Market and labor in market are crucial questions both to capital and labor. The questions have been discussed and answered by economists, from the mainstream, and also from the camp of labor.
“Markets”, writes Michael D. Yates in his Work Work Work: Labor, Alienation, and Class Struggle (Monthly Review Press, New York, USA, 2022), “act as a veil, hiding the face of the system. They are impersonal mechanisms, which allow us to use them without knowing what is underneath.”
Yates elaborates the issue: “We buy goods and services and are thereby dependent on those who produce our food, clothing, shelter, and services of every kind. However, we simply exchange money for them. And as the Romans said, Pecunia non olet. Money has no smell.”
He shows the argument employers use to defend self-interest: “Employers say that they pay the market wage. If it is too low for survival, that is no fault of the boss.”
This week, the jamboree of the rich global elite of the World Economic Forum (WEF) has started again after the COVID interregnum. Top political and business leaders have flown in on their private jets to discuss climate change and global warming, as well as the impending global economic slump, the cost of living crisis and the Ukraine war.
Che Guevara’s speech on behalf of the Cuban government to the ministerial meeting of the Inter-American Economic and Social Council (CIES), sponsored by the Organization of American States (OAS) at Punta del Este, Uruguay, on August 8, 1961. Head of the US delegation, Douglas Dillon, presented Washington’s recently proclaimed Alliance for Progress for official ratification by the meeting. The conference was presided over by Uruguayan President Eduardo Haedo.
Mr. President; Distinguished delegates:
Like all the delegations, we must begin by expressing our appreciation to the government and people of Uruguay for the cordial reception they have given us during this visit. I would also like to personally thank the distinguished presi dent of this gathering for the gift he made to us of the com plete works of Rodó, and would like to explain to him the two reasons why we are not beginning this presentation with a quotation from that great Latin American. The first is that I went back to Ariel after many years, looking for a passage that would express, at the present time, the ideas of someone who is, more than a Uruguayan, a man of our Americas, an American from the Río Bravo to the south. But Rodó expresses throughout his Ariel the violent struggle and the contradictions of the Latin American peoples against the nation that 50 years ago was already interfering in our economy and in our political freedom. And it was not proper to quote this in someone else’s house.
The world is sliding into a recession due to multiple overlapping crises, the head of the WTO said on Tuesday.
Speaking at the opening of the WTO’s annual public forum in Geneva, Ngozi Okonjo-Iweala noted that the World Bank and the International Monetary Fund (IMF) have both downgraded their global growth forecasts, and that trade indicators are “not looking too good.”
Colliding crises such as surging food prices, the soaring cost of living, and the energy crunch, first triggered by the Covid-19 pandemic and then aggravated by the Russia-Ukraine conflict, have created the conditions for a global recession.
Economists distinguish between two kinds of inflation: “demand-pull” and “cost-push”. Demand-pull inflation is said to occur when there is excess demand in a situation where supply cannot be augmented, because full capacity output has been reached in one or more crucial sectors. War-time inflation is a classic example. In India during the pre-neoliberal, dirigiste period, inflation was often the result of insufficient foodgrain output relative to demand, arising from a poor harvest.
Cost-push inflation on the other hand occurs when supplies can be augmented, as the economy is nowhere near full capacity in key sectors, but one of the classes tries to raise its share of output, by demanding a higher price for the input it provides, while other classes are unwilling to lower their shares, giving rise to a tug-of-war, which manifests itself through inflation.
The G7 governments have a problem. The war in Ukraine against Russia is not won. It looks set to be a long grinding conflict, possibly with no end. And yet the world and particularly Europe depends on Russian energy supplies. The G7 has agreed to stop buying Russian oil, as part of its programme of using economics sanctions as a war weapon. But up to now, energy imports from Russia have not been stopped because it would mean a catastrophe for the EU countries, particularly Germany. And Russia is still selling huge volumes—globally – albeit at a discount from the world price—to India, China and other energy-thirsty economies.
The de-dollarization or decline of dollar hegemony will put the United States in a slow crash and make everyday Americans poorer. Other countries have to de-dollarize because of American foreign policy, which forces them to create an alternative, said Michael Hudson, professor of economics at the University of Missouri-Kansas City.
“Any country that supported land reform, any country that protected its economy and grew its own food, and any country that did anything the United States didn’t like, they have all the foreign exchange, and all the savings stolen,” Hudson said, adding that “so obviously, this has led countries no longer to keep their savings in the form of U.S. dollars.”
Dollar hegemony is the system where U.S. overseas military spending and other spending deficits result in U.S. dollar savings in foreign countries. Then, foreign central banks recycle their reserves in dollars in the form of purchasing U.S. treasuries. Dollar hegemony enabled Americans to have high living standards and to become rich even though the U.S. is de-industrialized.
In the second part of an interview with Peoples Dispatch, Ahilan Kadirgamar, senior lecturer at the University of Jaffna, details the economic crisis that has engulfed Sri Lanka. He explains why shortages of essentials have continued over the months, and the inability of the government to tackle it.
He also talks about how Sri Lanka has already begun to adopt IMF policies before even signing an agreement and how this is affecting the country. He lists out the steps that need to be taken urgently to protect livelihoods and ensure the future of the next generation.
Watch the first part of the interview on the political crisis here:
The Biden Administration stealthily hiked Medicare premiums to their highest prices ever while simultaneously pushing to funnel even more money into the private health insurance industry, further privatizing the government insurance program. It’s also important to note that Biden took around $47 million on legalized bribes from health care executives during his 2020 presidential campaign. Cenk Uygur and Ana Kasparian discuss on The Young Turks.
“Last week, the Biden administration quietly reaffirmed its decision to enact the highest Medicare premium hikes in history right before this year’s midterm elections. At the same time, President Joe Biden is endorsing a plan to funnel significantly more Medicare money to insurance companies and further privatize the government insurance program for older Americans and those with disabilities. In effect, the higher premium increases will subsidize the larger payments to — and profits for — private insurance corporations. This comes after Biden raked in roughly $47 million from health care industry executives during his 2020 campaign. The Biden administration announced on May 27 that due to “legal and operational hurdles,” Medicare recipients won’t see their premiums lowered this year, even though that rate was originally hiked last November in large part due to the projected costs of paying for a controversial Alzheimer’s drug that Medicare now says it generally will not cover. The administration’s announcement comes as Biden officials move forward with a jolting 8.5 percent hike in payments made to private insurers operating Medicare Advantage plans next year.”
Apart from inflation and war, what grips current economic thought is the apparent failure of what mainstream economics likes to call ‘globalisation’. What mainstream economics means by globalisation is the expansion of trade and capital flows freely across borders. In 2000, the IMF identified four basic aspects of globalisation: trade and transactions, capital and investment movements, migration and movement of people, and the dissemination of knowledge. All these components apparently took off from the early 1980s as part of the ‘neoliberal’ reversal of previous national macro-management policies adopted by governments in the environment of the Bretton Woods world economic order (ie US hegemony). Then the call was to break down tariff barriers, quotas and other trade restrictions and allow the multi-nationals to trade ‘freely’ and to switch their investments abroad to cheap labour areas to boost profitability. This would lead to global expansion and harmonious development of the productive forces and resources of the world, it was claimed.