Economics

What comes after neoliberalism?

Simon Mohun, an economist who has done much work to analyse recent developments using Marx’s concept of capitalistically-unproductive labour, and emeritus professor of economics at Queen Mary University of London, talked with Martin Thomas. When we talked in 2009 , I said that the financial crisis of 2008 marked the end of neoliberalism. I think I was right about that. I was far too sanguine in thinking that neoliberal economics and neoliberal politics would run on parallel tracks. Politically, there’s been very little difference. But the economic model is bust, and that manifests itself in a...

Solidarity versus squandering

Karl Marx wrote of capitalism “enforcing economy in each individual business”, while “on the other hand, [it] begets, by its anarchical system of competition, the most outrageous squandering of labour-power and of the social means of production, not to mention the creation of a vast number of employments, at present indispensable, but in themselves superfluous”. He further wrote of its “shameful squandering of human labour-power for the most despicable purposes”, notably through overdriving workers by bullying us, atomising us, and setting us to compete against each other. Capitalism promotes...

The “iron cages” of capitalism

Andrew Gamble titled his book on Friedrich Hayek The Iron Cage of Liberty . Hayek (1889-1992) was a theorist of ruthlessly free-market capitalism, influential with Thatcher. The “iron cage” image came from Max Weber : “Fate decreed that the cloak… [of] care for external goods… should become an iron cage... Since asceticism undertook to remodel the world and to work out its ideals in the world, material goods have gained an increasing and finally an inexorable power over the lives of men as at no previous period in history. Today... victorious capitalism, since it rests on mechanical...

Kino Eye: The labour theory of value on film

Which Hollywood film elucidates the labour theory of value? I’m no economist and no doubt someone could punch holes in the explanation, but it can be found in John Huston’s The Treasure of the Sierra Madre (1948). Two Americans in Mexico, Fred Dobbs (Humphrey Bogart) and Bob Curtin (Tim Holt) turn their hand to gold prospecting, assisted by a cantankerous veteran gold miner, Howard (Huston’s father, Walter). The trio go through various trials and tribulations and eventually find gold, although their encounter with a group of bandits puts their success in jeopardy. Sitting around their campfire...

The economics of inflation

Neither Marxist nor orthodox (bourgeois) economic theory has a good fix on price inflation, its causes and cures. This sketchy article will not remedy that lack, but it may help interpret debates and arguments on the issue. In the Transitional Programme of 1938 Trotsky wrote: "Neither monetary inflation nor stabilisation can serve as slogans for the proletariat... Against a bounding rise in prices... one can fight only under the slogan of a sliding scale of wages. This means that collective agreements should assure an automatic rise in wages in relation to the increase in price of consumer...

Behind the £30 billion cuts

Thirty-odd billion pounds of cuts are trailed for 17 November. The Tories plan to “repair” economic life by deliberately running down the public services and public investment which underpin it, and by deliberately further pauperising people who depend on state benefits. This upside-down economics come from economic life being ruled by markets rather than collective conscious human decision. In a capitalist market economy, as Karl Marx wrote, “the relations connecting the labour of one individual with that of the rest appear, not as direct social relations between people at work, but as what...

Worker power can defy “the markets”

The Tories will say that their cuts coming on 17 November, and their hard line against public sector wage rises, are unavoidable adjustments to “market realities”. Almost the whole political spectrum, apart from working-class socialists, agrees. After the Truss-Kwarteng experiment in maverick “Reaganite” bourgeois economics, which lasted only two weeks after the “mini-budget” of 23 September before starting to collapse, all the economists say that tax rises and cuts are no less unavoidable than heating your house or wearing warm clothes if you want to stay healthy in cold weather. The writers...

Tory fiasco raises the stakes

The Tory party melée may now subside a bit, with Rishi Sunak nodded in as the new prime minister on 24 October. But it has triggered an economic crisis. It has taken the lid off a swirl of dispute in the Tory party. And it has raised the stakes for the labour movement. The usual pattern of capitalist crises is that debt builds up in a boom, with easy credit and speculative ventures, then a jolt reveals that many debtors are unlikely to pay, and collapse snowballs. Not through a boom, but through the Covid lockdowns, government debt has increased hugely since early 2020, corporate debt mildly...

Capitalism: a new crisis

A slump is coming. There will be an economic “crisis”, not just in the sense of bad times, but in the more precise sense of a wave of collapses, failures, unemployment. It will come together with high inflation and social cuts. It may be mild or it may be sharp. Maybe it will be mild enough to be just a slowdown, rather than a crisis, but that looks less and less likely. The signs are bad worldwide, and worse in the UK. The price inflation which many central banks, early this year, thought might be a temporary result of supply blockages, is now well “embedded”. Central banks are increasing...

Socialism vs Trussonomics

Liz Truss’s rant about “growth” and “aspiration” rings hollow as British capitalism wallows in turmoil. Even at best, it only reproduces in crass form an old story of the capitalist class, which tells workers to turn to cooperation with the bosses to expand the whole “cake” of capitalist production. The benefits from that “growth” will trickle down to us, and we’ll end up better than if we quarrel with the bosses about the size of our “slice”, or indulge in “envy” of their riches. For capitalists, indeed, “growth” is the ultimate: sheer accumulation. As Marx put it: “Accumulate, accumulate...

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