Archive for ‘Uncategorized’

May 9, 2012

The New Few: warning from a Tory radical

The New Few, or A Very British Oligarchy: Power and Inequality in Britain Now 
By Ferdinand Mount (Simon & Schuster 305pp £18.99)

From the ES review:

The New Few then races through some corrosive examples. The still-shocking £9bn HSBC takeover of sub-prime vultures Household, culminating in £53bn set-aside to sweep up this folly; the “festering morass of bad debts” that was HBOS; vainglorious Fred the Shred, and many more. The central concern is the arbitrary power of the CEO and decline of the active shareholder, interlocked with the rise of the fund manager with their top-slice off every transaction: a “croupier’s take”. In short, there was systemic collusion between the two dominant groups. “One set of oligarchs- the fund managers – approve the size of salaries, bonuses and pension pots for another set of oligarchs – the CEOs, board members and senior managers”.

Why so little appetite to confront these excesses? Mount identifies three basic reasons- or excuses, or illusions – that sustain the system. “The market is always right”; “big is beautiful”, and “complexity equals progress”: they echo the dominance of neo-liberalism, of a system too big to fail, due to the sheer complexity of financial products with no appreciation of moral hazard. A brief history of oligarchy follows, and the forces that shape it: war, technology, bureaucracy, forms of ideology – the links between money and power.

From Nick Cohen’s review:

read more »

March 26, 2012

rrrrrrrrrrrrrrr //

A capitalism's social pyramid

Very promising new blog:

D. Harvey, “Towards Urban Revolution?”

The city is a terrain where anti-capitalist struggles have always flourished.

The history of such struggles, from the Paris Commune through the Shanghai
Commune, the Seattle General Strike, The Tucuman uprising and the Prague
Spring to the more general urban-based movements of 1968 (which we now
see faintly echoed in Cairo and Madison) is stunning. But it is a history that
is also troubled by political and tactical complications that have led many on
the left to underestimate and misunderstand the potential and the potency
of urban-based movements, to often see them as separate from class struggle
and therefore devoid of revolutionary potential. And when such events do
take on iconic status, as in the case of the Paris Commune, they are typically
claimed as one of ‘the greatest proletarian uprisings’ in world history, even as
they were as much about reclaiming the right to the city as they were about
revolutionizing class relations in production.

Labor’s location and power in finance

“[L]abour itself is being incorporated into capital in new ways, not just via workplace discipline but via the process of securitization. Some have sensed this new development, but have cast it in terms of growing household debt, with the appropriation of interest payments out of labour’s income being treated as a further ‘take’ on surplus value. But this is not the critical aspect of the development, and it is certainly not new….The critical development is the recasting of labour as the provider of income streams for securities, to facilitate asset diversification and the search for yield. The rapid growth of mortgage, auto, credit card and student loans, as well as contracts on telephones, energy and healthcare, all provide the raw materials on which securities are built to meet the demands of global investors.


Anticipating the Occupy Movement

There is a vicious campaign underway at the moment against ‘communism’, this despite the utter lack of a Left with any social power. The most meager Democratic Party proposals, or defenses of remaining aspects of the social safety net, minor extensions in unemployment aid, are branded ‘class warfare.’


October 21, 2011

Who runs the world?


From The New Scientist:



AS PROTESTS against financial power sweep the world this week, science may have confirmed the protesters’ worst fears. An analysis of the relationships between 43,000 transnational corporations has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy.


The study’s assumptions have attracted some criticism, but complex systems analysts contacted by New Scientist say it is a unique effort to untangle control in the global economy. Pushing the analysis further, they say, could help to identify ways of making global capitalism more stable.


The idea that a few bankers control a large chunk of the global economy might not seem like news to New York’s Occupy Wall Street movement and protesters elsewhere (see photo). But the study, by a trio of complex systems theorists at the Swiss Federal Institute of Technology in Zurich, is the first to go beyond ideology to empirically identify such a network of power. It combines the mathematics long used to model natural systems with comprehensive corporate data to map ownership among the world’s transnational corporations (TNCs).


“Reality is so complex, we must move away from dogma, whether it’s conspiracy theories or free-market,” says James Glattfelder. “Our analysis is reality-based.”


Previous studies have found that a few TNCs own large chunks of the world’s economy, but they included only a limited number of companies and omitted indirect ownerships, so could not say how this affected the global economy – whether it made it more or less stable, for instance.


The Zurich team can. From Orbis 2007, a database listing 37 million companies and investors worldwide, they pulled out all 43,060 TNCs and the share ownerships linking them. Then they constructed a model of which companies controlled others through shareholding networks, coupled with each company’s operating revenues, to map the structure of economic power.


The work, to be published in PloS One, revealed a core of 1318 companies with interlocking ownerships (see image). Each of the 1318 had ties to two or more other companies, and on average they were connected to 20. What’s more, although they represented 20 per cent of global operating revenues, the 1318 appeared to collectively own through their shares the majority of the world’s large blue chip and manufacturing firms – the “real” economy – representing a further 60 per cent of global revenues.


When the team further untangled the web of ownership, it found much of it tracked back to a “super-entity” of 147 even more tightly knit companies – all of their ownership was held by other members of the super-entity – that controlled 40 per cent of the total wealth in the network. “In effect, less than 1 per cent of the companies were able to control 40 per cent of the entire network,” says Glattfelder. Most were financial institutions. The top 20 included Barclays Bank, JPMorgan Chase & Co, and The Goldman Sachs Group.


John Driffill of the University of London, a macroeconomics expert, says the value of the analysis is not just to see if a small number of people controls the global economy, but rather its insights into economic stability.


Concentration of power is not good or bad in itself, says the Zurich team, but the core’s tight interconnections could be. As the world learned in 2008, such networks are unstable. “If one [company] suffers distress,” says Glattfelder, “this propagates.”


“It’s disconcerting to see how connected things really are,” agrees George Sugihara of the Scripps Institution of Oceanography in La Jolla, California, a complex systems expert who has advised Deutsche Bank.


Yaneer Bar-Yam, head of the New England Complex Systems Institute (NECSI), warns that the analysis assumes ownership equates to control, which is not always true. Most company shares are held by fund managers who may or may not control what the companies they part-own actually do. The impact of this on the system’s behaviour, he says, requires more analysis.


Crucially, by identifying the architecture of global economic power, the analysis could help make it more stable. By finding the vulnerable aspects of the system, economists can suggest measures to prevent future collapses spreading through the entire economy. Glattfelder says we may need global anti-trust rules, which now exist only at national level, to limit over-connection among TNCs. Bar-Yam says the analysis suggests one possible solution: firms should be taxed for excess interconnectivity to discourage this risk.


One thing won’t chime with some of the protesters’ claims: the super-entity is unlikely to be the intentional result of a conspiracy to rule the world. “Such structures are common in nature,” says Sugihara.


Newcomers to any network connect preferentially to highly connected members. TNCs buy shares in each other for business reasons, not for world domination. If connectedness clusters, so does wealth, says Dan Braha of NECSI: in similar models, money flows towards the most highly connected members. The Zurich study, says Sugihara, “is strong evidence that simple rules governing TNCs give rise spontaneously to highly connected groups”. Or as Braha puts it: “The Occupy Wall Street claim that 1 per cent of people have most of the wealth reflects a logical phase of the self-organising economy.”


So, the super-entity may not result from conspiracy. The real question, says the Zurich team, is whether it can exert concerted political power. Driffill feels 147 is too many to sustain collusion. Braha suspects they will compete in the market but act together on common interests. Resisting changes to the network structure may be one such common interest.


The top 50 of the 147 superconnected companies

1. Barclays plc
2. Capital Group Companies Inc
3. FMR Corporation
4. AXA
5. State Street Corporation
6. JP Morgan Chase & Co
7. Legal & General Group plc
8. Vanguard Group Inc
10. Merrill Lynch & Co Inc
11. Wellington Management Co LLP
12. Deutsche Bank AG
13. Franklin Resources Inc
14. Credit Suisse Group
15. Walton Enterprises LLC
16. Bank of New York Mellon Corp
17. Natixis
18. Goldman Sachs Group Inc
19. T Rowe Price Group Inc
20. Legg Mason Inc
21. Morgan Stanley
22. Mitsubishi UFJ Financial Group Inc
23. Northern Trust Corporation
24. Société Générale
25. Bank of America Corporation
26. Lloyds TSB Group plc
27. Invesco plc
28. Allianz SE 29. TIAA
30. Old Mutual Public Limited Company
31. Aviva plc
32. Schroders plc
33. Dodge & Cox
34. Lehman Brothers Holdings Inc*
35. Sun Life Financial Inc
36. Standard Life plc
37. CNCE
38. Nomura Holdings Inc
39. The Depository Trust Company
40. Massachusetts Mutual Life Insurance
41. ING Groep NV
42. Brandes Investment Partners LP
43. Unicredito Italiano SPA
44. Deposit Insurance Corporation of Japan
45. Vereniging Aegon
46. BNP Paribas
47. Affiliated Managers Group Inc
48. Resona Holdings Inc
49. Capital Group International Inc
50. China Petrochemical Group Company

* Lehman still existed in the 2007 dataset used

From Principia Dialectica:

Goldman Sachs overview of debt crisis

Piecemeal view — to keep the news economy flowing
Robert PESTON was on the same train as Junius with his assistant talking very loudly, what an annoying twat. That does not help a dialogue. He spoke of Greece. But he seems to be a surface character, he did not say anything of note. In fact Le Monde of the 6th of October says that Greece is now in recession. And that the demands by the EU are too much for the people to bear. They need to find another solution, i.e. wipe out the debts and start again.. Peston spoke alot of having speakers for some event, he mentioned his friend Julia Hobsbawm, Seb Coe and other celebreties. You wonder what these people can deliver, more surperficial hogwash.

Thought about going to show Le Monde with the article about recession in Greece and also the one about the collapse of the raw materials market to Peston.. But that would have been a bad move. Maybe you should never tell the enemy what he ought to do, as Machiavelli , Gracian or Sun Tzu recommend. In any case he moved out of the train very fast,  just as he speaks. But maybe it would have been a good idea to engage with Peston, to see what he would have said. It is a dilemma, just like th Greek crisis. (Drop a line to Aufheben, they’re got form in that area, Ed)

October 5, 2011

It’s the economy, stupid

In this round-up, why we need economics, why China is a growing power for reaction in the world, the corruption of the UK banking industry, the obscene wealth of the tax-evading fatcats, and the bizarre fashionable anti-capitalist backlash on Wall Street. First, some satire from the Daily Mash.

Trader may have been acting in own self-interest

THERE is a chance the scary trader on the BBC News may have been acting selfishly, it has emerged.

Alessio Rastani said stockmarkets were ‘toast’, the Eurozone rescue package would fail and that in 12 months your savings would be wiped out, in a move that experts said was clearly about making a colossal amount of money by lunchtime.

The trader, who does not get invited to a huge number of parties, also left millions of viewers traumatised with the revelation that financial markets do not care about them.

Julian Cook, chief economist at Donnelly-McPartlin, said: “Rastani has obviously built up significant positions in panic, paranoia and Mad Max futures, but the emerging Eurozone deal could have knocked at least 12% off their value.

“Therefore he had no choice but to go on television and tell you that you were going to die. I’m only surprised he didn’t put an unloaded pistol to his head and pull the trigger.”

Martin Bishop, fear analyst at Madeley Finnegan, said: “Rastani has already driven fear prices up 6%. “And this is top quality, long-term fear because it comes from an expert who everyone knows is a total shark but also has no idea whether or not to believe him and so will inevitably just do exactly what he says.”

Meanwhile Rastani also claimed that ‘Goldman Sachs, not governments, rule the world’ leading to an explosion in online I-told-you-sos from amateur experts who have been saying this sort of thing in pubs for years.

But Roy Hobbs, professor of simplification at Roehampton University, said: “With all due respect to Goldman Sachs, it’s actually run by a complex network of bastards.

“Or do Goldman Sachs pay me to say that? You’ll never know.”

Irish Left Review · Has the Left given up on Economics? – Though provoking post here from Nick Srnicek of Disorder of Things: The leftist response to the economic crisis has instead been mostly been to focus on piecemeal reactions against government policies. The student movement arose as a response to tuition fee and EMA changes; the right to protest movement arose as a response to heavy-handed police treatment; and leftist parties have suggested a mere moderation of existing government policies. The project to bring about a fully different economic system has been shirked in favour of smaller-scale protests. There is widespread critique, but little construction.[…]


Russia, China veto UN resolution on Syria crackdown – Russia, China veto UN resolution on Syria crackdown By Tim Witcher (AFP) – 3 hours ago UNITED NATIONS — A senior aide to Syria’s embattled President Bashar al-Assad on Wednesday hailed as “historic” Russian and Chinese vetoes of a UN resolution against his regime’s deadly crackdown on protests. But Syria’s newly united opposition said that by voting against the European-proposed resolution at the UN Security Council, Russia and China risked provoking opponents of Assad’s regime to resort to violence. […]

Osborne admits UK banks ran ‘ponzi schemes’ – by Sunny Hundal     October 5, 2011 at 10:20 amI missed this key passage from George Osborne’s speech to Tory conference: The banks and those regulating them believed that the bubble would never stop growing, that markets were always self- correcting, that greed was always good, thattheir Ponzi schemes would never collapse, and that none of the debts would ever turn bad.[…]

Billionaire Bet: Warren Buffett Challenges Rupert Murdoch To Release His Tax Returns – NEWS FLASH Billionaire Bet: Last week, News Corp’s Wall Street Journal editorial board told the billionaire behind the president’s “Buffett Rule” that, instead of calling for America’s wealthy to pay their fair share in taxes, Warren Buffett should “educate the public” by allowing “everyone else in on his secrets of tax avoidance by releasing his tax returns.” Today at Fortune’s Most Powerful Women Summit, Buffett wholeheartedly agreed to release his tax returns to the public. He just has one condition: “I think it might be a terrific idea if [the Wall Street Journal] would just ask their boss, Rupert Murdoch, and he and I will meet at Fortune, and we’ll both give you our tax returns and you can publish them.” Buffett noted, “I’m ready tomorrow morning.” Murdoch has yet to respond.

MICHAEL KINSLEY – Goldman Sachs, the huge and hugely profitable investment bank, has become a symbol of the financial excesses that helped to bring on the current recession. Because Goldman is thought of as a “Jewish” firm, and because it dominates the financial industry, criticism of Goldman, or of bankers generally, is often accused of being anti-Semitic. Commentators including Rush Limbaugh and Maureen Dowd have been so accused. When, if ever, are such accusations fair? […]

Isca Stieglitz – Insider trading? It’s not Alessio Rastani or Goldman-Sachs I’m worried about!

GREENS ENGAGE – Funny isn’t it? Greens – we’re predominantly ‘anti’ capitalist, are deeply suspicious of anything remotely ‘businessy’ (unless it passes ‘green’ muster), and certainly question the motives of those involved in it…or at least until ‘someone’ says exactly what we want to hear. How quickly the leap is made, how quickly the scrutiny stops and how quickly we latch onto people who wouldn’t ordinarily get our time of day. However, with a whiff of ‘conspiracy’, a sniff of ‘rule the world’ and a large helping of ‘we told you so’, (when all that’s been stated is the bleedin’ obvious), and we’re there posting and hosting like we’ve just discovered something ground breaking – no checking, no research, no search for provenance – the complete suspension of scrutiny and the hanging on the every word of bloke no one knows. Ah, but he’s a ‘trader’ so he must know stuff and now he’s gone on telly and shared seemingly (not!) big secrets, well, we can obviously trust him. I’m not saying I trust Rastani or not, I don’t know enough at this stage to make that decision and that’s the point, neither does anyone else. I wonder about the mind of someone who jumps so quickly. […]

Who are the 99 percent? – (Ramin Talaie – BLOOMBERG) “I did everything I was supposed to and I have nothing to show for it.” t’s not the arrests that convinced me that “Occupy Wall Street” was worth covering seriously. Nor was it their press strategy, which largely consisted of tweeting journalists to cover a small protest that couldn’t say what, exactly, it hoped to achieve. It was a Tumblr called, “We Are The 99 Percent,” and all it’s doing is posting grainy pictures of people holding handwritten signs telling their stories, one after the other.[…]

Joined Protest on the Brooklyn Bridge, Got Trapped, But Didn’t Get Arrested / And some thoughts about all this

NEVER GOT USED TO IT – I’ve been a pretty active activist the past few days, though I’ve been going on my own, with a downbeat attitude that repeatedly gets turned around. I went on a protest to the NYPD yesterday. Well, that was not so great, except for a few minutes, when the bulk of the protest first arrived at the police headquarters. That was fun. Also, I like a chant that developed briefly that went, “Students, labor, shut the city down.” At least I think that’s what they were saying – and if it is, I am all for that! I go along with “Banks got bailed out, we got sold out,” even if it isn’t that inspiring politically, because it is very true and lots of people can relate to that. I’m not that crazy about “We are the 99%,” because the implicit class analysis is a bit limited. “This is what democracy looks like” is getting kind of tired, too (remember, I heard that dozens of times a dozen years ago, while running around in clouds of tear gas). […]

Jodi Dean on phases of struggle

One benefit of the model in use at occupy wall street is the possible formation of a group, collectivity, out of folks who have a hard time thinking and acting as a group. So, if we think of the occupiers as primarily people who don’t union membership as an option and don’t see any existing parties as persuasive, then they are trying to build a different kind of group. An interesting problem they face is how to describe it–it’s not an ‘identity category’ or an ‘interest group’ or even an issue-based group. Given that absence, the non-expression of core ideas makes sense–there aren’t any so, armed by some pretty influential theory (anarchists, Hardt and Negri, Tikkun) and a read of recent politics influenced by that theory, the activists are turning (or trying to turn) a weakness into a strength. What I hope will happen is that this will be a stage (the inchoate stage wherein previously dissipated rages begin to consolidate) and that we will see another stage of more organization and specificity emerge. Graeber suggests as much when he mentions the thirty working groups. The thing is, folks committed to anarchist ‘horizontal’ organizing might be really good at one phase of struggle and a barrier at another. Graeber’s description makes it seem like unions are the ones who make it difficult for the ‘movement’ folks, but it makes more sense, I think, to recognize that their commitments can become a detriment at another point. I heard last week (maybe this has changed) that some law folks were very interested in helping with the larger first amendment issues around the protests (masks, tents) but that they weren’t getting very far because there was no ‘there’ (no substantial entity) to represent.

Ideological notes

 Henwood on October 3, 2011 –

I know this will prompt more rebukes for trying to impose an anachronistic old left on the spontaneously new, but someone’s got to do it.

I read this quote in the New York Times the other day. I know that that may not be the go-to medium for reports on Occupy Wall Street, but it’s not unrepresentative of some of the things I’ve seen and heard first hand from that quarter:

“This is not about left versus right,” said the photographer, Christopher Walsh, 25, from Bushwick, Brooklyn. “It’s about hierarchy versus autonomy.”

Autonomy in this context sounds like a hipster version of bourgeois individualism. I’ve also seen a bit of Ron Paul-ish “end the Fed” stuff around OWS, which is a topic in itself, something I’ll take up in the near future. But I don’t want to get that wonky just now. I just want to make a simple point. Occupy Wall Street is hardly about autonomy. It’s about living out solidarity and about attracting people to a movement. They’re living a collectivity, even if they’re not articulating it that way.

I suspect the problem is that three decades of neoliberalism have destroyed any available vocabulary for solidarity. My guess is that most of the people in Zuccotti Park were born after Thatcher and Reagan took office. There’s no such thing as society, as the Lady said. But there is, and we need more of it.

Maybe 99% is a bit much, but…

Doug Henwood on October 1, 2011 –

The last day or two I’ve been seeing some complaints that the chant of the Occupy Wall Street protesters that “We are the 99%” casts the net too widely, effacing all kinds of class, race, and gender distinctions. Well, yes, probably so. But I still find it cheering.

It is a fact that over the last couple of decades, much of the growth in total income in the U.S. has gone to the upper reaches of society. For example, based on Census data, between 1982 and 2010, the richest fifth of society have claimed a little over half of the increase in total personal income; the top 5%, nearly a quarter the gain. The bottom 60% of society, though, has gotten less than a quarter. And, for a number of reasons, the Census figures seriously underestimate the action at the very top. (For more, see the forthcoming LBO, now in prep.) Using data compiled by the economistsEmmanuel Saez and Thomas Piketty from IRS records, we can estimate that the top 1% took in a quarter of the income gain between 1982 and 2008. The bottom 90%, though, only took in 40% of the gain. (1982, by the way, is when the great bull market in stocks took off, corporate profitability began a long upsurge, and the Roaring Eighties really began.) And the further you go down the ladder within the bottom 90%, the smaller the gains.

Looked at another way, here are two graphs of average incomes, adjusted for inflation, the first from the Census data:



The teenage moralism of the Occupy Wall Street hipsters almost makes me ashamed to be Left-wing

 – Occupy Wall Street, the gathering of angry actors, graphic designers and various other hipsters in the financial districts of New York City, might just be the most degenerate Left-wing movement of recent times. Its weird demands, plastered across tongue-in-cheek placards and on super-cool, self-pressed t- shirts, capture the descent of the modern Left into the cesspool of victimology, conspiracy-mongering and disdain for mass society and its allegedly dumb inhabitants. Far from representing anything that I, a Leftie, would recognise as progressive and humane, this gaggle of rich kids spouts little more than snobbery and fear, seemingly incapable of deciding whom they loathe the most: greedy fat bankers or the dumb fat public. […]

Manhattan—The class war began at the corner of Broadway and Cedar St., as Wall Street’s bankers waited for a bus and Wall Street’s occupiers, for a revolution. What had begun two weeks ago as an unfocused rabble of ragtag discontents had become a still-unfocused rabble of ragtag discontents—but way bigger. The culprit: Radiohead. Rumors of a surprise solidarity concert had brought the huddled masses streaming in from Williamsburg, Greenpoint, and Bushwick. The crowd in Zuccotti Park, occupation-central, bulged outwards, spilling into the bus stop, tivas scuffing shined loafers and graphic tees dueling paisley ties. […]

With some thanks to Engage

September 16, 2011

Marx is hot 3

Marx to Market: The economic crisis has made the philosopher’s ideas relevant again, but the world shouldn’t forget what Marx got wrong. By 


Society generally moves on from its mistakes. Doctors no longer drain blood from patients. Aviators don’t try to fly by strapping wings to their arms. Nobody still thinks that slavery is a good idea. Karl Marx, though, appears to be an exception to the rule of live and learn. Marx’s most famous predictions failed; there has been no dictatorship of the proletariat, nor has the state withered away. His followers included some of the 20th century’s worst mass murderers: Lenin, Stalin, Mao, Pol Pot. Yet the gloomy, combative philosopher seems to find adherents in each new generation of tyrants and dreamers.

You might even say the Bearded One has rarely looked better. [READ THE REST]

September 8, 2011

War for oil?

TERRY MACALISTER: So, was this a war for oil?

OIL POLITICS: Smoke rises from an oil terminal in the town of Brega, Libya, on August 15. Most of the town has been liberated from Qadhafi's forces.

The dust in Libya has not yet settled, but already the struggle has begun over who gets what.

The Libyan conflict has been a war about oil if not “for” oil. The country’s economy is almost totally dependent on hydrocarbons and a key objective for the transitional government will be to get the wells up and running again as soon as possible. [READ THE REST]

Jaffar Al-Rikabi: In Arab Protests, Oil Role Defies Simple Explanations

Oil is perhaps the most commonly cited factor in explaining the course of the various Arab revolutions in train since the Spring, but compared across countries its influence proves less decisive than generally suggested, argues Jaffar Al-Rikabi.

With the European Union announcing last Friday an oil embargo on Syria, denounced by some as ‘ too little too late,’ and by others as leading to ‘ nothing good,’ the impact of oil on the fate of the Arab protests has come to the fore of public attention.

In Libya, The National Transitional Council is scrambling to revive oil production, with new oil minister  Ali Tarhouni declaring last Saturday that production at the Misla and Sarir oil fields would be restarting in ten days time. During the preceding months of fighting between Gaddafi and rebel forces, Qatar had come to the rescue of the opposition, providing towns in eastern Libya with petrol, diesel and cooking gas to stave off a fuel crisis in rebel areas.  [READ THE REST]

September 6, 2011

Marx is hot 2

From the BBC:

Plastic bust sculpture of Karl Marx

Karl Marx may have been wrong about communism but he was right about much of capitalism, John Gray writes.

As a side-effect of the financial crisis, more and more people are starting to think Karl Marx was right. The great 19th Century German philosopher, economist and revolutionary believed that capitalism was radically unstable. [READ MORE]

George Magnus (UBS): Give Karl Marx a Chance to Save the World Economy

Karl Marx and the World Economy

Policy makers struggling to understand the barrage of financial panics, protests and other ills afflicting the world would do well to study the works of a long-dead economist: Karl Marx. The sooner they recognize we’re facing a once-in-a-lifetime crisis of capitalism, the better equipped they will be to manage a way out of it.

The spirit of Marx, who is buried in a cemetery close to where I live in north London, has risen from the grave amid the financial crisis and subsequent economic slump. The wily philosopher’s analysis of capitalism had a lot of flaws, but today’s global economy bears some uncanny resemblances to the conditions he foresaw.

Consider, for example, Marx’s prediction of how the inherent conflict between capital and labor would manifest itself. As he wrote in “Das Kapital,” companies’ pursuit of profits and productivity would naturally lead them to need fewer and fewer workers, creating an “industrial reserve army” of the poor and unemployed: “Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery.” [READ MORE]



September 3, 2011


This is a journey through a publishing house in Saudi.

Whereas Iranian publishers are complaining that cost-saving plans to print Qur’ans in China have led to an embarrassing number of typographical errors.

Officials are now discussing a ban on Chinese-printed Qur’ans.

Nuclear power – never safe

A nuclear power plant has reported that last week’s 5.8-magnitude earthquake may have created stronger shaking that it was designed to withstand, prompting the Nuclear Regulatory Commission to send additional inspectors to the Virginia facility this week.

“We’re perplexed,” said Jim Norvelle, spokesman of Dominion, which operates the North Anna nuclear plant, located about 10 miles from the quake’s epicenter in Mineral, Va. He said the plant’s engineers had estimated that the two reactors, which went online in 1978 and 1980, could withstand quakes of between 5.9- and 6.2-magnitude.

Half of Manila’s population live in slums

Paul Mason reports on San Miguel, in the Phillipines here.

Top international money brokers drop a bombshell

Tullett Prebon plc is one of the largest inter-dealer money brokers in the world. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index. They have just released their analysis of British economic fortunes.

Tonight, George Osborne will not get any sleep:

The bleak reality

An overview of the current world economic situation from today’s Financial Times:

‘Don’t expect China et al to save the world’ by Dani Rodrik

In a world economy rapidly running out of bright spots, many are putting their hopes on the emerging and developing economies. Many experienced very rapid growth over the past decade, and most have recovered quickly from the 2008-2009 crisis.

Optimism abounds. Citigroup predicts real gross domestic product will grow more than 9 per cent a year in Nigeria and India, and more than 7 per cent in Bangladesh, Indonesia and Egypt over the next two decades. In a new Peterson Institute for International Economics study, Arvind Subramanian projects that aggregate output of developing and emerging economies will expand at an annual rate of 5.6 per cent over the same horizon.

If they prove correct, developing countries will make a substantial contribution to aggregate demand in the struggling rich countries and ensure the world economy’s steady growth. We shall witness the most impressive closing of the gap between rich and poor in history.

Unfortunately, these predictions are largely extrapolations from the recent past and they overlook serious structural constraints. China’s problems are already well recognised. The country’s growth has been fuelled over the past decade by an ever-growing trade surplus that has reached unsustainable levels. China’s leaders must refocus its economy away from export-oriented manufacturing and towards domestic sources of demand, while managing the job losses and social unrest this restructuring is likely to generate.

At least China has successfully built broad-based modern industries, something that remains a daunting task for most other countries. India has scored important successes in IT and business services, but it must expand its manufacturing base if its economy is to generate decent jobs for a vast, low-skilled workforce and sustain growth. In Nigeria, formal employment has actually shrunk due to public sector retrenchment, privatisation, trade liberalisation and lack of job creation in new industries. Nigerian workers are flocking back to family farms.

In Latin America, global competition has fostered productivity gains in manufacturing and non-traditional agriculture. But gains are limited to narrow segments of the economy. Labour has migrated to less productive service sectors and informal activities. In Brazil, for instance, despite an exceptional performance last year, the average growth rate over the past decade is just a fraction of what the country achieved for decades before 1980.

Other countries are hooked on dangerous, unsustainable levels of foreign borrowing. Turkey has grown rapidly, despite pitifully low levels of domestic saving, thanks to an ever-widening current account deficit . This renders the economy susceptible to swings in markets, as the beating the lira has taken in recent weeks shows. Growth booms based on capital inflows or commodity booms have typically been shortlived.

Optimists believe this time will be different because policies and institutions have greatly improved in the developing world. They point to these countries’ commitment to macroeconomic stability, openness to the global economy and better governance (as exemplified by the spread of democracy and end of civil wars in Africa). These changes portend well, but they serve mainly to reduce the risks of crises. They do not constitute a growth engine.

Sustained growth, of the type that a handful of countries in Asia have managed to generate, requires more than conventional macroeconomic and openness policies. It requires active policies to promote economic diversification and foster structural change from low-productivity activities (such as traditional agriculture and informality) to mostly tradable higher-productivity activities. It requires pulling the economy’s labour force into sectors that are on the automatic escalator up, such as formal manufacturing.

This structural transformation is rarely the product of unassisted market forces. It is typically the result of messy and unconventional interventions that range from public investment to subsidised credit, from domestic-content requirements to undervalued currencies. Few countries have managed such industrial policies well.

An additional complication now is that policymakers in the US and Europe have long stopped viewing subsidies and undervalued currencies in developing nations with benign neglect. With high unemployment and stagnant economies, they are likely to be even more vociferous in opposing such policies.

Hence, the policies optimists hope will sustain growth in the emerging markets are unlikely to work, while the policies that would deliver growth are unlikely to be permitted by industrial countries. Growth in the developing world will most likely remain episodic and too weak to propel the world economy.

The writer is a professor of international political economy at Harvard’s Kennedy School of Government and author of The Globalization Paradox

Warren Buffett says: ‘tax the rich!’

The third richest man in America, and the original liberal communist, wants to get the world back to work here.

According to today’s Financial Times, ‘Pakistan allowed Chinese military engineers to photograph and take samples from the top-secret stealth helicopter that US special forces left behind when they killed Osama bin Laden. The action is the latest incident to underscore the increasingly complicated relationship and lack of trust between Islamabad and Washington following the raid.’

Meanwhile, the military machine gears up for new battles:

Meanwhile…on the eternal return of the toxic

“So where did the highly toxic effluvia of the financial system go? They ended up in a final repository: the central banks.” Read the article here.

That picture of the capitalist production process as ‘industry’ pumping out ‘wealth’, suggested by the title of Adam Smith’s masterpiece, The Wealth of Nations, deserves a few comments. First, the celebration of ‘industry’ and ‘wealth’ is an expression of what may be called ‘wealth fetishism’ or ‘wealthism’, inasmuch as it declares the endless spurting of contextless ‘wealth’, that is, use-values purportedly lacking any definite social form traceable to the production process (such as the gift, commodity or commodity capital form), to be the purpose of production. By contrast, in Book I of the Politics, Aristotle observed that true wealth is limited, making the point that nothing should count as wealth but what contributes to the attainment of some identifiable human good, which inescapably stands in relation to the good of the polis. Second, the fiction of ‘wealth’ operative here is itself a by-product of the value form, which displaces the appearance of social form into a thing, money. Third, though ‘wealthism’ is a by-product of the value forms constitutive of the capitalist mode of production, the notion that what drives capitalism is the restless desire to accumulate ‘wealth’ is a falsehood stemming from the incapacity of common sense and various economic theories to recognize the actual social forms ruling capitalism. For it is the uncanny impulsion to accumulate surplus value, not ‘wealth’, that keeps capital’s heart throbbing. Finally ‘wealthism’ paints a conveniently false picture of the reality of capitalism; it gives capitalism a thin but tolerable tale to tell about itself: to speak with the French, it provides a ‘metanarrative’ of material progress that is only an ‘alibi’.

Beyond the ‘Commerce and Industry’ Picture of Capital by Patrick Murray, an essay from The Circulation of Capital. Essays on Volume Two of Marx’s Capital Edited by Christopher J. Arthur and Geert Reuten.

Henryk Grossman: an introduction

Henryk Grossman is particularly relevant today and not only because of his explanation of economic and financial crises, which I will briefly recapitulate. That theory was formulated and can only be understood as an element in a broader, classical-Marxist analysis of capitalist society and the way it can be superseded. The specifics of Grossman’s political outlook help explain the generally hostile reception of his work in the immediate wake of the publication of his best-known study, The Law of Accumulation and Breakdown of the Capitalist System,Being also a Theory of Crises, and subsequently. Grossman expressed his revolutionary Marxism not only in his writings but also in political activity. That was not always flawless – on the contrary. But his views about the responsibilities of socialists are superior to fashionable notions of the responsibilities of intellectuals. Furthermore, the continuities and discontinuities in his practice and, in some periods, the inconsistencies between it and his theoretical commitments are instructive.

read more »

September 2, 2011

Mining and automobile manufacture in India

Car manufacture

Balance sheet of Maruti Suzuki Workers’ Strike

Gurgaon Workers’ News assess the recent massive strike at Maruti Suzuki auto in India.

Preliminary Balance Sheet of the 13-Days Sit-Down Strike at Maruti Suzuki Factory in Manesar/Gurgaon, India

India: Wildcat strike at Maruti Suzuki continues, may spread

The strike at the Indian carmaker’s Manesar plant has entered its sixth day, with threats of similar strikes at other plants being made.

The wildcat strike exploded a week ago, with around 2,000 workers demanding the recognition of a new union – Maruti Suzuki Employees Union (MSEU) – formed by those working at the Manesar plant, among other things.

Around 1,000 workers from different firms in the Gurgaon-Manesar industrial belt gathered at the gate of MSI’s Manesar plant today to express solidarity with the MSEU strikers.


The Jharkhand Movement

The state Jharkhand was formed in November 2000, before that the mining areas of Dhanbad-Jharia and the steel manufacturing regions around Bokaro and Jamshedpur were situated in the southern part of Bihar.

The Dhanbad Mafia

In India the name Dhanbad is synonymous with coal mafia. Together with the ‘nationalised command’ over the mines appeared a ‘mafia mode of production’, which was both part and outcome of the re-structuring process.

July 22, 2011

More news behind the headlines

In this edition, the shifting sands of power in the Middle East, the alliance between Iran and North Korea, the politics of India’s oil supply, Vince Cable’s corrupt dealings, and why Mongolia matters.

Is Libya trying to sell off its shipping fleet? – By Robert Zeliger – How desperate is Muammar Qaddafi to raise cash? According to a new report, the Libyan leader is trying to unload the country’s fleet of 22 shipping vessels as economic sanctions and continued fight.

Why Mongolia Matters « Commentary Magazine – Our colleague Michael Rubin makes a good case for why we should care about Mongolia as well as why we should reject the realpolitik that would have the United States eschew friendship with small st..

How Saudi Arabia and Qatar Became Friends Again – By Sultan Sooud Al Qassemi – In the spring of 2006, Qatar’s then energy minister broke his silence on a stalled, multibillion-dollar project to supply Qatari gas to Kuwait. “We have received no clearance from Saudi Arabia” he…

North Korea and Iran increase collaboration on nuclear missile, report claims – It was capable of manufacturing high strength steel that Iran has been unable to manufacture. Iran has instead relied on carbon fibre materials that are less reliable.”What previously had been a on…

‘India can cope with oil supply halt’ – NEW DELHI: India has back-up plan to cope with a halt to crude supplies from Iran, oil minister S Jaipal Reddy said, as the Islamic republic upped the ante in an oil payments row and Indian refiner…

Cable flies into controversy with £32m for Westland Business News, Business – AgustaWestland has secured a £22m government loan to build the new AW169 helicopter at its Yeovil factory, along with £10m in research and development grants. The funds, announced by the Business…