ECCARIUS, Johann Georg [John George] (1818-1889)
A prominent figure in the German and international working-class movement, and tailor by trade. He was a member of the League of the Just, and later the Communist League, and a founder of the German Workers’ Educational Society in London. He participated in the inaugural meeting of the (First) International (1864-72), was the Council’s General Secretary (1867-71), Corresponding Secretary for America (1870-72), a delegate to all the International’s congresses and conferences, and a close associate of Marx. Unfortunately, late in life he spoiled this fine history by joining up with the reformist leaders of the British trade unions. [Info from MECW 20:523-4.]
Executive Committee of the Communist International. This was the central governing committee of the Communist International, or Comintern, in between its congresses.
A confused blending of diverse, inherently conflicting ideas, opposed political views, incompatible philosophical conceptions, incoherent combinations of theoretical premises, and the like.
In philosophy this often takes the form of attempts to combine materialism with philosophical idealism, as with the frequent attempts of bourgeois-influenced semi-Marxists to incorporate Kantian epistemological agnosticism or positivistic empiricism into their theories. (Lenin had to strongly combat this tendency among some of the Bolsheviks in his 1908 book Materialism and Empirio-Criticism.) In ethics, too, there have been frequent attempts to shoehorn Kantian absolutism (such as the notion of the categorical imperative) into the fundamental Marxian ethical theory based on collective interests of social classes.
In political economy one of the most common forms of eclecticism is the attempted merger of Keynesian theory with Marxism, as for example with the Monthly Review School.
And of course in politics itself there have been endless attempts by revisionists to combine bourgeois political theory in its many forms with Marxism, leading to things like the notion that revolution can be achieved “through the ballot box”; that socialism just means nationalization; that the dictatorship of the proletariat is no longer necessary under socialism; and on and on.
Eclecticism in its many forms within Marxism is a reflection of the fact that bourgeois ideas dominate our current society, and are even still part of the thinking of people as they turn toward revolution. As Lenin remarked, a person cannot live in a society and at the same time be totally free of it! An important way to combat eclecticism in our own thinking is to work to explore Marxist theory more deeply, to engage in serious and careful investigations of past theoretical struggles within Marxism, and to really focus on what the central dialectical contradictions are in any particular sphere of revolutionary Marxist theory. Combatting eclecticism and non-Marxist ideas within Marxism does not mean that Marxist theory can never be changed; but it does mean that we owe it to our revolutionary predecessors to only change the theory when there are very good and very well considered reasons for doing so. We must strive to maintain revolutionary Marxism (or Marxism-Leninism-Maoism) as the coherent overall social theory it has become through long and hard struggle.
See below and: TIPPING POINT (Quotation)
A current within the world socialist movement that seeks to align ecological concerns about environmental destruction and resource depletion with socialism in order to build an ecologically sustainable society that is also equitable and provides for the material needs and wants of the masses. Eco-socialism has often emphasized the need to eliminate economic growth and to instead redistribute society’s existing resources and technologies so that they meet the needs of the masses rather than the needs of capitalist profit. While this may be a feasible route for any revolution that occurs in the First World, a revolution that occurs in the Third World will certainly need a period of economic growth to secure the conditions for building socialism. Indeed, it may even be necessary for a while to enter into a New Democratic phase in which certain segments of the national bourgeoisie are allowed to engage in capitalism (though under the strict direction and limitations set down by the dictatorship of the proletariat). However, there is no reason why such growth cannot be done in a way that minimizes waste and pollution, and that at the same time the state and the masses are devising and already starting to implement new technologies, industrial and consumption practises, and educational campaigns that make environmental protection and the eventual elimination of material growth a serious goal. Certainly, with the environmental crisis today being perhaps the primary contradiction in the world, any socialism that emerges must necessarily and urgently address this crisis. Also related to this, the environmental hardships inflicted on oppressed nations as a result of capitalist accumulation in the First World provide an opportunity for socialists to crystallize in the minds of the world’s proletariat and peasantry that capitalism is leading humanity to catastrophe unless drastic action by the working class and its allies is taken.
Eco-socialism has been championed and elaborated on by such writers as John Bellamy Foster and Fred Magdoff, who have written extensively about the unsustainability of capitalism as a result of its basic imperative to accumulate. Such analyses place the environmental crisis in its proper context, instead of focusing upon the particular practices of certain enterprises or groups (which is the tact often chosen by commentators who see the problem not as being capitalism per se but as a particular variant of it, namely ‘consumerism’, which they think they can ameliorate with moralistic and individualistic pleas and appeals).
Eco-socialism has expressed one of its forms in the policies of President Evo Morales in Bolivia, where the government has sought to adopt programs that benefit the environment and that respect the interests and culture of its indigenous peoples, many of whom live a life much more in tune with direct reliance upon and respect for the environment. However, even in Bolivia, the difficulties of operating in an environment dominated by imperialist capital have become apparent, with the government being compelled to make many key concessions to imperialist capital (particularly with respect to mining operations that seek to extract the country’s vast lithium resources, ironically in order, among other things, to allow multinational corporations to build electric cars) and breaking several promises to its indigenous support base. This shows the limitations of a program that is not through-and-through revolutionary but is instead really reformist and remains tethered to and dependent upon the world capitalist market for its development (as well as, domestically, remaining within the realm of bourgeois parliamentary democracy). So long as capitalism remains the predominant economic system in the world, there can be no authentic solution to the environmental destruction that it wreaks. —L.C.
The application of statistical methods to the study of economic data and problems. Thus econometrics is more within the empirical tradition of classical political economy than is most of modern bourgeois economics.
The censorship of political ideas through economic means. This is the dominant method of political censorship in most countries in contemporary capitalist society.
It is the genius of bourgeois democracy that the ruling class is able to almost entirely prevent revolutionary ideas from reaching the great majority of the working class and masses (most of the time), not through making the expression of such ideas illegal or through overt forceful suppression and arrests, but rather through the simple means of owning almost all the media and means of communication: the radio and TV stations, the newspapers (especially the dailies), almost all the magazines, and even through their economic domination of the Internet and so-called “social media”.
“Money is such an effective censor in capitalist society that direct state-organized censorship is seldom required. A curtain of silence falls on all views that do not have the backing of moneyed interests concentrated at the apex of society. Within the dominant media the most brutal atrocities by the main agents of global power go unreported or if reported they are treated as anomalies, inexplicable happenings, instances of corruption or of the failure of values—never as the systematic outgrowth of capitalism and imperialism.” —John Bellamy Foster & Harry Magdoff, in a fundraising letter for Monthly Review, September 2005.
“It is true that the United States generally allows a relatively greater freedom of speech and freedom of the press than many other countries. But only in the sense that there is usually less suppression of publications and ideas here through laws and government force than in many other countries. The reason for this is that the U.S. ruling class has come close to perfecting the suppression of ideas it disapproves of through an alternative method; that is, through its control of the economic system and its nearly total control of the media and means of communication and education in the country. Thus, individuals can usually say what they like even if it goes against the interests and desires of the capitalist class, but still only on the condition enforced by the capitalist ownership and control of the media, that very few other people will ever get a chance to hear what the dissenters have to say. It is the genius of this evil system that it still effectively silences most dissent while loudly proclaiming the supposed freedoms of speech and the press!” —First paragraph on the U.S.A. page on BANNEDTHOUGHT.NET about the de facto banning of ideas in the United States.
See also below, and: CRISES—ECONOMIC, CRISIS THEORIES, DEPRESSIONS, FINANCIAL CRISES, GREAT DEPRESSION OF THE 1930s, OVERPRODUCTION CRISES, PANICS, POLYCRISIS, RECESSIONS
ECONOMIC CRISES — Global Synchronization Of
In the capitalist-imperialist era capitalist economic crises have tended to become more and more synchronized around the world. That is to say, even though the more shallow and limited short-term recessions might still be restricted to a single country, the most serious of these crises, including the Great Depression of the 1930s and the Great Recession of 2007-2009 (and beyond), have definitely become global. This, in itself, is an aspect of the more global character of finance capitalism in the imperialist era.
One recent study by bourgeois economists of world financial synchronization notes that “The co-movement in credit, house prices, and equity prices [stock prices] has reached historical highs in the past three decades. The sharp increase in the co-movement of global equity markets is particularly notable.” [Òscar Jordà, et al., “Global Financial Cycles and Risk Premiums”, June 2018, NBER No. 24677.] Although overproduction crises are fundamentally a matter of the overproduction of productive capital in the “real economy”, they almost always break out first in the financial sphere, as Marx explained. Thus the internationalization of finance means that the most serious overproduction crises now break out all around the world at more or less the same time.
ECONOMIC CRISES — Simultaneous Multiple Crises
Marx overwhelmingly focused on just one sort of economic crisis in capitalist society, namely, what he called overproduction crises. He pointed out that this type of economic crisis only occurs under capitalism; that such crises regularly recur in a cyclic fashion (with a typical period of roughly 5 to 10 years); and—as he and Engels mentioned in the Communist Manifesto—that there are very good reasons to think that over time they will get worse and worse. (This last point, however, has had to be somewhat modified in the capitalist-imperialist era, where it seems that the cycle of overproduction crises has split in two, with shorter-term crises mostly remaining quite mild, but the much less frequent long-term crises becoming ever more serious, and even downright dangerous to the continued existence of the capitalist system. See: Split-Cycle Theory )
But while overproduction crises are restricted to the capitalist era, Marx recognized full well that other sorts of economic crises are possible, and have occurred throughout history, such as those due to wars or civil unrest, or to general crop failures and other major natural disasters. And thus, in the capitalist era, and especially in the capitalist-imperialist era, it is actually possible and even quite common to have multiple different and simultaneous economic crises. The advent of the Covid-19 Pandemic led to severe economic problems around the world, especially in its first full year (2020), on top of the other already existing economic crises (which we will briefly list below). And in 2022, the Russia-Ukraine War has also caused an economic crisis not only in those two countries but to some degree extending also throughout Europe and beyond.
Since multiple simultaneous economic crises are possible, and are these days even rather common and often quite obvious, it is important that our analysis of the overall economic situation take all of these separate and overlapping crises and their various causes and effects into account. However, the record of our Marxist-Leninist tradition in this regard is not particularly impressive. In particular, the past obsession with the imagined permanent “General Crisis of Capitalism” in the imperialist era has greatly distorted past analyses. It has exaggerated the seriousness of the overall economic problems and situation in the better periods, and—by lumping periods of serious economic problems together with periods of not-so-serious problems—it has in effect downplayed those more serious periods. Moreover, it has made it more difficult to recognize the approach of a period of genuine general crisis as it is now truly starting to develop.
As one might expect, a particularly poor example of how this has been done was that by Gus Hall and the revisionist Communist Party of the USA in the late decades of the 20th century, in association with their Soviet state-capitalist and social-imperialist masters. The article “The Triple-Layered Crisis”, by Daniel Rubin, in their theoretical journal Political Affairs (June 1985), identifies three separate crises then affecting the U.S.: 1) The (perpetual) General Crisis of Capitalism, as always; 2) Something they call “the structural crisis of state monopoly capitalism”; and 3) The cyclical economic crisis then occurring in the 1980s (including stagflation, etc.). The second of these three proclaimed American capitalist crises was proven somewhat ironic when a mere 5 to 6 years later it was the Soviet Union and its bloc that completely collapsed due to the “structural” problems of actual state monopoly capitalism, rather than any complete collapse of American-style corporate monopoly capitalism so far.
What then are the actual layers of economic crises prevailing at the present time (late 2022)? We should at least recognize these important ones:
• The long-developing overproduction crisis which started at a low level around 1973 after the Post-World War II capitalist boom ended. This overproduction crisis then went through a several-decades “Long Slowdown” in which capital expansion in the advanced capitalist countries of the world proceeded at only half the rate during that Post-War boom. In the new 21st century this overproduction crisis has continued to gradually worsen into a long period of even weaker economic performance, or “in-and-out of recessions”, with the Great Recession of 2008-2009 (and beyond) being particularly severe. And this long-developing overproduction crisis still continues, and still continues to develop in the direction of a new outright intractable depression.
• Automation and the disappearence of jobs. Even more fundamental to capitalism than particular overproduction crises, there is also the continuing and overall rapid improvement in productivity which has been leading to the permanent loss of more and more jobs. It is true that, in the past, new sorts of jobs have then often arisen which made up for the jobs being lost. For example, with the advent of computers that eliminated many jobs, there were also new jobs which opened up in the manufacture and use of computers. However, a major turning point was reached around 1987 in the U.S., when new technology (including more and ever-improving artificial intelligence software) began to eliminate old jobs at an ever-faster rate than new jobs were being created. (See: AUTOMATION—The Claim that Automation Creates More Jobs than It Displaces)
• The ever-worsening economic problems resulting from climate change and global warming, including worsening droughts, floods, violent storms, and so forth. While it is true that many liberals tend to unduly focus more on this particular crisis than they do on the above two much more basic economic crises, still this is a serious matter in itself, which will inevitably become ever-more economically damaging as long as capitalism exists.
• The economic problems from the Covid-19 Pandemic, which were very bad indeed in the first year or two of the pandemic, though they still remain quite serious. Virtually all the other economic crises we are listing here are directly caused by the capitalist system, and/or arise out of its very essence. In the case of this pandemic it is “merely” the complete incompetence and insufficient concern for the welfare of the people on the part of the capitalist ruling class that is to blame, since—in order to keep their profit-making system running—they allowed the disease outbreak to get totally out of hand. (This often happens with other disease outbreaks too, such as AIDS.) Unlike the other sources of major economic problems listed here, those from the pandemic have been declining, and hopefully may almost disappear in the near future.
• Currently less important factors which still have some negative consequences for the American economy. Of course there are lots of other specific things contributing to the developing economic crisis in the U.S. today, including trade wars with China; billions lavished on fighting Russia in Ukraine; the general vast expenses to support U.S. imperialist dominance throughout much of the world; many serious types of pollution and the costs of dealing with them (or not dealing with them); etc., etc. Just about any one of these currently relatively minor factors could possibly suddenly become vastly more important in its negative effects on the U.S. economy. To give just one horrendous possibility, the U.S. imperialists could recklessly and inadvertently push the Russians into an interimperialist nuclear war.
So at present there are four main economic crises overlapping in the U.S. economy: 1) The long-developing overproduction crisis; 2) automation and continuing disappearances of jobs; 3) climate and environmental change; and 4) the Covid-19 Pandemic. The last one is presently rapidly declining in severity; the second and third are always gradually getting worse under capitalism; and the first one, the overproduction crisis, has its ups and downs even though overall and long-term it is definitely getting worse.
The fact that all these crises exist means that it is harder to deal with each of them, and at least to that extent they reinforce each other. On the other hand, curiously, attempting to deal with one of these crises can sometimes actually ameliorate (for awhile) some of the others. Thus the enormous Keynesian government distributions to businesses and directly to people (even to the working class and poor!) in 2020-2021, though done to try to deal with the economic problems caused by the pandemic, had the effect of temporarily ameliorating the development of the overproduction crisis by briefly increasing the ability of the people to buy the otherwise excess capitalist production. Unfortunately, this helicopter money also had the effect of aggravating the supply chain problems already caused by the pandemic, and also led to some substantial inflation. This inflation, in turn, is now making it much more difficult to increase Keynesian deficit spending to deal with the current further weakening of the economy. What helped in the short run is hurting in the longer run.
So, yes, there are multiple individual overlapping economic crises; but they are also all interconnected in many ways into a single overall economic crisis. —S.H. (08/31/22)
See also: POLYCRISIS
Any of a number of different cycles in a capitalist economy which either actually exist, or which are postulated by one or another economist to exist.
One that certainly exists is the standard industrial cycle that Marx talked so much about, with a period of 5 to 10 years. Marx explained how these cycles occur in terms of the overproduction of capital which builds up and must in one way or another be destroyed in order to clear the ground for the next cycle. At the time when (according to Marx) these cycles first appeared, i.e., in the early 19th century, they lasted on average about 5 years. During the last part of the 19th century they seemed to have changed to closer to a 10-year period, according to Engels. Over the past 110 years in the U.S., however, there have been about 25 such cycles (though some have been quite mild), which implies a period of a little less than 5 years again. Some bourgeois economists, not wanting to give any credit to Marx, call this the “Juglar Cycle”, after the French physician and statistican, Clément Juglar, who superficially discussed them in 1860 (long after Marx first talked about them!).
A quite questionable cycle (or “wave”) is Kondratiev’s Long Wave, which the semi-Marxist Russian economist Nikolai Kondratiev could not plausibly explain, but which he identified empirically from historical economic records from the 19th century. He variously said this cycle had a period of 45, 50 or 60 years. There were indeed long-term ups and downs in the European economies during the 19th century, but it is doubtful if this was due to some actual economic cycle at that time. (For more on this point, see: Chapter 4 of my work in progress, An Introductory Explanation of Capitalist Economic Crises. —S.H.) However I have argued that beginning in the imperialist era there is in fact a longer economic cycle which led first to the Great Depression of the 1930s, and now to the beginnings of a new depression. This cycle does not, however, have any definite period to it. (See Chapter 5 of the same work mentioned for more on this point.) See also: Split-Cycle Theory.
In addition to the standard 5-to-10 year cycle, and the possible long-term cycle of non-regular duration, the following economic cycles have also been postulated (on very weak evidence) by bourgeois economists:
The “Kitchin Cycle”, named after Joseph Kitchin. This is supposed to be a cycle with a period a little over 3 years long, based on inventory fluctuations. According to the bourgeois economist Joseph Shumpeter there are exactly 3 “Kitchin” cycles in one “Juglar Cycle”, and exactly 6 “Juglar Cycles” in one “Kondratiev Cycle”! (This is a kind of economic numerology and pseudo-science!)
The “Kuznets Cycle”, postulated by Simon Kuznets, which is supposed to be an intermediate cycle between the standard industrial cycle and Kondratiev waves, and lasting around 20 years. Kuznets thought that demographic changes (due to changing birth rates, immigration, etc.) explained these cycles. Why such demographic changes should be imagined to be so “cyclical” is the big mystery here!
See also below.
ECONOMIC CYCLES — Changes In Over Time
The length of capitalist economic cycles has proven to change somewhat over time, along with the severity and political impact of the crisis stage of the cycle when that stage arrives. In general, in the pre-monopoly era, crises got more serious as the decades went by. However, in the capitalist-imperialist era a strange thing happened; over the past century most crises have been relatively mild and have resulted only in recessions. On the other hand, there was one really major and disastrous crisis, the Great Depression of the 1930s. Moreover, the 2007-2009 Great Recession was qualitatively worse than any other recession since the 1930s, and came close to developing into a second great depression. How can we make sense of this somewhat confusing picture? In my opinion the only way to do this is with the Split-Cycle Theory, that is, by recognizing that the former 5 to 10 year industrial cycle which generally got worse each time has morphed into a series of 5 to 10 year cycles leading to recessions which are generally quite mild, but during which the most important underlying contradictions are not truly resolved, and which therefore eventually result in a really disastrous depression. The reason for this bifurcation is simply that capitalist governments have taken a much more proactive role in mitigating crises and postponing their truly purgative function until some later date. But when that “later date” eventually arrives, all hell breaks loose.
In addition, the cycle has changed in one other exceedingly important way: Crises are no longer self-resolving. Not only is major intervention by the capitalist state necessary to keep recessions from developing into depressions, but when such depressions do eventually develop anyway, there are no longer any effective economic means to truly end them. Only the massive destruction of the excess productive capital which has been built up over the decades can clear the ground for a new boom. And only an ultra-destructive world war is now sufficiently destructive of physical capital to do that job. The capitalist cycle has now reached the final limits of what humanity can tolerate if it is to survive. —S.H.
See also: OVERPRODUCTION CRISES and related sub-entries.
“In the stage of imperialism, war is the only means to break through
the obstacles to continued capitalist accumulation and expansion, and to set a new
framework for accumulation; in this, war is integral to the workings of the whole
system in a way beyond its earlier (and important) role during the reign of industrial
capital, and before that, merchant capital.
“While there still exists the motion toward economic crisis characteristic of competitive capitalism, these crises no longer play the same purgative role as before. On the one hand, through the more centralized character of finance capital (including the heightened role of the state) and due to the export of capital especially to the oppressed nations, capital can to a certain extent ameliorate these crises for certain periods of time; on the other hand, this really only has the effect of transferring the contadictions to a higher level and making the eventual explosion all the more destructive. Further, when these economic crises do occur on a devastating scale, they do not serve as before to more or less thoroughly clear the decks for a new expansion; thus the stagnation of the Great Depression never really broke, and only World War 2 and its outcome made possible the necessary restructuring.
“Thus far interimperialist war, and specifically the new relations established through this all-out violent confrontation between imperialists, has objectively functioned as the mechanism which has both ruptured the old framework of accumulation and set the terms for a new one.”
—Lenny Wolff, The Science of Revolution: An Introduction, (RCP Publications, 1983), pp. 160-161. [Although this is a good commentary, one thing it does not make sufficiently clear is that overproduction crises are only resolved by the destruction of excess productive capital. This is the reason that highly destructive world wars are now the only way to clear the ground for new capitalist economic booms. —S.H.]
ECONOMIC FORECASTING (Bourgeois)
See also: EMPIRICISM—In Economic Forecasting, RECESSIONS—Predicting, ECONOMIC PREDICTIONS
“Virtually nobody foresaw the Great Depression of the 1930s, or the
crisis which affected Japan and southeast Asia in the early and late 1990s. In fact,
each downturn was preceded by a period of non-inflationary growth exuberant enough
to lead many commentators to suggest that a ‘new era’ had arrived.” —Bank for
International Settlements, June 2007, quoted in Kevin Phillips, Bad Money: Reckless
Finance, Failed Politics, and the Global Crisis of American Capitalism (2008).
[Actually, there were some Marxist economists who predicted the Great Depression of the 1930s (such as Eugen Varga), and there were likewise some Marxist economists or writers (including myself) who predicted the current crisis—and who also predict that it will eventually worsen into a new great depression. But of course bourgeois economists pay no attention whatsoever to what we predict, no matter how right we turn out to be. —S.H.]
“The only function of economic forecasting is to make astrology look respectable.” —John Kenneth Galbraith, quoted in The Economist: The World in 2010, p. 74. [This is certainly true as far as long-term forecasting by bougeois economists goes! —S.H.]
ECONOMIC INTERESTS (Of the Proletariat)
“The fact that economic interests play a decisive role [in history] does not in the least imply that the economic (i.e., trade-union) struggle is of prime importance; for the most essential, the ‘decisive’ interests of classes can be satisfied only by radical political changes in general. In particular the fundamental economic interests of the proletariat can be satisfied only by a political revolution that will replace the dictatorship of the bourgeoisie by the dictatorship of the proletariat.” —Lenin, “What Is To Be Done?” (1902), LCW 5:390-1 (footnote).
See: PLANNING (Economic)
Any science, insofar as it actually is a science!, must be able to make at least some predictions about future events and developments, at least given the presumption of certain specific conditions. We do not demand that all predictions made by economists turn out to be correct. But we do say that events as they develop test the correctness of economic theories, and when explicit or implicit predictions turn out to be incorrect this should lead to modifications, or in some cases, complete rejection of the theories that gave rise to those erroneous predictions.
In the 1840s Marx was already able to predict that periodic economic crises of overproduction were inherent in capitalism and would continue as long as capitalism existed. Bourgeois economists denied this (as many of them still do!), and asserted that the previous panics and “market gluts” were caused by special external factors (such as government missteps) that could be avoided in the future. The bourgeois economists have been proven wrong in their prediction, and Marx’s prediction has been proven correct. Marx made other important economic predictions as well, such as that capitalist economies would become more and more monopolistic—which likewise has been proven quite correct.
Some of Marx’s economic predictions have been somewhat more problematic, such as his prediction of the further immiseration of the proletariat over time. Actually, on a world scale he has been proven correct here too as the many billions of people who are forced to live on less than two or three dollars a day amply demonstrate! However, it is true that within capitalist-imperialist countries the ruling bourgeoisie has been able to raise the wages of many workers because of the huge wealth they have stolen from the rest of the world. Followers of Marx, and Lenin specifically, have somewhat modified or extended Marx by developing the theory of capitalist-imperialism to account for this.
There are also a few very important socio-economic predictions made by Marx that have not yet come true, but very well still might. The most central of these is that capitalism will lead to such crisis and misery that the workers and masses will eventually be forced to rise up and completely overthrow it. If humanity is to have a future, we had best do everthing we can to help make that prediction come true too!
Compare the widespread and general success of Marx’s economic predictions to the almost complete failure of bourgeois economists to make any successful predictions. It is easy to see which is the real science here!
See also: ECONOMIC FORECASTING (Bourgeois), EMPIRICISM—In Economic Forecasting, RECESSIONS—Predicting
“There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.” —Frédéric Bastiat, “What Is Seen and What Is Not Seen”, in Selected Essays of Political Economy, translated by Seymour Cain (Foundation for Economic Education, 1995). [Although Bastiat was a bourgeois economist, and a minor one at that, he is right here in suggesting that the real test of the theories of any economist lies in what successful predictions he or she is able to make. —S.H.]
“Central bankers still debate whether it’s possible to recognize asset
bubbles when they occur and whether they can or should be deflated....
“This failure left the world unprepared for the most recent financial crisis [2008-9], and the economics profession has been far too complacent about it. Economists can’t be expected to predict the future. [sic!] But they should be able to identify threatening trends and to better understand the conditions that can turn a change in prices into a financial tsunami.” —“The Enduring Mystery of Financial Markets”, Bloomberg Businessweek, Oct. 21-27, 2013, p. 14. Emphasis added.
ECONOMIC STATISTICS — Sources
These are links to a number of sources for economic statistics of the United States and other countries:
FED STATS, links to U.S. statistics:
U.S. DEPARTMENT OF COMMERCE:
— STATISTICAL ABSTRACT OF THE UNITED STATES [This important annual volume is being cancelled for budget reasons;
this 2012 edition will be the last one.] http://www.census.gov/compendia/statab/
— ECONOMICS & STATISTICAL DIVISION: http://www.esa.doc.gov/about-economic-indicators
— BUREAU OF ECONOMIC ANALYSIS (BEA): http://www.bea.gov/
— U.S.CENSUS BUREAU—Business & Industry Page: http://www.census.gov/econ/
BUREAU OF LABOR STATISTICS (BLS) of the U.S. Department of Labor:
— Home Page: http://www.bls.gov/
— Economy at a Glance: http://www.bls.gov/eag/eag.us.htm
U.S. DEPT. OF AGRICULTURE, Economics Statistics & Market Information System:
FEDERAL RESERVE SYSTEM [U.S.]:
— Statistics & Historical Data: http://www.federalreserve.gov/econresdata/releases/statisticsdata.htm
— FRED Database maintained by the St. Louis branch: http://research.stlouisfed.org/fred2/
— Research Papers of the San Francisco branch: http://www.frbsf.org/economics/
NATIONAL BUREAU OF ECONOMIC RESEARCH (NBER): http://www.nber.org/data/
SHADOW GOVERNMENT STATISTICS (John Williams), exposes, analyzes and corrects flawed U.S. economic statistics: http://www.shadowstats.com/
UNITED NATIONS STATISTICAL DIVISION: http://unstats.un.org/unsd/economic_main.htm
INTERNATIONAL ECONOMIC STATISTICS (IES) Database, maintained by the St. Louis branch of the Federal Reserve: http://liber8.stlouisfed.org/iesd/
INTERNATIONAL MONETARY FUND—Data and Statistics: http://www.imf.org/external/data.htm
WORLD BANK—Data: http://data.worldbank.org/data-catalog/
CIA WORLD FACTBOOK: https://www.cia.gov/library/publications/the-world-factbook/index.html
— Alphabetized Statistical Index: http://www.oecd.org/document/39/0,3746,en_2649_201185_46462759_1_1_1_1,00.html
— List of OECD Databases: http://www.oecd.org/document/3/0,3746,en_2649_201185_47636163_1_1_1_1,00.html
EUROSTAT—EUROPEAN COMMISSION STATISTICAL WEBSITE: http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home
EUROPEAN CENTRAL BANK—Statistics: http://www.ecb.int/stats/html/index.en.html
ECONOMIST (magazine) — Markets/Data: http://www.economist.com/markets-data
ECONOMICS NETWORK (U.K.) focusing on Britain: http://www.economicsnetwork.ac.uk/links/data_free
NATIONAL BUREAU OF STATISTICS OF CHINA: http://www.stats.gov.cn/english/
CHINA ECONOMIC STATISTICS from the U.S.-China Business Council: https://www.uschina.org/info/ and https://www.uschina.org/statistics/economy.html
CHINA AGRICULTURAL & ECONOMIC DATA (from the U.S. Dept. of Agriculture): http://www.ers.usda.gov/Data/China/
INDIASTAT.COM, statistics about India: http://www.indiastat.com/default.aspx
ECONSTATS—U.S. & International: http://www.econstats.com/
INFOPLEASE—Economic Statistics: http://www.infoplease.com/ipa/A0873847.html
ECONOMIC STATISTICS — Distortion of by Capitalist Governments
Bourgeois governments, such as that of the U.S., collect and publish a large diversity of economic statistics. However, it is clearly in their interests to distort these statistics, and it is easily shown that they regularly do so. Statistics that make the government and the ruling class look better, such as a higher GDP growth rate or a higher capacity utilization rate, are routinely exaggerated. And statistics which make the capitalist system and the goverment look bad, such as the unemployment rate, the inflation rate, or a big increase in the consumer price index, are routinely falsified downward, often hugely so.
One method the govenment (and the compliant ruling class media) uses to accomplish this is to have multiple statistical series, and to only publicize in a major way the particular series which makes things look relatively better. Thus the U.S. goverment has six different versions of the unemployment rate. The one that is widely publicized (U-3) does not include all the millions of people who have given up looking for work after many months of trying and finding nothing, nor all the people who are forced to work only part time when they actually want and need to work full time. The U-6 series, which is seldom mentioned in the press, includes many of those people, but still does not count many other unemployed people. [For a good discussion of how the government distorts the unemployment rate, see “The Actual U.S. Unemployment Rate as of Early 2009”, from John Bellamy Foster’s “Editor’s Notes” in Monthly Review, April 2009, at: https://www.massline.org/PolitEcon/MR/ActualUnemploymentEarly2009.htm.]
A similar technique is to talk about a seasonally adjusted set of statistics when that looks better, and to talk about the non-seasonally-adjusted figures when they look better.
Of course the most basic technique of all is just to lie about the real statistics or to consciously distort them. In the case of the consumer price index (CPI), for example, the ruling class has a strong vested interest in shaving the true value. They have been forced to increase Social Security benefits if the cost of living goes up, and some multi-year union contracts also include “escalator” clauses, increasing pay each year to compensate for cost of living rises. So the capitalists minimize the impact of this to their profits by rigging the statistics. (The CPI is determined by the cost of a weighted basket of different commodities that an average person supposedly buys. But this makes it easy to rig the statistics by changing just what commodities are included in the basket, and the precise economic weight given to each.)
See also: CHAINED CPI, GREAT RECESSION—Ten Year Retrospective [Leonhardt quote]
[Speaking in reference to a table of indices of industrial output in different years for the U.S., Britain and France:] “Every time the methods for computing indices are changed, the results exceed those obtained before. The inclusion in U.S. indices of the rapidly growing servicing sphere has a particular distorting effect.” —Eugen Varga, Politico-Economic Problems of Capitalism (1968), p. 168.
“If it wasn’t clear before last week that Chinese officials were concerned about a slowing economy, a move by the government on Sept. 28  to censor negative economic news made it clear. Among the items on a list of forbidden topics on a government directive sent to journalists in China were any economic data that showed a slowing economy, local government debt and risks, and signs of declining consumer confidence.” —Alexandra Stevenson, “Betraying Worries, China is Pumping $174 Billion Into Economy”, New York Times, Oct. 8, 2018, p. B-3.
“[A] new law in Tanzania [will] allow the government to jail people who
question official statistics for up to three years. The law is the latest attempt by
the government to suppress criticism of its policies, which have slowed economic growth.”
—The Economist, Oct. 6, 2018, p. 9.
[No doubt the economic authorities in many other countries look at the audacity of the Tanzanian government with real admiration. For the time being, however, the bourgeois ruling class in the U.S. and most other countries will have to be content with their virtually total domination of news sources to drown out anybody questioning their ever-more-phony economic statistics. —Ed.]
ECONOMIC STRUGGLE [Struggle Around Economic Issues]
“Social-Democracy [Communism] represents the working class, not in its relation to a given group of employers alone, but in its relation to all classes of modern society and to the state as an organized political force. Hence, it follows that not only must Social-Democrats [Communists] not confine themselves exclusively to the economic struggle, but that they must not allow the organization of economic exposures [of factory conditions, etc.] to become the predominant part of their activities. We must take up actively the political education of the working class and the development of its political consciousness.” —Lenin, “What Is To Be Done?” (1902), LCW 5:400.
Activity in the economic sphere which is designed to harm, weaken or defeat an opponent.
“Economic warfare is a military operation, comparable to the operations of the three services in that its object is the defeat of the enemy, and complementary to them in that its function is to deprive the enemy of the material means of resistance. But, unlike the operations of the armed forces, its results are secured not only by direct attack upon the enemy but also by bringing pressure to bear upon those neutral countries from which the enemy draws his supplies.” —From a once classified document of the British government during the German Nazi era, apparently from even before the beginning of World War II. Quoted in Robert Smith Thompson, The Eagle Triumphant: How America Took Over the British Empire (2004), p. 188.
ECONOMICS — Bourgeois
The bourgeois pseudo-science of economics as practiced and promoted by incorrigible defenders of the capitalist system.
The earliest period of the development of bourgeois economics (from the late 1600s up until around 1870) is known as “Classical Economics”, and in this early stage it did have some partially correct and scientific aspects, especially in the work of its two most prominent representatives, Adam Smith and David Ricardo. This is the theory that Marx critiqued in his great work Capital, and from which he adopted the correct elements—most notably the basic idea of the labor theory of value. And quite obviously, all the wealth of the world is the result of human labor working on the raw materials of the natural world all around us.
But after Marx’s work, and in part in reaction against it, bourgeois economics took a major turn for the worse. It dropped the labor theory of value completely because it gave too much credit to the working class as the source of economic value. As an “alternative”, it created the nonsensical marginalist theory of value—that value is merely the current market estimate of the usefulness to consumers of one additional commodity of the given sort. This “marginalist revolution” was led by three economists in particular, William Stanley Jevons in Manchester, Carl Menger in Vienna, and Léon Walras in Lausanne, Switzerland. This reformulation of classical economics under the pernicious influence of marginalism came to be known as “Neoclassical Economics”. The mathematical tool for talking about any changes at “the margin” (i.e., the current rate of change) is the differential calculus, and it was Walras (with the help of a mechanics professor) who first seriously began to formulate this theory in mathematical terms. Later on this mathematization was extended and codified by Alfred Marshall in Cambridge, England, and by others. Since that time bourgeois economics has become more and more mathematical, more and more esoteric, and less and less relevant to the real world.
Neoclassical economics has dominated bourgeois economics ever since. However, the real world keeps showing that there are at the very least some extremely severe shortcomings to this theory, which has led to a variety of slightly modified theories which are mere variations on the general theme. The first big shock was the Great Depression of the 1930s which led Marshall’s student and follower, John Maynard Keynes, to revise some secondary aspects of bourgeois economic theory. Keynesianism finally admitted (what Marx had argued all along) that one of the rarely acknowledged principles at the foundation of neoclassical economics, namely “Say’s Law”, is not always valid (though it still falsely claims that it is “generally” valid). Contrary to their established doctrine, capitalist production just does not automatically lead to the creation of its own complete markets!
The true cause of capitalist overproduction crises is the overaccumulation of capital along with the facts that workers cannot be paid enough to buy all that they produce; that therefore capitalist booms can only be kept going by extending more and more credit to working class consumers and by building more factories even if they are not needed; and that this expansion of excess productive capital along with an enormous credit bubble is bound to collapse in the end in the form of a huge financial crisis. In short, economic and financial crises are inherent in capitalism. Bourgeois economics simply refuses to acknowledge this fundamental fact. And yet, when crises do become severe, they have to come up with some sort of explanations for what is going on. The Keynesian patch to neoclassical economics was the first major attempt to do this.
As Marx and Engels noted in the Communist Manifesto, the primary way of resolving capitalist overproduction crises is through the destruction of excess productive capital and starting over again. The truly massive destruction in World War II did this to a degree which was historically unprecedented. However, Keynesians mistakenly attributed the post-World War II boom to Keynesian “pump priming” rather than to the destruction of capital, and this greatly elevated the stature of Keynesianism within bourgeois economics. As President Nixon remarked, “We are all Keynesians now.” At the same time, what was called “Keynesianism” was watered down back toward the direction of pre-Keynesian neoclassical economics. Paul Samuelson led in creating what was termed the “neoclassical synthesis” of Keynesianism with the earlier neoclassical economics. This “synthesis” smuggled “Say’s Law” back into the theory, and for that reason the purer Keynesian, Joan Robinson, referred to this as “Bastard Keynesianism”.
And yet, virtually as Nixon proclaimed the triumph of Keynesianism, the U.S. and capitalist world entered the beginnings of a new overproduction crisis in which Keynesian deficit policies seemed rather ineffective and even helped lead to out-of-control “stagflation”. The first stage of this new crisis is now called the “Long Slowdown”, during which the GDP growth in the capitalist world fell to only half the rate during the post-World War II boom. This qualitative slowdown led the bourgeoisies of the world, and their political representatives such as Ronald Reagan in the U.S. and Margaret Thatcher in Britain, to supplement continued and expanding Keynesian deficit financing with neoliberalist attacks on the working class in order to try to take out the ill-effects of this continually developing capitalist overproduction crisis on the backs of the working class and masses. Bourgeois economics has by no means abandoned Keynesianism in practice (quite the contrary), though in their theory more and more emphasis is now put on neoliberalist or laissez-faire doctrines.
However, even with their intensifying attacks on the working class and their continuing massive government deficits, world capitalism is getting deeper and deeper into trouble. The Great Recession of 2007-2009 (which actually still continues as far as the welfare of the masses is concerned) showed just how fragile capitalism has become and just how incompetent bourgeois economics is as far as being able to resolve this still developing crisis. At times even the bourgeoisie itself seems close to despair. (See the graphic at the upper right from the cover of the Economist during the financial panic in 2009.) The problem for the bourgeoisie is not just that they have a defective theory of economics; it is instead that capitalism itself is inherently crisis prone and that no economic theory can save their evil system in the end.
See also: AUSTRIAN SCHOOL, HELICOPTER MONEY, MONETARISM, NEW KEYNESIAN ECONOMICS, and individual bourgeois economists such as: Ben BERNANKE, Milton FRIEDMAN, Alan GREENSPAN, Alvin HANSEN, Joseph SCHUMPETER, etc.
ECONOMICS and POLITICS
See: POLITICS and ECONOMICS
ECONOMIES OF SCALE
Lowering the unit costs of producing products because of the more efficient methods possible in larger scale production. There are many reasons why this is possible; for example, in a larger operation it is often possible to have more division of labor than in smaller scale production. A relatively smaller proportion of capital might be necessary for development costs and research and development. Similarly, a larger capitalist producer might be able to better bargain down the price of raw materials and buy politicians to gain special benefits from the capitalist government.
ECONOMISM [Often capitalized.]
1. An opportunist trend in the Russian Social-Democratic movement in the late 19th century and early 20th century, which focused almost exclusively on promoting the workers’ economic struggle and neglected or even opposed political struggle by the working class against Tsarist absolutism.
2. Similar trends in other countries, such as those which focus almost entirely on trade union and economic struggles and oppose or neglect carrying out revolutionary political educational work in any substantial way.
Ordinary Economism has little or no real interest in revolution, even as an ultimate goal, and seldom (if ever) talks about it. What is sometimes known as “Left” Economism is a trend which does subjectively desire social revolution, but which imagines that the path toward eventual revolution lies through focusing entirely (or almost entirely) on current mass economic struggles and other reforms. The idea here is often that the masses are “not yet ready” to be exposed to revolutionary ideas, and that this will have to come “later”. (Always indefinitely far into the future.) Sometimes it is even imagined that the workers and masses will spontaneously develop revolutionary ideas after engaging in prolonged struggles over reforms!
On the other hand, the term “Left” Economism is sometimes misused by “left” sectarians. These are people (such as the RCP in the U.S.) who do talk about revolution, but who refuse to participate with the masses in most of their day-to-day struggles over reforms. The revolutionary Marxist approach, in contrast, is to definitely participate in struggles around reforms, but to do so most of all for the purpose of being better able to bring revolutionary ideas to the masses. Strangely, neither “left” Economists nor “left” sectarians are able to understand this basic political method of Marx and Lenin.
See also: REFORMISM, SOCIALIST ECONOMISM
“The Economists [in Russia] limited the tasks of the working class to an
economic struggle for higher wages and better working conditions, etc., asserting that the
political struggle was the business of the liberal bourgeoisie. They denied the leading
role of the party of the working class, considering that the party should merely observe
the spontaneous process of the movement and register events. In their deference to
spontaneity in the working-class movement, the Economists
belittled the significance of revolutionary theory and class-consciousness, asserted that
socialist ideology could emerge from the spontaneous movement, denied the need for a
Marxist party to instil socialist consciousness into the working-class movement, and
thereby cleared the way for bourgeois ideology. The Economists, who opposed the need to
create a centralized working-class party, stood for the sporadic and amateurish character
of individual circles [or collectives]. Economism threatened to divert the working
class from the class revolutionary path and turn it into a political appendage of the
“Lenin’s Iskra played a major part in the struggle against Economism. By his book, What Is To Be Done?, Lenin brought about the final ideological rout of the trend.” —Note 76, Lenin: SW 3 (1967).
“[T]he basic error that all the Economists commit [is] their conviction that it is possible to develop the class political consciousness of the workers from within, so to speak, from their economic struggle, i.e., by making this struggle the exclusive (or, at least, the main) starting-point, by making it the exclusive (or, at least the main) basis. Such a view is radically wrong.... Class political consciousness can be brought to the workers only from without, only from outside the economic struggle, from outside the sphere of relations between workers and employers. The sphere from which alone it is possible to obtain this knowledge is the sphere of relationships of all classes and strata to the state and the government, the sphere of the interrelations between all classes.” —Lenin, What Is To Be Done?, (NY: International, 1969), pp. 78-79.
A very important weekly magazine published in London and representing the ideological views of the British capitalist-imperialist ruling class. In addition to lots of information about the world economy, it also has much political and general news. It was founded in 1843.
Given the fact that the revolutionary proletariat of the world does not at the present time have any major news publication which can inform it of economic, political and social developments around the world, the Economist is very likely the best single English-language source available for such news. Of course revolutionaries reading it will need to always keep in mind the capitalist class perspective of the magazine. And it is very expensive ($25/month as of February 2023). But serious political people very much need a journal like this and should not just rely for all their information on what they happen to stumble across on the Internet. However, the Economist itself does have a very good web site at: http://www.economist.com/
An interesting expose of some of the many reactionary views and ruling class biases of The Economist over the decades can be found in Pankaj Mishra, “Liberalism According to The Economist”, The New Yorker, Nov. 11, 2019, online at: https://www.newyorker.com/magazine/2019/11/11/liberalism-according-to-the-economist
ECONOMY — American
See: UNITED STATES ECONOMY
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