Economics

Why competition breeds monopolies

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Economy Class

When I was at university friends who studied economics were told that not only is the boom and slump cycle entirely natural, but that it was also a good thing. One professor said "the economy is like a drunk throwing up the morning after the night before". A slump may not be pleasant, but it was necessary to cleanse the system.

What Causes Boom and Bust?

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Gordon Brown used to endlessly repeat the mantra that, thanks to New Labour's policies, there would be "no return to boom and bust".

That looks laughable given recent events. At least it would be funny if people's lives were not being savaged by recession and cuts.

In reality, the history of capitalism is one of successive expansions followed by collapse. Today's apologists will have to choose their words more carefully given the objective reality of the crisis. Yet during booms when new buildings go up on a grand scale, high street sales increase and unemployment falls, enthusiasm towards the market seems to correspond to an extent with reality.

Economy class

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Does money make the world go round?

Money is a key factor in explaining inequalities in the world today. Rich people can pay for the best healthcare, education and lifestyle. It seems as though "money makes the world go round". For those who want to challenge inequality, money is therefore an obvious target. Would abolishing money address the injustices at the heart of capitalist society? In order to answer this question, we have to understand what money is.

Economy class

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Accumulation: the motor of capitalism

We are often told that what drives capitalism is greed - the endless desire to accumulate more and more wealth. The idea that individuals are just self-interested was promoted by classical political economists such as Adam Smith. Smith attributed to humans a natural propensity to "truck and barter". This was, he argued, all part of the "economic man".

Can Marxism explain the crisis?

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Recent panic in the stock markets has led some commentators to ask whether Karl Marx might have been right after all. Bill Dunn explains some of the core ideas at the heart of Marx's understanding of capitalism and shows how they can be used to explain the system's current crisis

Worries that banks might not get the returns they expected from lending to Greece and other states have provoked a fresh round of stock market panic. The International Monetary Fund (IMF) has downgraded its global growth forecast for 2012 to 4 percent. By coincidence, this is exactly the same figure that in October 2008 it predicted for 2009. It had no idea, even after it had begun, that we were in for a spectacular contraction.

The state of the global economy

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Bankers and bosses appeared cheerful at this year's World Economic Forum in Davos. But the state of the global economy remains precarious

Last month the global ruling class - the bankers, political leaders, the CEOs of top multinationals and their acolytes - met for the World Economic Forum at the luxurious Swiss ski resort in Davos.

Band of warring brothers

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The spending review comes at a time of high international tension, as governments around the world compete to escape economic ruin. Jane Hardy analyses the global "currency wars".

Financial pundits have given up scrabbling for the green shoots of recovery. New York professor Nouriel Roubini said on 14 October, "The growth rate is so low it's going to feel like a recession even if technically it's not a recession." On top of that he has predicted that there is a 35 to 40 percent chance of a double dip recession. The recovery in the US, the heartland of global capitalism, looked extremely fragile. In mid-October the dollar hit a 15-year low and unemployment increased, and 18 months into the so-called recovery jobs are still being shed.

An assault on us all

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Joseph Choonara opens our coverage of the spending review, arguing that George Osborne's plans expose the lie that "we're all in it together".


Photo: Guy Smallman

The Osborne Axe has fallen. The chancellor's spending review heralds the deepest assault on the public sector since the Second World War. George Osborne's key lines of attack give the lie to his claim that "we are all in it together".

Same old ideology

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Economist Graham Turner gives his assessment of the austerity plans and their wider significance.

George Osborne's spending review does not pull any punches. Page 13 of the document outlines the "scale of the fiscal challenge". He argues that "the spending plans in the 2007 comprehensive spending review were based on unsustainable assumptions about the public finances". It goes on to say that government attempts to tackle the "structural deficit did not begin to take effect until 2010, by which time the impact of the financial crisis had made an unaffordable situation unsustainable".

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