The new recession is arriving?

October 2020 Forums General discussion The new recession is arriving?

  • This topic has 180 replies, 18 voices, and was last updated 6 days ago by ALB.
Viewing 15 posts - 166 through 180 (of 181 total)
  • Author
    Posts
  • #204347
    Ozymandias
    Participant
    #205043
    Anonymous
    Inactive
    #205044
    Ozymandias
    Participant

    Sadly Marcos the vast majority of workers don’t even realise they are living in Capitalism. That’s how insidious it is. To them it’s just “life”. They don’t even know what a social system is. They are just trying to survive.

    #205045
    alanjjohnstone
    Participant

    I’m not so sure about all that.

    I feel there is a change in people’s attitudes and an increase in discontent and resistance. Yes it is misdirected but it exists and i believe it is growing.

    We cannot expect class struggle to be so linear and without turns and twists. There will be set-backs but there will also be progress culminating in ideas being transformed.

    He might not be everybody’s favourite but i found these observations from Wilhelm Reich in Sex-Pol to be pertinent.

    “Everything that contradicts the bourgeois order, everything that contains a germ of rebellion, can be regarded as an element of class – consciousness; everything that creates or maintains a bond with the bourgeois order, that supports and reinforces it, is an impediment to class consciousness”

    And:

    “Against the principle of self-denial preached by political reaction, we must set the principle of happiness and abundance…Any socialist political economist can prove that sufficient wealth exists in the world to provide a happy life for all workers. But we must prove this more thoroughly, more consistently, in greater detail than we generally do”

    and again in these days of riots and looting
    “Question: If two human beings, A and B, are starving, one of them may accept his fate, refuse to steal, and take to begging or die from hunger, while the other may take the law into his own hands in order to obtain food. A large part of the proletariat, often called the lumpenproletariat, live according to the principles of B. Which of the two types has more elements of class consciousness in him? Stealing is not yet a sign of class consciousness but a brief moment of reflection shows, despite our inner moral resistance, that the man who refuses to submit to law and steals when he is hungry, that’s to say, the man who manifests a will to live, has more energy and fight in him than the one who lies down unprotesting on the butchers slab…we have said that stealing is not yet class consciousness. A brick is not yet a house, but you use bricks to build a house.”
    We concede that socialist consciousness on a wide scale is not going to emerge from mere abstract propagandising or proselytising.
    As Marx explains:
    “Both for the production on a mass scale of this communist consciousness , and for the success of the cause itself , the alteration of man on a mass scale is necessary , an alteration which can only take place in a practical movement , a revolution. The revolution is necessary , therefore, not only because the ruling class cannot be overthrown in any other way , but also because the class overthrowing itcan only in a revolution succeed in ridding itself all the muck of ages and become fitted to found society anew” – Feuerbach and Materialist Outlook
    We accept our role as more of a study group right now because they can only learn from their own experience. We see socialist consciousness emerging from people’s experiences of capitalism coupled with hearing the case for socialism through discussion and analysis. We may not seek to “lead” our fellow workers but it doesn’t stop us giving them a “push” forward, so to speak.
    #205085
    Matthew Culbert
    Keymaster

    The parasite class are at it already.

    British Gas-owner Centrica will tell thousands of staff to accept new working conditions, including no extra overtime pay, or risk their jobs.

    The firm said if employees don’t sign the contract, there will be a fresh wave of redundancies, although it insists that is a “last resort”.

    Centrica has already outlined 5,000 job cuts as customer numbers tumble.

    The firm said it had “been open about the changes” needed to win back customers.

    The proposals are all subject to a consultation period with unions, the company stressed.

    “Our employees’ base pay and pensions will be protected, but simplifying and modernising their terms is essential if we’re to become more flexible and price competitive,” said Centrica.

    https://www.bbc.co.uk/news/business-53433452

    #206579
    alanjjohnstone
    Participant

    https://www.theguardian.com/business/2020/sep/12/twenty-years-after-the-dotcom-crash-is-techs-bubble-about-to-burst-again

    From what i read it has been those internet businesses that have been boosting the stock-market prices…now it seems they cannot sustain their boom.

    Tesla’s shares fell 21% and Elon Musk’s net worth plunged $16.3bn (£12.7m), Musk’s loss is the amount China (population 1.4 billion) set aside to tackle coronavirus in March

    #206580
    Anonymous
    Inactive

    Before ww1 there was a boom  of fictitious capital and the Great Depression started after that and followed  by the Great War

    #207797
    ALB
    Participant

    Just read about Chancellor Rishi Sunsk’s speech to the Tory virtual Conference (not to be confused with the virtual Tory conference that sir Keith Starmer addressed  a couple of week ago) at which he spoke about the having a “sacred responsibility” to balance the books:

    https://www.scotsman.com/news/politics/rishi-sunak-vows-balance-books-after-coronavirus-sacred-responsibility-2993086%3famp

    He is being touted as Boris’s successor. This speech shows that he certainly has the same ability to waffle as Boris. Far from there being anything sacred about “balancing the books”, that’s
    what has to happen.

    The books have to balance. The question is how. The government’s books balance with its spending on the expenditure side and taxes and borrowing on the income side. This says nothing about how much comes from taxes and how much from borrowing. The books can be balanced — in fact must be balanced — at any level of expenditure and at any proportions of borrowing tax revenue.

    Of course Sunak meant what he said to be understood that he would balance expenditure and tax revenue and so without needing to resort to borrowing. This hardly ever happens and isn’t necessary  even from a capitalist point of view. But it’s not what he said, so he can get out of it if he doesn’t do it (as he probably won’t),

    #207801
    ALB
    Participant

    The media are also reporting:

    ”Mr Sunak promised the “overwhelming might of the British state will be placed at your service” to those struggling financially,”

    Oh yes? What is this “overwhelming might”? As experience over many years has shown, the state does not have the might to overcome the economic laws of capitalism. Those struggling financially will continue to struggle financially if the operation of capitalism brings about a higher level of unemployment — and the supposedly mighty state won’t be able to do anything to stop it.

    Sunak’s statement about the “overwhelming might of the British state” rivals for hubris Gordon Brown’s claim to have ended the boom/slump.

    #207847
    ALB
    Participant

    More on the Sunak’s supposed “sacred responsibility to balance the books” from column by Sunday Times economic editor, David Smith, in today’s Times:

    ”The reality is different. Balanced budgets are rare. The Office for Budget Responsibility’s database goes back to 1948 and there are no years in which public sector net borrowing— the budget deficit — was exactly zero. In thirteen years there was a budget surplus; of these, eight were under Labour governments, five under the Tories.”

    Incidentally, that means that in those 72 years there was a budget deficit in 59 of them — and the (capitalist) world didn’t come to an end. So a budget deficit is not even a big problem for capitalism let alone for wage workers (in fact it’s not our problem at all).

    #208173
    ZJW
    Participant
    Paul Mattick’s lastest piece, ‘Magic Money’: https://brooklynrail.org/2020/10/field-notes/Money-Magic
    #208177
    ALB
    Participant

    As usual good eg this bit about Keynesianism but there’s something towards the end that is odd (it’s the bit added in bold);

    “Despite economists’ beliefs, what determines the scale of production is neither the human need for goods and services nor the quantity of money in the hands of consumers, but the profitability of monetary transactions or paid businesses. Goods are not produced in capitalism because people need them, but when they can be sold at a satisfactory profit. An economic recession signals a decline in profitability, which makes business owners uninterested in further investment on a scale adequate to employ the potential wage-earning population. The Keynesian idea was that governments could take (by taxation) or borrow the money entrepreneurs were not spending to expand production, to purchase goods or hire workers directly. This additional spending, by increasing demand, would “jump start” a slowed economy, leading to a return to prosperity. Under prosperous conditions, expanded profitable production would produce money available for taxation to pay off the government debt.

    As we know, this is not what happened. Government spending did not in itself increase the profitability of private capital, since the money the government handed out for paid businesses for such products as fighter jets and bombs was taken from already-existing business profits, through taxation or borrowing. The most this spending could accomplish by recirculating uninvested funds was to tamp down the hardship, to businesses and workers alike, while the processes of the business cycle—basically, the devaluation of invested capital, including the liquidation of unpayable business debt, along with the decline of labor costs as unemployment rises—opened the way to an increase in profitabilityand the renewal of prosperity. Meanwhile, paying off the debt and the interest on it required taxing business profits, or further borrowing on the capital market, which raised interest rates, a cost for businesses. Businesses defended their bottom lines by raising prices; workers fought for higher wages to defend their standard of living, usually more slowly than the price increases to which they were reacting. Prices increased throughout the economy as different business sectors struggled to make others pay the costs of the debt: the dread stimulus-induced inflation.“

    This is the theory that businesses cause inflation (a rise in the general price level) by raising prices. But businesses normally charge what the market will bear and how can the market bear an increase in prices when trade is bad in a recession? It can’t. So another explanation must be sought. The one we have offered is that inflation is caused by the government overissuing an inconvertible currency (what the Americans call “fiat money”); this causes the currency to depreciate reflected in a rise in the price level, Hence the result of Keynesian policies was inflation in a recession — “stagflation”

    #208179
    rodshaw
    Participant

    As a slight aside to this topic – how does the government overissue currency these days? Is it still by printing more notes, or by electronic means, or a bit of both? I think I read somewhere that “quantitative easing” doesn’t actually permeate into the general economy.

    #208180
    Young Master Smeet
    Participant

    Rodshaw: Mattick saved me some typing:

    Instead the central banks—in the case of the US, the Federal Reserve—simply expanded their liabilities (“printed money”<sup>8</sup>) to buy bonds, both Treasuries and private debt, such as mortgage-backed bonds, from private financial institutions. This at once injected money into the financial system and raised bond prices, which by lowering bond yields pushed investors towards the stock market. Basically, none of this costs business anything, while the rise in stock prices disproportionately benefits the small super-wealthy minority who disproportionately own stocks, so there is no motivation to raise prices—especially under the deflationary conditions of a global business slowdown—producing an inflation-free expansion.<sup>9</sup>

    (9. This is not quite correct, since the prices of assets traded within the financial system, such as stocks, real estate, and art are wildly inflated.)

    There is inflation, in stock and bond values, and a complete dislocation between stock market prices and reality.

    #208182
    LeonTrotsky
    Participant

    The US feds are continuing to inject money into the economy (read: stock market) under the guise of a “recovery plan”, which is nothing but another transfer of wealth and hence power to the pilfering corporate class.  The chasm of wealth and power between the corporate class and the working class is so wide and deep in the US that only a  complete collapse of the their economy would change anything.

    • This reply was modified 6 days, 8 hours ago by LeonTrotsky.
Viewing 15 posts - 166 through 180 (of 181 total)
  • You must be logged in to reply to this topic.