The attached essay, composed by CPEG members Mel Rothenberg and Bruce E. Parry over the past year, argues that a Marxist materialist analysis is fundamental in understanding and articulating the current international social/economic conjuncture. They note about the essay, “We sketch the theoretical framework underlying such an analysis, apply this framework broadly to describing the key phenomena defining our era, and draw some general strategic conclusions on what political approach and tasks revolutionary Marxists should be currently focusing on. To do all this in a relatively short essay necessitates a necessarily cryptic and schematic presentation, but we felt this was worth doing in view of the absence of such analysis among Marxist activists. There are a number of worthy lengthy and more detailed treatises written by scholars and academics, some of the most relevant of which we reference. Unfortunately these works are often theoretically dense and do not ordinarily find their way to left activists, the primary intended audience of this essay.
Tag Archive for Discussion
Every Month a CPEG member will be posting a brief issue analysis for discussion and comments. This month’s discussion piece was authored by CPEG member Ron Baiman, with additional commentary from CPEG member Mel Rothenberg. More information about both can be found in the “About Us” section of our site.
One of our premier cities, sitting at the center of the industrial heartland, once a symbol of democracy, upward mobility, racial integration, a growing and vibrant middle class, and opportunity and a better life for immigrants from all over the world, has gone bankrupt. The cause has been obvious for at least three decades: massive de-industrialization, free-trade, union busting, white flight and suburban sprawl, deregulation, and “Financialization.” Similarly, for the same reasons, the Illinois economy, the largest and most important in the Midwest, has been in a downward spiral for decades.
Every Month a CPEG member will be posting a selected economics article for discussion and comments. This month, CPEG member Mel Rothenberg has chosen the 2009 article “America’s Exhausted Paradigm” by Thomas Palley, available for reading here.
This report traces the roots of the current financial crisis to a faulty U.S. macroeconomic paradigm. One flaw in this paradigm was the neo-liberal growth model adopted after 1980 that relied on debt and asset price inflation to drive demand. A second flaw was the model of U.S. engagement with the global economy that created a triple economic hemorrhage of spending on imports, manufacturing job losses, and off-shoring of investment. Deregulation and financial excess are important parts of the story, but they are not the ultimate cause of the crisis. Instead, they facilitated the housing bubble and are actually part of the neo-liberal model, their function being to fuel demand growth based on debt and asset price inflation. The old post–World War II growth model based on rising middle-class incomes has been dismantled, while the new neo- liberal growth model has imploded. The United States needs a new economic paradigm and a new growth model, but as yet this challenge has received little attention from policymakers or economists.