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It's still getting worse
The last time Michael Roberts commented on the state of the US and world economy was in May. The piece was called: "The worst is yet to come". Now things are getting worse for world capitalism. The US economy is in "recession" and there is little doubt that the third quarter figures will confirm the end of the long boom. Michael Roberts updates our analysis of the present economic situation. (August 21, 2001)
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The Economy - the Worst is Still to Come
During the month of April, world stock markets had a huge rally. The US markets rose around 15-30%. Capitalist investors shrugged off their despondency about the US economic slowdown. A few favourable economic figures had come out and the US Federal Reserve Bank made yet another surprise cut in interest rates. Suddenly the investor mood has changed. But have things really changed, or is the worst yet to come? By Michael Roberts. (May, 2001)
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The Pain After the Gain
The collapse of the stock exchange and the effects on the real economy. By Michael Roberts (April 3, 2001)
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Busted! The 'New Economic Paradigm' Goes South
For the past few years we have been carefully following the development of the US and world economies. Yet almost overnight, instead of "the boom will last forever", the press now has stories about "how to survive the recession", and openly discusses the economic slowdown. The Dow Jones Industrials (DJIA) and NASDAQ suffered overwhelming losses today in a broad-based sell-off that handed the Dow Industrials its worst percentage loss in 11 months and took the NASDAQ below the 2,000 mark for the first since December 1998. (March 12, 2001)
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2001 AD: From Boom, to Gloom, to Doom
Michael Roberts looks back at the year 2000, the year when the US hi-tech stock market bubble burst, and examines the economic prospects for the coming year.
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Marxism and the theory of 'Long Waves'
As part of the Trotsky year web site we publish this article by Alan Woods which discusses Kondratiev's theory of the long waves. Trotsky answered Kondratiev back in the 1920s. Alan Woods points out that the movement of the capitalist cycle since then further disproves Kondratiev's ideas.
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Marx was right: it's official!
A decade ago in the heady days of 'capitalism's final triumph', when the New World Order was announced and the End of History proclaimed, the century old industry of writing learned tomes under which to bury the ideas of Marxism appeared to have become redundant. New volumes began to line the library shelves to explain that capitalism was the height of human social evolution. In passing one notes the low level of ambition of these people who believe that a system that leaves two thirds of the world's population in dire poverty, that keeps a billion people unemployed or underemployed, is the best that we can achieve. Yet before one could finish reading a single volume of these confused scribblings, the New World Order choked beneath the ashes of war in the Balkans; the south east Asian economies collapsed; leaving the New Paradigm hanging by the single thread of the innovations associated with new technology. By Phil Mitchinson. (October 2000)
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Unpopular Capitalism
Amid the protests taking place in Prague against the International Monetary Fund, pollsters everywhere are detecting a growing anti-corporate mood throughout the major capitalist countries. After years of privatisation, stock market euphoria and propaganda about the wonders of the capitalist market, the pendulum is certainly swinging in the opposite direction. Karl Marx once said that "social being determines social consciousness." As we predicted, years of downsizing and corporate domination are causing a reaction not only amongst the working class, but also in the middle class. All too often the capitalist media and their shadows in the labour movement, attempt to paint a picture that everything is wonderful in the market economy. For the strategists of capital, the golden economy is piling up wealth and prosperity on an unimaginable scale. Everyone is a winner in this corporate world. But the growing mood in society is a lot different. By Rob Sewell. (October 2000)
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The class struggle and the economic cycle (Once again on the World Economy)
The capitalist system moves in a never-ending cycle of booms and slumps. That has been the case for the last two hundred years. The cycle of booms and slumps, however, does not have a fixed and regular character. To begin with, the length of the cycle has always been somewhat flexible. In Marx's day it was an average of 10 years, but in the years of upswing after the second world war it was considerably less, something like 5-6 years, or even less. The exact length of the cycle is therefore not a principled question for Marxists. What is necessary is to analyse concretely the nature of the cycle, and try to establish how it will most likely evolve. The prolongation of the boom undoubtedly has an effect on the whole rhythm of the perspectives. Twelve months ago it seemed to us that following the crisis in Asia and Russia we would move fairly quickly in the direction of recession. We never put a date on it, however it is true to say that we did not think that the boom would continue for as long as it has done. By Alan Woods and Ted Grant. (October 18, 2000)
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From Bulls to Bears
In the last month or so, the world's stock markets have taken a huge tumble, down about 20% on average. Of course, prices of shares in most markets are still way above where they were five years ago and even still above levels of 18 months ago. After the excitement of the US stock market index, the Dow, going over 10,000, it seemed there was no stopping the boom. The Dow hit 11,500 and the NASDAQ index, which combines the prices of all the new high-technology and Internet company shares (like Yahoo, Cisco, Microsoft and Amazon), rose to an amazing 4,500 from just 1,000 only two years ago. There was even talk of the Dow going to 36,000 within a few years! But the trend now is clearly downwards. The Dow has fallen back to just above 10,000 as I write and the NASDAQ is back to 3,000. The casino capitalism of the stock market is in what they call a bear market." By Michael Roberts. (October 16, 2000)
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The Enforcers - What is the WTO, and why we must fight it!
At the end of September 2000, tens of thousands have been trying to protest at the
annual meeting of the World Bank and International Monetary Fund in Prague. They are right
to protest. But what are they protesting about? The World Bank, IMF and the World Trade
Organisation - that was stopped in its tracks in Seattle last December - are the three
pillars of the global capitalist economic order. They argue that problems like world
poverty, the destruction of the environment and poisoning of our food "just
happen." Actually these things are imposed by the giant multinationals that control
the world's economic resources. And these three institutions are their enforcers. (October 4, 2000)
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The End of Boo at the Last Minute
Boo.com is the first big internet start-up to collapse losing its investors over £80m. Michael Roberts looks at the bursting internet stocks bubble and predicts that "profitless prosperity will turn into deflating depression." (May 22, 2000)
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Bulls, Bears, and Busts
In the last few weeks there has been a huge crash (NASDAQ down by 40%)
in the stock prices of the new information technology companies. Until then,
the great new economy of computers, mobile phones, digital TV and, above all,
the internet has been greeted by capitalist investors around the world as an
unstoppable avenue to untold wealth. Every day we have been told in the newspapers
of yet another 20-something internet entrepreneur, who becomes a multi-millionaire
overnight, thanks to a launch on the stock market. By Michael Roberts. (April 16, 2000)
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Bubble.com - the "New Economic Paradigm" Exposed
In this 10,000 word article Mick Brooks analyses in detail all the claims of the proponents of the "new economic paradigm" from a Marxist point of view. He explains that this, far from being a 'new economy' in which the business cycle has been abolished,
is something we have seen many times before in the history of capitalism. (April 13, 2000)
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Furious, disillusioned investors march on the Cyprus Stock Exchange
On March 24th, after an accumulated fall of the Cyprus Stock Exchange of nearly
50% over a period of five months, angry investors decided to march on the Stock
Exchange to try and force the prices up! Millions of working class families are investing
their savings on the stock exchange in the belief that it can only go upwards.
This article gives a glimpse of the social and political effects of a collapse in the stock exchange.
From the Cypriot Marxist paper, Socialistiki Ekfrasi. (April 2000)
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Internet Revolution - a New Paradigm or Another Bubble?
"It is only a matter of time before the US Internet bubble is burst, investments collapse and consumption of the masses falls back because of a loss of confidence in the 'new economy'." Michael Roberts looks at the Internet revolution, analyzes its effects on the capitalist economy and compares it with previous technological revolutions. (March 2000)
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The Goldilocks World
A look back at our economic forecast of 18 months ago. Has anything really changed in the economic situation?
By Michael Roberts. (February 16, 2000)
- The New World Disorder: World Relations at the
dawn of the 21st Century
In this new, 25,000 word document, Alan Woods and Ted Grant analyse the world relations
that have emerged after the collapse of Stalinism in the East. It looks at the effects of
NATO's bombing campaign over Yugoslavia and Russia's war in Chechnya. It also looks at how
the balance of forces between the major power blocs have been affected. The document
analyses this new world (dis)order in which the US have emerged as the dominant
imperialist power among growing tensions and instability, and draws the lessons for
Marxists today. (December 15th, 1999)
- On a Knife's Edge:
Perspectives for the world economy
"Asia's astonishing bounce-back"—this is the kind of headline that has
started to appear in recent months. Having apparently shrugged off the effects of the
stock markets crash in 1997, they are now anxiously looking for signs of revival in Asia
and Europe as proof that the world has avoided recession. Once more the advocates of the
so-called New Economic Paradigm proclaim the triumph of the free market. However, such
triumphalism lacks any semblance of a scientific basis. The serious representatives of
capital look with growing concern at the prospects for the world economy. By Alan Woods
and Ted Grant. (October 15, 1999)
- 1929: Can it happen again?
Seventy years after the 1929 stock exchange crash which led to the Big Depression,
Mick Brooks looks at how the stock exchange works, what causes speculation and concludes
that "what goes up, must come down." (October 1, 1999)
- 1999: the Start of the Long
Economic Winter
The world is heading for a major slump in the next 12-18 months. All the signs are
there. On the surface, all seems reasonably rosy. The world's stock markets have recovered
from their autumn crash and the 'real economy' of developed capitalism also performed
reasonably well in 1998. Only Japan continued to dive by nearly 3%. But so-called emerging
Asia suffered the worst slump in a lifetime, while Russia entered yet another horrific
downturn as the rouble collapsed. Latin America is now sliding into recession. Overall,
the capitalist world grew about 1.5%, hardly enough to compensate for population growth.
And 1998 was a relatively good year. The neon signs of a deep slump ahead are flashing.
Michael Roberts. (January, 1999)
- False Dawn: the Delusions of Global
Capitalism
"False Dawn", by London School of Economics professor John Gray, takes us on a
world tour of the social devastation being left in capitalism's wake. Fascinating for its
factual and statistical data alone, it is perhaps Gray's conclusions which make the
deepest impression. The free market he argues will cause disaster, war, ethnic conflict,
environmental destruction and impoverish millions. Yet throughout a lucid and empirically
remarkable work, Gray offers no hope, proposes no reform and predicts the gloomiest of
futures. In essence he argues that the global market economy is fatally flawed and
incapable of reform.
- Japan's Economic Crisis
"Flat on its back for years and showing few signs of life, Japan's economy was
nonetheless still in the world of the living. When we last checked, that is. Reports of
its imminent demise are now coming thick and fast. A world that had grown bored with the
"Japan isn't growing" story is suddenly paying attention to the new "Japan will collapse
and take the rest of us with it" story." The Economist, 11/4/98. Phil Mitchinson
analyses the reasons behind the crisis. (May 1998)
- A New Stage in the
Capitalist Crisis
This long article by Alan Woods reviews the events since the stock exchange crash of
October 1997, and how the crisis has spread to the once powerfull economies of South Korea
and Japan despite the reassuring comments of most bourgeois economist in the aftermath of
the crash. An update to the ideas developed in Ted Grant's article The First Tremors. (January 2,
1998)
- First Tremors of the Coming
Slump
In this introduction to the special feature Rob Sewell gives a general view of the
meaning of the present turbulence in the markets and explains why we say these are just
the first tremors of a coming slump. (October 1997)
- Tiger Economies in Crisis
Michael Roberts, ecomics editor of Socialist Appeal, explains the immediate causes of the
present crash of the markets: the currency crisis in South East Asia and how these
economies, which were supposed to be models of capitalist development suddenly collapsed.
(October 1997)
- The First Tremors
In this major article, Ted Grant provides us with a general analysis of the present state
of capitalism. With chapters on the nature of the boom/slump cycle, the peculiarities of
the present "boom", the claim that Information Technology has solved the
problems of capitalism, the crisis of overproduction, the situation in South East Asia,
the consecuences that the coming slump will have and the tasks in front of Marxists at
this particular juncture. (October 1997)
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