Class war disguised as national renewal – Truss and Kwarteng to unleash turbocharged Thatcherite economics

Book review: ‘Thatcher’s Trial, Six Months That Defined A Leader’, by Kwasi Kwarteng, 2015

The article below was originally published here on The Rising Tide blog.

An emergency budget is due on September 23. The new government led by Liz Truss has started as it means to go on. It will borrow £150bn to give to the already engorged energy companies. Meanwhile, the people will pick up the tab.  

Under the premiership of Johnson and now Truss, their critics have given far too much weight to issues of competence and style. The issue is not competence or even intelligence but policy. 

The class war content of the policies enacted and proposed has been grotesquely downplayed. Or even worse, in the case of Johnson often misrepresented as defying traditional Tory policies of low public spending rather than the reality of unprecedented levels of public expenditure being used to enrich big business and the wealthiest in our society.


The new Chancellor, Kwasi Kwarteng, will be centre stage when he delivers his first budget. His 2015 book, ‘Thatcher’s Trial, Six Months That Defined A Leader’, provides many clues to understanding his politics, and how they will shape his economic policies. The book focuses on the six months from March 1981 budget to Thatcher’s September 14 cabinet reshuffle.

The events Kwarteng selects in the book find an echo today. The new prime minister making her mark; a controversial budget dominated by inflation and a crisis in Ireland. On the other hand, others like the Thatcher purge of the so-called wets in the Tory party has already been done by Johnson, or in the case of the 1981 right-wing SDP split in the Labour Party, has taken the form of a defeat of the left within the party. The other events Kwarteng looks at, like the social rebellions, are probably just around the corner.

The book is more narrative than analysis. But it has a distinct theme: Thatcher as a leader defying the odds and conventional wisdom in a crusade of national renewal. In short, the book is a celebration of right-wing voluntarism.

Kwarteng provides no evidence for national economic success under Thatcher because none exists. But as with Johnson and Truss, the talk of national renewal and unprecedented economic growth is just fodder for the newspapers, the BBC and election-time propaganda.


This week, the Chancellor will echo the PM when he speaks about the importance of growth. Kwarteng and Truss will put forward policies for the few, not the many. They will justify their redistribution of wealth to the rich by claiming that everyone benefits from the bigger national economic cake they say will follow, rather than focus in their view on redistributing more fairly, an increasingly small one.

With no sense of irony, they will decry the economic failure of previous governments, including the Tory ones. They may even imitate Thatcher, who criticised previous Tory leaders like Macmillan and Heath as quasi-socialists for their ‘acceptance’ of the post-war social contract and the welfare state. 

They will offer the well past its sell-by-date reheated fare of monetarism as a way to increase economic growth. Unlike Thatcher, who had the Nobel Prize-winning Milton Friedman to add some intellectual gloss to the economics of warfare against the working-class and oppressed, Truss and Kwarteng will be relying on the downmarket versions in the form of the Adam Smith Institute and the TaxPayers’ Alliance who now occupy senior advisory posts to the government.

Chancellor Kwarteng’s mantra will be the same as Thatcher’s. As he puts it, ‘For her, ‘the way to achieve recovery was to ensure that a smaller proportion of the nation’s income went to the government, freeing resources for the private sector where the majority of people worked’.

State investment

But this mantra, as the Socialist Economic Bulletin SEB explained, “is a misreading, as the far higher growth rate in the US and to a lesser extent the UK was in the pre-war and war period itself. The exceptionally strong growth was caused by the state taking control of investment and directing very large increases, in order to wage war. The subsequent ‘Golden Age’ was the gradual deceleration of this war boom.”

Chart 1 SEB

The 1970s

The collapse of the post-war boom in the early seventies brought a combination of a political, economic and social crisis. The question was, as it remains today, in the interests of which class was a solution to be devised. 

Edward Heath, [Conservative PM 1970-74], tried and failed to implement his ‘Selsdon Man’ policies of free market competition and attacks on the rights of trade unions. Instead, a united labour movement led by the NUM defeated him.

Heath did try to make the working class pay to resolve the economic crisis with his version of an irreversible shift in power and wealth from labour to capital. But as Heath explained, this was not enough to increase investment and, with it, growth.

In 1973 he complained to the Institute of Directors, ‘The curse of British industry is that it has never anticipated demand. When we came in we were told there weren’t sufficient inducements to invest. So we provided the inducements. Then we were told people were scared of balance of payments difficulties leading to stop-go. So we floated the pound. Then we were told of fears of inflation and now we’re dealing with that. And still you aren’t investing enough’.

Thatcher rose to power in the Tory party on the back of Heath’s two electoral defeats in 1974. Like Heath, she was also committed to growth.

Her strategy – embraced by Truss and Kwarteng – is highlighted by the new Chancellor in a reference he makes to an anonymous journalist writing in the Economist: ‘the government was elected in 1979 above all else to roll back the frontiers of the public sector, to leave resources free for private-sector expansion. The key to this strategy lay in reducing public spending and borrowing, to bring down taxes and interest rates.’ Critical to this was defeating the organised labour movement by set-piece confrontations backed by anti-trade union laws designed to make strikes as ineffectual as possible.


In his book ’From Labourism to Thatcherism’, Colin Leys also highlighted another strategy proposed inside the Conservative Party by Enoch Powell. A strategy implemented by Boris Johnson, to be continued by Truss and Kwarteng. “The later sixties saw ‘a more fundamental right-wing movement than Heath’s ‘competition policy’ gaining ground inside the Conservative Party. Enoch Powell, shadow minister for health, shared his enthusiasm for the market for cutting back the state, but went much farther in calling for denationalisation, an end to state intervention in industrial disputes and strict control of the money supply to control inflation. He also combined this with a nationalist campaign against entry into the EEC and a racist campaign against immigrants.”  

Powell’s strategy was carried out by Johnson. Truss will take Powell’s strategy many steps further. That will not be about her character or competence but her design and purpose. It will be about the times and the demands of the capitalist class she is the political leader for the moment. Already, there is talk in the papers that the government is reviewing regulations on the 48-hour week and holiday pay. That is just the beginning. On her watch, the vicious racism will accelerate. The Tory press is already crowing that Truss will stop all attempts by those fleeing war to cross the English Channel. 

In short, each attempt by the Tories since 1970 to reverse Britain’s economic decline has become more extreme.  

Tory austerity

Twelve years of Tory austerity, an unprecedented wage fall, and a surge in the wealth of the 1% have failed to foster growth. The critical element to growth, investment, has not been revived. On the contrary, Britain faces an investment strike by capital as workers have not been squeezed enough to restore the level of profits it demands before investing. 

The economics espoused by Truss and Kwarteng is like the bloodletters approach that hastened Charles II’s demise – a decline in the patient’s condition has not led to alternative remedies being pursued. The answer – then and now – is that the bloodletting did not go far enough.

Brexit and Covid

Brexit was both an application of and a facilitator for the new Powellism of Johnson and Truss. Covid has set the template for transferring vast amounts of public money to private corporations. As a result, the NHS continues to be deliberately undermined, and the take-up of private health treatment is surging, often with reluctant patients. Conservative think tanks openly talk about using inflation to reduce the real level of public spending and wipe out some areas of state provision altogether. 

Slash and burn  

Truss may not have much time as PM, but we should not assume she won’t use it to great effect. Her policy will be one of slash and burn. She will try to Americanise as much as she can of not only the British economy but also British politics. The latter will see a ramping up of racism, bigotry and attacks on women’s rights. She will hope that an incoming Labour government will be reluctant to undo her ‘achievements’, particularly on privatisation and attacks on trade union rights. She will also hope that Keir Starmer will be what Tony Blair was to Thatcher, her ‘greatest achievement’.

The labour movement  

Truss and Kwarteng have signalled their desire to achieve 2.5% GDP growth in the British economy in advance of the budget. Anything approaching that growth rate can only be achieved in one of two ways – by a massive increase in public investment as proposed by Jeremy Corbyn and John McDonnell i.e.  Corbynomics, or by unleashing an even more vicious attack on the working class share of the economy. The latter would cause much more devastation than the austerity assault suffered since 2010.

It would be of great benefit for our side in the class struggle to emulate Kwarteng, the political historian, in one way – learn from the 1970s. A united labour movement brought down a Tory government in 1974 and replaced it with a Labour one. It can do so again. But a Labour Party that repeats the failures of the Wilson and Callaghan governments will lead to an even bigger disaster for the working class and the oppressed than in 1979.

‘Thatcher’s Trial, Six Months That Defined A Leader” by Kwasi Kwarteng, 2015

The causes of global inflation are not going away

By Michael Burke

There are widespread hopes that the surge in prices may be coming to a halt. Yet there is little evidence to support them. There is very little to suggest the main driving forces of global inflation are receding. This can be shown factually in a few graphics.

The main causes of inflation have nothing to do with the war in Ukraine. The chart below shows an index of globally traded commodities. It is clear that the surge in prices began in April 2020, while the current military conflict in Ukraine began on February 24 this year.

Chart 1. CRB Commodities’ Index, last 5 year

Source: Bloomberg

SEB has previously argued that the impulse for the inflationary wave was provided by an extraordinarily reckless US economic policy. This combined an unprecedented growth in money supply with an equally unprecedented rise in US government Consumption. This was also timed for the synchronised exit from lockdown that was taking place in early 2020 in the main Western economies.  It also came after a prolonged period of low or falling Investment in those same economies.

This was almost a textbook case of causing inflation by printing money and stimulating Consumption without anything remotely like a corresponding rise in Investment. As in the textbooks, this led to inflation.

The first of these factors can be seen in Chart 2 below, which shows the main components of US Government Consumption Expenditures from the beginning of 2020 onwards.

Chart 2. US Government Consumption Expenditures, $bn

Source: BEA

Before the policy began, the combined US government outlays on Consumption Expenditures and Current Transfers totalled $6.3 trillion. The largest inflationary impulse came from an increase in this total the 1st quarter of when the combined total of outlays was $9.2 trillion. This level of spending has subsequently receded, but at $7.4 trillion remains way above the starting point at the beginning of 2020.

The inflationary trend is reinforced by the exceptional growth in US money supply, as shown in the chart below.  The exceptional pace of growth in the supply of money can be illustrated by the point that it took 10 years for US M1 money supply to double from $2 trillion to $4 trillion. But M1 money supply rose from $4 trillion in February 2020 to $20.7 trillion in March 2022, over 5 times larger in little more than 2 years.

Chart 3. US M1 money supply, US$ billions

Source: FRED

The level of money supply has since edged lower, down to $20.5 trillion. It is probably not prudent to withdraw this money at the same reckless pace it was created. But the consequence of such exceptionally high level of money supply circulating in the economy will be to reinforce inflationary pressures for some time to come. 

As already noted, the same note of caution applies to US Government Current Expenditures. They have fallen back but remain at a level likely to support inflation rather than suppress it.

Crucially, none of this has huge stimulus to spending has led to increase in Investment. Increasing the means of production through Investment is the only method for raising the level of output up to the inflated levels of government Consumption and money supply growth.

As shown in Chart 4 below, over the 2-year period from the 1st quarter of 2020 to the 1st quarter of 2022, the total level of Investment (Gross Fixed Capital Investment, GFCF) has risen by just 2.6%. There has been almost no increase over that period in the means of production (especially when the rate of depreciation is considered). As the consequences of this completely negligent US economic policy are euphemistically described as ‘bottlenecks’, this highlights there is limited spare capacity slack in the economy to prevent prices rising further.

Chart 4.   US Gross Fixed Capital Formation, US$ billions, 1st Quarter 2018 to 1st Quarter 2022

Source: OECD

Finally, it is important to note the impact of central bank monetary policy, as interest rates are generally being increased in the Western economies in a misguided attempt to dampen inflation. Because those price pressures are caused by an economic policy which has created a huge imbalance between supply and demand, interest rate rises are an attempt to correct that imbalance by suppressing Consumption.

The central bankers explicitly state they aim to suppress wage growth below inflation. This will mean adding to the risks of slump and amount to a redistribution of wealth and incomes from workers and the poor to the profitable and to the asset-rich.

In addition, for those with access to credit, real interest rates remain extraordinarily low. Chart 5 below shows the US government yield curve, which is the interest rate payable on US government bonds from 1 month out to debt that matures in 30 years.

One of the key benefits for the US of the US Dollar dominance in global trade is mirrored in global financial markets, with the US setting the floor on global interest rates for most countries (the main exception being Japan).

Chart 5.

Source: FT

There is no part of the US government yield curve where interest rates are currently more than 3.5%. Yet US CPI inflation is currently 8.5%, meaning that interest rates in real terms are -5%. For anyone who can borrow at interest rates close to these levels in real terms, credit is exceptionally cheap.

However, this is available only to those with the best credit ratings, big businesses and the very rich. In practical terms, while most of the population is suffering a sharp fall in real incomes, the financial markets operate in such a way that only widens class divides and deepens the upwards redistribution of wealth and incomes that is currently taking place.

Yet the best credit ratings of all, and the cheapest borrowing costs still belong to government. The Western governments could slow and then reverse the surge in inflation with a massive level of Investment in the productive economy. The imbalances between Investment and Consumption could be ended by a very large increase in Investment, rather than suppressing Consumption.

But that would significantly increase the role of the State in the productive economy and lessen the dominance of the private sector. This is not at all the current policy programme, and is in fact its opposite.

The next great British economic crisis has begun. There is a way out.

By Michael Burke

The British economic crisis combines all the elements of the world economic turmoil, but in a uniquely negative way. As a result, Britain is set to have the most severe economic dislocation of all the advanced industrialised economies, which is driven by the string of policy choices made by this and preceding governments. The task for socialists is to analyse the cause of the crisis and to plot the alternative.

To begin with the analysis, it is completely false to claim that the global surge in prices is a response to the Russian invasion of Ukraine. Chart 1 below shows the trend in oil price (Brent Crude) over the last 3 years.

The surge in the oil price began in April 2020. The military conflict began on February 24, 2022. The oil price jumped, from effectively $100/bbl on the day of the invasion to over $130/bbl but is now close to $95/bbl. There is no longer any price premium on oil arising from the war.

Chart 1. Brent Crude oil price, last 3 years

Source: FT

Instead, the current elevated level of the oil price began over two years ago and for entirely different reasons than the war. Although oil is perhaps the single most important commodity in relation to prices in general, this pattern of the surge in prices taking place long before the war is evident for commodities in general, the surge in prices beginning in April 2020, as shown in Chart 2 below.

Chart 2. CRB Commodities Index

Source; Bloomberg

What happened in early 2020 is that the major Western economies were coming out of lockdown, which was always going to be a period of rising Consumption. But as shown elsewhere it was precisely at this point that the Biden Administration chose to launch the biggest increase in Consumption spending in US history, far greater than anything ever seen, even including world wars.

At the very same time, the US Federal Reserve Bank decided to embark on the largest pace of money creation ever seen in US history, as shown in Chart 3. The narrow measure of money supply rose rapidly in February 2020 from $4 trillion to over $20 trillion.

Chart 3. US M1 money supply total

Source: US Federal Reserve Data (FRED)

Whatever the motivation for these unprecedented steps, in early 2020 there was both an extraordinarily sharp increase in the level of money supply in the US economy and a government-sponsored increase in Consumption, without any increase in Investment.

It is not necessary to be a monetarist to accept that the combination of vastly greater amounts of money in the economy, plus increased Consumption demand without any commensurate increase in the supply of goods via Investment was certain to push prices higher.

This is exactly what happened. Furthermore, because of the weight of the US in the global economy and especially because most globally traded commodities are denominated in US Dollars, then this inevitable surge in prices was bound to have a global impact. This is the source of the current global surge in prices, the period we are still in.

It is also this mismatch between Consumption and the availability of money on the one hand, and the supply of goods in the absence of any Investment which has been dubbed the ‘supply-side’ crisis.

The next part of this piece examines the distortion of economic reality in the economic theory of monetarism. Many readers may want to skip this section and go straight to the section dealing with the British crisis. But the grain of truth monetarist theory contains might be of interest to some.

Mendacious monetarism

The theory of monetarism is not really a theory at all. It is simply an accounting identity. The classic monetarist formula is as follows:


where M is the level of money supply in the economy
V is the velocity (the rate of transactions over a certain time period)
P is the price of goods and services
Q is the quantity of goods and services.

The logic of the equation is not at issue. Yet the supporters of monetarism claim that their insight held the key to the control of inflation. In the dictum of its most famous advocate Milton Friedman, “inflation is always and everywhere a monetary phenomenon”.

Their policy asserted that if M is controlled (and they held endless and inconclusive debates on which measure of M that should be) then P could be controlled. So, for many years the central banks of the advanced industrialised economies spent all their efforts on controlling the supply of money M in order to control the level of prices P.

But the essential dishonesty of monetarism is that the equation contains 4 variables, not two. In addition to M and P there is also V and Q. And the essence of variables is that they vary.

To take an obvious example, suppose Q falls and there are fewer goods and services in the economy, but P is rising. This is the current situation, what is known as ‘stagflation’. But if inflation (P) is rising by 9% and that is offset by falling Q, as output of goods and services is falling way below trend, is the role of monetary policy to boost output or to curb prices? And what about V, which is currently falling?

The claims made for monetarism are clearly false because it treats a multi-variable equation as simple mathematics.

However, it as an accounting identity that rests on a truism. If money in the economy is expanding at a rate without a comparable increase in the quantity of goods available, prices will rise.

The uniquely grim British economy

The British government and its supporters like to claim that that the economic crisis is because of international factors. This is correct. Although they cling to the false assertions about the war in Ukraine rather than the reality of a completely reckless US economic policy as the cause.

But the government has made a global economic crisis much worse through the effects of its own policies. Britain’s stagflation will be far worse than comparable countries.

This is shown in Chart 4 below, where the projected levels of growth and inflation for the British economy are far worse than in the rest of the G7.

Chart 4. UK, G7 countries outlook for GDP growth and inflation

Source: FT

SEB has previously shown that exceptionally weak business investment has fallen even further since the Brexit referendum. Exports have also fallen, while the priority of protecting business in the pandemic has left the economy permanently scarred and shrunk the labour force. Now the Bank of England is issuing dire forecasts of 13% inflation, much higher unemployment and a 3-year slump.

None of these policy choices are accidental or arises from missteps. These are a conscious political programme to deal with the structural economic weakness of the British economy, which has become acute. As the Tory leadership debate shows, there is a consensus around main elements of this programme.

All of the impositions of lower pay, the cuts to benefits and pensions, the defunding of public services and the attempts to smash the unions are part of the same project. They are also much easier to implement in real terms when inflation is high, than to achieve the same effect by nominal cuts.

It is popularly known as making workers pay for the crisis, which is increasing the rate of exploitation of labour, to boost the profits of capital. Attacks on government spending (the ‘small state’ of the Tory party debate) are to facilitate tax transfers to big business and the rich, accelerating the programme that has been in place since 2010.

Responding to the crisis

A crisis caused by grossly excessive money creation in the US and stoking Consumption cannot be addressed by further money creation or stimulus to Consumption.

Instead, the main planks of a programme to address the ‘supply-side’ crisis require an increase in the factors of production, both labour and capital (labour shortages, where pay is too low to cover outlays is a also a key feature of the current crisis in all the advanced industrialised economies, made worse in Britain by Brexit). In addition, measures must be taken to lower prices.

The most immediate and pressing need is to lower prices. The energy price cap could do what it claims, by spectacularly fails, which is impose a cap on prices. Instead, the cap is really a cushion for profits, with the regulator ensuring that any supplies conforming to its rules makes very substantial profits.

The cap should be set at a pre-crisis tariff, so that average annual bills return close to £1,000 rather than over £4,000 which is currently projected. Any supplier which goes under should be taken over by the State, with no compensation for shareholders.

In addition, all sorts of prices that are administered by government-appointed regulators, such as water, mail, transport and others should be frozen at pre-crisis levels, with the same policy applied on renationalisation. The reasonable expectation would be that these policies would lead to the State rapidly becoming a major owner of industry once more.

At the same time, strong measures are required to tackle the rise in poverty, including for those in work, on benefits or relying on the State pension. Inflation-matching rises are required for all grades in the public sector earning £52,000 or below (twice the average full-time wage). This will help set a ‘going rate’ in the private sector as well. The minimum wage should be raised to the inflation-adjusted living wage.

There must also be widespread measures to increase labour participation rates, including a programme of retraining and proper apprenticeships. All taxes on learning must be abolished, so student loans must go. A further specific measure is to freeze all rents.

Yet none of this is affordable without a dramatic and large increase investment. There would be a risk of government finances collapsing or a further plunge in the pound, driving up inflation even further.

However, the mechanism for achieving this is readily at hand. No sensible Chancellor or Finance Minister, even in the neoliberal period has ever sought to limit government borrowing for investment. Instead, they have simply refused to carry it out. Yet with inflation currently at 9% and poised to go into double digits, the interest rate on government bonds is massively below that level. In effect, investors are willing to pay (in real terms) to hold government debt. The yield on UK government debt (gilts) is still below 2%, as shown in Chart 5 below.

Chart 5. UK Government 10-year bond yields, %

Source: FT

The government purchase of almost any viable asset will enjoy huge returns as a result, including the nationalisation of major companies. But, of course very large-scale investment is required in the real economy, to make the transition to renewables, electrify and expand the public transport network, retrofit homes to save energy and bills, to fix our broken waterways and modernise and upgrade the entire rail network.

Over the medium-term structural issues such as the housing shortage, the lack of R&D and the private chaos of our transport delivery networks can be addressed through the investments of a state-owned National Investment Bank, which have operated successfully in other countries for decades. Taxes on big business, especially on penalising share buybacks and dividends can be used to supplement borrowed funds.

The opposite of increasing the rate of exploitation of labour is to increase the level of productivity through Investment, and to ensure that the working class and society as a whole are the chief beneficiaries of that.

Of course, under the current political configuration none of this seems at all likely. But that does not mean it is impossible. As well as analysing the current crisis and developing alternatives, a key task of socialists is to broaden support for ideas such as these so that when the opportunity comes there is widespread support for clear-sighted policies.

Two very different strikes

By Tom O’Leary

After 12 years of austerity it is a significant moment when groups of workers have decided to resist further cuts in real wages, as well as worse terms and conditions. All of these impositions are designed to boost profits.  Even in the public sector the excuse that ‘there is no money left’ serves to obscure the fact that the government is trying to set an economy-wide ‘going rate’ below inflation, to the benefit of private shareholders, including Tory donors.

Naturally, all socialists support the striking rail workers and any others who enter the fray (including the striking barristers, who are vital to maintaining legal aid).  But it is important to note at the same time the difficulty presented by another altogether different strike that has been taking place in the British economy – the investment strike by British companies.  

This strike is decisive in determining growth and prosperity. Breaking it must be a central objective of socialist economic policy.

The scale and length of this strike is shown in Chart 1 below.  In effect there has been a 15-year long refusal to invest by business since the Global Financial Crisis of 2007-08. The level of business investment peaked at £51.6 billion in the 4th quarter of 2007. In the 1st quarter of 2022 it was still lower by around £50 million.

Chart 1. UK Business Investment 2006 to 1st Quarter 2022

Over the same period Business Investment has fallen as a proportion of GDP. Even though the British economy has crawled along at a snail’s pace of approximately 0.9% on average per annum over the last 15 years, there has still been a sharp decline in the proportion of national income devoted to Business Investment.

In the 4th quarter of 2007 it amounted to 10.6% of GDP, but is now just 9.1%.  As Chart 2 shows, much of the recent trend is attributable to Brexit. As Adam Smith pointed out in The Wealth of Nations, the efficiency of all investment is partly determined by the size of market. Brexit reduced the size of the market that the majority of larger British firms were operating in. Reducing the efficiency or expected return on investment tends to deter it, as shown in the chart.  Therefore, this may be a lasting, structural effect.

Chart 2 UK Business Investment pre- and post-Brexit, £bn

Source: Bloomberg

But, as previously shown, this weakness was already in place from 2007 onwards, and has become sharply worse from 2016 onwards.

Why Investment matters

All goods and services can only be consumed if they are first produced. The two most important factors in production are labour and capital. Labour is the most important of these, but cannot by itself increase production and increase prosperity without working harder or longer. But an increase in capital, or an increase in the means of production can lift output. While both may require only one person to operate it, a mechanical digger has greater productive capacity than a shovel.

An increase in the means of production can increase prosperity. Investment either maintains or increases the means of production.  Raising the level of Investment can therefore increase the means of production. In a capitalist country like Britain that overwhelmingly means Business Investment, which bears a decisive role in future prosperity, or lack of it.

But this is precisely what has been lacking. The miniscule increase in GDP in this country over the last 15 years has largely been driven by population growth (more workers) and greater exploitation (longer or unpaid hours).

Most of the real GDP growth over the period is accounted for by the increase in the number of workers, up 10.8% since 2007. Investment growth has been absent. It is extremely difficult to raise living standards if there is no growth of Investment.

Instead, some companies are now riding the wave of global inflation to increase prices and profits, while keep a lid on pay. As prices have surged this increase in profit margins by some firms has led to broad misery for the mass of the population, whose incomes from work, or benefits or pensions have fallen way behind the rise in prices.

Worse performance

It is also true that most of the leading Western economies have also been experiencing a prolonged downturn in the level of Investment (or GFCF, Gross Fixed Capital Formation). Chart 3 below shows the level of total GFCF (both private and public) as a proportion of GDP.

In the European Union and in the US there has been a significant slowdown, which largely accounts for the marked deceleration in GDP growth itself.  These are shown in the blue and green lines respectively and are currently 22% and 21% of GDP.

But total GFCF in the British economy has been considerably below their levels for some time, beginning in 1992. This coincided with the British Pound crashing out of the Exchange Rate Mechanism in September of that year, which its proponents said would lead to greater economic freedom and a surge in investment.

The opposite has been the case. GFCF in Britain has fallen back to 17% of GDP once more, which will largely determine slower growth than both the EU and US in the next period.

Chart 3. GFCF in the EU, US and UK as a % of GDP, 1970 to 2021

Source: World Bank              Key: EU blue line, US green line

Economic policy

Currently, this is why the current strike wave is not only fully justified but is crucial in reversing these trends. It is important for far broader layers of the population than just the rail workers and others that they are successful, going way beyond the workers directly in industrial disputes themselves.

Yet this raises too the question of economic policy as a whole. Suppose some disputes are successful, or others less so, or even defeated. Only those workers who win will be cushioned against price rises and possibly only to some extent. And those on benefits or pensions will gain nothing unless a change in government policy can be forced. Broad misery will increase without a change of economic policy.

Over the medium-term, the stagnation of the British economy means it is incapable of sustained improvements in living standards. Without an increase in the productive capacity of the economy, even heroic efforts to wrest the profits from companies will eventually reach a dead-end, and even anything close to that would be fiercely resisted by the state, as those who remember the miners’ strike can testify.

So, in addition to extremely important industrial disputes, the working class must think for itself. Acting in its own interests, it can lead the economy and society out of the current morass. It is the only class that can.

This means adopting policies which re-order economic activity to produce broad and rising prosperity for the overwhelming majority. It means preventing profits being off-shored in tax havens, or paid as ‘special dividends’ to shareholders, or to finance enormous remuneration for executives and their luxury consumption. It means the State increasingly directing investment, through nationalisation, a state investment bank, and changing the entire tax regime to penalise dividends and excess pay, supporting private investment.

The value generated by labour needs to be used to restore living standards for the working class and the poor as a whole, and with the remaining portion increasingly directed towards productive investment, beginning with renewable energy as well as sectors such as public transport, education, green affordable housing and others.

The immediate cost of living crisis is driven by the slump in the purchasing power of labour – prices of goods have soared while pay and other ordinary incomes have stagnated.  To lower the price of goods means they need to become more plentiful – increasing the capacity to produce them through investment. The shortages of labour that have been caused by reduced pay can be reversed by increasing pay.

Victory for striking workers, and generalising their disputes against austerity policies are now decisive. At the same, the Business Investment strike must be broken for any realistic possibility of a sustained rise in living standards.

Stats for Socialists: Public support for the Rail Workers

By Paul Atkin

Government attempts to divide the rail workers from others are falling flat. An independent poll by Opinium shows strong public support for the workers’ case.

On pay, there is overwhelming support for rail workers to get a pay rise that reflects the increase in the cost of living. This is an interest we all have in common and its becoming increasingly plain that the government does not agree. They now explicitly state that wage claims should be BELOW the rate of inflation. This is the death knell for any claim that they want to “level up”, or believe in a “high wage economy”.

Three out of five support the right to go on strike if negotiations fail. Government sabre rattling about restricting the right to strike is not cutting with the grain.

The weakest part of the government’s case is their belief in privatisation and the sacrosanct character of profits and dividends, with overwhelming support for profits from rail services to be reinvested in protecting jobs and improving services. This reflects a growing awareness that the share of the economy being taken by owners of capital is rocketing at a time that the rest of us are being squeezed until our pips squeak.

This takes a specific form in large majorities opposing cuts to jobs on trains and stations.

And even more opposing cuts to staff inspecting and maintaining safety on the tracks.

Given that the government is very evidently intervening to make sure that the rail companies do NOT meet the concerns of the workers, they are doing the opposite of what the public wants them to do.

Labour should take note. We are heading into a summer and autumn in which the rising costs of food and energy are propelling workers to turn to their unions to try to stop themselves being forced under. This affects all of us. Most of the public support the workers taking action. If Labour front benchers give “a categorical no” to support for that action, as David Lammy did for airline workers in UNITE and GMB on Sunday, the party will be acting as a human shield for the government (and giving it a lifeline).

See you on a picket line some time soon.

The above article was originally published here on Urban ramblings.

All climate politics is global

By Paul Atkin

As revealed in this Oxfam Report, the poorest 50% and middle 40% of the global population have a minimal or declining carbon footprint. The top 10%, and even more the top 1%, already have carbon footprints that are unviable and are increasing so fast that they will have bust us through the 1.5C limit on their own by 2030.

The top 10% are people who are on more than £125,000 a year. Most of them live in the Global North, but are a minority even here. The working class in the Global North, is overwhelmingly in the middle 40%.

The strategy of the ruling class in the Global North is primarily to sustain their own wealth and power.

  • Some of them are in denial about climate change as a result.  
  • Even those that recognise reality can only envisage a green transition which prioritises their own consumption standards by keeping the bottom 50% impoverished. Carbon offsetting by keeping the global majority in their place.
  • Hence the failure to transfer investment to the Global South and the prospect that the 350 carbon bombs identified by the Guardian will be dropped; because it is profitable to do so.
  • This underlines the paradox of the debate about “stranded assets”, as assets are only stranded if there is a viable transition. If there isn’t, they stay profitable until everything collapses around us; which will always be the stronger motivation for companies operating on quarterly profit returns. The notion that Fossil Fuel capital will be more motivated by social responsibility than profits runs counter not only to the record of its counterparts in the tobacco and asbestos industries, but also its own record in covering up its own research on the climate impacts of its operations from the 1950s onwards. They knew. They covered it up. Now that we know, they greenwash instead.
  • As they recognise that climate breakdown will create social and political crises on an unimaginable scale, from waves of climate refugees to possible war in the Arctic, they are prioritising military spending over solving the problem. The US government is spending 14 times as much on its armed forces as it planned to do on domestic climate measures – and then didn’t agree to. They have committed $40 billion to stoke the war in Ukraine rather than seek a peace deal; while climate transition funding for the Global South is reluctantly dispensed through an eye dropper.

What that means is an immediate future dominated, not by win-win global cooperation to solve our problems and build a sustainable society, but by wars and crises that make doing so ever more difficult. Campaigning against these is an urgent priority for anyone committed to Just Transition.

A strategic challenge for the working class in the Global North is therefore recognising that our own ruling classes are structurally incapable of making the transition; but are divided between those that will openly sabotage it and those that will float half measures.

While we can bloc with the latter against the former, if we want a full transition, we have to lead it. If we don’t want to be thrown under the bus, we have to be driving the bus. That means thinking like the leaders of society, because it’s our job now. And we need to seek alliances with the global majority, including countries that see themselves as Socialist.

The tactical challenge is that we operate in a national polity that presumes a “national interest” that subordinates the working class to the ruling class and this is deeply ingrained in popular perception, political (and union) movements; so consciously thinking internationally – outside the limits of the Brit Box – and framing our campaigning accordingly is essential.

Exposing the causes of the surge in prices

By Michael Burke

UNITE the union’s new general secretary Sharon Graham has launched a ‘profiteering commission’ to discover and expose the role of profiteers in the current cost of living crisis. This is a good initiative as the exposures themselves can play a role in increasing the level of understanding about who is responsible for the crisis. This may also contribute to raising the level of class consciousness, which has not increased in proportion to the fall in real incomes since 2010.

There is no doubt that profiteering is a major factor in pushing prices higher.  As the chief executive of BP said, “we have more cash than we know what to do with,” after annual profits rose to almost £10bn. This statement alone explodes the myth perpetuated by ministers that any windfall tax on energy companies would interfere with investment plans.

But the statement itself is highly revealing in another way. Profits are crucial to capitalism, and some are experiencing a bonanza. Yet it is widely understood that some firms continue to struggle. As shown in Chart 1 it is clear that the level of company insolvencies is now above the pre-pandemic level.

Chart 1. Company insolvencies England & Wales February 2019 to February 2022

This is hardly surprising as growth was already weak prior to the beginning of the pandemic. The level of output has only recently recovered to end-2019 levels, before the economic effects of the pandemic were first felt. In addition, some producers of finished or semi-finished goods, as well as service providers will have been hard hit by the rise in commodities’ prices. All of this also flatly contradicts all the government’s boosterism about a surging economy.

As a result of this economic weakness, the situation is very uneven on profits. Clearly, some are experiencing a price-gouging bonanza, while others are experiencing declining profitability. Therefore, it is necessary to examine some of the key economic trends as a whole, in addition to analysing the role of specific sectors or firms.

Table 1. below shows some key variable for the British economy over two different periods. The first is the period from the 4th quarter of 1999 to the 4th quarter of 2021 (the most recent data). The second period is shorter, beginning before the pandemic in the 4th quarter of 2019 and also ending in the 4th quarter of 2021.

Table1. Wages, Compensation, Profits and Business Investment, £bn

 Q4 1999 to Q4 2021, £bn  % changeQ4 2019 to Q4 2021, £bn  % change
  Wages  111 to 254  +129  226 to 254  +12.4
Total Compensation (incl. employers’ social contributions)          128 to 309          +141          278 to 309          +11.2
  Total Profits (Gross Operating Surplus)        55 to 139        +153        124.5 to 139        +11.6
  Business Investment    31.3 to 53.2    +70    56.8 to 53.2    -6.3
Source: ONS, author’s calculations

Wages, Profits and Investment

Taking just wages and profits first, over the longer period the growth in profits has been the strongest of all, rising 153% (all data are based on nominal, not real £, for the purposes of comparison). However, this growth rate in profits is not hugely or qualitatively greater than the growth of compensation or wages, although it is clear that business owners have been winning in the struggle over each class’s share of national income.

The most significant laggard is in the growth of business investment which has risen at half the pace of the growth in the level of profits over the 22-year period.

Turning to the much shorter period starting with the quarter immediately before the pandemic, these patterns have largely continued but in a somewhat more dramatic form. There is no qualitative difference in the growth rates of wages, compensation or profits over the 2-year period. (Again, it should be stressed these are nominal data, before adjusting for inflation). But there has been no growth at all in business investment, which actually declined over the period.

Chart 2. UK Gross Operating Surplus and Business Investment, £bn

As Chart 2 clearly shows the level of business investment has completely failed to keep pace with the increase in the total mass of profits for businesses. At the end of 1999 business investment amounted 57% of profits on this measure. At the end of 2021 it was equivalent to just 38%.  

This is equivalent to approximately a decline of £100 bn in business investment in 2021 compared to 1999, based on the rise in profits and an unchanged investment ratio.

Why investment matters to prices

This reduction in investment directly lowers the growth rate of GDP, as it is equivalent to approximately £100 billion, around 4% of GDP. But crucially, Investment has the effect of producing an increase in the means of production.

It is widely recognised that the current surge in prices globally is a product of a ‘supply-side’ shock, where the supply of goods is insufficient to meet demand. In the first instance this was caused by US monetary policy, which has been extraordinarily expansionary without any commensurate increase in Investment.  Sanctions against Russia and the war in Ukraine have exacerbated these trends.

In contrast, all productive Investment either replaces or augments the existing capacity to supply goods to the economy (increases the means of production). Without it, demand can outstrip supply and cause prices to rise. A sustained increase in Investment would both create high quality jobs as well a generally lowering the upward pressures on prices.

Of course, specific mechanisms would be needed to ensure that this happened. Companies based in Britain have shown a distinct reluctance to increase their Investment over the long run.  Changes to the tax code would be necessary to oblige them to increase Investment at the expense of both shareholder dividends and executive pay. The tax rate could be increased on profits, so that the State could use the revenues to directly increase its own Investment (as well as increasing borrowing to Invest).

Naturally, none of this should cut across the work of the profiteering commission. The numerous scandals that can be revealed in that process can both rouse the indignation of the population as well as identifying funds to increase pay and lower prices for hard-pressed households.

‘The Devastating Economic Impacts of an Abortion Ban’ – an important article to read

By Kerry Abel, Abortion Rights Chair

With the fate of Roe v Wade to be ruled on by the US Supreme Court in the coming weeks, the New Yorker has carried an important article that sets out the economic consequences of removing a woman’s right to choose. These are in addition to a host of health, social and political consequences. The article, ‘The Devastating Economic Impacts of an Abortion Ban’, by Sheelah Kolhatkar, explains how an overturning of Roe v Wade would inflict serious economic harm on women. The article should be read here.

In the article Kolhatkar explains that:

‘The legalization of abortion, in the seventies, had dramatic effects on the ages at which and the circumstances under which women became mothers. It reduced the number of teen-age mothers by a third, and that of women who got married as teen-agers by a fifth.’

 ‘…the original Roe decision acknowledged that making people carry and raise unwanted children could “force upon” women “a distressful life and future,” the draft opinion, written by Justice Samuel Alito, barely mentioned the substantial ways that the loss of access to safe, legal abortion would hamper the ability of women to participate fully in society.’

Kolhatkar quotes some economists who have clearly explained how the overturning of Roe v Wade would seriously harm women’s education, employment, and earning prospects.

Tiffany Green is an economist and population-health scientist and assistant professor at the University of Wisconsin School of Medicine and Public Health. Reporting on Green’s views, Kolhatkar states:

‘…that many of those effects would disproportionately fall on those who were already marginalized…A few statistics help clarify how race and class influence who will most be harmed: in 2014, forty-nine per cent of all abortions were obtained by people who were below the federal poverty line. As of 2004, approximately a third were obtained by people who were white, thirty-seven per cent by those who were Black, and twenty-two per cent by Hispanic people. Black women are significantly more likely than white women to experience an unintended pregnancy, owing to disparities in the economy and the health-care system, and other factors; for the same group, childbirth is more dangerous….Green told me. “And the overwhelming thrust of the evidence is that this is going to negatively impact women and other pregnant people’s economic prospects, their mental health, their physical health, and ultimately their lives. The end of Roe v. Wade is likely going to have devastating fallout.”’

In addition Kolhatkar points out:

‘…most people don’t have access to paid family leave: the U.S. is one of the few nations that doesn’t guarantee paid leave to new parents. The cost of child care is prohibitively expensive, averaging more than a thousand dollars a month for infants. Research conducted by economists such as Claudia Goldin, at Harvard, and Francine Blau, at Cornell University, has shown that the gender pay gap begins to widen once women become mothers. The workplace protections that do exist for mothers apply mostly to people with college degrees; at the lower end of the economic spectrum, where hourly workers may be engaged in shift work with unpredictable hours, there are few safeguards in place.’

Progressive economists have been making the case in defence of Roe v Wade. Kolhatkar reports that Caitlin Myers, an economics professor at Middlebury College, last Autumn:

‘…marshalled a hundred and fifty-four economists to file an amicus brief against the abortion ban, in which they outlined decades of research on how unwanted pregnancies can affect women’s education, employment, and earning prospects, and can impact the labor market more broadly.’

There has also been some attempt to put the economic arguments before the Supreme Court. Kolhatkar reports how Julie Rikelman, from the Center for Reproductive Rights explained to the court that:

‘narrowing women’s access to the procedure could disproportionately harm low-income women or those experiencing personal crises. She turned to numbers to bolster her argument. “In fact,” Rikelman said, “the data has been very clear over the last fifty years that abortion has been critical to women’s equal participation in society. It’s been critical to their health, to their lives, their ability to pursue ”’

Unfortunately, at this point, Rikelman was interrupted by the Supreme Court Chief Justice John Roberts.

It appears the court is not taking seriously the economic arguments in support of Roe v Wade. The leaked draft opinion, written by Justice Alito, totally ignores the economic effects of an abortion ban could have on women’s lives.

It is vital that the negative economic impact of an abortion ban is more widely understood. The full article by Sheelah Kolhatkar, which should be read here, helps to increase that knowledge.

Who caused the surge in inflation?

By Michael Burke

The advanced industrialised economies have gone from being in a low-inflation or even deflationary environment to an inflationary one, seemingly in the blink of an eye. The situation is even worse in the developing economies, with shortages of basic foods and energy as well high prices.

There has been an entire cottage industry among economists over the past period discussing the causes, consequences and remedies for deflation. No longer. That period ended at the beginning of 2021, as Chart 1 below shows. Because the inflationary process has already been subject to a degree of mythologising, it is necessary to set out the factual mechanics of the process in a little detail.

Chart 1. Consumer price inflation in the G7 and OECD

Until the end of 2019 and for many years preceding average consumer price inflation in the G7 tended to vary between 2% and 3%, sometimes even lower. However, the pandemic which ripped through the world, and whose effects were especially prevalent among the G7 and OECD economies, as well as the lockdowns it caused, pushed both economic activity and prices lower. CPI inflation pushed down towards zero.

That deflationary episode then ended dramatically at the beginning of 2021 and until the most recent data in February 2022. The cause of the sudden change was the ending of lockdown in these economies and the sharp rise in economic activity that ending lockdown caused. This surge in Consumption in two of the leading advanced economies is shown in Chart 2 below.

Chart 2.Change in Real Private Consumption in EU and US, 2019 to 2021

However, there was no corresponding increase in Investment in these same economies over the same period, as shown in Chart 3 below.

Gross Fixed Capital Formation (GFCF) in the US and in the EU was barely higher at the end of 2021 than it had been at the beginning of 2019. If we take the two-year period as a whole, given the deep slump in Investment in the 2nd quarter of 2020 as lockdowns took effect, the average level of Investment was lower than prior to the pandemic.

Chart 3. US and EU GFCF in the pandemic

In common usage, there was an increase in demand but no increase in supply. More accurately, there was an increase in Consumption without an increase in Investment. In classical economic theory this leads to rising prices. As noted at the beginning of this piece, that is precisely what happened from the beginning of 2021 onwards. 

The other main explanations for the rise inflation are not at all rooted in facts. The suggestion that this round of inflation was brought on by the conflict in Ukraine can be dismissed as the conflict only began in late February this year. However, it is certain that since both Russia and Ukraine are globally important producers of key commodities, there will be very large and serious inflationary consequences that arise for hundreds of millions of people as a result. But these effects are only beginning now and will be touched on further below.

The earlier claim that it is China that is to blame is less easily dismissed, but only marginally so.  The disruption to the Chinese economy arising from the pandemic has clearly been less severe than in the G7 or in the OECD economies, as evidenced by its relative GDP growth rate over 2020 to 2023. For example, IMF projections for real GDP growth over those 3 years is over 16% for China, which is more than double that of the US.

But the more subtle and potentially dangerous claim is that it is the Chinese response to the pandemic which has caused the global ‘supply-chain bottlenecks’ which have pushed prices higher.  This in turn is used as a demand that China should end its zero covid policy.

However, it is not factually accurate. The ‘bottlenecks’ have their source in the advanced industrialised countries. So, even though China provides vastly more raw materials and semi-finished goods to the US, EU and other advanced industrial economies (as well as finished goods) than it imports from them, producer prices began to rise in the US slightly before they rose in China. Crucially US producer price inflation is far in excess of Chinese PPI (in October 22.4% versus 13.5%). These producer price inflation rates are shown in Chart 4. Below.

Chart 4. US and China Producer Price Inflation

Source: St Louis Federal Reserve

US producer prices began to turn before those in China, and the rate of inflation in the US much higher. These do not support claims that China is the source of ‘global bottlenecks’.

There is a further point, worth repeating about the consequences of inflation. Naturally, the beneficiaries of inflation are those firms who stand to gain from the rise in prices, the most obvious of which are the Big Oil firms currently. But others will be cashing in too from rising commodities’ prices, including agri-food businesses, Big Pharma, the nuclear industry and others.

However, the severity of the crisis will mean huge hardship for hundreds of millions of people, possibly billions of them. Supplies of essentials may slow to a trickle or even dry up altogether, especially in light of US-led sanctions. Or they may reach prices which force hardship and even hunger for the poorest populations.

According to the UN, 45 African and ‘least developed’ countries import at least a third of their wheat from Russia or Ukraine – 18 of those countries import at least 50 percent. Egypt, the world’s largest wheat importer, obtains over 70 percent of its imports from Russia and Ukraine, while Turkey obtains over 80 percent. 

In general, in the advanced industrialised countries there will be far greater misery than at present, with millions of people forced into some version of ‘heat or eat’. In the developing world, hundreds of millions will suffer even greater hardship and outright starvation is not ruled out for some. The sanctions regime now in place will hit the world’s poorest, far beyond the arena of the conflict.

The inflation outlook is very grave. The G7’s failure to invest and the co-ordinated ending of lockdowns was the initial cause. Those factors have now been compounded by the war in Ukraine and the sanctions that have followed.

What is the current phase of imperialism?

The piece below examines the evolution of imperialism. It is republished and was first written in 2014.

The question of imperialism is once again a widely-discussed issue following the crisis in Ukraine.

There are accusations from the British and US governments that Russia is imperialist, and many on the left appear to concur. The accusation is entirely false.

The article reaffirms the central idea that imperialism arises from the concentration of capital through monopolies (or more often oligopolies) and its merger with bank capital which forms finance capital and then goes on to dominate almost the whole world through specific imperialist countries.

The dominant imperialist country is the US. It is currently mobilising the World Bank and the IMF, which are the main pillars of the post-World War II architecture to act against Russia. At the same time it has ordered the SWIFT global bank payments network to boycott Russia.

No other country in the world can issue those instructions or hope to have them carried out. This is a strong real world indicator of which country is the dominant imperialist power, who its junior partners are and how it marshals them. The main architecture itself was created in US interests at Bretton Woods.

As the piece was written in 2014 and republished unamended, it includes data that has since become outdated. But generally the factual changes do not qualitatively alter the trends, or the main point of the argument. It is hoped that a comprehensive revision may be possible at a later date.

What is the Current Phase of Imperialism?

Previously published: May 13, 2014

By Michael Burke

A new situation requires a new analysis, and each new factor in the situation requires a specific and concrete analysis, placing it and its weight correctly in the overall situation. 

In world politics, the new situation is that the US was unable to bomb Syria, it finds itself negotiating with, rather than bombing Iran, and its coup in the Ukraine may not be entirely successful in drawing Russia’s neighbour into NATO’s sphere of influence. 

This overturns recent history. The overthrow of the Soviet Union in 1991 was accompanied by the US-led Gulf War. Since that time, the US and its various allies have bombed, invaded or intervened in Somalia (twice), Yugoslavia, Haiti, Afghanistan, the Philippines, Liberia, Iraq, the Maghreb, Yemen, Libya, Pakistan, Libya and South Sudan. The US has also led, organised or outsourced countless other interventions, overthrown governments and destabilised economies in pursuit of its interests. There has also been a series of coups and attempted coups in Latin America with varied success, and the so-called ‘colour revolutions’ in Eastern Europe to install pro-US, pro-NATO governments, as well as the US hijacking of the Arab Spring. 

However, the economic rise of China has warranted a strategic ‘pivot’ towards Asia in an attempt to curb the rise of the only economy that could rival US supremacy in the foreseeable future. Given this absolute priority and the reduced circumstances of the US economy, it has been necessary to suspend new large-scale direct military interventions elsewhere. 

This curb on US power has had immediate and beneficial consequences for humanity. Syria could not be bombed and neither could Iran. In these, Russian opposition to US plans was a key political obstacle, especially as the US wanted to deploy multilateral and multinational forces to do its bidding and needed the imprimatur of the UN Security Council. The US response to this blockage has been to increase pressure on Russia, most dramatically with its ouster of the elected Ukrainian government in a coup and its attempt to breach the country’s agreed neutrality by bringing it into NATO. 

This curb on US power, however limited or temporary, should be welcomed by all socialists, by all democrats and simply by all those who desire peace. Instead, we have the strange spectacle that some on the left have raised the charge that Russia is imperialist, or that China is, or countries such as Brazil, or India or South Africa are‘sub-imperialist’

This is not a coincidence. In the US State Department’s frustration it has produced every type of calumny against Putin, including that he is an imperialist[i] and akin to Hitler. Self-styled socialists who simply echo these charges are not highly amenable to logical argument. But it is vital for socialists to understand the nature of imperialism and its current manifestation[ii]


Concrete political aims must be set in concrete circumstances. All things are relative, all things flow and all things change
. Lenin, Two Tactics of Social Democracy in the Democratic Revolution 
The most important single work of Marxism on the subject of imperialism is Lenin’s Imperialism the Highest Stage of Capitalism

Lenin’s stated aim in writing the work was to demonstrate that the 1914-1918 war was imperialist (that is an annexationist, predatory, war of plunder) on the part of both sides; it was a war for the division of the world, for the partition and repartition of colonies and spheres of influence of finance capital, and so on.

Furthermore, he argued, that the character of the war, its class character, was determined by the position of the ruling classes of the warring countries and of the whole world, as the ruling classes of the belligerent countries had between them annexed almost the entire world. Therefore, he concluded imperialist wars are absolutely inevitable under such an economic system, as long as private property in the means of production exists[iii]

However, Lenin was categorical in warning that this was a study of imperialism in a given historical epoch and this was specifically (or concretely) ‘a composite picture of the world capitalist system at the beginning of the twentieth century’. As shown below, he also highlighted how this composite might change, as it was already changing. 

Therefore it completely contravenes Lenin’s injunctions in this and other works, indeed it is completely alien to the method of Marxism, to abstract from his pamphlet one or two important features of imperialism at this point, and use them as a measuring rule for modern imperialism. Imperialism, like all phenomena, must be analysed concretely, and only after taking all the main factors into account, and so establish its laws of motion. 

Changing politics

Three decisive changes in world politics have occurred since Lenin wrote his great work. As we shall see, the world economy has not stood still either, like all phenomena it too has continued to ‘flow’, in Lenin’s words. 

The first decisive political change was in the contest over who would be the dominant imperialist in the world, which began in 1914 was resolved by 1945. The US had become the single dominant imperialist power and would countenance no serious rivalry from other imperialists. The best they could hope for was to play some subordinate but mutually beneficial role as a junior ally of US imperialism. 

The second decisive change took place between in the short period between Lenin’s writing the pamphlet and its later Preface. The Russian Revolution meant that for the first time the working class was able to lay hold of and maintain state power. Since that time, and notwithstanding the overthrow of the Soviet Union, there have been continuously some parts of the globe where the working class holds state power, including Cuba, Viet Nam and Venezuela. Of these workers’ states by far the weightiest in the world economy is China. In all these cases, private property in the means of production is not the dominant form of ownership in the domestic economy. However, all are obliged to operate in a global capitalist system in which imperialism dominates. 

Taking advantage of this contradiction, the third change is that the anti-colonial and national liberation struggles were able to free the great bulk of humanity from burden of direct colonial rule, and in some cases this led ultimately to socialist revolution. 

These three facts, US supremacy within the imperialist bloc, the continuous existence of workers’ states and the wave of direct decolonisation, are entirely new factors. They are decisive in understanding that the main antagonism in the world is no longer inter-imperialist competition (which has certainly not been abolished).

Now, the pre-eminence of the US and the existence of workers’ states with real political and economic weight means that principal contradiction in world politics is between the US and its imperialist allies versus the workers states and the countries oppressed by imperialism (including the semi-colonial world and the remaining colonies). Of these, the biggest, the weightiest threat to US economic interests is the rise of China. 

Changing economics

In Imperialism the Highest Stage of Capitalism, Lenin sums up the main economic features of imperialism in that period. To some readers these are well-known, but they are worth repeating here. Worth repeating too is his own characterisation of this definition, which is that it was a special stage in the historical development of capitalism (which has continued to develop). 

The five features identified by Lenin are as follows: 
(1) the concentration of production and capital has developed to such a high stage that it has created monopolies which play a decisive role in economic life; 
(2) the merging of bank capital with industrial capital, and the creation, on the basis of this “finance capital”, of a financial oligarchy; 
(3) the export of capital as distinguished from the export of commodities acquires exceptional importance; 
(4) the formation of international monopolist capitalist associations which share the world among themselves, and 
(5) the territorial division of the whole world among the biggest capitalist powers is completed. 

Lenin’s starting-point is the concentration of production into monopolies, which is the basis of imperialism. This concentration is the inevitable outcome of ‘free competition’ between capitalists and has as a result risen exponentially since the pamphlet was written. Concentration means capitalist rivals are eliminated, and so increased profits require expansion overseas

The increase in concentration of production and trend towards monopolisation can be illustrated by the fact that the largest companies in the world are now larger than most countries. The tenth largest company in the world has revenues of well over US$200bn, and only 40 countries in the world have a greater level of annual GDP. In Lenin’s time, 44% of all US industrial output was carried out by just 3,000 firms. Now the output of just 130 firms is equivalent to 48% of US GDP[iv]

Concentration of production within the imperialist bloc has also increased. The dominance of the US is evident from the fact that it boasts nearly one-third of the leading Fortune 500 global firms, the same as its next three imperialist rivals together. At the turn of the twentieth century US Steel was the largest company in the world, with average net profits of US$34million. This is equivalent just under US$1 billion in today’s terms. In 2013 the most profitable company in the world was Apple, with profits of US$42bn. Aside from the few loss-makers, most companies in the Fortune 500 had profits far in excess of US$1 billion in 2013. 

The role of banks has also increased, but in an even more pronounced way. Lenin uses detailed data to show that the 9 leading banks in Germany held deposits of 10 billion German Marks. Two banks in the US, owned by the plutocrats JP Morgan and Rockefeller had deposits equivalent to 11 billion German Marks. These were equivalent to US$2.4 billion and US$2.6 billion in 1913 exchange rates. In today’s terms these are equivalent to US$56 billion and US$62 billion respectively. In 2013, Germany’s largest bank Deutsche Bank alone had deposits equivalent to US$727 billion. JP Morgan Chase is the biggest bank in the US which in 2013 held deposits of US$ 1,288 billion. At the same time, Lenin identifies the growth in traded securities to the equivalent of 479 billion French Francs. This is the equivalent of US$ 2,700 billion in today’s terms. But this is a fraction of the current level of international claims held by banks in the imperialist centres, of US$32,859 billion[v].

Taken together these data show that the main features identified by Lenin, the concentration of capital and monopoly and the increasing dominance of finance capital have both become more pronounced and more dominant features of imperialism. 

However, value can only be extracted if it is produced. Just as imperialism is a parasitic extension of capitalism, the dominance of finance capital is a parasitic characteristic of imperialism, which leads to its decay. 

Parasitism and decay

Under a system of super-exploitation, the capitalist has a diminishing incentive to develop the productive forces of the economy as profits can be increased simply by increasing the scope of territory and the number of slaves held by the slave-owners. This was noted by Marx in his analysis of the Southern slave states of America. 

In a different context, imperialism too is a system of super-exploitation, one which attempts to embrace the whole world. Marx had earlier shown that the first imperial power, Britain in Ireland, had benefited from a higher rate of exploitation in its colony, with the imperial power ‘pocketing the excess’ profits even beyond the rate of exploitation in their own domestic market. As the brutality and rapaciousness of the regime increases, so too does its parasitical nature. This leads to decay and its vulnerability to competition from a more vigorous system of production. 

At the beginning of the twentieth century Britain was the premier trading nation in the world, via its empire. However, Lenin points out that Britain’s profits from its foreign and colonial trade was just one-fifth of its profits derived from its overseas financial investments. Britain had already become a ‘rentier state’, primarily living off these investments. 

Britain had run a trade deficit, the value of imports exceeding the value of exports for most of the period from the 1890s to the outbreak of the 1914-18 war[vi]. But the very high level of interest income (or rent) on its overseas possessions meant that the balance on the current account (the combined balance of trade in goods and services plus overseas interest payments) remained in surplus. This overall surplus on the current account ended in the 1930s. Repeated devaluations of the overvalued pound frequently redressed this imbalance by making exports cheaper and increasing the value of overseas interest payments in pound sterling terms. The discovery of North Sea oil also gave a temporary boost, but deficits on the current account have become such a fixed feature of the British economy since that in some official data it is sometimes referred to as the current account deficit, rather than the current account balance. 

The deficit on the current account must have an off-setting item to balance it. This is the capital account, the net flows of capital rather than of interest payments or dividends. When Britain fell into a current account deficit in the 1930s it was obliged to become a net importer of capital to off-set it. 

As noted above, Lenin had identified the export of capital as one of the key features of imperialism at the beginning of the twentieth century. Only the most hide-bound or scholastic reading of Lenin would then argue that in the 1930s Britain passed from being an imperialist nation to an oppressed one. Instead, the parasitism and decay of British imperialism has led it into a new and more decrepit, leech-like phase. Where Britain has trod the United States has followed. 

Capital importers

The much greater size of the US domestic market, the consequent scope for increasing the division of labour and the greater productivity of its industries all meant the capitalist mode of production retained a degree of vigour there that had long become a distant memory in Britain. This was reinforced by the pre-eminent position of the US following the 1914 to 1945 world wars. 

However the US too has become a net importer of capital over a different timescale. This is shown in Chart 1 below. The US became an importer of capital because the growth of the economy was insufficient to maintain both the growth in living standards of the population and to fund the Viet Nam war. The US became an importer of capital in the course of the Viet Nam war and in order to pay for it. 

Chart 1. US Current Account Balance 1960 to 1980, US$ billions

Source: Federal Reserve Economic Data

The US did not become an economically oppressed nation while it was raining more bombs on Viet Nam, Laos and Cambodia than were dropped in the whole of the Second World War. Instead, imperialism and the dominant imperialist power has entered a new phase, where it sucks in capital from the rest of the world. It does so without in advance being either a net exporter of goods or of capital. 

As Lenin and a host of commentators had shown, in an earlier phase imperialism had been an exporter of capital. By the early 1970s the US (and Britain, long before) had become importers of capital. 

Persistently incurring new net debts will tend to run down any existing net stock of overseas capital. This is precisely what has happened. The US, as well as France and Britain are imperialist powers who own no net overseas assets, that is to say, their overseas debts are greater than their overseas assets. This is shown in Table 1 below. 

Table 1. Net International Investment Position 2012, US$ billions

Source: IMF, International Financial Statistics[vii]

The US is the world’s biggest net overseas debtor. It requires capital inflows to support the living standards of the population while maintaining the same level of military spending as the rest of the top 10 nations put together. These debts in return require interest payments, which in turn piles up further debt. 

Yet the most remarkable feature of the current economic aspects of imperialism is that the US, a country which has no net assets but only net debts, achieves a surplus on its investment income account. The net flows on the investment income account are shown in Table 2 below. 

Table 2. Investment Income Account, Net Flows, 2012, US$ billions

Source: World Bank, Data, Net Primary Income[viii]

Taken together these five imperialist powers have effectively no net overseas assets, as the net assets of Japan and Germany are effectively balanced by the net debts of the US, France and the UK. Yet in 2012 they received a net US$526 billion in net payments of interest and dividends from the rest of the world.

Within this bloc, the US is clearly pre-eminent. It extracted more interest from the rest of the world than Japan, despite having net debts greater than the level of Japan’s net assets. France and the UK were junior partners in this role. By contrast, both Japan and Germany are able to sustain trade surpluses because of accumulated levels of productivity (and in Japan’s case severe restrictions on imports). For them, there is no imperative to engineer investment income surpluses, these are a natural outcome of their trade-driven accumulation of overseas assets. Even so, along with France and the UK, they too play a supporting role in the global system of imperialism and benefit from it. 

[* The UK is undergoing a particular period of turmoil in its overseas accounts, associated with the continuing crisis of its banking system and their overseas operations. In the prior year the surplus was $42 billion. But it remains to be seen to what extent the UK can recover this position]. 

Finance Capital

A capitalist economy is one in which there is generalised commodity production. Money is the universal commodity, standing in for all other commodities in the process of exchange. The control over the direction or allocation of money capital therefore becomes decisive in the development of capitalism itself. The medium for this allocation is the banks[ix]

As a result, the degree of concentration of capital and the dominance of monopolies depends on the financial capacity of the banks. The scale of necessary investment requires access to large-scale savings. The elimination of rivals requires financial resources. So, the creation of Ford Motors, Standard Oil and AEG relied on the emergence of JP Morgan, Rockefeller and Deutsche Bank respectively. This control over the allocation capital places the banks in an increasingly dominant position in the capitalist economy. Dominance over the global financial system is the essential condition for dominance over an entire economic system dominated by finance capital. 

As the dominant force in the global financial system, the US directs resources for its own needs. It charges vastly higher rates of interest when it recycles capital overseas than it is willing to pay. This explains how it is possible for the US to draw in interest income when it owns no net assets. At the same time, the US and its junior partners in France and the UK have not grown as rapidly as the world economy over a prolonged period, and yet they are continually able to draw in capital from the rest of the world. This too is only possible because of the US dominance over the global financial system, with Britain and France playing an important subordinate role. 

The US dominates all global transactions through the trading pre-eminence of the US Dollar, which accounts for approximately 85% of all foreign exchange transactions.[x] Firms seeking to raise capital privately are inspected by the US-dominated ratings’ agencies. Governments are frequently obliged to apply to the IMF or World Bank, where the US dominates. The obligatory criteria under which these finances are disbursed, or not, comprises privatisations, reduced government spending, lower living standards and financial ‘liberalisation’. These have the effect of allowing greater access to domestic markets for the imperialist powers, their firms and their banks, and most especially allows access to domestic savings, which are required to fund the external deficits of the US and the other imperialists. It is no accident that the ideology underpinning these criteria is called the ‘Washington Consensus’. It amounts to dominance over the financial system which dominates the world and gives the US privileged access to its resources. 

This is far removed from the era of ‘free trade’, between firms and nations which ended by the turn of the twentieth century. In any event this frequently involved robbing the colonies of goods or raw materials for far below their value, or in many cases simply outright plunder. It is even further removed from the trade of one large country with another, say Brazil with Venezuela or China in Africa. These can be mutually beneficial trading relationships, even while governed by laws of the capitalist market. 

Instead, the parasitic imperialist powers are able to conjure capital and interest from the rest of the world, seemingly out of thin air and on a repeated basis. It is comparable to free trade only in the way that an armed robber is akin to a market stallholder. In both cases money changes hands, but US dominance over the global financial system leaves as little in return as the robber. And this is not a one-off, but it is a continuous flow of capital. 

It is only possible to rob someone repeatedly if a knife is held to their throat. The extraordinary US expenditure on its military and the willingness of its French and British aides de camp to support its military adventures (even their disappointment when the US was obliged to refrain from bombing Syria) is explained by this imperative to plunder the rest of the world. Military dominance and repeated shows of military force are necessary to underpin a system of global financial extortion

The negative effects of imperial domination are not most frequently felt through war. This is just the most extreme symptom. Instead, a consequence of the dominance of the US and its interests in global finance is that even any changes in the economic or monetary conditions of the US reverberate globally. Abrupt changes in the US repeatedly manifest themselves as regional or even global crises. This is shown in Chart 2 below. 

Chart 2. US Long-Term Interest Rates and Financial Market Crises

Source: Federal Reserve Economic Data

The chart above shows long-term US interest rates and some of the main financial market crises. The yields on US government debt change if there is an alteration in the balance of supply and demand for capital in the US. This was the case when Reagan came to office and hugely expanded the US budget deficit. It has also been the case with (increasingly modest) economic revivals in 1994, in 1997 and the very mild economic upturn in 2012. In all cases the increased demand for capital in the US led to a rise in US long-term interest rates.

The consequence was that capital flowed out of the semi-colonial world and into the US, leaving the former in crisis. This occurred with the Latin America debt crisis of the early 1980s, the global financial crisis in the early 1990s, the Asian financial crisis of 1997 and 1998. The recent ‘emerging market’ slowdown is only milder to date because the rising demand for capital in the US to fund rising consumption has been extremely modest by historical standards. Yet among the countries most affected by this slowdown include Brazil, Russia, South Africa, Turkey[xi], and so on, precisely those countries which are foolishly described as sub-imperialist, or even in Russia’s case, without the diminishing prefix. It is only those countries who are able impose capital controls that can partly insulate themselves from being a store of savings for the US (and face fierce opposition from the US for doing so). This imperial dependence on capital inflows is the reason that the US, and its proxies like the IMF are so adamant that capital movements be ‘liberalised’. 

In each case after these major crises the subsequent outflow of capital from the semi-colonial countries restored the US domestic balance of supply and demand for savings and so US long-term interest rates declined. But the outflow of capital left devastation in its wake in the semi-colonial countries affected. 

Increased parasitism, further decay

The impact of US dominance is felt not only in the colonial and semi-colonial countries but also in the subordinate imperialist countries themselves. As noted above, in 1994 there was a global financial crisis provoked by an increased demand for capital in the US which affected all countries unevenly. 

While the UK and France attempt to benefit directly from the dominance of the US and the role of global finance, Japan and Germany remain more closely related to the archetypal imperialist power of the early twentieth century. Highly competitive industries and persistent trade surpluses have previously allowed the build-up of a stock of overseas assets from which German and Japanese imperialism draw interest from the rest of the world. Consequently, they have had less incentive to support domestic finance at the expense of domestic industry. As a result Japan and Germany have much less to gain from the increased dominance of US-led global finance in the worldwide system of imperialism. 

After 1945, the US aim of bolstering capitalist allies as a bulwark against the Soviet Union prioritised the rebuilding of war-ravaged Japan and Germany. This was state intervention to preserve the capitalist system. But it was only after the US had established its supreme dominance over the rest of the world, including the subordination of these other imperialist powers through war. 

The weight of the imperialist economies is not static, either as a group or individually. They have undergone a series of dramatic changes. The only constant is US dominance. Chart 3 below shows the relative weight of these five imperialist economies in the world economy, both individually and as a group. The data is shown in the table below. 

Three distinct dates are chosen. 1913 represents a snapshot of the world economy on the eve of 1914-1918 war. 1951 represents the post-1945 settlement. This is also the highest recorded point of imperialist power on a world scale as accounted for by share of world GDP and is also the highest recorded level for the weight of the US in the global economy. 2008 is the final data available from Maddison before his death, and of course coincides with the onset of the global financial crisis. 

Chart 3

Source: Author’s calculation from Maddison data

The high-point of these imperialist powers in terms of share of world GDP was 1951. There has been a sharp decline since that time (which has almost certainly been deepened by the effects of the crisis). Within that bloc, the US has returned to its former starting point a century ago, whereas most of the other imperialist powers have declined in a more marked way. The UK has experienced the most spectacular fall of all, its weight in the world economy declining by two-thirds in a hundred years. Japan is the partial exception to this rule, having been only on the verge of becoming an imperial power at the beginning of the twentieth century and being utterly devastated by war and nuclear bombing by the early 1950s.

This still left just 9.5% of the world’s population in these 5 countries to enjoy the benefits of one-third of world output in 2008. Within those countries a tiny minority of the population takes the lion’s share. All manner of chauvinist and racist explanations are advanced for this unequal distribution of global income, and the accumulated wealth it brings. But in reality it is only possible if most of the world is dominated by a global system of imperialismthe forcible transfer of incomes and wealth from most of the world to a minority of it. This system includes ideological, legal, institutional, commercial and financial strands. All of these are underpinned by the aggressive exercise of military dominance, led by the US. 

A century ago, Britain had already become a ‘rentier nation’, living off its overseas income. The factual verdict on this strategy in terms of delivering growth is devastating. By contrast, Japan’s post-War success was built on very high levels of investment and favoured nation status in its trade relationships with the US. Japanese investment as a proportion of GDP rose to what was then an unprecedented level of 30% of GDP and in consequence GDP growth accelerated to over 8% per annum. 

However this period is already at an end. The Japanese domestic economy has not been accumulating net new capital for some years and the structural trade surpluses have become deficits. Growth has also stagnated for 25 years and it seems probable that like the US, France and the UK, Japan’s net overseas assets will dwindle towards zero (or below). 

A decisive blow was struck by the US against both Japan and West Germany in the late 1960s. Both countries had been growing more strongly than the US over a considerable period based on much higher levels of investment. Using the pressure of its military relationships, in a series of measures the US forced sharp revaluations of both the Japanese Yen and the Deutsche Mark. It suspended the convertibility of the US Dollar and finally collapsed the entire post-WWII Bretton Woods financial system. In this way it was able to disguise a substantial devaluation of the US Dollar as a widespread but piecemeal revaluation of other major currencies, while its grip on Middle East oil ensured this did not lead to an outright balance of payments crisis in the US. 

The effect was not to increase US growth but to slow both the Japanese and German economies for a generation, just as it had used the combination of its military and financial muscle to devastating effect against France and the UK during the Suez crisis in 1956. The US later repeated this feat particularly in relation to Japan, by redirecting Japanese capital towards the US arms race to bankrupt the Soviet Union in the 1980s. The most important outcome was the overthrow of the Soviet Union and its reduction to the status of a semi-colonial country, primarily producing raw materials for the (US-dominated) international markets. A side-effect was to foster the collapse of Japanese growth into stagnation, which has been unaltered since 1990. 
Inter-imperialist rivalry has not been abolished. But the US has used a combination of its financial and military dominance to ensure its own dominance within the imperialist bloc, even as that bloc has been in relative decline. 


The concentration of capital and the dominance of finance capital have both become more pronounced features of global capitalism in the current phase of imperialism. 

Simultaneously, the decayed and parasitical ‘rentier nation’ that Britain had already become over a century ago is now the norm for the imperialist countries as a whole and for its dominant country, the United States. 
Like an ancient despot, the US and its allies draw in tribute from the rest of the world in the form of a continuous inflow of capital. There is even a substantial net inflow of interest income, even though they possess no net overseas assets, only liabilities. 

The main mechanism for this worldwide extortion is the US dominance over the global financial system, which is itself the dominant sector of capitalism. This is only possible because it is underpinned by the vast military resources of the US, which are far greater than all its major rivals combined, and which it exercises repeatedly and brutally.

Like Britain before it, the US has become a ‘rentier nation’, whose main overseas income is derived from the exaction of interest and other payments rather than net trade. But this has entered a new phase, where the tribute of interest income continues to flow even though there are no assets on which it is based. Without any net overseas assets, this is only possible because of its status as imperial power. Imperialism is a global system of super-exploitation, directed by control over finance capital and supported by military dominance. The sole imperial super-power is the US, supported by its allies. 

Because imperialism has entered a more decrepit phase does not make it more benign. On the contrary. The US relentlessly seeks to extend its interlocking systems of military alliances, trade treaties and financial predominance because it is in relative decline. The vampire always seeks fresh blood. 

Using ‘imperialism’ as a term of abuse, or even as a synonym for a large trading nation, albeit one possessing nuclear weapons, is to rob it of all scientific value. The fact that US imperialism can occasionally be challenged or stymied by some combination of semi-colonial countries and worker’s states acting in concert does not alter the essential meaning. Instead, these challenges are a reflection of the relative economic decline of the imperialist powers in general combined with a growing and related war-weariness on the part of the population. The US insistence on its own supremacy within the imperialist bloc has only exacerbated that collective decline, while preserving its own dominant status. 

Rather than echo the frustrations of the US State Department, socialists and communists welcome the current impotence of the US, for however long it lasts and however limited it is. In 1997 a triumphalist US imperialism set out its bold plan to brook no global or regional opposition and to be able to fight two major wars simultaneously[xii]. In 2013 the US and its allies were unable to begin bombing Syria. 

Imperialism is the enemy of all humanity and its set-backs or defeats are a cause for celebration as they represent an advance for all humankind and the struggle for socialism. 

[i] This is not new. At the outbreak of war in 1914, most leaders of the Socialist Parties in Europe promptly discovered that their real enemy was the same as the one identified by their own bourgeoisie. 
“The scientific concept of imperialism, moreover, is reduced to a sort of term of abuse applied to the immediate competitors, rivals and opponents of the two imperialists mentioned, each of whom holds exactly the same class position as his rivals and opponents! This is not at all surprising in this day of words forgotten, principles lost, philosophies overthrown, and resolutions and solemn promises discarded.” 
Lenin, preface to Bukharin’s ‘Imperialism and the World Economy’, 

[ii] As the US became free to engage in increased military adventures with the collapse of the Soviet Union, there arose a concerted effort to disguise this by arguing that ‘imperialism’ was a diffuse and unspecific phenomenon. Hardt and Negri led the way in ‘Empire’arguing that ‘imperialism has no address.’ Imperialism is a global system of exploitation, but it has a sole superpower protagonist which is headquartered in Washington DC. 

[iii] This essay cannot possibly do justice to the scope of Lenin’s work, which relied on exhaustive and voluminous research in a host of languages. The notebooks for his pamphlet encompass hundreds of works, in Volume 39 of his Collected Works . However, with access to modern and publicly available databases it is possible to analyse some of the most important features identified by him and to update them in light of factually altered conditions. This can be done without the volume of work that Lenin was obliged to do, and should be done by socialists seeking to understand the development of capitalism. 

[iv] The Fortune 500 list of leading global firms contains 130 from the US In 2013 their combined revenues was equivalent to just under $16 trillion, approximately the same as US GDP. 

[v] Bank for International Settlements, BIS Quarterly Review, Q3 2013 

[vi] Bank of England, Three centuries of economic data There is an accompany dataset which shows the trade deficit from 1891 to 1906, followed by a trade surplus until the outbreak of the war. Dataset can be accessed here

[vii] IMF, 

[viii] World Bank, 

[ix] Lenin drew on Hilferding’s ‘Finance Capital’ which analysed the dominance of finance capital beginning with the role of money which ‘stands in the place of’ all other commodities. 

[x] BIS, Annual Foreign Exchange Survey, Reuters report 

[xi] Financial Times, Emerging Market: Fears of Contagion 

[xii] Project for the new American Century,