In the 1920s Andrew Mellon, who served as secretary of the treasury under Presidents Harding, Coolidge, and Hoover (it was sometimes said that they served under him), introduced a series of gargantuan tax cuts culminating in what was known as the Mellon Plan. This consisted of a huge cut in the income tax rates of the rich along with reductions in other taxes paid by the wealthy. High income tax rates, Mellon claimed, “tend to destroy individual initiative and enterprise and seriously impede the development of productive enterprise.” When Mellon’s foes, such as the great Progressive Senator Robert La Follette, declared that Mellon was trying to “let wealth escape” its fair share of taxation, he sought to turn the tables on them by charging that they were engaging in class warfare. “The man who seeks to perpetuate prejudice and class hatred,” the treasury secretary stated, “is doing America an ill service. In attempting to promote or defeat legislation by arraying one class of taxpayers against another, he shows a complete misconception of the principles of equality on which the country was founded” | more…
A key feature of neoliberal economic policies in both poor and rich nations is the mania for the privatization of socially-owned assets and services. The shift from publicly to privately-produced goods and services is designed to phase out public programs and to repudiate governmental responsibility for social welfare. Socially-owned land, infrastructure, and enterprises are to be sold to private investors. Or, in a less direct approach, advocated commonly in the United States, there is partial privatization. Instead of directly producing public services (such as highway construction and education), the state finances their provision either by purchasing the services from private vendors (contracting out), or else by providing vouchers to individuals, agencies, or corporations to purchase the services. Although the two forms of privatization are not the same, privatizers of all stripes have always made it clear that their ultimate goal is to eliminate the base of political support for government spending for social purposes | more…
Jonathan Nitzan and Shimshon Bichler, The Global Political Economy of Israel (London and Sterling, Virginia: Pluto Press, 2002), 407 pages, cloth $75.00, paper $24.95.
One of the characteristics of much academic writing is an obsession with theory at the expense of empirical investigation. It is rare to find a book that combines genuinely novel theoretical exploration with rigorous empirical study, the more so in fields such as political science where abstraction seems to have become the norm. It is for this reason that The Global Political Economy of Israel is such a gripping read. A remarkable investigation into the concrete workings of the Israeli and U.S. economies that avoids the fatuous generalities of much of the globalization literature, it presents a challenging theoretical framework that not only clarifies the past but also seeks to understand the present | more…
Representatives of the established order were unprepared for the mas- sive 1999 demonstrations in Seattle against the World Trade Organziation (WTO) and remain on the defensive in the face of the inter- nationally coordinated actions against neoliberal globalization that have followed. On an ideological level, they have responded by seeking to undermine the legitimacy of antiglobalization activists, especially those in the developed capitalist world, by claiming that these activists oppose the very policies and institutions that are in the best interest of the poor in the third world. One example: the former head of the WTO, Mike Moore, declared that “The people that stand outside and say they work in the interests of the poorest people …they make me want to vomit. Because the poorest people on our planet, they are ones that need us the most.” | more…
John Saul has had an extensive and committed involvement with Southern Africa. His analyses are taken seriously in left circles in South Africa. Sadly, perhaps understandably, his most recent extended visit to this country has left him feeling deeply disappointed (“Cry for the Beloved Country: The Post-Apartheid Denouement,” Monthly Review 52, no. 8, January 2001, pp. 1–51). This sense of disappointment is rooted, I would guess, partly in the intellectual, organizational and even emotional energies that Saul, like many others, invested in the solidarity struggle against apartheid, and in legitimate expectations for a post-apartheid South Africa. There is also, and I want to underline my own empathy with his irritation on this score, a hint of personal hurt: “The most startling thing I personally discovered about the New South Africa is just how easy it has become to find oneself considered an ultraleftist!” (p. 1) This sense of disappointment, even of betrayal, is also present in many progressive circles within South Africa, and indeed among many cadres of our movement. Despite all of this there is, I believe, something seriously off-beam in Saul’s analysis | more…
It is interesting that, on one of the two main fronts of inquiry opened up in my original essay, Jeremy Cronin professes—despite the wounded tone he adopts throughout and for all his talk about my “frozen penultimates,” “sneers,” and “derision”—to be in considerable agreement with me. This concerns my reading of the overall trajectory of socioeconomic policy that the African National Congress (ANC) government has adopted since 1994. As he puts the point, “Saul goes on to argue that the ANC liberation front has erred seriously on two critical fronts—the choice of economic policies, and the relative demobilization of our mass constituency (except during electoral campaigns). I agree with Saul on both counts.” Indeed, he adds, “I agree substantially with the broad analysis of the last twelve years or so in South Africa that Saul makes in his pessimism of the intellect mode,” including, it would appear, my criticisms of the “government’s macroeconomic policy (the Growth Employment and Redistribution framework—GEAR), privatization policies, excessive liberalization measures, the failure to mobilize our mass base, or concerns about the growing bureaucratization and the influence of an emerging black bourgeois stratum on policy” | more…
The growth and eventual bursting of financial bubbles is an inherent feature of capitalist accumulation, as can be seen in the long history of such crises from the South Sea Bubble of the early eighteenth century to the financial blowouts of the present day. In the first half of the summer a dramatic bubble-bursting decline in the U.S. and European stock exchanges wiped out the stock market gains of the previous five years—a period characterized by manic speculation | more…
Most economic theory assumes a pure capitalism of perfect competition. This book is a penetrating critique of the rhetoric and practice of conventional economic theory. It explores how even in the United States—the most capitalist of countries—the market has always been subject to numerous constraints. | more…
Only once we understand the long history of human efforts to draw sustenance from the land can we grasp the nature of the crisis that faces humankind today, as hundreds of millions of people are faced with famine or flight from the land. From Neolithic times through the earliest civilizations of the ancient near East, in savannahs, river valleys and the terraces created by the Incas in the Andean mountains, an increasing range of agricultural techniques have developed in response to very different conditions. These developments are recounted in this book, with detailed attention to the ways in which plants, animals, soil, climate, and society have interacted. | more…
For a long time now, the U.S. economy and the economies of the advanced capitalist world as a whole have been experiencing a slowdown in economic growth relative to the quarter-century following the Second World War. It is true that there have been cyclical upswings and long expansions that have been touted as full-fledged “economic booms” in this period, but the slowdown in the rate of growth of the economy has continued over the decades. Grasping this fact is crucial if one is to understand the continual economic restructuring over the last three decades, the rapidly worsening conditions in much of the underdeveloped world to which the crisis has been exported, and the larger significance of the present cyclical downturn of world capitalism | more…
Historically, monetary crises have been related to hyperinflation, from which Argentina has often suffered. Hyperinflation is generally viewed as a calamity leading to the destruction of the capitalist monetary system of circulation. In the present Argentine crisis, however, there has been a complete implosion of economic and monetary relations due to hyperdeflation. This is the strangulation of the economy by the requirement to pay an unsustainable debt | more…
Against the background of Argentina’s dramatic economic downfall, a meeting was held in January 2002 at the Faculty of Economic Sciences of the University of Buenos Aires. The focus of the meeting was the need to work on alternative proposals to deal with the crisis | more…
