A video interview with Marxist economist Mick Brooks speaking about the world crisis. Made by TANIT member and host of the Speakers’ Corners Show Heiko Khoo.
Archive for the ‘Economics’ Category
The Great Depression: then and now
The 1920s were good years for the world economy. They were years of boom. Boom and speculation go together like strawberries and cream, and there was speculation aplenty as well. In such a period of ‘irrational exuberance’ the illusion spreads that the good times will go on for ever. Sound familiar? On the eve of the great 1929 stock exchange collapse, a journalist asked a speculator how so much money was being made on the market. This was the reply: “One investor buys General Motors at $100″ (he meant a GM share) “sells to another at $150, who sells it to a third at $200. Everyone makes money”. This seems pure magic, but for a while it can work. In a ‘bull market’ as in 1925-29 nearly all share prices go up and up. Over those years US industrial shares trebled in price! We all know what happened next.
This is not yet another attempt to repeat Marx’s analysis. This has been done thousands of times, including by the present author (See Brooks, Sewell and Woods-What is Marxism?). At best surveys of that kind will take the reader back to Capital which is, of course, the definitive treatment.
Neither is it an attempt to ‘prove’ the labour theory of value, as Marxists have been challenged to do over and over again. It is intended rather to show the dramatic effects that the operation of the law of value has on working people’s lives.
In several posts in 2010, I argued that the people of Europe were going to have to pay for the bailout of the banking system in the Europe through a significant reduction in their living standards (by higher taxation and inflation, lower incomes, rising unemployment and reduced public services.
It started with the Greeks (see my post, Greek countdown, 1 February 2010). The socialist government there agreed to take a E110bn in loans from the European Union and IMF to fund the buyback of its maturing government bonds and future government borrowing. It had to do so because capitalist bond investors (who are mainly Greek and European banks and pension funds) were refusing to buy any more Greek government debt unless the prices they paid were slashed. In other words, the government would have to pay an 8-10% interest rate on their borrowing, a level that was just way too much forcing the government to borrow even more to pay for it!