Explaining the last ten years: Keynes or Marx – who is right?

The latest economic data from the major capitalist economies do not make pretty reading.  The global slowdown, as measured in real GDP growth, is worsening.  The first reading for real GDP growth in the US, for the first quarter of 2016, delivered an annualised rise of just 0.5%, or 0.125% quarter over quarter.  If we compare the size of the US economy after taking into account changes in prices (inflation), with the first quarter of 2015, then the American economy is larger by just 1.9%.  That’s the slowest rate of expansion since early 2014. The US economy, the best of the …

The Fed, interest rates and recession | Michael Roberts Blog

On Friday, US stock markets fell to their lowest level since August 2015 in its third consecutive weekly decline. In many previous posts, I have argued that stock markets are really still in a long-term secular ‘bear market’ of decline.  Stock market values follow the profitability of capital and, as I have argued in other posts, the profitability of US capital has not yet reached the bottom of its current downwave that, in my view, began in 1997, with various upturns (2001-6, 2009-13).  If that is correct, then the US stock market (and others as well) have yet to reach …

Predictions for 2016

As I write, global stock markets kicked off 2016 by plunging, so much so in the case of China that stock market exchange was closed to stop selling.  The fall was prompted by all-round disappointing surveys of business activity in China, India, the US and parts of Europe. Indeed, by the end of 2015, most stock markets had their worst yearly results since the Great Recession in 2009  Clearly, rich investors and financial institutions are getting worried that the global economy, far from picking up pace, is slowing even further. It has now been eight years of what I have …

Kuznets, Piketty, Marx and human development | Michael Roberts Blog

Kuznets, Piketty, Marx and human development A new index of human development (HDI) has been created.  The origins of the HDI are found in the annual Development Reports of the United Nations Development Programme (UNDP). These were devised and launched by Pakistani economist Mahbub ul Haq in 1990 and had the explicit purpose “to shift the focus of development economics from national income accounting to people-centered policies”. Human well-being is widely viewed as a multidimensional phenomenon of which income is only one facet.  Human development defined as “a process of enlarging people’s choices” (UNDP 1990, p. 10), namely, enjoying a healthy life, acquiring knowledge and achieving …

Varoufakis

THE ECONOMIC CASE FOR AUTHENTIC DEMOCRACY: Yanis Varoufakis

THE ECONOMIC CASE FOR AUTHENTIC DEMOCRACY: TED GLOBAL-GENEVA 8th December 2015 Yesterday I delivered a TED Global talk in Geneva on the future of democracy and capitalism. While awaiting the video, here is the text of my talk. INTRODUCTION: DEMOCRACY IS NOT INEVITABLE Democracy: In the West we make the colossal mistake of taking it for granted. We see democracy not as the most fragile of flowers that it really is but as part of our society’s furniture – as an intransient given. We also believe that capitalism inevitably begets democracy. It doesn’t! Capitalism may have yielded liberal democracies in America …

Too much profit, not too little? | Michael Roberts Blog

Too much profit, not too little? Most years I attend the London conference of the Historical Materialism journal.  This brings together academics and others to present papers and discuss issues from a generally Marxist viewpoint.  This year I presented a paper on whether rising inequality causes crises under capitalism (Does inequality causes crises).  My session was well attended and the audience included many of the small band of Marxist economist s around at the moment. The gist of what I said was this.  Rising inequality of income and wealth in the major economies has become a popular thesis among both mainstream …

Starting at LSE | The Idge of Reason

So I registered as a post graduate student at the London School of Economics 3 weeks ago. Social work, which is my background, used to be about critical reflection on the political economy. Generally in social work you are working along an inequality faultline, inequality is not just about money, it’s about dynamics between groups. It’s about power imbalances, power and abuse. Social work exists along the cracks of those faultlines, in my case over 11s. One of the ways you have to learn to think in social work, is about how institutions function, or don’t. You have to know …

The Ideas of Karl Marx

The ideas of Marx have never been more relevant than they are today. This is reflected in the thirst for Marxist theory at the present time. In this article, Alan Woods deals with the main ideas of Karl Marx and their relevance to the crisis we’re passing through today.Marx and EngelsIt is 130 years since the death of Karl Marx. But why should we commemorate a man who died in 1883? In the early 1960s the then Labour Prime Minister Harold Wilson declared that we must not look for solutions in Highgate cemetery. And who can disagree with that? In …

British Labour, Marxist McDonnell and deficit-denying

September 30, 2015 The election of a new leader of the UK’s opposition Labour party has provoked a flurry of interest in the international media and among economists.  That’s because the new leader, Jeremy Corbyn and his newly appointed finance spokesman, John McDonnell, have been considered as ‘avowed Marxists’. That is certainly the case for McDonnell.  He is an ‘avowed Marxist’ because he says he is.  On the day of his big keynote economics speech at Labour’s annual conference this week, he said that “If you look at our capitalist system, one of the definitive analysts of how it works …

A Man Is Trying To Sell His Car.

From crawl to crash?

The final figures for US real GDP in the second quarter of this year (April to June) were released at the end of last week.  They showed that the US economy was growing at an annual rate of nearly 4% (3.9%) in the summer after yet another poor first (winter) quarter of just 0.6% growth.  So, compared to summer 2014, the US economy has expanded by 2.7%.  Indeed, the US economy has been growing at that sort of rate for the last four quarters. However, before the cry comes that, finally, American capitalism is back on a sustained trend in …