Economic researchers at the Institut de Recherches Économiques et Sociales in France indicate that global commodity chains have three different elements: (1) a production element linking parts and commodities in complex production chains; (2) a value element, which focuses on their role as “value chains,” transferring value between and within firms globally; and (3) a monopoly element, reflecting the fact that such commodity chains are controlled by the centralized financial headquarters of monopolistic multinational corporations and garner massive monopoly rents, as theorized by Stephen Hymer in the 1970s.
Michael Roberts Blog | Mainstream economics cannot deliver even on its own terms because it makes two basic assumptions that are not based on reality; one in so-called ‘microeconomics’ and one in so-called ‘macroeconomics’. As a result, mainstream falls down as a scientific analysis of modern (capitalist) economies.
Decades of neoliberal political narratives have attempted to convince us that the only reason for public ownership is to subsidize private capital growth. Neoliberal economics are focused on the transfer of wealth from the public to private capital through commodification of public assets and services. The result has been a society tilted in favour of profit generation through public subsidies of infrastructure and services over human need.
Neither Marx nor Engels ever argued any more than Marxists today believe that capitalism will collapse “automatically” or transform itself into some less exploitative form. Capitalism has always shown a remarkable ability to accommodate challenges, albeit always at the expense of working people.
A classic refrain below. The alternative is that the government can actually make things and not wait for private markets to figure it out and even then it is not operating like a capitalist enterprise.
For example, when government spends money on basic research, it typically doesn’t capture the monetary value that research creates. But the eventual economic benefits, which are reaped by companies downstream of government-funded research, tend to vastly outweigh the cost. The government doesn’t need to be the one who gets paid, as long as society gets paid. The same is often true of environmental cleanup, road networks and anything with a positive externality.
The cheerleaders of neoliberal policy are rising like zombies after the current collection of economic, health, climate, and political crises seemed to bury them for a while. This means that it is not going to be enough to just defend the current wreck, but build something better. Socialists have social and economic policy programs that deal directly with these challenges. It is time to dust them off and fight for them with abandon.
Marx opposed both these mainstream theories. The quantity theory of money was opposed by Marx for two reasons: 1) money is endogenous, created by banks etc, not by state fiat; 2) overall, money represents value in commodity production and is not independent of it.
The Covid-19 crisis will affect the public finances through higher unemployment, reduced tax revenue and substantial government spending on schemes to support the economy. Already there are calls for a return to austerity once the most acute phase of the medical emergency has passed. It can be difficult for citizens to take a position on these debates: many feel that they lack the technical knowledge.
This memo was sent to the Prime Minister’s Office and the Privy Council Office on Friday, April 3, 2020. It attempted to do three things in two pages: 1) encapsulate the problems that were emerging with the design of CERB, at the highest level – one of politics and trust; 2) clarify the technical problems with CERB as currently designed; 3) provide fixes for each of these problems. Its goal was to provide ways to expand coverage and protection to income supports available under CERB, which on that date provided $2,000 a month, for up to 4 months, in emergency income support to those who lose their jobs between March 15, 2020 and October 3, 2020.
If all country pandemics were the same, then the figure below would be how this pandemic will come to an end. The start-to-peak ratio of Covid-19 infections for all countries would be 40-50 days. Many countries are not yet near the peak point and there is no guarantee that the peak will at the same time point, if mitigation and suppression methods (testing, self-isolation, quarantine and lockdowns) are not working similarly. But ultimately, there will be a peak everywhere and the pandemic will wane – if only to come back next year, maybe.
According to AFP estimates, some 1.7 billion people across the world are now living under some form of lockdown as a result of the coronavirus. That’s almost a quarter of the world population. The world economy has seen nothing like this.
Nearly all economic forecasts for global GDP in 2020 are for a contraction of 1-3%, as bad if not worse than in the Great Recession of 2008-9. And forecasts for the major economies for this quarter ending this week and the next quarter are coming in at an annualised drop of anything between 20-50%! The economic activity indicators (called PMIs), which are surveys of company views on what they are doing, are recording all-time lows of contraction for March.
Forecasts of a global slump in the rest of 2020 are coming in droves from mainstream economists – it’s now the consensus that there will be a contraction in global real GDP in at least two consecutive quarters (Q1 and Q2), in the wake of COVID-19 pandemic and the ‘lock down’ in response.