BoccaraFrédéric Thepresent.global.crisis

8/10/2019 BoccaraFrdric Thepresent.global.crisis

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International Initiative for Promoting Political Economy - 4thAnnual conference in Political Economy

Frdric Boccara - Crisis, Stakes, Proposals, Opportunities and Potentials

Thepresentglobalcrisisofcapitalism:diagnosis,newstakesfornewkindof

proposals,opportunitiesandpotentials

Frdric Boccara

UniversitParis13,SorbonneParisCit,CEPN(CNRS,UMR7234)

EconomieetPolitiqueJournalEuroprogressiveeconomistsnetwork(EuroPen)andEconomistesAtterrs,France

France

1.TheFinancialcrisis

Thefinancialcrisisislinkedtoadeepoveraccumulationofmaterialandfinancialcapital.

Sincethe

beginning

of

the

1970's

and

the

surge

of

the

systemic

crisis,

with

difficulties

of

the

overall

profit

rate,wehavewitnessedasurgeofanewoveraccumulation,attheturningpointoftheKondratievlong

waveopenedafterworldwar2(P.Boccara,2012).

Facing thatoveraccumulation, therehasbeenefforts to raise theprofit rate,especiallybydominant

capital. Threemeans have been used : (i) investment in new technologies, for extra profit and for

economieson the capitalvalue (ii) action fordiminishing the shareofwages in the valueadded, (iii)

effortsbydominantcapitalstodevelopwithdrawalsandtransfersintheirfavor.

Buttheresultshavebeencontradictory. Inparticular,theunemploymenthasremainedhigh,andhigh

difficultiesonthedemandregularlycomeback.

But,indeed,sincetheearlybeginningofthe1980's,thereseemstohavesomeincreaseintheefficiency

ofmachines andequipments.And, in the same time, theoverallefficiencyof capital (as amonetary

value)experimenteddifficulties.Asan indicatorofthat,wecanseetheoutput/capitalratiocalculated

on(1)machines(2)onthewholefixedmaterialcapital,onthecaseofFranceandUSA(graphs1and2).

The indicatorsshowan increaseformachinesefficiency,butnotasocleartrendfortheoverallcapital

efficiency: thehuge increase in the total capitaladvances in values seems topulldownward the real

technologicalunderlyingefficiency.Itcanalsobeinterpretedintermsoforganiccompositionincreasing.


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(Graph1)

Output/Capital

USA

source:BEANationalaccounts

(Graph2)

0%

50%

100%

150%

200%

250%

40%

45%

50%

55%

60%

65%

1929

1931

1933

1935

1937

1939

1941

1943

1945

1947

1949

1951

1953

1955

1957

1959

1961

1963

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

Ouput / CapitalFrance - Non financial Firms

Value added / Fixed capital

Value added / Equipment

1982

1975

Source:InseeNationalaccounts


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During the1990and the2000years, theaccelerationofdebt andof laborproductivityhaveworked

increasingly together against the real potential of growth and employment in developed capitalist

countries, along a chaotic path of crisis (with especially twomain in capitalist developed countries1:

recessionin19901993,andthekrachofthesocalledneweconomyin20002001,seexxDimicoli)with

anoveralllowergrowthrateontheperiod(especiallyforEurope)andahighunemploymentrate.

Itleadsthentothebigandquasiworldfinancialandglobalcrisis.

WecanseeitforFranceonthosetwographs.

(Graph

3)

France

0

200

400

600

800

1000

1200

1400

1600

1978

T4

1980

T4

1982

T4

1984

T4

1986

T4

1988

T4

1990

T4

1992

T4

1994

T4

1996

T4

1998

T4

2000

T4

2002

T4

2004

T4

2006

T4

2008

T4

2010T4

2012T4

Total resident debt of fi rms(credit + financial securities)

GDP(Value Added

Credit

Financialpaper

(securities)

Source:Insee,BanquedeFrance

Graph3:

We

see

the

tremendous

increase

of

the

debt

of

firms

(measured

by

total

internal

indebtedness)

comparedtotherelativelylittleincreaseoftheGDP,whichmeasuresthetotalvalueaddedproduced.

Wewouldliketostressthatanincreaseofdebtsisnotnecessaryaprobleminitself...ifthereisenough

growthincounterpart.Enoughgrowth, itmeansenoughdemand,andonthesupplyside,aproduction

1wecanmention,amongothers,theAsianfinancialcrisis


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efficiencyproduced.Otherwise,capitaaccumulation(intheformofdebttitles,orofequipment,oretc.)

withoutenoughdemand,atleastonamiddleterm,meansoveraccumulation.

Indeed,in

developed

countries,

(1)

demand

was

highly

attacked

by

the

capital

offensive

against

wages,

whichplaysagainstdemand,and(2)insufficientdemand2wasreplacedbyfinancialization,andinseveral

developedcapitalistcountries, insufficientdemandfromhouseholdswassupportedbysecuritizationof

households debts (the sadly famous subprime system),whichwas a financial inflation driven by the

growing exigencies of banks capital for profit andwhichmasked, until the collapse, that therewas

insufficientunderlyingemploymentandinsufficientwages.

Itwouldbeacompletelydifferentpictureifitwerecredittohouseholdsanticipatingfutureemployment

andwages,andiftheyreallycame.Butitisthefundamentalmyopiaofthesystem.

The

attack

against

public

spending

played

the

same

role

against

demand

side,

and

also

contributed

to

underminethesupplysideefficiency.

2 duetoveryhightotallaborproductivityincreasesinproductionusedtoincreasecapitalincomeand

freeingalotofworkersinthelabormarket,withlowincome,andduealsototheverylowvalueofthe

newequipments)


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(graph4)

France

0

100

200

300

400

500

600

700

800

900

1978

T3

1980

T3

1982

T3

1984

T3

1986

T3

1988

T3

1990

T3

1992

T3

1994

T3

1996

T3

1998

T3

2000

T3

2002

T3

2004

T3

2006

T3

2008

T3

2010T3

2012T3

Total resident debt of firms

(credit + financial securities)

GDP(Value Added Produced)

Total Employment

Source:Insee,BanquedeFrance

Onthegraph4,wecanseehowmuchtherealpotentialofgrowthwasattacked.Imeanemployment,

whichdoesnotonlyplayaroleonthedemandsidebywagesofworkers,butalsoonthesupplyside,

becausepeopleandemploymentareahighandahigherpartoftherealefficiency.

Thesurgeofthefinancialcrisis,anditslasting,isessentiallyduethebasicrulesofcapitalism.Basicrules

deeplyimplementedinpowerfulinstitutions,asbanksandmultinationalenterprises,nthecultureandin

thesystemofpowers.Thebasic rule is:"moneymustbeusedonly tomakemoney"andtomakethe

most importantquantityofmoney that ispossible,whatever theconsequencescanbe (i.e. inMarxist

terms:moneymustbeused as capital). Privateproperty, forexample, ismean to ensure it,but the

essentialrule

is

the

profit

rate

seeking.

Themonopolyappearsnowasamonopolyontheuseofmoney.Ithastobecontested.Anditis,infact,

inmanycapitalistcountries,butwithoutenoughconsciousofit.

2.Theoriginalityofthepresentcapitalismandthenoveltyoftheperiod

Iwould like to say somewordson theoriginalityof thepresentcapitalismandon thenoveltyof the

period.


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Financialcrisisisacomponentofaglobalgenuinesystemiccrisis.Thiscrisiscallsfornewanswers,upto

human challenges an up to the transformations experimented by capitalism, turned global and so

financial.

Aftermoney,weshallinsistononeveryimportantaspect:technology.

Thereisaprocessofwhatwecall,inFrance,theinformationalrevolution.

Wedefine itas thereplacementofhuman'sbrainby informationalmachines forcertainoperations in

materialproductionandinservicesactivities.Soinformationtendtopredominateprogressively.Itslogic

is, inprinciples,highlydifferent,andratheropposed,tothelogicofthe industrialrevolution(industrial

revolutionwasattherootofthecapitalism).

Information revolution needs sharing and to promote human capabilities. But it ismainly used and

orientatedto

serve

the

financial

capital

globalization

and

the

development

of

MNEs.

That

brings

to

high

contradictions3.Somewordsto

sketchthenoveltyoftheinformationalrevolutioncomparedtotheindustrialone.

1. Information issharablenearlywithoutanycost.Forexample:achemical formulatomakea

tireortomakeamedicine,orasoftwaretocommandmachines,canbeusedsimultaneouslyinFrance,

inBrazil,inChinaandinTunisia.Onthecontrary,amachinetoolcanonlybeatoneplace.Andweneed

nearlyadoublecosttoduplicateitntwoplacesfortwoplants.

2. Information needs the development of human capabilities to be efficiently used and

developed.It

is

opposed

to

the

principles

of

capitalism

that

gives

priority

to

the

development

of

the

materialmeansofproduction.

Yet,MNEsshareinformationonahigherlevelthanonlynationalenterprises,evenpublicownedones.It

isoneof themain reasonwhy they supplantedandovercamenationalpublicownedenterprises, for

examples intelecom industry.But itbringstocontradictions,essentiallybecausethey imposefinancial

capital criteria against people and nature development, and because of their limited sharing of

informationalresults (astechnology). Insteadof"traditional"nationalization,wewouldneedakindof

"multi"

nationalization

on

a

public

basis

to

fully

benefit

from

the

potential

of

efficiency

of

the

informationalrevolution.Onecanalso imaginegenuineinternationalcooperationandsharingbetween

differentpublicenterprises,notcapitalcostly, insteadoffinancialparticipationsandtakeoverstobuild

suchcooperationsandlimitedsharingsthatarecapitalcostly,asMNEsdo.

3Andinthesametimewehavetheprogressiveachievementandextensionoftheindustrialrevolution

allaroundtheworld.


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Averynewaspectoftheeconomicsituation,comparedforexamplewiththe1930s, isthatinvestment

innewtechnologiesisnotsufficienttoabsorbthesurplusofnewprofitliberatedbyproductivitygrowth.

So,withsuch liquidities,weobserveanexceptional financialization. It isatthebasisofspecificvicious

circlesandofthelastingofthelongwave(morethantheclassicalKondratievcycledepressivephase).

Hence,in2011,afterthedeepyearsofthecrisisforquantitativegrowth,FDIbegunagaintoincreasein

theworld,atapaceof11%,especially towardsdevelopingcountries,even ifithasdecreasedtowards

thelessadvancedeconomies.

After the informational revolution, we have to mention that there is also a genuine monetary

revolution. It freesmonetarycreation fromgold.Butwe,neverthelessneeda relation to reality.The

limitmustnotbethesavings,asconservativesthinkinaMalthusianview.Butthe"limit"maynowturn

progressivelytobetheneedsforsocialexpansionintheworldandthecapacitytorealizeit.

Third,thereistheecologicalrevolution,bringingthreatens,butalsoopeningnewfrontiers.Itreinforces

the imperiousnecessity for changing theproductionmode concretely,andof radically contesting the

fundamentalrulesofprofitability.Becauseprofitmeansaccumulationofmaterialcapitalagainstnature

andman.

Fourth,wehave a seriesofdemographic revolution, callingparticularly for an expansionofpersons

publicservicesorforanewkindofindependenceofwomen.

Thoseareobjectivelygenuinerevolutions.Andtheyarefacingtheconservationofthebasicrulesofthe

system:capitalpowerand itsmonopolizationoftheuseofmoneyfor its logicandobjectives.Itmeans

forprofit

and

accumulations,

the

other

twofold

face

of

profit

rate.

However,infaceofthecrisis,theserevolutionsareobjectivelyacallfortheradicaltransformationofthe

system.

Inparticular,theriseofnewtechnologiesandofemergingcountriesdeveloppotentialofanewworld.If

we clarify the sense ofwhat is happening. Sowe see our responsibilities as progressives forces, as

organizations,andaspoliticallyinvolvedintellectuals.

3.

Political

potentials

and

the

stakes

Limitingthecapitalist logicofprofitabilityisananswer(fromChamberlin,J.RobinsonuntilStiglitz)now

tobeovercame.Becauseitwillnotreallyanswertothesituation.

ItisthesameaboutthenecessityofaStateintervention:itcannowadaysconsolidatethecapitalistlogic.

Whatisatstakesistobegingoingtowardsanalternativelogic,byovercominginpracticethe4markets

oftheglobalfinancialcapitalism.

3.1.Thelabormarket


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Weplead inFrance foraradical"securizationofemploymentand training", to insure foreachperson

employment or a paid trainingwith a coming back to employment. The principle of unemployment

wouldbeeradicatedgradually4.Socialsecurity isapartofthatovercoming.Makingprogressively labor

forceturningnontradableonthemarket.

3.2.Theproductionmarketorthemarketofproducts(andfirms)

Beyondpublicownership, it concerns theneedofnew socialefficiencycriteria for theproduction,as

opposed to profitability criteria, and as an alternative to them. Especially: economizing capital and

developingvaluedaddedavailable forhumanbeings in theplaceofprofit.Thatmeans to implement

ratios like VA/K (value added / capital) and the quantity of available value added (AVA) for a given

populationofforagiventerritory.Itmeansalsopromotingcooperationandtofavorspendingintraining

and research.Thatwouldnecessitateanewkingofsocialappropriationofenterprisesand firmswith

newsocial

rights

for

all

different

workers

to

intervene

in

the

management

of

firms

themselves.

Especially

bydevelopingrepresentativeinstitutionsinsidefirmsandwithanewroleandnewpowersforthem.

Itopenstoanecologicalandculturalreshapingofproductionsandtoanindicativeplanning.

3.3.Themonetaryandfinancialmarket

ItisthequestionofthemasteringofbankcreditandofthemonetarycreationbyCentralbanks.Instead

ofbeingorientedtowardsprofitandevenspeculation,weneedanotherkindofselectivity.Creditwould

be lesscostly for investmentdevelopingemployment (inquantityandquality)andvalueadded,more

costly for those diminishing employment and/or value added, and at quasi prohibiting rates for

speculation.It

could

be

done

by

alowering

of

banks

interest

rates

and

it

needs

new

social

institutions.

Theloweringofinterestrates(i)wouldbedonedirectlybypublicownedbanks,(ii)couldbesubsidized

by specific funds (included the receipts of a socalled Tobin tax), (iii) would be practices by the

refinancingpolicyofcentralbank(thecentralbankshouldproposelowerrefinancingratesforenterprise

paper given by the banks as collateral, according to the employment contents of the investment

correspondingtothepaperandtotherespectofsocialandecologicaldevelopmentcriteria).Themore

the firm develop employment, value added and respect social end ecological criteria, themore the

interestwouldbelowereduntilzero,evenmore(withsubsides).

Newsocialinstitutionsshouldfellowtheuseofthecredits.Theyshouldbeopenedtorepresentativesof

inhabitantsandofworkers,andtheyshouldbeincorrespondencewithrepresentativeinstitutionsinside

thefirmsthemselves.

Forcentralbanks,Imentiontwootherimmediatelypossibleactions,inlinkwiththeEuropeancrisis:

4Inaprogressivelynewregulation,attimeoflesserdemandformaterialgoods,thisdemand wouldbe

replacedbydemandfortrainingandalsobyfreetime.Itopenstoanovercomeofthe"salariat"system

itself,inlinewiththeMarx'scommunism.


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- TobuyexistingpublicdebtsinEurope,withoutantisocialandausterityconditions,byEuropean

centralbank(ECB)andwithgivingbacktoStatestheinterestchargesthatStateswouldpaid on

thedebttoECB;

- To finance public services new spending,within existing European treaties (but against their

logic),throughanewFund(aEuropeanFundforSocialandEcologicalDevelopment),atavery

low interestrate,neartozero,theFund itselfbeingfinancedbythemonetarycreationofECB,

debt paper corresponding would not be tradable. Such a Fund would be a new social and

democratic institutionwithparliamentmembersandwithtradeunionrepresentatives. Itcould

beseizedbypeopleproposingtheirlocalorregionalprojectsofpubicservicesdevelopment.

ThatmeanstakingthePublicservicesdevelopmentandfinancingoutofthehandsoffinancialmarkets.

3.4.TheInternationalandWorldmarket

Weneedsinstitutionsofmasteringtheinternationalandworldmarketandtopromotecooperation.Not

toinsurethefreedomofthemarketandthethroatcuttingcompetition.Itconcernsthepromotion

ofcooperationrules,orforexampleinternationalselectiveNorth/Southfinancingatlowercostlinkedto

trade, tohelp theproduction traded reachingbetter standards imposed in trade. In counterpart, this

loweringof interest ratecouldbeconditionedbyoutletsontheNorthsideorbyemployment inboth

sides.

Public

services

are

at

the

core

of

the

mastering

of

the

four

markets.

With such a new economy, and beyond, with what we call a new anthroponomy which

denominatesanotherconceptionofthenoneconomichumansocialrelationsweaimtoconstructa

newcivilizationforallHumanity.

We could cross the West and the East contributions, in order to progress for each parts on its

insufficiencies.Notably: libertiesfromOccident,butwithoutselfishnessandmonopolies,andspiritand

solidarityfromOrientwithouthierarchicaldominations.

4.Politicalpotentialsandthestakes

In Europe and in France,we formulate immediate proposals. They got simultaneously a radical and

revolutionaryperspective,openingtoatransformationofthefunctioningofthesystemandofitslogic.

Points of rapprochements between critical and heterodox streams of economists are developing.

EspeciallybetweenMarxistsandLeftKeynesian.Thegrowingrejectofausterityandalsoofantisocial

conditionnalitiesimposedbyECBandtheIMFtoSouthEuropecountries(Greece,Spain,Italy,Portugal)


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enlargeinEuropethecircleofeconomistsformulatingalternativeproposals.Beyondthelimitedposition

of aneconomist as Stiglitz,economic voices are growing for claimingotherpositive conditionnalities,

reverseones,infavorofpublicservicesandemployment.VoicesaregrowingfortransformingECB,the

banksand,even,theworldfinancialsystem.

Therearealsohugeneedsandincentivesforalliancesbetweenpeoplesofallcountriestouniteagainst

theUSdollardomination,andtheUSimperialism.Ontheotherhand,thereastrongpressuresfromUS

governmentandfromUSmultinationalenterprises(MNEs)tomakeeachgovernmentcollaboratingto

their domination, especially pressure on intermediate capitalist countries in Europe or on Emerging

countries.On thecontrary, there isagrowingneedofunificationagainsteconomic imperialism,even

fromwithinthesystem,bypeopleandcountriessufferingfromthefinancecapitaldominationleadedby

USandbytheUSMNEs.Thisneedisreinforcedbythegrowingofaworkingclassandofinequalitiesall

aroundtheworld.

Thesemovementsarenotwithoutcontradictions.Butweneedtoclarify itandtoput itinperspective.

ThedevelopmentoforiginalMarxistanalysis, theirdiffusionandtheirmasteringaredecisivetoclarify

stakesaswellassocialandpoliticalstrugglesforanewdemocratization.

Conclusion

Toconclude,somewordsontheworldfinancialsystemandoncommongoods.

I

have

no

time

to

enter

in

detail

in

MNEs

specific

stakes.

Their

are

characterized

by

a

combination

between localized activities and globalization of resources especially financial and informational

resourceswhichleadstoadissociationinthecosts,somebeingnationalcostsandothersbeingglobal

costsandtheycantransfervalues (especiallythroughtransferprices)anddevelopacertainkindof

resourcessharinginsidetheirperimeter.Theglobalcostsincludebothcapitalandinformationcosts,and

are abasis, today, for resource and values transfers from countries.Thequestion is tomaster those

financialandinformationaltransfers,it isthesharingofresourcesbyothermeansandotherrulesthan

thoseofthefinancialcapitalanditsmarkets.Forexample,thesharingoflocalizedvaluedaddedonthe

globalvalueaddedofaMNEshouldbetheobjectofcommoninternationalcooperativepolicies,through

specificrules.

At theworld level,we, FrenchMarxists economists, formulated long years agoproposals for adeep

reformoftheIMF:itsdemocratization(votingrightspartlylinkedtothepopulationweight,suppression

oftheUSAvetoright,etc.), itsaim,and itstools. Iwantto insisthereontheneedforanewfinancing

towardscodevelopmentofpeople.

Forthat,thereisthenecessityofanotherworldcommoncurrencythantheUSdollar.

ThegovernoroftheChinesecentralbankformulatedrecentlyontheinternationalstage.Heproposedto

developsuchaworldcommoncurrencyfromtheexistingSpecialdrawingrights(SDR).Hewassupported

byBrazilandbyRussiabutUSArejectedtheproposals.


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PaulBoccaraalreadyformulatedin1983similarproposals,intheNewDelhiinternationalconference5.I

wouldliketospecifyit.First,SDRmaybeenlargedtoothercurrenciesandtheycouldberelatedtosome

fundamentalbasicproducts.But,second,itisofveryhighimportancetoorientatethosespecialdrawing

rights. Theymust stimulate public services expansion (including social protection) and another bank

creditinfavorofemployment.

So(1)profoundlydemocratized IMFcouldrefinanceCentralbanksofcountries inordertomakethem

stimulate in their country a selective credit for efficient investment, developing employment and

training.(2)Ontheotherhand,theIMFshouldsubscribedirectlypublicdebts,andholdit,incounterpart

ofsupplementarycreationofthenewcommoncurrency,undertheconditionthatthepublicspending

corresponding develop public services, international cooperation, especially to develop global public

goodsofhumanity.

Indeeditisthequestionofahugeexpansionofpublicservicesforallcountries,bothforsocialdemand

and for efficiency, with a new kind of productivity. This expansion is essential to go towards the

developmentofcommongoodsofHumanity,asnatureaswellastechnology,cultureorhealth.

ItwouldtherebychallengetheworlddominationofMNEs,alsohelpingandhelpedbyculturalstruggles

andsocialseekingforanewcivilizationforallHumanity.

5Seexxx()forrecentformulationanddevelopmentoftheproposals

Documents

BoccaraFrédéric Thepresent.global.crisis