Tip:
Highlight text to annotate it
X
>>: OKAY.
SO WE'VE BEEN THROUGH THIS CRISIS.
AND THERE ARE ALL SORTS OF EXPLANATORY FORMATS OUT THERE.
AND IT'S INTERESTING TO LOOK AT THE DIFFERENT GENRES.
ONE GENRE IS THAT IT'S ALL ABOUT HUMAN FRAILTY.
I MEAN, ALAN GREENSPAN TOOK REFUGE IN THE FACT --
IT'S HUMAN NATURE, HE SAID.
YOU CAN'T DO NOTHING ABOUT THAT,
BUT THAT'S A WHOLE WORLD OF EXPLANATIONS THAT KIND OF SAY
IT'S THE PREDATORY INSTINCTS.
IT'S THE INSTINCT FROM MASTERY.
IT'S THE DELUSIONS OF INVESTORS AND THE AGREED AND
ALL THE REST OF IT.
SO THERE'S A WHOLE RANGE OF DISCUSSION OF THAT AND,
OF COURSE, THE MORE WE LEARN ABOUT THE DAILY PRACTICES ON
WALL STREET, WE KIND OF FIGURE THERE'S A GREAT DEAL OF TRUTH
IN ALL OF THAT.
THE SECOND GENRE IS THAT THERE'S INSTITUTIONAL
FAILURES, YOU KNOW, REGULATORS WHO WERE ASLEEP AT THE SWITCH,
THE SHADOW BANKING SYSTEM INNOVATED OUTSIDE OF THEIR
PURVIEW ET CETERA, ET CETERA, ET CETERA.
AND THEREFORE INSTITUTIONS HAVE TO BE RECONFIGURED AND
IT HAS TO BE A GLOBAL EFFORT BY THE G20,
SOMETHING OF THAT KIND.
SO WE'VE LOOKED AT THE INSTITUTIONAL LEVEL AND SAY
THAT HAS FAILED, AND THAT HAS TO BE RECONFIGURED.
THE THIRD GENRE IS TO SAY EVERYBODY WAS OBSESSED WITH
A FALSE THEORY.
THEY READ TOO MUCH HYECONED
BELIEVED IN THE EFFICIENCY OF MARKETS AND IT'S TIME WE
ACTUALLY GOT BACK TO SOMETHING LIKE -- OR WE TOOK SERIOUSLY
OR HYMAN MINSKY'S THEORY ABOUT THE INHERIT INSTABILITY OF
FINANCIAL ACTIVITIES.
THE NEXT GENRE IS THAT IT HAS CULTURAL ORIGINS.
NOW, WE DON'T HEAR THAT MUCH IN THE UNITED STATES,
BUT IF YOU WERE IN GERMANY AND FRANCE,
THERE ARE MANY PEOPLE THERE THAT WOULD KIND OF SAY THIS IS
AN ANGLO SAXON DISEASE.
AND IT'S NOTHING TO DO WITH US.
I HAPPENED TO BE IN BRAZIL WHEN IT WAS GOING ON AND --
KIND OF SAYING -- WELL, FIRST OFF WE WERE SAYING OH,
THANK GOD THE UNITED STATES IS BEING DISCIPLINED BY
THE EQUIVALENT OF THE IMF.
WE'VE BEEN THROUGH IT EIGHT TIMES IN THE LAST 25 YEARS AND
NOW IT'S THEIR TURN.
FANTASTIC, SAID LULA AND ALL OF THAT AND THE
AMERICANS I KNEW UNTIL IT HIT THEM, WHICH IT DOES.
AND THEN THEY KIND OF CHANGED THEIR TUNE A LITTLE BIT.
SO THERE'S KIND OF A WAY IN WHICH IT BECAME CULTURAL AND
YOU CAN SEE IT, BY THE WAY IN WHICH THIS WHOLE GREEK THING
IS BEING HANDLED.
THE WAY THE GERMAN PRESS IS SAYING, WELL,
IT'S THE GREEK CHARACTERS, DEFECTS
IN THE GREEK CHARACTER.
AND THERE'S A LOT OF RATHER NASTY STUFF GOING ON AROUND
THAT, BUT ACTUALLY THERE ARE SOME CULTURAL FEATURES,
WHICH HAVE LED INTO IT.
FOR INSTANCE, THE U.S.
FASCINATION WITH HOME OWNERSHIP,
WHICH IS SUPPOSEDLY A DEEP CULTURAL VALUE.
SO 67, 68 PERCENT OF
U.S. HOUSEHOLDS ARE HOME OWNERS.
MORE THAN 22 PERCENT IN SWITZERLAND,
BECAUSE IT'S A CULTURAL VALLEY IN THE UNITED STATES.
BEING SUPPORTED BY THE MORTGAGE INTEREST TAX
DEDUCTION WHICH IS A HUGE SUBSIDY.
IT'S BEEN PROMOTED SINCE THE 1930S,
VERY EXPLICITLY IN THE 1930S.
THIS IS BUILT UP BECAUSE THE THEORY WAS THAT GETTING
CUMBERED HOME OWNERS DON'T GO ON STRIKE.
AND THEN THERE'S A KIND OF NOTION THAT IS A FAILURE
OF POLICY.
AND THE POLICY HAS ACTUALLY INTERVENED.
AND THERE'S A FUNNY KIND OF ALLIANCE BETWEEN THE GLENN
BECK WING FOR FOX NEWS AND THE WORLD BANK.
BOTH OF WHOM SAY THE PROBLEM IS TOO MUCH REGULATION OF
THE WRONG SORT.
SO THERE ARE ALL OF THESE -- ALL OF THESE WAYS.
AND ALL OF THEM HAVE A CERTAIN TRUTH.
AND SKILLED WRITERS WILL TAKE ONE OF THOSE PERSPECTIVES AND
BUILD A STORY AND ACTUALLY WRITE A VERY PLAUSIBLE KIND OF
STORY ABOUT THIS AND I THOUGHT TO MYSELF, WELL,
WHAT KIND OF PLAUSIBLE STORY CAN I WRITE,
WHICH IS NONE OF THE ABOVE.
WHICH IS ONE OF THE THINGS I ALWAYS THINK TO MYSELF.
AND IT'S NOT HARD TO DO PARTICULARLY IF YOU'RE COMING
FROM A MARXIST PERSPECTIVE BECAUSE THERE AREN'T MANY
PEOPLE WHO TRY TO DO THIS ANALYSIS
FROM A MARXIST PERSPECTIVE.
AND I WAS REALLY CLUED INTO THIS BY THIS THING THAT
HAPPENED AT THE LONDON SCHOOL OF ECONOMICS ABOUT A YEAR AND
A HALF AGO WHEN HER MAJESTY, THE QUEEN,
ASKED THE ECONOMISTS HOW COME YOU GUYS DIDN'T SEE
THIS THING COMING?
SHE DIDN'T SAY IT EXACTLY THAT WAY, BUT, YOU KNOW,
IT'S JUST THE SENTIMENT.
THEY GOT VERY UPSET.
AND THEN SHE ASKED -- SHE CALLED THE BANK -- GOVERNOR
BANK OF ENGLAND SAID, HOW COME YOU DIDN'T SEE IT COMING?
AND THE BRITISH ACADEMY PUT FORWARD THIS -- ALL THESE
ECONOMISTS AND THEY COME UP WITH THIS FABULOUS LETTER
TO HER MAJESTY.
AND IT WAS ACTUALLY ASTONISHING.
IT SAID, WELL, YOU KNOW, MANY DEDICATED PEOPLE, INTELLIGENT,
SMART, SPENT THEIR LIVES WORKING ON ASPECTS OF THIS
THING VERY, VERY SERIOUSLY, BUT THE ONE THING WE MISSED
WAS SYSTEMIC RISK.
YOU SAY, WHAT?
(LAUGHTER.) AND THEN THEY WENT ON TO TALK ABOUT A POLITICS OF
DENIAL AND ALL THE REST OF IT.
SO THEN I THOUGHT, WELL, YOU KNOW SYSTEMIC RISK, YOU KNOW,
I CAN TRANSLATE IT INTO -- YOU'RE TALKING ABOUT
THE INTERNAL CONTRADICTIONS OF CAPITAL ACCUMULATION.
AND MAYBE I SHOULD WRITE A THING ABOUT THE INTERNAL
CONTRADICTIONS OF CAPITAL ACCUMULATION AND TRY TO FIGURE
OUT THE ROLE OF CRISIS AND THE HISTORY OF CAPITALISM.
AND WHAT'S SPECIFIC AND SPECIAL ABOUT THE CRISIS
THIS TIME AROUND.
THIS WERE TWO WAYS IN WHICH I THOUGHT I WOULD DO THIS: ONE
WAS TO SORT OF LOOK AT WHAT'S HAPPENED SINCE 1970S TO NOW.
AND THE THESIS THERE IS THAT IN MANAGE WAYS THE FORM OF
THIS CURRENT CRISIS IS DICTATED VERY MUCH BY THE WAY
WE CAME OUT OF THE LAST ONE.
THAT THE PROBLEM BACK HAD THE 1970S WAS EXCESSIVE POWER OF
LABOR IN RELATIONSHIP TO CAPITAL,
THAT THEREFORE THE WAY OUT OF THE CRISIS LAST TIME WAS
TO DISCIPLINE LABOR.
AND WE KNOW HOW THAT WAS DONE.
IT WAS DONE BY OFFSHORING.
IT WAS DONE BY -- AND REAGAN AND IT WAS DONE BY A MERE
LIBERAL DOCTRINE.
IT WAS DONE BY ALL KINDS OF DIFFERENT WAYS.
BUT BY 1985 OR '86 THE LABOR QUESTION, ESSENTIALLY,
HAD BEEN RESOLVED FOR CAPITAL.
IT HAD ACCESS TO ALL OF THE WORLD'S LABOR SUPPLIES.
NOBODY IN THIS PARTICULAR INSTANCE BESIDES GREEDY UNIONS
IS THE ROUTE OF THE CRISIS.
NOBODY THIS INSTANCE IS SAYING IT HAS ANYTHING TO DO WITH
EXCESSIVE POWER OF LABOR.
IF ANYTHING, IT'S THE EXCESSIVE POWER OF CAPITAL.
AND IN PARTICULAR, THE EXCESSIVE POWER FINANCE
CAPITAL, WHICH IS THE ROOT OF THE PROBLEM.
NOW, HOW DID THAT HAPPEN?
WELL, WE HAD BEEN, SINCE THE 1970S,
IN A PHASE OF WHAT WE CALL WAGE REPRESSION.
THAT WAGES HAVE BEEN REMAINED STAGNANT.
THE SHARE OF WAGES IN NATIONAL INCOME RIGHT THROUGHOUT
THE OCD COUNTRIES HAS STEADILY FALLEN.
IT'S EVEN STEADILY FALLEN IN CHINA OF ALL PLACES.
SO THAT, THERE ARE LESS AND LESS BEING PAID OUT IN WAGES.
WELL, WAGES TURNOUT TO BE ALSO THE MONEY, WHICH BUYS GOODS.
SO IF YOU DIMINISH WAGES THEN YOU'VE GOT A PROBLEM WITH --
WHERE'S YOUR DEMAND GOING TO COME FROM?
AND THE ANSWER WAS, WELL, GET OUT YOUR CREDIT CARDS.
WE'LL GIVE EVERYBODY CREDIT CARDS.
SO WE'LL OVERCOME IF YOU LIKE -- THE PROBLEM EFFECTIVE
DEMAND BY ACTUALLY PUMPING OUT THE CREDIT ECONOMY.
AND AMERICAN HOUSEHOLDS, BRITISH HOUSEHOLDS,
THE WORLD ROUGHLY TRIPLED THEIR DEBT OVER
THE LAST 20, 30 YEARS.
AND A VAST AMOUNT OF THAT DEBT, OF COURSE,
HAS BEEN WITHIN THE HOUSING MARKET.
AND OUT OF THIS COMES A THEORY, WHICH IS VERY,
VERY IMPORTANT, THAT CAPITALISM NEVER RESOLVES
IT'S CRISIS PROBLEMS.
IT MOVES THEM AROUND GEOGRAPHICAL.
AND WHAT WE'RE SEEING RIGHT NOW IS A GEOGRAPHICAL
MOVEMENT OF THAT.
EVERYBODY SAYS, WELL, OKAY, EVERYTHING IS BEGINNING TO
RECOVER IN THE UNITED STATES AND THEN GREECE GOES ***.
AND EVERYBODY -- WHAT ABOUT THE PIGS, YOU KNOW?
AND IT'S INTERESTING.
YOU HAD A FASTEN CRISIS -- IN A FINANCIAL SYSTEM,
YOU'VE SORT OF HALF RESOLVED THAT,
BUT AT THE EXPENSE OF A -- DEBT CRISIS.
ACTUALLY IF YOU LOOK AT THE ACCUMULATION PROCESS OF
CAPITAL, YOU SEE A NUMBER OF LIMITS AND A NUMBER OF
BARRIERS.
AND THERE'S A WONDERFUL LANGUAGE THAT MARKS USES IN
THE GRUNDRISSE, WHERE HE TALKS ABOUT THE ROMAGE
CAPITAL CAN'T BUY A LIMIT.
IT HAS TO TURN IT INTO A BARRIER,
WHICH IT THEN CIRCUMVENTS OR TRANSCENDS.
AND THEN WHEN YOU LOOK AT THE ACCUMULATION PROCESS YOU LOOK
AT WHERE THE BARRIERS AND LIMITS MIGHT LIE,
AND THE SIMPLE WAY TO LOOK AT IT IS TO SAY LOOK,
A TYPICAL CIRCULATION PROCESS OF A ACCUMULATION GOES LIKE
THIS: YOU START WITH SOME MONEY,
YOU GO INTO THE MARKET AND YOU BUY LABOR POWER,
MEANS OF PRODUCTION, THEN YOU PUT THAT -- THEM TO WORK WITH
A GIVEN TECHNOLOGY AND ORGANIZATIONAL FORM,
YOU CREATE A COMMODITY, WHICH YOU THEN SELL FOR
THE ORIGINAL MONEY PLUS A PROFIT.
NOW, YOU THEN TAKE PART OF THE PROFIT AND YOU RECAPITALIZE IT
INTO AN EXPANSION FOR VERY INTERESTING REASONS.
NOW, THERE ARE TWO THINGS ABOUT THIS.
ONE, IS THERE ARE A NUMBER OF BARRIER POINTS IN HERE.
HOW IS THE MONEY GOT TOGETHER AT THE RIGHT PLACE,
AT THE RIGHT TIME, IN THE RIGHT VOLUME?
AND THAT TAKES FINANCIAL INGENUITY.
SO THE WHOLE HISTORY OF CAPITALISM HAS BEEN ABOUT
FINANCIAL INNOVATION.
AND FINANCIAL INNOVATION HAS THE AFFECT OF ALSO
EMPOWERING THE FINANCIERS.
AND THE EXCESSIVE POWER OF THE FINANCIERS CAN SOMETIMES --
THEY DO GET GREEDY.
NO QUESTION ABOUT IT.
AND IF YOU LOOK AT FINANCIAL PROFITS IN THE UNITED STATES,
THEY WERE SORING AFTER 1990.
THEY WERE GOING UP LIKE THIS.
PROFITS IN MANUFACTURE WERE COMING DOWN LIKE THIS.
AND YOU COULD SEE THE IMBALANCE IN THIS COUNTRY.
I THINK THE WAY IN WHICH THIS COUNTRY HAS SIDED WITH THE
CITY OF LONDON AGAINST BRITISH MANUFACTURING SINCE THE 1950S
ONWARDS HAS HAD VERY SERIOUS IMPLICATIONS FOR THE ECONOMY
OF THIS COUNTRY.
YOU'VE ACTUALLY SCREWED INDUSTRY IN ORDER TO KEEP,
YOU KNOW, FINANCIERS HAPPY.
ANY SENSIBLE PERSON RIGHT NOW WOULD JOIN AN ANTICAPITALIST
ORGANIZATION.
AND YOU HAVE TO.
BECAUSE OTHERWISE, WE'RE GOING TO HAVE THIS CONTINUATION.
AND NOTICE IT'S A CONTINUATION OF ALL SORTS
OF NEGATIVE ASPECTS.
FOR INSTANCE, THE RACKING UP OF WEALTH,
YOU WOULD HAVE THOUGHT THE RISES WOULD HAVE STOPPED THAT.
ACTUALLY MORE BILLIONAIRES IN INDIA LAST YEAR THAN EVER.
THEY DOUBLED LAST YEAR.
THE WEALTH -- THE RICH, I MEANT -- I READ SOMETHING
THIS MORNING.
THIS COUNTRY HAS ACCELERATED.
JUST LAST YEAR, WHAT HAPPENED WAS THE LEADING HEDGE FUND
OWNERS GOT PERSONAL REMUNERATIONS OF $3 BILLION
EACH IN ONE YEAR.
NOW, I THOUGHT IT WAS OBSCENE AND INSANE,
BUT A FEW YEARS AGO WHEN THEY GOT 250 MILLION.
BUT THEY'RE NOW HAULING IN 3 BILLION.
NOW, THAT'S NOT A WORLD I WANT TO LIVE IN.
ASK IF YOU WANT TO LIVE IN IT, BE MY GUEST.
I DON'T SEE US DEBATING, DISCUSSING THIS.
I DON'T HAVE THE SOLUTIONS.
I THINK I KNOW WHAT THE NATURE OF THE PROBLEM IS.
AND UNLESS WE'RE PREPARED TO HAVE A VERY BROAD BASED
DISCUSSION THAT GET IT AWAY FROM, YOU KNOW,
THE NORMAL KIND OF PROBLEM YOU GET HAD THE POLITICAL CAMPAIGN
AND, YOU KNOW, EVERYTHING IS GOING TO BE OKAY NEXT YEAR
IF YOU VOTE FOR ME.
IT'S CRAP.
YOU SHOULD KNOW IT'S CRAP.
AND SAY IT IS.
AND WE HAD A DUTY, IT SEEMS TO ME -- THOSE OF US WHO ARE IN
ACADEMICS AND SERIOUSLY INVOLVED IN THE WORLD,
TO ACTUALLY CHANGE OUR MOTIVE THINKING.