Stagnation
The U.S. economy in early March 2007 appears to be rapidly decelerating. Orders for durable goods in manufacturing dropped 8 percent in January and the manufacturing sector as a whole shrank during two of the last three months for which data is currently available (November–January), representing what is being called a “recession” in manufacturing, and raising the possibility of a more general economic downturn (New York Times, February 28, 2007) | more…
Changes in capitalism over the last three decades have been commonly characterized using a trio of terms: neoliberalism, globalization, and financialization. Although a lot has been written on the first two of these, much less attention has been given to the third. Yet, financialization is now increasingly seen as the dominant force in this triad. The financialization of capitalism-the shift in gravity of economic activity from production (and even from much of the growing service sector) to finance—is thus one of the key issues of our time. More than any other phenomenon it raises the question: has capitalism entered a new stage? | more…
Twenty-first century capitalism is not an improved and benign version of its nineteenth- and twentieth-century manifestations, nor will it ever be, despite daily bluster by the system’s practitioners and apologists that a rising tide of prosperity will soon lift all boats. The animating principles of capitalism governing the pursuit of profits are as hollow and iniquitous now as they were in 1848, especially where human exploitation and the distribution of wealth are concerned. As super-capitalist Warren Buffett remarked recently in a trenchant understatement: “A market system has not worked well in terms of poor people” (The New York Times, June 27, 2006) | more…
Our friends Leo Panitch and Colin Leys, editors of the Socialist Register, have recently published Coming to Terms with Nature: Socialist Register, 2007 (Monthly Review Press, 2006), which includes contributions by a distinguished group of analysts addressing crucial environmental issues—dealing with everything from “fossil capitalism” to eco-localism | more…
n the 1980s the Brazilian economy suffered a long spell of stagnation and inflation caused by the foreign debt crisis affecting all indebted countries. That crisis triggered an acute inflationary process that reached 2,012.6 percent in 1989 and 2,851.3 percent in 1993, according to the general price index from the Getulio Vargas Foundation. The second half of the 1980s and the first of the 1990s saw the deployment of successive anti-inflationary plans, starting with the 1986 Plano Cruzado and ending with the 1994 Plano Real.* The period also marked the end of the industrialization strategy known as “import substitution” and the onset of neoliberal policies in Brazil | more…
The year now ending marks the fortieth anniversary of Paul Baran and Paul Sweezy’s classic work, Monopoly Capital: An Essay on the American Economic and Social Order (Monthly Review Press, 1966). Compared to mainstream economic works of the early to mid-1960s (the most popular and influential of which were John Kenneth Galbraith’s New Industrial State and Milton Friedman’s Capitalism and Freedom), Monopoly Capital stood out not simply in its radicalism but also in its historical specificity. What Baran and Sweezy sought to explain was not capitalism as such, the fundamental account of which was to be found in Marx’s Capital, but rather a particular stage of capitalist development. Their stated goal was nothing less than to provide a brief “essay-sketch” of the monopoly stage of capitalism by examining the interaction of its basic economic tendencies, narrowly conceived, with the historical, political, and social forces that helped to shape and support them | more…
In a series of articles in Monthly Review and in Monthly Review Press books during the 1970s and 1980s, Harry Magdoff and Paul Sweezy proposed that the general economic tendency of mature capitalism is toward stagnation. A shortage of profitable investment opportunities is the primary cause of this tendency. Less investment in the productive economy (the “real economy”) means lower future growth. Marx wrote about the possibility of this very phenomenon | more…
Harry died in the early hours of January 1, 2006, at our house in Burlington, Vermont, where he had lived for three and a half years. As he died, I laid on the big double bed facing him and held his arms, with my wife, his caregiver, and his good friends Gladys and Percy Brazil there too. Talking with them after he died I reflected on how it had been an honor to have Harry live with Amy and me since my mother Beadie had died and to help him get the most out of his final years. It was also fun and intellectually stimulating, although sometimes a challenge because of my health problems and our work schedules | more…
The following intellectual biography of Harry Magdoff is a slightly revised and expanded version of a piece that was posted on MRzine a few days after Harry’s death on January 1, 2006. It evolved out of an earlier biography I wrote for the Biographical Dictionary of Dissenting Economists in 2000. Since the aim of this biography was to present the basic facts of Harry’s intellectual career, personal feelings and observations were largely excluded. A brief word on Harry’s character and the warm emotions he engendered within those who knew him therefore seems essential here | more…
Harry Magdoff died on New Year’s Day 2006 at the age of ninety-two. He will be remembered in the hearts of those who knew him, those who were profoundly influenced when they heard him speak, and those who have read Monthly Review and his great books on imperialism, which helped mature the thinking of the generation of leftists who came of age during the Vietnam War. It is the warmth of his person, the clarity and incisiveness of his thinking, and his profound vision of the absolute necessity of socialism that characterize his historic contributions and set him apart as one of a handful of great Marxist thinkers of the last century. The breadth of Harry’s knowledge—his grasp of world history, Marxist literature, and broader literatures—was extraordinary. He was as content, for example, to discuss the nature of calculus with a college student as Shakespeare with a Shakespeare scholar, all with that wonderful enthusiasm and energy he always brought to conversations | more…
Pablo Neruda wrote in elegant verse what Harry Magdoff analyzed in prose:
But we have to see behind all them, there is something
behind the traitors and the gnawing rats,
an empire which sets the table
and serves up the nourishment and the bullets….
Harry saw behind them all, behind the traitors and the gnawing rats, and he identified, analyzed, and rejected the empire which sets the table. The table settings changed over decades, even the size and shape of the table were altered. The careful economic proof of U.S. empire in the sixties became the contemporary global imperialism in this post-9/11 millennium. Harry Magdoff named, tracked, and opposed the bloody dehumanizing course of U.S. imperialism over six decades | more…
Even when Harry Magdoff was writing articles less often in his final years, he continued to compose letters that displayed his keen interest in world developments, the evolution of his thinking, and his deep personal commitments. Reprinted here are four letters he wrote in the opening years of the new millennium. The first was written while he still lived in New York. The last three were written in Vermont where Harry had moved in June 2002 to live with his son Fred and his daughter-in-law Amy Demarest. The fragilities of old age had largely confined him by then to home. But his thinking still knew no bounds | more…