[Marxism-Thaxis] As capitalism stares into the abyss, was Marx right all along? ( Yes)
Does a bear s___ in the woods ? ^^ Stephen King: As capitalism stares into the abyss, was Marx right all along? We may avoid a 1930s Depression but the best we can hope for may be a 1990s Japan Monday, 2 March 2009 http://us.mg204.mail.yahoo.com/dc/launch?.partner=sbc.rand=c27i56kobk3ja Modern bourgeois society ... a society that has conjured up such gigantic means of production and of exchange, is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells. Those of you with revolutionary zeal will immediately recognise these words. Penned by Karl Marx in 1848, they form part of the Communist Manifesto. Marx, like Adam Smith before him, had a historical view of society's development. Capitalism, with its bourgeoisie, had replaced feudalism, but capitalism, according to Marx, would be replaced by communism. Capitalism was inherently unstable, as Marx noted later in the same paragraph: .the commercial crises... by their periodical return, put the existence of the entire bourgeois society on its trial, each time more threateningly. In these crises, a great part not only of the existing products, but also of the previously created productive forces, are periodically destroyed. In these crises, there breaks out an epidemic that, in all earlier epochs, would have seemed an absurdity – the epidemic of over-production. Whatever else one thinks of Marx, he certainly knew a thing or two about the business cycle. Were he alive now, he would surely claim his theories were being vindicated. We are, after all, witnessing the most remarkable collapse in economic activity around the world. Take Japan. In November, industrial production fell 8 per cent. That was bad enough. In December, production dropped another 9 per cent. That was even more remarkable. January's production figures, though, are simply eye-wateringly awful, showing a further 10 per cent decline. Production, then, is down almost 30 per cent in just three months, a pace of decline unprecedented in Japanese post-war economic history. Or how about the US, where we discovered last week that national income contracted in the final quarter of last year at an annual rate of more than 6 per cent, the biggest drop since the early 1980s. Then there's Taiwan, where exports have been in freefall in recent months. Not to mention dear old Blighty, where the economy might end up shrinking by approaching 4 per cent this year. The pace of decline in global economic output is extraordinary. On virtually any metric, we are seeing the worst global downturn in decades: worse than the aftermath of the first oil shock in the mid-1970s and worse than the early-1980s downswing, when the world economy had to cope with a doubling of the oil price, the tough love of monetarism and the onset of the Latin American debt crisis. Moreover, this time we cannot use the resurgence of inflation as an excuse for lost output: the credit crunch in all its many guises has seen to that. Instead, we have a world of collapsing output combined with falling prices: a world, then, of depression. For many years, Marxist ideas appeared to be totally irrelevant. The collapse of the Berlin Wall in 1989 brought to an end the era of Marxist-Leninist Communism, while China's decision to join the modern world at the beginning of the 1980s drew a line under its earlier Maoist ideology. In western economies, Marxist ideas were at their most potent after the First Word War when the likes of Rosa Luxemburg could smell revol-ution in the air and as the Roaring Twenties gave way to the Great Depression of the 1930s. I'm not suggesting we're entering revolutionary times. However, it seems increasingly likely that the economic landscape in the years ahead will be fundamentally different from the landscape that has dominated the working lives of people like me who entered the workforce in the 1980s. We've lived through decades of plenty, where incomes have risen rapidly, where credit has been all too easily available and where recessions have been mostly modest affairs. Suddenly, we're facing a collapse in activity on a truly Marxist scale. It's difficult to imagine the world's love affair with free markets being sustained under this onslaught. The extreme nature of this downswing will change our lives for decades to come. The first change relates to the allocation of capital. Increasingly, policymakers are accepting that market forces, left to their own devices, will lead to a race to the bottom. The dangers are becoming greater by the day. Interest rates are close to zero while prices and wages are in danger of declining. If deflation takes hold, real interest rates on cash will start to rise, creating perverse incentives in capital markets. Why bother to buy equities or corporate bonds if you are nicely rewarded for hanging on to an entirely risk-free piece of paper? The
[Marxism-Thaxis] The US Financial System is Effectively Insolvent
Meaning , what ? Its firms can't pay their debts ? depression = stag-deflation CB The US Financial System is Effectively Insolvent by Nouriel Roubini Forbes.com (March 05 2009) For those who argue that the rate of growth of economic activity is turning positive - that economies are contracting but at a slower rate than in the fourth quarter of 2008 - the latest data don't confirm this relative optimism. In 2008's fourth quarter, gross domestic product fell by about six percent in the US, six percent in the euro zone, eight percent in Germany, twelve percent in Japan, sixteen percent in Singapore and twenty percent in South Korea. So things are even more awful in Europe and Asia than in the US. There is, in fact, a rising risk of a global L-shaped depression that would be even worse than the current, painful U-shaped global recession. Here's why: First, note that most indicators suggest that the second derivative of economic activity is still sharply negative in Europe and Japan and close to negative in the US and China. Some signals that the second derivative was turning positive for the US and China turned out to be fake starts. For the US, the Empire State and Philly Fed indexes of manufacturing are still in free fall; initial claims for unemployment benefits are up to scary levels, suggesting accelerating job losses; and January's sales increase is a fluke - more of a rebound from a very depressed December, after aggressive post-holiday sales, than a sustainable recovery. For China, the growth of credit is only driven by firms borrowing cheap to invest in higher-returning deposits, not to invest, and steel prices in China have resumed their sharp fall. The more scary data are those for trade flows in Asia, with exports falling by about forty to fifty percent in Japan, Taiwan and Korea. Even correcting for the effect of the Chinese New Year, exports and imports are sharply down in China, with imports falling (minus forty percent) more than exports. This is a scary signal, as Chinese imports are mostly raw materials and intermediate inputs. So while Chinese exports have fallen so far less than in the rest of Asia, they may fall much more sharply in the months ahead, as signaled by the free fall in imports. With economic activity contracting in 2009's first quarter at the same rate as in 2008's fourth quarter, a nasty U-shaped recession could turn into a more severe L-shaped near-depression (or stag-deflation). The scale and speed of synchronized global economic contraction is really unprecedented (at least since the Great Depression), with a free fall of GDP, income, consumption, industrial production, employment, exports, imports, residential investment and, more ominously, capital expenditures around the world. And now many emerging-market economies are on the verge of a fully fledged financial crisis, starting with emerging Europe. Fiscal and monetary stimulus is becoming more aggressive in the US and China, and less so in the euro zone and Japan, where policymakers are frozen and behind the curve. But such stimulus is unlikely to lead to a sustained economic recovery. Monetary easing - even unorthodox - is like pushing on a string when (1) the problems of the economy are of insolvency/credit rather than just illiquidity; (2) there is a global glut of capacity (housing, autos and consumer durables and massive excess capacity, because of years of overinvestment by China, Asia and other emerging markets), while strapped firms and households don't react to lower interest rates, as it takes years to work out this glut; (3) deflation keeps real policy rates high and rising while nominal policy rates are close to zero; and (4) high yield spreads are still 2,000 basis points relative to safe Treasuries in spite of zero policy rates. Fiscal policy in the US and China also has its limits. Of the $800 billion of the US fiscal stimulus, only $200 billion will be spent in 2009, with most of it being backloaded to 2010 and later. And of this $200 billion, half is tax cuts that will be mostly saved rather than spent, as households are worried about jobs and paying their credit card and mortgage bills. (Of last year's $100 billion tax cut, only thirty percent was spent and the rest saved.) Thus, given the collapse of five out of six components of aggregate demand (consumption, residential investment, capital expenditure in the corporate sector, business inventories and exports), the stimulus from government spending will be puny this year. Chinese fiscal stimulus will also provide much less bang for the headline buck ($480 billion). For one thing, you have an economy radically dependent on trade: a trade surplus of twelve percent of GDP, exports above forty percent of GDP, and most investment (that is almost fifty percent of GDP) going to the production of more capacity/machinery to produce more exportable goods. The rest of
[Marxism-Thaxis] FW: Fianna Fail's strategy
The following is my opinion: The Fianna Fail party has a strategy. It is my opinion that Brian Cowan, as Taoiseach, is being increasingly viewed by the Fianna Fail Party as a transitory leader of the Party. The Party will sacrifice him to save its skin. He will be saddled, so it hopes, with all the blame concerning the harsh decisions that are currently being made by the Fianna Fail led government. Consequently, in true Stalinist fashion, he will be eventually sacrificed to the masses to save the Party. When he has done the dirty work he will be shouldered with the blame for Fianna Fail's lack of popularity. He will then be replaced by a new and shining leader. Since many of the nasty decisions will have already been taken by Cowan, the new leader will appear as free from such blame --a smiling and kinder figure -a people's person. It is hoped in this way that any popular support lost by the party will be recovered as a result of the election of its new leader. The mass media will give her/him the customary honeymoon period. In this way it is hoped that the party will win the next general election. Fianna Fail hopes to be able to claim too that it saved the nation from collapse under very adverse global economic conditions. In this way Cowan, as a figure from Greek tragedy, will have fallen on his own sword. The Party, by distancing itself from Brian Cowan, will have saved the day by exclusively holding Cowan responsible for having imposed harsh policies on the working class. There is no better party than Fianna Fail to successfully appeal to patriotism as a device for rallying the Irish people behind it. Paddy Hackett htttp:\\patrickhackett.blogspot.com ___ Marxism-Thaxis mailing list Marxism-Thaxis@lists.econ.utah.edu To change your options or unsubscribe go to: http://lists.econ.utah.edu/mailman/listinfo/marxism-thaxis
[Marxism-Thaxis] Stirner, Feurbach, Marx and the Young Hegelians - David McLellan
Stirner, Feurbach, Marx and the Young Hegelians - David McLellan Submitted by Ret Marut on Feb 27 2009 http://libcom.org/history/stirner-feurbach-marx-young-hegelians-david-mclellan A summary of Stirner's ideas and their strong impact on his fellow Young Hegelians. McLellan asserts that Stirner's influence on Marx has been under-estimated and that he played a very important role in the development of Marx's thought by detaching him from the influence of Feuerbach, his static materialism and his abstract humanism. Stirner's critique of communism (which Marx considered a caricature) also obliged Marx to refine his own definition. Stirner's concept of the creative ego is also said to have influenced Marx's concept of praxis. Source; originally a chapter in The Young Hegelians and Karl Marx; David McLellan, MacMillan Press, UK, 1980. ^^ CB; Praxis is defined in the First Thesis on Feuerbach in which Marx activates the subject -ego. I The chief defect of all hitherto existing materialism – that of Feuerbach included – is that the thing, reality, sensuousness, is conceived only in the form of the object or of contemplation, but not as sensuous human activity, practice, not subjectively. Hence, in contradistinction to materialism, the active side was developed abstractly by idealism – which, of course, does not know real, sensuous activity as such. Feuerbach wants sensuous objects, really distinct from the thought objects, but he does not conceive human activity itself as objective activity. Hence, in The Essence of Christianity, he regards the theoretical attitude as the only genuinely human attitude, while practice is conceived and fixed only in its dirty-judaical manifestation. Hence he does not grasp the significance of “revolutionary”, of “practical-critical”, activity. ___ Marxism-Thaxis mailing list Marxism-Thaxis@lists.econ.utah.edu To change your options or unsubscribe go to: http://lists.econ.utah.edu/mailman/listinfo/marxism-thaxis
[Marxism-Thaxis] Fictitious capital and the transition out of capitalism - Loren Goldner
Subject: Fictitious capital and the transition out of capitalism - Loren Goldner Fictitious capital and the transition out of capitalism - Loren Goldner Submitted by libcom on Nov 17 2005 An exploration of the growing fictitious dimension of the economy and its implications for class struggle. This text is from theBreak Their Haughty Power web site at http://home.earthlink.net/~lrgoldner Fictitious Capital and the Transition Out of Capitalism (Loren Goldner) The following is a thought experiment which attempts to see fictitious capital in relation to the end of capitalism. By pursuing the concept of fictitious capital as far as we can, by illuminating the unbelievable distortions it has fomented in what is called economic development on a world scale, we can highlight the nature of contemporary struggles as well as explain why there are not more struggles. We can also address the reasons why a society beyond capitalism seems such a remote possibility at present. In discussing fictitious capital, we must never forget that it is subordinate to, and derivative from, capital generally. It is important not to foment the illusion that the struggle is against fictitious capital, leaving real capital itself unexamined. But at the same time, it is indispensable to sort out the fictitious dimension of the contemporary economy, if only conceptually. Many people today, including people on the radical left, regard contemporary capitalism as functioning normally, more or less the way it always has. I could not disagree more. Perhaps, as contemporary ideologies assert, capitalism has reinvented or is reinventing itself, as it has done several times in the past. Be that as it may, the post-1973 period presents one of the strangest, if not the strangest phases in the history of capitalism. What, then, is fictitious capital? Fictitious capital is, on first approach, paper claims on wealth (in the form of profit, interest and ground rent) in excess of the total available surplus value, plus available loot from primitive accumulation. There is $33 trillion in outstanding debt (Federal, state, local, corporate, personal) in the U.S. economy, three times GDP. (No one knows how much is tied up in the international hedge funds and derivatives.) The state (including Federal, state and local levels) consumes 40% of GDP. The net U.S. debt abroad is $3 trillion ($11 trillion held by foreigners minus $8 trillion in U.S. assets abroad) That amount is growing by $500 billion a year at current rates. Foreigners hold an increasing percent of U.S. government debt; the four major Asian central banks (Japan, China, South Korea, Taiwan) alone hold over $1 trillion. It is the Federal government's debt which makes possible the reflationary actions of the Federal Reserve Bank. If Doug Noland's notion of financial arbitrage capitalism is right, the old conceptualization of the role of the banking system and the Fed's (apparent) ability to expand and contract credit availability through it, is superceded; increasing amounts of virtual credit are created by securitized finance independent of banks. One must also consider the government-linked entities (Freddie Mac, Fannie Mae), which backed the reflation of mortgages of the past 4 years, leading to an incredible housing bubble. This entire edifice depends on 1) low inflation in the U.S., as higher inflation would scare off foreign lenders; 2) the willingness of U.S, consumers to go more and more heavily into debt (with debt service now taking 14% of incomes, as opposed to 11% a few years ago) 3) the willingness and ability of foreigners to go on re-lending U.S. balance-of-payments deficits back to the U.S. Let's shift to another level altogether: the extent of unproductive labor and unproductive consumption in the U.S. economy. Marx defines the state debt as fictitious; he defines labor performed for revenue (as opposed to capital) as unproductive. Many Marxists would agree that military expenditure performed for the revenue of the state is unproductive labor, even if it produces a profit for an individual capitalist. One can extend that paradigm, I think, much farther in terms of other goods and services commanded by state revenue, and/or the fictitious capital of the state debt. To be productively consumed, surplus-value that is concretely means of production (Dept. I) or means of consumption (Dept. II) must RETURN to C or V for further expanded reproduction; by that criterion, it would seem that unproductive consumption in the U.S. economy must be enormous. Now perhaps for the most controversial point: what do individual reported corporate profits mean in such a situation? Do they really correspond to a proportional amount of surplus-value? The amount of profit from interest and ground rent relative to profit from manufacture grows every year. Even within profit of manufacture, what does this mean when companies like
