Economy

In this recent article from the In Defence of Marxism magazine, Rob Sewell – editor of Socialist Appeal – looks at the current economic crisis, outlines the global economic perspectives, and explains what is meant when Marxists define this as an “organic crisis of capitalism”.

In April 1961, Yuri Gagarin, the Russian cosmonaught, became the first person in space. Flight, and later space travel, were once viewed as an indication of humanity’s progress and ability to overcome even the most enormous of obstacles. But the recent explosions of two private space ventures demonstrate the barrier that capitalism has become in our exploration of the stars.

Tectonic shifts are taking place in the world economy. The price of oil has fallen dramatically in the past six months. The price of Brent Crude has now fallen to less than $60 a barrel. This marks a near fifty per cent drop in price from $115 a barrel in June. It heralds a new stage in the capitalist crisis, and its impact is being felt throughout the world.

Behind the gloss of various superficial measures introduced by George Osborne in his 2014 Autumn Statement on Wednesday 3^rd December lay a far grimmer message for the vast majority of ordinary people. The real story of Osborne’s statement is the warning of what lies ahead after the next election: years more of austerity and deep, savage cuts.

“Six years on from the financial crash that brought the world to its knees, red warning lights are once again flashing on the dashboard of the global economy.” Such ominous statements may sound familiar to our regular readers. However, these words are not those of a Marxist, but of the British Prime Minister, David Cameron, expressing his deep concerns about the state of the world economy.

A few years ago, Mario Draghi, President of the European Central Bank, stated he would “do whatever it takes” to save the euro and restore growth. However, while the euro has stabilised, temporarily, the European crisis has certainly deepened. This time it is threatening to plunge the European Union into the nightmare of a Japanese-style deflation.

In July of this year, George Osborne, the British Chancellor, announced that the UK economy had finally recovered and reached its pre-crisis level. But the so-called “recovery” has been anything but that for the vast majority of people. Meanwhile, dark clouds are forming on the horizon, threatening to plunge the world economy into an even deeper crisis.

This year’s Rich List, published by the Sunday Times, shines a spotlight on the reality under capitalism: whilst millions of ordinary workers and youth face a future of austerity, the super-rich continue to see their wealth increase. Felix Lighter reports on the latest evidence for the “trickle up” economics under capitalism.

Thomas Piketty, a French economist and academic, has become an overnight sensation thanks to his book “Capital in the Twenty-First Century”, a bestseller that has sparked debate on all sides for its detailed analysis of inequality under capitalism, with elation and praise from the reformist left, and horror and fright from the free-market right. Adam Booth takes a look at the response to Piketty’s Capital.

On Wednesday 2nd April 2014, roughly 450 people filled the LSE’s Old Theatre to hear a lecture on ‘The Seventeen Contradictions of Capitalism’, given by the prominent Marxist academic, Professor David Harvey, who was launching his new book on the Marxist theory of capitalist crisis. Josh Holroyd reviews Harvey’s analysis of the crisis of capitalism.

This year’s budget from George Osborne has been described as the most typical Tory budget he has yet given. Whether that is correct is open to debate; but what is true is that it has many of the features of previous Tory budgets in a pre-election year: huge handouts to the rich, lots of shiny baubles for wavering Tory voters, and nothing for the poor.

It has often been stated that the correctness of Marxist theory – in its ability to predict the general course of development within the economy and society – demonstrates the superiority of foresight over astonishment. Never has this been better demonstrated than by the events of the current crisis, which has left the ruling class flailing blindly in search of an explanation or a solution.