Political Economy
François Chesnais has defined three stages in the process of financial globalization. The first took place in the 1970s and he calls it “indirect financial internationalization of closed national systems.” Latin American countries including Brazil took part in this process of attracting a substantial volume of loans. The second stage, 1980-85, started with Paul Volcker’s “dictatorship of creditors” and the discovery by Margaret Thatcher of neoliberalism as the doctrine for the new age. The center countries, starting with the United States and Great Britain, unlocked their financial markets by liberalizing the international flow of capital. The interlinking of national systems became more direct and immediate through market finances. In Latin America, the debt crisis exploded with rising interest rates (following the negative Volcker shock) involving massive debt contracted in the prior period brokered by the banking system | 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…
Since Fernando Collor’s 1989 presidential victory, and most notably since Fernando Henrique Cardoso’s two terms in office (1995-98 and 1999-2002, respectively), economic policies have been enacted in Brazil that represent a subordinate alliance of the country’s dominant classes with international capital. Unfortunately, under President Lula these same sectors have remained in control, and economic policy caters to their interests | more…
Most of Andre Gunder Frank’s early work on the nature of underdevelopment focused on one region: Latin America. Here he broadened his canvas and traced the world-wide effects of the process of capital accumulation from the period just prior to the discovery of America to the industrial and French revolutions. It is Frank’s thesis that “the world has experienced a single all-embracing, albeit unequal and uneven, process of capital accumulation centered in Western Europe,” which has been capitalist for at least two centuries. | more…
Defining moments in the history of a nation are time and again overshadowed by the drama of war. These critical events are often domestic policy decisions that affect the immediate state of a country and have serious consequences for the future. Significant examples in U.S. history include: the initial decision of the revolutionary government to found a republic dedicated to the lofty principles of “life, liberty, and the pursuit of happiness” but embracing slavery, a contradiction that ultimately led to civil war; the decision to prematurely end reconstruction efforts in the South after the Civil War, a policy reversal which allowed the long-term oppression and exploitation of the emancipated slaves and their descendents; and the decision during the Second World War to encourage the mass migration of poor African Americans from the rural South to the industrial centers of the Midwest and Northeast to support the war economy, a haphazard resettlement program that resulted in the ghettoization and continued oppression of a significant national minority | more…
Mainstream, or more formally, neoclassical, economics claims to be a science. But as Michael Perelman makes clear in his latest book, nothing could be further from the truth. While a science must be rooted in material reality, mainstream economics ignores or distorts the most fundamental aspect of this reality: that the vast majority of people must, out of necessity, labor on behalf of others, transformed into nothing but a means to the end of maximum profits for their employers. The nature of the work we do and the conditions under which we do it profoundly shape our lives. And yet, both of these factors are peripheral to mainstream economics. | 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…
Important bloated men squat on the facts
thinking they can hide them with their weight:
men who think their power like King Canute
ordering the sea to behave, can abolish
the eons slow inexorable rise of mountains,
the branching and dying of species, wind
and water that will grind the Himalayas to dust | more…
Fires crackle in the brittle trees
bled dry by drought, the grass,
bleached straw on the dusty hills
where rain no longer falls
in what used to be its season | more…
In his new extensively revised and expanded edition of this book, Samir Amin suggests new approaches to Marxian analysis of the crisis of the late capitalist system of generalized, financialized and globalized oligopolies following on the financial collapse of 2008. Considering that Marx’s Capital, written before the emergence of imperialism as a decisive factor in capitalist accumulation, could provide no explanation for the persistent “underdevelopment” of the countries of the “global South,” Amin advances several important theoretical concepts extending traditional Marxian views of capitalist evolution. | more…
The global economic crisis that closed the first decade of the 21st century has demonstrated that the contradictions of capitalism cannot be overcome. The challenge for socialist analysis is to reveal both the nature of these contradictions in the neo-liberal era of globalized finance, and their consequences in our time. Crises need to be understood as turning points that open up opportunities. How to facilitate this is the sharpest challenge posed to socialists by the most severe global economic crisis since the 1930s. | 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…