openDemocracy on the global financial crisis of 2007-08:
Saskia Sassen, “Globalisation, the state and the democratic deficit” (18 July 2007)
Tony Curzon Price, “The end of gentlemanly capitalism” (13 August 2007)
Robert Wade, “The financial crisis: burst bubble, frayed model” (1 October 2007)
Avinash D Persaud, “The dollar standard: (only the) beginning of the end” (5 December 2007)
Fred Halliday, “Sovereign Wealth Funds: power vs principle” (5 March 2008)
Willem Buiter, “The end of American capitalism (as we knew it)” (17 September 2008)
By Tom Eley writing at WSS
(3 October 2008)
In the wake of Monday’s vote in the US House of Representatives rejecting the $700 billion bailout package for the American financial industry, prominent voices in the US and international media have responded by denouncing the lower house of Congress and complaining that the American political system is too susceptible to popular opinion and insufficiently obedient to the will of the corporate and political elite.
The yearning for more authoritarian forms of rule was expressed by, among others, Michael Gerson, the former chief speechwriter for George W. Bush. In a column in the Washington Post, he complained, “[I]t is now clear that American political elites have lost the ability to quickly respond to a national challenge by imposing their collective will.” The Times of London, part of Rupert Murdoch’s media empire, was even more blunt, headlining a column, “Congress is the Best Advert for Dictatorship.” Continue reading
by Robert Skidelsky
A few geniuses aside, economists frame their assumptions to suit existing states of affairs, and then invest them with an aura of permanent truth. They are intellectual butlers, serving the interests of those in power, not vigilant observers of shifting reality
The looming bankruptcy of Lehman Brothers and the forced sale of Merrill Lynch, two of the greatest names in finance, mark the end of an era. But what will come next?
Cycles of economic fashion are as old as business cycles, and are usually caused by deep business disturbances. “Liberal” cycles are followed by “conservative” cycles, which give way to new “liberal” cycles, and so on. Continue reading
The leading Pakistani urban planner and commentator Arif Hasan (of Urban Resource Centre) wrote this think-piece in June 2007 as a Discussion Document for UN Event on “Sustainable Urban Future: Urbanization in an Era of Globalization and Environmental Change” – New York, July 09 – 10, 2007
International capital is desperately looking for a home. Cities of South and South-East Asia are attractive destinations since they have a weak regulatory framework and have undergone structural adjustment. Here, this investment, is increasingly determining not only the shape of the city but also social and economic relations.
New terms, such as “world class cities”, “investment friendly infrastructure”, “foreign direct investment” or ”FDI” as it is called, have entered the development vocabulary. All politicians and official planners in the Asian cities I know are using these terms and it is largely because of them that the whole approach to planning has undergone a change. Local governments are obsessed by making cities “beautiful” to visitors and investors. This means building flyovers and elevated expressways as opposed to traffic management and planning; high-rise apartments as opposed to upgraded settlements; malls as opposed to traditional markets (which are being removed); removing poverty from the centre of the city to the periphery to improve the image of the city so as to promote DFI; catering to tourism rather than supporting local commerce; seeking the support of the international corporate sector (developers, banks, suppliers of technologies and the IFIs) for the above.
The above agenda is an expensive one. For this, sizeable loans have been negotiated with the IFIs on a scale unthinkable before. Projects designed and funded through previous loans have not met their objectives and there is evidence to show that they will again not meet their objectives. Many of the projects are being floated on a BOT process. Projects have replaced planning. This is especially true of transport related projects. In addition, there has never been more liquidity in banks and leasing companies. However, due to the freedom that these loan giving institutions have today, this liquidity is used to provide short-term high interest loans which do not bring any benefit to the city or to the majority of its residents. Continue reading
The fresh upheavals in the world financial trades were quelled by the on the spot intervention of both international economic institutions corresponding to the IMF and of domestic ones in the stepped forward realms, corresponding to the Central Store in the USA. The peril appears to pass through excel, although new tremors in South Korea, Brazil and Taiwan do not augur in any case. We may face expression still an additional catastrophe of identical or a larger magnitude momentarily.
Anything are the lessons that we may possibly derive bask in the preceding misfortune to steer clear of succeeding?
The foremost lesson, it may perhaps seem, is that brusquest word furthermore long time properties flows are two unconnected phenomena with absolutely trivial in general. The past is speculative in addition to technical in personality and has extremely trivial to do with central experiences. The latter is investment oriented plus dedicated to the going up of the welfare and quality of its current dwelling house. It is, thence, wrong to bring up “global funds flows”. There are money (coupled with however durable portfolio money in addition to endeavor capital) – along with there is speculative, “scorching” money. While “warm wealth” is especially encouraging since a lubricant on the wheels of liquid capital markets in well to do realms – it can be shocking in less liquid, tender economies or in economies in transition. Continue reading
Filed under capitalism, IFIs
By ROBERT WEISSMAN
Last week came the news that the Commodity Futures Trading Commission (CFTC) is investigating potential manipulation of the oil trading market.
That’s a good thing, though the CFTC is not exactly the most aggressive regulator around. (Says Judy Dugan of Consumer Watchdog: “On its face, the investigation smacks of the fox investigating a hen shortage in the chicken coop.”)
Market manipulation may be contributing to the recent oil price spike — though even in the worst case, it is only part of the story. The most important factor is supply and demand: supply is having trouble keeping up with unabated demand growth.
Are Wall Street firms and hedge funds in fact manipulating the oil market? Perhaps. There are certainly enough conflicts of interest, and unregulation, to make such activity plausible. These aren’t exactly guys with an honorable track record. Continue reading
By Alex Lantier
10 June 2008
This is the last part of a series of articles on the world food crisis also posted here. The original versions of Part one and Part two can be found here.
The current food crisis reflects not only financial events of recent years, but longer-term policies of world imperialism. Instead of allowing for a planned improvement of infrastructure and farming techniques, globalization on a capitalist basis has resulted in a restriction in many parts of the world of farm production. This has been carried out in order to lessen competition and prevent market gluts from harming the profit interests of the major powers.
One major aspect of imperialist policy was to limit farm production in the so-called “First World” to prevent sudden falls in world prices. In the US, this policy took the form of the federal government’s Conservation Reserve Program, first passed as part of the 1985 Food Security Act.
The program allows farmers to apply for payments of $50 per acre of land on which they do not plant crops. A nationwide limit of 180,000 square kilometers (about 10 percent of US arable land) was imposed on the program, later decreased to 130,000 square kilometers in 2007.
Though the bill was presented as a means of limiting soil erosion due to overplanting of ecologically vulnerable land, much of the fallow land registered under the project was not, in fact, vulnerable to erosion, but rather chosen by farmers on the basis of the price of the crops that could be grown on it. This was in line with the law’s stated objectives, which were “acreage reduction” and the maintenance of “target prices and price-support loans.”
Similar payments to farmers for farmland kept out of cultivation were adopted on a country-by-country basis, after the 1992 reform of Europe’s Common Agricultural Policy. Continue reading