[DEBATE] : The Crisis of the Capitalist World - Prabhat Patnaik

[Yoshie Furuhashi]

Outstanding!  The last four paragraphs are the best summary of the
current conjuncture.  The entire article came under 1,200 words, too.
Prabhat Patnaik is great.
Yoshie

On Wed, Jan 14, 2009 at 4:21 AM, Miles Teg <b.miles.teg at gmail.com> wrote:
> The Crisis of the Capitalist World
> Prabhat Patnaik Printable Version
<snip>
> Two broad approaches have come to the fore among the governments in
> capitalist countries for tackling the crisis: the first of these emphasizes
> fiscal expansion by the capitalist States. But expansion by any single
> capitalist State, if undertaken in isolation, will have its effects largely
> "leaking" out of the economy (to a point where the benefits accruing to
> other countries would be greater than to itself). Because of this, the
> expansion will have to be a coordinated one among several capitalist States,
> or else the fiscally-expanding economy will be tempted to put up
> protectionist barriers which will exacerbate conflicts and compound the
> problem. But any such coordinated fiscal expansion, or indeed any fiscal
> expansion for that matter, will have to be based on control over
> cross-border financial flows, i.e. on the mobility of globalized finance,
> since, otherwise, large-scale and speculative shifts of finance from one
> country to another can easily destabilize fiscal policy.
>
> The second approach is to avoid doing anything positive, to avoid fiscal
> expansion, merely to support the financial system, and to wait for the next
> "bubble" to come along. This is the approach that Herbert Hoover the
> American President before Franklin Roosevelt had adopted, which had the
> effect of prolonging and worsening the crisis, and the approach that George
> Bush has been inclined towards.
>
> Not surprisingly, the first of these approaches is opposed by finance
> capital while the second of these is favoured by it. And again, not
> surprisingly, the first approach has been mooted by European Social
> Democracy in general and by the British Labour government, while the second
> is the favoured one among all Right-wing governments.
>
> At one point of time it appeared that the capitalist world was veering
> around towards a coordinated fiscal expansion, and even Bush started talking
> about it. That was in the immediate aftermath of the collapse of investment
> banking on the Wall Street, when the reputation of finance capital was down
> in the dumps and an anti-finance capital sentiment was sweeping the
> capitalist world. Since then however the Right (representing the interests
> of finance capital) has managed to regroup itself. Germany has debunked talk
> of fiscal expansion; and the British Tories, after initially supporting it,
> have opposed Gordon Brown's fiscal expansion plans. Fiscal expansion
> prospects in other words have again receded to the background, and it has
> become obvious once more that the world will remain steeped in crisis (until
> some new "bubble" comes) unless the power of finance is broken. But that in
> effect would mean going beyond contemporary capitalism to a new and humane
> order.
>
> January 1, 2009.
>
> http://www.networkideas.org/news/jan2009/news01_Capitalist_World.htm
>
>
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