The World Is Sliding Into Recession, Warns WTO Chief

Countercurrents | September 30, 2022

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.

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Controlling Inflation at the Expense of Working Class

Prabhat Patnaik

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.

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Life expectancy and human development in the 21st century

Michael Roberts Blog | September 11, 2022

Life expectancy is one of the best measures of human development.  In hunter-gather societies, on average, about 57-67% of children made it to 15 years. Then 79% of those 15 year-olds made it to 45 years.  Finally, those remaining at 45 years could expect to reach around 65-70 years. So we can see that life expectancy at birth in these societies was very low, given high child mortality. But some 40% did make it to about 65 years on average.  It seems to have been worse in the class-based feudal and slave societies.  The average medieval life expectancy for a peasant was only a mere 35 years of age at birth, but it was closer to 50 years on average for those who made it beyond 15 years. 

You can see that measuring life expectancy at birth is not a perfect guide to how long humans did live in pre-capitalist societies.  Nevertheless, there is no doubt that life expectancy on average rose sharply once science came to bear on hygiene, sewage, knowledge of the human body, better nutrition etc.  Of course, there were sharp inequalities in life expectancy in class societies between rich and poor.

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Many reasons why price cap on Russian oil exports cannot work

The United States and its allies are trying to impose new restrictions on the Russian economy, but like attempts so far, this one too looks fated to fail

Shirin Akhter and C Saratchand

Peoples Dispatch | September 16, 2022

(Photo: Wikipedia)

In their ongoing economic war on Russia, the United States and its allies propose a price cap on Russian oil exports. The oil price cap idea promoted by US Treasury Secretary Janet Yellen suggests that oil-consuming nations organize into a buyer’s cartel to limit Russia’s revenues from oil exports. This proposal follows previous measures against Russia, which have not dented its economy to the extent that it would be induced to change its posture (as the US and its allies desire) concerning the conflict in Ukraine.

Instead, the direct restrictions placed on Russian exports, principally of primary commodities such as oil and natural gas, have increased their world prices. They are so high that Russia’s export earnings have increased even if the volumes of some export have declined.

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Energy, cost of living and recession

Michael Roberts Blog | September 04, 2022

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.

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FACE OF AN ECONOMY: Housing in U.S. city

A Journal of People Report

Housing for the common citizens is a chronic problem in capitalist economy. This is a widely discussed and researched issue. Yet the economy fails. In one sense, it is not the economy’s failure. Rather it is one of the characters of the economy.

The following reports from the U.S. tell about the housing reality. This is a face of the economy with huge resources.  

A Hailey, Idaho datelined report by The New York Times (“A Town’s Housing Crisis Exposes a ‘House of Cards’”, July 31, 2022) said:

‘Near the private jets that shuttle billionaires to their opulent Sun Valley getaways, Ana Ramon Bartolome and her family have spent this summer living in the only place available to them: behind a blue tarp in a sweltering two-car garage.

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West prepares to plunder post-war Ukraine with neoliberal shock therapy: privatization, deregulation, slashing worker protections

Western governments and corporations met in Switzerland to plan harsh neoliberal economic policies to impose on post-war Ukraine, calling to cut labor laws, “open markets,” drop tariffs, deregulate industries, and “sell state-owned enterprises to private investors.”

Jake Kallio and Benjamin Norton

Multipolarista | July 28, 2022

While the United States and Europe flood Ukraine with tens of billions of dollars of weapons, using it as an anti-Russian proxy and pouring fuel on the fire of a brutal war that is devastating the country, they are also making plans to essentially plunder its post-war economy.

Representatives of Western governments and corporations met in Switzerland this July to plan a series of harsh neoliberal policies to impose on post-war Ukraine, calling to cut labor laws, “open markets,” drop tariffs, deregulate industries, and “sell state-owned enterprises to private investors.”

Ukraine has been destabilized by violence since 2014, when a US-sponsored coup d’etat overthrew its democratically elected government, setting off a civil war. That conflict dragged on until February 24, 2022, when Russia invaded the country, escalating into a new, even deadlier phase of the war.

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Beyond Greenwashing: The Hollow Foundations Of Ethical Capital

Claire Parfitt

Progress in Political Economy | July 21, 2022

The explosion of ESG investing

ESG investment funds, which claim to invest according to environmental, social and governance criteria, grew to almost US$3 trillion in 2021.  With a 53% increase since 2020, this made ESG the fastest growing sector of the asset management industry.

The rapid flow of funds into ESG investments has led to many demands from investors and the financial press for reliable accounting information. There is enormous variability in valuations of stocks and indices according to ESG criteria, and even a fundamental confusion about what ESG investing is.

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