Economics

Point-scoring and addled advice

Right-wing Labour MPs John Mann, Chris Leslie, and Mike Gapes have rushed to the internet, TV, and the press to score points against Shadow Chancellor John McDonnell. McDonnell said just before Labour Party conference that Labour would vote for the Tories' "fiscal charter", on the grounds that it has so many loopholes for running deficits that it carries little weight, and voting against it would help the Tories brand Labour as over-spenders. On Monday 12 October McDonnell, rightly we think, reversed his position and said Labour would vote against the "charter". Mann, of all people, is now...

China: the crash and the workers

The bill for the Chinese government’s gaudy response to the global crash of 2008 is now falling due. Then, the government promoted the biggest surge of investment in roads, bridges, railways, and buildings ever seen in world history. China has built a high-speed rail network bigger than all the rest of the world’s high-speed rail put together in just the few years since 2007. As with capitalist investment booms generally, the flipside was a rise of debt held in expectation of the returns from the investment once completed. Total debt in the Chinese economy­­­ has soared since 2008, and is now...

Corbyn: “economically illiterate”?

To judge by what you hear from the camps of the other candidates for Labour leader, or the media you might believe that Corbyn's economic policy could only be implemented by a storming of the Westminster Palace with a troop of Red Guards. That is far from the truth. Corbyn's proposals for renationalisation of the rail network and a gradual takeover of the private energy corporations are classified as “old policies” by Corbyn's opponents who attempt to portray them as unpopular. These policies would indeed have been mainstream in the 60s, 70s and 80s, prior to pro-market policies of the Tories...

New centres of capital

As of 2014, “developing Asia” — China, Singapore, South Korea, Malaysia, Taiwan, and other countries — became a bigger exporter of foreign direct investment than North America (the US and Canada) or the whole of Europe. The United Nations agency which monitors such things, UNCTAD, reports that “developing economies” produced 36% of all foreign direct investment in 2014, up from less than 10% as recently as 2003 (UNCTAD World Investment Report 2015). The shift is not a blip, or a sudden and temporary development due to economic difficulties in the USA and Europe. It is the latest step in a...

The hinterland of the contemporary left

This book presents six occasional essays in which the American novelist Benjamin Kunkel gives an account of recent work by contemporary thinkers of the left. In an autobiographical introduction, Kunkel declares his support for “replacing a capitalism bent on social polarisation, the hollowing out of democracy, and eco-ruin with another, better order... marked by public ownership of important economic and financial institutions... and by social equality”. In Kunkel’s view the left has been intellectually disorientated for a generation. It appears uncertain about how best to analyse contemporary...

The hegemony of neoliberalism

Friedrich Hayek Review of Philip Mirowski: Never let a serious crisis go to waste: how neoliberalism survived the financial meltdown (Verso, 2013) Philip Mirowski addresses the left, very broadly defined — “people who have taken it as a fundamental premise that current market structures can and should be subordinate to political projects for human improvement” — but with “a simple message: Know Your Enemy before you start daydreaming of a better world”. He dismisses most already-circulating “better world” schemes as helpless against the dominance of neoliberalism. He quotes Paul Krugman — “I...

A workers’ government will seize the banks

It wasn’t the stars, or geology. It wasn’t ocean currents, or the weather. The world economy was brought crashing down in 2008 by the particular way we have allowed it to be organised. It was brought down by being organised around the priority of maximum competitive greed and gain of a small exploiting minority. From the early 1980s to 2008, world capitalism became more and more governed by the drive for quick, fluid gains, measured and coordinated through an increasingly complex and fast-flowing system of world financial markets. Ever more elaborate forms of credit were packaged and traded...

Orthodox economists think Osborne is wrong

The Centre for Macroeconomics asked professional economists - almost all orthodox, mainstream people - whether "the austerity policies of the coalition government have had a positive effect on employment and GDP in the UK?". This was the result: Ignoring those who sat on the fence, 19% thought the policies had had a positive effect, and 81% disagreed. The Labour leadership could roundly oppose cuts without even having to step outside the mainstream of informed bourgeois opinion. And yet it is so terrified of the right-wing press denouncing it, and accusing it of being (horror of horrors) not...

Basic Income: a get-rich-quick scheme?

The Universal Basic Income, or UBI, has become a popular demand on the left, but even among some right-wingers as well. UBI is a proposal for the state to give everyone a set amount of money, irrespective of where you live and your employment status. The practical specifics of the proposal varies e.g. from what age it is paid, and how it would be funded. And its propoponents differ over what kind of payment it is: is it in place of waged work, is it a wage supplement, is it a new kind of benefit? And over what is its social purpose: is it a useful reform in capitalist society, designed tackle...

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