Economic Theory
The growing inequalities we are witnessing in the world today are having a very negative impact on the health and quality of life of its populations. It is true, as many conservatives and neoliberal authors continue to stress, that health indicators are improving in many parts of the world, including in many underdeveloped countries. But what these authors are not saying is that the rate of improvements in these indicators have slowed down in most countries that have experienced a growth of inequalities, and in many of them, including the United States, these indicators have even reversed. According to the last report of the National Center for Health and Vital Statistics, infant mortality in the United Staes has increased, reversing the decline that had occurred since 1953.1 The growth of inequalities is thus bad for people’s health. But why? | more…
Economic theory is not neutral, and the results when it is applied owe much to the implicit and explicit assumptions embedded in a particular theory. That such assumptions reflect specific ideologies is most obvious in the case of the neoclassical economics that underlies neoliberal economic policies | more…
Except in times of war, capitalist economies almost never reach full employment. The mere absence of jobs for those desiring paid employment, however, is not necessarily a problem for the ruling economic interests. Unemployment and the underutilization of labor more generally—the existence of what Marx called the industrial reserve army of labor—is a necessary part of a capitalist economy, since it keeps wages low as workers are forced to compete with each other for jobs. This becomes a serious problem for the system or for the political structure when the shortfall in employment coincides with a deeper structural crisis; when aggregate demand and thus investment opportunities are hindered by low employment and low wages; and when a shortage of jobs creates a political problem, sometimes even igniting popular opposition at the grassroots of society. All three of these contradictions are apparent in 2004, setting the stage for a national debate on the question of jobs, which more than three years since the beginning of the 2001 recession is now suddenly a front page story | more…
Doug Henwood, After the New Economy (New York: The New Press, 2003), 269 pages, hardcover $24.95.
In the late nineties, the San Francisco Bay Area was caught up in the mania of the high-tech, information-based “New Economy.” Venture capitalists threw money at e-commerce start-ups based on dicey premises, while loss-making companies raked in millions at their initial public offerings. In low income areas like the Mission District, dot-coms moved in, forcing out poor people whose only recourse was to organize themselves in anti-displacement coalitions and hope for the market to crash. In the fray, even a new type of gold digger emerged: women in search of nerdly adolescent millionaires with fat stock options. It was a stupefying time | more…
David Bacon, The Children of NAFTA: Labor Wars on the U.S./Mexico Border (Berkeley: University of California Press, 2004), 348 pages, cloth $27.50.
I once heard a discussion about the first sentences of books and those sentences that were among the most famous and most powerful. The opening of Gabriel Garcia Marquez’s One Hundred Years of Solitude was among the most popular. David Bacon’s first sentence in chapter one of his book must now rank among the most gripping: “NAFTA repeatedly plunged a knife into José Castillo’s heart.” | more…
The number of people living a precarious existence has been increasing in many countries of the world, with hunger all too widespread. There are approximately 6 billion people in the world, with about half living in cities and half in rural areas. Between the poor living in cities and those in rural areas, a vast number of the world’s people live under very harsh conditions. It is estimated that that about half of the world’s population lives on less than two dollars per day, with most of those either chronically malnourished or continually concerned with where their next meal will come from. Many have no access to clean water (1 billion), electricity (2 billion), or sanitation (2.5 billion) | more…
Capitalism is hundreds of years old and today dominates nearly every part of the globe. Its champions claim that it is the greatest engine of production growth the world has ever seen. They also argue that it is unique in its ability to raise the standard of living of every person on earth. Because of capitalism, we are all “slouching toward utopia,”—the phrase coined by University of California at Berkeley economist J. Bradford DeLong—slowly but surely heading toward a world in which everyone will have achieved a U.S.-style middle-class life | more…
This year Cuba will be celebrating the forty-fifth anniversary of its victorious revolution: a great historic achievement. And when we bear in mind that the Cuban revolution—the long sustained action of a nation of just eleven million people—survived for forty-five years against all odds, successfully confronting the declared enmity, the U.S.-dictated international political encirclement and economic blockade, as well as the ever renewed attempts to subvert and overthrow the post-revolutionary order by the world’s most preponderant economic and military power, even this simple fact puts forcefully into relief the magnitude and the lasting significance of the ongoing Cuban intervention in the historical process of our time. We are all contemporaries to an achievement whose reverberations reach well beyond the confines of the tendentiously propagandized “American Hemisphere,” offering its hopeful message to the rest of the world | more…
Since the early 1980s, the leading capitalist states in North America and Western Europe have pursued neoliberal policies and institutional changes. The peripheral and semiperipheral states in Latin America, Africa, Asia, and Eastern Europe, under the pressure of the leading capitalist states (primarily the United States) and international monetary institutions (IMF and the World Bank), have adopted “structural adjustments,” “shock therapies,” or “economic reforms,” to restructure their economies in accordance with the requirements of neoliberal economics | more…
What is today viewed as globalization is not in fact a new phenomenon as the writing of W. E. B. Du Bois attests. Dr. Du Bois understood the impacts of what today we call neoliberalism, its damages, its causes, the interests it serves, and the way it divides the working class and undercuts the progressive movements with horrible consequences at home and abroad. These remain our themes today, though we would add “and women” in brackets where Dr. Du Bois wrote only “men,” and we would include ethnicity and religion as part of the discussion of the color line | more…
A discourse on poverty and the necessity of reducing its magnitude, if not eradicating it, has become fashionable today. It is a discourse of charity, in the nineteenth-century-style, which is does not seek to understand the economic and social mechanisms that generate poverty, although the scientific and technological means to eradicate it are now available | more…
Harry Magdoff sat down to talk in front of a video camera in April 2003, three weeks before the conference “Imperialism Today” sponsored by Monthly Review in honor of his ninetieth birthday. An edited version of his remarks would be shown on a large screen at the start of the conference. But Harry has much to say that will be left on the cutting room floor, not because it lacks relevance, but because the time for the video is short, and a good portion of it will be devoted to how he became a socialist. Here, then, are Harry’s thoughts on capitalism, imperialism, the United States—and Iraq. (Note: the transcript of the interview was edited in July 2003 under Harry’s supervision to fill in a number of details.) | more…