Economics

Prosperity for the few, stagnation for the many

Right-wingers are trumpeting the claimed prosperity of the US economy since Trump’s election, and of the British economy after Brexit. A closer look shows the prosperity as very partial. Stock market prices in the USA have risen strongly since November 2016, though no more than their general rising trend since they hit bottom in March 2009. The slice of corporate profits in total US income is as high as it was at its pre-2008 peak, which in turn was the highest since 1965. Unemployment in the USA continues to fall towards 4% from its 10% peak in 2009.Its workforce participation has also been...

Reverse the rise in inequality!

The Resolution Foundation, a statistical think-tank, reported in March on the economic prospects if the Tories win on 8 June. "If nothing is done to change [the] outlook... [2015-20] will go down as being the worst [period] on record for income growth in the bottom half of the income distribution. "It will also represent the biggest rise in inequality since the end of the 1980s". The toxic mix comes from low wage growth — which the government's own Office for Budgetary Responsibility predicts — and a great wave of pre-programmed cuts in working-age welfare benefits. The percentage of children...

Trump and neoliberalism

“Neoliberalism as a set of principles rules undivided across the globe: the most successful ideology in world history”, declared the left-wing historian Perry Anderson in 2000. With Trump, we see both a strand of neoliberalism, pushed on a scale which threatens to break up neoliberalism “from the inside”, but in a reactionary way; and a strand of real revolt against neoliberalism, expressed again in a reactionary way. Large sections of the neoliberal bourgeoisie are genuinely alarmed by Trump. Yet we have already seen many orthodox neoliberals adapt to Trump’s power. Theresa May is only one...

Trump’s “America First” means workers last

Perhaps it’s foolish to take anything Donald Trump says as an articulation of core principles or beliefs. But this passage from his inaugural address hit many like a bolt of lightning: From this day forward, a new vision will govern our land. From this moment on, it’s going to be America First. Every decision on trade, on taxes, on immigration, on foreign affairs, will be made to benefit American workers and American families. We must protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs. Protection will lead to great...

Socialist ideas can beat Trump

Donald Trump, who becomes US president on 20 January, threatens to push the USA, and maybe more of the world, back decades on women’s rights, ethnic minority rights, migrant rights, and civil liberties. He threatens to batter and marginalise the long-beleaguered US trade-union movement. With his swagger and desire to throw the USA’s weight around, he threatens to set off a surge of trade wars and maybe shooting wars. Even the most moderate liberals are horrified. But a bland, moderate, liberal defence of the status quo will not defeat Trump and the other politicians of his type, Le Pen and...

The economic consequences of Donald Trump

Newly-elected US president Trump will surely hack back migrants', workers', women's, and civil rights; speed environmental destruction; and raise risks of war, especially with Iran. He may also disrupt the large trends which have allowed capitalist growth for 60-plus years. A trade-liberalising, world-market-boosting trend, embedded in institutions keystoned by the USA, was launched in 1947 and has emerged from five major convulsions since then strengthened or intact. It survived the US dollar's breaking of its link with gold, in 1971, and the crises of the 1970s: in fact, global financial...

Bankers’ greed brings us down

“For questions about the survival of big European banks to be swirling almost ten years after the financial crisis started is utterly damning”, writes the big business magazine The Economist. Questions are indeed swirling. On 26 October, the Bank of England asked British banks to say how much they are owed by Germany’s huge Deutsche Bank and Italy’s oldest bank, MPS, in case those banks prove unable to pay. Deutsche Bank’s share price has fallen by over 50% this year. The stock markets value this giant of international banking at less than Snapchat, a social-media business with a few hundred...

The pound and the Marmite crisis

It’s often thought bad in Marxist publications to write articles on the theme “we don’t know”, but that is what I have to do about the falling pound. The exchange rate of the pound against other major currencies has fallen 17% since the Brexit vote on 23 June, and has recently had a further sudden lurch downwards. The inflation rate is ticking up a bit. Marmite is disappearing from the shelves at Tesco because its producer demanded a price rise to compensate for the falling exchange rate. These trends could swell into dramas. The fall of the pound could spiral as speculators, seeing it sag...

No hard Brexit

Loud voices among the Tories are pushing for a “hard Brexit”. They want to slam the door on migrants from Europe and make things difficult for migrant workers already here. The Tories are divided. Most of big business want to stay in the EU’s “single market”, so that they do not face tariffs or complicated juggling with forms and regulation when trading with the EU. They want to keep “passporting” rights for UK-based banks to trade across the EU. They know they won’t get that without continuing freedom of movement for workers, but they don’t mind that, or they positively welcome a bigger pool...

The world of neoliberalism, three years on

Three years ago, we surveyed “the world of neoliberalism” as it had emerged from the 2008 financial crash and the acute phase in 2010-12 of the eurozone government-debt crisis. Many patterns have continued since 2013. Overall economic growth has been slow by historical standards, even slower by comparison with the rates expected in recovery from a big slump. Of the global growth, the bulk, 63% in 2015-6, has been in China and India, and the Chinese growth figures are dubious. Output per worker-hour in the USA has stagnated, rising at only 0.4% a year between late 2010 and 2016. Real median...

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