The crisis of bourgeois economics

User avatar
blindpig
Posts: 10589
Joined: Fri Jul 14, 2017 5:44 pm
Location: Turtle Island
Contact:

Re: The crisis of bourgeois economics

Post by blindpig » Sun Dec 06, 2020 3:11 pm

Modern monetary theory
06.12.2020
Part 1: Chartalism and Marx

Michael Roberts is a renowned contemporary expert on Marxist political economy, author of several books and articles on the crises of capitalism. In his article, he examines modern monetary theory, a trend of economic thought that is gaining popularity among the left, including in Russia . - Ed .

Image

Modern monetary theory (MMT) has gained popularity among leftist economic views in recent years. New Left Democratic spokeswoman Alexandria Ocasio-Cortez , her supporter and leading advocate, recently openly discussed the SDT and its political significance with Labor left-wing economic and financial opinion leader John McDonnell .

Image Image

SDT began to occupy such a place in the left environment, since it offers a theoretical justification for the policy of budget spending financed by central bank money, as well as increasing the budget deficit and public debt without fear of crises - and thus supports the policy of public spending on infrastructure projects, creating jobs and industry in stark contrast to neoliberal mainstream policies of austerity and minimal government intervention.

In this and a number of subsequent articles, I offer my view on the value of the SDT and the political conclusions from it for the labor movement.

First of all, I will try to provide a general description of the SDT in order to identify its similarities and differences with Marx's monetary theory.

So, SDT is based on ideas called Chartalism. Georg Friedrich Knapp , a German economist, introduced the term "Chartalism" into his state theory of money, which was published in German in 1905 and translated into English in 1924. The name comes from the Latin charta , meaning "coupon" or "ticket". Chartalism argues that money emerged from the government's efforts to manage economic activity, not as a spontaneous solution to barter problems or a means to denote debt.

Image
Georg Friedrich Knapp

Chartalism argues that generalized commodity exchange historically emerged only after the state was able to create the need to use its sovereign currency by taxing the population. For the chartalist, the ability of money to act as a unit of credit / debt accounting is fundamentally dependent on trust in the sovereign, or on the sovereign's ability to impose its will on the population. The use of money as a unit of account for debt / credit predates the emergence of an economy based on generalized commodity exchange. Thus, Chartalism argues that money first emerged as a means of accounting from debt, not exchange. Keynes was a very big fan of Chartalism, but the latter is clearly the opposite of Marx's views that money is analytically incomprehensible without an understanding of commodity exchange.

Image
John Maynard Keynes

Could Chartalist / Modern Monetary Theory (MCT) and Marxist Theory of Money be compatible or complementary, or is one of them wrong? My short answers are as follows:

money precedes capitalism, but not because of the state;
yes, the state can create money, but it does not control its price, so that confidence in its currency can disappear;
the strict chartist position is incompatible with the Marxist theory of money, but the SDT has some aspects that complement Marxism.
Let me now try to expand on these arguments.

Modern money theory and the Marxist theory of money complement each other in the sense that both are endogenous theories of money. They both reject the quantitative theory of money, namely that inflation or deflation depends on the decisions of central banks to pump up the money supply with credit or not. On the contrary, it is the demand for money that drives the supply: i.e. banks issue loans, and as a result, deposits and debts are created to finance loans, and not vice versa. In this sense, both the SDT and the Marxist theory recognize that money is not a veil over the real economy, but the modern (capitalist) economy is monetary through and through.

Both Marx and MMT advocates agree that the so-called quantitative theory of money, as outlined in the past by Chicago School economist Milton Friedman and others, that dominated government policy in the early 1980s, is incorrect. Governments and central banks cannot soften the ups and downs of capitalism by trying to control the money supply. A gloomy report on current quantitative easing (QE) programs adopted by major central banks in an attempt to stimulate the economy confirms this. Central bank balance sheets have skyrocketed since the crisis in 2008, but bank lending has not increased, nor has real GDP growth.

Image
Milton Friedman

But the Marxist theory of money has an important difference from SDT. Capitalism is a money economy. Capitalists start with money capital and invest it in production and commodity capital, which, in turn, through the use of labor (and its exploitation), ultimately brings new value, which is embodied in an increase in money capital. Thus, the demand for money drives the demand for credit. Banks create money or credit as part of this process of capitalist accumulation, but not as something that separates finance capital from capitalist production. SDT / Chartalists claim that the demand for money is driven by " animal spirits»Individual agents (Keynesianism) or a state in need of credit (Chartalism). On the contrary, the Marxist theory of money holds that the demand for money, and therefore its price, is ultimately determined by the rate of capital accumulation and capitalist consumption.

Image
Capital accumulation

Theory and history of money
This shows the basic contradiction between modern monetary theory, its chartist origins and the Marxist theory of money. Marx's theory of money is specific to capitalism as a mode of production, while SDT and Chartalism are ahistorical. For Marx under capitalism, money is a representation of value and therefore of surplus value. In the scheme "M - C ... P ... C '- M'" [money] M can be exchanged with [commodity] T because M represents C and M 'represents C'. Money could not have made exchange possible if the capacity for exchange was not already inherent in commodity production, if it were not a representation of socially necessary abstract labor and, therefore, value. In this sense, money does not arise in the course of exchange, but are the monetary expression of exchange value or socially necessary labor time.

Marx's theory analyzes the functions of money in the capitalist commodity economy. This is a historically specific theory, not a general theory of money throughout history or a theory of money in pre-capitalist economies. So, if it were true that money appeared for the first time in history as a unit of accounting for taxes and payments on debts (as the Chartists and Keynes argue), this would not contradict Marx's theory of money in capitalism.

Image
David Graeber

Anyway, I have significant doubts that historically the government debt was the cause of money (I will return to this in a future post). David Graeber , an anarchist anthropologist, seems to make this point in his book Debt. The first 5000 years of history ”, although it doesn't fit very well for me. Marx argues that money arises naturally as commodity production is generalized. The state simply approves the monetary form, but it does not invent it. Indeed, I think that Greber's quote from Locke in his book summarizes this argument well:

"According to Locke, it will no longer be worth the price of a small silver coin to be called a shilling, just as a short man will not grow taller if it is announced that from now on it is fifteen inches away."

In a classic assertion of Chartalism, Knapp argued that states have historically designated a unit of account and, by requiring taxes to be paid in a particular form, ensured that that form would circulate as a means of payment. Each taxpayer would have to get his hands on a sufficient amount of arbitrarily determined money and thus would be involved in money exchange. Joseph Schumpeter refuted this approach, saying:

“If Knapp simply said that the state can declare any object (receipt, ticket or token) legal tender, and added that from proclaiming this fact, or even proclaiming the fact that a certain payment token or ticket will be accepted for tax purposes, it is still far from giving any value to this payment sign or ticket, then this would be true, but rather trite. If he said that such an action by the state determines the value of this payment token or ticket, it would be an interesting, but erroneous statement ”[History of Economic Analysis, 1954].

Image
Joseph Alois Schumpeter

In other words, Chartalism is either trivial and true OR interesting and incorrect.

Money as a commodity or out of thin air
Marx argued that money in capitalism fulfills three main functions: as a measure of value, as a medium of exchange, and "money as money", which includes payments on debts. The function of the measure of value derives from Marx's labor theory of value, and this is the main difference from the Chartalists / SDTs, who (as far as I can tell) have no theory of value at all and therefore no theory of surplus value.

As a result, for SDT adherents, value is ignored due to the primacy of money in social and economic relations. Let's take this explanation of one of the supporters of the SDT of her relationship to Marx's theory of value:

“Money is not just an 'expression' or 'representation' of aggregate private value creation. Instead, the SDT assumes that the monetary fiscal framework and the macroeconomic cascade together actualize a common material horizon of production and distribution ... Like Marxism, SDT justifies value in building and maintaining a collective material reality. Accordingly, she rejects neoclassical utility theory, which associates value with the play of individual preference. The only thing, unlike Marxism, SDT argues that the production of value is conditioned by the abstract fiscal power of money and the hierarchy of intermediation that it supports. SDT does not at all reject the physical force of gravity in our reality. Rather

If you are able to understand this scholastic jargon, I think you can understand it to mean that MMT differs from Marx's theory of money in that it claims that money is not tied to any law of value that attracts it to a position like "Gravity", but have the freedom to increase and modify the value itself. Money is the primary causal force affecting value, not the other way around!

In my opinion, this is nonsense. This echoes the ideas of the French socialist Pierre Proudhon in the 1840s, who argued that capitalism is bad only in the monetary system itself, and not in the exploitation of labor and the capitalist mode of production.

Image
Pierre-Joseph Proudhon

Here is what Marx said about Proudhon's view in his chapter on money in the Economic Manuscripts of 1857-1859:

"... is it possible, by changing the instrument of circulation - the organization of circulation - to revolutionize the existing relations of production and the distribution relations corresponding to them?" [Collected. cit. Ed. 2nd. T. 46, part 1, p. 61]

For Marx, a doctrine "which offers its focuses in the sphere of circulation in order, on the one hand, to avoid the violent nature of changes, and on the other hand, to make these changes themselves not a prerequisite, but, on the contrary, a gradual result of the restructuring of circulation", would be fundamentally a mistake and misunderstanding of the reality of capitalism.

In other words, separating money from value and actually turning it into the main driving force of capitalism does not allow us to recognize the reality of social relations at the heart of capitalism and production for profit. Without a theory of value, SDT adherents find themselves in a fictitious economic world, where the state can issue debt obligations and convert them into loans in the state account at the central bank at will and without any restrictions or consequences in the real world of productive capital, although this is never it is not as easy as it seems .

For Marx, money makes money through the exploitation of labor in the capitalist production process. The new created value is embodied in the goods for sale; the realized value is represented by the amount of money. Marx began his theory of money with money as a commodity, like gold or silver, whose value could be exchanged for other commodities. Thus, the monetary value of all commodities was tied to the price or value of gold. But, if the value or price of gold changed due to a change in the labor time spent on the production of gold, then the value of money, estimated in other commodities, also changed. A sharp reduction in the production time of gold and, consequently, a fall in its value would lead to a sharp increase in the prices of other goods (Spanish gold from Latin America in the 16th century) - and vice versa.

The next stage in the development of the nature of money was the use of paper or fiat currencies pegged to the price of gold, the gold exchange standard, and then, finally, the stage of fiat currencies or "credit money". But, contrary to the opinion of SDT or chartists, this does not change the role or nature of money in the capitalist economy. Their value is still tied to the socially necessary labor time under capitalist accumulation. In other words, commodity money has / contains value, while non-commodity money represents / reflects value, and therefore both can serve as a measure of the value of any other goods and express it in the form of price.

Modern states clearly play a decisive role in the reproduction of money and the system in which it circulates. But their power over money is quite limited - and, as Schumpeter said (and Marx might have said), these limits are most evident in determining the value of money. The Mint can print any numbers on its bills and coins, but cannot determine what those numbers indicate. This is driven by the myriad pricing decisions made primarily by private firms that strategically respond to the cost and demand structure they face in competing with other firms.

This makes the value of government-backed money unstable. Actually, this is recognized by the Chartist theory. According to it, the main mechanism by which the state provides the value of fiat money is to impose tax obligations on its citizens and declare that it will accept only a certain thing (no matter which one) as money to pay off these tax obligations. But Randall Rae, one of the most active authors of this school, admits that if the tax system collapses, "the value of money will quickly fall to zero." Indeed, when the creditworthiness of a state is seriously questioned, the value of national currencies falls and demand shifts to real commodities such as gold as genuine store of value, storing value. The price of gold skyrocketed with the onset of the current financial crisis in 2007, and an even larger increase occurred in early 2010, when the debt crisis in the southern Eurozone exacerbated the situation.

Image
Randal Ray

Political conclusions
I often hear various statements of the adherents of the SDT that "money can be created from nothing." “Bank money does not exist as a result of economic activity. On the contrary, bank money creates economic activity. " Or this:

“Money for a bank loan does not exist until we, the clients, apply for a loan” (Ann Pettifor).

The short answer to this slogan is: “yes, the state can create money, but it cannot set its price,” in other words, value. The price of money will ultimately be determined by the movement of capital tied to socially necessary labor time. If the central bank "prints" money or lends money to government accounts, it gives the government the money it needs to launch programs to create jobs, infrastructure, and so on. no taxation or bond issue. This is a political conclusion from the SDT. This is a "way out" of the capitalist crisis caused by the decline in production in the private sector.

Image

SDT and Chartalists propose to replace or supplement private sector investment with public investment "paid for" by "making money out of thin air." time and still dominate the economy. Instead, the result will be higher prices and / or lower margins, which will ultimately stifle private sector production. The policy of public spending through unlimited creation will fail until the supporters of the SDT are ready to jump to the Marxist political conclusion. namely, the nationalization of the financial sector and the "commanding heights" of the production sector through state ownership and the production plan, thus limiting or terminating the law of value in the economy. As far as I can tell, representatives of the SDT diligently avoid and ignore such a political conclusion - perhaps because, like Proudhon, they misunderstand the reality of capitalism, preferring to seek "foci in the sphere of circulation"; or maybe because they actually oppose the abolition of the capitalist mode of production. they misunderstand the reality of capitalism, preferring to look for "tricks in the sphere of circulation"; or maybe because they actually oppose the abolition of the capitalist mode of production. they misunderstand the reality of capitalism, preferring to look for "tricks in the sphere of circulation"; or maybe because they actually oppose the abolition of the capitalist mode of production.

Of course, none of this has been tested in real life, since the SDT policy has never been implemented (as, indeed, and Marxist politics in modern economics). So we don't know if inflation will explode from the endless creation of money to fund investment programs. SDT people say that "scarcity monetization" will end once full employment is achieved. But this begs the question of whether the private sector in the economy can be subtly manipulated by the central bank and government policy. History has shown that this is not the case and governments in no way can control the process of capitalist production and production prices in such a finely controlled manner.

Even leading SDT advocate Bill Mitchell is aware of this risk. As he wrote on his blog :

“Think of an economy coming back from a recession and growing a lot. In this situation, the budget deficit could still increase, which would make it clearly procyclical, but we could still conclude that the fiscal strategy was justified, since the growth of net public spending stimulates the economy to grow to full employment. Even when growth in non-government spending is positive, budget deficits are appropriate if they support the movement towards full employment. However, once the economy reaches full employment, it would be inappropriate for the government to increase nominal aggregate demand by expanding discretionary spending, as this could lead to inflation . ” (emphasis on M.R.).

It appears that MMT ultimately simply boils down to proposing a theory justifying unlimited government spending to maintain and / or restore full employment. This is her task, nothing more. That is why she finds support in the leftist labor movement. But this seeming merit of SDT hides its much greater vice - preventing real change. MMT says nothing about why cataclysms in capitalist accumulation occur, except that the state can shorten or avoid boom-bust cycles by judicious use of government spending in a predominantly capitalist accumulation process. So it is not proposing a policy of radical change in social structure.

The Marxist explanation is the most comprehensive because it combines money and credit in the capitalist mode of production and also shows that money is not a decisive flaw in the capitalist mode of production and that it is not enough to understand finance. In this way, Marxism can explain why Keynesian solutions do not work to maintain economic prosperity.

Michael Roberts

https://www.rotfront.su/sovremennaya-de ... a-teoriya/

Google Translator
"There is great chaos under heaven; the situation is excellent."

User avatar
blindpig
Posts: 10589
Joined: Fri Jul 14, 2017 5:44 pm
Location: Turtle Island
Contact:

Re: The crisis of bourgeois economics

Post by blindpig » Mon Dec 21, 2020 4:44 pm

Characterisation of the Crisis and Changes in the Model of World Domination


The tendency of the profit rate to fall, as Marx explained, is the weak point of capitalism, to the extent that profit is the aim, the motive and the finality of capital. Its effective fall, conditioned by the rise in the organic composition of capital, is at the end of the day the cause of the paralysis of the process of accumulation of capital, sharpening the basic contradiction of capitalism between the social character of the process of production and the private, capitalist form of appropriation of its results.

The crisis is the consequence of the huge increase in productivity of the labour force, of human labour exploited in factories and fields, which in turn produces an increase in capital, in surplus-value and in commodities, capital which cannot be re-accumulated at a suitable rate of profit.

The problem is not the abundance of unsold commodities, but the abundance of commodities unsold at a given rate of profit. The cause of the crisis is in no way a crisis of under-consumption. The working class exists for capitalism as producer of value, not as consumer.

Pursuing higher profits or the maintenance of the average profit rate, on the other hand a tendency for the profit rate to fall occurs because the real limit of capitalist production is capital itself. To overcome these inherent limits to the capitalist mode of production, the following lines of action have been adopted in the last decades.

Political intervention to organise the valorization cycle at world level:
A) Producing and realising surplus value on a world scale through a boundless increase in productivity. Extending capitalist production relations to the entire world.

B) Territories and markets are annexed, the price of labour force, agricultural products and raw materials becomes cheaper, etc.

The increase in productivity has been accompanied by a lowering of wages – devaluing the price of labour force as a commodity. To compensate for this there has been an exaggerated increase in fictitious capital and in credit. Financial and speculative capital have soared to face up to the stagnation of the profit rate while parasitism increases as a result of capitalist development in its imperialist phase.
The crises of overproduction of capital as of commodities, exclusive to capitalism, make the irrationality of the system violently explicit. The present crisis has struck capital with a violence difficult to measure and to dominate, revealing the historic limits and the caducity of capitalism.

In this sense, in the International Meeting of Communist and Workers’ Parties held in Athens from 18 to 20 November 2005, on the subject “Current tendencies of capitalism and their economic, social and political impact. The Communist alternative”, our party gave the following warning in its contribution:

“The risk of a world economic collapse is increasing each day. The global economy demonstrates that, in spite of the high concentration of capital, profits represent an ever decreasing percentage of the millions bandied by the big transnational companies. The operations of financial engineering, with the aim of “doctoring” the accounts of the results of the big firms, are everyday practice to try to cover up the situation, but they can in no case slow it down. Capital is encountering ever greater difficulties in completing its cycle of increased reproduction. Extremely high levels of speculation and having recourse to financialization not only cannot solve the problem, but complicate even more the panorama.”

Other factors linked to the crisis of overproduction interact dialectically and come in conflict in their turn with the limits of capitalism and the production of surplus-value and capital. Among these:

- The oil production peak and its consequences for models of production, transport, urbanism, life etc. The International Energy Agency declares that the developing countries could increase their demand by 47% to 121 million barrels daily in 2030 and that the oil companies and the producing countries will have to spend around

100 000 million dollars annually (76.500 million euros) to develop new sources in order to keep up this pace.

- Climate change, perhaps already out of control for the system of production of surplus-value and which affects ecosystems and peoples’ conditions of life and work of negatively. The earth has lost in just over a quarter of a century practically a third of its biological wealth and its resources and at the present pace humanity will need two planets by 2030 to maintain its lifestyle, as the World Wide Fund For Nature (WWF) has warned.

- The food catastrophe, which condemns millions of human beings to death by exhaustion due to lack of nourishment. According to the FAO, the number of undernourished people rose from 850 to 925 millions, as a result of the rise in the price of foodstuffs in the period 2.007 – 2008,. The price of foodstuffs increased by 12 % between 2005 and 2006, by 24% in 2007 and by nearly 50 % between January and July 2008.

The capitalist crisis will not be overcome by reformist means or Keynesian recipes. Only by means of increasing exploitation, plunder and drastic restriction of all democratic rights can the capitalist system overcome the crisis. Marx and Engels, in The Communist Manifesto asked themselves “How does the bourgeoisie get over these crises?” and they replied “On the one hand by enforced destruction of a mass of productive forces; on the other, by the conquest of new markets, and by the more thorough exploitation of the old ones. That is to say, by paving the way for more extensive and more destructive crises, and by diminishing the means whereby crises are prevented.”

Either the bourgeoisie will consolidate its exit from the crisis by toughening capitalist dictatorship and introducing growing levels of violence to guarantee the process of accumulation of capital, or the great majorities of working people will opt for a solution in terms of a popular counter-offensive which will benefit the social majority and not the plutocracy.

Modern society is built in tune with the contradiction labour/capital in the sense that all the contradictions existing in society come up against the increase in the value of capital. The food crisis, the energy crisis, the environmental crisis, the hydrologic crisis, gender discrimination through patriarchal hierarchy, the destruction of the land, urban speculation, racial and ethnic discrimination, famines and pandemics, etc. All the struggles generated in these fields must be directed against the power of monopolies, in the perspective of revolutionary overcoming of capitalism.

The consequences of the capitalist crisis are daily worsening for the working class and other popular sectors. The constant increase in unemployment, the redundancies planned by the employers to eliminate the sectors of the working class with most rights, the systematic theft of indemnities and outstanding payments, the non-payment of over-hours, the lowering of wages, etc. are all on the agenda.

In inter-annual terms, the Spanish economy has experienced a contraction of 4,2% of GDP in the last year, with a rate of -1,1% in the second semester of 2009, according to the data of the Ministry of Economy and Finance. All the productive sectors registered negative growth rates in comparison with the same period of the year before. The Aim of Stability fixed for the period of 2010 – 2012, foresees a negative growth of 3,6 % for 2009, coinciding with the figures of the Spanish government.

The Spanish working class is being harshly hit. Full-time employment has fallen by 7,1 % in one year. According to a recent document issued by the experts of the Ministry of Finance, 63 % of Spanish wage-earners receive a gross monthly income of less than 1 100 euros (16,7 million wage-earners). Between 1999 and 2006, net profits of Spanish firms increased by 73%, more than double the average of the EU-15 33,2 %) or of the euro zone (36,6 %), whereas in the same period labour costs in Spain increased by only 3,7%, five times less than in the EU-15 (18,2%). According to forecasts of the National Employment Institute, unemployment will be about 25 % at the end of 2009.

The economic data confirm that there is a direct relation between unemployment, temporary jobs and wage levels. Geographically, the data make it clear that communities with a rate of unemployment higher than the national average are also those where temporary contracts and low wage-earners (around 1.000 euros) are most prevalent.

Map of lack of job security

Unemployment rate
Below national average
Above national average
On each community is indicated the percentage of workers earning around 1000 euros
Percentage of temporary workers







Young workers suffer particularly from this situation, with uncontrolled work-days and very low wages. More than 60% of work contracts imposed on young people are temporary, while their wages are 30 % below average, with the result that in 2008 only 21´% of young people could lead an independent economic life. In many cases, working women come to the aid of the deteriorating family economy by accepting jobs in the black sector with infinitesimal wages and no kind of labour protection.

The financial oligarchy expropriates working-class families who cannot pay their mortgages – which affects the immigrant sector of the class in particular – and is making a multi-million business of slowly re-appropriating houses that cannot be paid by their owners. In the year 2008, more than 58.686 mortgage embargos were registered, more than double the number of the previous exercise and three times as many as those counted in 2006. This number is higher than the total of the years 2004 – 2007 and the trend was getting worse in the first semester of 2009. Many workers are incapable of paying mortgage dues which frequently represent more than 50% of their wage incomes. These roughly 60 000 homes which have passed out of the hands of working people into those of capital in one year are the equivalent of the ownership of a city of 250 000 inhabitants. It will be in the second semester of 2009 that the real estate disaster will strike popular sectors even harder, in a country with more unsold houses than the United States.

The dictatorship of capital expresses itself in its true dimension. The police state is taking shape day by day, with changes in the law and harassment and repression of the people in every struggle. Bourgeois “freedom” is being converted into a museum-piece and is giving way to repression, fascism and anticommunism.

The conditions described form a scenario where it is essential to raise the socialist alternative in face of a capitalism which is at death’s door, enlarging the consciousness and the organised struggle of the working class and of growing sectors of working people.



THE PARTY NECESSARY FOR THE CONSTRUCTION OF SOCIALISM. ITS LEADING ROLE
The crisis offers a unique opportunity which affects the governability of capitalism and its state ; political power becomes more vulnerable. The capacity to decide what to produce, how and for whom is weakened. Conflicts appear between different fractions of the bourgeoisie, which will be more or less decisive depending on the capacity of the working class and its allies to intervene in the class struggle, and to try to transform the economic crisis into a political crisis which will pave the way for the revolutionary overcoming of capitalism.

A period is beginning when we will have to try to break down the apparently invincible totalitarianism in which the dominating class plunges the working majority, questioning capitalism head-on. A moment in which the main task of the Communist Party consists in organizing and watching fractures so that the working class can take new steps in terms of counter-offensive.

The working class must play a decisive role in the social conflict, joining forces where its interests are concerned with the broad masses which, mobilised by secondary contradictions or by partial demands, must incline the relation of forces in favour of socialism.

In the present scenario where the class struggle is becoming sharper, it is urgent to rebuild the labour and trade union movement in a class sense and the impetus of popular struggles; this is the demand of a Communist Party which assumes a vanguard role and boosts and orientates the organised struggle of the working class and of all working people who are faced with increased exploitation as well as the infinity of problems imposed by capitalism on the great majority.

The choice between socialism and barbarity is the challenge facing mankind today. As communist and worker parties we must trace the strategic lines which will allow the working class to weaken the power of monopolies, open up spaces of counter-power and weaken the imperialist blocs, in favour of the working class, of sovereignty and of oppressed peoples.

The leading role of the Communist Party must bring a strategic perspective to working class and popular struggles, build unity of the working class and give an impetus to its organised struggle by offering an alternative of popular and socialist power in the face of the power of monopolies and the dictatorship of capital.

The working class demands an alliance with the broad popular masses affected by the impositions of monopoly capitalism. So that a majority alternative to the oligarchy can be built. This is a prerequisite for the hegemony to be won in a Leninist sense; thus, the ideological struggle becomes very important.

The conquest of socialism, like every revolutionary process, is not something that occurs from one day to the other. Nor will it follow a straight path or be the result of a spontaneous struggle process. The rise of the political struggle of the working class demands, in addition to certain objective socio-economic conditions which create a revolutionary scenario, some subjective conditions which require the intervention and the politico-ideological orientation of the Communist Party.

In the conditions of the class struggle in Spain and keeping in mind the present relationship of forces that means precisely to create a social and political front which corresponds to and expresses the yearning for change of the masses, bringing together working-class and popular struggles against capitalism in crisis in the perspective of socialism.



THE WORKING CLASS NEEDS A PARTY OF A LENINIST TYPE
The solution to the present capitalist expresses itself in terms of socialism or barbarity. What has happened since the triumph of the counter-revolution in the Soviet Union and in the other European socialist countries, with the increase in imperialist violence in every field (wars, armaments, espionage, repression…), the increased exploitation of the working class, the continuing decline of labour and social rights and the absolute incapacity of capitalism to respond to the great problems of mankind, fully confirm the thesis that this is the era of socialist revolution.

Two decades have been sufficient to prove that those who have put Marxism-Leninism aside have in fact embraced the line of integration in the system, of complete reformism and, in some cases, of the most rabid anti-communism

The abandon of Marxism-Leninism was not only a formal question. It brought with it the complete destruction of certain communist parties which eliminated democratic centralism in order to become electoral machines of a social-democratic type, dismantling the Leninist structure, destroying the revolutionary character of communist militancy and renouncing the dictatorship of the proletariat and at the same time the conquest of political power, sharing essentially the imperialist criticisms of socialist countries.

The facts have confirmed that the working class needs a structure capable of organising and leading the struggle for socialism. A party structure, based on the principles of democratic centralism, which will be capable of combining in a correct way the different forms of struggle in function of the changing conditions of the class struggle. A structure capable of endowing the labour and popular movement with a power strategy based on a rigorous, scientific analysis of reality. A class structure, organised in a party, conscious that the class struggle in each country is part of the struggle of the working class world wide and that as a result raises the flag of proletarian internationalism.

The period in which in our country the right-wing ″euro-communist ″ tendency predominated resulted in a historic defeat for the working class. Today the bad habits and the deviations generated during that period must be definitively rejected, which implies recovering the teachings and the revolutionary spirit of the Bolshevik Party and analysing in a detailed way and defending the experiences of socialist construction during the 20th century.



THE REVOLUTION IS NOT THE RESULT OF A GRADUAL PROCESS OF REFORMS, IT IS THE VICTORIOUS STRUGGLE FOR POWER AND THE HISTORIC VICTORY OVER CAPITALISM IN CRISIS.
The Communist Party, through democratic centralism, must give an impulse to a political intervention which unites and leads the working class, which, in turn, must bring together a whole front of class alliance with different popular social strata confronted with monopoly capitalism. The broad participation of the masses in the class struggle brings with it an extraordinary experience. The role of communists is to make sure that the process of working class and popular struggle fractures and weakens the power of the dominating classes in the perspective of the socialist revolution.

In Spain the capitalist superstructure was crowned by the Bourbon monarchy, imposed on the people by fascism as the greatest example of the power of the oligarchy and the landowners. The revisionist thesis defended in Spain by reformism according to which, in the conditions of a parliamentary monarchy, socialism is reduced to a mere struggle for deepening democracy through a process of reforms, depending on the struggle of the working class in a bourgeois-democratic framework, forgetting that Franco’s dictatorship as well as the present parliamentary monarchy are two concrete historical forms of dictatorship of capital, rejects the Marxist theory of the state and withdraws the working class from its revolutionary objective.

However, in the present conditions of capitalist crisis, while the working class struggle tends to grow, republican aspirations are also progressing in broad sectors of the people. As in other moments of the history of our country, the republican demand is progressively changing into the alternative of power for the popular classes. In the last years, important advances have been achieved in this sense, from commemorating and defending the historic experience of the 2nd Republic to fighting openly for the 3rd Republic.

The necessary working class and popular counter-offensive, for the PCPE, must imply a process of intensification of the mass struggle to win a constituent process orientated towards the proclamation of this 3rd Republic and the derogation of the 1978 constitution; an alternative whose main aim, for the communists, is to make of the working class of the peoples of Spain a national class in power. As a result, this process must be launched on the basis of the interests of the proletariat and its allies, which, in the present conditions, for the PCPE, must contain certain openly socialist elements.

The strategy towards workers’ power, towards socialism, means refusing any compromise with imperialism, as much in its military expression, with the leaving of NATO, as with the incorporation of Spain in that imperialist pole which is the European Union.

The Socialist Revolution is not an illusion, it is not the result of a gradual process of reforms. The historic debate between reform and revolution is once again in full force. The reconstruction of the international communist movement in Marxist-Leninist keystones, as at other moments throughout the history of the struggle of the working class, will be a determining factor in giving an impetus to the revolutionary process and the triumph of socialism in the 21st century, which will be the century either of the triumphant proletarian revolution or of barbarity.

https://www.iccr.gr/en/news/The-Communi ... st-Crisis/
"There is great chaos under heaven; the situation is excellent."

User avatar
blindpig
Posts: 10589
Joined: Fri Jul 14, 2017 5:44 pm
Location: Turtle Island
Contact:

Re: The crisis of bourgeois economics

Post by blindpig » Wed Jan 06, 2021 4:01 pm

Democracy is under attack. And Wall Street is sounding the alarm
Analysis by Matt Egan, CNN Business
Updated 2:38 PM ET, Tue January 5, 2021

New York (CNN Business)Business leaders, investors and economists are sounding the alarm about the state of democracy in the aftermath of the 2020 presidential election.

The fear is that President Donald Trump's efforts to sow doubt about the political system will harm the fragile recovery by causing social unrest, amplifying political division and paralyzing Washington when it needs to focus on rebuilding the economy from the worst pandemic in a century.
Longer term, the attacks on democracy could backfire by eroding confidence in the rule of law and cherished institutions that have made the United States the world's strongest economy.
"I'm very worried," said David Kotok, chief investment officer of Cumberland Advisors. "If there's no trusted and stable democracy, the whole business-economic-market enterprise falls apart."
In other words, corruption is bad for business.
Business groups are nervous enough to issue a series of statements this week about what is normally a ceremonial event: Wednesday's counting of electoral votes by a joint session of Congress. More than 170 prominent business leaders signed a letter urging Congress to accept the Electoral College results.

Both the US Chamber of Commerce and the Business Roundtable slammed efforts to change the election outcome and urged Congress to stick to counting the electoral votes.
"With our country in the midst of a pandemic," the Business Roundtable said in a statement, "business leaders recognize that ongoing division and distrust in our political system threatens the economic recovery and job creation our country desperately needs."
'Political theatrics are a distraction'
Jason Furman, a former economic adviser to President Obama, pointed out that economic prosperity requires stability.
"Business leaders are right to argue that anything that undermines America's confidence in the smooth functioning of democracy also undermines the bedrock upon which America's economic success rests," Furman, now an economics professor at Harvard University's John F. Kennedy School of Government, told CNN Business in an email.

Furman said that President-elect Joe Biden and Congress should be squarely focused on ending the pandemic and restoring the economy.
"Political theatrics are a distraction that can only hurt in the short run while raising even more concerns over the longer run," Furman said.
Of course, this is hardly the first time of elevated political tensions in US history. And the economy was able to rebound from volatile periods in the past, including the civil unrest of the 1960s and the Watergate scandal of the 1970s.
Tensions amplified by social media
Still, today's crisis is being complicated by the growing divide between rich and poor in the United States -- an inequality gap that the pandemic has worsened. And Wall Street leaders have been taken aback by the harsh rhetoric of the current moment.
"The Nixon era seems like a polite game of chess by two English gentlemen by comparison to today," Michael Cembalest, chairman of market and investment strategy at JPMorgan Asset Management, told CNN Business.
Instead of focusing on earnings and GDP, Cembalest has been devoting ample space in his research reports to guiding nervous clients through the weeds of Constitutional and election law.
"Business leaders and investors are concerned -- on both sides of the aisle -- about how far the fringes will go," Cembalest said.

The pro-Trump fringe is being inflamed by conspiracy theories on social media claiming widespread election fraud -- even though courts have repeatedly rejected those claims.
"There are almost two parallel worlds: The social media world and the actual judiciary," said Cembalest.
Thousands of Trump supporters are expected to protest in Washington during Wednesday's joint session of Congress. Business leaders are urging restraint.
"Small businesses, local communities and our nation pay a steep price when demonstrations turn violent and destructive, so it is critical that these gatherings be peaceful," Thomas Donohue, CEO of the US Chamber of Commerce, said in a statement Monday.
The rule of law is being stress-tested
Corporate America and Wall Street have been on high-alert for evidence of a breakdown in the nation's respect for the rule of law. That's because academic research shows that countries that have a track record for strong adherence to the rule of law tend to prosper more. It's a crucial difference between emerging markets and developed ones. And it makes sense: Investors are reluctant to plow money into countries ruled by corruption.
"When you risk the rule of law, you jeopardize the ability of society to flourish," said Kotok, the Cumberland Advisors executive. "That is what is at stake right now in the bizarre unfolding of this election."

Trust in the court system resolving disputes leads to confidence among investors and CEOs. And vice versa. In fact, there's a clear connection between the rule of law and higher market valuations.
"A very unorthodox outcome here could rattle the market's confidence," said Cembalest, adding that he set a "high" threshold beyond the objections being raised by some US Senators to the election.
The JPMorgan executive is cautiously optimistic that the country will get through January without doing lasting damage to the rule of law or the economy at large. But Cembalest expressed concern about scenarios floated in recent weeks by some Trump allies about invoking martial law or launching military tribunals to overturn the election.
"There's certainly a line that if you cross, there's no looking back," he said, "such as any involvement by the military and any coordinated efforts to change the outcome through...illegal means."
The fact that these unthinkable scenarios are even being discussed by business leaders and Wall Street executives is telling.
The post-Trump world
The hope is that after a peaceful transfer of power, the incoming Biden administration will be able to work with Republican leaders to rebuild the economy. That would be a signal that Washington is avoiding political paralysis in the aftermath of the election.
"If Biden and (Senate Majority Leader Mitch) McConnell dial temperatures down and compromise on large infrastructure bill, then the country moves on," Cembalest said.
Kristina Hooper, chief global market strategist at Invesco, said she's not very concerned about the economic impact of the attacks on democracy.
"This could very well be a fleeting period in American history that has little impact on the future," she said.
Hooper predicted that the political fights this year and next will focus on how to fund the economic recovery -- not whether Biden is the legitimate president.
"We'll be relieved to have those kinds of debates because it will suggest a return to normalcy," Hooper said.
So, that's where we are. After four years of chaos, investors are yearning to return to the Tea Party-era spending debates that look quaint by today's standards.

https://us.cnn.com/2021/01/05/economy/e ... index.html

Well, Bourgeois Democracy is suffering, that's for sure. Democracy is alive and well elsewhere, due south of Key West, for instance.

'Corruption' is part and parcel of how 'business' is done, should have qualified that as 'corruption in governance'. They can't tolerate crooked referees managing their disputes.
Still, today's crisis is being complicated by the growing divide between rich and poor in the United States -- an inequality gap that the pandemic has worsened. And Wall Street leaders have been taken aback by the harsh rhetoric of the current moment.
"harsh rhetoric"? When? Where? Simply because it is mentioned? From the Bernie crowd? That ain't harsh, it is milquetoast and collaborationist. Lemme at 'em...

The only debate we can expect is how to fund the economic recovery...on the backs of the working class. Both Biden and Bernie gonna have to show some finesse in placating their 'unrealistic' left and they may not succeed, particularly if the economy continues to tank.

Even more than the the suburban middle class Wall St is the greatest proponent of 'normalcy', cannot function optimally without it. Fascism will only postpone their demise, perhaps even accelerate it.
"There is great chaos under heaven; the situation is excellent."

User avatar
blindpig
Posts: 10589
Joined: Fri Jul 14, 2017 5:44 pm
Location: Turtle Island
Contact:

Re: The crisis of bourgeois economics

Post by blindpig » Tue Feb 23, 2021 12:48 pm

DRIFTS AND CONSEQUENCES OF THE US FINANCIAL WAR AGAINST THE WORLD
20 Feb 2021 , 1:28 pm .

Image
The so-called US sanctions jeopardize the dollar's long-term status as the world's dominant reserve currency (Photo: Clyde & Co)

One of the weapons most used by the United States is the dollar, supported by the global oil business and the Pentagon army , which dominates the financial system as it is the currency most used in transactions worldwide and functions as a reserve. This makes the US dollar a voluptuous tool that, through so-called financial sanctions, can smother the economy of the White House's preference without much risk.

However, within the United States a critical mass has begun to form around the impact of unilateral coercive measures (UCM) emanating from Washington on the same financial supremacy centered on the US dollar. Although the general consensus is that the main country of the global North is called to lead the field of world finance, the sanctioning strategy has diminished that strength.

Specifically, an American think tank, Defense Priorities, has drawn attention to this section and has recommended a modification to the sanctioning policy of the United States. In a brief report entitled " Recalibrating the sanctions to preserve the financial hegemony of the United States ", published on its website, the Washington think-tank judges from the beginning that the MCU are "an overused foreign policy tool" and analyzes in detail and concisely the impact of this procedure.

DESTINATION FINANCIAL MANIFEST
The report characterizes that "the dominance of the United States in the global economic and financial system provides unmatched influence to coerce other countries through sanctions", however, the MCU "have been used excessively to punish and signal disapproval, rather than as a tool to serve achievable ends of American foreign policy. "

The financial war of the United States against the rest of the world does not seem to bear the fruits it promises, if one takes into account the empirical experience, for example, of the economic, financial and commercial attacks of the North against Venezuela, which have seriously injured to everything that breathes in the country, but the campaign of "maximum pressure" does not finish to curdle in a definitive "regime change" that places pro-US actors in power of the Venezuelan State to the detriment of Chavismo.

In fact, says the thought tank, "sanctions are rarely successful because (1) they tend to require states to cease activities that their leaders consider critical to their government or security, and (2) others can often be opened. markets to replace the closure of those sanctions. "

Those two factors come at a cost to the United States: they dilute its power over time, "as states seek alternatives to the financial system dominated by the United States that exposes them to punishment," in addition to "increasing tension, imposing hardships on the civilian population and can create long-term hostility. "

Despite the failed "sanctions" strategy, Washington is increasing its use, Defense Priorities says: "While the Clinton administration averaged about 8 new sanctions designations per year, the Obama administration averaged more than 525 per year, and the Trump administration added more than 975 per year. "


Image
The number of States, entities and individuals added to the sanctioning list of the United States increases every year (Photo: Defense Priorities)

Defense Priorities judges that "while sanctions should not be abandoned altogether, the United States should implement them judiciously by abandoning maximalist political demands, setting clear expectations about realistic political outcomes, and declaring in advance the process and benefits of removal."

Although the thought tank advocates strengthening American power, the characterization of the situation clearly suggests that Washington is eroding its financial hegemony with a policy that increasingly isolates it from the image of Manifest Destiny in defense of human rights and liberal democracy. Sanctioning arrogance is not as effective as it is in speech.

TYPES OF AMERICAN MCUS
It is worth briefly reviewing the types of "sanctions" that Washington uses to undermine its own financial hegemony, mentioned by the American think-tank.

Economic sanctions, which "isolate states from goods markets. The long US embargo on Cuba is an example," says Defense Priorities.
Financial sanctions, which cut off "access to the banking, capital and dollar markets," are often used in the context of what the White House's political marketing calls "the war on terror" against state and non-state actors. . The financial blockades against Iran and Venezuela, deepened during the Trump administration, are examples of this type of MCU.
Individual sanctions, which "apply economic, financial and travel restrictions against individuals, often political and business elites in foreign countries." The use of this type of MCU can significantly affect the business of a State if a government actor with specific economic functions is sentenced, as in the case of Alex Saab .
Secondary sanctions, directed against "economic actors for doing business with sanctioned entities or States." Threats to third parties who "dare" to defy the dictates of the Treasury Department are often accompanied by this battery of sanctions.
In the Venezuelan case, all the types of MCU described by the Washington think-tank are applied, causing an economic, financial and commercial asphyxia similar to that which countries such as Cuba, North Korea, Iran and Syria have suffered historically. The complaints about US practices by all these countries have been notorious and even taken to international bodies such as the United Nations and the International Criminal Court.

WHY MCU RARELY WORK
In this the Defense Priorities report is categorical: the MCUs do not work because it is precisely a single entity that issues them, even when other states allied to Washington support them with some actions. "While they can cause economic damage, sanctions are most effective in changing behavior when imposed multilaterally, when demands are modest, when they target weak states, and when there is a clear path to relief," says the tank. thinking.

These parameters do not apply to the current US MCU regimes, and their consequences "have failed to generate important changes. Recent US sanctions tend to be unilateral, accompanied by maximalist demands and directed at increasingly strong powers." With the latter, he refers to countries like China and Russia, objects of "sanctions" due to hegemonic competition in the economic and military fields respectively.

In addition, Defense Priorities reviews, "often the target, wary of capitulating to what it perceives to be fundamental national interests and fearful that showing weakness will lead to further punishment, responds by resisting pressure and redoubling its previous behavior." The subjective level of the sanctioned country is not taken into account in the corridors of the White House and the US Congress, with the unilateral attitude being a decisive factor in the failure of the MCU's political objectives.

Added to this is the fact that "economic sanctions", such as the oil embargo against Venezuela, "also fail because new national actors or other states can often intervene in the gap to satisfy the needs of the market in the sanctioned state." , as we have seen in the national energy front and relations with Iran, which have transported gasoline and other primary products to the Venezuelan economy in the framework of business cooperation and solidarity between two States victims of economic, financial and commercial blockades.

Given these facts, which open other possibilities for markets other than what is imposed by dolarcentrism, the think-tank says that also "sanctions can cause suffering to the civilian population and make impoverished people more dependent on the sanctioned government. This feeds powerful people. nationalistic reactions against the United States, which makes resistance to American demands politically valuable. "

The latter can be clearly seen with the campaigns that took place in Venezuela both by the government of President Nicolás Maduro and from the national social base in favor of the demands to end the US blockade on the country. Even though it does not stand out for being a nationalist position, Fedecámaras (an entity that is not characterized by its support for Chavista policies but quite the opposite) recognizes that the MCU against Venezuela have diminished the country's business capacities and is willing to manage lobbying for the repeal of "sanctions".

BALANCE OF GLOBAL DE-DOLLARIZATION
On the other hand, there is an important aspect mentioned by the North American tank of thought and that later deepens in a concise way: the fact that the dollar is used less and less and the financial system based on its supremacy. We quote extensively from the data and analysis provided by the report:

"The US dollar (USD) remains the world's dominant reserve currency and is the predominant medium of exchange for most of world trade. Dominance of the global financial system allows the United States to impose costly financial sanctions on countries and entities. .

"The USD represents more than 60% of the foreign exchange reserves and half of the world's loans are denominated in USD. Among the economic benefits of USD dominance are lower borrowing rates, allowing massive deficit spending from the United States.

"US banks are critical to settling international transactions, including transactions between two non-US states. To maintain access to the US banking system and therefore participate in global markets, nations must comply with state sanctions. United.

"Companies, individuals, foreign banks, and governments that come into conflict with the United States run the risk of being locked out of the United States financial system, having their foreign assets frozen, and being exposed to heavy fines.

"This financial power deters many banks and lending organizations from operating in opposition to the United States. It can cause them to limit risk by even avoiding legal trading in sanctioned countries for fear that shady laws will be interpreted to punish them."


Image
The dominance of the US dollar among global reserve currencies has fallen over the past two decades (Photo: Defense Priorities)

The American financial club, apparently, does not bear the fruits it once did. Although Washington's objectives in imposing "sanctions" have to do with the closure of the circulation of capital for a specific entity, experience shows that the construction and use of alternatives to what is imposed by de facto dollarization in international business It is the path chosen to face the blockages. The financial agreements between some countries of the European Union and Iran for the use of the euro as a form of payment , for example, is illustrative of this.

Perhaps the greatest cost of MCUs is, as the graph shows, the fact that more and more countries turn to other currencies such as global reserves and not to the dollar. Gold, cryptocurrencies and the digital yuan appear as investment and savings possibilities in the short, medium and long term, as this note published on our rostrum shows.

This means, Defense Priorities says, "a serious threat to long-term US prosperity. The US dollar accounted for 72% of world reserves in 2000; today, the figure is 61%." He continues: "Russia, China and even the European Union have sought to reduce dependence on the dollar. Each has moved to insulate their economy from US pressure by creating alternatives, or reducing exposure, to the US-dominated international banking system." .

Furthermore, so-called "secondary sanctions", such as those that prevent international companies from buying oil from Iran and Venezuela, for example, "alienate and enrage allies, making them irritate the US 'leadership'." This already denotes a de-dollarized attitude on the part of those who even consider themselves historical partners of the United States, such as the main countries of the European Union ( Germany is a significant case ).

It also says Defense Priorities:

"The sanctions also invite economic retaliation. For example, Russia's ban on agricultural imports in response to the US sanctions was detrimental to apple and pear growers in the Pacific Northwest and to the Alaskan fishing industry.

"Sanctions on the civilian population - Iran, Syria, Iraq in the 1990s, Yemen - intentionally create suffering and, as a result, intensify anti-US sentiment, risking future setback. This also weakens soft power and the influence of the United States.

"Broad-based US sanctions campaigns can also help close competitors. Iran's sanctions have blocked Western companies, giving China an opportunity to invest in Iran's natural resource, construction and infrastructure markets at prices of bargain".


What has been said indicates that the sanctioning policy of the United States generates economic retaliation, violates the most basic human rights of the victim populations and, not least, it bends sanctioned countries towards a common cooperation, at the same time that it closes markets for the Americans themselves.

Considering the panorama, and to close, the think tank located in Washington recommends "recalibrating" the foreign policy of the United States regarding the constant financial war that it carries out on third countries. "The United States should not apply sanctions by reflex to signal disapproval of the behavior of a country or its government," is one of the recommendations. But it goes further.

"Over-reliance on financial penalties jeopardizes the dollar's status as the dominant reserve currency. The mere possibility of such profound economic risk calls for restraint. Therefore, penalties must be used prudently and weighed against unavoidable costs." analyzes Defense Priorities.

Furthermore, it emphasizes the fact that this policy "limits the freedom of negotiation of the executive power and may complicate the conclusion of a diplomatic agreement", as reflected in the prerogatives upon the return of the Iranian nuclear agreement (called the Joint Comprehensive Plan of Action ): the demands by the Islamic Republic to conclude some negotiation on the subject must begin with the cessation of the MCU against Iran.

The diagnosis of the sanctioning strategy, therefore, seems to be based not on its effectiveness to achieve specific political results but "on the amount of economic punishment it inflicts." Said "coercive pain" seems to be more of an end and not a means, as demonstrated by the UCM imposed on the Bolivarian Republic of Venezuela.

Also, threats of "financial and secondary sanctions" threaten "the long-term status of the dollar as the world's dominant reserve currency," as is happening right now (see chart above).

Finally, Defense Priorities recommends that the Biden administration "conduct a comprehensive review of all sanctions with a view to working with Congress to eliminate ineffective sanctions. Ultimately, the power of sanctions to secure concessions comes from lifting them, not imposing them. ". It is very likely that the new American government will ignore these advice, due to the excessive drift characteristic of the American Empire in decline.

What is proven is that the MCUs, the blockades and the threats from Washington are undermining the financial supremacy it holds. Until new notice.

https://misionverdad.com/globalistan/de ... a-el-mundo

Google Translator

The analysis of Defense Priorities is astute capitalist analysis and the US should take heed but the demands of imperialism contradict that analysis. Only other asset the US has for inflicting it's dictates upon other nations is the military, which has proven inadequate for imposing US policy. Like the MCU above the US military can inflict horrendous pain, it can destroy the world, but has proven unable to bend determined people to it's will. So what will the new regime do? Probably more of the same, with more resort to the military option, it already has the top level personnel from the Obama years in place for that. Because for US capitalists there are no good choices these days. And the choices they make will probably be bad for everyone except perhaps China, which seems to go from strength to strength. But only the people of the US can euthanize our mad dog ruling class.
"There is great chaos under heaven; the situation is excellent."

User avatar
blindpig
Posts: 10589
Joined: Fri Jul 14, 2017 5:44 pm
Location: Turtle Island
Contact:

Re: The crisis of bourgeois economics

Post by blindpig » Mon Mar 15, 2021 2:13 pm

Image

Thomas Piketty and Karl Marx: Two totally different visions of Capital
Posted Mar 15, 2021 by Éric Toussaint

Originally published: CADTM (Committee for the Abolition of Illegitimate Debt) (March 9, 2021) |

In his book Capital in the Twenty-First Century,(1) Thomas Piketty has gathered his data meticulously and provided a useful analysis of the unequal distribution of wealth and income, yet some of his definitions are somewhat confusing and even questionable. Consider, for instance, his definition of capital: “In all civilisations, capital has served two great economic functions: on the one hand to provide dwellings (that is to say, to produce “housing services,” the value of which is measured in terms of the rental value of the dwellings: this is the value of well-being of having a roof over one’s head as opposed to being outside); and, on the other hand, as a factor of production for producing other goods and services.” He continues: “Historically, the early forms of capitalistic accumulation seem to concern tools (from flint, etc.), agricultural infrastructure (fences, irrigation, draining, etc.), and rudimentary dwellings, before evolving into more sophisticated forms, such as industrial and professional capital and increasingly elaborate dwellings.(2) Piketty proposes a scenario that suggests capital has been present from the origins of humanity and that revenue from a savings account held by a limited-income retired person is the same as revenue derived from capital.

Capital according to Thomas Piketty

This major confusion is present in the heart of his analysis he develops in Capital in the Twenty-First Century. For Piketty, an apartment worth €80,000 or €2,000 on a savings account(3) may be defined as capital, in the same way as a factory or commercial premises worth €125 million. The ordinary citizen who owns an apartment, has some reserves in a savings account and a life insurance policy worth, say, €10,000 will readily agree with Piketty’s definition, which corresponds with those found in standard economic textbooks and repeated by their bank manager. However, they are wrong, because capital in our capitalist society is much more complex than these simple definitions. Capital is a social relationship that enables a minority (the richest 1%), to get richer by exploiting the labour of others (see below).

Yet when Piketty talks of a progressive tax on capital, he makes no distinction between the kind of “wealth” represented by a €1,000 savings account and the fortune of a Jeff Bezos, a Bill Gates or an Elon Musk.

The same confusion is to be found in his analysis of income: Piketty considers that the income from renting out an €80,000 apartment is a capital gain of the same kind as the income Mark Zuckerberg, the boss of Facebook, derives from his empire.

As far as wages are concerned, Piketty considers that all income declared as wages is wages, whether this means the €3 million salary package of the CEO of a banking group (an amount that is in fact revenue from capital and not a wage or salary(4)) or the €30,000 salary of a bank employee.

Capital according to Karl Marx

We should question the meaning Piketty gives to words like “capital” and define revenue from capital and revenue from labour differently. Piketty presents capital as something that exists in all civilisations and that has necessarily always existed. In this he is in tune with the political economy of the 18th and early 19th century, as found in the writings of Adam Smith in particular, before Karl Marx threw light on what Capital (and wages) really are and developed his critique of the political economy of his time.

Karl Marx has ironical comments on contemporary writers who, like Piketty does, considered the first silex tools to be the original form of capital or just capital: “By a wonderful feat of logical acumen, Colonel Torrens has discovered, in this stone of the savage the origin of capital. “In the first stone which he [the savage] flings at the wild animal he pursues, in the first stick that he seizes to strike down the fruit which hangs above his reach, we see the appropriation of one article for the purpose of aiding in the acquisition of another, and thus discover the origin of capital.” (R. Torrens: “An Essay on the Production of Wealth” &c., pp. 70-71.)»(5)

In his Capital, he states: “We know that the means of production and subsistence, while they remain the property of the immediate producer, are not capital. They become capital only under circumstances in which they serve at the same time as means of exploitation and subjection of the labourer.”(6) Marx explains that an artisan who owns his/her own tools and works for her/himself does not own capital and does not receive a wage. During the centuries that preceded the victory of the capitalist class over the old order, the overwhelming majority of producers worked for themselves, both in towns and in the country. Artisans organised into corporations and peasant families made up the majority of producers, who owned their tools of production, and in the countryside the majority of peasant families owned land, and in addition could make use of communal lands to feed their livestock or glean firewood. Between the end of the 15th century and the end of the 18th century in Western Europe, the developing capitalist class needed the support of the State to dispossess this mass of producers of their tools and/or their land(7) and force them to submit to becoming wage-workers in order to survive. The capitalist class needed to take organised action in order to impoverish and dispossess the working classes and thus force them to accept being wage-workers. That process did not take place all by itself. Karl Marx analyzes the methods that enabled the primitive accumulation of capital in a detailed and rigorous way. In Volume One of Capital, he reviews all the methods used to dispossess producers of the means of production, and thus of their means of subsistence.(8)

Marx draws an anecdote from a book by Edward Gibbon Wakefield (20 March 1796–16 May 1862) to illustrate the idea: “Mr. Peel, he moans, took with him from England to Swan River, West Australia, means of subsistence and of production to the amount of £50,000. Mr. Peel had the foresight to bring with him, besides, 300 persons of the working class, men, women, and children. Once arrived at his destination, ’Mr. Peel was left without a servant to make his bed or fetch him water from the river.’”(9) Marx comments ironically: “Unhappy Mr. Peel who provided for everything except the export of English modes of production to Swan River!” This is because in Australia at the time there was a profusion of land available and the workers were able to find a patch of land on which to set themselves up. Marx, through his comment regarding this fiasco experienced by the capitalist Peel, wants to show that as long as producers have access to the means of subsistence–in this case land—, they are not forced to submit to serving a capitalist.(10)

Marx concludes
So long, therefore, as the labourer can accumulate for himself–and this he can do so long as he remains possessor of his means of production–capitalist accumulation and the capitalistic mode of production are impossible. The class of wage labourers, essential to these, is wanting.“(…)”the expropriation of the mass of the people from the soil forms the basis of the capitalist mode of production.
He adds:
the capitalist mode of production and accumulation, and therefore capitalist private property, have for their fundamental condition the annihilation of self-earned private property; in other words, the expropriation of the labourer.
Karl Marx writes:
property in money, means of subsistence, machines, and other means of production, does not as yet stamp a man as a capitalist if there be wanting the correlative–the wage-worker, the other man who is compelled to sell himself of his own free will.
We should also point out that Marx, in the same section of Capital dedicated to primitive accumulation, vehemently denounced the extermination or forcible subjugation of the indigenous peoples of North America and the other regions that fell victim to colonial domination and the primitive accumulation of capital:

The discovery of gold and silver in America, the extirpation, enslavement and entombment in mines of the aboriginal population, the beginning of the conquest and looting of the East Indies, the turning of Africa into a warren for the commercial hunting of black-skins, signalized the rosy dawn of the era of capitalist production.

Consequences of Thomas Piketty’s definition of capital

Image
Capital in the Twenty-First Century, [1] Thomas Piketty

To return to Piketty, the definition of capital he gives introduces complete confusion. Let’s look at his definition again: “In all civilisations, capital has served two great economic functions: on the one hand to provide dwellings (…) and, on the other hand, as a factor of production for producing other goods and services.” So, for Piketty, Capital has existed in all civilisations; he goes all the way back to prehistory when he writes: “Historically, the early forms of capitalistic accumulation(11) seem to concern tools (from flint, etc.) (…) and rudimentary dwellings, before evolving into more sophisticated forms, such as industrial and professional capital and increasingly elaborate dwellings.“ For Piketty, a prehistoric flint tool, a cave, and a computer assembly plant are all capital. If we believe him, “capitalistic” [sic] accumulation goes back as far as the first assembly of a few pieces of flint that had been chipped and shaped. That definition throws no light on the historic specificity of capital, its genesis, how it is reproduced and accumulated, to which class it belongs, or the social and property relations to which it corresponds. The list of examples of capital Thomas Piketty gives resembles a supermarket catalogue; in a way it’s an inventory like the one in Jacques Prévert’s poem”Inventory“… with only the raccoons missing.(12)
Speaking of capitalist accumulation today, Piketty limits the discussion almost exclusively to the role of inheritance and fiscal policies that are favourable to capitalists; but in reality these factors, though they play a tangible role in transmitting and strengthening capital, are not what create it. Historically, for the capital held by the capitalist to begin a process of enormous accumulation, it was necessary to forcibly dispossess producers of their tools and their means of subsistence and exploit their labour power. The accumulation of capital as it continues today requires the continuing exploitation of working people and of Nature. Capital plays no useful role for society; on the contrary, continuing the accumulation of capital and the activities that generate it is literally deadly. Piketty’s failure to acknowledge that leads him to make a statement such as this:
If capital plays a useful role in the production process it is natural that it earns a return.(13)
Piketty’s confusion is undoubtedly the result of his fundamental convictions:
I am not interested in denouncing inequalities or capitalism as such (…) social inequalities are not a problem in themselves if they may be justified, that is to say for the common good. (…)(14)
My critique of Piketty’s definitions in no way minimises the interest of the monumental portrait his research has drawn of the wealth and income inequalities that have developed over the last two centuries. And, putting aside undeniable fundamental disagreements regarding the notion of capital, it is important, if anti-neoliberal fiscal reform is to be achieved, that we endeavour to bring together a broad spectrum of movements and individuals ranging from Thomas Piketty to movements of the anticapitalist Left. And if it is also possible to come together to demand cancellation of the public debts held by the European Central Bank (for a total amount of over 2,500 billion euros), it must be done. I do not regret having co-signed the call for the cancellation of sovereign debts held by the ECB(15) in February 2021 along with Thomas Piketty. But like the other members of the CADTM who signed that text, I consider that more must be done–beginning, for example, with levying a large Covid tax on wealthy individuals and major corporations. The CADTM feels that cancellation of public debts must be accompanied by a series of anticapitalist measures, and it is not certain that Thomas Piketty would support all of them.

Thanks to Anne-Sophie Bouvy, Christine Pagnoulle, Brigitte Ponet, Claude Quémar and Patrick Saurin for their readings.

Translated by Snake Arbusto

Footnotes
Thomas Piketty, Capital in the Twenty-first Century, trans. Arthur Goldhammer, Cambridge (MA): Harvard University Press, 2013
Thomas Piketty, Capital in the Twenty-first Century, p. 337.
Note that according to Piketty, the amounts held in France in savings accounts, check-book accounts, etc. account for only 5% of (private) assets! p. .
It’s very convenient for capitalists to include the very high revenues of a corporation’s executives, which also include dividends and stock options, in calculating total payroll.
Source: Note 9 to Capital, Book One: The process of production of capital. Part VII, Part III: The Production of absolute surplus-value, Chapter 7: The Labour-Process and the Process of Producing Surplus-Value, available on the Internet: www.marxists.org. Also available in audiobook form, see next note. In the German original and the French translation, Marx jokingly adds a note of wild etymology, suggesting that stock as a reference to capital derives from the German word for stick.
Karl Marx, Capital–Book One: The process of production of capital. Part VIII: Primitive accumulation. Chapter Thirty-Three: The Modern Theory of Colonisation. The text from which the excerpts quoted in this article is available on the Internet: www.marxists.org ; it is available in audiobook form at www.marxists.org
Confiscation of land by capitalists began in England in the 15th century with what is known as the “Enclosure Movement,” which consisted in ending the traditional right of use of the land and the commons via the Enclosure Acts and turning them over as private property to wealthy aristocrats and bourgeois. Read Chapter 27 of Volume 1 of Marx’s Capital: Expropriation of the Agricultural Population From the Land: www.marxists.org, available as audio – www.archive.org
The section of Capital in which Marx details the various sources of primitive accumulation of capital is Book One: The Process of Production of Capital –Part VIII: Primitive Accumulation (First English edition of 1887, translated: Samuel Moore and Edward Aveling, edited by Frederick Engels). There is an audiobook version of Part Eight (see link in earlier note).
E. G. Wakefield: England and America, vol. Il, p. 33. Cited by Karl Marx.
Writing of the specific situation of North American and Australia in the early 19th century, Marx explains that the possibility for colonists from Europe to become owners of land or begin working for themselves enables “The wage-worker of to-day [to become] to-morrow an independent peasant, or artisan, working for himself.” In North America, Australia and other regions colonised by Europe, the situation gradually changed over the course of the 19th century and the early 20th century, and the great mass of independent producers whose ancestors had emigrated from Europe were also dispossessed of their means of production.
Author’s bold.
Excerpt from the poem ”Inventaire“ (”Inventory”) by Jacques Prévert (published 1946):
“A stone
two houses
three ruins
four gravediggers
a garden
flowers
a raccoon (…)” coonytanuki.tumblr.com
Thomas Piketty, Capital in the Twenty-first Century, p. 674
Idem, p. 62
See the French version : www.cadtm.org The French version has been published by Le Monde, La Libre Belgique and RTBF

https://mronline.org/2021/03/15/thomas- ... f-capital/
"There is great chaos under heaven; the situation is excellent."

User avatar
blindpig
Posts: 10589
Joined: Fri Jul 14, 2017 5:44 pm
Location: Turtle Island
Contact:

Re: The crisis of bourgeois economics

Post by blindpig » Mon Mar 29, 2021 2:08 pm

Image

Winning the Green New Deal and Medicare for All: Modern Monetary Theory or Marxism?
ByTony Gong -March 19, 2021816
The global economic crisis has made clearer than ever the need for social spending. Workers, students, and youth in the U.S. are rallying behind Medicare for All (M4A), cancellation of student debt, and a Green New Deal (GND). Yet whenever these proposals are raised, corporate Democrats and Republicans always ask, “who’s going to pay for it?” This question, though disingenuous, deserves an honest answer from socialists.

Modern Monetary Theory (MMT) – a school of thought that is enjoying rising popularity on the left – says that social spending can be fully funded through monetary policy (i.e. “printing money”) without fear of inflation. As evidence, MMT proponents point to the trillions in government stimulus spending on COVID-19 relief as proof that the capitalist state can fully fund employment and social programs. It is striking that Rep. Alexandria Ocasio-Cortez believes MMT “absolutely” needs to be “a larger part of our conversation,” and that Bernie Sanders had MMT champion economist Stephanie Kelton serving as senior economic advisor to both his presidential campaigns.

But capitalism has never achieved long-term full employment, and gains for working people are never permanent and always reversible. Capitalists have always used the threat of unemployment to drive down wages and keep workers in line. Bosses resist social spending tooth-and-nail in order to lower the share of wealth going to working people, and to keep workers from developing the confidence to fight for more gains. Will MMT really be able to both uphold the capitalist system and cure the ills it generates?

Unfortunately, MMT’s reliance on capitalism hobbles it at every step. MMT does not look to the working class, which is the only force that can lead the fight for serious change, to win the GND and M4A. Instead, it believes these programs can be won through technocratic compromises with big business, which would water down these programs and weaken the movement. As a bourgeois theory, MMT ultimately sees social spending as a way to pull U.S. businesses out of the current depression, not as a good in itself. But printing money, as the past decade of quantitative easing has shown, does not mean that capitalists will fruitfully invest that money to “fix” the depression. Moreover, printing money is really an option for only a few rich imperialist countries. In the current crisis that grips the entire world, MMT is an insufficient answer for working people all around the globe looking for a way out.

What is Modern Monetary Theory?
MMT is both a heterodox (non-mainstream) view of how a capitalist economy works, and a slate of policy recommendations. According to MMT, money did not originate from bartering but from the state, which uses its authority to issue currency and dictate demand for it. Anything, whether gold or digital bits, would be made into money when the state accepts that thing as payment for obligations (taxes, debt, fines) to itself. All of the state’s subjects (e.g. taxpayers) are compelled to use this money by force of law, and so it becomes the most acceptable money for commerce. Those outside the state will also accept this money because they know the state’s subjects will accept it.

MMT economists bolster their case that money originated from obligations to the state with their interpretation of anthropological research into a wide range of monies, from the development of Sumerian currency in tax collection, to the ancient Germanic tribes’ practice of weregild (restitution for injury or death), to the monetization of colonial African economies through British imperial taxation.

If money begins with the state, MMT reasons, then the national government can create and destroy money at will. This assertion contradicts the idea that government spending is funded by tax collection. Instead, MMT argues that the government effectively creates money at the moment of spending – and tax collection comes months later. Stephanie Kelton explains in a seminal MMT paper “Can Taxes and Bonds Finance Government Spending?” that “it is not money but bridges, armies, satellites, etc. that the government wants and that it acquires them by encouraging the population to provide them in exchange for government money.” In other words, the state uses compulsory tax collection to impart value to newly printed money, which in turn is exchanged for private sector production.

This analysis has an intellectual history rooted in Chartalism, an early 20th century economic theory that “taxes drive money.” Chartalism influenced John Maynard Keynes in the development of his theory, which in turn influenced MMT in both economic and political conclusions. MMT itself was born in the 1990s out of a post-Keynesian online forum discussion between hedge fund millionaire Warren Mosler and a group of economists.

MMT’s Political Program, the Job Guarantee, and Inflation
MMT proponents, who are generally left-leaning, have eagerly taken up the cause of programs like the Green New Deal. They are right to compare fighting climate change, ending mass incarceration, and universal healthcare to the desperate challenges of the Great Depression and World War II.

Drawing parallels to the New Deal, MMT economists see the GND as providing social value and as counter-cyclical, i.e. able to counteract the economic downturn by boosting investment and spending. While the cost of social programs will be tremendous, Kelton argues that funding is not an issue because “f Congress authorizes… a few hundred billion dollars, then the Fed’s job is to make sure that those checks don’t bounce.” MMT sidesteps the question of who pays for the Green New Deal by pointing out the Federal Reserve (Fed) can simply print money for the program.

To answer concerns around the inflationary effect of increasing the money supply, MMT builds on Keynes’s ideas around full employment. MMT proponents claim that as long as money creation is matched with increased production, there will be no inflation. A country at full employment would be at maximum output, beyond which additional money creation would cause inflation. At anything less than full employment, however, MMT proponents argue that money creation would not lead to inflation, and also that the government itself should sign up to full employment through a program called the Job Guarantee. This way, during downturns, the economy can maintain consumer spending, continue producing at maximum output, and reduce the social pain of unemployment.

This theory of inflation is heavily colored by the experience of the past decade. The Fed has effectively printed a lot of money through “quantitative easing,” but inflation remained low because the 2008 financial crisis laid bare a long-running crisis of profitability. Without good avenues for investment, capitalists refused to spend the newly-created money on offices, wages, plants, and so on – but instead poured it into speculative assets. For the past two decades, the general economy also faced deflationary pressures due to overproduction and the decreasing share of wealth going to the working class while certain assets, like housing and stocks, became speculative and inflated to sky-high prices. Prominent bourgeois economist Larry Summers begrudgingly describes this phenomenon as “secular stagnation.” It is not economic laws discovered by MMT, but the lack of profitable investments combined with deflationary pressure in the capitalist economy, that has held down general inflation in the previous period of money-printing.

True to its Keynesian roots, MMT proposes to make up for the ongoing lack of private investment with large-scale public spending through programs like the Job Guarantee (JG). The JG would create $15-an-hour living-wage jobs for anyone who wants work, which is an excellent starting point. However, according to prominent JG advocate Pavlina Tcherneva in “The Job Guarantee: Design, Jobs, and Implementation,” these jobs are intended for ”transitioning to private sector employment opportunities,” “without competing with the private sector.” The JG is meant to bring the private sector back to profitability, so the jobs it offers are intentionally worse than private sector employment to avoid competition.

The JG wage would be fixed to $15 an hour and not be indexed to inflation. MMT economists argue this is necessary to prevent more inflation. Taking a JG job would mean leaving behind other welfare assistance. If the private sector expands, the JG program will shrink in response so as to keep capitalists as the primary employers. The jobs are designed to be low-skill and labor-intensive with minimal use of capital. All this adds up to a program where the initial decent wage will be eroded through inflation, just like the minimum wage, and where business interests take precedence over the welfare of workers. The JG is not a government program for good jobs – it is closer to a form of welfare that requires work.

The reason MMT theorists are compelled to weaken the JG is that as bourgeois theorists, they cannot threaten the power of the bosses, who they believe should be the primary employers in an economy. The unemployed form what Marx called a “reserve army of labor” that capitalists can call upon to replace those who are currently working. This threat of unemployment and replaceability acts as downward pressure on wages, and helps capitalists to make profits. If MMT removes the threat of unemployment, then it must offer another way to cut costs – such as dooming JG jobs to eventually be undesirable, with wages eroded by inflation – to protect the interests of the capitalists. Without strong social pressure defending the JG program and making it better, corporate lobbies can easily twist the JG into workfare.

Rather than weaken the Job Guarantee to accommodate capitalism, socialists fight for good jobs for everyone, even if that means changing the economic system. A strong working-class movement can win social spending without prematurely conceding to business interests. Social demands will always conflict with the demands of big business under capitalism, and economists have to choose which side they are on. Unfortunately, MMT proponents have backed down and yielded to the interests of profit – and not just on the JG.

Is MMT the Right Strategy for Social Spending?
MMT is concerned first and foremost with saving capitalism and sees the path to social welfare strictly through cooperation with business interests. Its central thesis is that social programs can be funded through money creation, and not additional taxation which would cut into profits. However, the fight for social spending is class warfare, while MMT is trying to appease the capitalist class with a shortcut to paying for social programs that avoids taxing the rich. But can the Federal Reserve really be turned into a radical left-wing institution that prints trillions of dollars for social welfare programs? How will MMT mobilize the forces that will carry out this transformation?

Marxists do not see the state as a neutral arbiter between classes, but as an instrument of the ruling class – the capitalist class. This does not mean workers can never win victories against the state, but there are serious limits to the ability to reform the system. If tomorrow the Fed were to start funding social programs, the corporate-controlled Congress could just rewrite the Fed’s charter. Just because financial markets skyrocketed in response to central banks printing money for corporations doesn’t mean they will stay friendly if central banks print money for social programs, which the markets broadly oppose. And if corporations find it unprofitable to invest in the GND or M4A, they will not produce the necessary numbers of turbines or medicines, and instead just pocket the newly printed money.

We already saw this when the coronavirus stimulus measures in 2020, which largely went to corporate cash hoards while only one-fifth went to workers, helped increase the wealth of U.S. billionaires by $1 trillion. At the same time, American workers lost $1.3 trillion in earnings in just the first two months of the pandemic. One in four households in the U.S. have experienced job loss and millions of people face evictions – all while the Fed printed an unprecedented $3.5 trillion for corporate shareholders. To guarantee the success of serious reforms like the GND or M4A, we can’t just give money to the big manufacturers and pharmaceutical companies. Even after receiving $2.5 billion in government funding for COVID-19 vaccine research and billions more for the first hundreds of millions of doses, U.S. big pharma delivered only 68 million of the 300 million vaccines promised by the end of January. While vaccine production is ramping up, its rollout has been a disaster. We need to take all major corporations under democratic public ownership so that competition and trade secrets don’t hamper cooperation, production can be directed toward necessary goods, and prices can be set affordably.

In the fight for social spending and real gains for working people, our opponent is not theories of inflation or money circulation but the capitalist class. The fight for social programs is part of the struggle over the social product – namely what share of the wealth produced by workers goes to the working class and what share goes to the capitalists. During the postwar boom, facing a powerful labor movement and the threat of the USSR, the capitalists in the West temporarily conceded to extensive social spending. The massive expansion of production after the destruction wrought by WWII allowed profitability to be maintained even while social welfare increased the share of wealth going to the working class. But as profitability declined and the capitalists turned to neoliberalism, social programs became a target of cost-cutting and privatization. Capitalists restored profitability by muscling into the workers’ share of the wealth and increasing the rate of exploitation.

The working class, with its strength in numbers and potential power in the workplace, is the force that can win social spending without concessions, not MMT technocrats working within the capitalist state machinery. To build the strongest possible movement, social spending demands must mobilize workers and squarely face our enemy. That means taxing the rich to pay for social programs and bringing key corporations into public ownership under workers’ control.

Unfortunately, taxing the rich is anathema to many MMT theorists. In the Levy Economics Institute working paper, “How to Pay for the Green New Deal,” MMT proponents state that they “do not agree with [Sanders’s] goal of raising revenue” through taxing employers and the rich to pay for M4A. Instead, they “propose to impose a surcharge of 4.6 percent on the employee portion of the payroll tax” to “allay fears of inflation” by “[reducing] consumption demand by the less fortunate bottom 90 percent of Americans.” Despite MMT’s rhetorical concern for ordinary people, this would shift the tax burden further to the working class! Such a tax would not only be regressive, but also give ammunition to the right wing to attack social programs. Founding MMT theorist Randall Wray recently co-authored a paper, “Is It Time to Eliminate Federal Corporate Income Taxes?” where he claims “corporate taxation… is inefficient and largely borne by consumers and employees, not shareholders” and “prefer[s] the elimination of the corporate profits tax.” This is a shocking rehash of the right-wing myth that corporate taxes get passed on to consumers and workers, so we shouldn’t tax them.

Winning social programs is an uphill battle and the political needs of the movement cannot be hindered by the economic theories that support them. MMT’s technocratic approach, which relies on bureaucratic maneuvers and shifts taxes from the rich to the working class, will demobilize workers and progressives fighting in their workplaces and the streets for social spending. The only way to defeat corporate opposition is through industrial actions and mass movements, united around a program of taxing the rich and taking major corporations into democratic public ownership.

MMT vs. Marxist Economics
MMT’s weaknesses can be traced to a fundamental misunderstanding of money, value, and the sources of the crises of capitalism. Historically, the origin of money arises from one set of social conditions and its universal adoption arises from another. The state may invent and issue currency to quantify taxes, but it ultimately seeks to collect real value and not money. Feudal lords, for example, were more than happy to collect non-money taxes from their subjects in the form of corvée, or labor in lieu of money or crop payment. Yet the same fiefdom a few centuries prior might have been Roman lands that saw more ubiquitous use of money because of widespread trading and production of goods for sale. How much an economy uses money depends on the production of commodities, their exchange, and the need to quantify and build fortunes. Under capitalism – which Marx described as “generalized commodity production” – it is not the state’s taxes that drive demand for money, but commodity circulation and movement of capital.

Marxists understand that a commodity has a value based on how much labor, on average, is used to make it (the socially necessary labor time). For markets to function, the quantity of money and its circulation needs to reflect the socially necessary labor time of commodities, and can’t be determined arbitrarily by feudal kings or capitalist states without causing economic disruption. Excessive money supply, all things being equal, is inflationary. MMT, lacking a theory of value, struggles to explain the general movement of prices. Instead, it assumes the state can set prices (control inflation) by manipulating the amount of money in the economy. But the control over the quantity of money is not the same as control over the value of money. Under capitalism it is the capitalist market, not the state, that ultimately determines what and how much to produce and thereby what value money will have.

In this sense, MMT doesn’t account for the underlying objective tendencies towards crisis in capitalism: the tendency towards overaccumulation of capital and the tendency in the general economy for the rate of profit to fall as more is invested in technology and machines than in workers’ labour power, which is the only source of surplus value. This is a tendency and not a law, but it can be seen in the U.S.’s struggle with declining productivity growth. From 1991-2007, U.S. worker productivity grew an average of 2.2% per year. From 2010-2017, productivity growth fell to 0.9% despite the heavy use of quantitative easing. With capital investments barely improving output per worker, and low or negative real interest rates in all the advanced capitalist countries, capitalists are refusing to invest newly printed money because they can’t turn a profit. The growth of capital intensity – a ratio that roughly reflects capital consumed to labor power consumed in production – has in the past decade been near zero or even negative for the U.S. The seeds of the current economic crisis were sown long before COVID-19 emerged.

If the previous period of quantitative easing didn’t fix the dearth of profitable investments, then neither will printing even more money as MMT proposes to do. The combination of declining rates of profit and easy monetary policy led to “stagflation” in the 1970s, when economic growth in the advanced capitalist countries stagnated while inflation soared. That led the ruling class to reject Keynesianism in favor of neoliberalism, which promised to restore profitability through lowering the share of wealth going to the working class, including vicious cuts to social programs. MMT is a return to Keynesianism, except armed with the Job Guarantee so that state employment can soak up newly printed money.

The JG stops short of massive state employment, however. In the MMT vision for a GND, laid out in “How to Pay for the Green New Deal,” “JG workers would be used only in a subset of GND projects,” for “labor-intensive work” that does “not require expensive capital investment or materials,” and “not be used as skilled labor.” Skilled labor and capital-intensive goods and services would make up “a core component of the GND” but still be “undertaken by private contractors while paid for by [the state],” funded with money-printing.

Workers desperately need higher wages and a huge expansion of social spending, but MMT’s watered-down program offers undesirable jobs while its money-printing approach risks further deepening the crisis under capitalism. In a capitalist economy already glutted with goods, printing money for additional production will exacerbate the crisis of overproduction. Only a rational, planned economy under democratic control can redirect production to rebuild infrastructure based on 100% renewable energy, universal healthcare, and good jobs for all.

Without a theory of value, MMT also underestimates the role of debt in capitalism. State debt is more than a number; it is a tool for capitalists to transfer wealth from other classes. Not only are capitalists the main benefactors of state spending, they are also the state’s creditors and will see their loans to the government repaid with interest through taxation of the working class and the middle class. In Volume 1 of Capital, Marx called “public debt… one of the most powerful levers of primitive accumulation” of capital.

But excessive state debt becomes a burden on capitalism. Bank assets that could have been invested in capitalist enterprise are instead tied up in non-productive government bonds, which become especially attractive in the current atmosphere of economic uncertainty and low profitability. New state debt ceases to be an instrument of capital accumulation as real interest rates drop to zero or negative. Addressing the national debt with money creation, which has already happened in a limited way through quantitative easing, caused skyrocketing prices in the real estate and financial markets. For capitalists, this meant rising capital costs: more expensive commercial real estate and higher costs to buy shares in startups and corporations. This further reduced profitability and discouraged investment. Printing money merely transforms, but does not negate, the problems of debt.

Additionally, state debt is not the only debt to be concerned about. In the last year zombie companies, which can’t earn enough profit to pay the interest on their debts and need to borrow more to avoid bankruptcy, have doubled their debts to $2 trillion. This explosion of debt was spurred on by the Federal Reserve, which printed money to buy up corporate bonds in a new precedent. Today there is so much speculative money competing to buy junk bonds that their yields have fallen and companies are told to issue even more junk debt. The corporate debt bubble is a powder keg, waiting to detonate a financial crisis if interest rates rise. There is no historical reason to believe that interest rates will remain indefinitely at the current low levels. If interest rates rise and threaten the mass of corporate zombies, the political establishment may even pick and choose elements of MMT’s logic to justify ever-larger corporate bailouts and thereby try to prevent the corporate debt bubble from exploding.

Meanwhile, no relief is coming for household debt. The federal government has passed loan forbearance for student loans and mortgages, and a weak moratorium on evictions, but workers still have to pay back enormous sums after the grace period ends. The empty recovery after 2008 and the current crisis have stretched ordinary people to their limits on debt. With almost 90% of people with student loans currently not repaying them during the pandemic forbearance, the specter of mass default looms over working people once repayment becomes mandatory. But the Fed will not rescue us like they did zombie corporations unless forced to by a mass movement. In the absence of such a movement, capitalists and the state will send debt collectors, lawyers, and police to extract the pound of flesh they believe they are owed. Debt is such an integral part of capitalism that the ruling class will never allow a technocratic money-printing solution to deprive it of such a useful tool. A socialist transformation of society is needed to end the burden of excessive personal debt and reset working people’s lives to be debt-free.

MMT Depends on the Power of U.S. Imperialism
Much of MMT’s economic proposals rests on the special position of U.S. imperialism. MMT’s policies require “monetary sovereignty” – a list of sovereign privileges which includes full control over currency issuance, tax collection, debt issuance, and the ability to float exchange rates. While the U.S. fulfills that criteria, few countries around the world do. Individual Eurozone countries, for example, do not have full control over the issuance of the Euro. Many developing countries don’t have floating exchange rates because imperialism has straight-jacketed their economies for tourism or exporting commodities, forcing them to peg to the U.S. dollar. Attempts by neocolonial countries to exercise monetary sovereignty regardless of these constraints have triggered currency crises, such as the hyperinflation currently gripping Lebanon as the central bank prints liras to cover the debts of a government wracked by corruption and imperialist extraction. It is clear that MMT proposals only have a chance of working only in truly wealthy countries.

As the pre-eminent global imperialist power, the U.S. also has the privilege of the dollar being the reserve currency of the world. This means countries trade with each other largely in dollars, even if neither country uses the dollar domestically. The dollar accounts for over 60% of foreign exchange reserves globally. Worldwide acceptance of the dollar lends credibility to MMT’s assertion that the U.S. can print as much of it as it wants. But that’s partly because the consequences of money-printing can be offloaded to other countries, with dollar-pegged countries being hit the hardest because they may need to match new dollars with money-printing of their own to maintain the currency peg.

A massive money-printing program, leading to devaluation, will test the reserve status of the dollar and the strength of U.S. imperialism that backs it. In this moment of worldwide crisis, capitalists of other countries will not easily allow the U.S. to export either inflation or cheaper dollar-priced goods to their home markets. Advanced capitalist countries would certainly retaliate against dollar devaluation. For the neocolonial world, dollar-driven inflation on top of the coronavirus crisis could trigger economic calamity and provoke popular uprisings that challenge imperialism.

For rising Chinese imperialism, this could present opportunities to wrest countries out of the U.S. sphere of influence and into their own. We might even see elements of MMT adopted by both right- and left-wing nationalists looking to combat U.S. hegemony with domestic monetary autonomy. With global trade tied to the dollar, creating a vast amount of dollars is in effect a protectionist measure, equivalent to exporting the U.S.’ way out of crisis, that will no doubt accelerate inter-imperialist rivalry, further decouple national economies, and deepen the economic crisis. Breaking with capitalism is a critical step for neocolonial countries to end imperialist domination, and for advanced economies to step back from mutually destructive economic competition.

How Can Workers Win Social Spending?
Today’s social programs model themselves after President Roosevelt’s New Deal. The key social programs of the New Deal were not won with words and clever arguments, but by a titanic uprising of the working class. In the 1930s several strike waves swept across the country, through which millions of workers unionized under the Congress of Industrial Organizations. Socialists played a key role in this process, including leading the Minneapolis Teamsters strike in 1934 that squared off against the police, private militias, the National Guard, and a hostile labor bureaucracy to lay the foundations of a strong union.

That is the kind of class warfare approach we need today.

The coronavirus crisis and economic depression has worsened already extreme inequality. The answer to “who’s going to pay for social spending” needs to be “the rich.” Seattle showed the way when Socialist Alternative city councilmember Sawant led and won a militant campaign to tax Amazon. Now, workers and socialists over the country need to defend those gains from a right-wing attempt to recall her. If one city councilmember can do that, imagine if Bernie or AOC called for a mass movement to tax the rich and fund the GND and M4A. That kind of fighting movement, linked to building an independent workers’ party freed from Democratic Party interference, can translate the huge popularity of these social programs into actuality.

Massive spending is no longer the sole property of MMT economists. President Biden is planning a major stimulus that would provide $400/week in unemployment benefits, and a one-time check of $1,400 – all without any new taxes. However, this does not mean that Biden has been won over to the left or adopting permanent social spending. While Biden’s stimulus plan is the exact opposite of his very fiscally conservative stance during the primary and general elections, it is only the depth of the current crisis that is forcing him and the ruling class to spend on ordinary people in order to prop up the economy.

If passed, this top-down spending will engender illusions in lobbying the political establishment for extensive social spending, among both activists and technocrats like MMT’s proponents. Lasting social change, however, can only be won by an organized working class movement. MMT presents itself as a shortcut to the hard work of building a movement, a panacea of sorts to those who hunger for social change. Socialists should be friendly and understanding of MMT’s appeal, but firm in pointing out its weakness as a bourgeois theory which does not recognize the limitations of the capitalist system itself. Only a socialist transformation of society can guarantee high standards of living for all.

https://www.socialistalternative.org/20 ... r-marxism/
"There is great chaos under heaven; the situation is excellent."

User avatar
blindpig
Posts: 10589
Joined: Fri Jul 14, 2017 5:44 pm
Location: Turtle Island
Contact:

Re: The crisis of bourgeois economics

Post by blindpig » Wed Apr 28, 2021 1:43 pm

AGAINST THE BACKGROUND OF THE US FINANCIAL WAR AGAINST THE REST OF THE WORLD

Ernesto Cazal

27 Apr 2021 , 9:13 pm .

Image
Still from the film 'Blade Runner 2049' (Photo: Sony Pictures Releasing)

Over the years, a greater number of spokespersons have joined the chorus of criticizing the sanctioning policy of the United States from that same country, taking into account several reasons in addition to the most criminal, namely, its destructive capacity and violator of the most fundamental human rights.

In Washington, for example, there is a sector arguing that unilateral coercive measures (UCM) are used " excessively to punish and disapprove " and, as a consequence, undermine US financial hegemony in the medium and long term.

At the same time, others acknowledge receipt of the lack of commitment and work on the diplomatic side, taking into account that the White House usually uses its preferred financial weapon to exert pressure on other countries and entities, favoring tough actions over conciliatory and conciliatory attitude. dialogue according to international legal parameters.

In short, the excessive use of "sanctions" is conceived by the aforementioned sectors as a misguided strategy , without full effectiveness for the purposes that its perpetrators lie. It could also be said that the US government is mistaking its strategy, mistaking it for the tactical, albeit frantic, use of a financial tool.

All this shows a complex picture in which the United States seems to be subdued by its own hubris at a time of its own imperial decline after an exceptionalist unilaterialism ready to go to war against the rest of the world. But perhaps the picture is much more complex still.

The pressure that the main Atlanticist analysts, journalists and politicians talk about incessantly is a weapon, yes, but perhaps it is not being used in an uncontrolled way, as many could conclude from what has been said above. Although they no longer have the unilateral Hegemony of all the elements and mechanisms of power in the world, it is true that they maintain dollarcentric financial power and are still effective in propagandizing their soft power through broad audiovisual and social media industries . not to mention its military force widely deployed across the globe.

Taking into account Andrei Martyanov's research and analysis , the United States is no longer No. 1 in the military arena, but its might remains to be feared. Russia and China, and even India, have moved towards a much more developed technological horizon of war than the Anglo-Americans, who have an entire military infrastructure in their hundreds of bases outside North America.

Reports from the US military establishment account for its technological-industrial disadvantage compared to its larger competitors in Eurasia. The pulse of the trade war against China started in the Trump era was marked from the beginning by the technical-industrial factor, with Asians being capable of producing their own industry of microprocessors, chips and next-generation technology (AI, quantum computing, etc. .) and opening markets where until a few years ago Silicon Valley companies, in conjunction with the US national security state, monopolized.

This greater Chinese technological-industrial independence has been under attack by the United States as it tries to advance in the fields where it is no longer a leader, and using the most powerful weapons it has left.

The MCUs have been taken, then, as a chisel and stone for the construction of a new paradigm of global production and association, where the planet is divided between two areas of influence in conflict, one for total control of the capitalist system, the other for promoting a kind of pluripolarity.

The "sanctions" seek to destroy countries with their inhabitants, isolate entities and states from the international financial system, and shape commercial circuits to redirect capital into their pockets. The facts show that the kidnapping and theft of assets of the Guaidó clan from the Bolivarian Republic of Venezuela is not only mere corruption and desire for profit, but also finances US projects for "regime changes", drug production and semi-feudal infrastructure (the wall Trump-Biden).

In its genetic code it seems to be inscribed that MCUs are even more deadly than military weapons due to their impact, one that sometimes puts American interests in trouble, and they are conceived to last strategically over time. For this reason, it is institutionally and technically difficult to lift "sanctions" , since the United States tends to shoot at various state and non-state targets with influence on the target that do not allow untangling the bureaucratic complexity of the American financial war apparatus, knowing in advance that Faith does not exist in the American political corridors.

Take the example of the Biden administration's alleged rapprochements with the Islamic Republic of Iran. Washington has promised to lift the financial blockade related to the Iranian nuclear program, as promised in the 2015 agreement, if Tehran, in turn, reverses its sovereign decision to regulate its own nuclear industry at will. But other key Iranian institutions and individuals could continue to be "sanctioned" for secondary reasons, complicating diplomatic scenarios as Iran would remain economically under siege.

Biden could lift "sanctions" on Iran's National Oil Company for whatever the United States claims it does to fund "weapons of mass destruction" programs, but would remain on OFAC's blacklist for financial facilitation. " the terrorism orchestrated by the Revolutionary Guard ". And so on with various institutions (Central Bank, shipping companies and hydrocarbon companies). The same problem arises with Venezuela, where banks, institutions and senior state officials are bombarded by "sanctions" every few weeks.

While the Biden administration has the authority to grant a temporary MCU waiver, these would remain in effect legally although their effects would be nullified until formally revoked by the Treasury Department, a move "hugely unpopular in the internal circles of the United States." if you mean Iran, according to an Atlantic Council columnist . It is highly unlikely that such a government, or anyone from now on, will de-escalate its own personal financial war against the rest of the world.

None of this should surprise us when we read the news that the United States government imposed a new regulation on companies in its country : it will require from May 2021 that they request permission to use information technology equipment and services from countries considered "adversaries", a measure that could affect up to 4.5 million companies.

The "foreign adversaries"? China, Russia, North Korea, Iran, Venezuela and Cuba: what many of their politicians sometimes like to call the "Axis of Evil."

With the United States being the world leader of what in Davos they call the Great Reset, a technological revolution that comprises a new paradigm of technocratic capitalism, well explained by Alastair Crooke here , it was to be expected that it would react to its neoliberal dependence on the other global workshops of aggressively, with a "sanctions" submachine gun.

Fact: Three-quarters of the roughly 6 million businesses in the United States use foreign technology, estimates the Department of Commerce.
These rules apply to a wide range of technology, including hardware and software used in critical infrastructure and telecommunications networks, as well as artificial intelligence and quantum computing technology, as well as services that handle personal information, along with monitoring equipment such as cameras. Internet-enabled surveillance, sensors and drones: key elements for the production of the revolutionized technological-economic paradigm that has been accelerating with the pandemic .

If we clear the picture, we can clearly see that the United States is trying to root out all influence coming from the emerging bloc that promotes multipolarity, pushing its limits to the sovereign limits of its "adversaries", imposing war fronts on various flanks, increasing the possibilities that China, Russia, North Korea, Iran, Venezuela and Cuba end up consolidating alternatives to the Atlanticist pressures in their decadent phase while bombarding the economies of the societies it rejects.

In a scenario of intense and daily financial war against the world, there is both the possibility of the Thucydides volcano erupting (the definitive clash that many expect between the greatest military powers) and the future fact that there will be one or more financial architectures. adapted to new times. In the background, you can hear the techno-industrial race that will mark the new paradigms of life, whether of one side or the other, for the next decades.

We are in the future, one marked by a battery of "sanctions" whose order is to destroy and build, with a single beneficiary at the expense of the rest . The anti-blockade policies of the "Axis of Evil", separately or coordinated among its members, should have a totally opposite effect: the benefit must cover us all.

https://misionverdad.com/globalistan/en ... -del-mundo

Google Translator
"There is great chaos under heaven; the situation is excellent."

User avatar
blindpig
Posts: 10589
Joined: Fri Jul 14, 2017 5:44 pm
Location: Turtle Island
Contact:

Re: The crisis of bourgeois economics

Post by blindpig » Tue May 04, 2021 1:29 pm

Image

What is new with contemporary (global) leading corporations? If gigantic monopolies are a repeated phenomenon in capitalism’s history, why all the fuss we see every day regarding high concentration?

Leading corporations of the 21st century are intellectual monopolies. These are firms that rely on a permanent and expanding monopoly over portions of society’s knowledge. A recent joint OECD and European Union report shows that the top 2000 corporations in business expenditure in research and development (BERD) concentrated 60% of total IP5[1] patents between 2014 and 2016 (Dernis et al., 2019).

How did this happen if intellectual rents enjoyed by the innovator were supposed to disappear once the rest of the industry adopts the new technique? They disappeared if the secret was broken, the patent expired, or when another firm innovated, overcoming the innovating firm’s advantage. Knowledge is cumulative and those innovating have a greater absorptive capacity to keep innovating. Aided by a more stringent and global intellectual property regime, the continuous reinforcement of knowledge monopolies has led to a perpetuation of the core, maximizing rentiership over time.

Intellectual monopolies may not monopolize the markets they operate, which can even be competitive markets like Amazon’s marketplace, where Amazon sells its products with millions of other sellers. Their monopolistic condition relies on their capacity to significantly and systematically monopolize knowledge, which generally – but not always – contributes to market concentration.

What we are witnessing is the climax of a process that began almost half a century ago with the formation of global value chains (GVC) led by multinational corporations that retained the exclusive knowledge on how to integrate the supply chain. It was also in the 1970s that the big pharma blockbuster drug model emerged signalling a turning point in terms of intellectual property and rents. Furthermore, the initial policy transformations that paved the way for intellectual monopoly capitalism also date from the 1980s and continued during the 1990s (from the Bayh-Dole Act to the Trade Related Aspects of Intellectual Property Rights followed by free trade agreements, bilateral investment treaties, and regional pacts that installed a global intellectual property regime). Yet, it was not until this century, in particular after the advancements in deep learning and neural networks that unleashed big data based innovations that the consequences of intellectual monopoly capitalism became apparent.

To acknowledge them, I suggest thinking of innovation, as any process based on human labour, not only from its implications but also as a social relation of production. In other words, innovating always has a twofold meaning. One looks forward and starts when the innovation is achieved, thus studying the effects of innovation as an accomplished result. The subordination of complementors in digital platforms (such as third-party sellers in e-commerce) as well as of outsourced firms in GVC exemplify how innovations (or more broadly intangibles), once monopolized, are used to subordinate other organizations. The other approach looks backward and delves into the social relations of production that take place in order to innovate. This is innovation as a process. In contemporary capitalism, this process increasingly takes place as networks, organized and planned by intellectual monopolies.

Intellectual monopolies are not only – nor mainly – a result of giant corporations’ in-house R&D. Their knowledge monopoly is based on appropriating and monetizing knowledge results from their multiple innovation networks organized as modularized knowledge steps in charge of different organizations (from start-ups to public research organizations and universities). Intellectual monopolies also outsource innovation steps by actively engaging in open access or open science initiatives (including open-source software in the case of tech giants), monetizing knowledge commons.

In this context, what is the fate of the rest of the firms – which are the overwhelming majority of the industrial landscape – and how do they manage to remain profitable while subordinating to intellectual monopolies? How are science and technology transformed in this context? What are the implications for research universities and other public research organizations? What is the place of the peripheries as profits concentrate in a handful of corporations from core countries? What is the role played by those core countries’ states in the emergence and spread of intellectual monopoly?

To answer these questions, I elaborate on the concept of predation, initially defined by Veblen (1899) as a direct relation of spoliation. Predation contributes to explaining the higher concentration of intangible assets by intellectual monopolies. Intellectual monopolies predate knowledge from other organizations. Innovation in capitalism has thus grown as a power relationship. “Inventors” (those actually working on intellectual monopolies’ innovations) will at most receive a minor payment in comparison with the rents amassed by the intellectual monopoly that surveilled the whole process. As a result of this division of intellectual labour, the industrial landscape is split between corporations that control production, distribution, and consumption by controlling innovation processes and a myriad of organizations whose best alternative is to subordinate.

Meeting the world’s predators

In our epoch, intangibles assets’ rise cannot be understood without considering the -highly asymmetric- digital economy. Its five leading corporations represent over 25% of the S&P 500. The combined market capitalization of Google, Apple, Facebook, Amazon, and Microsoft (GAFAM) is even above Japan’s 2019 GDP. As well as their counterparts from China, GAFAM concentrate profits and (tangible and intangible) capital based on monetizing knowledge and data. Their continuous innovations rely on their exclusive access to big data sources, thus predating society by curtailing access to an input that was socially constructed. Furthermore, they analyse data with artificial intelligence (AI) algorithms that, more often than not, were developed by other organizations. They use that data to orient their business and innovate based on customized models that are capable of predicting and shaping each individual’s behaviours with the greatest existing accuracy.

Although at the forefront of this new stage, intellectual monopoly capitalism goes beyond digital industries. Big pharmaceuticals are another paradigmatic example. Furthermore, companies from the most diverse industries are becoming intellectual monopolies. From State Grid Corporation of China (SGCC), China’s state-owned utility company, to BlackRock’s financial data monopoly.

Depending on the diversity of knowledge management techniques and on the multiplicity of monopolized technologies, intellectual monopolies differ in scope. Some are focused on narrow niches – such as Siemens’ dominance of AI for life and medical sciences inventions or SGCC’s lead in AI-related inventions for energy management (World Intellectual Property Organization, 2019). Meanwhile, GAFAM and its Chinese counterparts expand their power, dominating general-purpose technologies. All in all, intellectual monopoly capitalism can be conceived as the stage in capitalism where capital accumulation (and distribution) is led by a core of intellectual monopolies that base their accumulation (and power) on their permanent and expanding monopoly (and assetization) of predated knowledge.

By synthesizing the common traits of these cases, I argue that intellectual monopoly capitalism capital accumulation is increasingly driven (and hampered) by rent-seeking and predation. Intellectual monopolies sabotage society by privately monetizing intangible goods; they are –simultaneously- capitalists, rentiers, and predators. The more their rents grow, the more the rest of the world will be deprived of access to knowledge and of a greater portion of the total value produced. Intellectual monopolies are also the corporations leading the rankings of offshored retained earnings and declare profits in tax havens, further favouring their shareholders by minimizing paid taxes. This points to the entangled connection between an accumulation strategy based on rentiership and predation that results in levels of earnings and financial strength that allow to further expand rents, this time by participating in financial markets.

Intellectual Monopolies maximize their appropriation of wealth ultimately at the expense of workers of all the subordinate firms but also including their own workers. Workers’ differentiation under intellectual monopoly capitalism results in a majority with earnings below what they need to reproduce themselves and their families. To tilt the scale, unions must regain the power they lost in Western countries and gain the power they never had in Asia. A global organization of labour is required. However, this is much easier said than done.

The effects of intellectual monopoly capitalism on the peripheries

The persistently uneven distribution of innovation in the world is a structural truth worsened by intellectual monopoly capitalism. Intellectual monopolies originate in core countries, in particular in the United States, but their effects are spread all over the world. In my book “Capitalism, Power and Innovation: Intellectual Monopoly Capitalism Uncovered” I study intellectual monopoly capitalism integrating three levels of analysis: global, national, and network. At the national level, it distinguishes between core and peripheral countries. At the network level, it focuses on how intellectual monopolies plan, organize and predate from their innovation networks, thus also including a broad set of subordinate firms, universities, and public research organizations from all over the world.

In the peripheries, intellectual monopolies systematically pass over – less powerful – states. Part 3 begins with an assessment of innovation and upgrading policies for development under intellectual monopoly capitalism. In this context, innovation studies (including the idea of an entrepreneurial state), as well as GVC and catching-up approaches, have shortcomings in providing viable policy recommendations. Peripheral countries’ specific traits result in a greater technological gap with (intellectual monopolies and their innovation networks from) core countries and reinforce underdevelopment. However, the relatively more developed countries within the peripheries exhibit an unbalanced knowledge and innovation structure with their leading research institutions integrated into global knowledge networks, thus risking being subordinated to intellectual monopolies, while local firms generally lag behind.

To account for specific effects of intellectual monopoly capitalism on the peripheries, I propose the concepts of knowledge and data extractivism, two specific forms of what can be dubbed intangibles extractivism.

Knowledge extractivism refers to science and technology from the peripheries that are monetized in core countries, usually by corporate intellectual monopolies and eventually by academic intellectual monopolies. This form of extractivism mainly affects leading universities and public research organizations from so-called emerging or middle-income countries.

Concerning data, a new layer in the international division of labour is emerging. It splits the world between raw data providers and a handful of data-driven intellectual monopolies. Raw data is valueless, but as continuous streams of data are centralized and processed with deep learning and neural network approaches, algorithms improve by themselves and learn faster. Peripheral countries (and even Europe) are net providers of raw data and pay for digital intelligence.

Intangibles extractivism results in a higher concentration of intangible assets in the hands of a few corporations from the core, which expands their rents at the expense of knowledge and data produced in the peripheries. Some authors conceive this unequal exchange of knowledge and data as a new form of colonialism, defined as data or digital colonialism (Couldry & Mejias, 2019a, 2019b; Kwet, 2019). A vicious cycle is established between intangibles extractivism and the lack of technological autonomy in the peripheries.

My book provides evidence knowledge extractivism from the peripheries by global (but born in core countries) intellectual monopolies. Chapter 12 focuses on the distribution of innovation rents from Singapore’s innovation hub, showing that it is multinational corporations that appropriate most of them. Chapter 13 presents evidence of pharmaceutical knowledge extractivism from the University of Buenos Aires, in Argentina.

Hence, what can we do to tilt the scale against intellectual monopoly capitalism?

We must first acknowledge that this question should be answered through community debates and collective and democratic decision-making processes. So, I only anticipate here some ideas attempting at contributing to such discussions.

Beyond counterbalancing trends, such as knowledge commons and open access initiatives, the current private knowledge regime needs to be overcome. A new commons knowledge regime should simultaneously consider knowledge access and use. In this respect, sci-hub -a website that grants access to academic publications- works as a democratizing development policy. This reform becomes all the more important if we consider the Covid-19 pandemic. Democratizing access to knowledge also requires public (free) education to guarantee that local populations can critically understand it and further elaborate on it.

In a similar vein, data privacy acts aimed at limiting tech giants’ power, further contribute to knowledge privatization by fostering individual property over data. On the contrary, I think that digital global public goods should be fostered. Every Google search, every Amazon purchase, every Facebook or YouTube post, and so on contribute to improve the algorithms used, thus, to improve the services we all receive. Digital platforms are globally produced by society at large and since digital services -in particular those in the hands of big tech companies- tend to be natural monopolies, why not envisioning them as global public goods?

Moreover, peripheral countries must set their own agenda to battle against intellectual monopolies, which should include limiting all forms of extractivism (data, knowledge, and also natural goods, some of them essential for digital value chains).

The accomplishments of these measures and others -such as global agreements to strengthen labour market regulation forbidding new and old forms of informality that the digital (gig) economy takes to unprecedented levels within capitalism-, will only take place if grassroots social movements and workers unions fight for them. As social scientists, we should engage in these fights and this includes retargeting our research agendas. We need to be bold and ask challenging questions, bridge the gap between general trends and specific, in-depth analyses. Our research priorities should consider social and environmental impacts, which require integrating other social actors in the definition of science and technology agendas. Uncovering new and structural trends of capital accumulation, thus identifying the roots of poverty, inequality, and underdevelopment cannot wait. My research on intellectual monopoly capitalism pursues this aim.

References

Couldry, N., & Mejias, U. A. (2019a). Data colonialism: Rethinking big data’s relation to the contemporary subject. Television & New Media, 20(4), 336–349.

Couldry, N., & Mejias, U. A. (2019b). The costs of connection: How data is colonizing human life and appropriating it for capitalism. Stanford University Press.

Dernis, H., Gkotsis, P., Grassano, N., Nakazato, S., Squicciarini, M., van Beuzekom, B., & Vezzani, A. (2019). World Corporate Top R&D investors: Shaping the Future of Technologies and of AI (EUR 29831). Joint Research Centre and OECD report.

Kwet, M. (2019). Digital colonialism: US empire and the new imperialism in the Global South. Race & Class, 60(4), 3–26.

Veblen, T. (1899). The theory of the leisure class: An economic theory of institutions. Macmillen.

World Intellectual Property Organization. (2019). WIPO Technology Trends 2019. Artificial Intelligence. WIPO.

Footnotes

[1] Patents in the 5 largest patent offices: European Patent Office (EPO), Japan Patent Office (JPO), Korean Intellectual Property Office (KIPO), National Intellectual Property Administration of the People’s Republic of China (CNIPA) and the United States Patent and Trademark Office (USPTO).

Cecilia Rikap is a tenure researcher of the CONICET (Argentina’s National research council), associate researcher of the Centre de Population et Développent (CEPED), IRD/Université de Paris and of the COSTECH lab, Université de Technologie de Compiègne. She tweets at @CeciliaRikap.

https://developingeconomics.org/2021/04 ... velopment/

The behavior of Big Pharma to calls for suspension of intellectual property rights in the face of this pandemic puts a point on this article and displays capitalism in all of it's awfulness. Property is death.
"There is great chaos under heaven; the situation is excellent."

User avatar
blindpig
Posts: 10589
Joined: Fri Jul 14, 2017 5:44 pm
Location: Turtle Island
Contact:

Re: The crisis of bourgeois economics

Post by blindpig » Mon May 10, 2021 1:32 pm

Image

What are the real reasons behind the New Cold War?
Posted May 10, 2021 by William I. Robinson
Originally published: ROAR magazine (May 6, 2021) |

The announcement on April 15 by President Biden that this administration was expelling 10 Kremlin diplomats and imposing new sanctions for alleged Russian interference in the 2020 U.S. elections–to which Russia replied with a tit for tat–came just days after the Pentagon conducted military drills in the South China Sea. These actions were but the latest escalation of aggressive posturing as Washington ramps up its “New Cold War” against Russia and China, pushing the world dangerously towards international political and military conflagration.

Most observers attribute this US-instigated war to rivalry and competition over hegemony and international economic control. These factors are important, but there is a bigger picture that has been largely overlooked of what is driving this process: the crisis of global capitalism.

This crisis is economic, or structural. One of chronic stagnation in the global economy. But it is also political: a crisis of state legitimacy and capitalist hegemony. The system is moving towards what we call “a general crisis of capitalist rule” as billions of people around the world face uncertain struggles for survival and question a system they no longer see as legitimate.

In the United States, the ruling groups must channel fear over tenuous survival away from the system and towards scapegoated communities, such as immigrants or Asians blamed for the pandemic, and towards external enemies such as China and Russia. At the same time, rising international tensions legitimate expanding military and security budgets and open up new opportunities for profit making through war, political conflict and repression in the face of stagnation in the civilian economy.

All around the world a “people’s spring” has taken off. From Chile to Lebanon, Iraq to India, France to the United States, Haiti to Nigeria and South Africa to Colombia, waves of strikes and mass protests have proliferated and, in many instances, appear to be acquiring a radical anti-capitalist character. The ruling groups cannot but be frightened by the rumbling from below. If left unchallenged, the New Cold War will become a cornerstone in the arsenal of U.S. rulers and transnational elites to maintain a grip on power as the crisis deepens.

THE CRISIS OF GLOBAL CAPITALISM
Economically, global capitalism faces what is known in technical language as “overaccumulation”: a situation in which the economy has produced–or has the capacity to produce–great quantities of wealth but the market cannot absorb this wealth because of escalating inequality. Capitalism by its very nature will produce abundant wealth yet polarize that wealth and generate ever greater levels of social inequality unless offset by redistributive policies. The level of global social polarization and inequality now experienced is without precedent. In 2018, the richest one percent of humanity controlled more than half of the world’s wealth while the bottom 80 percent had to make do with just five percent.

Such inequalities end up undermining the stability of the system as the gap grows between what is–or could be–produced and what the market can absorb. The extreme concentration of the planet’s wealth in the hands of the few and the accelerated impoverishment and dispossession of the majority means that the transnational capitalist class, or TCC, has increasing difficulty in finding productive outlets to unload enormous amounts of surplus it accumulated.

The more global inequalities expand, the more constricted the world market becomes and the more the system faces a structural crisis of overaccumulation. If left unchecked, expanding social polarization results in crisis–in stagnation, recessions, depressions, social upheavals and war–just what we are experiencing right now.

Contrary to mainstream accounts, the coronavirus pandemic did not cause the crisis of global capitalism, for this was already upon us. On the eve of the pandemic, growth in the EU countries had already shrunk to zero, much of Latin America and sub-Sahara Africa was in recession, growth rates in Asia were steadily declining, and North America faced a slowdown. The writing was on the wall. The contagion was but the spark that ignited the combustible of a global economy that never fully recovered from the 2008 financial collapse and had been teetering on the brink of renewed crisis ever since.

Even if there is a momentary recovery as the world slowly emerges from the pandemic, global capitalism will remain mired in this structural crisis of overaccumulation. In the years leading up to the pandemic there was a steady rise in underutilized capacity and a slowdown in industrial production around the world. The surplus of accumulated capital with nowhere to go expanded rapidly. Transnational corporations recorded record profits during the 2010s at the same time that corporate investment declined.

The total cash held in reserves of the world’s 2,000 biggest non-financial corporations increased from $6.6 trillion in 2010 to $14.2 trillion in 2020–considerably more than the foreign exchange reserves of the world’s central governments–as the global economy stagnated. Wild financial speculation and mounting government corporate, and consumer debt drove growth in the first two decades of the 21st century, but these are temporary and unsustainable solutions to long-term stagnation.

THE GLOBAL WAR ECONOMY
As I showed in my 2020 book, The Global Police State, the global economy has become ever more dependent on the development and deployment of systems of warfare, social control and repression simply as a means of making profit and continuing to accumulate capital in the face of chronic stagnation and saturation of global markets. This is known as “militarized accumulation” and refers to a situation in which a global war economy relies on perpetual state organized war making, social control and repression–driven now by new digital technologies–in order to sustain the process of capital accumulation.

The events of September 11, 2001 marked the start of an era of a permanent global war in which logistics, warfare, intelligence, repression, surveillance and even military personnel are more and more the privatized domain of transnational capital. The Pentagon budget increased 91 percent in real terms between 1998 and 2011, while worldwide, total state military budgets outlays grew by 50 percent from 2006 to 2015, from $1.4 trillion to more than $2 trillion, although this figure did not take into account the hundreds of billions of dollars spent on intelligence, contingency operations, policing, bogus wars against immigrants, terrorism and drugs, and “homeland security.” During this time, military-industrial complex profits quadrupled.

But focusing just on state military budgets only gives us a part of the picture of the global war economy. The various wars, conflicts and campaigns of social control and repression around the world involve the fusion of private accumulation with state militarization. In this relationship, the state facilitates the expansion of opportunities for private capital to accumulate through militarization, such as by facilitating global weapons sales by military-industrial-security firms, the amounts of which have reached unprecedented levels. Global weapons sales by the top 100 weapons manufacturers and military service companies increased by 38 percent between 2002 and 2016.

By 2018, private for-profit military companies employed some 15 million people around the world, while another 20 million people worked in private security worldwide. The private security (policing) business is one of the fastest growing economic sectors in many countries and has come to dwarf public security around the world. The amount spent on private security in 2003, the year of the invasion of Iraq, was 73 percent higher than that spent in the public sphere, and three times as many persons were employed in private forces as in official law enforcement agencies. In half of the world’s countries, private security agents outnumber police officers.

These corporate soldiers and police were deployed to guard corporate property, provide personal security for TCC executives and their families, collect data, conduct police, paramilitary, counterinsurgency and surveillance operations, carry out mass crowd control and repression of protesters, run private detention and interrogation facilities, manage prisons and participate in outright warfare.

In 2018, President Trump announced with much fanfare the creation of a sixth military service, the “space force.” The corporate media duly towed the official line that this force was needed to face expanding threats to the United States. What went less reported is that a small group of former government officials with deep ties to the aerospace industry had pushed behind the scenes for its creation as a way to hype military spending on satellites and other space systems.

In February of this year, the Federation of American Scientists reported that military-industrial complex lobbying is responsible for the decision by the U.S. government to invest at least $100 billion to beef up its nuclear stockpile. The Biden administration announced in early April to much acclaim that it would pull all U.S. troops out of Afghanistan. While U.S. service troops in that country number 2,500, these pale in comparison with the more than 18,000 contractors that U.S. government has hired to do its bidding in the country, including at least 5,000 corporate soldiers that will remain.

The so-called wars on drugs and terrorism, the undeclared wars on immigrants, refugees and gangs–and poor, dark-skinned and working-class youth more generally–the construction of border walls, immigrant detention centers, prison-industrial complexes, systems of mass surveillance and the spread of private security guard and mercenary companies, have all become major sources of profit-making and they will become more important to the system as stagnation becomes the new normal. In sum, the global police state is big business at a time when other opportunities for transnational corporate profit-making are limited.

But if corporate profit, and not an external threat, is the reason for expanding the U.S. state and corporate war machine and the global police state, this must still be justified to the public. The official state propaganda narrative about the “New Cold War” serves this purpose.

CONJURING UP EXTERNAL ENEMIES
There is another dynamic at work in explaining the New Cold War: the crisis of state legitimacy and capitalist hegemony. International tensions derive from the acute political contradiction in global capitalism in which economic globalization takes places within a nation-state-based system of political authority. To put this in technical terms, there is a contradiction between the accumulation function and the legitimacy function of states. That is, states face a contradiction between the need to promote transnational capital accumulation in their individual national territories and their need to achieve political legitimacy and stabilize the domestic social order.

Attracting transnational corporate and financial investments to the national territory requires providing capital with all the incentives associated with neoliberalism, such as downward pressure on wages, union busting, deregulation, low or no taxes, privatization, investment subsidies, fiscal austerity and on so. The result is rising inequality, impoverishment and insecurity for working and popular classes; precisely the conditions that throw states into crises of legitimacy, destabilize national political systems and jeopardize elite control.

International frictions escalate as states, in their efforts to retain legitimacy, seek to sublimate social and political tensions and to keep the social order from fracturing. In the US, this sublimation has involved channeling social unrest towards scapegoated communities such as immigrants–this is one key function of racism and was a core component of the Trump government’s political strategy–or towards an external enemy such as China or Russia, which is clearly becoming a cornerstone of the Biden government’s strategy.

While the Chinese and Russian ruling classes must also face the economic and political fallout of global crisis, their national economies are less dependent on militarized accumulation and their mechanisms of legitimization rest elsewhere–not on conflict with the US. It is Washington that is conjuring up the New Cold War, based not on any political or military threat from China and Russia, much less from economic competition, as US- and Chinese-based transnational corporations are deeply cross-invested, but on the imperative of managing and sublimating the crisis.

The drive by the capitalist state to externalize the political fallout of the crisis increases the danger that international tensions will lead to war. Historically wars have pulled the capitalist system out of crisis while they serve to deflect attention from political tensions and problems of legitimacy. The so-called “peace dividend” that was to result in demilitarization when the original Cold War ended with the 1991 collapse of the Soviet Union evaporated almost overnight with the events of September 2001, which legitimated the sham “War on Terror” as a new pretext for militarization and reactionary nationalism. U.S. presidents historically reach their highest approval ratings when they launch wars. George W. Bush reached an all-time-high of 90 percent in 2001 as his administration geared up to invade Afghanistan, and his father George H. W. Bush achieved an 89 percent approval rating in 1991, right as the U.S. declared the end of its (first) invasion of Iraq and the “liberation of Kuwait.”

THE BATTLE FOR THE POST-PANDEMIC WORLD
We are currently witnessing a radical restructuring and transformation of global capitalism based on a much more advanced digitalization of the entire global economy and society. This process is driven by so-called fourth industrial revolution technologies, including artificial intelligence and machine learning, Big Data, autonomously driven land, air and sea vehicles, quantum and cloud computing, 5G bandwidth, bio- and nanotechnology and the Internet of Things, or IoT.

The crisis is not only economic and political, but also existential because of the threats of ecological collapse and nuclear war, to which we must add the danger of future pandemics that may involve much deadlier microbes than coronaviruses. The pandemic lockdowns served as dry runs for how digitalization may allow the dominant groups to step up restructuring time and space and to exercise greater control over the global working class. The system is now pushing towards expansion through militarization, wars and conflicts, through a new round of violent dispossession and through further plunder of the state.

The ruling classes are also using the health emergency to legitimate tighter control over restive populations. The changing social and economic conditions brought about by the pandemic and its aftermath are accelerating the process. These conditions have helped a new bloc of transnational capital, led by the giant tech companies, interwoven as they are with finance, pharmaceuticals and the military-industrial complex, to amass ever greater power and to consolidate its control over the commanding heights of the global economy. As restructuring proceeds, it heightens the concentration of capital worldwide, worsens social inequality and also aggravates international tensions and the dangers of military conflagration.

In 2018, just seventeen global financial conglomerates collectively managed $41.1 trillion dollars–more than half the GDP of the entire planet. That same year, to reiterate, the richest one percent of humanity led by 36 million millionaires and 2,400 billionaires controlled more than half of the world’s wealth while the bottom 80 percent–nearly six billion people–had to make do with just five percent of this wealth. The result is devastation for the poor majority of humanity.

Worldwide, 50 percent of all people live on less than $2.50 a day and a full 80 percent live on less than $10 per day. One in three people on the planet suffer from some form of malnutrition, nearly a billion go to bed hungry each night and another two billion suffer from food insecurity. Refugees from war, climate change, political repression and economic collapse already number into the hundreds of millions. The New Cold War will further immiserate this mass of humanity.

Capitalist crises are times of intense social and class struggles. There has been a rapid political polarization in global society since 2008 between an insurgent far-right and an insurgent left. The ongoing crisis has incited popular revolts. Workers, farmers and poor people have engaged in a wave of strikes and protests around the world. From Sudan to Chile, France to Thailand, South Africa to the United States, a “people’s spring” is breaking out everywhere. But the crisis also animates far-right and neofascist forces that have surged in many countries around the world and that sought to capitalize politically on the health calamity and its aftermath. Neofascist movements and authoritarian and dictatorial regimes have proliferated around the world as democracy breaks down.

Such savage inequalities are explosive. They fuel mass protest by the oppressed and lead the ruling groups to deploy an ever more omnipresent global police state to contain the rebellion of the global working and popular classes. Global capitalism is emerging from the pandemic in a dangerous new phase. The contradictions of this crisis-ridden system have reached the breaking point, placing the world into a perilous situation that borders on global civil war.

The stakes could not be higher. The battle for the post-pandemic world is now being waged. Part of that battle is to expose the New Cold War as a ruse by the dominant groups to deflect our attention from the escalating crisis of global capitalism.

https://mronline.org/2021/05/10/what-ar ... -cold-war/
"There is great chaos under heaven; the situation is excellent."

User avatar
blindpig
Posts: 10589
Joined: Fri Jul 14, 2017 5:44 pm
Location: Turtle Island
Contact:

Re: The crisis of bourgeois economics

Post by blindpig » Mon May 17, 2021 1:15 pm

WHO PAYS THE BILL FOR THE DISASTER?
Sergio Rodríguez Gelfenstein

May 13 , 2021 , 10:57 am .

Image
Covid expenses reach trillions of dollars worldwide (Photo: wildpixel / Getty Images)

To my Nicaraguan friend and brother Luis Armando Guzmán (El Chiri), who left us before his time, leaving us forever his noble, combative, fraternal and supportive spirit.

Much more than a simple conjunctural crisis, the capitalist system is confronted with fundamental failures that are related to the contradictions that are generated in its monopolistic imperialist phase. The Covid19 pandemic has shown like never before the seams of the structure of world domination in which citizens are mere spectators who attend the drama of their own sacrifice in favor of the maintenance of capital.

Faced with this, the great centers of power in the West have set out to search for antidotes that allow the treatment of evil not only in the immediate crisis, but above all by taking care to act towards the depths of the system.

But since cancer cannot be cured with aspirin, shock therapies are being used to exterminate those they consider a malignant virus that has penetrated their guts to destabilize them.

Thus, away from the powers, several of the countries that have been used as a model in the implementation of neoliberal systems of authoritarian and violent representative democracy, are collapsing under the impulse of peoples who show fatigue before an exclusion that places them at subhuman levels subsistence. These are the cases of Yemen, Chile, Colombia and Palestine, to name just a few, where the crisis becomes more dramatic.

In the very centers of world power, governments are rushing to take action that shows despair at the need to save themselves. In President Joe Biden's speech before Congress on the 100th day of his assumption of the highest magistracy in the country, the need to increase social investment "in line with the most orthodox traditions of liberal Democrats" was highlighted, according to Cuban analyst Jesús Arboleya. By announcing some measures in this regard, Biden sought to respond to sectors close to Bernie Sanders who, after the senator's defection, were compelled to support the former vice president located politically at the opposite end of his party.

According to Arboleya, the problem that emanates from these proposals is given by the ability to specify them. The measures that fall within a typical Keynesian orientation refer to what more and more analysts are warning about Biden's interest in resembling his counterpart Franklin D. Roosevelt. But this fact reminds that Roosevelt had to respond in this way to face what until now was considered the greatest crisis in the history of the United States: the one that occurred between 1929 and 1933. This situation shows the size of the current crisis it crosses the power of the North.

Among the measures taken more recently that are included in a package that amounts to 1.8 trillion dollars, stand out -according to Arboleya- "... multi-million dollar relief plans for the economic effects of the pandemic and large state investments in civil infrastructure, [...] billions of dollars to guarantee free access to community colleges, child care and improvements in the health system, which has been called the American Family Plan, to which was added the call to face related social problems with social equity, systemic racism, women's rights, the protection of the universal vote, gun control, care for the environment and better treatment of immigrants. "

TAXES ON THE SUPER-RICH IN THE US COULD GENERATE CONFLICTS

This new plan is added to a previous one for 2 trillion dollars dedicated to infrastructure, which is added to the 4.3 trillion dollars that have been allocated to broken down legislative actions (3.8 trillion) and administrative (0.5) of the 6.8 trillion committed and the 2.9 trillion (of the 6 committed) of the Federal Reserve, all of which -in any case- is insufficient considering that the total cost of the pandemic in the United States is 16 trillions of dollars, according to Juan Torres López, a Spanish economist, professor of Applied Economics at the University of Seville, citing David M. Cutler and Lawrence H. Summers ( The Covid-19 Pandemic and the $ 16 Trillion Virus ).

The problem of the problem is, then, to find the resources to make these proposals a reality. In this sense, the Biden administration can resort to inorganic issuance of money. More than anything else, they are the owners of the little machine that makes them and they will have no problem doing so, thus carrying the salvation of the United States to the entire planet. To this is going to be added another option aimed at raising taxes on the highest sectors of society, the owners of capital and large companies, which could upset the millionaires and generate conflicts.

But, oh surprise! Although it is about raising taxes on the rich from 20% to 40%, there has not been the slightest opposition from him. They realize that it is that or to start the transit through the route of hell, since it is not possible to sustain a country that prides itself on being the greatest world power with a minimum income of 8 dollars per hour of work.

On the other hand, in a letter by Luis Casado already cited in previous articles, this Chilean analyst reminds us that the United States had taxes of 90% when they enjoyed their highest levels of growth. Citing The History of Taxation in the USA , Casado states that:

"For the fiscal years 1944 to 1951, the maximum marginal rate for individual income tax was 91%, rising to 92% for the years 1952 and 1953, and returning to 91% for taxes for the years 1954 to 1963. For fiscal year 1964 the highest marginal rate for income tax was reduced to 77%, and then to 70% for fiscal years 1965 to 1981 ".

It also tells us that the last six presidents in the 40 years since 1981 have continued to reduce the tax burden on millionaires to 20%. This is the reason why - seen in historical perspective - this "increase" of 20%, in reality means a reduction of 50%, still highly advantageous to increase profits. Recent events, especially since the beginning of the pandemic, demonstrate this.

Someone could say that Biden became "socialist" taking typical measures of governments of that orientation that assume the preaching of a high intervention of the State in the management of the economy. However, basically, this reality is a clear manifestation of the dimension of the difficulties that afflict the system, without even the big capitalists expressing concern about the "decrease" of their profit levels if they are obliged by law to assume a greater prominence in meeting the costs of the crisis.

https://misionverdad.com/opinion/quien- ... l-desastre

Google Translator

No doubt that Biden's motivation for the Keynesian measures in his proposal is political. However, to say that the great booj are on board with this out of recognition of the depth of the crisis is premature. Perhaps shock muted their initial response. In any case, unless they feel the existential breathing down their collective necks then individual advantage is their only goal. So, some will, some won't, depending upon how proposed measures affect them personally. Of course there will be a few, mebbe even more than a few, who feel secure enough and are educated enough to respond to the collective crisis, but the number of those will never be anything near a plurality of the rich, capitalist competition assures this. Advantage will nearly always be seized(which should be our motto too!).

When the dust settles I expect we will be trickled upon, as usual, with perhaps a few bells and whistles which the pols can point to as proof of their worth. Lots of mealy-mouthed excuses, blame the 'radicals', "We need more Dems in office, send money!". Rinse and repeat.
"There is great chaos under heaven; the situation is excellent."

Post Reply