Japan Facing Biggest Catastrophe Since Dawn of Nuclear Age
Democracy Now
Japan remains in a state of emergency three days after a devastating earthquake and tsunami hit the country. An estimated 10,000 people have died, and Japan is facing the worst nuclear crisis since the atomic bombing of Hiroshima and Nagasaki. On Monday, a second explosion hit the Fukushima Daiichi nuclear plant, and a third reactor lost its cooling system, raising fears of a meltdown. Radiation levels have been detected as far as 100 miles away. Dozens of people have tested positive for radiation exposure, and hundreds of thousands of have been evacuated, with the number expected to rise.
Yurika Ayukawa, Professor of Climate, Energy, and Environment at Chiba University of Commerce in Japan. She is formerly with the Citizens’ Nuclear Information Center.
Harvey Wasserman, longtime anti-nuclear activist and the editor of nukefree.org. He is also a senior adviser to GreenPeace USA and the author of the book SOLARTOPIA! Our Green-Powered Earth.
Kevin Kamps, specialist in nuclear waste at the nuclear watchdog, Beyond Nuclear. Last year he was in Japan assessing the state of its nuclear facilities.
Arnie Gundersen, nuclear industry executive for many years before blowing the whistle on the company he worked for in 1990, when he found inappropriately stored radioactive material. He is now chief engineer at Fairewinds Associates.
Japan Al Jazeera English report on Minami Sanriku,
Watch/Listen/Read
Showing posts with label Crisis. Show all posts
Showing posts with label Crisis. Show all posts
Monday, March 14, 2011
Immanuel Wallerstein: Structural Crisis in the World-System -- Where Do We Go from Here?
Structural Crisis in the World-System: Where Do We Go from Here?
by Immanuel Wallerstein
Monthly Review
...
A second major cyclical rhythm of the capitalist world-economy is that involving the interstate system. All states within the world-system are theoretically sovereign but actually highly constrained by the processes of the interstate system. Some states are, however, stronger than others, meaning that they have greater control over internal fragmentation and outside intrusion. No state, nonetheless, is wholly sovereign.
In a system of multiple states, there are rather long cycles in which one state manages to become for a relatively brief time the hegemonic power. To be a hegemonic power is to achieve a quasi-monopoly of geopolitical power, in which the state in question is able to impose its rules, its order, on the system as a whole, in ways that favor the maximization of accumulation of capital to enterprises located within its borders.
Achieving the position of being the hegemonic power is not easy, and has only been truly achieved three times in the five-hundred-year history of the modern world-system—the United Provinces in the mid-seventeenth century, the United Kingdom in the mid-nineteenth century, and the United States in the mid-twentieth century.4
True hegemony has lasted, on average, only twenty-five years. Like quasi-monopolies of leading industries, quasi-monopolies of geopolitical power are self-liquidating. Other states improve their economic, and then their political and cultural, positions and become less willing to accept the “leadership” of the erstwhile hegemonic power.
Premise No. 3 is a reading of what has happened in the modern world-system from 1945 to 2010. I divide this into two periods: 1945 to circa 1970; circa 1970-2010. Once again, I summarize what I have argued at length previously. The period 1945-circa 1970 was one of great economic expansion in the world-economy, indeed by far the most expansive Kondratieff A-period in the history of the capitalist world-economy. When the quasi-monopolies were breached, the world-system entered a Kondratieff B-downturn in which it still finds itself. Predictably, capitalists since the 1970s have shifted their focus from the production arena to the financial arena. The world-system then entered the most extensive continuous series of speculative bubbles in the history of the modern world-system, with the greatest level of multiple indebtednesses.
The period 1945 to circa 1970 was also the period of full U.S. hegemony in the world-system. Once the United States had made a deal with the only other militarily strong state, the Soviet Union (a deal rhetorically called “Yalta”), U.S. hegemony was essentially unchallenged. But then once the geopolitical quasi-monopoly was breached, the United States entered into a period of hegemonic decline, which has escalated from a slow decline into a precipitate one during the presidency of George W. Bush.5 U.S. hegemony was far more extensive and total than those of previous hegemonic powers, and its full decline promises to be the swiftest and most total.
There is one other element to put into the picture—the world-revolution of 1968, which occurred essentially between 1966 and 1970, and took place in all three major geopolitical zones of the world-system of the time: the pan-European world (the “West”), the Socialist bloc (the “East”), and the third world (the “South”).6
There were two common elements to these local political uprisings. The first was the condemnation not only of U.S. hegemony but also of Soviet “collusion” with the United States. The second was the rejection not only of dominant “centrist liberalism” but also of the fact that the traditional antisystemic movements (the “Old Left”) had essentially become avatars of centrist liberalism (as had mainstream conservative movements).7
While the actual uprisings of 1968 did not last very long, there were two main consequences in the political-ideological sphere. The first was that centrist liberalism ended its long reign (1848-1968) as the only legitimate ideological position, and both the radical left and the conservative right resumed their roles as autonomous ideological contestants in the world-system.
The second consequence, for the left, was the end of the legitimacy of the Old Left’s claim to be the prime national political actor on behalf of the left, to which all other movements had to subordinate themselves. The so-called forgotten peoples (women, ethnic/racial/religious “minorities,” “indigenous” nations, persons of non-heterosexual sexual orientations), as well as those concerned with ecological or peace issues, asserted their right to be considered prime actors on an equal level with the historical subjects of the traditional antisystemic movements. They rejected definitively the claim of the traditional movements to control their political activities and were successful in their new demand for autonomy. After 1968, the Old Left movements acceded to their political claim to equal current status for their demands, in place of deferring these demands to a post-revolutionary future.
Politically, what happened in the twenty-five years succeeding 1968 is that the reinvigorated world right asserted itself more effectively than the more fragmented world left. The world right, led by the Reagan Republicans and the Thatcher Conservatives, transformed world discourse and political priorities.
The buzzword “globalization” replaced the previous buzzword “development.” The so-called Washington Consensus preached privatization of state productive enterprises, reduction of state expenditures, opening of the frontiers to uncontrolled entry of commodities and capital, and the orientation to production for export. The prime objectives were to reverse all the gains of the lower strata during the Kondratieff A-period. The world right sought to reduce all the major costs of production, to destroy the welfare state in all its versions, and to slow down the decline of U.S. power in the world-system.
Mrs. Thatcher coined the slogan, “There is no alternative” or TINA. To ensure that, in fact, there would be no alternative, the International Monetary Fund, backed by the U.S. Treasury, made as a condition of all financial assistance to countries with budgetary crises adherence to its strict neoliberal conditions.
These draconian tactics worked for about twenty years, bringing about the collapse of regimes led by the Old Left or the conversion of Old Left parties to adherence to the doctrine of the primacy of the market. But by the mid-1990s, there surfaced a significant degree of popular resistance to the Washington Consensus, whose three main moments were the neo-Zapatista uprising in Chiapas on January 1, 1994; the demonstrations at the Seattle meeting of the World Trade Organization in Seattle, which scuttled the attempt to enact worldwide constraints on intellectual property rights; and the founding of the World Social Forum in Porto Alegre in 2001.
The Asian debt crisis in 1997 and the collapse of the U.S. housing bubble in 2008 brought us to our current public discussion of the so-called financial crisis in the world-system, which is, in fact, nothing but the next-to-last bubble in the cascading series of debt crises since the 1970s.
Premise No. 4 is the description of what happens in a structural crisis, which the world-system is in at the present time, has been in at least since the 1970s, and shall continue to be in until probably circa 2050. The primary characteristic of a structural crisis is chaos. Chaos is not a situation of totally random happenings. It is a situation of rapid and constant fluctuations in all the parameters of the historical system. This includes not only the world-economy, the interstate system, and cultural-ideological currents, but also the availability of life resources, climatic conditions, and pandemics.
To Read the Entire Essay
by Immanuel Wallerstein
Monthly Review
...
A second major cyclical rhythm of the capitalist world-economy is that involving the interstate system. All states within the world-system are theoretically sovereign but actually highly constrained by the processes of the interstate system. Some states are, however, stronger than others, meaning that they have greater control over internal fragmentation and outside intrusion. No state, nonetheless, is wholly sovereign.
In a system of multiple states, there are rather long cycles in which one state manages to become for a relatively brief time the hegemonic power. To be a hegemonic power is to achieve a quasi-monopoly of geopolitical power, in which the state in question is able to impose its rules, its order, on the system as a whole, in ways that favor the maximization of accumulation of capital to enterprises located within its borders.
Achieving the position of being the hegemonic power is not easy, and has only been truly achieved three times in the five-hundred-year history of the modern world-system—the United Provinces in the mid-seventeenth century, the United Kingdom in the mid-nineteenth century, and the United States in the mid-twentieth century.4
True hegemony has lasted, on average, only twenty-five years. Like quasi-monopolies of leading industries, quasi-monopolies of geopolitical power are self-liquidating. Other states improve their economic, and then their political and cultural, positions and become less willing to accept the “leadership” of the erstwhile hegemonic power.
Premise No. 3 is a reading of what has happened in the modern world-system from 1945 to 2010. I divide this into two periods: 1945 to circa 1970; circa 1970-2010. Once again, I summarize what I have argued at length previously. The period 1945-circa 1970 was one of great economic expansion in the world-economy, indeed by far the most expansive Kondratieff A-period in the history of the capitalist world-economy. When the quasi-monopolies were breached, the world-system entered a Kondratieff B-downturn in which it still finds itself. Predictably, capitalists since the 1970s have shifted their focus from the production arena to the financial arena. The world-system then entered the most extensive continuous series of speculative bubbles in the history of the modern world-system, with the greatest level of multiple indebtednesses.
The period 1945 to circa 1970 was also the period of full U.S. hegemony in the world-system. Once the United States had made a deal with the only other militarily strong state, the Soviet Union (a deal rhetorically called “Yalta”), U.S. hegemony was essentially unchallenged. But then once the geopolitical quasi-monopoly was breached, the United States entered into a period of hegemonic decline, which has escalated from a slow decline into a precipitate one during the presidency of George W. Bush.5 U.S. hegemony was far more extensive and total than those of previous hegemonic powers, and its full decline promises to be the swiftest and most total.
There is one other element to put into the picture—the world-revolution of 1968, which occurred essentially between 1966 and 1970, and took place in all three major geopolitical zones of the world-system of the time: the pan-European world (the “West”), the Socialist bloc (the “East”), and the third world (the “South”).6
There were two common elements to these local political uprisings. The first was the condemnation not only of U.S. hegemony but also of Soviet “collusion” with the United States. The second was the rejection not only of dominant “centrist liberalism” but also of the fact that the traditional antisystemic movements (the “Old Left”) had essentially become avatars of centrist liberalism (as had mainstream conservative movements).7
While the actual uprisings of 1968 did not last very long, there were two main consequences in the political-ideological sphere. The first was that centrist liberalism ended its long reign (1848-1968) as the only legitimate ideological position, and both the radical left and the conservative right resumed their roles as autonomous ideological contestants in the world-system.
The second consequence, for the left, was the end of the legitimacy of the Old Left’s claim to be the prime national political actor on behalf of the left, to which all other movements had to subordinate themselves. The so-called forgotten peoples (women, ethnic/racial/religious “minorities,” “indigenous” nations, persons of non-heterosexual sexual orientations), as well as those concerned with ecological or peace issues, asserted their right to be considered prime actors on an equal level with the historical subjects of the traditional antisystemic movements. They rejected definitively the claim of the traditional movements to control their political activities and were successful in their new demand for autonomy. After 1968, the Old Left movements acceded to their political claim to equal current status for their demands, in place of deferring these demands to a post-revolutionary future.
Politically, what happened in the twenty-five years succeeding 1968 is that the reinvigorated world right asserted itself more effectively than the more fragmented world left. The world right, led by the Reagan Republicans and the Thatcher Conservatives, transformed world discourse and political priorities.
The buzzword “globalization” replaced the previous buzzword “development.” The so-called Washington Consensus preached privatization of state productive enterprises, reduction of state expenditures, opening of the frontiers to uncontrolled entry of commodities and capital, and the orientation to production for export. The prime objectives were to reverse all the gains of the lower strata during the Kondratieff A-period. The world right sought to reduce all the major costs of production, to destroy the welfare state in all its versions, and to slow down the decline of U.S. power in the world-system.
Mrs. Thatcher coined the slogan, “There is no alternative” or TINA. To ensure that, in fact, there would be no alternative, the International Monetary Fund, backed by the U.S. Treasury, made as a condition of all financial assistance to countries with budgetary crises adherence to its strict neoliberal conditions.
These draconian tactics worked for about twenty years, bringing about the collapse of regimes led by the Old Left or the conversion of Old Left parties to adherence to the doctrine of the primacy of the market. But by the mid-1990s, there surfaced a significant degree of popular resistance to the Washington Consensus, whose three main moments were the neo-Zapatista uprising in Chiapas on January 1, 1994; the demonstrations at the Seattle meeting of the World Trade Organization in Seattle, which scuttled the attempt to enact worldwide constraints on intellectual property rights; and the founding of the World Social Forum in Porto Alegre in 2001.
The Asian debt crisis in 1997 and the collapse of the U.S. housing bubble in 2008 brought us to our current public discussion of the so-called financial crisis in the world-system, which is, in fact, nothing but the next-to-last bubble in the cascading series of debt crises since the 1970s.
Premise No. 4 is the description of what happens in a structural crisis, which the world-system is in at the present time, has been in at least since the 1970s, and shall continue to be in until probably circa 2050. The primary characteristic of a structural crisis is chaos. Chaos is not a situation of totally random happenings. It is a situation of rapid and constant fluctuations in all the parameters of the historical system. This includes not only the world-economy, the interstate system, and cultural-ideological currents, but also the availability of life resources, climatic conditions, and pandemics.
To Read the Entire Essay
Wednesday, March 09, 2011
“My Fear is that Climate Change is the Biggest Crisis of All”: Naomi Klein Warns Global Warming Could Be Exploited by Capitalism and Militarism
“My Fear is that Climate Change is the Biggest Crisis of All”: Naomi Klein Warns Global Warming Could Be Exploited by Capitalism and Militarism
Democracy Now
Award-winning journalist Naomi Klein has been reporting on global warming and the climate justice movement for years. “My fear is that climate change is the biggest crisis of all,” Klein says. “If we don’t come up with a positive vision of how climate change can make our economies and our world more just, more livable, cleaner, fairer, then this crisis will be exploited to militarize our economies, to create fortress continents. And we’re really facing a choice. What we really need now is for the people fighting for economic justice and environmental justice to come together.”
To Watch/Listen/Read
Democracy Now
Award-winning journalist Naomi Klein has been reporting on global warming and the climate justice movement for years. “My fear is that climate change is the biggest crisis of all,” Klein says. “If we don’t come up with a positive vision of how climate change can make our economies and our world more just, more livable, cleaner, fairer, then this crisis will be exploited to militarize our economies, to create fortress continents. And we’re really facing a choice. What we really need now is for the people fighting for economic justice and environmental justice to come together.”
To Watch/Listen/Read
Thursday, February 24, 2011
Monday, January 03, 2011
Francis Shor: WikiLeaks, Ideological Legitimacy and the Crisis of Empire
WikiLeaks, Ideological Legitimacy and the Crisis of Empire
by: Francis Shor
TruthOut
While empires try to maintain their hegemony through economic and military prowess, they must also rely on a form of ideological legitimacy to guarantee their rule. Such legitimacy is often embedded in the geopolitical reputation of the empire among its allies and reluctant admirers. Once that reputation begins to unravel, the empire appears illegitimate.
The establishment of the US empire in the aftermath of World War II built upon its economic and military supremacy. That empire created an architecture of financial and geopolitical institutions that served not only its own interests, but also those of global capital and international legal and democratic structures. There were, of course, myriad contradictions that materialized throughout the earliest cold war period, but much of the West accepted the general framework and ideological legitimacy of the empire. While a crisis of legitimacy emerged around the Vietnam War and the undermining of the Bretton Woods agreement by the Nixon administration, it was not until the end of the cold war and the development of reckless unipolar geopolitics over the last decade that a real decline in US hegemony became apparent.
Given the battered economic and military standing of the United States over the past several years, the hysterical reaction of the American political class over the recent release of State Department cables by WikiLeaks is not surprising. However, it is instructive to note the response of those in the West to such "displays (of) imperial arrogance and hypocrisy" as reported by Steven Erlanger in The New York Times. Erlanger cites an important editorial from the Berliner Zeitung that underscores the question of ideological legitimacy: "The U.S. is betraying one of its founding myths: freedom of information. And they are doing so now, because for the first time since the end of the cold war, they are threatened with losing worldwide control of information."
To Read the Rest of the Essay
by: Francis Shor
TruthOut
While empires try to maintain their hegemony through economic and military prowess, they must also rely on a form of ideological legitimacy to guarantee their rule. Such legitimacy is often embedded in the geopolitical reputation of the empire among its allies and reluctant admirers. Once that reputation begins to unravel, the empire appears illegitimate.
The establishment of the US empire in the aftermath of World War II built upon its economic and military supremacy. That empire created an architecture of financial and geopolitical institutions that served not only its own interests, but also those of global capital and international legal and democratic structures. There were, of course, myriad contradictions that materialized throughout the earliest cold war period, but much of the West accepted the general framework and ideological legitimacy of the empire. While a crisis of legitimacy emerged around the Vietnam War and the undermining of the Bretton Woods agreement by the Nixon administration, it was not until the end of the cold war and the development of reckless unipolar geopolitics over the last decade that a real decline in US hegemony became apparent.
Given the battered economic and military standing of the United States over the past several years, the hysterical reaction of the American political class over the recent release of State Department cables by WikiLeaks is not surprising. However, it is instructive to note the response of those in the West to such "displays (of) imperial arrogance and hypocrisy" as reported by Steven Erlanger in The New York Times. Erlanger cites an important editorial from the Berliner Zeitung that underscores the question of ideological legitimacy: "The U.S. is betraying one of its founding myths: freedom of information. And they are doing so now, because for the first time since the end of the cold war, they are threatened with losing worldwide control of information."
To Read the Rest of the Essay
Wednesday, December 01, 2010
Roman Frydman and Michael D. Goldberg: Market Mysticism
Market mysticism
Roman Frydman and Michael D. Goldberg
Eurozine
Faith in the "efficient markets hypothesis" is largely to blame for the massive deregulation of the late 1990s and early 2000s that made the crisis more likely, if not inevitable. Two economists excoriate the ideology of self-regulating markets and its pseudo-scientific foundations.
...
What is worse, the false concept of rationality on which mainstream economic theory is based, also underpins mistaken conclusions about the proper extent of market regulation. As a result, contemporary economic models produce two extreme positions: exclusion of any active role for the state or radical state interventionism.
As Michel Foucault convincingly showed, language is power. Aware of this, the neo-classical economists carried out a real coup d'état. They created a para-scientific jargon that helped them to direct social choices in a very dangerous and unproductive direction. The premises that form the basis of their models became in great part inscrutable to anyone lacking a PhD in economics, and debate was infused with terms that mean one thing to the uninitiated and quite another to economists.
The concept of rationality forms the foundation of this discourse. In everyday language, rationality means common sense or reasonableness. By contrast, for economists, a "rational individual" is not merely reasonable; he or she is someone who behaves in accord with a mathematical model of individual decision-making that economists have agreed to call "rational". The centrepiece of this standard of rationality, the so-called "Rational Expectations Hypothesis" (REH), presumes that economists can exactly model how rational individuals comprehend the future. The unreasonableness of this standard helps explain why macroeconomists and finance theorists find it so hard to account for large swings in market outcomes.
Indeed, economists' incoherent premises have led them to embrace absurd conclusions – for example, that unfettered financial markets set asset prices nearly perfectly at their "true" fundamental value. If so, the state should drastically curtail its supervision of the financial system. Unfortunately, many officials worldwide came to believe this claim, known as the "efficient markets hypothesis," resulting in the massive deregulation of the late 1990s and early 2000s that made the crisis more likely, if not inevitable.
In recent years, another school of thought, behavioural economics, has uncovered mountains of evidence that market participants do not act as conventional economists would predict "rational individuals" to behave. But, instead of jettisoning the bogus standard of rationality underlying those predictions, they interpret their empirical findings to mean that many market participants are irrational, prone to emotion, or ignore economic fundamentals for other reasons.
The behavioural view suggests that large swings in asset prices serve no useful social function. If the state could somehow eliminate them through massive intervention, or ban irrational players by imposing strict regulatory measures, the "rational" players could reassert their control and markets would return to their normal state of setting prices at their "true" values.
This is implausible, because an exact model of rational decision-making is beyond the capacity of economists – or anyone else – to formulate. Once economists recognize that they cannot explain exactly how reasonable individuals make decisions and how market outcomes unfold over time, we will no longer be stuck with two polar extremes concerning the relative roles of the market and the state.
An alternative theory of markets is needed, and its basis should be the fact that participants must cope with ever-imperfect knowledge about the fundamentals of economic change. This obvious feature of capitalism is completely ignored by the dominant market models, though it is the main explanation for asset-price fluctuations in market-based economies.
Such an alternative approach also leads to a new way of thinking about the respective roles of the state and financial markets. So long as price fluctuations remain within reasonable bounds, the state should limit its involvement to ensuring transparency, curbing monopolistic behaviour, and eliminating market failures. But when price fluctuations become excessive, as they did in the run-up to the recent crisis, the state can implement measures to limit their amplitude (though it always has a greater problem coping with imperfect knowledge than the market does).
A combination of passive and active roles for the state along these lines would leave markets to allocate capital while holding out the possibility of reducing the social costs that arise when asset-price swings continue for too long and then end, as they inevitably do, in sharp reversals.
To Read the Entire Essay
Roman Frydman and Michael D. Goldberg
Eurozine
Faith in the "efficient markets hypothesis" is largely to blame for the massive deregulation of the late 1990s and early 2000s that made the crisis more likely, if not inevitable. Two economists excoriate the ideology of self-regulating markets and its pseudo-scientific foundations.
...
What is worse, the false concept of rationality on which mainstream economic theory is based, also underpins mistaken conclusions about the proper extent of market regulation. As a result, contemporary economic models produce two extreme positions: exclusion of any active role for the state or radical state interventionism.
As Michel Foucault convincingly showed, language is power. Aware of this, the neo-classical economists carried out a real coup d'état. They created a para-scientific jargon that helped them to direct social choices in a very dangerous and unproductive direction. The premises that form the basis of their models became in great part inscrutable to anyone lacking a PhD in economics, and debate was infused with terms that mean one thing to the uninitiated and quite another to economists.
The concept of rationality forms the foundation of this discourse. In everyday language, rationality means common sense or reasonableness. By contrast, for economists, a "rational individual" is not merely reasonable; he or she is someone who behaves in accord with a mathematical model of individual decision-making that economists have agreed to call "rational". The centrepiece of this standard of rationality, the so-called "Rational Expectations Hypothesis" (REH), presumes that economists can exactly model how rational individuals comprehend the future. The unreasonableness of this standard helps explain why macroeconomists and finance theorists find it so hard to account for large swings in market outcomes.
Indeed, economists' incoherent premises have led them to embrace absurd conclusions – for example, that unfettered financial markets set asset prices nearly perfectly at their "true" fundamental value. If so, the state should drastically curtail its supervision of the financial system. Unfortunately, many officials worldwide came to believe this claim, known as the "efficient markets hypothesis," resulting in the massive deregulation of the late 1990s and early 2000s that made the crisis more likely, if not inevitable.
In recent years, another school of thought, behavioural economics, has uncovered mountains of evidence that market participants do not act as conventional economists would predict "rational individuals" to behave. But, instead of jettisoning the bogus standard of rationality underlying those predictions, they interpret their empirical findings to mean that many market participants are irrational, prone to emotion, or ignore economic fundamentals for other reasons.
The behavioural view suggests that large swings in asset prices serve no useful social function. If the state could somehow eliminate them through massive intervention, or ban irrational players by imposing strict regulatory measures, the "rational" players could reassert their control and markets would return to their normal state of setting prices at their "true" values.
This is implausible, because an exact model of rational decision-making is beyond the capacity of economists – or anyone else – to formulate. Once economists recognize that they cannot explain exactly how reasonable individuals make decisions and how market outcomes unfold over time, we will no longer be stuck with two polar extremes concerning the relative roles of the market and the state.
An alternative theory of markets is needed, and its basis should be the fact that participants must cope with ever-imperfect knowledge about the fundamentals of economic change. This obvious feature of capitalism is completely ignored by the dominant market models, though it is the main explanation for asset-price fluctuations in market-based economies.
Such an alternative approach also leads to a new way of thinking about the respective roles of the state and financial markets. So long as price fluctuations remain within reasonable bounds, the state should limit its involvement to ensuring transparency, curbing monopolistic behaviour, and eliminating market failures. But when price fluctuations become excessive, as they did in the run-up to the recent crisis, the state can implement measures to limit their amplitude (though it always has a greater problem coping with imperfect knowledge than the market does).
A combination of passive and active roles for the state along these lines would leave markets to allocate capital while holding out the possibility of reducing the social costs that arise when asset-price swings continue for too long and then end, as they inevitably do, in sharp reversals.
To Read the Entire Essay
Friday, November 19, 2010
History for the Future: Richard D. Wolff On Capitalism
Richard D. Wolff On Capitalism
History for the Future
Richard D. Wolff, professor of economics emeritus at the University of Massachusetts-Amherst, and author of many books and articles on capitalism and economics. Recently, he is the author of Capitalism Hits the Fan: The Global Economic Meltdown and What To Do About It (2009). We talk about the origins of the current economic crisis, especially changes in the system since the 1970s, and how we can do better than capitalism…
To Listen to the Episode
History for the Future
Richard D. Wolff, professor of economics emeritus at the University of Massachusetts-Amherst, and author of many books and articles on capitalism and economics. Recently, he is the author of Capitalism Hits the Fan: The Global Economic Meltdown and What To Do About It (2009). We talk about the origins of the current economic crisis, especially changes in the system since the 1970s, and how we can do better than capitalism…
To Listen to the Episode
History for the Future: Doug Henwood on Politics and the Economic Crisis
Doug Henwood on Politics and the Economic Crisis
History for the Future
... Doug Henwood, editor of the Left Business Observer, host of the radio show, “Behind the News,” and author of Wall Street and After the New Economy. The LBO is a wonderful source for sane analysis of truly troubling, and often baffling, economic and political developments. In the episode we discuss the origins of the economic collapse, the bailout, the significance of health care “reform,” the lack of progressive pressure on the Obama administration, and more.
To Listen to the Episode
History for the Future
... Doug Henwood, editor of the Left Business Observer, host of the radio show, “Behind the News,” and author of Wall Street and After the New Economy. The LBO is a wonderful source for sane analysis of truly troubling, and often baffling, economic and political developments. In the episode we discuss the origins of the economic collapse, the bailout, the significance of health care “reform,” the lack of progressive pressure on the Obama administration, and more.
To Listen to the Episode
Tuesday, July 06, 2010
Thursday, April 08, 2010
Crisis and Resistance in the Neoliberal City : A Conversation with David Harvey, Max Rameau, Shiri Pasternak, and Esther Wang
Crisis and Resistance in the Neoliberal City : A Conversation with David Harvey, Max Rameau, Shiri Pasternak, and Esther Wang
Indy Reader
David Harvey: This foreclosure crisis, this financial crisis, has to be thought of as a crisis of the city, a crisis of urbanization – and if it’s a crisis of the city and of urbanization, then the solution has to be a reconfiguration of the city and a redirection of what urbanization is about. The pattern of this crisis is not anything new; and one of the things that happens in the U.S., and on the left in general, is that we seem sometimes to suffer from amnesia as to what has happened in the past. I would like to recall that the last biggest crisis period of capitalism, from around 1973 to 1982, was a deep crisis of urbanization. It began with the collapse of global property markets in the spring of 1973, leading to the bankruptcy of several financial institutions, followed of course by the Arab-Israeli war and the oil price hike (which everybody remembers more than they remember the property market crash). This was followed by a crisis of municipal finance and the disciplining of almost all cities, not only in the U.S., but around the world, to a new regime of financial terror, what I’d also call “neoliberal politics.” Understanding what this regime was about is crucial because it was part of the solution to the crisis of the 1970s, a solution which underpins the nature of the crisis we are currently in. This is a terribly important point to make, because how we come out of this crisis is almost certainly going to define the nature of the next crisis down the road – unless we decide to say, “To hell with capitalist crises! To hell with capitalism!”
In the 1970s it was clear that corporate America was in difficulty, economically and politically. Economically, it decided to try to get out of it by confronting and disciplining labor, big time, and it had a number of means to do that. First, it opened up immigration, for instance the 1965 Immigration Reform Act in this country. It’s very interesting to remember that in the 1960s and the 1970s the Germans were importing people from Turkey, the French were actually subsidizing bringing in immigrants from the Maghreb, Britain was of course accepting people from the ex-empire, and the Swedes were bringing in people from Yugoslavia. Immigration became one of the capitalist class’ main tools to try to solve the “problem” of the power of labor, the scarcity of labor, and the high level of wages. Second, they tried to use technological change to throw people out of work as much as possible, through labor-saving innovations. The third was the invention of interesting politicians with names like Reagan and Thatcher, whose main mission was of course to screw labor and destroy labor organization – they did it democratically while Pinochet did it through military violence in Chile. And finally if this political assault on labor didn’t work you could always offshore production to Mexico or the Philippines or Bangladesh or ultimately even to China.
By all these means, capitalists successfully disciplined labor in the 1970s and early 1980s, such that by the time you get to 1985 the labor question is no longer a serious barrier to capitalist accumulation. What that meant however, was that labor had very little power in the market, and as a result of that, real wages did not increase anywhere in the world, even in the United States, from the 1970s to the present day. We’ve been through 30 years of wage repression, guaranteeing capitalist profits, with a public policy which was actually oriented in that same direction. I always remember that Margaret Thatcher’s economic advisor said in effect, sometime after he left the postion, that he really believed that the fight against inflation was really a cover to bash the workers and create an industrial reserve army so that capitalists could have easy profits ever thereafter.
What we’ve seen since then is of course a tremendous increase in inequality and a tremendous concentration of wealth in the upper classes. The story we’re told is that the upper classes should have that wealth, after all, they invest, and as they invest they create jobs and aren’t-we-all-grateful-to-them-for-doing-so. The idea that we could actually get jobs by other means is ruled out of the picture, of course. But in fact the capitalist class doesn’t particularly care about creating jobs, it cares about making money. And it soon found, in the 1980s in particular, that it could make money by investing in asset values rather than in production, so it started to invest in the stock market, in property markets, in oil futures and so on. New markets were developed in which you could actually make even more money than you could spending your money on assets through purchasing derivatives of assets – and very soon you could buy on derivatives of insurances of derivatives of assets and so on.
What resulted was a financial asset bubble, rather than at real expansion of production and real jobs. The rest of us were reduced very frequently to service functions, reconfiguring the class structure. We went through deindustrialization in this country, through a reconfiguration of the nature of job structures and also of the kinds of people who can occupy those job structures. This was crucial to fueling the bubble that grew in the 1990s in particular. During that period, if you asked where to put your money, you were told to put it in property markets. It’s important to remember that we’ve had many financial crises over these last thirty years, and many of those crises have been related to urbanization, and have been about property. We had the Savings and Loans crisis in 1987-89, when somewhere around 600 or 800 banks or financial institutions were declared bankrupt, and this was a crisis tied very much to commercial property. In 1992 the Swedish banking system went bankrupt over excessive property development. In 1989 the Japanese economy crashed around land market prices. What we’ve had is a whole series of asset bubbles and we seem to forget what these asset bubbles are about. These asset bubbles are like Ponzi schemes: people put money in the stock market, the stock market rises, and people put more money in the stock market, and it just keeps going like that, the same with property markets, the same with oil futures. And this leads us to a point where, finally, the asset bubble breaks. It breaks big time this time, not like it did in 1987, which was sort of contained, but in a much bigger way, that becomes global immediately, as the 1973-75 crisis was global. That then poses the problem: what exactly are we going to do about this?
Now the answer to this lies in the way we came out of the crisis in the 1970s, when the New York investment banks acquired vast quantities of money from recycling petro dollars. Their big problem was where to invest it–the economy wasn’t doing well, so where do you put your money to make a sufficient rate of return? One of the things they decided on was lending to developing countries–because the good thing about lending to countries is that countries can’t disappear, you know where they are and you know you can go get your money. So in the 1970s they lent to places like Mexico. Then they raised the interest rates and Mexico couldn’t pay, and was going to go bankrupt–which meant that the New York investment banks could go bankrupt. So at that point, the government stepped in, the treasury and the IMF got together, and they bailed out Mexico so that Mexico could bailout the New York banks. But they bailed out Mexico in such a way that the Mexican population suffered a drop in living standards of about 20% in the next two to five years. This is what’s called saving the banks and socking it to the people.
Now I defy you to look at what’s been going on in this country in terms of its public policy and say its anything other than saving the banks and socking it to the people. We’re the ones who are paying, they are the ones who are benefitting. This is a class project, it was a class project back in the 1970s and it continues to be one now. If we come out of this crisis with this class project intact then we are in deep trouble. We have to turn it around in such a way that government policy gets turned into support of the people, not support of the banks. The banks should be nationalized, turned into public utilities which serve people, not capital. And this is something on which we really need to concentrate our ideas on, right now. In particular, the biggest danger of all is that the stimulus package which is being passed is going to be handed out to mayors, handed out to cities, handed out all over the place, in such a way that there is absolutely no control over exactly what’s going to be done with it. So what’s going to be done with it is that people are going to be use it to fund their favorite projects. Mayor Bloomberg’s favorite project is to give $45 million to retrain Wall Street executives, which seems to me an astonishing way in which to spend the money – but that’s the way Mayor Bloomberg thinks. But I think we have different ideas; in New York, together with the some of the social movements who are forming the Right To The City group, we would like to suggest a whole different set of ways the stimulus package could be spent in order to benefit people rather than capital. Along with that, we have the supreme irrationality that you have tent cities arising in California and elsewhere, increasing homelessness, at the same time that you have all these vacant properties around. Is that a rational situation? And it seems that this is a situation where political activism can take very direct action–for instance, Picture the Homeless in NYC tried to commandeer a building last week–and this is the kind of thing we need to be supporting publicly as much as we can.
To Read the Rest of the Panel Discussion
Indy Reader
David Harvey: This foreclosure crisis, this financial crisis, has to be thought of as a crisis of the city, a crisis of urbanization – and if it’s a crisis of the city and of urbanization, then the solution has to be a reconfiguration of the city and a redirection of what urbanization is about. The pattern of this crisis is not anything new; and one of the things that happens in the U.S., and on the left in general, is that we seem sometimes to suffer from amnesia as to what has happened in the past. I would like to recall that the last biggest crisis period of capitalism, from around 1973 to 1982, was a deep crisis of urbanization. It began with the collapse of global property markets in the spring of 1973, leading to the bankruptcy of several financial institutions, followed of course by the Arab-Israeli war and the oil price hike (which everybody remembers more than they remember the property market crash). This was followed by a crisis of municipal finance and the disciplining of almost all cities, not only in the U.S., but around the world, to a new regime of financial terror, what I’d also call “neoliberal politics.” Understanding what this regime was about is crucial because it was part of the solution to the crisis of the 1970s, a solution which underpins the nature of the crisis we are currently in. This is a terribly important point to make, because how we come out of this crisis is almost certainly going to define the nature of the next crisis down the road – unless we decide to say, “To hell with capitalist crises! To hell with capitalism!”
In the 1970s it was clear that corporate America was in difficulty, economically and politically. Economically, it decided to try to get out of it by confronting and disciplining labor, big time, and it had a number of means to do that. First, it opened up immigration, for instance the 1965 Immigration Reform Act in this country. It’s very interesting to remember that in the 1960s and the 1970s the Germans were importing people from Turkey, the French were actually subsidizing bringing in immigrants from the Maghreb, Britain was of course accepting people from the ex-empire, and the Swedes were bringing in people from Yugoslavia. Immigration became one of the capitalist class’ main tools to try to solve the “problem” of the power of labor, the scarcity of labor, and the high level of wages. Second, they tried to use technological change to throw people out of work as much as possible, through labor-saving innovations. The third was the invention of interesting politicians with names like Reagan and Thatcher, whose main mission was of course to screw labor and destroy labor organization – they did it democratically while Pinochet did it through military violence in Chile. And finally if this political assault on labor didn’t work you could always offshore production to Mexico or the Philippines or Bangladesh or ultimately even to China.
By all these means, capitalists successfully disciplined labor in the 1970s and early 1980s, such that by the time you get to 1985 the labor question is no longer a serious barrier to capitalist accumulation. What that meant however, was that labor had very little power in the market, and as a result of that, real wages did not increase anywhere in the world, even in the United States, from the 1970s to the present day. We’ve been through 30 years of wage repression, guaranteeing capitalist profits, with a public policy which was actually oriented in that same direction. I always remember that Margaret Thatcher’s economic advisor said in effect, sometime after he left the postion, that he really believed that the fight against inflation was really a cover to bash the workers and create an industrial reserve army so that capitalists could have easy profits ever thereafter.
What we’ve seen since then is of course a tremendous increase in inequality and a tremendous concentration of wealth in the upper classes. The story we’re told is that the upper classes should have that wealth, after all, they invest, and as they invest they create jobs and aren’t-we-all-grateful-to-them-for-doing-so. The idea that we could actually get jobs by other means is ruled out of the picture, of course. But in fact the capitalist class doesn’t particularly care about creating jobs, it cares about making money. And it soon found, in the 1980s in particular, that it could make money by investing in asset values rather than in production, so it started to invest in the stock market, in property markets, in oil futures and so on. New markets were developed in which you could actually make even more money than you could spending your money on assets through purchasing derivatives of assets – and very soon you could buy on derivatives of insurances of derivatives of assets and so on.
What resulted was a financial asset bubble, rather than at real expansion of production and real jobs. The rest of us were reduced very frequently to service functions, reconfiguring the class structure. We went through deindustrialization in this country, through a reconfiguration of the nature of job structures and also of the kinds of people who can occupy those job structures. This was crucial to fueling the bubble that grew in the 1990s in particular. During that period, if you asked where to put your money, you were told to put it in property markets. It’s important to remember that we’ve had many financial crises over these last thirty years, and many of those crises have been related to urbanization, and have been about property. We had the Savings and Loans crisis in 1987-89, when somewhere around 600 or 800 banks or financial institutions were declared bankrupt, and this was a crisis tied very much to commercial property. In 1992 the Swedish banking system went bankrupt over excessive property development. In 1989 the Japanese economy crashed around land market prices. What we’ve had is a whole series of asset bubbles and we seem to forget what these asset bubbles are about. These asset bubbles are like Ponzi schemes: people put money in the stock market, the stock market rises, and people put more money in the stock market, and it just keeps going like that, the same with property markets, the same with oil futures. And this leads us to a point where, finally, the asset bubble breaks. It breaks big time this time, not like it did in 1987, which was sort of contained, but in a much bigger way, that becomes global immediately, as the 1973-75 crisis was global. That then poses the problem: what exactly are we going to do about this?
Now the answer to this lies in the way we came out of the crisis in the 1970s, when the New York investment banks acquired vast quantities of money from recycling petro dollars. Their big problem was where to invest it–the economy wasn’t doing well, so where do you put your money to make a sufficient rate of return? One of the things they decided on was lending to developing countries–because the good thing about lending to countries is that countries can’t disappear, you know where they are and you know you can go get your money. So in the 1970s they lent to places like Mexico. Then they raised the interest rates and Mexico couldn’t pay, and was going to go bankrupt–which meant that the New York investment banks could go bankrupt. So at that point, the government stepped in, the treasury and the IMF got together, and they bailed out Mexico so that Mexico could bailout the New York banks. But they bailed out Mexico in such a way that the Mexican population suffered a drop in living standards of about 20% in the next two to five years. This is what’s called saving the banks and socking it to the people.
Now I defy you to look at what’s been going on in this country in terms of its public policy and say its anything other than saving the banks and socking it to the people. We’re the ones who are paying, they are the ones who are benefitting. This is a class project, it was a class project back in the 1970s and it continues to be one now. If we come out of this crisis with this class project intact then we are in deep trouble. We have to turn it around in such a way that government policy gets turned into support of the people, not support of the banks. The banks should be nationalized, turned into public utilities which serve people, not capital. And this is something on which we really need to concentrate our ideas on, right now. In particular, the biggest danger of all is that the stimulus package which is being passed is going to be handed out to mayors, handed out to cities, handed out all over the place, in such a way that there is absolutely no control over exactly what’s going to be done with it. So what’s going to be done with it is that people are going to be use it to fund their favorite projects. Mayor Bloomberg’s favorite project is to give $45 million to retrain Wall Street executives, which seems to me an astonishing way in which to spend the money – but that’s the way Mayor Bloomberg thinks. But I think we have different ideas; in New York, together with the some of the social movements who are forming the Right To The City group, we would like to suggest a whole different set of ways the stimulus package could be spent in order to benefit people rather than capital. Along with that, we have the supreme irrationality that you have tent cities arising in California and elsewhere, increasing homelessness, at the same time that you have all these vacant properties around. Is that a rational situation? And it seems that this is a situation where political activism can take very direct action–for instance, Picture the Homeless in NYC tried to commandeer a building last week–and this is the kind of thing we need to be supporting publicly as much as we can.
To Read the Rest of the Panel Discussion
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