feature of politics, both mainstream and within such radical uprisings as the Occupy Wall Street phenomenon. This essay attempts to uncover the roots of inequality, showing that the source of it is in the nature of the capitalist economy. The magnitude of inequality ebbs and flows with the balance of class forces, but great inequality is built into the system’s fundamental structures.… | more |

The Global Stagnation and China

Five years after the Great Financial Crisis of 2007–09 began there is still no sign of a full recovery of the world economy. Consequently, concern has increasingly shifted from financial crisis and recession to slow growth or stagnation, causing some to dub the current era the Great Stagnation. Stagnation and financial crisis are now seen as feeding into one another.… To be sure, a few emerging economies have seemingly bucked the general trend, continuing to grow rapidly—most notably China, now the world’s second largest economy after the United States. Yet, as [IMF Managing Director Christine] Lagarde warned her Chinese listeners, “Asia is not immune” to the general economic slowdown, “emerging Asia is also vulnerable to developments in the financial sector.” So sharp were the IMF’s warnings, dovetailing with widespread fears of a sharp Chinese economic slowdown, that Lagarde in late November was forced to reassure world business, declaring that stagnation was probably not imminent in China (the Bloomberg.com headline ran: “IMF Sees Chinese Economy Avoiding Stagnation.”)… | more |

Women, Labor, and Capital Accumulation in Asia

One of the enduring myths about capitalism that continues to be perpetuated in mainstream economic textbooks and other pedagogic strategies is that labor supply is somehow exogenous to the economic system. The supply of labor is typically assumed, especially in standard growth theories, to be determined by the rate of population growth, which in turn is also seen as “outside” the economic system rather than in interplay with it. The reality is, of course, very different: the supply of labor has been very much a result of economic processes, not something extraneous to it. Throughout its history, capitalism has proved adept at causing patterns of labor supply to change in accordance with demand…. But nowhere has this particular capacity of capitalism to generate its own labor been more evident than in the case of female labor.… | more |

Capitalism and the Accumulation of Catastrophe

Over the next few decades we are facing the possibility, indeed the probability, of global catastrophe on a level unprecedented in human history. The message of science is clear. As James Hansen, the foremost climate scientist in the United States, has warned, this may be “our last chance to save humanity.” In order to understand the full nature of this threat and how it needs to be addressed, it is essential to get a historical perspective on how we got where we are, and how this is related to the current socioeconomic system, namely capitalism.… | 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 |

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 |

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 |

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 |

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 |

The Internet’s Unholy Marriage to Capitalism

The United States and the world are now a good two decades into the Internet revolution, or what was once called the information age. The past generation has seen a blizzard of mind-boggling developments in communication, ranging from the World Wide Web and broadband, to ubiquitous cell phones that are quickly becoming high-powered wireless computers in their own right.… The full impact of the Internet revolution will only become apparent in the future, as more technological change is on the horizon that can barely be imagined and hardly anticipated. But enough time has transpired, and institutions and practices have been developed, that an assessment of the digital era is possible, as well as a sense of its likely trajectory into the future.… | more |

The Trajectory of Historical Capitalism and Marxism’s Tricontinental Vocation

The long history of capitalism is composed of three distinct, successive phases: (1) a lengthy preparation—the transition from the tributary mode, the usual form of organization of pre-modern societies—which lasted eight centuries, from 1000 to 1800; (2) a short period of maturity (the nineteenth century), during which the “West” affirmed its domination; (3) the long “decline” caused by the “Awakening of the South” (to use the title of my book, published in 2007) in which the peoples and their states regained the major initiative in transforming the world—the first wave having taken place in the twentieth century. This struggle against an imperialist order that is inseparable from the global expansion of capitalism is itself the potential agent in the long road of transition, beyond capitalism, toward socialism. In the twenty-first century, there are now the beginnings of a second wave of independent initiatives by the peoples and states of the South.… | more |

Ecological Civilization

Given the overwhelming harm being done to the world’s environment and to its people, it is essential today to consider how we might organize a truly ecological civilization—one that exists in harmony with natural systems—instead of trying to overwhelm and dominate nature. This is not just an ethical issue; it is essential for our survival as a species and the survival of many other species that we reverse the degradation of the earth’s life support systems that once provided dependable climate, clean air, clean water (fresh and ocean), bountiful oceans, and healthy and productive soils.… There are numerous ways to approach and think about the enormous harm that has been done to the environment. I will discuss the following: (1) the critical characteristics that underlie strong ecosystems; (2) why societies are not adequately implementing ecological approaches; and (3) how we might use characteristics of strong natural ecosystems as a framework to consider a future ecological civilization… | more |

ALBA and the Promise of Cooperative Development

Existing international economic institutions and relations operate in ways detrimental to third world development. That is why eight Latin American and Caribbean countries—led by Venezuela, Cuba, and Bolivia—are working to build the Bolivarian Alliance for the Americas (ALBA), a regional initiative designed to promote new, nonmarket-shaped structures and patterns of economic cooperation.… In response to worsening international economic conditions, ALBA has recently stepped up efforts to promote a full-blown regional development process.… Although the precise terms of the agreement are still to be negotiated, official statements point to the creation of an integrated trade and monetary zone, with a new regionally created currency, the sucre.… | more |

Capitalism and the Curse of Energy Efficiency

The Return of the Jevons Paradox

The curse of energy efficiency, better known as the Jevons Paradox—the idea that increased energy (and material-resource) efficiency leads not to conservation but increased use—was first raised by William Stanley Jevons in the nineteenth century. Although forgotten for most of the twentieth century, the Jevons Paradox has been rediscovered in recent decades and stands squarely at the center of today’s environmental dispute… | more |

The Financialization of Accumulation

In 1997, in his last published article, Paul Sweezy referred to “the financialization of the capital accumulation process” as one of the three main economic tendencies at the turn of the century (the other two were the growth of monopoly power and stagnation). Those familiar with economic theory will realize that the phrase was meant to be paradoxical. All traditions of economics, to varying degrees, have sought to separate out analytically the role of finance from the “real economy.” Accumulation is conceived as real capital formation, which increases overall economic output, as opposed to the appreciation of financial assets, which increases wealth claims but not output. In highlighting the financialization of accumulation, Sweezy was therefore pointing to what can be regarded as “the enigma of capital” in our time… | more |

The Wall Street Collapse and Return of Reality-Based Economics

Over the past generation, the U.S. economy as well as most of the rest of the global economy have been dominated by the idea that free market capitalism produces dynamic growth, financial stability, and as close as we are likely to come to a fair society. Supporters of this pro-market framework hold that government interventions to encourage growth, stability, or even fairness will almost always produce more harm than good. This mode of thinking has been the intellectual foundation for the era of financial deregulation in the United States—the dismantling of the Glass-Steagall regulatory system that was built amid the rubble of the 1929 stock market crash and ensuing 1930s Depression. The Clinton administration provided the final nails in the coffin of financial regulation with the passage of the Financial Services Modernization Act in 1999… | more |

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