Economics

Instability and crisis in China

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Despite its meteoric growth rates, China may not be the economic juggernaut the Western media portrays. Jane Hardy uncovers the structural tensions and the workers' movements challenging the global superpower.

According to the International Monetary Fund the US has been knocked off top spot in the global economy and replaced by China. This further heightens the hype about China. But a recent book by Matthew Crabbe, Myth Busting China’s Numbers, is critical of some of the statistics. If you take spending power per head, for example, the picture is very different.

Chained to austerity

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Despite slashing public spending, the coalition's economic medicine has failed. Now the economy is taking another turn for the worse.

According to the Greek legend Prometheus, who angered the gods by stealing fire from them, was chained to a rock to have his liver eaten away by an eagle. Each night the liver would grow back so when dawn broke the torture might begin again. So too the budget deficit. No matter the savagery that chancellor George Osborne perpetrates, it is still there the morning after.

Euro banks fail the stress test

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Bankers were crowing at the end of October when it was revealed that “only” 25 Eurozone banks failed stress tests conducted by the European Central Bank (ECB).

The tests, which looked at how banks would cope with adverse economic conditions, highlighted particular problems for the troubled Italian economy, where nine banks failed, but gave the all clear to much of the sector across Europe.

There are, however, questions about the stringency of the tests, especially as earlier tests, in 2011, cleared banks in Belgium and Ireland months before they had to be bailed out.

Exploring Capital

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The current crisis of capitalism has coincided with a renewed interest in Marx's Capital. Socialist Review spoke to Alex Callinicos about his forthcoming book examining Marx's understanding of capitalism.


There's been a revival of interest and debate in Marx's Capital. Why do you think this is and why did you want to intervene in these debates with your new book?

The main reason is because of the radicalisation and resistance to neoliberalism that we've seen since the 1990s. Initially there were critiques of neoliberalism and capitalism on very diverse intellectual bases.

Why read Wage-Labour and Capital?

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Wage-Labour and Capital is online at http://bit.ly/187qEer

Karl Marx's pamphlet Wage Labour and Capital first appeared as a series of articles in Neue Rheinische Zeitung, the newspaper that Marx edited during the 1848-9 revolution that swept Germany and Europe.

The articles were based lectures that Marx had given to German workers in Brussels in 1847.

Marx's aim in the pamphlet is to set out and explain "the economic conditions which form the material basis of the present struggles between classes."

What's wrong with the Keynesian answer to austerity?

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As austerity measures bite while the economy continues to flatline, arguments for a Keynesian response to the recession are gaining traction. Marxist economist Michael Roberts casts a critical eye over the Keynesian case, arguing that it misunderstands the causes of capitalist crisis

A new radical think-tank kicked off last year in the UK. It's got a great name: Class: the Centre for Labour and Social Studies. Sounds socialist, even Marxist, doesn't it? Unfortunately, at its first meeting the speakers, especially the economists, were all Keynesians. All the arguments against austerity were Keynesian. Apparently, a Marxist analysis has no contribution to make in explaining the Great Recession and the ensuing long depression - or what to do about it.

Of zombies and cannibals

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With many unprofitable companies avoiding bankruptcy, can capitalism rise from the dead?

Anyone turning to the economics sections of the "high-brow" press recently could be forgiven for thinking they had turned to the film reviews section by mistake. Talk of zombies has been everywhere - but it isn't the latest film from director George Romero they have been discussing. Instead it's "zombie banks", "zombie firms" and even "zombie households" that are the focus of much attention.

Economy Class: The myths of globalisation

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Companies still rely on states to protect their profits


Complex supply chains give groups of workers a lot of power to halt production


Globalisation emerged as a fashionable concept in the years after the ending of the Cold War. Neoliberalism had established itself as the new economic orthodoxy in the West during the 1980s, preaching the need for privatisation and attacks on the welfare state.

With the disintegration of the Soviet Union, champions of neoliberalism declared "the end of history", expecting an end to any systemic opposition to capitalism. Globalisation was to sweep the free market, unfettered and unregulated, into former "communist" countries and beyond.

The permanent arms economy and the long boom

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Economy Class

The long boom that lasted from the 1940s to the 1970s was the "golden age" of capitalism. Today it is something only glimpsed in episodes of Mad Men and old movies. Yet this golden age did exist with full employment and rising living standards and the creation of the welfare state. It was an age of consumption and there was a widespread feeling that things really could only get better.

Can Keynes solve the crisis?

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• Keynes argued against cutting workers' wages in a recession and leaving the market to its own devices

• He argued that governments should cut interest rates and directly invest to lift the economy

• But he tailored his solutions to what bosses would accept

The ideas of John Maynard Keynes are back with a vengeance. This has been a consistent theme in the past few years, from the corridors of power to the pages of the Financial Times. After 30 years of deriding Keynes's ideas many are now reconsidering the economic remedies he prescribed.

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