Critique Notes 61
This issue is devoted very largely to Rosa Luxemburg. At the end of these Notes I have written a brief semi-introduction. Together with the latter, the articles cover most of the important issues with which Luxemburg was involved. The interpretation of her ideas and of her life remains a source of debate and we will be glad to receive further articles discussing the issues in this volume.
The Crisis Again
The situation in the world economy has turned down again, without actually rising very much after being metaphorically struck by lightning in the last year of the Bush administration. Discussing the convergent trends of declining wages and austerity in the United States and Europe, Robert Reich, the social democratic former Clinton- era Secretary of State for Labour points out that ‘Since the start of the recession, the share of total US national income going to profits has risen even as the share going to labour has plunged. Profits in the US corporate sector are now at a 45-year high.’1 In other words, the ruling class has not only lost nothing, it has actually improved its take of total value produced. At the same time as it has pushed its current slogan of the need for austerity and sacrifice, its material, social and political position appears better than ever. The effrontery of using the austerity slogan in defence of capitalism in such circumstances is hard to believe. The cruelty of its measure, shown most clearly in Greece, is justified with lies about the laziness and short working days of Greek workers. The multi-billionaire Warren Buffett’s, famous statement that there is a class war going on and his side had won seems amply justified.
The amount of money that is now held by corporations in the capitalist world contrasts with their relatively static asset holdings. In other words, we are witnessing a continued flight away from capital and towards money. Neither private business nor the state is engaged in economic expansion, in spite of nods towards the importance of infrastructure. China is different, but there they have effectively exhausted their ability to construct people-free towns and carless highways. More correctly, whereas they can build more inter-urban roads and new towns, the effect on the economy is diminishing. The particular economics of Stalinism has always been paradoxical, but it is instructive that it has shown itself in similar, even if not identical, form to that of the former Soviet Union. The decline in the growth rate has been partly induced by the downturn in Europe and the United States, but the internal constraints have also played their part.
At the same time, the rest of the so-called BRICs (Brazil, Russia, India and China) are in trouble, as officially announced by the International Monetary Fund. India’s growth rate is down, and there are charges of governmental corruption.2 Brazil is also in trouble.3 South Africa was never in the same category, although it was sometimes placed as the ‘s’ at the end of the BRIC. It is now even less so, having only been placed conveniently at the end of the acronym because of the relative underdevelopment of the rest of Africa. Russia remains mired in a permanent transition dependent on energy prices and an on/off outflow of capital. The outflow for the last two years has been considerable.4 It is not clear why Russia is a so-called emerging market when it appears to be largely an exporter of raw material and capital. The BRIC currencies have begun to decline and will no doubt plunge, with the exception of China, but with the inclusion of South Africa. Although some observers were arguing that the BRICs would help to lift the world economy out of its downturn, it has now become clear that they were wrong.5
So we have a general downturn, or a universal depression, a term now being used more often, although not by the established political parties. On the one hand, there is a rising level of money deposits in the developed world6 and on the other, static real investment. One can interpret this in the manner of Luxemburg, as a result of the inequality in society, where wages are insufficient to provide the demand for the goods produced. In a sense, that is what Robert Reich is doing in his Financial Times article.7 One can also argue that, although inequality is the basis of the problem, the immediate source of the stasis lies in the failure to invest. As orthodox economists might put the issue, the inducement to invest is low. That, in its turn, is explained by the capitalist being worried by the rate of return. That is not determined by final consumer demand alone, however, as some Keynesians would have it.
The question of supply restraints is dealt with in the research article written by Bob Rowthorn and Bill Martin8 for the UK. They point out that independent small firms only account for 3.5% of innovation, dealing a death blow to contemporary conservative ideology that places great store by the role of small business in innovation, and hence in providing the competitive edge to the economy. However the burden of the article is to point out that there is an underutilization of resources or an undercapacity operation of the economy since the downturn in 2007-2008. In that way, they have undermined the view that austerity is necessary because growth is not possible without new sources of supply, without which there would be an inflation, with a necessary rise in interest rates, and no rise in rates or quantities of profit. One would have thought that their conclusion was intuitively obvious, but it did need to be empirically proven.
So it is not a question of insufficient skilled workers, or excessive demands by workers or commodity suppliers. If anything, costs have been held down by an excessive supply, ignoring the cost of metals and energy. There is no excuse for austerity.
Why Money is not Becoming Capital: The Nature of the Ruling Class
The real question remains why large companies are piling up money. To repeat the point with another quote: ‘Profits have made a complete recovery following the Lehman disaster. This is driven by record margins, in the US, corporate profits as a proportion of gross domestic product are at their highest ever’.9 Why is the capitalist class not investing?
In previous Critique Notes we have pointed to the huge surplus in bank accounts held by individuals and corporations. This is contrasted with a weak growth in the gross domestic product.10 The composition of the capitalist class has changed in that the individual or corporate owner has re-asserted himself, while at the same time conceding a place at the table to the top managerial elite. A revealing article11 by a supporter of private equity points out that:
The public company is in trouble because the relationship between owners and managers has proved so fraught. By granting stock or stock options to bosses, boards have tried to align managers’ incentives with shareholders’, but this approach has failed. Managers are prone to build empires rather than make profits, to spend on perks rather than dividends, and to gamble recklessly with shareholders’ capital. If any reminder were needed on this last point, the recent trading loss at JPMorgan should do the job.
The number of companies listed on US public exchanges has declined by 38 per cent since 1997, he asserts, pointing to the growth of private equity and effectively declaring that private equity will be dominant in two decades.12
One does not have to go along entirely with his viewpoint to recognize the reality of a particular symbiotic and yet antagonistic relationship between owners or nominal owners and managers. The defects of the managerial incentive system cannot be overcome, given the nature of capitalism. The assertion that managers waste profits is well described in what has become a business textbook, Barbarians at the Gate.13
Behind this phenomenon lies, in part, a process that everybody recognizes but yet orthodox economics refuses to theorize, the changing nature of control over the economy or, more correctly, control over surplus value. They prefer to call it oligopoly, and then they forget either to see what it means, except in the most superficial way, or how it has evolved. The term, of course, makes no difference. One can call a market with a small number of firms a monopoly in that they will necessarily collude whether overtly, covertly or tacitly to avoid lowering prices beyond a certain point. The effect is that production is limited to a particular level and innovation is itself contained, although not eliminated. As a result there will be profits that cannot be invested in the particular firm, from which they arose, unless they are used unproductively in advertising and a series of manoeuvres to increase the imprint of the firm or simply wasted as described above. There are, however, limits to these forms of expenditure, provided by auditors, shareholders and the courts. The question then becomes why the conglomerates that exist, such as that of Buffett, do not invest more widely. To an extent Buffett and private equity clearly do so. However, this is not the same as investing in the original firm, where the variables are well known. The questions considered by the investors then become more general - on the nature of the economy and the health of the capitalist system over time.
However, a more rational approach would also look at the nature of those investors. That amounts to an investigation of the ruling class itself. Interestingly, those giving advice to such investors call them high net worth individuals and then divide them into three groups, those with US$1 million in spare money, those with US$5 million in resources, and then those with more than US$30 million. The total of the three groups comes to 11 million in the world and the richest group has just 100,000 people.14 The richer elements have set up their own finance capitalist groupings in ‘private equity’ or as investment corporations of various kinds. In earlier times, this led to the evolution of corporations run by managers in which the investor-shareholders played a limited role while the ‘public company’ delivered sufficient returns in a rising share price and/or an increasing share price, but exercised their legal rights when the returns on their investments were in danger. Since the 1980s, however, the managers have effectively been incorporated into the capitalist class itself, partly though their exorbitant remuneration and partly by the relative loss of control by the nominal owners, the shareholders. The Economist15 has argued that there are now several different forms in which companies are controlled: the public company, the family company, the state-capitalist company and the private company, nowadays often controlled by private equity, which is itself a relatively new form.
Whereas there has been a considerable volume of literature on the question of the increasing role of managers and hence bureaucracy within capitalism, the contemporary situation is new. The capitalist started as an individual controlling capital, through the operations of his company or corporation. As the size of the corporation has grown and become increasingly integrated within the wider economy, both national and international division of labour demands increasing specialization and a hierarchy of bureaucratic specialisms: accountants, financial officers, personnel departments, middle-level managers, executives, advertising and marketing operatives, and so on, as well as those doing the work of the firm. This applies to any firm, whether it is productive or unproductive, whether it helps human progress or hinders it. While these layers of management are incorporated into the sinews of capitalism and duly indoctrinated, they also require sufficient rewards to ensure their loyalty, particularly as they can be at the sharp end of the class struggle. The logic of this situation is a permanent tension between those whose wealth is counted in hundreds of millions or perhaps billions and the managerial group whose salaries run from a few hundred thousand dollars to a few million over a limited work life. Clearly a wholly or very largely owned empire, like that of Murdoch, or Buffett, or the Quandt family in Germany, or the dynasties of Rockefeller, Du Pont, Rothschild, and so on, is able to maintain control more satisfactorily than where the shares are widely spread, even if there is a controlling interest. At one time, the point was often made that 1 per cent of the shares of a very large company, such as EXXON, would be enough to ensure that crucial decision-making was to the liking of owners of that 1 per cent. However, that ceased to be case, given the agglomerations of shareholdings held by particular individuals, by insurance companies, by pension funds and by private equity, which could have different interests from each other and the founding owners.
As a result, the form of the capitalist class itself is changing. Finance capital had effectively assumed a dominant role within capital from the late nineteenth century and returned to that role from the late 1970s. As I argued in my articles in Critique,16 finance capital assumed dominance within global capitalism but this leadership role was exercised by the dominant capitalist country, first the UK through the British Empire and then the United States. The return to finance capital in the last 30 years played an important role in reshaping the capitalist class. The wealthy became much wealthier and the society became polarized, with consequent increasing need for policing. Increasingly, finance played the crucial role in developing the world economy, and the role of its associated operations multiplied enormously. In itself it changed the nature of the corporation, with a complex chain of holding companies with its nominal headquarters chosen for reasons that had little to do with the work of the company itself.
The implosion of finance capital that is still reverberating around the world has not yet reached its ultimate destination. At the time of writing, the accusations that banks have been fixing the daily interest rates, Libor and Euribor, have intensified criticism of their operations. What has become quite clear is that such fixing was probably endemic, and hence tolerated. Exactly who it benefited is not clear. Was it particular individuals, banks, bank divisions or someone else? It is also not obvious why the issue should have surfaced at this time and not in 2008-2009 or earlier. There is rivalry between New York and London as the prime site for finance capital, and statements that more financial activities will move back to New York suggest that the exposure will result in the decline of City of London. This does not, however, explain the genesis of the accusation. Sections of capital who might have had trouble getting loans or had the price of their loans increased have been threatening to sue the relevant banks, and the Conservative Party in the UK, which is close to small business, has taken up the issue.
The effect is that the composition and form of the capitalist class is still in a process of change. At any rate, from the point of view of these Critique Notes, the changing nature of the capitalist class has had important political economic consequences. In the first place, the governing role of finance capital is more limited and indeed is under challenge. This is partly a consequence of the decline of the United States and partly a result of the semi-permanent harassment of the banks for their dubious operations over the last 30 years. In the second place, the organizational role of finance capital, usually provided by the dominant capitalist power, has been partially broken. In the third place, the different forms of capital have led to the evident conflict of sections of capital and to increasing muddle. This is most evident in their attempts to deal with the Euro crisis as well as in their overall strategy of austerity. Fourthly, without leadership and understanding of the present state of capitalism, their policies have not only been conflicted and muddled but even crazy.
How Long Can the System Last?
That is the issue. Whereas Marxists would pose the question of the longevity of the system itself, the ruling class may not pose it in such apocalyptic terms. It can ask the question of how long they can rule in the present fashion, and whether they do not need to find a new method of rule. Stalinism provided the stability the system needed in that it accepted the division of the world and generally conceded in the West, most notably in 1968 in France. Social Democracy was even more pliable. Since neither exists, at least in their historic forms, there is no ceiling or floor as to future struggles. In fact there is no guide either. The ruling class switched to finance capital as the dominant form of capital towards the end of the 1970s, but that has imploded. Not everyone seems to have realized that the dominance of finance capital implied the dominance of Anglo-American capital in general over the other countries, like Germany. The logic of the present situation is that Germany, or rather the German bourgeoisie, freed, to an extent, from the control of finance capital, which one German minister called locusts, is fighting to assert itself.
If we look at the nature of the Eurozone troubles, we see that there is a constant refrain of the importance of the markets. However, the markets are no more than US investors, or firms on behalf of other investors, most of whom are from the United States, which are demanding security for their purchase of government bonds. Bond investors like the giant US bond investing firm PIMCO are effectively determining the fate of the Eurozone. The US rating agencies, however neutral they see themselves to be, are governed by the prevailing ideology of the time. It is, therefore, from one standpoint, the United States that is determining the instability of the Eurozone, in that its investors could take a longer term view, in which governments would pay off their debt, while growing their economies. Whether it is ideological or short-term fear that governs their outlook, the effect has been the same. Their attitude has dovetailed with that of the pre-World War II economists, the necessary survival of the fittest, and therefore the need for the less fit to become stronger or go under.
It is rational that the German capitalist class should see themselves as removing the burden of debt to the United States in order to develop their own economies without interference. It is the first time since 1945 that the German ruling class has taken a stand independent of the United States, even if their conservative economics coincides with that of the Republican Party in the United States.
In short, a rational analysis of the world economy cannot stop at the banking crisis, or the monetary indebtedness of a series of countries. To understand the real situation one has to remove the veil of money. After all, the monetary holdings of one bank, BNY-Mellon, are almost double the US gross domestic product and so double its national debt.17 The United States is not limited by resources, manufacturing ability or industrial backwardness. It could remove its national debt in one fell swoop through taxation of the wealthy. Only the insanity of the prevailing ideology and its control over the media prevents a genuine discussion of such a process. The argument that only the wealthy can run the economy efficiently and only small and medium-sized business, owned by well-rewarded directors, can ensure innovation, competitiveness and a high rate of growth can be exploded by any rational person from the age of 14 onwards.
The demand for austerity has to be understood as a conscious decision to establish independence of finance capital - de facto Anglo-American finance capital - on the one hand and as the re-imposition of the classic capitalist forms of control prevalent before World War I on the other. It is not really about austerity itself. Hence the particularly vicious attitude to the Greek population has to be understood more in terms of the attempt to subordinate the local capitalist class, while trying to crush the working class to the point of total political demoralization.
Part 2: What will Happen?
There are only four things that can happen with the Eurozone crisis and the situation with Greece at the moment:
(1) The right concedes - effectively the capitalist class accepts that it has to buy peace and it relaxes the austerity conditions. The technicalities are secondary, even if they will argue over them. They can print money on a large scale and use the money to expand the building of infra-structure on an equally large scale - such as updating sewage works, replacing environmentally injurious power stations, constructing high-speed rail networks, and so on. They can also nationalize loss-making industrial firms and raise their productivity in order to reduce their prices. They can raise the wages of the public sector employees and increase pensions in order to buy social order and increase demand. As long as the economies have excess capacity, as is the case today,18 inflation will be limited. It is clear that the capitalist class has refused to do this for the last 40 years and will not do so unless the system itself is threatened. What is, however, possible is that they go a very limited part of the way along this road, as a compromise, when they feel that they have lost or are likely to lose. This, however, is the final option.
(2) Secondly, they keep up the pressure by increasing the reserve army of labour, reducing benefits and using the police and army. This is not a stable solution but can last a few years. Several scenarios are possible. The left may attempt to take power and be defeated. Alternatively, the economic demoralization may be such as to keep the population angry but physically quiescent. In either case, the day of reckoning will only be postponed but quite certain, as very few people accept the justification for the crisis. Power may be taken in one country but not elsewhere leading ultimately to a defeat in that country, given the impossibility of socialism in one country.
(3) Thirdly, the pressure is such that the left threatens to take power or has sufficient influence to take power, but bides its time. This is only possible, as indicated above, if there is a European wide revolutionary wave of protest, leading to the formation of mass revolutionary parties. (4) They take the half-way house mentioned in one, partly as a result of three. The reality is that the left today has no party in any country. However, there are groupuscules and small groups. The evolution of Syriza in Greece shows how quickly new but substantial left groupings can form. Syriza is reformist in its essence, but still regarded by the bourgeoisie as part of the far left. It is not excluded that reformist groupings like Syriza give birth to more left-wing formations, as they find that they are at a dead end. They may also clear the way for genuinely socialist formations. However, in 2012, the influence of Stalinism hangs heavy over working class groups, and the origins of Syriza in the Communist Party cannot be ignored.
The countries that are crucial in any genuine move to the left are France and Germany. It is not that Spain, Italy and the UK are to be ignored, but the history of the left has shown the revolutionary importance of France and the revolutionary centrality of Germany. The history of Germany has not been wiped out in the minds of the population in the way it has been largely eradicated in the countries of the former Soviet Union. Again the history of Stalinism in the division of Germany and the continued influence of the successor to the Communist Party of the DDR continues to blight the left in that country. Nonetheless, Germany has once again the largest and strongest formations of the working class in Western Europe, if not Europe. They do not as yet constitute a class itself. (The question of the Russian working class, partly unemployed and partly at work in decaying industrial plants, is another question.) The evolution of the Spanish crisis has been one in which the Germans have been pressurized to concede, particularly by the USA, as well as other EU countries.
Why is the ruling class in this hole? It thought that it had no challenge with the end of the Soviet Union. The United States was declared the sole superpower, without another contender, and one of its respected theoreticians, Francis Fukayama, declared the end of history. Symbolically, he has now reversed himself and written about the importance of a big state.19
It decided to change the world in its own image, under a President of a new type, one who appeared to be a pure American patriot eager to subordinate the world to the democratic wonders of the United States. Instead, it failed to establish its goal in Iraq, to build a vibrant market democracy, and opened the way for Iran, a theological dictatorship, to become the dominant power in the Middle East. Socialism was buried once more, Marxism declared an antique philosophy of no value, yet again, and capitalism the only possible socio-economic system, which had the special role of providing everyone with the possibility of developing their talents to the full provided that they worked hard and accepted the necessary efficiency of the market.
The contrast could not be greater. Capitalism has manifestly failed. We are now living in the worst depression of the last 100 years, it is declared. In fact, there is no reason why we should speak of only 100 years. This downturn is very likely to become the worst depression in the history of capitalism, since there is no end in sight. The last depression came to an end with World War II, but war is unlikely.
Is there an Alternative: Another War?
Whenever this issue is discussed, someone argues that war is probable. It is pointed out that the ruling class has turned to war in the past when it was in real trouble. Although Lenin and Luxemburg moved a motion against the working class supporting the coming war in 1907, at the Congress of the 2nd International, most people did not expect war. It is true that the ruling class did not expect the war that emerged or its results, and almost certainly would never have embarked on the war had they known what was to occur. Nonetheless, the fact that people do not expect a war does not mean that there will be a war.
War is improbable for a number of reasons. Firstly, it is impossible to use the thermo-nuclear weapons without wiping out a large part of the world. To kill both sides cannot be the intention of those going to war. Atomic and thermo-nuclear weapons have shown how weapons can reach their ultimate form, where they become almost useless in order to engage in a drawn out war, such as is required for a war to establish a basis for stability. In fact, today, many weapons have reached such proportions that the dominant power - the United States - can wipe out the other side, without atomic weapons. Again, the use of such power will not subordinate the defeated country, since it will de facto cease to exist. It is hard to see what the point would be.
Secondly, it is not clear who will fight whom. It is inconceivable that any existing developed nation will go to war with another nation. Proxy wars in third-world countries are possible, but that is not the same thing and it will not stabilize the system. Russia might have fought China by proxy as it did when the Soviet Union supported Vietnam against China, but that is unlikely given their common interests today.
Thirdly, as implied above, third-world wars as in Iraq, Afghanistan, and so on., do not fulfil the function since they are largely guerrilla wars. The colonial wars of South-East Asia and Africa are over.
Fourthly, the integration of the world market is such that a major international war would have an immediately deleterious effect on all economies. Technological efficiency would decline. Most firms would lose out, even though those connected to the war industries would not. It is true that something similar was said before the World War II, but the integration was much more limited compared with the present day.
In other words, while continued minor wars, as at present in the Middle East, will no doubt continue, a major war like World War II is highly unlikely. The latter did stabilize the world and provide a period of class compromise for a limited time, but it cannot be repeated.
While it is good to think that it is unlikely that so many millions will die, the next few decades could be ones in which the present-day Greek suffering will be extended and worsened.
Summary and Conclusion
What are the major obstacles to the Left becoming dominant in Europe?
(1) Stalinism - the skirmishes that have taken place in the last period have shown the continued physical importance of Stalinist remnants. This is most obviously true of Greece, France and Germany. The existence of a Stalinist party that actually supports Stalin is unbelievable but it is a fact that the KKE in Greece got just over 8 per cent of the vote until the last election on 17 June, when its vote was halved. One does not need to examine the situation in every country to know that successors to the discredited Communist Parties continue to operate and act as a brake on the left in many countries. The struggle in countries with Stalinist parties in power, like China, or in partial power, as in South Africa, is a different matter, as their political, social and economic control over the society makes opposition very difficult to impossible.
(2) Ideology - however, the left is less hindered in countries like the UK by the presence of Stalinist remnants. More important is that the ideology continues in its afterlife, and ‘intellectuals’ who were among or around the Stalinists continue to have some influence, while leading trade unionists might still owe their situation to the ‘heritage’ of the old Communist Party. Unfortunately, Maoism and variants of socialism in one country continue to flourish in odd countries from Nepal to the United States. One aspect is the role of third worldism or third-world nationalism, or indeed nationalism. Whether one can call all or any of these derivatives Stalinism is questionable, but it is important to understand their origins.
(3) Some argue that the population is so ground down by capitalism and so captured by its ideology, of commodity fetishism, that little can be expected. In the article on Consciousness in an earlier Critique I argued against this view.20 People may want gadgets, or a better life-style, but that does not mean that they do not understand their exploitation. Today, we are witnessing a contradictory process in which the ruling class is screaming of the necessity of austerity, while at the same time awarding themselves huge increases in salaries and obtaining higher and higher profits/dividends. As a result, there is the Occupy Movement, which speaks of the inequality in the society, and the growth of government- supported moralism around the issue of tax payment. On the one hand, salaries are cut, and workers declared redundant, while on the other, on-retail firms appear ever more profitable. On the one hand, we have workers who are being evicted for non-payment of mortgages, while on the other we have grand houses left empty, as they were bought only as an investment. In other words, everyone can see the conflicted nature of the economy and the bankruptcy of the economic system. The one thing that holds them back is the lack of a credible alternative.
(4) The credible alternative - Stalinism and social democracy have made socialism appear either utopian to those who like the idea or a dystopia for those who are ignorant of their anti-socialist essence. With time, the anecdotes of those who lived in the Soviet Union or Eastern Europe will play less of a role in the study and genuine knowledge of those regimes. The increasing harshness of capitalism is driving people towards an anti-capitalist stance. Opinion polls show clear shifts in that direction. It is to be expected that sections of the working class will move both right and left, given the absence of a democratic alternative in most countries, which usually have two parties with similar policies, alternating in power. The Parliamentary System is clearly cracking and the despair felt by the population is epitomized by the rise of comic parties like the Pirate Party in Germany and the party of a comedian in Italy. This is clearly a preliminary phase before political life becomes more serious. It cannot duplicate the experience of the 1930s, but an analogous result is not impossible. Hopefully, in fact almost certainly, a left with a socialist programme will emerge, controlled from below, with a classic programme for a society where labour becomes mankind’s prime want as opposed to its curse.
- 1. Robert Reich: ‘A diabolical mix of US wages and European austerity’, Financial Times, 31 May 2012, http:// www.ft.com/cms/s/0/7b84f1c8-a977-11e1-9772-00144feabdc0.html#axzz1wIzk7BCF (accessed 5 August 2012).
- 2. ‘Analysis: James Crabtree: India: Bollygarchs at Bay’, Financial Times, 5 June 2012, http://www.ft.com/cms/ s/0/aa6814e4-aee9-11e1-a8a7-00144feabdc0.html#axzz22iGT6ocK (accessed 5 August 2012).
- 3. ‘Brazil’s Economy: A Bull Diminished’, The Economist, 18 May 2012: ‘The economy has slowed, but there are still opportunities around. Brazil’s rate of growth has sunk to 2.6 per cent for 2011, the currency has fallen to 2 reals to the dollar from 1.54, and commodity prices, which it sells, are declining’, http://www.economist.com/ node/21555588 (accessed 5 August 2012). It was inevitable that the flows of speculative funds to the BRICS would dry up, and that prices of raw materials would begin to fall.
- 4. There was an outflow of US$84 billion alone in 2011. Charles Clover, ‘Russia’s Economy, Unsustainable Support’, Financial Times, 21 March 2012: ‘Net private capital outflow from Russia amounted to an estimated $5.8 billion in May and $46.5 billion in the first five months of this year, Central Bank Chairman Sergei Ignatyev said on Wednesday.’ RiaNovosti, St Petersburg, 6 June 2012, http://en.rian.ru/business/20120606/173877734. html (accessed 5 August 2012).
- 5. The decline in the BRICs is made clear by Stefan Wagstyl in the Financial Times, 28 June 2012, p. 33, in an article entitled: ‘Flight from EM Currencies hits Global Companies: Hopes for the BRIC’s Ability to Restart the Global Economy are Starting to Fade’.
- 6. Daniel Schafer and Patrick Jenkins, ‘Excess Deposits Demand Novel Responses from Global Banks’, Financial Times, 31 May 2012, part 2, Companies and Markets, p. 19. Speaking of HSBC, the article says that ‘Like most banks with big retail operations, its excess deposits have ballooned during the financial crisis.’ It gives a figure of 10 for the number of times the so-called ‘balance sheet management’ unit at HSBC has increased since 2006.
- 7. Reich, op. cit.
- 8. Robert Rowthorne and Bill Martin: ‘Is the British Economy Supply Constrained II? A Renewed Critique of Productivity Pessimism’, Centre for Business Research, University of Cambridge, May 2012, http://www.cbr.cam. ac.uk/pdf/BM_Report3.pdf (accessed 7 June 2012). Martin Wolf, among others, quotes this research in his piece on 1 June 2012, Financial Times, p. 13.
- 9. ‘Danger of Market Herd Stampedes’, Financial Times, 30 December 2011, p. 10. For detailed statistics in the United States see the Bureau of Economic Analysis report of 31 May 2012, http://www.bea.gov/newsreleases/ national/gdp/2012/pdf/gdp1q12_2nd.pdf
- 10. Bureau of Economic Analysis, op. cit.
- 11. Sebastian Mallaby, ‘Mr Obama, Stop the Attack on Private Equity’, http://www.ft.com/cms/s/0/4724d5c0a368- 11e1-988e-00144feabdc0.html#axzz1xQOpzFTL (accessed 10 June 2012).
- 12. Ibid.
- 13. Bryan Burrough and John Hellyar, Barbarians at the Gate, The Fall of RJR Nabisco (London: Arrow Books, Random House, 2010).
- 14. Royal Bank of Canada and Cap Gemini Report on High Net Worth Individuals, http://www.capgemini. com/services-and-solutions/by-industry/financial-services/solutions/wealth/worldwealthreport/
- 15. ‘The Big Engine that Couldn’t’, The Economist, 19 May 2012, p. 24.
- 16. Hillel Ticktin, ‘Finance Capital and the Transitional Epoch’, Critique, 16 (1984), pp. 23-42. Hillel Ticktin, ‘Towards a Theory of Finance Capital’, Critique, 17 (1986), pp. 1-17.
- 17. Bank of New York-Mellon states on its web site that it has US$27.1 trillion held ‘in custody or administration’, http://www.bnymellon.com/about/companyprofile.html
- 18. Ibid., in relation to the UK.
- 19. Francis Fukuyama, ‘Conservatives must Fall Back in Love with the State’, Financial Times, 21 July 2012, p. 11.
- 20. Hillel Ticktin: ‘Political Consciousness and its Conditions at the Present Time’, Critique, 34, (2006), pp. 9-26.