Review of the Month
In the last few years the idea of a “New Economy” has gained wide currency, almost rivaling “globalization” as a neologism that characterizes our era. Thus The Economic Report of the President, 2001, begins: “Over the last 8 years the American economy has transformed itself so radically that many believe we have witnessed the creation of a New Economy.” This New Economy is seen, first and foremost, as consisting of those firms and economic sectors most closely associated with the revolution in digital technology and the growth of the Internet. The rapid convergence of information technologies—including computers, software, satellites, fiber optics, and the Internet—has, it is believed, fundamentally altered the economic landscape. Since the mid-1990s, these revolutionary technological developments have, it is argued, spilled over into the wider economy, generating higher productivity growth, a sustained acceleration of economic growth, lower unemployment, lower inflation, and an attenuation of the business cycle | more…
In conventional parlance, the current era in history is generally characterized as one of globalization, technological revolution, and democratization. In all three of these areas media and communication play a central, perhaps even a defining, role. Economic and cultural globalization arguably would be impossible without a global commercial media system to promote global markets and to encourage consumer values. The very essence of the technological revolution is the radical development in digital communication and computing. The argument that the bad old days of police states and authoritarian regimes are unlikely to return is premised on the claims that new communication technologies along with global markets undermine, even eliminate, the capacity for “maximum leaders” to rule with impunity | more…
The unlikely postelection contest between Al Gore and George W. Bush, which ultimately led to the anointing of Bush as president by the Republican majority on the US Supreme Court (despite the fact that Bush received fewer popular votes than Gore both in the United States as a whole and most likely in Florida as well—the state that gave Bush his electoral college win), has tended to erase all other developments associated with the election. But all of this should not cause us to forget that the Ralph Nader Green Party campaign for the presidency was arguably the most extraordinary phenomenon in US left politics in many years | more…
The standard solution offered to the environmental problem in advanced capitalist economies is to shift technology in a more benign direction: more energy-efficient production, cars that get better mileage, replacement of fossil fuels with solar power, and recycling of resources. Other environmental reforms, such as reductions in population growth and even cuts in consumption, are often advocated as well. The magic bullet of technology, however, is by far the favorite, seeming to hold out the possibility of environmental improvement with the least effect on the smooth working of the capitalist machine. The 1997 International Kyoto Protocol on global warming, designed to limit the greenhouse-gas emissions of nations, has only reinforced this attitude, encouraging many environmental advocates in the United States (including Al Gore in his presidential campaign) to advocate technological improvement in energy efficiency as the main escape from the environmental mess. | more…
Socialists since the time of Marx have been proponents of democracy, but they have argued that democracy in capitalist societies is fundamentally flawed. In capitalist societies, the wealthy have tremendous social and economic advantages over the working class that undermine political equality, a presupposition for viable democracy. In addition, under capitalism the most important economic issues—investment and control over production—are not the province of democratic politics but, rather, the domain of a small number of wealthy firms and individuals seeking to maximize their profit in competition with each other. This means that political affairs can only indirectly influence economics, and that any party or individual in power has to be careful not to antagonize wealthy investors so as to instigate an investment strike and an economic collapse that would generally mean political disaster | more…
Social Security was the crowning achievement of Roosevelt’s New Deal. It has been the most successful and still remains the most popular of all U.S. government programs. More than a pension program, Social Security provides for workers and their families in the case of early death and disability, in addition to retirement. In 1997, it provided about twelve trillion dollars worth of life insurance alone, more than that of the entire private life-insurance industry. Furthermore, it does all of this in the form of social insurance, in which the distribution and the amount of benefits provided are determined by family relation- ships and basic economic rights-factors that private insurance and pension plans ignore. Nearly one-fifth of the elderly in the United States rely on Social Security as virtually their sole source of income, while two-thirds of all recipients depend on it for at least half of their income | more…
Some wags claim that it is the conservatives who fear socialism, while the radicals believe that capitalism will last forever. Conservatives, they say, fear widespread popular discontent, while radicals abandon hope of a revolutionary overthrow of capitalism. An exaggeration? Of course. Even so, this witticism is not inappropriate. Many on the left have indeed retreated from class and a vision of a democratic, egalitarian socialism. The important social issues of our day—race, gender, and the environment—more often than not are divorced from the role of class structure. The rule of the capitalist class and the class struggle are shoved to the back burner. Whether consciously or not, the implicit assumption underlying the retreat from class is that capitalism will somehow or other go on and on as it creates miraculous new technology. Best then to stick to making those adjustments in social conditions that the system will presumably allow | more…
History, as if to warn us continuously against any tendency toward complacency, is full of ironies. As recently as a few months ago, the close of the twentieth century had come to be associated, in the prevailing view of the vested interests, with “endism”: the end of class struggle, the end of revolution, the end of imperialism, the end of dissent—even the end of history. The new century and new millennium were supposed to symbolize that all of this had been left behind and that we could look forward to a new era of infinite progress based on the New Economy of the information age, which would usher in a gentler, kinder, virtual capitalism. The main worry was a technical glitch known as Y2K. Would computers across the world malfunction on January 1, 2000? | more…
The twentieth century came to a close in an atmosphere astonishingly reminiscent of that which had presided over its birth—the “belle époque” (and it was beautiful, at least for capital). The bourgeois choir of the European powers, the United States, and Japan (which I will call here “the triad” and which, by 1910, constituted a distinct group) were singing hymns to the glory of their definitive triumph. The working classes of the center were no longer the “dangerous classes” they had been during the nineteenth century and the other peoples of the world were called upon to accept the “civilizing mission” of the West | more…
It is an old axiom, common to both Marxian and Keynesian economics, that uneven, class-based distribution of income is a determining factor of consumption and investment. How much is spent for consumption goods depends on the income of the working class. Workers necessarily spend almost all of their income on consumption, with relatively little left over for savings or investment. Capitalists, on the other hand, spend only a small percent- age of their income for personal consumption. The overwhelming proportion of the income of capitalists and their corporations is devoted to investment | more…
Economic analysts, as everyone knows, have widely differing views on the way the economy works. The single most important division lies between right and left—a division that has its roots in class. But even among those on the left there are areas of sharp disagreement. One of these is over the centrality of the Keynesian revolution to the development of economics. Did the revolution in economic thought, associated with thinkers such as Keynes and Kalecki, teach things that Marxist political economists should view as essential? Another disagreement is over the role of monopoly and competition. How central is the concentration and centralization of capital to our understanding of the workings of capitalism today—a full century after Marxists and other radicals first raised the question of monopoly capitalism? Whatever one’s abstract theory is—and all theories by definition rely on a degree of abstraction—its usefulness lies in its capacity to make sense of everyday reality, while providing the strategic analysis necessary for practical revolutionary solutions. | more…
Understanding the Politics of Globalization
The “Seattle Shock”-as Business Week called it in an editorial that warned of a popular backlash against “our very economic system”-reflects heartfelt indignation by the financial press at the intrusion of mass democracy into an elite discourse. In the New York Times, columnist Thomas Friedman raged at anti-World Trade Organization (WTO) protesters, whom he presents as “flat-earth advocates” duped by knaves like Pat Buchanan. Friedman, perhaps the most obtuse of the big-time columnists, complains that “What’s crazy is that the protesters want the W.T.O. to become precisely what they accuse it of already being-a global government | more…
Primitive Accumulation in Russia and China
The Russian bank laundering scandal in the newspapers last fall is only the latest installment in the ongoing saga of corruption coming out of the former Soviet Union. The more important question is: where did they get the money in the first place? How, for example, did the former Premier of the Ukraine manage to buy a seven million dollar mansion in Marin County, California, on his official salary of a few thou- sand dollars a year? The answer is only too apparent: Moscow’s gangster rule has become so well known that the term “Mafia” has lost its exclusively Italian connotation. China is not much better | more…