Economic crisis

The politics of economics

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The efforts of governments and central bankers to prop up the financial system and make workers pay for the crisis can be derailed by rising anger.

Great economic crises cause ructions within global capitalism, both among those who exploit and rule, and among those whose labour keeps the system going.
This year's financial crisis is no exception. Not since the collapse of the old Eastern bloc and the USSR in 1989-91 have we had a spectacle of major ruling classes being thrown into such turmoil.

Hope and despair - the experience of the 1930s and the crisis today

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As he reaches his 80th birthday this month, Noam Chomsky looks at Barack Obama's victory, today's economic crisis and his memories of a childhood shaped by the 1930s Depression.

I'm old enough to remember the Depression. Some of my earliest childhood memories are of people coming to the door trying to sell rags. Most of the extended family was unemployed, all my aunts were seamstresses, and there were shop boys, things like that. My most striking memories are of things like riding a trolley car with my mother past a textile factory where security forces were beating women strikers, and I remember going with my father to what looked like an extremely imposing building where he was trying to get some money and couldn't - his bank had closed.

Iceland's bosses in hot water

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As the collapse of Iceland's economy threatens workers' living standards there, Sarah Ensor reveals how the Icelandic working class met the depression of the 1930s with militant resistance.

The Financial Times described Iceland as a "reasonably large banking system with a small country attached". Yet until the 1990s this was a small economy based on fish and cheap geothermal energy. Between 1940 and the 1970s the former Danish colony halfway between Moscow and Washington built valuable relationships with both states. Standards of living were high and inequality relatively low. Then a new breed of entrepreneurs emerged.

The value of money

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How do the billions wiped off the stock market relate to the rest of the capitalist system? Joseph Choonara goes back to Karl Marx to explain.

Pity money. Over recent months it has been "injected" into markets, "destroyed" in financial meltdowns and stock market collapses; it has been "devalued" and "revalued" and passed along the increasingly unfathomable webs spun by capital.

How will the economic crisis affect people's lives?

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The collapse of the subprime mortgage market last year which spread to the global banking system is now biting into the real economy and employment, writes Kevin Devine.

Heaven knows it's hard to be upset about merchant bankers losing their jobs, but the so-called "credit crunch" has now turned into a much more serious crisis of the banking system as a whole. Given the banks' centrality to capitalism's market economy, a serious recession is now very much on the cards. Massive exposure to the tottering pyramid of debt associated with the "subprime" mortgage market and other scams means that the banks have pretty much stopped lending to each other and other businesses.

Money for the banks...

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My first thought when the government bailed out Northern Rock last year was, where the hell does it find this kind of money when there's never a spare million for a new school or hospital?

That was nothing. Last month has brought new surprises at the amount of wealth in the system and how prepared governments are to use it to bail out the rich and powerful.

The whole scale of it takes your breath away. Banks lent money they didn't have to people who couldn't pay it back and then packaged these debts as prettily as they could and sold them on in such a way that no one really knew where they were. When this game of pass the parcel stopped, everyone panicked and refused to lend to one another.

State of dependence

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The era of globalisation meant that national states would have no role in modern capitalism. This was a myth accepted by many, left and right. Mark L Thomas argues this was never the case and looks at the impact of recent state interventions to rescue the free market.

When Alistair Darling, the chancellor, put £37 billion into three British banks, effectively part-nationalising them, in mid-October in the hope of stabilising the banking system, it capped a remarkable few weeks. Here were New Labour, champions of the free market and the City of London, doing something Old Labour had never dared. This happened just days after the return of that arch-neoliberal Peter Mandelson to the cabinet and was all done with the backing of the party of Margaret Thatcher.

John Maynard Keynes - the second coming

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Politicians and economists across the world are dusting off their copies of the works of economist John Maynard Keynes. Suddenly the free market needs rescuing and state intervention appears to be the only solution to the crash.

Financial cupboards that were declared bare for every other demand - public sector pay, pensions, education and public housing - are suddenly bursting with borrowed billions to bail out the system.

Market madness

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The ruling classes of the US and Britain are reeling in the face of the economic meltdown of their system and the real character of capitalism is exposed, writes Chris Harman

On Sunday 7 September the most right wing Republican administration in the US for three quarters of a century carried out the takeover of the mortgage giants Freddie Mac and Fannie Mae. It was then what appeared to be the "greatest nationalisation in the history of humanity", as Nouriel Roubini, professor at New York University and former US government adviser, described it.

System failure: Economic turmoil and endless war

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As the worst economic crisis since the 1929 crash rips through the world's markets, Alex Callinicos analyses the factors driving ever greater political instabilities across the globe

The world took a big step into even greater economic and geopolitical instability in the summer and early autumn of 2008. The credit crunch that started when the financial markets froze up in August 2007 shows every sign of becoming a global economic crisis. And the drive by the US to shore up its position as the hegemonic capitalist state has precipitated a potentially very dangerous confrontation with Moscow after the brief war between Russia and Georgia in August. Never has there been a greater need for a powerful anti-capitalist and anti-imperialist left.

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