Economics

Truss, Kwarteng and economics

The Truss-Kwarteng policy is not Thatcherism, but Reaganomics. Thatcher and Reagan, early 1980s leaders of what came to smother the world under the name “neoliberalism”, had much in common; but also differences. Orthodox Thatcherites are shocked by Truss and Kwarteng. The chief difference is this: Thatcher was a budget-balancer. She avoided government budget deficits. Such budget-balancing is a standard neoliberal line, though by now even Germany’s official economists, the most rigid on the issue, agree that governments should run temporary budget deficits in sharp slumps. (It’s a myth that...

Inflation and how to counter it

Inflation is high because of the knock-on effects of world gas, oil, and some other prices being pushed up by the Ukraine war. That compounds with supply blockages, some due to China’s Zero-Covid lockdowns. As some spending power pent up during lockdowns is released, and creates some “snowball” of expanding market demand, those factors make it easy for bosses in many sectors to push up prices. The governments’ response is to raise interest rates (tighten credit) and clamp down on wages so as to cool demand. Experience from the 1980s was that (much higher) interest rates then tamed inflation...

Time to lose faith in markets

“Markets may lose faith in the British economy”, said Rishi Sunak on 30 August. He was trying to convince Tory party members to back him for Tory leader against Liz Truss, with her promise of tax cuts. The same argument is used by Tories against conceding real wage rises in the NHS and other public services, and against budget boosts for the NHS and those services to cover unexpected price rises for the inputs they have to buy. Bosses likewise say that if they concede a good wage rises, then “markets” will predict lower profits for them, fewer people and institutions will buy their shares, and...

The USSR's drive for crude growth

Tony Southwell ( Solidarity 605 ) argues that industrial growth in the Stalinist economies was a matter of “conscious decision-making of the bureaucracy... choices”, and so not “organic”. But, as Marx put it, “social existence determines consciousness”. The leading bureaucrats in Stalinist states were not people dropped from the sky who might opt to plan for industrial growth, or just as well as opt to plan to wind back to subsistence agriculture plus growing a few flowers. Their consciousness was shaped and selected by “social existence” organic to the system. International pressures drove...

Marx's Capital volume 1 - 12-session course

Marx's Capital volume 1 - 12-session course Format of each session (which we'll vary slightly from week to week): - Quick outline of the passages of Capital covered, and questions - 15 minutes - Work in "breakout rooms" on discussing selected extracts and comments - 30 minutes - Report-back on that work, and discussion - 20 minutes - Review of discussion points - 25 minutes Running from 3 October 2021 to 3 April 2022, every other Sunday at 18:30-20:00 London time, skipping 28 November and 26 December. Zoomlink: bit.ly/capi-z Eventbrite bit.ly/capi-ebrite The basic reading is Otto Rühle's...

Michel Husson, 1949-2021

The death on 18 July 2021 of Michel Husson means a large loss of light and sparkle in the world of discussion and debate in Marxist economics. Unlike almost anyone else today, or maybe even in history, Husson was equally at home in abstruse "Marxist high theory" debates about value and price, in hypothesising about broad epochal shifts in capital's modes of self-regulation, and in detailed everyday statistical investigations (would a cut in the working week reduce unemployment, how much, under what conditions?) His website hussonet.free.fr made available a wealth of week-by-week Marxist...

Automation will not abolish work

Aaron Benanav’s book Automation and the Future of Work is aimed against what he calls the automation discourse. He defines this as a belief that high levels of technological unemployment will result from the introduction of new technology and that we will soon be faced with a largely automated economy. Such ideas can be found both on the left and right. Benanav rejects both their economic analysis and the political solutions such as Universal Basic Income (UBI) most commonly proposed to deal with the fallout from automation. I welcome Benanav’s riposte to the recent flurry of predictions of a...

Hedge funds drive food price rises

World prices for basic food commodities (grains, soyabeans, vegetable oils) were up 40% in May 2021 on their level in May 2020, and the trend is accelerating. The impact on food prices in shops is high at present in Nigeria and West Africa. It has been low in Britain, Europe, the USA, and China. Food prices are now moderating in India, after about 10% inflation in 2020. Shop food prices depend on processing costs as well as world basic-commodity prices, and those may filter through into shop prices only with delay. Still, the rise in the underlying index is comparable in size to the food...

Bob Sutcliffe 1939-2019

Bob Sutcliffe, a well-known Marxist economist for over fifty years, and at one time a comrade of ours in the Workers’ Socialist League of 1981-84, died on 23 December 2019, aged 80. I last talked with Bob about 10 years ago, when I was seeking interviews and discussions with Marxist economists about the 2007-8 crisis and its aftermath. Bob explained that his health was bad, and he couldn’t contribute, but he was, as ever, friendly, helping me with introductions to other economists. He was then, and had been for some years, working as a university teacher in the Basque country of Spain. When I...

Automation and the working class

According to one account in 2013, 47% of jobs in the USA risk being automated away within “a decade or two”.[1] That prospect has been interpreted as utopia or as dystopia. The near future will be one of networked individuals freed from drudgery by automation, and able easily to get what they want to consume and to undermine all hierarchies. Or: only a techno-elite will retain employment and wages. The rest of us will be reduced to a new pauper class vegetating on “universal basic income” handouts. Further research has queried the projections. Many tasks can be automated, but jobs involve more...

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