Monday, October 31, 2011
Near-death experiences are simply "manifestations of normal brain functions gone awry" and that many common near-death experiences could be caused by the brain's attempt to make sense of unusual sensations and perceptions occurring during a traumatic event, researchers explain. Dr Caroline Watt, said: "Our brains are very good at fooling us...The scientific evidence suggests that all aspects of the near-death experience have a biological basis."
There is a condition called "Cotard" - or "walking corpse" syndrome, where a person believes they are dead. It has been seen following trauma and during the advanced stages of typhoid and multiple sclerosis. Out-of-body experiences, where people feel they are floating above themselves, are also commonly reported. But Swiss researchers found such experiences could be artificially induced by stimulating the right temporoparietal junction in the brain that plays a role in perception and awareness. The "tunnel of light" sensation reported by those who believe they are having a near-death experience can also be artificially induced. Pilots flying at G-force can sometimes experience "hypertensive syncope" which causes tunnel-like peripheral or even central visual loss for up to eight seconds. And a US study suggested the light at the end of the tunnel can be explained by poor blood and oxygen supply to the eye. The feelings of bliss and euphoria, meanwhile, can be recreated with drugs such as ketamine and amphetamine. The paper also suggests the action of noradrenaline, a hormone released by the mid-brain, can evoke positive emotions, hallucinations and other features of the near-death experience.
"Taken together, the scientific experience suggests that all aspects of near-death experience have a neuro-physiological or psychological basis."
Brendan Barber, the TUC's general secretary, said: "Top directors have used tough business conditions to impose real wage cuts, which have hit people's living standards and the wider economy, but have shown no such restraint with their own pay."
"When you think the average pay is going up 1% or 2%, it's not even meeting price rises. These pay packages have become so complex that executives don't even understand it themselves." Deborah Hargreaves, chair of the High Pay Commission, told BBC.
At a time when company share prices and profits have fallen, what explains such extravagant rewards? Pay is set by remuneration committees, who are supposedly bound to guard the shareholder interest. But in practice the committees are dominated by a closed circle of former managers, who can ignore shareholder votes. Deborah Hargreavesnoted on the Today programme: "remuneration committees on companies are often made up of other executives from other companies with an interest in keeping pay high."
According to the IDS, Mick Davis who heads Xstrata was the highest paid executive in the FTSE 100. The mining giant extracts metals, exports coal and harvests wood in locations from Chile to Australia. Davis was paid £18,426,105.
Bart Becht retired as the chief executive of Reckitt Benckiser in April after 16 years at the company. With a total pay packet of £17,879,000, he was the second highest paid executive on the list.
ICAP boss Michael Spencer made £13,419,619 according to IDS.
In fourth place was the former Tesco boss Terry Leahy, who was paid £12,038,303. He retired in March.
Tom Albanese has been at the helm of the mining group Rio Tinto for four years. According to IDS, he was paid £11,623,162, ranking him fifth highest paid executive in Britain's top 100 companies.
Sunday, October 23, 2011
Warren Buffett...................USD 39 billion (Berkshire Hathaway)
Charles Koch.....................USD 25 billion (Koch Industries Inc)
George Soros.....................USD 22 billion (Soros Fund Management)
Sheldon Adelson................USD 21.5 billion (Las Vegas Sands Corp)
Michael Bloomberg.............USD 19.5 billion (Bloomberg L.P)
John Paulson......................USD 15.5 billion (Paulson & Co)
Carl Icahn............................USD 13 billion (Viacom)
Anne Cox Chambers.................USD 12 billion (Cox Enterprises)
Ronald Perelman.......................USD 12 billion (MacAndrews & Forces Holdings Inc)
Abigail Johnson.....................USD 11.7 billion (Fidelity Investments)
Friday, October 21, 2011
Migrants are rarely well off in the country they move to, forming an underclass with little if any security of employment or housing. Immigrants often receive low paying work in the service industry ( the 3-D jobs, dirty dangerous and difficult), once they enter the developed capitalist system and they can never afford the education to gain higher paying jobs. As a result they stay in the service industry their entire lives, being some of the most lowly-paid members of the working class of wage and salary earners.The immigrants who now try to settle in Britain come at the bottom of the social scale, taking the worst houses, accepting the worst conditions. Likely to be of more importance is the perception (rightly or wrongly) that Britain is a fair and open society and the desire to be with family and friends already in the UK. Such primary reasons stem largely from the foreign policy of the UK government, in presenting itself as a bastion of the free world whilst simultaneously exerting links over far-flung lands. It is taught in school that capitalist countries are mosaic countries, small units of various cultures existing within a larger schema or government. This view is marketed so that potential immigrants will not have to leave their customs behind and still be able to reap the so-called rewards of capitalist society. Yet only those who assimilate into the capitalist system are able to experience the "freedoms" it promises, often at the cost to their own culture.
While it is true that the decision to economically migrate is not taken solely on labour market factors, and the nature of the political regime and the historic links may well have a strong determining role, nevertheless the demand for labour to be attracted to concentrated areas is a structural feature of capitalism. Since its inception, capitalism has drawn workers into highly concentrated areas of development in order to satisfy its labour needs. All those people seeking migration are simply obeying the imperative that they must try to find a place to work; and no amount of government restrictions will change that fact. Hence, migrants with even a smattering of English, and a desire to work for a bearable living standard or to pay off debts to people-traffickers, choose countries like Britain.
No ruling class is ever completely unanimous. Capitalism creates conflicts within each ruling class; no two capitalists have interests which are exactly the same. The question of immigration causes disputes within the British ruling class. Some want to establish the principle that when a particular industry or trade is short of workers, its owners have the right to bring in workers from any other country, and thus help to counteract the danger of having to raise wages and salaries. Some other members of the capitalist class feel it would be a mistake to let in too many workers from other countries. Some members of the capitalist class take advantage of any "foreign" immigration to whip up nationalist feeling, using the perception among workers (who have the votes) that there is some threat to themselves from competitors from overseas. Those who are in possession of little are easily frightened by the threat of some other coming to take it away. The appearance of jobs going to these “foreigners” whilst their “own” go without work reinforces the illusion that migration causes unemployment. World socialists have argued that racism is usually fuelled and ignited by poverty and fear, and therefore cannot be removed until the cause is.
So while many of those seeking to enter the UK might be well-qualified machine operators, engineers, builders, doctors etc (as they are), if the capitalist economy is going through yet another of its inevitable cyclical crises, there'll be no employers or money to pay for these much-needed workers. Such economic crises make migrants unwanted. They put politicians under maximum pressure to keep them out to minimise state expenditure, spending which reduces the nation's profitability the bigger it gets, and is especially disliked when making profits is then as difficult as it gets. Increased racism and nationalism also become more likely as high unemployment and poverty produce considerable social suffering, provoking the pained to find and lash out at those they think responsible, and politicians in need of scapegoats, chauvinistic bigots and money-mad tabloids all eager to point some out.
The problems we face are not caused by workers from other parts of the world migrating to this part, but by the capitalist system of class ownership and production for profit instead of the common ownership and production geared to satisfying people's needs which will be the case in socialism. The socialist response is simply to point out that poverty and social disruption are caused by capitalism, a social system which requires the vast majority of the population to rely on selling their labour power to survive. With or without immigration there will be unemployment, homelessness, crime. What an extraordinary notion it is that so many members of the human race should be forced to remain on that small section of the earth's surface in which they happened to be born. Who gave the world's rulers the right to tell us which bit of land we should live on? How much longer are we willing to sit around and let a tiny minority divide us? Socialists understand that the thing which makes workers leave behind their communities, and go to a place where their language is not spoken, is the wages system itself, which swats humans around the globe like a kitten playing with its toys. This underlies the need for us to recognise our identical position with regards to the wages system, and work together, as workers across the world, across boundaries, to create a commonly owned planet where all can live in security.What socialists envisage is that when the resources of the Earth have become the common heritage of all the human race then the world would no longer be divided into separate states, and people would be free to travel anyway in the world without needing a passport or visa and whether to live or to work or simply for pleasure.
Unique amongst all political parties, left or right, the Socialist Party has no national axe to grind. We side with no particular state or government. We have no time for border controls. The world over, workers must do what they can individually and collectively to survive and resist capitalism. In many parts of the world that means escaping political tyranny or economic poverty. Workers should try and resist taking sides. We must not blame another worker for our poverty.
Tuesday, October 18, 2011
The economic elite have at least $46 trillion in wealth. The majority of this wealth is held within the upper one-tenth of one percent of the population.
Across the world 10.9million people have $42.7 trillion between them in their bank accounts.
Just a one trillion dollar pile of $100 bills would be 20 times the height of Mt. Everest.One trillion is equal to 1000 billion, or $1,000,000,000,000. To put it in perspective, last year the entire cost of feeding all 40 million Americans on food stamps was $65 billion. If you make $50,000 a year, and don’t spend a single penny of it, it will take you 20,000 years to save a billion dollars.
According to data from the Boston Consulting Group, millionaire households represent just 0.9 percent of the global population, but control some 39 percent of the planet's wealth
According the 2010 Global Wealth Report There were 11.2 million millionaire households in the world at the end of 2009 (a “millionaire household” is a household with $1 million or more in assets under management. Those assets don’t include real-estate, private businesses or luxury goods. It does include cash deposits, money-market funds, listed securities held directly or indirectly through management investments, and onshore and offshore assets.)
83% of the world’s households own only 13% of the wealth. The top 0.5% of households (those with $5 million or more) owned 21%, or $23 trillion, of the world’s wealth.
In 1998 ,the United Nations produced a report that the world's 225 richest people now have a combined wealth of $1 trillion. That's equal to the combined annual income of the world's 2.5 billion poorests people.The wealth of the three most well-to-do individuals now exceeds the combined GDP of the 48 least developed countries.
UK - The Office of National Statistics Social Trends report shows that the top 1% of the population control 23% of the country's cash, property and assets. The richest tenth of the country have total average wealth of £3,954,900 That the poorest tenth of the country had a net wealth below zero between 2006 and 2008, with MINUS £500 to their names after debts were subtracted from their physical and pension wealth. Dorling says the government's latest figures show that in the capital the top 10% of society had on average a wealth of £933,563 compared to the meagre £3,420 of the poorest 10% – a wealth multiple of 273. Another Government commissioned report, showed Britain's wealthiest 10% of the population were almost 100 times richer than the poorest 10%. The economics editor of The Telegraph quotes a report from consultants AT Kearney that the richest 1% in the UK hold some 70% of the country’s wealth. Kevin Cahill's book Who Owns Britain sets out the figures pretty starkly: The UK is 60m acres in extent, and two-thirds of it is owned by 0.36% of the population, or 158,000 families. A staggering 24m families live on the 3m acres of the nation's "urban plot". The average Briton living in a privately owned property has to exist on 340 square yards. The 24 million dwellings, 11% owned by private landlords and 65% privately owned. 10.9 million carry a mortgage of some kind.
Canada - 61 individuals own about 6% of all personal net worth in Canada (which totalled some $2.8 trillion in 2010). In contrast, the bottom 50% of Canadians owns about 3% of all personal net worth. Those 61 individuals therefore own twice as much wealth, as the bottom 17 million Canadians.
Australia - the wealthiest 20 per cent own 61 per cent of the country's wealth, while the poorest 20 per cent own 1 per cent
New Zealand - 10 wealthiest New Zealanders have total assets of $21.7 billion, the equivalent of 37.5 per cent of the total value of all NZX-listed companies at the end of June.
The 50 wealthiest individuals in both countries in New Zealand has total assets equivalent to 61.3 per cent of the NZX's total value. The top 10 in the NZ Rich List have total assets equal to 11.0 per cent of GDP.
India - The number of Indians who have financial assets of over $1 million, excluding main residences, is 127,000. Population of India 1.2 billion. The wealthiest 100 Indians are collectively worth $276 billion.
Pakistan - The richest 40,000 people in the country have combined income equal to that of the poorest 18 million people. The super rich — the 18,000 who make up 0.001 per cent of the population — earn 180 times as much as the poorest 18 million. Or, to put it in another way, the super rich earn in just two days what it takes the poor to earn in one year.
China - the richest 10 per cent of Chinese controlled 45 per cent of the wealth, while the poorest 10 per cent has just 1.4 per cent.
Singapore - The number of millionaires in Singapore has climbed to its highest level yet at 99,000 last year, according to the report from 82,000 in 2009. Together, Singapore millionaires held about $453 billion worth of financial assets last year, an average of about $4.6 million per millionaire here. About a third of their assets went to property, a third to equities, and another third to cash, fixed income and other financial instruments.(The report defined high net worth individuals as those having investable assets of $1 million or more, excluding primary residence, collectibles, consumables and consumer durables.
Israel - The richest 20% of Israelis made 40.6% of total household income last year, while the poorest 20% earned only 6.3% of the total.
Chile - Four families in Chile concentrate 47% of the assets of companies quoting in the Santiago Stock exchange. Andronico Luksic; Anacleto Angelini; Eduardo Matte and Sebastián Piñera, whom together made up 9.16% of Chile’s GDP in 2004 and 12.49% of GDP in 2008.
Brazil - The richest 10 percent of the population own 50.6 percent of the country's wealth, while the poorest 10 percent possess only 0.8 percent of the wealth.
France - 133,000 full time employees in the private sector - the so-called very high wage earners - earned more than 215,600 euros a year. One per cent of the population earned more than 500,000 euros a month .The poorest ten per cent earned less than 10,010 euros a year
Africa - In Africa there exists an elite of about 100,000 Africans who possess a collective net worth of 60% of the continent's gross domestic product in 2008.
South Africa - According to the Naledi Research Paper on the Living Wage, presented to the Cosatu central committee last month, the top 10% of earners receive about 94 times more than the bottom 10%. The poorest 10% share R1.1bn between them while the richest 10% share R381bn, 51% of the total. 40,000 white commercial farmers own 224 million acres of agricultural land.
Swaziland - The royal family consumes about 5 per cent of the annual budget. The king has an estimated personal fortune of US$200 million. The Swazi monarchy is estimated to be wealthier than the country as a whole.
Botswana - Dr Kenneth Dipholo of the Ministry of Finance and Development Planning has said that the richest 10 percent of the population controls 42 percent of the total national income. The poorest of 50 percent of the population share 17.4 percent of national wealth.
Wednesday, October 12, 2011
A former Boots finance chief has accused the firm of risking the future returns of its 20,000 pensioners by trying to change the way their plans are paid. Alliance Boots has written to members of its retirement scheme offering a "pension increase exchange". Under the proposal pensioners can choose to give up future inflation-linked increases on pensions earned before 1997 in exchange for a one-off boost to pensions.
But the independent pension consultant John Ralfe, the former head of corporate finance at Boots, said yesterday: "The exchange is not neutral for pensioners – the company is giving only 60 per cent of the value of expected increases and keeping 40 per cent for itself. Even those pensioners who live to the average age will be worse off and those living longer than average will be much worse off." He said the firm's pensioners were being asked to make an extremely difficult decision and claimed Alliance Boots "leaves itself open to misselling claims from pensioners and elderly widows who find themselves living too long".
Polonium-210 is a radioactive material that emits hazardous particles called alpha particles. Polonium's radioactive particles don't simply vanish when cigarette smoke blows away.
Dr. John Spangler, a professor of family medicine at the Wake Forest Baptist Medical Center in North Carolina, said when smokers inhale, the radioactive particles damage the tissue on the surface of the lungs, creating "hot spots" of damage. When combined with other cancer-causing chemicals in tobacco, Spangler said the damage from radiation is potent.
"The two together greatly increase your risk of lung cancer," Spangler said. "So tobacco smoke is even more dangerous than you thought before." Spangler said smokers may not realize how long this radiation can linger in their homes. "Some of these radiation particles hang around for decades and decades," Spangler said. "You're emitting radiation when you smoke, and your family, your dog, your cat are all inhaling that radiation. How many smokers want to expose their child to radiation?"
Monday, October 10, 2011
The Roma are easy scapegoats. They're at the bottom of society, have no lobby and are poorly-organized politically. There is societal racism against them, and it is legitimized by a majority of the ruling elite. In 1993, after three Roma in the Romanian village of Hadareni were lynched with the involvement of the police, the government, in its official explanation, expressed understanding for the "anger of the villagers." And in February 2009, when right-wing extremists in the Hungarian village of Tatárszentgyörgy set the house of a Roma family on fire and shot the father and his young son as they fled from the flames, no member of the Hungarian government called on people to unite to stop the violence.
The lack of prospects for the Roma in eastern Europe has prompted tens of thousands of them, primarily from Romania and Bulgaria, to head west. Roma refugees have come to Italy, Spain, France, England, and recently also to Germany's large cities. In the western European countries they work for a couple of euros an hour doing cleaning, construction, or they beg. Some steal. For many, it is more than they could have ever imagined in their home countries.
Friday, October 07, 2011
Farmland values in one of the most-productive regions in the U.S. Midwest soared 17 percent in the second quarter as higher grain prices made real estate more attractive
Shrinking land and water supply in countries including China and India, will limit their capacity to boost food production, creating import demand. That’s going to be met by the major exporting regions in North and South America, Australia, and parts of Central and Eastern Europe.
Wednesday, October 05, 2011
David Schweikart, After Capitalism, a review of his book here
An outline of the economic model by him here
"worker self-managed market socialism...has three basic features: 1) each productive enterprise is managed democratically by its workers; 2) the day-to-day economy is a market economy: raw materials and consumer goods are bought and sold at prices determined by the forces of supply and demand; 3) new investment is socially controlled: the investment fund is generated by taxation and dispensed according to a democratic, market-conforming plan."
More details at the link
Applying a Marxian approach and see that all the fundamental categories that define capitalism - generalised wage labor, commodity production (means of production were bought and sold between enterprises as well as final goods), money , profits, capital accumulation, class monopoly of the mean of production etc etc - were also to be found in the Economic Democracy. A democratised version of capitalism is what is required. Well actually that would still make it a class-based exploitative capitalist society in which the prusit of profit was paramount - only a nicer, more cuddly, version of capitalism That is that makes it capitalist and not socialist Once more we see an attempt at squaring the circle, making capitalism work in the interest of the community by "improving" on Yugoslavian-type workers councils and Mondragon-type co-operatives and introducing banking reform to finance it all. Within this model wage labour would still function and it follows that so too would capital. Capital accumulation out of surplus value would be the overriding imperative of his system. He wants to humanise capitalism and the wage labour-capital relation. A utopia. Capitalism needs inequality to function properly on its own terms. Egalitarian capitalism is a contradiction in terms.
He may think he is talking about a socialised economy, but the reality is that he is mimicking a capitalist economy involving workers self-exploitation and their competition against eachother.
And when they fail , pray tell us the difference between this "If a firm is unable to generate even the minimum per-capita income, then it must declare bankruptcy. Movable capital will be sold off to pay creditors. Any excess is returned to the investment fund, while fixed capital reverts to the community both processes mediated by the affiliated bank. Workers must seek employment elsewhere." and what happens these days. It doesn't matter essentially who pockets the profit enterprises make in your system which enterprises, it would be "held accountable" and would compete in the market in pursuit of profit.
Work-places won't be owned by the workers nor will it be controlled by the public, the power resting in the banks. The "public" will no more "own" than the workers "control" since they are still slaves to the market.
At the end of the day what we have is just another class-based society parading as one in which the means of production are purportedly publically-owned but actually owned by the state-apparatus and from which with a wave of a magic wand has expelled all those disagreeable little things about capitalism like class struggle, exploitation and so on. Schweikart's fallacy is that he believes the words "economic democracy" have a magical power; that saying it's so, makes it so. But there has to be a content, a material basis, for worker-managed socialism, that is to say there must be the reproduction of a social relation that does away with the organisation of labour as a class activity specific to workers.
Labour power IS a commodity by virtue of being exchanged for a wage. It remains a system of alienated labour which Marxists identify with capitalism. In fact it isn't socialism if the working-class exists at all.
There are many cases where workers take over, or start up, businesses themselves. This was described Marx in Capital Vol 111 where he referred to the role of worker co-operatives.
"The co-operative factories of the labourers themselves represent within the old form the first sprouts of the new, although they naturally reproduce, and must reproduce, everywhere in their actual organisation all the shortcomings of the prevailing system. But the antithesis between capital and labour is overcome within them, if at first only by way of making the associated labourers into their own capitalist, i.e., by enabling them to use the means of production for the employment of their own labour."
There is a tendency for worker co-ops to resemble more and more over time the conventional capitalist business model and the case of Mondragon - the largest worker co-op conglomerate in the world - would seem to bear this out. Over time, as it has grown, it has departed more and more from its original egalitarian principles and Mondragon has been noted for employing heavy hand tactics against its own workforce.
What about those who cannot work? The very young , the very old, the sick and the disabled? Are they not going to get anything? If they are going to get something where is this going to come from except out of the revenue generated by the wealth producers in the form of a taxation levy?.
The point is that we should not make a fetish out of worker ownership of industry. While it operates within the framework of a system of commodity production it will suffer from the very real shortcomings that capitalism inevitably imposes. It is only through the struggles of workers coupled with the spread of socialist consciousness and the idea of a socialist alternative to capitalism that this embodies that we can ever hope to transcend capitalism through the self abolition of our class and hence the elimination of class society itself.
More could be said about Schweikart's market socialism and its flawed conclusions but perhaps for another day
Tuesday, October 04, 2011
Every capitalist crisis, no matter what its imputed causes, manifests itself in a declining accumulation of capital. The share of social production earmarked for expansion is considerably reduced or even fully eliminated, curtailing total social production in the process. Seen from the restricted view of the market, however, this process appears as overproduction of goods or insufficient demand. The depression that resulted was a deflationary process which affected both prices and production, but which at the same time brought about substantial changes in the economic structure and prepared the way for a new economic boom. The depression became an instrument for overcoming economic crisis, and although not deliberately encouraged, it was passively allowed to run its course. Inflation, the creation of money by the state, impairs the price mechanism. As capital grew it created obstacles to its own further expansion. Its periodic crises became more and more oppressive and persisted long enough to create a real danger that the deflationary process would lead to social upheaval rather than to a new boom. To prevent this from happening, state economic interventions were in order in the great crisis that followed the 1929 crash; their theoretical justification came later.
This interventionist policy sought to achieve by inflationary means what seemed no longer attainable by deflationary methods. Keynes assumed that the interest rate was dependent on the quantity of money in circulation. An increase in the money supply would decrease the interest rate and spur new investments, which in turn would increase employment and raise prices and profits. Since the state had the power to create more money, it was a matter of government decision whether the way to economic recovery would be through lower interest rates. However, the profitability of capital had already fallen so far that even a reduction in interest rates would not be sufficient stimulus new investments. It would therefore be necessary to make up for the defective private demand by creating more public demand. However, since an increase in public spending by way of taxation would cut even more into the profits of the private sector, it would have to be financed through state deficits. The technique, of course, was not to print more money, which would depreciate the currency, but merely to expand state credit which would absorb idle private capital and finance the increased public demand. This added demand would, it was expected, stimulate the economy as a whole sufficiently to bring it out of the depression and into a boom, which in turn would enlarge the state's tax revenue to such a degree that it would be able to pay off its depression incurred debts in a new period of prosperity. The co-ordinated employment of monetary and fiscal policies would not only counteract the deflationary trend of the crisis, they would in addition initiate a new period of upswing, which although containing inflationary tendencies, need not degenerate into a real inflation as long as unused money and real capital were still available. The specter of inflation would loom only if anew disproportionality arose between the means of payment and commodity production. But this was a real possibility only when full employment was reached, and then it could be combated by state-initiated deflationary policies. In short, it was imagined that a theory and practical policy had finally been found which would place the economic cycle under conscious state control.
Even under the best conditions, a steadily rising inflation rate leads eventually to economic stagnation. Inflation must then be halted at the point where it begins to have a negative effect on the economy. Just as governments add steam to inflation by their monetary and fiscal policies, contrary measures can slow its course. However, it is not within the power of governments to bring inflation totally to heel, since price inflation will continue despite deflationary government measures. This being the case, depression is aggravated in two directions: on the one hand, because of a stepped up general economic decline, and on the other, because of the multiplying social conflicts generated by the inflationary distribution of income. Depression, like an upswing, sets limits to inflation. But any limit can be overstepped if one is willing to accept or is unable to avoid the attendant social risks; the hyper-inflations of the past are ample testimony to this. But the risk is far greater when inflation is worldwide than when it is isolated within individual countries, as has been the case in the past. The bourgeoisie therefore tries to check it, but it can only do so by accepting lower profits, reducing public spending, and allowing depression to deepen. As the hopes that the depression will have a deflationary effect fade, they are replaced by prospects of a new boom contrived by inflationary means. Where all this will lead cannot be forecast with certainty, but at least one thing is sure: the present crisis, with its peculiar deflationary inflation, will keep the world in a perpetual state of unrest that could easily lead to catastrophe.
The mainstream economics that emerged post-war, sometimes called the "neo-classical synthesis", was a more conventional marriage of core elements of the old "neoclassical theory" with Keynesian insights. For as far as economics goes, Keynes' co-worker, Joan Robinson coined the phrase "Bastard Keynesianism" to describe the vulgarisation of his economics and its stripping of all aspects which were incompatible with the assumptions of neo-classical economics. Thus the key notion of uncertainty was eliminated and his analysis of the labour market reduced to the position he explicitly rejected, namely that unemployment was caused by price rigidities. This process was aided by the fact that Keynes retained significant parts of the neo-classical position in his analysis and argued that the role of the state was limited to creating the overall conditions necessary to allow the neo-classical system to come "into its own again" and allow capitalism "to realise the full potentialities of production." [Keynes, The General Theory] Keynesianism was a tool for saving capitalism and avoid socialism. Save capitalism by reforming it. Keynesian economics is not trying to democratise the economy. Keynesian economics is more about regulation, public sector spending and so on, its not about democratic control, or worker control. It works within the framework of how to keep growth going, it leaves class systems in place and supports them. Keynesianism is not socialist, not even close, its just responsible capitalism. It isn't calling for abolishment of social classes but rather things like more progressive taxation, universal healthcare, spending on infrastructure projects etc.
In terms of policy rather than theory, the "Keynesian consensus" typically involved a number of common elements. First, markets are volatile and sticky so they need hands-on regulation. Second, when private investment fails the government can step in via fiscal (i.e., tax and spending) policy, and if necessary with big spending programmes like the European welfare states. Third, at the international level, capital flows are stabilised with a global financial architecture: the Bretton Woods system which fixed currency exchange rates until 1971; and institutions like the World Bank and IMF.
Keynes's demand management (or pump priming money) aims to overcome crisis by increasing the rate of exploitation. If it was implement correctly, it would lead to the lowering of the working class's living standard. Keynes wrote:
“Thus it is fortunate that the workers, though unconsciously, are instinctively more reasonable economists than the classical school, inasmuch as they resist reductions of money-wages, which are seldom or never of an all-round character, even though the existing real equivalent of these wages exceeds the marginal disutility of the existing employment; whereas they do not resist reductions of real wages, which are associated with increases in aggregate employment and leave relative money-wages unchanged, unless the reduction proceeds so far as to threaten a reduction of the real wage below the marginal disutility of the existing volume of employment. Every trade union will put up some resistance to a cut in money-wages, however small. But since no trade union would dream of striking on every occasion of a rise in the cost of living, they do not raise the obstacle to any increase in aggregate employment which is attributed to them by the classical school.” [ The General Theory]
Unlike neo-classical economist who prefer to cut nominal wage (or using deflation). Keynes preferred to cut the worker's living standard by cutting real wage using inflation so there would be fewer obstacles posed by unions to capitalist's profit restoration project. Inflation is therefore a means of attacking real wages. It can also be a concession to the working class since it tends to keep inefficient businesses functioning (every wage-slave with a grain of class consciousness knows that these are the best ones to work for!) Inflation tends to undermine debts (by reducing the value of repayments) and so favours industry relative to finance capital
Thus left-wing Keynesians who later founded the Post-Keynesian school of economics recognised that capitalists "could recoup themselves for rising costs by raising prices." Joan Robinson
The "Bastard Keynesianism" of the post-war period (for all its limitations) did seem to have some impact on capitalism. There is what is often called the "Golden Age of Capitalism," the boom years of (approximately) 1945 to 1975. This post-war boom presents compelling evidence that Keynesianism can effect the business cycle for the better by reducing its tendency to develop into a full depression. By intervening in the economy, the state would reduce uncertainty for capitalists by maintaining overall demand which will, in turn, ensure conditions where they will invest their money rather than holding onto it (what Keynes termed "liquidity-preference" and a situation we now call “credit-crunch”). In other words, to create conditions where capitalists will desire to invest and ensure the willingness on the part of capitalists to act as capitalists. This period of social Keynesianism after the war was marked by reduced inequality, increased rights for working class people, less unemployment, a welfare state you could actually use and so on. Compared to present-day capitalism, it had much going for it.
So instead of attempting the usual class war (which may have had revolutionary results), sections of the capitalist class thought a new approach was required. This involved using the state to manipulate demand in order to increase the funds available for capital. By means of demand bolstered by state borrowing and investment, aggregate demand could be increased and the slump ended. In effect, the state acts to encourage capitalists to act like capitalists by creating an environment when they think it is wise to invest again. As Paul Mattick points out, the "additional production made possible by deficit financing does appear as additional demand, but as demand unaccompanied by a corresponding increase in total profits. . . [this] functions immediately as an increase in demand that stimulates the economy as a whole and can become the point for a new prosperity" if objective conditions allow it. [ Crisis and Crisis Theory]
Keynesian capitalism is still capitalism and so is still based upon oppression and exploitation. It was, in fact, a more refined form of capitalism, within which the state intervention was used to protect capitalism from itself while trying to ensure that working class struggle against it was directed, via productivity deals, into keeping the system going. For the population at large, the general idea was that the welfare state (especially in Europe) was a way for society to get a grip on capitalism by putting some humanity into it. In a confused way, the welfare state was promoted as an attempt to create a society in which the economy existed for people, not people for the economy. So there is no denying that for a considerable time, capitalism has been able to prevent the rise of depressions which so plagued the pre-war world and that this was accomplished by government interventions. This is because Keynesianism can serve to initiate a new prosperity and postpone crisis by state intervention to bolster demand and encourage profit investment. This can mitigate the conditions of crisis, since one of its short-term effects is that it offers private capital a wider range of action and an improved basis for its own efforts to escape the shortage of profits for accumulation. In addition, Keynesianism can fund Research and Development in new technologies and working methods (such as automation) which can increase profits, guarantee markets for goods as well as transferring wealth from the working class to capital via indirect taxation and inflation. In the long run, however, Keynesian "management of the economy by means of monetary and credit policies and by means of state-induced production must eventually find its end in the contradictions of the accumulation process." [Mattick] This is because it cannot stop the tendency to (relative) over-investment, disproportionalities and profits squeeze In fact, due to its maintenance of full employment it increases the possibility of a crisis arising due to increased workers' power at the point of production. So, state intervention can, in the short term, postpone crises by stimulating production, however, these interventions do not actually set aside the underlying causes of economic and social crisis.
We frequently hear the distinction that Keynesian economics is of the Left, and the Austrian/Chicago school of the Right. Workers should not get involved in, or be distracted by, inter-capitalist squabbles but should keep their eye on the ball - to defend their own interests in the most militant fashion possible whether against the state or some private corporation. Beyond that they should be looking to get rid of capitalism in all its guises including state-capitalism, or mixed-economy. is any merit at all in workers supporting nationalisation as against privatisation. I say no because for workers to do so is a to be coopted into supporting one form of capitalism vis-a-vis another. Workers should follow a policy of strict abstentionism or neutrality on the question of economic policy which in the end is a capitalist issue not a working class issue. They should militantly pursue their class interests whether in the private sector or the state sector and not seek to ally themselves with sections of the capitalist class in wanting to expand the latter or minimise the former.
Through Keynesianism the state has become stronger and more centralised. Chomsky could state that "prisons also offer a Keynesian stimulus to the economy, both to the construction business and white collar employment; the fastest growing profession is reported to be security personnel." [ Year 501]
The pattern of a particular crisis is influenced by the concrete circumstances of the time so no crisis is merely a repetition of those which have preceded it. While there are elements common to all crises we cannot say in advance how these elements will interact in a specific situation or what is the relative strength of other factors associated with it. Consequently to understand a crisis, we can only be wise after the event.
We can say that all crises are intimately connected with two fundamental features of the system, viz., " anarchy of production " and " disproportional industrial development." These two features are again intimately bound up with each other. By anarchy of production we do not infer economic chaos, on the contrary capitalism is a system ruled by laws and compulsions of its own. What is meant is that capitalism is not a system consciously regulated by social aims. Capitalists do not meet beforehand to harmonise production in accordance with social ends. Capitalism being profit motivated production, capitalists invest in industry for no other motive and without regard for and little knowledge of other investments being carried out at the same time. Because the different branches of industry are atomistically controlled or to state it alternatively because "anarchy of production," prevails in capitalism, decisions for capital investment are carried out by Capitalists without knowledge or regard for investment decisions being made at the same time by other capitalists elsewhere. But capitalist production is social production and the different branches of industry form an interlocking whole. It can be seen then that the different yet integrated industrial spheres, governed as they are by autonomous decisions being made simultaneously, there exists in the system an inherent bias towards uneven development between the various branches of industry. When this disproportionality reaches a certain level the possibility of a crisis emerges. Thus the phase of the business cycle associated with accelerating investment, rising wages, rising employment and increasing profits, will come to an end and be replaced by the antithetical phase of reduced investment, falling employment and declining wages and profits. Capitalism may be described as a system of unstable equilibrium.
To put the matter concretely, capitalists in a particular industry have overestimated the demands for their product and so produced more than the market can absorb at a remunerative price and if we take it that other industries have not similarly expanded, then it can be said that this particular industry has over-expanded relative to other industries, i.e. a disproportionality of industrial development has taken place. This relative over-expansion of industry will, however, generate cumulative effects. Not only will the industry affected cut investment and hence production but in doin'g so it reduces its demands for commodities, including labour-power, to those industries linked to it. They in turn will cut their orders to other concerns and so on. As a result a widespread decline in production will occur. If the initial over-expansion is big enough it may permeate the entire economy and precipitate a crisis. Large scale unemployment will appear, purchasing power suffer a sharp decline and surplus products will then begin to appear on the market as a matter of course. It can be seen then that over-production in one branch of industry brings elements of over-production in other branches of industry, and by rupturing the conditions of equilibrium, initiates relative over-production, which is indistinguishable from general over-production. All crises then are crises of relative over-production. An industry can only over-expand in relation to other industries although the effect which this produces is, as has been already stated, indistinquishable from general overproduction.
Crises, as Marx pointed out, do not arise through a lack of paying consumption of the mass of the population. They arise because disproportional development in one industrial sector leads to a curtailment of investment (and so production) which by upsetting the balance of the different industrial branches brings about a general slowing down of production. The lack of paying consumption is a consequence not a cause of crises. A crisis is made possible because of the antagonistic class distribution of income inherent in a system of antagonistic class relations of production. Capitalists cut back investment because there is an unsatisfactory income distribution for them, in that profit margins are too small and wage levels too high. They are not concerned with some abstract purchasing power but in the concrete fact that the purchasing power in the form of wages is too high for the existing volume of capital to earn a given return. There is still plenty of purchasing power in the pockets, holdings, banks, etc of the capitalists, but of course they do not choose to spend.
People should ask themselvs if they think state intervention -- Keynesianism -- disproves the Marxist contention of capitalism as intrinsically prone to crisis and crises are not just incidental interludes between periods of high trade activity but an essential corrective for the uninhibited self-expansion of capital. As Marx states it: "Periodically the conflict of antagonistic agencies seek vent in crises. The crises are always but momentary and forcible solutions of the existing contradictions, violent eruptions which restore the disturbed equilibrium for a while." [Capital]
Thanks to here