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Economic Theory

January 2016 (Volume 67, Number 8)

January 2016 (Volume 67, Number 8)

Prabhat Patnaik’s Review of the Month in this issue addresses problems of economic stagnation and imperialism in the context of explaining the current global crisis. Patnaik is part of a broad tradition of Marxian thought and heterodox economic analysis more generally that has long focused on issues of economic stagnation under monopoly capitalism. Such questions are now finally being taken up even by orthodox economists, but in ways that systematically ignore decades of contributions in this regard made by heterodox theorists. Ever since Larry Summers raised the issue of secular stagnation (referring back to Alvin Hansen’s theory of the 1930s and ’40s) at an IMF meeting in 2013, the question of stagnation has become part of a worldwide economic debate, moving issues that were once on the margins to center stage. This has resulted in a proliferation of mainstream economic treatments of the history of the secular stagnation concept in the 1930–1950s period, after which mainstream economists had essentially declared the issue dead.… | more…

Baran and Sweezy’s Monopoly Capital, Then and Now

An interview with John Bellamy Foster

Monopoly Capital was the principal Marxian, and indeed radical, political-economic work to be published in the 1960s, written by the two most prestigious Marxian economists in the United States and perhaps globally. It grew out of the critique of militarism and imperialism and economic waste as much as out of economic crisis. It was one of the first major works to focus on multinational corporations. Its final chapter emphasized the “irrational system” and was influenced by [Paul] Baran’s early background with the Institute for Social Research in Frankfurt. All of this made it extremely influential with the New Left in the United States, particularly its more radical, socialist wing. A good indication of this is Assar Lindbeck’s 1971 mainstream attack on what he called The Political Economy of the New Left, which focused almost entirely on Monopoly Capital.… | more…

Secular Stagnation

Mainstream Versus Marxian Traditions

Paul M. Sweezy wrote in 1982, “it is my impression that the economics profession has not yet begun to resume the debate over stagnation which was so abruptly interrupted by the outbreak of the Second World War.” Thirty years later things appear to have changed. Former U.S. Secretary of Treasury Larry Summers shocked economists with his remarks regarding “stagnation” at the IMF Research Conference in November 2013, and he later published these ideas in the Financial Times and Business Economics.… Summers’s remarks and articles were followed by an explosion of debate concerning “secular stagnation” [which] can be defined as the tendency to long-term (or secular) stagnation in the private accumulation process of the capitalist economy, manifested in rising unemployment and excess capacity and a slowdown in overall economic growth…. Responses to Summers have been all over the map, reflecting both the fact that the capitalist economy has been slowing down, and the role in denying it by many of those seeking to legitimate the system.… | more…

Wall Street's Think Tank: The Council on Foreign Relations and the Empire of Neoliberal Geopolitics, 1976-2014

Wall Street’s Think Tank: The Council on Foreign Relations and the Empire of Neoliberal Geopolitics, 1976-2014

The Council on Foreign Relations is the most influential foreign-policy think tank in the United States, claiming among its members a high percentage of government officials, media figures, and establishment elite. For decades it kept a low profile even while it shaped policy, advised presidents, and helped shore up U.S. hegemony following the Second World War. In 1977, Laurence H. Shoup and William Minter published the first in-depth study of the CFR, Imperial Brain Trust, an explosive work that traced the activities and influence of the CFR from its origins in the 1920s through the Cold War. Now, Laurence H. Shoup returns with this long-awaited sequel, which brings the story up to date. Wall Street's Think Tank follows the CFR from the 1970s through the end of the Cold War and the collapse of the Soviet Union to the present.… | more…

The Strength and Fragility of the Brazilian Economy

Analyzing the Brazilian economy is a difficult and complex task; the current indicators register results ranging from excellent to mediocre and worrisome, depending on the variable observed. For example, the nation has advanced into modernity in a few sectors, while at the same time, in recent years, new forms of dependency from the center of capitalism deepened. Further complexities arise when, beyond the economy, one takes into consideration not only the results of so-called “inclusion” policies and the popularity of President Dilma Rousseff (popularly referred to as “Dilma”), but also the number of strikes and public displays of disenchantment that are emerging in every corner of the country.… To summarize some of the conclusions: since the government of Luis Inácio Lula da Silva (“Lula”), the Brazilian economy has widened its internal market through policies that have raised the minimal wage, transferred income to the poorest within the nation, increased the availability of credit to the low and middle segments of the population, and reduced taxation (mainly on manufactured goods in the essential consumption basket). Such widening of the market, with a low impact on imports, would in theory ensure the maintenance of a certain level of growth, regardless of the international dynamics, and, indeed, it has helped Brazil reach a positive economic performance during the worst of the recent global economic crisis and its aftermath.… Nonetheless, when the impacts of the global recession deepened with the sovereign debt crisis in Europe, these macroeconomic policies did not yield the same effect, at most achieving modest growth.… | more…

A Critical Reading of Steve Keen’s Debunking Economics (L’imposture économique

Samir Amin is director of the Third World Forum in Dakar, Senegal. His books published by Monthly Review Press include The Liberal VirusThe World We Wish to SeeThe Law of Worldwide Value, and, most recently, The Implosion of Contemporary Capitalism. This article was translated from the French by Shane Mage.

1. Let me begin by saying that I have read Steve Keen’s book Debunking Economics (L’imposture économique) with the greatest pleasure and, moreover, that I learned a great deal from it. I have never read anything quite so convincing on the absurdity, the absence of

Neoliberal Co-optation of Leading Co-op Organizations, and a Socialist Counter-Politics of Cooperation

Many people think of cooperatives as small, locally owned businesses, such as groceries, cafes, or bicycle shops, where people can work in an equal and participatory non-capitalist organization. In reality, the U.S. co-op movement is tied to federal agencies whose agenda is promoting neoliberalism, both domestically and abroad, and the co-op movement itself has neoliberal leaders. Many co-ops in name are profit-driven capitalist corporations in practice. And even in the abstract, the co-op principles of smaller co-ops enable neoliberal cooperative politics. All of this, however, raises the question of what a co-op based on socialist values would be, and China’s Nanjie village provides a living example of that.… | more…

Cooperatives On the Path to Socialism?

Clarifying what Karl Marx thought of the role of cooperatives is useful, not to receive the “correct” answer to what that role will be, but to help think through what alternatives answers might be and how they might color today’s expectations of the cooperative movement. If one sees a non-capitalist or socialist organization of society as ultimately desirable, then how should we answer the following questions in the present day: (1) Are co-ops in production, worker-owned enterprises, desirable experimental improvements to the organization of production over standard capitalist practices, in the direction of immediate social welfare? (2) Are such co-ops in production also little islands of a different future, models of socialism within a capitalist society? (3) Are they beachheads of socialism, politically practical steps along the road to bringing forth such a possible alternative society? (4) Will they ultimately also be the foundations of such a society, if it develops? (5) All in all, what is their importance, their role, in daily struggles?… | more…

Labor in the Global Digital Economy: The Cybertariat Comes of Age

Labor in the Global Digital Economy: The Cybertariat Comes of Age

Ursula Huws ties together disparate economic, cultural, and political phenomena of the last few decades to form a provocative narrative about the shape of the global capitalist economy at present. She examines the way that advanced information and communications technology has opened up new fields of capital accumulation: in culture and the arts, in the privatization of public services, and in the commodification of human sociality by way of mobile devices and social networking. These trends are in turn accompanied by the dramatic restructuring of work arrangements, opening the way for new contradictions and new forms of labor solidarity and struggle around the planet.… | more…

Notes from the Editors, November 2014

November 2014 (Volume 66, Number 6)

Notes from the Editors

On September 20, 2014, while corporate and government officials arrived in New York City for the UN Climate Summit, organizers and activists from around the world participated in a peoples’ summit called the NYC Climate Convergence (organized by the Global Climate Convergence and System Change Not Climate Change). The NYC Climate Convergence featured as the lead keynote speaker Naomi Klein, who presented the analysis of her new book, This Changes Everything: Capitalism vs. the Climate (Simon and Schuster, 2014). Her concluding chapter, significantly, is entitled “Leap Years: Just Enough Time for the Impossible.” Monthly Review readers will be interested that Klein observes in her book: “Karl Marx recognized capitalism’s ‘irreparable rift’ with the ‘natural laws of life itself’”. Later she refers to “global capitalism’s voracious metabolism”.… | more…

Piketty and the Crisis of Neoclassical Economics

Not since the Great Depression of the 1930s has it been so apparent that the core capitalist economies are experiencing secular stagnation, characterized by slow growth, rising unemployment and underemployment, and idle productive capacity. Consequently, mainstream economics is finally beginning to recognize the economic stagnation tendency that has long been a focus in these pages, although it has yet to develop a coherent analysis of the phenomenon. Accompanying the long-term decline in the growth trend has been an extraordinary increase in economic inequality, which one of us labeled “The Great Inequality,” and which has recently been dramatized by the publication of French economist Thomas Piketty’s Capital in the Twenty-First Century. Taken together, these two realities of deepening stagnation and growing inequality have created a severe crisis for orthodox (or neoclassical) economics.… | more…

Monthly Review Volume 66, Number 5 (October 2014)

October 2014 (Volume 66, Number 5)

Notes from the Editors

Secular stagnation (or the trend towards long-term slow growth and continuing high unemployment/underemployment) has become a big issue in the mature economies since 2013, when former U.S. Treasury Secretary Larry Summers raised the question at an IMF economic forum. Compilations of work on the subject can now be found on the Internet, such as the one by economists Coen Teulings and Richard Baldwin; which however leaves out all contributions by heterodox economists. Teulings and Baldwin credit Summers with having “resurrected” the secular stagnation issue. But is this true? Only in the sense that he reintroduced it to mainstream neoclassical economics. It has long been a topic on the left, and particularly in Monthly Review, where editor Paul Sweezy explicitly drew attention to the “secular stagnation” question more than forty years ago—with MR tracking the stagnation trend month by month in the four decades that followed.… Isn’t it about time…that orthodox economists, Summers included, began to acknowledge the enormous work done on this topic on the left over decades, and indeed the greater complexity and historicity of the analysis to be found there—not only in MR but within heterodox economics more generally? Such an admission might even do orthodox economists some good.… | more…