Commentary on Political Economy

Tuesday 27 September 2011

Martin Wolf on the EU Crisis

This article in the FT by Martin Wolf offers an excellent summary of the situation at present and the kind of hurricane that threatens to engulf not just the EU but the global capitalist economy overall.

There are two preliminary points that need to be made for a critical reading of the article: the first is that Wolf discusses the more immediate "technical" hurdles in the way of some sort of "solution" to the current crisis, but he fails to refer to the reality that the crisis itself, originating with the GFC, is merely a symptom of the decline in "profitability" of global capital once the profits and revenue from the Great Moderation that was induced by the exploitation of mainly Chinese workers as the work-horses of the world evaporated in a cloud of speculation from their recycling in the capitalist "metropole".

Wolf never looks into this. The second point is that Wolf does not look into "why" global capitalist elites find it so difficult to agree on what to do: and the obvious reason is that capitalism itself is an "antagonistic" social system that turns its citizens against one another. The details of this antagonism can be found and gleaned from our theoretical pieces on this site. Interestingly, it is now coming to light increasingly from many orthodox commentators (from Wolf to Krugman to Roubini to you name it) that this is a "political" crisis - precisely because, as we stress on this site religiously, "economics is a concentrate of politics".

That is why we concentrate more on the "theoretical" matters than on the "technical" ones - because we must understand this system thoroughly in order to enucleate its weaknesses and then propose possible remedies. In future, we will begin to focus more on the latter.

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