Economy

The following draft document was discussed at the World Congress of the International Marxist Tendency in July 2016. The main aim of the document is to define the main economic, social and political trends in the world today and to develop a perspective for the class struggle in the next period. The document was originally drafted in October 2015. [You can read the final version of the document, which was passed at the congress here as

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The latest in a series of annual reports from Oxfam, detailing the level of economic inequality in our world, is a striking example of Marx’s prediction that capitalism concentrates wealth in fewer and fewer hands. 

Global markets gave fallen 7.1% since January 1st, their worst start since 1970. George Soros, the renowned business magnate, says the situation developing in China reminds him of the period prior to the banking crisis of 2008. Former US treasury secretary Larry Summers has said, “The global risk to domestic performance in the US, Europe and many emerging markets is as great as any time I can remember.”

The arrival of the smart-phone application Uber has thrown the taxi industry into a state of disarray. First launched in June 2009 in San Francisco, the application has spread rapidly and today finds itself in over 300 cities in approximately 58 countries. While it offers many advantages over traditional taxis, including lower rates, it is having serious effects on the living conditions of taxi drivers. 

The International Monetary Fund has been forced, not only to repeatedly downgrade its growth forecasts, but to now predict a fall in World GDP in dollar terms, the first since 2009. This is a reflection of the crisis-ridden world we are in.

In this longer article, Adam Booth examines the rise of the sharing economy, which has featured heavily in the media because of firms like AirBnB and Uber. These new models are presented as offering a revolutionary new dynamic phase in the life of capitalism. But the reality under capitalism is far from this utopian promise.

The world economy teeters on the brink and the global capitalist system has entered its deepest crisis since the 1930s. Governments around the world are scrambling to stabilize the economy, but by doing so they are disrupting the already fragile social and political equilibrium.

World stock markets have been in meltdown from Shanghai and Shenzhen to London and New York. A sea of red blighted the computer screens of the stock exchanges everywhere in a panic global sell-off. Shock and disbelief among investors was ubiquitous. Even as the Dow Jones claws its way back from its worst losses, extreme volatility pervades the entire system. Could this crash be a one-off event, which will quickly return to normal, or the beginning of a series of shocks in an unstoppable chain of events?

As Adam Booth explains in this article, serious bourgeois economists can see a new world economic slump coming, which they have no way of averting, having already used all the traditional measures they would have adopted in the past, lowering interest rates, credit, etc. In these conditions any important event, such as a Greek default or a dramatic turn of events in the Middle East, can trigger an unravelling of all the pent up contradictions.

Once more, the world economy is dangling on the edge of a precipice. The crisis in Greece has again hit the headlines and threatens to drag Europe down with it. The days when capitalism could simply sail by without a care in the world have gone forever. As in the interwar period, the crisis of capitalism remains deep-seated and protracted.

“Capitalist production constantly strives to overcome these immanent barriers [to its further development], but it overcomes them only by means that set up barriers afresh and on a more powerful scale. The true barrier to capitalist production is capital itself.” - Karl Marx

“Where were the Marxists in 2008, when the demise of Lehman Brothers almost brought about the collapse of capitalism?” asks a puzzled Ralph Atkins, the capital markets editor of the Financial Times. Well, unlike Mr. Atkins and his coterie of free-marketeers, we were not in a state of total bewilderment. We had predicted such an eventuality. As capitalism plunged into a deep slump, we were explaining to an ever-widening audience that the crisis, which bourgeois economists denied could ever happen, was a stunning confirmation of the correctness of Marx’s ideas. These ideas, which had been repeatedly declared out-of-date by capitalist apologists, were shown to be shockingly relevant, in

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In 2015, the rich are still getting richer and the poor are still getting poorer. This is the conclusion of a new report on inequality produced by Oxfam and based on data compiled by Credit Suisse. The report confirms that the richest 1% of the world’s population now collectively own 48% of all the wealth of the planet. By 2016, based on current trends, they will have over half - that is, more than the other 99% of us have put together.

Desperate times call for desperate measures. So it is that after years of crisis, and further months of prevaricating, it seems that quantitative easing (QE) will soon be implemented across the Eurozone. However, the contradictions that have prevented such a programme of QE in Europe up until now have not gone away, and the fault lines along which the Eurozone will crack are already apparent and clear.

As they danced away the Old Year and welcomed the New with, as usual, copious quantities of the finest champagne, the bourgeois from New York to London must have felt a satisfying glow of confidence. Seven years after the 2008 calamity, are they not still firmly in command? The earlier fears that the crisis must lead to some terrible social and political Apocalypse have dissipated. Capitalism is alive and well. The profits are flowing freely and the rich are ever richer. In short, everything is for the best in the best of all capitalist worlds.