Posts Tagged 'Economics'

Review of “Latin America and Global Capitalism”

Serra Pelada gold mine, Brazil (Photo by Sebastiao Salgado).

Jeffery R. Webber, of University of Regina, reviews the book Latin America and Global Capitalism: A Critical Globalization Perspective by William I. Robinson in the October edition of the Monthly Review:

In chapter two, one of the most powerful and persuasive, Robinson charts the crisis of developmental capitalism, or import-substitution industrialization, in the 1960s and 1970s, and then shifts to neoliberalism, or export-led development, in the 1980s and 1990s across Latin America. Drawing on the historical materialist categories of proletarianization and primitive accumulation, he examines the contours of the new economic model through a focused exploration of nontraditional exports and services. He offers a penetrating look at the cut flowers industry in Ecuador and Colombia, the explosive growth of the fruits and wines sector in Chile, soy production in Argentina and the rest of the Southern Cone, and winter fruits and vegetable production in Central America. He demonstrates how there has been an “accelerated replacement of noncapitalist by capitalist forms of agricultural development” and a “concomitant displacement of the peasantry and its conversion into a rural proletariat. This has occurred along with an increase in rural to urban and transnational migration”; promotion of “flexible…work in the new agro-export platforms”; a move to “predominance of female workers in these platforms”; and “the articulation of local agricultural systems…to global agricultural and industrial food production and distribution chains.”

The main weakness in this otherwise compelling portrait of the political economy of the Latin American countryside today is the one-sided structural power allotted to capital. Opportunities for increases in agricultural workers’ bargaining power under certain conditions, such as those examined by Ben Selwyn in his important study of export grape production in North East Brazil, are elided.

Keynes and Long-Term Economic Stagnation


In his book The General Theory of Employment, Interest, and Money, written in 1936, economist John Maynard Keynes (1883-1946) stated:

[T]he actual phenomena of the economic system are coloured by certain special characteristics of the propensity to consume, the schedule of the marginal efficiency of capital and the rate of interests, about which we can safely generalise from experience, but which are not logically necessary.

In particular, it is an outstanding characteristic of the economic system in which we live that, whilst it is subject to severe fluctuations in respect of output and employment, it is not violently unstable.  Indeed it seems capable of remaining in a chronic condition of sub-normal activity for a considerable period without any marked tendency either towards recovery or complete collapse.  Moreover, the evidence indicates that full, or even approximately full, employment is of rare and short-lived occurrence.  Fluctuations may start briskly but seem to wear themselves out before they have proceeded to great extremes, and an intermediate situation which is neither desperate nor satisfactory is our normal lot…The same thing is true of prices, which, in response to an initiating cause of disturbance, seem to be able to find a level at which they can remain, for the time being, moderately stable. (Keynes, 249-250)


Keynes, John Maynard.  The General Theory of Employment, Interest, and Money.  Houghton Mifflin Harcourt, 1964.

Quoted from John Bellamy Foster and Robert W. McChesney, “Monopoly-Finnance Capital and the Paradox of Accumulaiton,” Monthly Review 61, no. 5 (Oct. 2009): 1-20. (accessed November 2, 2009)

Information Capitalism

information technology

Christian Fuchs writes that despite all of the talk about living in a “post-capitalist,” “post-modern,” or “information society” we still live in a society that is dominated by the structures of capitalism and class divisions:

For describing contemporary society, Marxist scholars have suggested terms that focus on transformation of the productive forces, like digital capitalism…high tech capitalism…informatic capitalism…and communicative capitalism…I prefer such terms to radical discontinuous terms like information society or postmodern society because the first contain a critical negativity.  But they convey the impression that technology (digital, virtual, high technology) determines society: that is, that the relations of production are a linear result of the productive forces.  Change in contemporary society affects forces and relations, structures and actions, because society is based on a dialectical dynamic of these two qualities…

Concepts like knowledge, information, postmodern, postindustrial, Internet, and network society fail to grasp the dialectic of continuity and discontinuity of society.  They construct the changes connected to new media as radical novelties and ignore the continuing dominance of capitalist structures.  In order to stress that capital accumulation is transformed by the rise of knowledge and information technologies and the transnational spatial model connected to the flexible regime of accumulation, I have suggested using notions like transnational network capitalism, transnational informational capitalism, or transnational knowledge capitalism as key concepts for describing contemporary society. (Fuchs, 390, 399)


Fuchs, Christian.  “A Contribution to the Critique of the Political Economy of Transnational Informational Capitalism.”  Rethinking Marxism 21, no. 3 (July 2009): 387-402.

Capitalist Economists

William Gropper, "Black Thursday"

William Gropper, "Black Thursday"

In the June issue of the Monthly Review sociologist Richard York, et. al. explain:

Bouchaud penetratingly observes, “The supposed omniscience and perfect efficacy of a free market stems from economic work done in the 1950s and 1960s, which with hindsight looks more like propaganda against communism than plausible science.” The capitalist ideology that undergirds economics in the United States has led the profession to be detached from reality, rendering it incapable of understanding many of the crises the world faces. Mainstream economics’ obsession with the endless growth of GDP—a measure of “value added,” not of human well-being or the intrinsic worth of ecosystems and other species—and its failure to recognize the fundamental ecological underpinnings of the economy, has led to more than simply an inability to perceive the deterioration of the global environment. In fact, the problem goes much deeper. Orthodox economics, like the capitalist system that it serves, leads to an “Après moi le déluge!” philosophy that is anything but sustainable in orientation.


Bouchaud, Jean-Philippe.  “Economics Needs a New Scientific Revolution.” Nature 455 (October 30, 2008).  Quoted in “Capitalism in Wonderland.”

York, Richard, et. al.  “Capitalism in Wonderland.”  Monthly Review.

Rate of Exploitation

Karl Marx Peace

In Capital Volume I, Karl Marx (1818-1883 CE) stated that:

Since, on the one hand the variable capital and the labour-power purchased by that capitalist are equal in value, and the value of this labour-power determines the necessary part of the working day; and since, on the other hand, the surplus-value is determined by the surplus part of the working day, it follows that surplus-value is in the same ratio to variable capital as surplus labour is to necessary labour…

The rate of surplus-value is therefore an exact expression for the degree of exploitation of labour-power by capital, or of the worker by the capitalist. (Marx, 326)

Constant capital is capital that is constant throughout the labor process; all of the previous labor incorporated into the parts of production (money spent on gears and metal which a previous manufacturer had to spend money on in wages and other constant capital, etc.).

Variable capital is the value inputted into the labor process by the worker, or the value of the worker being interjected into the products she or he creates, makes, gathers, etc (value created by humans).

Surplus value is simply value created by the worker that gives the capitalist his or her profit.

Basically, Marx is showing us that profit comes from the workers and not from commodities or machines or capitalists.  Which is why capitalists get upset about strikes, as the workers are withholding their surplus value and surplus labor from the capitalist, causing a fall in profit during the period of the strike.


Marx, Karl.  Capital: A Critique of Political Economy: Volume 1.  Translated by Ben Fowkes.  New York: Penguin Classics, 1990.


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