February 2013 (Volume 64, Number 9)
For a long time now orthodox economics has been hindered by its extreme irrealism—a refusal even to attempt a realistic theoretical understanding of how modern capitalism functions. The shift to using fanciful assumptions to explore largely minor issues, following a brief Keynesian moment in the post-Second World War era, has been in many ways self-reinforcing. Once fundamental characteristics of the capitalist economy such as labor exploitation, accumulation, built-in inequality, monopoly power, rent-seeking behavior, technological change, and the tendency to stagnation were removed from the analysis—as a result of an ideological process of system-rationalization—there was little recourse but to fall back in successive stages on more and more abstract models based on increasingly purified notions of individual rationality.… Nevertheless, the deepening crisis of today’s monopoly-finance capital has given rise to a new era of questioning within the economics profession, and some top-tier neoclassical economists are now struggling—though hindered at every step by their own training and inclinations—to recapture knowledge long abandoned. | more…
James Hansen and the Climate-Change Exit Strategy
The world at present is fast approaching a climate cliff. Science tells us that an increase in global average temperature of 2°C (3.6° F) constitutes the planetary tipping point with respect to climate change, leading to irreversible changes beyond human control. A 2°C rise is sufficient to melt a significant portion of the world’s ice due to feedbacks that will hasten the melting. It will thus set the course to an ice-free world. Sea level will rise. Numerous islands will be threatened along with coastal regions throughout the globe. Extreme weather events (droughts, storms, floods) will be far more common. The paleoclimatic record shows that an increase in global average temperature of several degrees means that 50 percent or more of all species—plants and animals—will be driven to extinction. Global food crops will be negatively affected. | more…
Celia Sánchez and the Cuban Revolution
Nothing makes me more hopeful than discovering another human being to admire. My wonder at the life of Celia Sánchez, a revolutionary Cuban woman virtually unknown to Americans, has left me almost speechless. In hindsight, loving and admiring her was bound to happen, once I knew her story. Like Frida Kahlo, Zora Neale Hurston, Rosa Luxemburg, Agnes Smedley, Fannie Lou Hamer, Josephine Baker, Harriet Tubman, or Aung San Suu Kyi, Celia Sánchez was that extraordinary expression of life that can, every so often, give humanity a very good name. | more…
The Migration and Labor Question Today: Imperialism, Unequal Development, and Forced Migration
It is impossible to disentangle the migration and labor question today without a deep understanding of the nature of contemporary capitalism, namely, neoliberal globalization. One of the main features of the new global architecture…is the assault on the labor and living conditions of the majority of the global working class, and in particular the migrant workforce, which is among the most vulnerable segments of this class. This essay will analyze some key aspects of the system that contemporary migration is embedded in, with emphasis on the process of segmentation and the growing precariousness (precarization) of labor markets worldwide. | more…
The First Weapon of Mass Destruction
When the real estate market was building momentum during the 2000s, [new types of restructured, risk-based financial instruments] looked like a free lunch and insurers could pocket the insurance premium without ever being called in to make up for losses. However, when the market reversed in 2006, the payday came: some insurers lost heavily, others went bust, and a few, such as AIG, were bailed out. … By the end of the cycle, we had learned about the pro-cyclical nature of ratings-based structured products and the dangers of the new food chain. Hedge fund manager George Soros called Credit Default Swaps “weapons of mass destruction.” We had, many believed, been defeated by novelty. Or had we? Many think that subprime products are new, and that the use of ratings to structure financial instruments and so-called Credit Default Swaps (CDS) are a recent invention permitted by advances in modern finance. They ought to study the history of Levy Maybaum, a man who lived in New Jersey in the late nineteenth century and invented the first CDS. | more…
What Does Ecological Marxism Mean For China?
Zhihe Wang’s article “Ecological Marxism in China,” which appeared in the February 2012 Monthly Review, demonstrated that Chinese interest in ecological Marxism has grown rapidly over the past two decades…. The practical, political, and theoretical reasons for its success include: pressing environmental issues facing China; the government’s call for ecological civilization; the many characteristics that ecological Marxism shares with traditional Chinese Marxism; and the support it has provided for China’s environmental movement. Numerous works by Western scholars, including Ben Agger, John Bellamy Foster, William Leiss, and James O’Connor, have recently been translated into Chinese. …In comparison [to the others], John Bellamy Foster’s ecological Marxism was introduced relatively late. But recently it has drawn the greatest attention from Chinese Marxist scholars…. Our purpose here is to elicit a response from Foster on some of these developments in Chinese thought. | more…
Toward a Global Dialogue on Ecology and Marxism
I would like to thank Zhihe Wang, Meijun Fan, Hui Dong, Dezhong Sun, and Lichun Li for doing so much to promote a global dialogue on ecological Marxism by summarizing some of the insights and concerns of Chinese scholars in this area, focusing in this case on my work in particular. The various questions, challenges, and critiques raised in relation to my work and that of related scholars are all, I believe, of great importance to the development of theory and practice in this area. I am therefore providing a brief set of responses to the problems raised, which I hope will be helpful in the further promotion of this global dialogue on ecology and Marxism. | more…
January 2013 (Volume 64, Number 8)
As Fred Magdoff notes in his article in this issue, the Royal Society of London—one of the world’s oldest (founded in 1660) and most respected scientific bodies—declared in its 2012 report, People and the Planet, that the environmental threat to the planet as a place of human habitation is now so serious that it is necessary for humanity to “develop socio-economic systems and institutions that are not dependent on continued material consumption growth.” In other words, a radical break with capitalism’s laws of motion is called for.… Behind this startling conclusion on the part of the Royal Society lies a nascent revolt of climate scientists against the dominance of capitalist economics in determining climate-change policy. | more…
‘Libor’ing Under the Market Illusion
Sandwiched between revelations of mounting losses ($5.8 billion and rising) at JP Morgan in the face of bungled bets by a trader known as the London Whale, and allegations of money laundering for Mexican drug cartels and breaches of U.S. sanctions by HSBC, the disclosures of deliberate rigging of the Libor rate by Barclay’s Bank might appear mundane and a trifle boring in comparison. It is, however, this scandal about an arcane interest rate that most starkly exposes the rotten core of the global financial system.… [T]he scandal is not simply one of colossal greed and hubris. It is about systemic failure. It is about the fictions and illusions that form the basis of today’s complex global financial system. | more…
Global Resource Depletion
Within the current system, there are steps that can and should be taken to lessen the environmental problems associated with the limits of growth: the depletion of resource taps and the overflowing of waste sinks, both of which threaten the future of humanity.… [H]owever, …attempts to trace these problems, and particularly the problem of depletion natural resources, to population growth are generally misdirected. The economic causes of depletion are the issues that must be vigorously addressed (though population growth remains a secondary factor). The starting point for any meaningful attempt actually to solve these problems must begin with the mode of production and its unending quest for ever-higher amounts of capital accumulation regardless of social and environmental costs—with the negative results that a portion of society becomes fabulously rich while others remain poor and the environment is degraded at a planetary level. | more…
Introduction to Lettuce Wars
This an excerpt from the forthcoming Lettuce Wars: Ten Years of Work and Struggle in the Fields of California (Monthly Review Press, 2012). Part memoir, part informed commentary on farm labor, the U.S. labor movement, and the political economy of agriculture, Lettuce Wars is a lively account written from the perspective of the fields. Bruce Neuburger portrays the people he encountered—immigrant workers, fellow radicals, company bosses, cops and goons—vividly and indelibly, lending a human aspect to the conflict between capital and labor as it played out in the fields of California. | more…
Tadeusz Kowalik and the Accumulation of Capital
Tadeusz Kowalik, the doyen of Polish political economists, died at his home in Warsaw on July 30, 2012. Kowalik is best known as the last surviving coauthor of the great Polish economist, Michał Kalecki (1899–1970), as an advisor to the Polish trade union movement Solidarity when it played a key part in bringing down the Communist government in the 1980s, and subsequently as a fierce critic of the capitalism that was put in its place. He challenged both the commonly accepted view of the Keynesian Revolution and the inability of Polish Communists to come to terms with their revolutionary past and find a place for themselves in the modern world. | more…
Capitalism and the Fallacy of Crude Underconsumptionism
The question of “underconsumptionism” is a tangled one—due not only to the commonplace fallacy associated with what is known as “crude underconsumptionism,” but also because the term has been used at various times to refer to what Joseph Schumpeter in his History of Economic Analysis called “non-spending” or effective demand theories (the second in a typology of underconsumption theories designated by Schumpeter). Underconsumption in this sense, however, would encompass theorists like Keynes and Kalecki who focus not on underconsumption per se, but on underinvestment. Hence, the term is no longer applied to theories of this type (except by some Marxian critics of “underconsumptionism”).… In the following exchange with Jonathan Penzner published in the April 1982 issue of Monthly Review, Harry Magdoff and Paul Sweezy, then editors of the magazine, pointed to the fallacy of crude underconsumptionism.