{"id":12500,"date":"2024-02-11T23:09:53","date_gmt":"2024-02-12T04:09:53","guid":{"rendered":"https:\/\/www.tempestmag.org\/v01_2020\/staging\/?p=12500"},"modified":"2024-02-24T00:04:55","modified_gmt":"2024-02-24T05:04:55","slug":"perspectives-for-socialists-in-2024","status":"publish","type":"post","link":"https:\/\/tempestmag.org\/test02\/2024\/02\/perspectives-for-socialists-in-2024\/","title":{"rendered":"Perspectives for socialists in 2024"},"content":{"rendered":"

D<\/span>avid McNally<\/strong> specializes in the history and political economy of capitalism. He teaches in the Department of History at the University of Houston and is the author, among other books of, Global Slump: The Economics and Politics of Crisis and Resistance<\/a><\/em>, Monsters of the Market: Zombies, Vampires and Global Capitalism<\/a><\/em>, and Blood and Money: War, Slavery, Finance, and Empire<\/a><\/em>.<\/p>\n

Tempest Collective:<\/span> We are interested in your take on the current global economic situation, particularly the economic cycle, the response to the 2007\u201309 crisis, the post-COVID period, and the coming home to roost of the \u201ceasy money\u201d moment. What\u2019s your perspective on the current moment? How close are we to a global recession?<\/p>\n

David McNally:<\/span> Those of us who grasp that the global crisis of 2007\u201309 was a turning point in the evolution of the global economy were proved right. But I think almost all of us (certainly myself) underestimated the degree to which the ruling classes would make an incredibly sharp pivot towards Keynesian-style stimulus and that all of their neoliberal nostrums against deficit spending would fly out the window when they saw a potential meltdown of the global financial system.<\/p>\n

It\u2019s always worth reminding ourselves that all seven major Wall Street banks faced collapse in 2008\u201309 and that there was genuine trauma in ruling-class circles about whether they could pull off an immediate rescue. Once that happened, I think the best commentators understood that neoliberalism was really fundamentally about a realignment of class power and much less about a hard ideological commitment to never running deficits and never going into debt. In other words, to preserve the existing configuration of class power that characterized neoliberalism (based on weakened unions, depleted social movements, and restored profitability), they would inject unprecedented amounts of stimulus into the system, and they would run enormous deficits to make this happen.<\/p>\n

While stabilizing the system, stimulus policies also essentially offset capitalism\u2019s inbuilt restorative mechanisms. Classically, the system has used deep recessions to purge the least efficient capitals from the economy and therefore open up the road to a new wave of restructuring, technological innovation, managerial reorganizations, and much larger concentrations of capital that enable a new boom.<\/p>\n

We have not seen a new boom. What we did see, however, was a concerted effort by central banks around the world to block the shift into a full-scale depression, which they did avert. This needs to be acknowledged. But one of the issues that then arises is the contradiction of having stopped a recession (and a very deep one) by blocking capitalism\u2019s restructuring mechanism. They have failed to purge the least efficient capitals from the system.<\/p>\n

Most commentators agree that a significant number of corporations in the Global North are so-called zombie firms<\/a>. That is to say, they\u2019re not actually profitable. But when money was effectively free from central banks, they could borrow to stay alive. They could take out loans at 1.5 percent and relend at 3.5 percent, and therefore show financial profits even if their core businesses were not making money.<\/p>\n

So, we have not seen the deep and prolonged restructuring that the United States saw in the early 1980s when steel plants, automobile factories, electrical goods, rubber, and parts plants went bankrupt on a large scale. There was very significant technological restructuring in that period which then enabled the neoliberal expansion to take place for the next 20 or 25 years.<\/p>\n

We haven\u2019t seen that kind of restructuring in the aftermath of the crisis of 2008\u201309. Instead what we have now is a capitalism that has dodged a huge bullet but did so at a cost to its own dynamism. But now, central banks have jacked up interest rates in order to bring down inflation, which is what we have seen for the last 18 to 24 months.<\/p>\n

Having done that, we need to then ask ourselves what has this produced? They jacked up interest rates because what they feared most was not inflation in the abstract. Rather, what they feared was wage inflation. They feared that there would be a wave of strikes and unionizing efforts to catch up with what workers had lost under price inflation.<\/p>\n

If inflation is at 6, 8, and 10 percent a year (particularly in foodstuffs, gas prices, rents), and if workers feel any enhanced bargaining power, they\u2019re going to push to make up that gap. That was the pattern particularly of the late 1960s and the first half of the 1970s when there was a rising strike wave, particularly throughout the Western countries of the Organization for Economic Cooperation and Development\u00a0 and the Global North but also in critical parts of the Global South.<\/p>\n