Subjects Archives: Economic Theory

Trade disputes with China have been heating up lately, but there really is no reason for the hostility.  Essentially the dispute boils down to the fact that China wants to subsidize the consumption of people in the United States and elsewhere, by propping up the value of the dollar. This is raising objections from the […]

Acclaimed philosopher and activist Noam Chomsky is Institute Professor Emeritus of Linguistics at the Massachusetts Institute of Technology.  He shared his perspectives on international affairs, economics, and other themes in an interview conducted at his office in Boston on September 14, 2010. Keane Bhatt: Your new book Hopes and Prospects begins with the story of […]

  Table 14 summarizes the main technical characteristics of the debt restructurings studied in this paper: the size of the exchange, the participation rate, the numbers of instruments tendered and new instruments issued, the options available to investors, etc.  Table 15 contains the main results, both in terms of the level and dispersion of NPV […]

In underdeveloped countries the appropriation of the economic surplus by foreign capital or its absorption by nonessential consumption of the parasitic upper classes is emphasized, the repercussions being a low level of investment and slow economic growth.

  Excerpt: The first objective of an audit is to clarify the past, to untangle the web of debt, thread by thread, so as to reconstruct the sequence of events which has led to the present impasse. . . .  Who has loaned and what was his role?  How did the State find itself committed, […]

  So there are no technological fixes [to the environmental problem caused by increasing consumption] in sight? I’ve gone on from the basic footprint concept to demonstrate a couple of other interesting spin-offs.  The assumption seems to be, in the mainstream, that improved technology, improved material and energy efficiency will help to solve this problem. […]

It is now abundantly clear that each and every response by the eurozone (EZ) to the galloping sovereign debt crisis has been consistently underwhelming.  This includes the joint EZ-IMF operation, back in May, to “rescue” Greece and, in short order, the quite remarkable overnight formation of a so-called “special vehicle” (officially the European Financial Stability […]

In a recent article, I discussed the 2010 Economics Nobel Prize in rather unflattering terms.  However, nothing beats the decision to award the 1997 Economics Nobel to Robert Merton and Myron Scholes for developing “a pioneering formula for the valuation of stock options.”  “Their methodology,” trumpeted the Nobel committee, “has paved the way for economic […]

  Prof. Prabhat Patnaik, eminent Marxist economist, taught in CESP-JNU (Centre for Economic Studies and Planning, Jawaharlal Nehru University) over the last four decades.  He has been one of the most outstanding economists in India and a great teacher.  He has retired from JNU recently.  On the occasion of his farewell, the students of CESP […]

When the Crash of 2008 hit Wall Street, European capitalism was thrown into disarray.  With the demise of the export-absorbing monster that was the US consumer market, what in 2003 Joseph Halevi and I called “The Global Minotaur” (see Monthly Review, Vol. 55), Europe not only lost a critical source of aggregate demand but also […]

Imagine a world ravaged by a plague, and suppose that the year’s Nobel Prize for Medicine is awarded to researchers whose whole career is based on the assumption that plagues are impossible.  The world would have been outraged.  That is precisely how we should feel about yesterday’s announcement of the recipients of the 2010 Nobel […]

  Historical Materialism has extended the deadline for proposal submissions to its special issue on the Middle East, conceived broadly to include: the Arab world from the Atlantic to the Gulf, Israel/Palestine, Iran and Turkey.  The new deadline for abstracts is the 10th of November 2010. HM is a Marxist journal, appearing four times a […]

  When Time magazine awarded Brazil’s President Lula the most influential world leader spot in its 2010 ranking of most influential people, Michael Moore, who wrote the excerpt on Lula, heralded the creation of the Bolsa Familia programme as well as the expansion of public education and health care.  These are important achievements, but one […]

  The article “Palestinian Economic Dependency on Israel,”1 published on the Alternative Information Center’s website on 23 September 2010, briefly mentioned official development assistance (ODA) to Palestinians.2  This article will elaborate more fully on foreign aid to the Palestinians, particularly in relation to the Israeli economy. Trade Deficit The Occupied Palestinian Territory (OPT) has an […]

Neoclassical economic models are based on the assumption that investment is financed from household savings.  Accordingly, capital accumulation will be maximized by policies aimed at increasing household savings rates and capital imports (“foreign savings”).  These models also predict that capital should flow from rich to poor countries, attracted by higher rates of return. However, facts […]

  Highlights: 2010: Palestinian economy far from recovery The Palestinian economy held back by: The enduring cost of Israeli military operation in Gaza The closure policy in the West Bank The siege of Gaza A weakened tradable goods sector and an eroded productive base are at the heart of the Palestinian development bottleneck. Rehabilitation of […]

  Excerpt: Household Debt and Credit Developments in 2010Q21 Aggregate consumer debt continued to decline in the second quarter, continuing its trend of the previous six quarters.  As of June 30, 2010, total consumer indebtedness was $11.7 trillion, a reduction of $812 billion (6.5%) from its peak level at the close of 2008Q3, and $178 […]

  Michael Lebowitz.  The Socialist Alternative: Real Human Development.  New York: Monthly Review Press, 2010.  Pp 192; $15.95 Only about ten or fifteen years ago, leftist theory was in a sorry state.  It seemed as if socialism had ceased to be a viable project with the fall of the Soviet Union.  Instead of an alternative […]

  9 July 2010 Today’s most e-mailed article on the New York Times website is “Biggest Defaulters on Mortgages Are the Rich” — in a nutshell, homeowners with loans over $1 million are more likely to have stopped paying their mortgages than those with more modest homes.  As law professor Brent White states, the wealthy […]

Under the Gold Standard the values of different currencies were fixed in terms of gold, which meant that the exchange rates between those currencies were fixed.  Exchange rate movements therefore could not be used to enlarge net exports and hence domestic employment.  At the same time governments were committed to the principle of “sound finance”, […]