9.1.12

The World Entered The Second Phase Of The Crisis

The World Entered The Second Phase Of The Crisis trGgl
Everywhere resumed the offensive right. She is limited to the issue of fiscal deficits and rising public debt. She pretends not to see that budget austerity, and the transfer of the debt burden of the popular classes that you like, can only result in recurrence in a further contraction in activity. This is the second phase of the crisis. This second phase will not last. The new dip into recession will require new policies, says French economist Gérard Duménil in an interview with Jornal da Unicamp (University of Campinas).
The French economist Gérard Duménil is the author of several books and essays on contemporary capitalism. This year he published, in collaboration with Dominique Lévy, the book The crisis of neoliberalism (Harvard University Press, 2011).
Duménil participated in a conference on the current crisis, conducted by the Center for Marxist Studies (Cemarx), within the scope of the graduate program in Political Science Institute of Philosophy and Humanities (IFCH) at Unicamp.
Jornal da Unicamp - You come to investigate the long neoliberal capitalism. According to his analysis how to characterize this current pace of capitalism?
Gérard Duménil - Neo-liberalism is the new stage in capitalism which he joined during the transition from the 70 and 80. Me and Dominique Levy talks of a new "social order". With this term we designate the configuration of the relative powers of social classes, domination and commitments. Neoliberalism is characterized, in this way, by strengthening the power of the capitalist class in alliance with the class of managers (cadres), especially in the tops of the hierarchies and financial sectors.
During the decades after World War II, the capitalist classes saw their power and their income is significantly reduced in most countries. In short, we might speak of an order "social democrat". The circumstances created by the 1929 crisis, the Second World War and the international strength of the labor movement had led to the establishment of this social order relatively favorable to economic development and improve the lives of the working class, workers and subordinate employees. The term "social" to characterize this social order is applied, of course, better in Europe than the United States.
With the establishment of the new neoliberal social order, the functioning of capitalism radically transformed: a new discipline was imposed on the workers as regards working conditions, purchasing power, social protection and so on. In addition to deregulation (particularly financial ), opening commercial borders and free movement of capital internationally, freedom to invest abroad. The latter two will put all the world's workers in a competitive situation, whatever the comparative wage levels in different countries.
In international relations, the first postwar decades, even in the old order "social democratic" imperialist practices were marked by the central countries, in economic terms, pressure on prices of raw materials and export of capital; at the political level, corruption, subversion, and war. With the advent of neoliberalism, imperialist forms were renewed. It is difficult to judge in terms of intensity, by comparison. In economic terms, the explosion of foreign direct investment during the 1990s undoubtedly multiplied the flow of benefits extracted from the peripheral countries of the capitalist classes of the center. The fact that the periphery countries wishing to receive such investments does not alter the imperialist nature of these practices, we know that all workers "want" to be exploited rather than unemployed.
When the mid-90's, we introduced this interpretation of neoliberalism in terms of class, it aroused little interest. But the explosion of social inequalities gave this interpretation of the strength of the evidence. The particularity of Marxist analysis is the reference to the least advantaged social groups. This character class is registered in all neoliberal practices, and even express leftist Keynesians now, in those terms. Refusal to this interpretation, however, still remains, and many do not accept the role we attribute to the managers (cadres, managers or executives N.dT.) in neoliberal social order.
Among Marxists, still refuses to control the means of production in modern capitalism are insured jointly by the capitalist class and the class of managers (cadres), which makes the latter category a second component of the classes superiors. This denial is even more puzzling when one bears in mind that neoliberalism income from higher levels of managers expanded more than the income of the capitalists.
JU - For some authors, neoliberalism was an inevitable adjustment caused by the state's fiscal crisis, for others the result was also inevitable, of globalization.
Gérard Duménil - The explanation of neoliberalism by "fiscal crisis" and often also inflation is the right explanation, is a defense of capitalist interests. She speculated the inconsistency of the political blocs that led the post-war social order. They were unable to handle the crisis of the 70 bed and prepared for neoliberalism. The same applies to the explanation offered by neoliberalism as a result of globalization. This argument reverses the causality. What neoliberalism is to guide globalization was an old trend towards new goals and accelerate their progress, opening the way to the "neoliberal globalization". The global justice movement fought for another globalization, solidarity and not based on exploitation for the benefit of a minority.
JU-You have just published, with his colleague Dominique Levy, a book about the current economic crisis. In its evaluation, what is the nature of this crisis?
Gérard Duménil - The current crisis is one of the four major crisis - structural crisis - that capitalism went through since the late nineteenth century: the crisis of 1890, the 1929 crisis, the crisis of the 1970s and the current crisis that began in 2007/2008. These crises are episodes of disturbance with a duration of about a dozen years (for the first three). That occur with a frequency of about 40 years and separate social orders that I remembered in response to the first question. The first and third of these crises, the decades of 1890 and 1970, continued in phases of falling rate of profit and can be described as a crisis of profitability. The other two crises of 1929 and the present, we call as "financial crisis of hegemony." They are big explosions that occur as a result of practices of the upper classes in order to increase their income and power. All procedures of neoliberalism are here in action: financial deregulation and globalization. The first is obvious, but globalization was also, as will be a key factor of the current crisis.
The fall in the rate of profit and uncontrolled explosion of the practices of the capitalist classes are two major types of explanation of the great crisis in the work of Marx. The first type is well known.
In Book III of Capital, Marx defends the thesis of the existence of a "tendency of the rate of profit" inherent in the nature of technological change in capitalism (the difficulty of increasing productivity at work, without making big investments expensive, which Marx described as the "elevation of the organic composition of capital").
Note that Marx explicitly refute the charge of the drop in the rate of profit to increased competition. (The second major type of explanation of the crisis and sketch appears in the writings of Marx in the early 1840). In the Communist Manifesto, Marx describes the capitalist class as sorcerers' apprentices, developing capitalist mechanisms in forms and degrees dangerous and losing, finally, control over the consequences of their actions. The financial aspects of the current crisis sent directly to the analysis of "fictitious capital", which Marx devoted many developments in the second book of Capital, developments that echo the ideas in the Manifesto. In a rather strange way, some Marxists only accept the explanation of the great crisis due to falling profitability, excluding any other explanation, multiply and become ill-founded calculations.
But the current crisis is not just a financial crisis. It is the crisis of unsustainable social order, neoliberalism. This crisis, in the center of the system should happen anyway, sooner or later, but arrived in a particular way in 2007/2008, appearing in the United States.
Two types of mechanisms converged. We find, on the one hand, the fragility induced in all countries by the practices of neoliberal financialization and globalization (particularly financial) practices promoted by the unbridled pursuit of profit growing by the ruling classes, reinforced by the rejection of the regulation. The U.S. central bank, in particular, lost control of interest rates and the ability to conduct macroeconomic policies as a result of financial globalization. Moreover, the crisis was the effect of U.S. economic history, a history of accumulated imbalances, the United States could maintain its international hegemony because - contrary to Europe as a whole, did not know such imbalances.
Since 1980, the rate of accumulation of capital in the United States slowed in the territory of the country, while increased foreign direct investment. This is necessary to add: a growing foreign trade deficit, a large increase in consumption (from most-favored layers) and an equally growing indebtedness of households. The foreign trade deficit (the excess of imports versus exports) fed a flow of dollars for the rest of the world that was to only use the purchase of U.S. securities, leading to the financing of the U.S. economy by foreigners a "debt" vis-à-vis foreigners, simplifying a bit.
For economic reasons, I will not explain here, the growth of external debt should be offset by the domestic debt, the family and the state, in order to maintain activity in the territory. This was done by encouraging household debt by the credit policy and deregulation, government debt could have replaced the family debt but that was against neoliberal practices prior to the crisis. Families creditors (banks and others) will not keep original loans, because the resold in the form of securities (bonds), half, more or less, was purchased by the challenge of the world.
From time given to families beyond their ability to repay the debts, defaults to the payment of maturity multiplied since the beginning of 2006. The devaluation of these bad loans financial destabilized the fragile edifice of the United States and the world, without the Central Bank of the United States was able to restore balance in the context of deregulation and globalization that he had favored . This was the trigger, but not the core of the crisis - a combination of factors (neoliberal madness in this domain) and real (globalization, on U.S. consumption and foreign trade deficit that country).
JU - You said in your lectures in Brazil that the economic crisis had entered a second phase. How has been developing the crisis?
Gérard Duménil - The world entered the second phase of the crisis. It is easy to see why. The first stage came in the fall of 2008, when they dropped the big U.S. financial institutions, which started the recession and the crisis spread to the rest of the world. The lessons of the crisis of 1929 were well learned. Central banks intervened massively to prop up financial institutions (for fear of a repeat of the banking crisis of 1932) and State budget deficits reached exceptional levels. But these Keynesian measures, stimulating demand, could only have the effect of temporary support activity.
The governments of the countries of Central had not yet woken up to the structural nature of the crisis. They act as if the crisis had been purely financial, and outdated, however, measures only create a Keynesian recipes suspension. No significant anti-neoliberal half was taken in the central countries. They're just policies to strengthen the exploration of the popular classes.
In the United States, Barak Obama administration drafted a law, the Dodd-Frank, to regulate the financial practices, but Republicans blocked their entire application. In other areas, such as business administration, export, foreign trade deficit, nothing was done. In Europe, the crisis was identified as the crisis of neoliberalism. Germany is presented as having demonstrated the sustainability of the neoliberal path. The crisis is attributed to the failure of execution of certain States, particularly Greece and Portugal.
Everywhere resumed the offensive right. She is limited to the issue of fiscal deficits and rising public debt. She pretends not to see that budget austerity, and the transfer of the debt burden of the popular classes that you like, can only result in recurrence in a further contraction in activity. This is the second phase of the crisis. This second phase will not last. The new dip into recession will require new policies.
Unlike Europe, the United States launched a massive scale direct financing of public debt by the central bank (the quantitative easing). Much more will be needed, although the right. We have difficulty seeing how Europe can escape it.
JU-are known to have beaten the economic crisis stronger, at least so far, in the U.S. and Europe. In the 1990s, however, the economic crisis were stronger in the periphery. Why this difference? How the current crisis is manifested in different regions of the world?
Gérard Duménil - Until the second half of the 1990s, neoliberalism was raging in the world, particularly in Latin America and Asia. Even today, the growth rates in Latin America are still lower than that of the first decades after World War II and this despite the massive reduction in real wages, which were reduced by half during the crisis 1970 in some countries in the region. In the decade of 1990 - and 2001 in Argentina - the progress of neoliberalism led to major crises, the crisis that Argentina is a case in point.

The world entered a new phase now. The transition to neoliberalism provokes a kind of "divorce" in the countries of Central, between the interests of the upper classes and the economic territory.
The U.S. case is spectacular. As I said, the country's major companies are investing less in the territory of the country and increasingly around the world. Globalization has led to a shift in the location of industrial production to the periphery: in Asia, Latin America and even in some countries in SSA.
JU-The proposed policies to overcome the crisis by the two largest in the European Union reiterated neoliberal formulas. Markets intimidate governments, Sarkozy and Merkel are demanding more and more budget cuts. Why insist on a policy that, for many observers, is the origin of the crisis? What results are achieved through the implementation of such policies?
Gérard Duménil-I do not believe at all that budget discipline has been one of the causes of the crisis. This is the expression of a Keynesian belief naive, so naive as the belief in the ability of these policies to bring an end to the crisis, regardless of the anti-neoliberal changes needed. However, in this context, policies that tend to eliminate the deficit will cause a further drop in production.
JU-Many analysts have emphasized that parties, whether right or left, do not differ much on proposals to tackle the crisis. Moreover, in several European countries such as England, Spain and Portugal, the right was favored electorally by the economic crisis. Do social movements could build an alternative power? What could be a popular program to address the current crisis?
Gérard Duménil - We are not talking about the politics of neoliberalism. The alliance at the summit of the social hierarchy among the capitalist class and the class of managers (cadres) achieved by various mechanisms to the lower classes away from politics "politicking". I mean, the games away from political parties and pressure groups. For classes only was the fight in the street.
It is necessary to enter the scene to social groups that are in the "periphery" of the managers (tables): the intellectuals and professional politicians. In the post-war social compromise, relatively large fractions of these groups were in favor of the alliance with the popular classes (which they did not belong), which supported them in their own fields of activity.
In the context of the collapse of world labor movement, the capitalist classes were able, with neoliberalism, sealing an alliance with the kinds of managers - using the remedy of compensation, clearly - leading these groups gradually peripherals (University provides many illustrations of this phenomenon) in undertaking social conquest of neoliberalism. The proportion of social groups motivated towards an alliance with the popular classes was significantly reduced, being limited to certain groups "enlightened" to which I myself belong.
The suffering of the masses does not reach the group of managers and, at the political level, there is no large game left. In France it is known in what became the Socialist Party, won entirely by the "globalization", a term to hide neoliberalism. Something similar could be said of the Democrats in the U.S. and leave yourself to judge the situation in Brazil in this regard.
Political life - politicking - is reduced to two games alternating between non-equivalent, but the party that says the left is unable to propose an alternative, let alone implementation. The vote comes down to what we call in France the "punishment vote". Going right to the left in Spain, for example, because the left was in power during the crisis, the right has, of course, no superior ability to manage the crisis.
JU-Many observers have spoken of the possibility of extinction of the euro. Do you think this can happen? In its evaluation, what are the likely outcomes of the current crisis?
Gérard Duménil - Some countries leave the euro zone. This does not solve the debt problem of them, who would become unaffordable even after the devaluation of the new currency to replace the euro. The problem is the cancellation of the debt or its adoption by the Central Bank. The debt crisis has now reached Central European countries and these countries will need to be aware of the extent and true nature of the problem.
This refers to the characteristics of what we call "the third phase of the crisis." What policies will be taken before a new recession? How will managed the crisis in Italy and then in France? How does Germany respond to the pressure of 'markets' (IFIs)? One thing is certain: these debts can not be paid, requiring the transfer of these outside banks or heavy intervention in their management.
Now the point is the willingness of the governments of major countries of Europe, especially Germany, to strengthen European integration (instead of popping the euro area), which opposes the will of "deglobalization" of some . This debate lies the central question: What Europe? A Europe of the upper classes or a new commitment from the left.
Duménil Gérard is a researcher at the CNRS. His latest book, in collaboration with Dominique Lévy, is the crisis of neoliberalism (Harvard University Press, 2011).
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