[Marxism-Thaxis] Capitalism, Socialism and Crisis
Capitalism, Socialism and Crisis By Prabhat Patnaik http://www.politicalaffairs.net/article/articleview/8201/ Original source: People's Democracy (India) A common view of the current financial crisis of capitalism holds that it is essentially an aberration. Some attribute this aberration to specific mistakes committed in the past, for instance by the US Federal Reserve with regard to monetary policy. Some hold the lack of adequate regulatory mechanism as being responsible for this aberration. Paul Krugman, the current year’s Nobel laureate, blames it on insufficient supervision of the financial system. And even Joseph Stiglitz, the well-known radical economist and Nobel laureate, characterizes it as a “system failure,” a term which makes the crisis a phenomenon that in principle could have been avoided with impunity. This entire perception however is untenable. The crisis is a result not of the failure of the system but of the system itself; it is a part of the mode of operation of contemporary capitalism rather than being unrelated or extraneous to it. Massive speculation In a “free market” regime, asset markets tend to be subject to speculation. Speculators buy assets not because of the yield on these assets but because they expect its price to appreciate in the coming days. They have no long term interest in the assets and are concerned exclusively with capital gains. Since buying today to sell tomorrow entails carrying the asset during the intervening period for which a “carrying cost” has to be incurred, the assets most suitable for speculation are those whose carrying costs are low; and these are typically financial assets which have virtually zero carrying costs (requiring only a few taps on computer keys to effect all necessary transactions). Financial asset markets therefore are always subject to massive speculation. Speculation generates bouts of euphoria or “speculative excitement” which have the cumulative effect of pushing up asset prices. An initial rise in some asset prices, caused no matter how, gives rise to expectations of a further rise, and hence to an increase in the demand for the assets in question which actually raises their prices further; and so the process feeds upon itself and we have asset price “bubbles.” Such “bubbles” typically characterize financial assets, which, as already mentioned, are particularly prone to speculation; but they are not confined to financial assets alone (as the housing market “bubble” in the United States has just demonstrated). Such “bubbles” have an obvious impact on the real economy. The rise in asset prices fed by speculative euphoria improves for individuals who own these assets the estimation of their wealth position, and hence causes an increase in their consumption expenditure, and thereby in employment. Likewise such a rise in asset prices, where the assets in question are producible, causes an increase in investment expenditure on these assets, which leads to their larger production, and hence to larger employment. In short, speculative euphoria in the asset markets makes the boom in the real economy, stimulated by whatever had caused the initial rise in asset prices, more pronounced and prolonged. Precisely because of this however if for some reason the asset price increase wanes or comes to a halt, speculators attempt to get out of the assets in question causing a crash in the asset prices. This causes a fall in aggregate expenditure on goods and services; a collapse in the state of credit, as banks face insolvency; and a possible collapse even in the inclination of depositors for holding bank deposits (since they fear banks’ insolvency), as had happened during the Great Depression. In short there is a collapse of the state of confidence all around, and hence a corresponding increase in liquidity preference; i.e. there is a disinclination to hold any asset other than pure cash, or in extreme cases only currency, and of course claims upon the government, which is considered to be the only safe and reliable borrower. Not all crises display this severity; but to a greater or lesser extent these features mark any crisis. Speculation therefore has the effect of making the boom more pronounced and prolonged; but it has also the effect of precipitating a severe crisis, as distinct from a mere cyclical downturn. In the absence of speculation the boom in the real economy will be a much more truncated and tame affair. But precisely because it is not a tame affair, it is followed by a crisis. Two conclusions follow from the above analysis. First, since speculation is endemic to modern capitalism, where financial markets play a major role, speculation-engendered euphoria and the consequent pronounced booms, together with the crises that invariably follow, are also endemic to modern capitalism. “Bubbles” constitute in other words the mode of operation of the
Re: [Marxism-Thaxis] Capitalism, Socialism and Crisis
Capitalism, Socialism and Crisis By Prabhat Patnaik _http://www.politicalaffairs.net/article/articleview/8201/_ (http://www.politicalaffairs.net/article/articleview/8201/) is one of the worse, if not the worst economic analysis, I have read (under the banner of Marxism) in perhaps the past decade. WL. **Need a job? Find employment help in your area. (http://yellowpages.aol.com/search?query=employment_agenciesncid=emlcntusyelp0005) ___ Marxism-Thaxis mailing list Marxism-Thaxis@lists.econ.utah.edu To change your options or unsubscribe go to: http://lists.econ.utah.edu/mailman/listinfo/marxism-thaxis
Re: [Marxism-Thaxis] symbols edited from Marxism
Reply Yes, Marxism List. The initial article grew out of a discussion of GM - genetically modified commodities, although the issue was framed as genetically altered food in Cuba. I remember basically having the same discussion on Marxism the better part of 10 years ago and wanted to avoid the pitfalls and this determined the extremely obscure form, which basically could only be unlocked - decoded, by someone familiar with the concepts and symbolism. The first imprint is really raw and written upside down with sentences deliberately put in the wrong order. Plus, you know that much of Marxism can be fairly hostile to my particular history and political orientation. I am extremely careful about what I write there, and try to leave no room for disagreement over political orientation and political ideology; and generally discuss nothing historical including American history. I do not mind being baited on this list since I can more than adequately explain my reasoning of issues of tension. :-) Actually, the piece is not obscure at all if you are really rooted in America's evolving culture or know how to locate the key - Rosetta stone. I suspected you would get having studied anthropology and the nature of symbols. Plus I wanted to preserve two copies in archives. I might do the three level which answers the question about what happens when someone loses their mind: where does the mind go when it is lost? WL. In a message dated 3/3/2009 4:20:00 P.M. Eastern Standard Time, cdb1...@prodigy.net writes: Waistline2 Marxism/T list 3/02/09 index. Decoded. 2nd level. ^ Wow !!! That's what I call real proletarian poetry. A definite chapter in the new Ballad for Americans. You go bro , the workers' T.S. Eliot John Henry Did you send it to the other lists ? **Need a job? Find employment help in your area. (http://yellowpages.aol.com/search?query=employment_agenciesncid=emlcntusyelp0005) ___ Marxism-Thaxis mailing list Marxism-Thaxis@lists.econ.utah.edu To change your options or unsubscribe go to: http://lists.econ.utah.edu/mailman/listinfo/marxism-thaxis
[Marxism-Thaxis] Obama’s Politics of Change and US Policy on China
http://henryckliu.com/page182.html Obama’s Politics of Change and US Policy on China By Henry C.K. Liu Foreign policy is fundamentally based on national interests that change only slowly and infrequently except under crisis situations. Still, even in normal times, electoral changes of administration inevitably bring changes in style and nuance in the formulation and implementation of foreign policy within a context of continuity. Yet the Obama administration has come into power at a time of unprecedented and severe global financial and economic crises that have profound implications in US national interests and US position in a changing geo-economic-political world order. Crisis conditions that are crying out for change are enhancing the new president’s ability to live up to his campaign slogan of “Obama for Change” not just domestically, but also in foreign policy. The question is whether Obama’s campaign for change can survive his politics of change. It is necessary to point out that Obama did not merely call for change for change’s sake, but for change that “we can believe in”. The campaign slogan of “yes we can” is soaked with ideological energy. It presumably means change that will reorder the systemic dysfunctionality that has built up in recent decades that has landed the world in its currency sorrowful state. It declares a commitment to more effective government to bring about a more equitable society at home and a more just world order internationally. The popular desire for change was the prime reason for Obama’s election victory. Yet, unfortunately, a more equitable society at home and aboard within a more just world order has not always aligned perfectly with US national interests historically. Clearly, a redefinition of US national interests is critical to the success of President Obama’s agenda of change. US National Interests The definition of US national interests was sharply distorted by the 2001 terrorist attacks of 9:11 in the first year of the George W. Bush administration. Foreign policy under Bush had been framed by an over-the-top militancy with two distinct characteristics: US unilateralism based on superpower exceptionalism and a transformational diplomacy agenda promoted by US neo-conservatism. This dubious militancy, as delineated in National Security Council document The National Security Strategy of the United States, released on September 20, 2002, a year after the September 11 terrorist attacks, has led to disastrous failures in US foreign policy on many fronts. These failures in turn have created not only an erosion of US observation of human rights overseas but also a decline of civil liberty domestically. This email was cleaned by emailStripper, available for free from http://www.papercut.biz/emailStripper.htm **Need a job? Find employment help in your area. (http://yellowpages.aol.com/search?query=employment_agenciesncid=emlcntusyelp0005) ___ Marxism-Thaxis mailing list Marxism-Thaxis@lists.econ.utah.edu To change your options or unsubscribe go to: http://lists.econ.utah.edu/mailman/listinfo/marxism-thaxis
[Marxism-Thaxis] Obama , getting money to the working class pronto
Obama , getting money to the working class, pronto 3/3/09 Notice of Certain Benefits Unemployed Workers May Be Eligiole For Under the Economic Stimulus Package. 1)Extra $25 per week in unemployment benefits 2)Period for Collecting Emergency Unemployment Compensation Extended 3)Partial (first $2,400)Suspension of Federal Income Tax On Unemployment Benefits for Tax Year 2009 Obama , Obama , Obama ! ___ Marxism-Thaxis mailing list Marxism-Thaxis@lists.econ.utah.edu To change your options or unsubscribe go to: http://lists.econ.utah.edu/mailman/listinfo/marxism-thaxis
[Marxism-Thaxis] Capitalism, Socialism and Crisis
Waistline2 at aol.com Capitalism, Socialism and Crisis By Prabhat Patnaik _http://www.politicalaffairs.net/article/articleview/8201/_ (http://www.politicalaffairs.net/article/articleview/8201/) is one of the worse, if not the worst economic analysis, I have read (under the banner of Marxism) in perhaps the past decade. WL. ^^ CB: This is one of the worst unsupported, conclusory assertions I've seen since Ralph's embarrassing posts a couple of days ago. An empty outburst, with no thought in it whatsoever. Who cares what you think without any argumentation ? ___ Marxism-Thaxis mailing list Marxism-Thaxis@lists.econ.utah.edu To change your options or unsubscribe go to: http://lists.econ.utah.edu/mailman/listinfo/marxism-thaxis