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economics

The political economy of crisis management in the heart of world capitalism

By Arindam Sen

May 2009 -- Do we see a faint glimmer of light at the -- still distant -- end of the tunnel? In March the housing market in the US stabilised somewhat and new claims for unemployment insurance stopped rising. Crisis-ridden US banks surprised everybody when they reported profits in mid-April, which was followed by a good stockmarket rally. But most other indices, including retail sales figures seem to suggest that such optimism might be premature. As late as March 31 the OECD released a very gloomy prognosis, predicting that the US economy would shrink by 4% this year and not grow at all next year.

Meanwhile, a great debate of sorts is raging over contradictory strategy options for crisis management, in the process revealing the class conflicts in US society -- both between the bourgeoisie and the working class, and among various sections of the bourgeoisie.

Two versions of the nationalisation slogan

(Updated April 23) `Capitalism is putting an end to humanity and the planet' -- ALBA on the 5th Summit of the Americas

Venezuela's President Hugo Chavez greets Cuba's President Raul Castro.

Translated by Federico Fuentes

Cumaná, April 17, 2009

The heads of state and governments of Bolivia, Cuba, Dominica, Honduras, Nicaragua and Venezuela -- member countries of the Bolivarian Alternative for the Peoples of Our Americas (ALBA) -- consider that the proposed Declaration of the 5th Summit of the Americas is insufficient and unacceptable for the following reasons:

Michael Lebowitz: What would Marx say today?

Michael Lebowitz addresses the World at a Crossroads conference. Photo by Alex Bainbridge.

Is it time to dust off a copy of Das Kapital and revisit Marx's analysis of capitalism's ills?

Michael Lebowitz has recently been in Australia as a featured guest of the World at a Crossroads conference, held in Sydney April 10-12, organised by the Democratic Socialist Perspective and Green Left Weekly. He was interviewed by the ABC Radio's Late Night Live on April 14, 2009.

Luis Bilbao: The grand duel -- At the Fifth Summit of the Americas, a crucial battle is to be waged

By Luis Bilbao, translated by Gonzalo Villanueva for Links International Journal of Socialist Renewal. It was first published in America XXI.

[Luis Bilbao will be a featured guest at the World at a Crossroads conference, to be held in Sydney, Australia, on April 10-12, 2009, organised by the Democratic Socialist Perspective and Green Left Weekly. Visit http://www.worldATACrossroads.org for full agenda and to book your tickets.]

April 9, 2009 -- The time has arrived: to align with the North to engage in the futile business of saving capitalism, or define positions and accelerate towards South American unity, the complementary solidarity of the region's economies and authentic sovereignty towards the good life for all. That is the option for which there is no possible postponement.

(Updated May 3) Ireland & Britain: Car workers occupy plants over jobs -- Support Visteon workers!

May 3, 2009 -- Workers at Visteon, following a four-week battle, have gained a victory. After the occupation of the Visteon plants and 24-hour picketing when the company announced its liquidation, Ford/Visteon bosses were finally forced to concede to the workers' demands. Workers in Enfield and Basildon have already voted in favour of the deal, while those at Belfast will be voting soon. Below are reports and videos that recount events as they unfolded.

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Review: John Bellamy Foster and Fred Magdoff's `The Great Financial Crisis'

The Great Financial Crisis
By John Bellamy Foster and Fred Magdoff
New York, Monthly Review Press, 2009
ISBN: 978-1-58367-184-9 paper

Review by Patrick Bond

Four decades ago, Monthly Review cofounder Paul Sweezy vigorously debated financialisation of the US economy with Robert Fitch and Mary Oppenheimer, whose article ``Who Rules the Corporations?'' in the journal Socialist Revolution proved most irritating. The central dispute was over whether debt relationships between banks and corporations – as well as interlocking directorships and other ruling-elite relationships -- translated into control by the former.

Asking ``The Resurgence of Financial Control: Fact or Fancy?'', Sweezy disdainfully answered ``fancy''. During the golden age era of financial stability, until the early 1970s, Sweezy's tracking of intracapitalist power relations allowed him to conclude that bankers were not in control, they were mainly facilitators.

Atilio Borón: From infinite war to infinite crisis

Atilio Borón (right) with friend.

By Atilio Borón[*], translated by Machetera, Scott Campbell, Christine Lewis Carroll and Manuel Talens

March 25, 2009 -- Machetera/Tlaxcala -- Some thoughts on the current capitalist crisis, its probable “solutions” and the role that a socialist option might play in the present juncture.

(Updated April 2) Eric Toussaint on G20: `Putting a fresh coat of paint on a world that is collapsing'; police attack protesters

London on March 28, 2009. Protest organised Put People First, an alliance of more than 150 unions, and attended by 35,000 people. Photo by Xinhua.

Stop press April 2

George Monbiot: G20 protests: Riot police, or rioting police?

At the G20 protests in London only one group appears to be looking for violent confrontation – and it's not the protesters.

Red Pepper: Death in the City

David Harvey: Their crisis, our challenge

Protest against home foreclosures, Oakland, March 12, 2009. Photo by David Bacon.

In a far reaching interview with Red Pepper, David Harvey argues that the current financial crisis and bank bail-outs could lead to a massive consolidation of the banking system and a return to capitalist ``business as usual'' -– unless there is sustained revolt and pressure for a dramatic redistribution and socialisation of wealth. David Harvey was interviewed by Marco Berlinguer and Hilary Wainwright. Transcribed by Kate Ferguson. This article first appeared in the April/May 2009 print edition of Red Pepper, and is posted with permission at Links International Journal of Socialist Renewal. It is posted in the interests of furthering left debate on how best to respond to the crisis. Links encourages readers to express their views in the ``Comments'' box at the conclusion of the article.

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Photo essay: Fighting back against home foreclosure

Photos by David Bacon

Oakland, California, March 12, 2009 -- On the steps of the Alameda County courthouse, community activists in the Association of Community Organizations for Reform Now (ACORN) protest against the auction of the foreclosed home of Armando Ramos and Fernanda Cardenas. Their home mortgage, held by the mortgage company OCWEN, had an adjustable rate. When it went up, Ramos and Cardenas could no longer make the payments. OCWEN then decided to auction off the home on the courthouse steps.

PSUV document: Crack in the accumulation of world capitalism (march towards the global depression)

The following document was produced by the United Socialist Party of Venezuela (PSUV) national leadership. It has been translated from the Spanish-language original by Federico Fuentes for Links International Journal of Socialist Renewal.

On March 21, all PSUV battalions met to discuss the document, together with an article written by Venezuela’s President Hugo Chavez (read it HERE). The day after, Chavez announced his government’s anti-crisis measures (see http://www.venezuelanalysis.com/analysis/4314).

The document is significant not only for what it says, but also because it is the beginning of a mass discussion on how to confront the crisis in Venezuela in the lead-up to the PSUV’s August congress (for more see http://www.escambray.cu/Eng/news/Wvenezuela090320434.htm).

The economic crisis: Whose fault is it, and how can it be overcome?

By Aleksandr Buzgalin and Andrey Kolganov, translated by Renfrey Clarke for Links International Journal of Socialist Renewal

March 23, 2009 -- The period at the end of 2008 and the beginning of 2009 was notable for a whole range of developments. Two of them, however, seem to the authors to be not only closely interconnected, but also of symbolic importance: a genuinely profound economic crisis broke out, and along with it, sharply increased interest came to be shown in the works of Karl Marx.

Over many years, various Marxists spoke of the crisis of capitalism at such length that the great majority of analysts ceased to take them seriously. The situation thus recalled the old story of the shepherd boy who continually cried “Wolf! Wolf!” even though there was no wolf there.

But one day, the wolf actually appeared ...

Meanwhile serious Marxists, unlike the party-political propagandists of the Soviet era, began talking of the threat of a world financial crisis and of the possibility of its turning into a world economic crisis only relatively recently, around the turn of the 21st century. This was the point at which it became obvious that the gap between fictitious financial capital on the one hand, and human capacities and the requirements of material goods production on the other, had reached dangerous dimensions.

John Bellamy Foster on the economic and ecological crises: `The common denominator is capitalism'

John Bellamy Foster interviewed by Links International Journal of Socialist Renewal/Green Left Weekly's Ruth Ratcliffe

A 20-minute interview recorded with a handheld cam in Oregon, USA, in February 2009. John Bellamy Foster is editor of Monthy Review and professor of sociology at the University of Oregon. He is co-author, with Fred Magdoff, of The Great Financial Crisis: Causes and Consequences (Monthly Review Press, January 2009) among numerous other works. Foster discusses the global economic crisis, its implications for the world and particularly the Australian economy. He also discusses the ecological crisis and the potential for revolutionary change.

Venezuela: Confronting capitalism's crisis with more revolution

By Manuel Sanchez

Caracas, March 14, 2009 -- In some countries, the severe crisis of capitalism has resulted in a realignment of respective governments with the imperialist powers — and the adoption of different forms of cut backs that affect the living conditions of the majority.

In the Venezuela, the opposite is occurring.

Before and after the victory for the pro-revolution forces in the referendum on February 15, 2009, to allow elected officials to stand for re-election more than once, the decision to push forward with the transition to socialism was ratified.

The world economic situation has also undoubtedly hit hard in Venezuela. The revolutionary government has already resolved to eliminate “all expenses that are not absolutely indispensable”.

But these austerity measures, far from adversely affecting the course of the revolution that seeks to transform the country, are favouring it. To the average politically trained eye, this has been evident since September 2008. President Hugo Chavez explicitly warned of this in this annual message to the nation on January 13.

Robert Brenner: A Marxist explanation for the current capitalist economic crisis

Robert Brenner.

Marxist economist Robert Brenner was interviewed by Seongjin Jeong for Hankyoreh, one of South Korea’s leading daily newspapers. The interview was published on January 22, 2009.

* * *

Seongjin Jeong: Most media and analysts label the current crisis as a ``financial crisis''. Do you agree with this characterisation?

Robert Brenner: It's understandable that analysts of the crisis have made the meltdown in banking and the securities markets their point of departure. But the difficulty is that they have not gone any deeper. From US Treasury Secretary Henry Paulson and US Federal Reserve chair Ben Bernanke on down, they argue that the crisis can be explained simply in terms of problems in the financial sector. At the same time, they assert that the underlying real economy is strong, the so-called fundamentals in good shape.

The doublespeak of the discredited IMF

By Eric Toussaint and Damien Millet, translated by Christine Pagnoulle and Judith Harris

March 12, 2009 -- The international crisis that erupted in the summer of 2008 demolished all the neoliberal dogmas and exposed the deception behind them. Unable to deny their failure, the World Bank (WB) and the International Monetary Fund (IMF) claim they no longer uphold the set of neoliberal policies known as the ``Washington Consensus’’. Yet, discredited though they may be, these two institutions are using the international crisis to return to the limelight.

For decades they have enforced the deregulation measures and structural adjustment programs that have led to the current impasse. After this total fiasco the WB and the IMF must now account for their decisions before world opinion.

Marx is back! Karl Marx and his contribution to the socialist tradition

The ideas of Karl Marx -- that class society creates great wealth for the few at the expense of the many  --  ring truer every day. Brian Jones, a member of the International Socialist Organization of the United States, examines Marx's revolutionary ideas in the following three articles. These articles first appeared in Socialist Worker, newspaper of the International Socialist Organization of the United States. They have been posted at Links International Journal of Socialist Renewal with permission of Socialist Worker.

Lessons from the past: The Great Depression and the Communist Party of Australia

A section of the Wharfie's Mural, the large-scale work of art from the walls of the CPA-led Waterside Workers Federation (WWF) canteen in Sussex Street, Sydney, in the 1950s and '60s.

By Dave Holmes

[This is an excerpt from the new pamphlet, Meltdown! A socialist view of the capitalist crisis, by Resistance Books. Meltdown! features essays by John Bellamy Foster, Phil Hearse, Adam Hanieh, Lee Sustar and others. Purchase a copy from Resistance Books.]

The current economic crisis is a fundamental crisis of the world capitalist system. British socialist Phil Hearse calls it the “third slump” in the history of the capitalism (the other two being the Great Depression of the 1930s and the 1974-75 sharp downturn). And the levels of mass distress may yet come to rival the 1930s.

Market madness: `Oversupply' of water tanks during a record water crisis!

Not enough water; `too many' tanks

By Dave Holmes

Melbourne, February 26, 2009 -- Australian plastics manufacturer Nylex has been placed in the hands of receivers. Nylex is a well-known name — the company produces the iconic Esky, water tanks, wheelie bins, hose and garden fittings and interior trimmings for car manufacturers. According to the February 13 Melbourne Age, “The drought and a government rebate stimulated demand for water tanks, but oversupply pushed down prices and demand collapsed after substantial rain in Queensland and NSW.”

The slump in the auto industry also contributed to the company’s woes. In the end, the banks (ANZ and Westpac) called in their loans.

The jobs of its 700-strong work force are in the balance. The receivers may or may not find a buyer for Nylex, but any new owner is likely to heavily restructure the company, leading to substantial job losses.

John Bellamy Foster: A failed system -- The world crisis of capitalist globalisation and its impact on China

By John Bellamy Foster

John Bellamy Foster is editor of Monthly Review and professor of sociology at the University of Oregon. He is coauthor, with Fred Magdoff, of The Great Financial Crisis: Causes and Consequences (Monthly Review Press, January 2009) among numerous other works. This article was originally a presentation delivered to the International Conference on the Critique of Capital in the Era of Globalization, Suzhou University, Suzhou, China, January 11, 2009. It appeared in the March edition of Monthly Review and is posted at Links International Journal of Socialist Renewal with John Bellamy Foster's permission.

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