December 18, Since the early s, world capitalism has followed a trajectory based on globalisation and neo-liberal policies. Capitalism Unleashed begins with a succinct analysis of the capitalist crisis that followed the end of the long post-war upswing in Productivity growth slowed, corporate profits were squeezed, inflation took off. After a period of turmoil , the capitalist ruling class launched a counter-offensive against the working class. Their aim was to claw back many of the economic concessions of the Keynesian era, to discipline the workers through higher unemployment, and attack trade union rights. Austerity, Privatisation and Deregulation provides an overview of the neo-liberal counter-revolution.
|Published (Last):||10 December 2019|
|PDF File Size:||6.97 Mb|
|ePub File Size:||2.63 Mb|
|Price:||Free* [*Free Regsitration Required]|
Rob Hoveman Andrew Glyn has been a prominent left wing economist for more than 35 years. He talks to Rob Hoveman about his latest book Capitalism Unleashed. When we met at Corpus Christi College, Oxford, where he has taught since , he said of his new book, "I wanted to trace how the world economy has changed over the last 30 years and try to make some sense of it.
From the s to the s the primary problem for the capitalist class was the strength of labour. That threat has receded. I wanted to work through why this was and where the main problems for the world economy are now located.
It also looks at the assault on pay and conditions and the decline of union strength, the contradictions of growth over the last three decades and much more. Even where trade unions were not strong, the sheer intensity of the boom pushed up wages significantly. Growing international competition also made it more difficult for firms to raise their prices in response to higher costs. The strength of labour forced an increase in real wages at the expense of profits.
For me that was the most important cause of the transition from the golden age to an era of instability. When Thatcher was elected, many on the left argued that monetarism was completely irrational. I disagreed. The rationale of monetarism, as a broad economic philosophy replacing Keynesianism, was to re-establish that the market rather than union militancy should determine wages, and that mass unemployment was a price that would have to be paid to restore profitability and ensure a healthier capitalism.
So the more the industrial unrest in the s the more that unemployment had to be pushed up to try and force wages down and productivity up. Of course there was much wringing of hands about the rising unemployment but its effect in putting labour on to the defensive was welcomed. Huge budget deficits were run up in the US in the s as military spending rose without a corresponding rise in taxes or growth in the economy. Ironically, this contrasts with the heyday of Keynesianism in the s and s when governments did balance their budgets on average despite increased spending on the welfare state.
Japan is an example of where deficits failed to haul the economy out of its stagnation over the last 15 years because on their own they did not bring the higher investment on which growth crucially depends. But government budget deficits in the US clearly did have some pump priming effects in the s and again more recently. If the s saw a right wing military Keynesianism, the new century has seen the growth of a sort of private sector consumer-led Keynesianism. Nonetheless, the prevailing philosophy has been to lower expectations of what the state can do to benefit labour and to insist that the market cannot be bucked.
The more strongly unionised industrial sectors have declined and the rising private service sector is far less unionised. Unionisation has grown in the public sector which has to some extent offset declines elsewhere. But that also explains, to my mind, the continuing drive to extend privatisation in the public sector. Its main economic rationale is to try and drive down wages by weakening union organisation.
Capital is more mobile and internationalised making workers more insecure. At present investment from the industrialised countries in new factories and so on in the low wage economies of the South is only about 4 percent of their investment in their home bases in the North. As yet this is a trickle. But the image of the new owners dismantling machinery at Longbridge and shipping it off to China is very striking.
And the threat from globalisation does not just come from relocation of investment. Purchasing parts by subcontracting to Southern producers has the same effect. Either way, the jobs of workers in the North are threatened. What makes this such a difficult issue is that this is the very same process which is bringing rapid capitalist development to some very poor parts of the world. If globalisation has helped to weaken the labour movement, it also has potentially profound and profoundly disruptive effects on the world economy.
I used to argue very strongly that the changes claimed by globalisation theorists were much exaggerated in relation both to trade and investment. These claims were being used by politicians to claim, falsely, that the traditional aims of the left were no longer realisable. However if recent trends continue we really will be in a new situation. Over the past 50 years or so we have seen the rise of Japan and subsequently the South East Asian Tigers.
Their rise has not been completely unproblematic either for Europe and the United States. Indeed there have also been stresses and strains for both Japan and the Tigers. Japan has seen 15 years of stagnation since its bubble burst in and the Tigers suffered a severe shock in the late s. However broadly speaking their emergence has been absorbed by Europe and the US. Economic shift "The growth of China is an economic shift of a completely different order.
Its labour force is nearly ten times the size of Japan and Korea combined. China already runs a big balance of payments surplus and the value of the dollar is now dependent on the Chinese monetary authorities buying dollars.
Wages are starting to rise, which will make China less competitive, but will also reduce the bonus enjoyed by consumers in the North from cheap Chinese goods. It is difficult to see how Europe and the US could absorb the competition coming from China. If the attraction of cheap labour turns the present trickle of investment from the rich countries into a flood, this would threaten stagnation in the North.
The Bank for International Settlements, which is supposed to regulate as well as monitor the international financial system, has produced a number of reports showing they are very worried. Those who would justify financial deregulation claim that risk is increasingly spread across the system and that this encourages real investment in the rest of the economy.
In fact real investment has remained relatively stagnant throughout the industrialised world, with the temporary exception of the internet boom in the US at the end of the s.
We have already seen, in recent years, major shocks to the financial system when the hedge fund Long Term Capital Management LTCM , with two Nobel prize winning economists on its board, went under and again with the collapse of the currencies of the Tiger economies. However there is no guarantee that such interventions will always be so successful. The financial elastic has thickened, and this can help absorb smaller shocks, but it is also being stretched exceedingly tight.
Wages have stagnated and profits have been substantially restored. The pay-off from the point of view of orthodox economics should be an upsurge of investment and a restoration of rapid growth and higher employment. Yet this has not occurred to any significant extent. One reason for this must be fears of instability.
Yet individual firms deciding when, where and how much to invest, seem to be faced with greater and greater uncertainties. Exchange rates have fluctuated wildly and long established industrial giants lost market share.
He rejects the argument beloved of New Labour politicians that higher taxes in Britain would discourage investment and "enterprise".
The first volume of Capital, for example, provides a brilliant framework for understanding what is happening in China today. Firstly, productivity growth is likely to slow over the next few years with the secular shift towards services where it is more difficult to innovate.
An ageing population compounds the problem. Secondly, there are likely to be increasing environmental constraints on the world economy. Already there is evidence of this in rising oil prices and depletion of other essential materials. Thirdly, the benefit to the North from low wage production in China will decrease as wages inevitably rise in China, as the precedents of history suggest always happens as labour reserves dry up.
These three factors presage very slow rises in average living standards. Slower economic growth, especially when combined with growing inequality in incomes, could generate much increased conflict over distributional issues.
Now the only jobs are poorly paid in the service sector, many of them servicing the rich who have seen their own incomes rise enormously. This will bring to the fore again the issues of inequality and redistribution.
Will we face a dystopia in which very large numbers of less qualified and poorly paid people exist to service the consumption needs of the rich? Or can we gain mass support for much higher taxes on the best off sections to redistribute income and develop welfare services to mitigate rising inequality and slow growth in living standards?
You may not agree with everything Glyn says, but socialists will benefit greatly by reading and engaging with it. It is available from Bookmarks - phone or go to www. Share article.
Review: Capitalism Unleashed by Andrew Glyn
Start your review of Capitalism Unleashed: Finance, Globalization, and Welfare Write a review Mar 22, Chris rated it really liked it Capitalism Unleashed is a straightforward, accessible volume that details the main drift of the global political economy over the course of the last three decades. Though the book is densely packed with facts and figures, charts and graphs, and technical data documenting phenomena such as Foreign Direct Investment flows or foreign exchange rates, it is guided at all times by a keen eye toward the social relations behind the numbers. At the heart of the book is an analysis of the shifting balance Capitalism Unleashed is a straightforward, accessible volume that details the main drift of the global political economy over the course of the last three decades. At the heart of the book is an analysis of the shifting balance of power between labor and capital, a battle that the latter has dominated since the unraveling of the postwar Golden Age during the s. Glyn did an effective job of conveying that story, and in painting a portrait of a political economy on the verge of a global slump the book was published in , just before the financial crisis and subsequent recession. For all its virtues, however, the book would have benefited from a reasonably diligent editor. Typographical, grammatical, and other errors abound.
Capitalism Unleashed: Finance, Globalization, and Welfare
Rob Hoveman Andrew Glyn has been a prominent left wing economist for more than 35 years. He talks to Rob Hoveman about his latest book Capitalism Unleashed. When we met at Corpus Christi College, Oxford, where he has taught since , he said of his new book, "I wanted to trace how the world economy has changed over the last 30 years and try to make some sense of it. From the s to the s the primary problem for the capitalist class was the strength of labour. That threat has receded. I wanted to work through why this was and where the main problems for the world economy are now located. It also looks at the assault on pay and conditions and the decline of union strength, the contradictions of growth over the last three decades and much more.