The US stock market has reached new highs. By any definition it is fantastically valued. Michael Roberts looks at the reasons behind the speculative fever and its relations with the real economy and concludes that a total eclipse is not far away.
Two years ago, at the time of the collapse of the Southeast Asian economies, we published a document called "The first tremors of the
coming slump". Jonathan Clyne, editor of the Swedish Marxist magazine Socialisten looks at what we said at the time and concludes that "our basic analysis of the epoch is still correct". Translated from Socialisten 43, September 1999.
Seventy years after the 1929 stock exchange crash which led to the Big Depression, Mick Brooks looks at how the stock exchange works, what causes speculation and concludes that "what goes up, must come down".
Paul Krugman's new book argues that the world might be facing a depression again which can only be avoided by returning to Keynesian policies. Phil Mitchinson reviews the book and points out the flaws of Krugman's "solutions".
"Asia's astonishing bounce-back" - this is the kind of headline that has started to appear in recent months. Having apparently shrugged off the effects of the stock markets crash in 1997, they are now anxiously looking for signs of revival in Asia and Europe as proof that the world has avoided recession. Once more the advocates of the so-called New Economic Paradigm proclaim the triumph of the free market. However, such triumphalism lacks any semblance of a scientific basis. The serious representatives of capital look with growing concern at the prospects for the world economy.
It is only a matter of time before the US internet bubble is burst, investments collapse and consumption of the masses falls back because of a loss of confidence in the 'new economy'. The internet revolution is a great technical leap forward. But under capitalism, it is being exploited by more and more precious investment capital being thrown into this tiny sector of the economy at the expense of all the rest.
In this 10,000 word article Mick Brooks analyses in detail all the claims of the proponents of the "new economic paradigm" from a Marxist point of view and proves why this, far from being a 'new economy' in which the business cycle has been abolished, is something we have seen many times before in the history of capitalism.
On March 24th, after an accumulated fall of the Cyprus Stock Exchange of nearly 50% over a period of five months, angry investors decided to march on the Stock Exchange to try and force the prices up! Millions of working class families are investing their savings on the stock exchange in the belief that it can only go upwards. This article gives a glimpse of the social and political effects of a collapse in the stock exchange.
In the last few weeks there has been a huge crash in the stock prices of the new information technology companies. Until then, the great new economy of computers, mobile phones, digital TV and, above all, the internet has been greeted by capitalist investors around the world as an unstoppable avenue to untold wealth. Every day we have been told in the newspapers of yet another 20-something internet entrepreneur, who becomes a multi-millionaire overnight, thanks to a launch on the stock market.