Dictionary of Revolutionary Marxism

—   Gl - Gn   —


GLASS-STEAGALL ACT
A law passed by the U.S. Congress in 1933 which separated the more risky forms of banking (“investment banking”) from ordinary commercial and savings banking. It was recognized in the
Great Depression that the combination of these two forms of banking had aggravated the financial aspects of that great economic crisis, and led to the failure of many more banks and the loss of savings deposits for millions of people.
        However, by the 1990s the ruling class had forgotten this lesson. Their unscientific and totally erroneous economic theory convinced them that great economic crises could no longer occur in the capitalist system. This, combined with their enormous greed and desire to gamble with people’s savings, led to the repeal of many important provisions of Glass-Steagall Act in 1999 at the hands of the Republican-controlled Congress and a Democrat President (Bill Clinton) who remarked: “This [repeal] legislation is truly historic. It is true the Glass-Steagall law is no longer appropriate to the economy in which we live.” [“Clinton Signs Legislation Overhauling Banking Laws”, Dow Jones News Service, Nov. 12, 1999.] A mere 8 years later the “Great Recession” began (the early stages of a new depression), and the renewed merger of ordinary banking and investment banking once again greatly aggravated the financial aspects of the crisis. (It is true however, that the repeal of the Glass-Steagall Act was mostly just a formality; the banking industry had pretty much been ignoring it—with the tacit approval of the government—for at least a decade.)

GLBT
A much less-common variation on the acronym
LGBT, referring collectively to people who are lesbian, gay (homosexual), bisexual or transgender.

GLOBAL DEBT
Capitalism can only function through the continual expansion of debt: consumer debt, business debt, and government debt. The most basic reason for this is that those who actually produce wealth (the working class) are only paid in wages for a fraction of the wealth they produce, and therefore—as consumers—can only buy back all that they produce by going ever deeper into debt. Growing business and government debt, though not quite as logically necessary, also become indispensable in practice to a great degree. (See:
Keynesian Deficits). Consequently, in the entire capitalist world, and in between the catastrophic financial collapses during major capitalist overproduction crises, debt must continue to grow, and to grow at a generally ever increasing pace.
        In major countries this expansion of debt becomes enormous. And on a world scale it eventually becomes truly colossal! According to the Institute of International Finance, based in Washington, D.C., global debt reached $246.5 trillion in the first half of 2019. This is 318 percent of the world’s annual GDP. This comes to $32,500 for every man, woman and child on earth! Of this grand total, the collective debt of the advanced capitalist countries is $177 trillion, and the debt of the “developing nations” is about $69 trillion. These amounts are very near to the limit that is possible even under the wild debt growth typical of (and necessary to) capitalism. It strongly suggests that a new world financial crisis is very near, and one leading to a new world capitalist depression.

[After citing the global debt figures mentioned above, the economist Alexander Losev continues:]
        “However, despite the unprecedented growth of world debt in the past ten years after the 2008 crisis, investment activity in the real economy is declining, growth in the world economy and international trade is slowing and the risk of a global recession is on the rise. The accumulated aggregate debt is becoming a real threat to the stability of the global financial system.
        “Credit financing has become the main, if not the only means of maintaining global consumer demand and a major impetus for the growth of stock markets and economic advance in general. The post-industrial model with a high level of automation and the transfer of production to countries with cheap labor and [the transfer of] profit centers to tax havens has led to a sharp decline in the share of human labor in the end product. Now owners of capital and means of production share much less with their workers and states. [I.e., much less of the total value added by production now goes to wages and taxes. —Ed.] Under the circumstances, governments must continuously increase their national debt to finance budget deficits, while the population has to take out loans to maintain existing living standards because of falling revenues.
        “Another problem is that now global debt is growing faster than the world economy, and each new percent of economic growth is matched by an additional increase in the aggregate debt by 1.5 to 2 percent. Deceleration of credit financing for various reasons, including a decline in economic acitivity due to trade wars, a shortage of liquidity and/or interest rate increases could instantly lead to the stagnation of the world economy. It is only the incredibly soft money-and-credit policy of the world’s major central banks that is keeping the entire economic and financial system afloat at this point.
        “The International Monetary Fund (IMF) noted that corporate debt-at-risk could rise to $19 trillion. In its half yearly report on the condition of world financial markets, the IMF warned that it will be impossible to service almost 40 percent of the corporate debt in the eight leading countries—the United States, China, Japan, Germany, Great Britain, France, Italy and Spain. The IMF notes that adaptive money-and-credit stimulation by central banks has helped companies accept financial risk, which led to ‘alarming’ debt levels with low loan quality.
        “It will be impossible to continue to expand loan capacity....
        “The unprecedented debt load of major economies, like the United States, China and the EU is fraught with a disastrous threat for the entire world. This could lead to a disaster that will by far exceed the Great Depression if deleverage starts. In effect, this happens when a credit bubble bursts. A deleverage could happen not because banks will run out of money for new loans but because borrowers may not have an opportunity to refinance debt and redeem loans. As the 2007-2008 America mortgage crisis showed, defaults totaling $1.3 trillion could trigger a domino effect with mass-scale bankruptcies and blowout sales of collateral that’s rapidly losing its value.
        “Since the gobal debt has reached $246.5 trillion, neither governments nor central banks will have enough resources to repurchase liabilities and write off debt as they did during the 2008 crisis when they helped banks, pension and investment funds, companies and individuals that were rapidly losing assets. In addition, considering that the market for currency and loan derivatives exceeds $600 trillion (about $545 trillion in the United States alone), it’s clear that there are several ticking bombs.
        “It is only a matter of time before a disastrous crisis makes the Great Depression of the 1930s and the 2008 recession seem mild.”
         —Alexander Losev, “Is There a Threat of a New Global Economic Crisis?”, speaking at the Valdai Club (a Russian ruling class discussion group), Nov. 14, 2019, online at: http://www.valdaiclub.com/a/highlights/is-there-a-threat-of-a-new-global-economic-crisis/#

GLOBAL FINANCIAL ASSETS
The total
financial assets owned by anyone or any company or government organization over the entire world. Of course most of this is only what Marx called “ficticious capital”, not genuine real capital assets.
        In 2007 the global financial assets were estimated to be $196 trillion by the McKinsey Global Institute. [Mapping Global Capital Markets: Fifth Annual Report, October 2008] By September 2018 global financial assets had grown to $290 trillion! [Ruchir Sharma, New York Times, Sept. 19, 2018.]

GLOBAL FINANCIAL MARKETS

“After the fall of Lehman Brothers 10 years ago, there was a public debate about how the leading American banks had grown ‘too big to fail.’ But that debate overlooked the larger story about how the global markets where stocks, bonds and other financial assets are traded had grown worrisomely large.
        “By the eve of the 2008 crisis, global financial markets dwarfed the global economy. Those markets had tripled over the previous three decades to 347 percent of the world’s gross economic output, driven up by easy money pouring out of central banks. That is one major reason that the ripple effects of Lehman’s fall were large enough to cause the worst downturn since the Great Depression.
        “Today the markets are even larger, having grown to 360 percent of global gross domestic product, a record high. And financial authorities—trained to focus more on how markets respond to economic risk than on the risks that markets pose to the economy—have been inadvertently fueling this new threat....
        “To have any chance of anticipating and preventing the next downturn, regulators must look for the threats that have emerged since 2008. They need to recognize that the markets now play an outsized role in the economy, and their attempts to micromanage this vast sea of money have only pushed the risks away from big American banks and toward new lenders outside the banking system, particularly in the United States and China.
        “Markets have grown so large in part because every time they stumbled, central bankers rescued them with easy money. When markets rose sharply—as they have in recent years—the authorities stood by, saying they are not in the business of popping bubbles. Now, the markets are so large it is hard to see how policymakers can lower the risks they pose without precipitating a sharp decline that is bound to damage the economy. It’s a familiar problem: Like the big banks in 2008, the global markets have grown ‘too big to fail.’” —Ruchir Sharma, the Chief Global Strategist of Morgan Stanley Investments Management (a giant Wall Street firm), “Sowing the Next Downturn”, New York Times, Sept. 19, 2018, p. A-19.

GLOBAL GDP
The total
Gross Domestic Product (GDP) for all the countries of the world, for a given year. The Global GDP for 2008 was $61.3 trillion. However, in 2009 the global GDP dropped for the first time in decades, by 2.4% in real terms, to just $58.2 trillion. It then expanded again in succeeding years.
        However, as the chart at the right shows, this growth rate of world GDP has been gradually declining again in the aftermath of the 2008-9 financial crisis. That is to say, the world economic crisis is still developing. Note also that as of the 2nd quarter of 2013 China alone is responsible for about half of all the GDP growth in the entire world! This demonstrates how “dangerously dependent on China” the world is at present (as the Economist noted on Sept. 21, 2013), and how really weak the rest of the world capitalist economy has become.

“GLOBAL SOUTH”
See:
NORTH VS. SOUTH THEORY

GLOBAL WARMING
The rise in the average surface temperature of the Earth due to the emission of certain gases into the atmosphere which cause it to more efficiently trap the radiant energy from the sun, leading to a result similar to what occurs in a greenhouse. The most important such gas is carbon dioxide, much of which is now being released into the atmosphere by humans burning fossil fuels such as coal and petroleum.
        See also:
CLIMATE CHANGE,   SUNLIGHT

“The climate system could jump abruptly from one state to another with devastating effects.” —Wally Broecker, 1984. [Broecker, who died in 2019, was one of America’s leading climate scientists and is sometimes referred to as “the grandfather of climate science.” His early recognition here that there might well be qualitative leaps in the situation, rather than merely slow gradual change, was especially prescient. —Ed.]

GLOBALIZATION   [Economics]
‘Globalization’ is a much ballyhooed term in recent decades, but with capitalist roots that go back for centuries. There are a variety of meanings which the term can have or include, such as:
        •   The fairly rapid expansion of capitalism from its earliest centers of development in a few countries to almost all other countries and to virtually every corner of the world;
        •   The tendency toward the development of a single world market, where commodities from one country can be sold in other countries and where a more or less uniform world market price develops for commodities (allowing, however, for differing transportation costs, tariffs added, etc.);
        •   Reflecting this, the great expansion of world trade, and also the growing importance of the export of capital;
        •   The international integration of production of many of the more complicated products, wherein more and more products include components from many other countries; and
        •   The formation of international cartels, transnational corporations (TNCs) or
multinational corporations (MNCs), and a tendency toward oligopoly even internationally (though much less thoroughly so than within individual major capitalist countries).
        [More to be added... ]
        See also sub-topics below, and LOGISTICS REVOLUTION,   ULTRA-IMPERIALISM

“The need of a constantly expanding market for its products chases the bourgeoisie over the whole surface of the globe. It must nestle everywhere, settle everywhere, establish connections everywhere.
        “The bourgeoisie has through its exploitation of the world market given a cosmopolitan character to production and consumption in every country. To the great chagrin of Reactionists, it has drawn from under the feet of industry the national ground on which it stood. All old-established national industries have been destroyed or are daily being destroyed. They are dislodged by new industries, whose introduction becomes a life and death question for all civilized nations, by industries that no longer work up indigenous raw material, but raw material drawn from the remotest zones; industries whose products are consumed, not only at home, but in every quarter of the globe. In place of the old wants, satisfied by the production of the country, we find new wants, requiring for their satisfaction the products of distant lands and climes. In place of the old local and national seclusion and self-sufficiency, we have intercourse in every direction, universal inter-dependence of nations. And as in material, so also in intellectual production. The intellectual creations of individual nations become common property. National one-sidedness and narrow-mindedness become more and more impossible, and from the numerous national and local literatures, there arises a world literature.
        “The bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draws all, even the most barbarian, nations into civilization. The cheap prices of its commodities are the heavy artillery with which it batters down all Chinese walls, with which it forces the barbarians’ intensely obstinate hatred of foreigners to capitulate. It compels all nations, on pain of extinction, to adopt the bourgeois mode of production; it compels them to introduce what it calls civilization into their midst, i.e., to become bourgeois themselves. In one word, it creates a world after its own image.” —Marx & Engels, Manifesto of the Communist Party, Ch. I: MECW 6:487-8.

GLOBALIZATION — Exaggeration Of
Although the degree of the globalization of capital in the imperialist era is considerable, and of considerable importance both economically and politically, there have been tendencies at various times to overstate or exaggerate its extent and to forget that the basic situation in modern capitalism is still separate imperialist states ruled by competing bourgeoisies, and with economies which are still in important ways largely independent of each other.
        The first thing to note is that the degree of globalization of capitalism varies from one period to another, and not always by increasing. There have been two main periods of greatly expanding globalization in the history of capitalist imperialism, and both have occurred towards the end of what were overall long periods of development leading up to periods of crisis. The first period of the major expansion of globalization was the couple decades leading up to World War I. But not only did that war strongly interrupt and to a considerable degree reverse that strong globalization trend, but perhaps just as much so did the
Great Depression of the 1930s that followed a decade after World War I. During this period capitalist economies seriously weakened, tariffs increased, and world trade and other aspects of globalization (such as the export of capital) actually declined until the end of the Second World War.
        After World War II a gradual expansion of world trade began again, along with the new huge spurt in the export of capital from the U.S. and later on also from the other major economies (including Britain, Japan and Germany). But especially from the 1980s on the expansion of all the various aspects of globalization picked up greater speed and strength. This was the second major period of expanding globalization.
        Although some theorists, especially those representing the bourgeoisie, began to view this as a “permanent” new feature of world capitalism, there is already important evidence that a new decline in many aspects of globalization has been developing. The first serious jolt occurred with the world financial crisis in 2008-9 and the first decline in world trade in decades. But there are also other indications (as mentioned in the quotation below), and all this will become a much more serious weakening of globalization as the world overproduction crisis continues to develop toward a new intractable depression.

Globalization Going Backwards: The world is less connected than it was in 2007.
        “How integrated countries are with the rest of the world varies more than you might expect. And the world is less integrated in 2012 than it was back in 2007. These are the conclusions of the latest DHL Global Connectedness Index, which found that the Netherlands is the most globalized of 140 countries (see chart)....
        “The index measures both the depth of a country’s connectedness (i.e., how much of its economy is internationalized) and its breadth (how many countries it connects with). The economic crisis of 2008 made connections both shallower and narrower. The depth measure has rebounded since 2009, and is now 10% higher than it was in 2005—though it remains below what it was in 2007. But the breadth of connectedness has continued to slip, and is now 4% lower than in 2005.
        “At first, as the economic crisis took hold, both trade and capital flows became less globalized, but since 2009 trade has bounced back whereas capital flows have continued to become less globalized, says DHL. This seems to reflect a fall in the number of places into which companies from any given country are willing to put their foreign direct investment.
        “... Mr. [Pankaj] Ghemawat [of the IESE Business School, who oversees the index] conducts surveys of popular views of globalization. He finds that people consistently assume that the world is much more interconnected than it really is.” —The Economist, Dec. 22, 2012, p. 105.

“GLOBOTICS”
Globalization and robotics considered together and as complimentary phenomena. This is a recent buzzword in bourgeois economics.

“Globalization and robotics (globotics) are transforming the world economy at an explosive pace. While much of the literature has focused on rich nations, the changes are quite likely to affect developing nations in important ways. The premise of [this] paper—which should be regarded as a thought-piece—is based on an extreme thought experiment. What does development look like when digitech [digital technology] has rendered manufacturing jobless and many services freely traded? Our conclusion is that the service-led development path may become the norm rather than the exception; think India, not China. Since success in the service sector is based on quite different factors than success in manufacturing, development strategies and mindsets may have to change. This is an optimistic conclusion since it suggests that developing nations can directly export the source of their comparative advantage—low-cost-labor—without having to make goods with that labor.”
         —Summary of the paper by Richard Baldwin & Rikard Forslid, “Globotics and Development: When Manufacturing is Jobless and Services are Tradable”, NBER Working Paper No. 26731, Feb. 2020.
         [It is interesting to see bourgeois economists try to think about how the international imperialist exploitation of cheap foreign labor might still “hopefully” continue even after most manufacturing work is fully automated! I think they will find, however, that most service work will also soon be automated too. And perhaps they should start to ponder just who the capitalist corporations can sell their goods and services to once the preponderance of work is automated and the huge mass of former workers have little or no money to spend on anything. —S.H.]

GLUT
See:
OVERPRODUCTION

GMO
See:
GENETICALLY MODIFIED ORGANISM

GNOSTICISM
See also:
DEMIURGE

Gnostics—followers of mystical, religious-philosophical doctrines during the early centures of our era. They tried to unite Christian theology and various theses of Platonic, Pythagorean and Stoic philosophy.” —Note 107, LCW 38.

GNP
See:
GROSS NATIONAL PRODUCT




Dictionary Home Page and Letter Index

MASSLINE.ORG Home Page