For those panicking about the economic crisis,
Pope Benedict XVI reminds that "money is decay" (2008)
The fall in economic growth in the world by the end of 2008
Great Recession ( English Great recession), the global recession of 2009, the global crisis - a recession in the global economy that began in 2007-2008. This recession is a long-term event that began in 2008 and has not ended to date.
Origins and causes
The emergence of the crisis is associated with the general cyclical nature of economic development, imbalances in international trade and capital movements, as well as overheating of the credit market, and especially the mortgage crisis, which manifested itself as a result of it, as a result of credit expansion launched in the 1980s and early 2000s.
High Commodity Prices
In the pre-crisis 2000s, there was a boom in consumption, accompanied by a steady rise in commodity prices. In January 2008, oil prices topped $100 a barrel for the first time in history: “when the market for high-yield, but very risky, structured U.S. asset-backed debt suffered a significant downturn due to the American subprime crisis, hedge fund money poured into the commodity markets, which led to the unrestrained growth of oil futures quotations…”, - analysts noted in December 2007.
In one day on June 6, 2008, oil rose in price by $ 10 per barrel, as Vedomosti noted, oil has not risen in price so sharply in one day since the crisis in the 1970s. On July 11, 2008, the price of WTI oil reached an all-time high of $147.27 per barrel, after which a sharp decline began that continued until December 2008, when oil prices fell to a four-year low of $36 per barrel.
In January 2008, for the first time in history, copper prices on the London Metal Exchange exceeded $8,000 per tonne. In early July, prices rose to $8,940 per ton, which was an absolute record since 1979, when trading began on the LME.
According to the FAO, in April 2008, a record high of the historical maximum of the composite index of food raw materials (274 points) was recorded.
The beginning of the crisis in the USA
On October 31, 2008, Prime Minister V. Putin announced a possible reduction in budget expenditures and state monopolies; further business support will have to be carried out mainly without additional state expenses.
2009-2010
Nezavisimaya Gazeta journalist Mikhail Sergeev concluded that stagflation awaited Russia in 2009: a combination of recession while maintaining high inflation, and that the government had resigned itself to the inevitability of such a negative scenario.
According to Forbes magazine, from May 2008 to February 2009, the number of Russian dollar billionaires decreased from 110 to 32 people, and their overall fortune decreased by almost 5 times.
Nezavisimaya Gazeta wrote that according to the results of the first half of 2009, "Russia has become the undisputed leader among large countries in terms of the relative rate of economic decline compared to the pre-crisis period."
According to data published on March 11, 2010 by Forbes magazine, the number of billionaires in Russia almost doubled in 2009, increasing from 32 to 62 people, which experts explained by rising oil prices and rising stock markets - including due to anti-crisis injections of the Russian government .
In March 2010, a World Bank report noted that the losses to the Russian economy were less than expected at the start of the crisis. According to the World Bank, this was partly due to the large-scale anti-crisis measures taken by the government.
Stock market
On October 6, 2008, another record-breaking event took place Russian market shares, the fall of the RTS index (per day by 19.1% - up to 866.39 points; in London, where trading did not stop, Russian "blue chips" fell by 30-50%).
From the beginning of August to the beginning of October 2008, the capitalization of the Russian stock market fell by 51.7%, while the capitalization of the stock markets of developing countries as a whole fell by 25.4%.
At the end of 2009, the Russian stock market was the world growth leader, the RTS index grew 2.3 times. March 12, 2010 Nezavisimaya Gazeta noted that the Russian stock market managed to win back most of the fall that occurred at the beginning of the global financial crisis.
By April 2010, there were practically no sectors in the Russian manufacturing industry that were in recession.
Anti-crisis measures
Measures to strengthen the financial sector implemented in 2008:
- subordinated loans - 450 billion rubles;
- recapitalization and other direct support measures - 335 billion rubles;
- recapitalization of the Deposit Insurance Agency - 200 billion rubles;
- recapitalization of banks - 75 billion rubles;
- recapitalization of the Agency for Housing Mortgage Lending - 60 billion rubles.
Measures to support the real economy implemented in 2008:
- fiscal stimulus measures aimed at supporting producers - 272 billion rubles;
- reduction of the tax burden - 220 billion rubles;
- support for industries - 52 billion rubles;
- measures of fiscal stimulus addressed to the population - 32 billion rubles;
- acquisition of housing for military personnel and for socially vulnerable groups of the population - 32 billion rubles.
According to academician V.V. Ivanter (2014): “During the crisis of 2008-2009, the deposits and incomes of the population, the free exchange of the ruble for foreign currency, were preserved. And spent about 200 billion dollars from the reserves. But at the same time, the economy “fell” by almost 8 percent.”
On October 10, 2008, Finance Minister A. Kudrin announced in Washington that the possibility of using pension savings to support the Russian stock market would be considered; he also said that the crisis could continue "for more than two years", and the growth of Russian assets "will have to wait for 3-5 years."
Crisis duration estimates
In 2008 and 2009, most politicians and economists predicted the imminent end of the crisis. However, there were those who spoke of its long-term nature. In particular, Russian economist Mikhail Khazin estimated the duration of the crisis at 5-8 years. Looking closely at previous deep financial crises, there is reason to worry that the decline in employment will be catastrophically deep and the recovery impossibly slow.”
In 2009, the forecasts of national governments regarding the consequences of the crisis for their own economies were in most cases more optimistic than those for the economies of other countries and the world as a whole, and most often called the end of 2009 or the beginning of 2010.
In 2011-2012, more and more economists began to talk about the protracted nature of the crisis. It is especially emphasized that the crisis is far from over and it continues to develop.
Assumptions by Russian specialists about when the crisis will end vary greatly: from a few months (Dvorkovich) to several decades (Kudrin, Ershov). Similarly diverse, although not so radical, forecasts are given by foreign authors. The reasons for the spread are that government officials, on the one hand, fear negative sentiment and even panic among market participants, including consumers, and try to reassure people with optimistic forecasts and assurances that “Everything is under control.” On the other hand, one has to make excuses for taking unpopular measures, which is easier to do against the backdrop of pessimistic forecasts.
The economic crisis goes hand in hand with worsening health conditions (due to rising unemployment and poverty and a widening gap between the rich and the poor), but is not always accompanied by an increase in the death rate. Financial hardship is causing suicide all over the world.
Crisis proposals
Fiscal expansion and financial regulation
To fight global crisis, The US, in addition to setting a 2% growth target, proposed that the G20 countries start recording spending again. This policy was rejected. At a meeting of G20 finance ministers, delegates agreed to pursue monetary policy and fiscal expansion as long as economic growth continues. A proposal was also put forward to help developing countries through IMF grants and improved financial regulation, including requiring registration of hedge funds (private, unregulated or subject to weaker regulation). investment funds) and their managers.
Increasing the birth rate
The Italian economist Gotti Tedeschi takes the view that the true origin of this crisis lies in the "falling birth rate in Western countries."
Encouraging consumption and reinforcing confidence
The Council of the Chambers of Commerce and Industry and 18 major Spanish companies on February 25, 2010 launched their public confidence building and positive public sentiment campaign to overcome the economic crisis.
Increasing budget deficit and spending
According to economists Paul Krugman and Robin Wells, the ossification of various economic and political authorities portends a prolonged crisis with high unemployment and low economic growth, unless solutions are found to promote a short-term deep recession, such as government actions aimed at borrowing money. and increased costs.
Agricultural support
The agricultural sector often remains in the shadow of industrialization. He, in turn, still uses new technologies and knowledge, but has lost its importance, which has noticeable cultural consequences. The time has come to take agriculture into account again, not out of nostalgia, but as an essential resource for the future."
World economy after the end of QE2
Recession in the global economy
In June 2011, the US ended the second monetary policy of quantitative easing (QE2). Opinions emerged that the recession was largely over. General Electric CEO Jeffrey Immelt estimated in August 2011, “The recession was fast, hard, and affected all businesses in one way or another. Some are emerging from the crisis to this day ... the United States was especially hard hit, Western Europe, Japan. In Brazil, there was something like a labor recession. The country continued to grow, as did China. Russia felt the crisis due to the fall in oil prices, and some regions of the world were not affected by the crisis at all. The main blow fell on the United States and Europe.
On August 18, the American bank Morgan Stanley released a report in which it noted that the US and EU countries are currently on the verge of a second wave of recession.
In the summer of 2011, the crisis affected US sovereign debt, leading to a debt ceiling crisis.
August 2. The US Congress approved a plan to raise the national debt limit and reduce the budget deficit. If the plan was not accepted, the United States was threatened with a technical default, as the country lost the ability to service its debt.
August 6th On the night of August 5-6, Standard & Poor's for the first time in history downgraded the US long-term credit rating from the maximum level of "AAA" to "AA +" with a negative outlook.
Gold in August rose in price by 12%. Investors see gold as a reliable alternative to volatile currencies.
quantitative easing program
The quantitative easing program, as an instrument of the monetary policy of various states, involves government cash injections into the country's economy in order to increase the money supply on hand. The increase in money from the population and enterprises should lead to:
- To the growth of consumption and production, and as a result, to the restoration of a stable economic situation and the possible end of the global economic crisis, as well as a greater strengthening of the US dollar;
1. The first program of quantitative easing - QE1. The implementation of this program, completed in 2009, was spent 1.7 trillion. dollars. It was a buyout of mortgage bonds and treasuries from the market. The result of QE1 was the revival of the US economy, the gradual recovery of the securities market and a significant increase in indices (up to 100 percent), with a gradual devaluation of the dollar. Mortgage rates were reduced to historic lows, which stabilized the real estate market that had collapsed during the crisis;
2. The second program of quantitative easing (QE2) was carried out from November 2010 to June 2011. According to most experts, the results of the second quantitative easing are mixed. After all, the program led to the fact that the Fed received an excess money supply instead of accelerating US GDP growth, as well as ever-increasing inflation rates, and a drop in the purchasing power of the population. All of these factors have become an untimely "anchor" for the country's economy. The Fed allocated $600 billion for this program. Thus, taking into account the costs of implementing the first wave of quantitative easing, a total of more than 2.3 trillion rubles was spent on injecting liquidity. dollars, which also led to a weakening of the dollar;
3. Operation "Twist". In order to overcome the consequences of the crisis that broke out in 2008, the Fed had to launch quantitative easing programs twice (QE1, QE2): they bought US Treasury bonds with the constant printing of additional volumes of banknotes.
The new program to stimulate the economy was called "Operation Twist" (or, as it was also dubbed, "Operation Turn"). In the 1960s, the Fed already ran a similar program. Then it was purchased Treasury securities with a further maturity of up to 30 years in the amount of 400 billion dollars. These funds were planned to be obtained through the sale of securities, the maturity of which was no more than 3 years.
The US economy, QE3 and the dollar.
At the beginning of 2012, the United States GDP was 20 percent of the world's gross product at 45 percent of final world demand.
US Fed assets in dynamics
Thanks only to the colossal Fed emissions since the outbreak of the 2008 crisis, which totaled more than $2.5 trillion. dollars (or 17 percent countries GDP s), it was possible to avoid the sliding of the economy into recession, that is, the complete collapse of the financial system, the impoverishment of the population, the collapse in industry.
In the first quarter of 2011, US economic growth accelerated from a low of 0.4 percent to 3.0 percent at the end of the year.
As we can see, Washington manages to maintain the illusion of stability and the prospects for the emergence of "sprouts of growth." But in fact, all this growth is directly sponsored by huge infusions of the Federal Reserve System.
The second wave of the global economic crisis
According to a number of experts, the second wave of the crisis is inevitable. The constant growth of the financial deficit and public debt in the United States, accompanying the government's measures to rescue the national economy, marked the beginning of the debt crisis: "The world economy is facing the risk of a" second bottom "".
The IMF report "World Economic Outlook" (October 2012) notes that the global economy could slide into recession, the risks of which are alarmingly high.
Presenting the World Bank's Mid-Year Report on World Economic Outlook (June 2013), Lead Economist and First Vice Chairman Kaushik Bazu noted that “we are at the bottom now, but we are ready to start the recovery. Starting next year, we will see some improvements.”
The Organization for Economic Co-operation and Development (June 2013) expects global economic growth to pick up and the world economy to almost fully recover to pre-crisis levels in 2014.
In August 2013, the end of the two-year economic downturn in the euro area was announced.
In January 2014, the International Monetary Fund raised its forecast for global economic growth on expectations of accelerating GDP growth in the US, the Eurozone and Japan: "The economy continues to recover," said IMF chief economist Olivier Blanchard. Also, IMF experts note that the locomotive of global growth has become the developed countries rather than developing, as was the case in the first years after the 2008 financial crisis.
June 2014 The World Bank downgraded its growth outlook for the global economy as the crisis in Ukraine, coupled with unusually cold weather in the United States, weighed heavily on growth in the first half of this year.
In the summer of 2014, the capitalization of global stock markets reached a historic high of $66 trillion in August, surpassing the previous peak of $63 trillion. 2007 (collapsed to $25 trillion during the crisis).
In October 2014, the head of the IMF, C. Lagarde, made a statement that the global economy is facing a long period of low growth, high unemployment and geopolitical problems - and the latter, in turn, lead to an even greater deterioration in the economy.
Impact of LTRO and QE on the US stock market
The world capitalist system still cannot get out of the most severe crisis in its history. Starting with mortgage turmoil in the United States, it has spread throughout the world, hitting hard on the economies of all countries without exception. The classics of Marxism noted the inevitability of crisis phenomena within the framework of the capitalist formation. They also said that the contradictions of capitalism would only grow like a snowball over time, exacerbating the consequences of economic shocks from time to time.
The proofs of both the first and second assertions are obvious today and lie on the surface. The causes that gave rise to the crisis were formed back in pre-crisis times and, characteristically, have not gone away today. All of them are inextricably linked with the fundamental structure of the world monetary and financial system, which was formed for the most part at the Bretton Woods conference in the United States in 1944.
Let us try to single out these reasons that caused, if not a collapse, then at least the most severe upheavals of the world capitalist system.
Reason 1. Hypertrophied development of the financial sector
One of the deep problems of the modern world economy is that its monetary and financial sector is hypertrophied.
In modern conditions, the financial system develops according to its own laws and has already largely broken away from the original material base. The reason for this was the opportunity that appeared in connection with the increased international migration of capital to receive speculative earnings on it thanks to the development of means of communication. According to experts, daily operations in the world currency, credit and financial markets 50 times exceed the value of transactions in world trade in goods. This phenomenon has introduced and continues to introduce deep imbalances in the world economy.
Thus, foreign liabilities (debts) of national banks from 1996 to 2011 increased more than 4 times - from 7.5 to 29.4 trillion. dollars (see Fig. 1).
Figure 1: Dynamics of changes in the volume of foreign liabilities of national banks (trillion US dollars)
Source: www.bis.org
The international bond market (debt securities) is developing even more rapidly. During the period from 1996 to 2011, the volume of international bonds increased almost 12 times - from 2.5 to 29.7 trillion. dollars (see Fig. 2).
Figure 2: Dynamics of changes in the volume of the international bond market (trillion US dollars)
Source: www.bis.org
If we compare the volume of the world bond market with the volume of nominal world GDP, we can find that the value of this indicator increased from 8.2% in 1996 to 42.5% in 2011 (see Fig. 3).
Figure 3: Ratio of the international bond market to world nominal GDP (%)
Calculated according to www.bis.org and www.worldbank.org
Reason 2. Distortion of the derivatives market
Derivatives are called financial instruments- “preliminary contracts”, which are an agreement between two parties by which they assume an obligation or acquire the right to sell or buy a certain product at a specified time at a pre-agreed price. The purpose of buying a derivative is not to obtain the commodity itself, but to insure against price or currency risks in the event of an unpredictable price change. However, in practice, trading in derivatives has become far removed from trading in real goods and is carried out for the sake of obtaining speculative profit from changes in the price of the underlying product.
In December 2011, the nominal volume of derivatives circulating on the world market rose to 673 trillion. dollars (Table 1).
Table 1. Nominal volume of derivatives traded on the world market (trillion US dollars)
| dec.07 | dec.08 | dec.09 | dec.10 | dec.11 | dec.12 |
| 597 | 569 | 600 | 605 | 673 | 712 |
Source: www.bis.org
The value of derivatives on the world market exceeded the volume of world GDP by at least ten times. In the US, the volume of derivatives exceeds GDP by more than 15 times. At the end of 2012, the US derivatives market was $310 trillion. dollars, while GDP in 2012 was 15.9 trillion dollars, public debt - 16.8 trillion dollars. During a crisis, derivatives give rise to a "domino effect": one instrument collapses, and others fall after it.
Reason 3. Systemically important financial institutions
The recent global financial crisis has clearly demonstrated that another weakness of capitalism lies in the activities of large financial institutions: "too big to fail" (Too Big To Fail (TBTF)). Such institutions are so large and interconnected that their bankruptcy becomes disastrous for the economy. In this regard, their support is necessary for the state in case of financial shocks.
Over the past decades, the banking sector has been characterized by a trend of constant growth, which clearly illustrates the regularity of capital's desire for centralization described by Marx. So, in the US 15 years ago, the assets of the 6 largest banks accounted for only 17% of GDP, and now - about 63%. The assets of the 10 largest banking institutions increased from 24% of total assets in the early 1990s to and 44% in 2000 to 58% in 2010.
In practice, this situation leads to the fact that the bankruptcy of one of the market participants in the future will have severe negative consequences for other participants due to the strong interconnectedness of all players.
During the current crisis, the authorities of all countries have decided to rescue large banks in order to prevent further deterioration of the financial system. However, in reality, such measures allowed banks to behave completely irresponsibly and buy any assets. If they make a profit, the bank will increase its market share; if they lead to losses, the bank will be rescued by the authorities.
Reason 4: Debt Crisis Growing
The danger of a growing debt crisis is another significant threat to the world monetary and financial system of capitalism. A high degree of threat is associated with the fact that debt problems have hit the world's largest economies - the EU, the US, and Japan.
In the case of the European Union, the escalation of the debt crisis threatens not only the integrity of this major integration bloc, but also the fate of the euro, the world's second most important currency.
The role of the EU in the global economy is very important. The European Union ranks 2nd in the world in terms of GDP (15.63 trillion US dollars in 2012, in purchasing power parity), 1st place - in terms of exports (2.17 trillion US dollars in 2012 g.), 2nd place - in terms of imports (2.39 trillion. US dollars in 2012) The total public debt of the EU - more than 16 trillion. USD (for 2012).
The crisis of sovereign (public) debt in a number of European countries in 2010, the EU countries with weaker economies, the so-called PIGS countries (Portugal, Ireland, Greece and Spain), hit hardest. Later, Italy faced such problems with a public debt of 120% of GDP in 2010, Belgium - 100% of GDP in 2010. To varying degrees, the crisis affected almost all EU countries.
The cause of the crisis in the EU was a combination of several factors, which include: globalization of the financial market; the relative ease of access to loans in 2002-2007, resulting in a large number of high-risk loans; deficit of the trade balance of a number of countries (excess of imports over exports); expanded bubbles (trading at prices significantly higher than fair prices) in the real estate market; slowdown in economic growth since 2008 and subsequent economic downturn; ineffective regulation of public expenditures and revenues; provision of large-scale government assistance to banks.
A possible debt crisis in the United States is a phenomenon that will threaten the collapse of the entire world economy. Having a colossal state debt- 16.8 trillion. dollars, which exceeds the country's GDP (15.94 trillion dollars in 2012), the United States avoids a technical default by raising its "ceiling". Since the country's debts are denominated in dollars, the US has the ability to repay the interest on its bonds by expanding the issuance of its currency.
Mass emission (issuance of new money into circulation) will naturally lead to a fall in the purchasing power of the US dollar. Should there ever be a US technical default, and it will lead to a sharp depreciation of the dollar, this will allow America to actually write off a significant part of its national debt. This will inevitably entail a colossal blow to the economies of all countries of the world that keep their foreign exchange reserves in dollars.
Another country experiencing serious debt problems is Japan. The national debt of this country has reached the amount of 12 trillion. dollars and more than twice its GDP. This is the worst indicator in the seven industrialized countries of the world. Considering the role of the country's economy in the world, the deepening and expansion of Japan's debt crisis will become a serious problem for the whole world. Japan's GDP in 2011 amounted to 4.7 trillion. dollars is the 5th largest economy in the world. The country ranks 5th in the world in terms of exports and imports: $788 billion and $808.4 billion, respectively.
Reason 5. The instability of the rates of the world's leading currencies
The instability of the rates of key world currencies is another significant and intractable problem of the modern monetary and financial system.
In the figs below. Figures 4 and 5 illustrate the dynamics of changes in the index of the effective exchange rate of the US dollar and the euro over 10 years.
Figure 4: Dynamics of change effective course US dollar (210=100)
Source: www.bis.org
Figure 5: Dynamics of changes in the effective euro exchange rate (210=100)
Source: www.bis.org
As can be seen, the dynamics of changes in the effective exchange rate index of both the US dollar and the euro demonstrates a very high level of instability. Such significant changes in the rates of the world's leading currencies undermine their function as a measure of value.
There is another reason for the instability of exchange rates. In the era of the WTO, when countries are deprived of the opportunity to fully use tariff and customs barriers, manipulations with the exchange rates of national currencies become an important weapon in the struggle for markets. The main purpose of such manipulations is to support domestic producers and thus stimulate exports.
Summing up, we note once again that the listed reasons for the crisis of world capitalism and its monetary and financial system largely grow out of the insoluble contradictions of this socio-economic formation. Their elimination will mean a change in a number of fundamental principles, goals, patterns, incentives and values of capitalism. Will those who today are the beneficiaries of this system agree to such changes? Unlikely. Indeed, during the years of the crisis, the number of dollar millionaires in the world increased by 14%, and the total amount of their capital increased by 32%. During the same time, the army of unemployed reached the level of 300 million people (a third of them are young people). The capitalists will keep the foundations of the systems unshakable to the last, strive for the concentration of capital, cherish the "sacred right of private property", impose consumption values and individualism on the working people.
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61 comments
consonant 09.08.2013 10:16
“Relations of production, the totality of material economic relations between people in the process of social production and the movement of a social product from production to consumption.
... Production-economic relations, or, as they are usually called, Production relations, differ from production-technical relations in that they express the relations of people through their relations to the means of production, i.e., property relations.
TSB
“Gold parity (from Latin paritas - equality, equivalence), 1) the weight content of pure gold in the national currency fixed by the law of the country; 2) the ratio of two monetary units, calculated on the basis of their gold content, fixed by law.
TSB
“The market, the sphere of commodity exchange. From the point of view of the territorial boundaries of the market and its scale, a local market (the sphere of commodity exchange), national (internal) and world (external) are distinguished. The market (the sphere of commodity exchange) is the dominant and determining form of communication between commodity producers on the basis of the social division of labor.
... The market (the sphere of commodity exchange) is carried out on the basis of world prices, which differ from the price level in individual countries.
TSB
.
Long, but seems to be exhaustive. The gold parity, on the basis of which world prices are formed, is directly related to market relations. At the same time, both of these concepts are equivalent and in no way carry an element of secondary nature in relation to each other. They arise simultaneously and simply cannot exist without each other. A market without an economic equivalent (gold parity) is no longer a market, but a simple exchange of goods.
.
As for those insulting attacks from the truly hysterical charisma of my opponent, in this respect I am completely calm. And that won't take me. In the course of my production activities, I have seen this ... God forbid, as they say, to everyone. But hardening.
And all these nervous attacks speak only of the lack of self-confidence and the weakness of their own positions. And yet, it is an indicator of the general level of culture and the degree of upbringing of this individual.
cat Leopold 09.08.2013 12:44
Of course, I expressed myself very unsuccessfully, expressing my conviction in an unacceptable form of a peremptory statement, for which I apologize, but it really hurt. But I don't think my statement about money is wrong. And I don't see any rebuttal.
I want to continue. Money, as we found out, from a Marxist point of view, and with which I think we all agree, is a universal form of value. But then let's deal with the Marxist view of value itself - what is it and why did this concept arise at all?
According to Marx, COST is the expenditure of all the physical and mental forces of the producer of a particular product during the working time necessary for its production (hours, days, weeks, etc.), of course, socially necessary time. These costs are More time, as Marx said, crystallizes in the object created by the worker, constituting its value, since it is intended not for its own consumption, but for exchange, i.e. since this object becomes a commodity. That is, any object produced by human labor that satisfies any need for it of other people becomes not only a useful thing, but also a thing of a certain value, which can only be obtained by giving in exchange for something of the same value, money, for example, in a certain amount.
cat Leopold 10.08.2013 07:00
Now specifically on the crisis of capitalism and its causes. The main reason for any GEF, including capitalism, is the IMPOSSIBILITY of further development of PRODUCTION FORCES under the given PRODUCTION RELATIONS. There can be a lot of manifestations of the coming and coming crisis in all spheres of public life, we all see and feel this very well from our own experience.
This is a GENERAL understanding of the general socio-economic crisis. But at the present time, we need an understanding of precisely the specific mechanism of BLOCKING the development of Pr. forces by existing Pr. forces. relationships. How exactly does this happen.
cat Leopold 10.08.2013 08:02
To do this, in my opinion, you need to clearly understand what Pr. forces, and what are relations of production in general and specifically for a given period of social life.
I want to note that these seemingly well-known and therefore banal things, their interpenetration and interaction, i.e. their dialectics, however, in reality, few people understand, and that is why, until now, the crisis mismatch of these basic factors of social life, namely the factors of people's production activity, NOT overcome.
Vasily-1 12.08.2013 17:28
When we talk about the crises of world capitalism, we must first of all understand economic processes both at the micro level (within a capital country) and at the macro level (between capital countries). We know that each individual capital of a productive application functions on the principle of its own circulation around the point of application (payment for permanent capital, the production itself, the sale of a good as a commodity). Here last operation is possible only under the condition of the circulation of the total capital of this particular country. At the same time, the total capital of a particular country carries out circulation around the axis of its application - social consumption through the market for the exchange of goods for money. Only real money on the return path of the movement of total capital (like the return branch of a giant conveyor) is already in monetary form capable of nourishing individual capitals at the exit of their goods from production. In a word, the internal economy of each more or less developed capitalist country has a complex mechanism of internal economic relations. It is these interrelations that force the domestic economy to improve in the direction of the socialization of production. According to the described principle, capitalism historically developed in individual countries and began to transfer its internal interdependencies to relations between capitalist countries. The current economic relations of capitalist countries are much more complicated, say, the stages of “large industry”. And this complexity is caused by the functioning of the most powerful transnational corporations (TNCs), whose technological flows can repeatedly cross the borders of many "independent" countries and carry with them not only the means of production, but also their costs. The question is how, under these new conditions, to determine external economy a separate capitalist? No way, the world capital economy has already formed, which functions on individual countries. And if we take into account that where the head of a TNC (headquarters) is, there is also a point of application of its financial activities, then it is possible to fully comprehend a completely new order of dependence of capitalist countries. Since the United States has the main composition of TNCs, its internal economy becomes incomprehensible to the world - it allegedly lives in debt. No, it contains a new form of exploitation of the whole world. Therefore, the idea of the crises of the world capital economy is the measure of the bourgeois world society, they are subjective. It is not an objective factor to assess the state of the world economy and its crisis phases along this path. Here a different approach is required - an approach from the position of the next socio-economic formation - the communist one. And here you need to learn materiel in a new way.
cat Leopold 13.08.2013 06:31
I am glad that I met the understanding that: "a different approach is required - an approach from the position of the next OEF, the communist one." But I'm afraid to stumble again on the same commentator as Evgeny; one of his comments, in my opinion, was good, and after that he imagined that he was Doka in everything and everywhere, but did not even know such an elementary thing that commodity production could be, and at first it was simple before than to turn into a capitalist-commodity. I have no desire to discuss in the name of self-affirmation, there is only in the name of TRUTH.
Vasily-1 14.08.2013 17:05
Leopold!
And you speak out, you won’t lose anything from this, but there will be a reason for further reflection. After all, the question is far from ordinary.
Rafik Kuliev 02.12.2014 10:01
The very fact of publishing such articles proves that this site belongs to the secret police.
gene 07.07.2016 00:45
inflatable muzzles
—
We shine in the country
It will be a shame to fall into the mud
An American is coming
Build bridges and connections.
We are all gray as mice
No progress no ideas
And we want at least a small niche
In the realm of the chosen people.
What is Tolstoy to us, Dostoevsky,
Mendeleev, Pasternak
There is a good reason to forget them -
There is no sausage whatsoever.
In the rain of investments
Our true path will blossom.
Everyone wants to be abroad
And not at home to bend your back,
But we looked with horror -
By what he brought
The inflatables were blown
And it hurts us to tears
For the myths dispelled
For the continuous lies in the press.
Utility tariffs
The body is shaking
dedicated server 23.04.2017 17:04
Many fortunes have disappeared, many have halved, many once well-to-do families are now in dire need, many workers are out of work.” Among the causes and factors leading to economic crises, a special place is occupied by psychological factors, since the behavior of subjects economic activity may be a "trigger" for the crisis.
spirit 16.05.2018 15:27
THUS SAITH THE LORD .., - IN - THE TRUTH LEGISLATIVE AND JUDGE, - THE LIVING AND THE DEAD ..!
“Let there be one law for both the natural inhabitant and the stranger,
settled between you. One court must be yours, as for
a stranger, so it is for a native, for I am the Lord your God.”
(Holy.., - CANON, - Lev.24:22.., Ex.12:49).
BUT, IF YOU .. - STARTED AGAINST GOD AND DECLARED YOURSELF,
"CIVILIZED" .., "SEcular - (SATANIC, - NOT
RECOGNIZING - GOD'S LAWS AND COURTS ...), THE STATE ",
(for Satan .., - a liar and a murderer - John.8,44 .., the first
Questioned the truth of the word
God's .., "Did God truly say" .., -
Genesis.3, 1…)
THIS .., - DOES NOT MEAN THAT GOD'S LAWS AND COURTS, -
LOSE POWER OVER THE WORLD ..!
THIS MEANS THAT, (YOU, - FOUND A CURSE .., - DEUTOLAW ..,
28, 15 - 68 .., And ...), YOU HAVE, - AHEAD .., - LARGE
PROBLEMS..!
THUS SAITH THE LORD!
AND THEREFORE.. - THUS SAITH THE LORD..!
If you, (against the Lord ...), for the sake of man, (seeking
your own ...), - you will tell the stranger .., "live .., - in my land, -
build a temple to your god and worship him, and live in peace with
And the stranger .., - will do according to your word, (line up .., -
temple to his god, to his glory ...), and will worship God
his own and shall be fruitful and multiply and multiply and
will intensify and tell you .., "this is my land .., - bestowed on me
my god - here is my shrine - the graves of my fathers "..!
And there will be a stranger .., - oppress you and will persecute you for -
then - that you did not listen to the Lord your God - (in - the truth .., - the LEGISLATIVE and JUDGE, - the living and the dead ...),
and allowed the stranger to build a temple to his god - (in the land - which he gave you, the Lord your God ...)!
THUS SAITH THE LORD!
Let it not be with you .., - as among the infidels and pagans - (as in
enslaved, - by the Jewish fascists of Russia ...), ungodly, -
lynching, where hypocrisy and all lawlessness reigns, - and
satanic law.., "WOULD BE A MAN, THE ARTICLE WILL BE FOUND" ..!
But .., - “Choose for yourself, - wise, reasonable and
tested.., says the Lord..!!
And this is the command to your judges, says the Lord:
listen to your brothers and judge justly as a brother with
brother, so also his stranger;
do not distinguish between persons in judgment, both small and great
listen: do not be afraid of the human face, for judgment is a matter
(Deut. 1:13-18).
THUS SAITH THE LORD .., - GOD - (HATES ILLEGALITY ...)!
“BEFORE SUCH COURT .., - AS BEFORE GOD, - ALL ARE EQUAL, KING
AND THE SERVANT IS RICH AND THE POOR..!
“Woe to those who make unjust laws and write
tough decisions
to remove the poor from justice and steal rights from
weak among the people, to make widows their prey
and rob the orphans.
And what will you do on the visitation day when doom comes
from afar?
Who will you turn to for help? And where do you leave wealth
What will you do .., - when exhausted, - strength
yours, to whom you will call - when you are in the power of the executioner ..!?
Woe to that .., - who plants, -
lynching..!
He himself .. - will become a victim - lynching ..!
IN - THE TRUTH LEGISLATIVE AND JUDGE - OF THE LIVING AND THE DEAD ..!
Analysis of the American market is a daily practice of experts from around the world working in private financial business structures, as well as in government agencies. What do the assessments of analysts from various countries of the world agree on at the beginning of 2008? First of all, it is the onset of a recession and the exhaustion of "points of growth" in real economy USA. On a global scale, this is a manifestation of the "limits to growth."
The limits of growth began to be actively written back in 2001. "A new Great Depression is inevitable. The global market is approaching the limits of its growth, the Pacific crisis has already shown this," Gazeta.ru noted after September 11, 2001. The world media constantly stressed that global GDP growth in 2001 was the lowest level of world economic growth in the last 20 years. Analysts recorded a decrease in business activity simultaneously in the three largest world markets - the US, Japan and the UK. At the beginning of 2008, the subject of limits to growth is being discussed even more sharply.
It is also necessary to note such an important sign as the steady growth of the US foreign debt: "The growing American debt is a very unpleasant trend that devalues the foreign exchange reserves of other countries and forces them to maintain the US budget deficit," E. Yasin believes. This assessment fixes the aspect of the interconnectedness of the state of the US economy with the economies of most countries of the world.
Another major sign of the approaching crisis is the complete exit of the global financial and economic sphere from the control of politicians. In 2000, G. Schroeder at the conference "Modern Management in the 21st Century" stated: "We do not want the domination of the market over politics, but strive for a balance of power on a national and international scale ... We will take care of the return of the political component, especially in the aspect of globalization and problems associated with it" (Deutschland, No. 4, 2000). Alas, in the first years of the new millennium, the influence of political institutions on the process of globalization has practically been lost.
Moreover, the process of "disappearing" the influence of key players in the global market has begun. OPEC has practically no effect on the world oil price, and the hour is not far off when the remnants of influence on the global monetary and financial system of the Fed will be exhausted. D. Soros in 2007, in one of his interviews, argued that the recession in the American economy would be severe and unexpected. He emphasized that it would be hard for both the European Union and most countries of the world. Soros also assumed that the "weak link" would be Southeast Asia.
The global financial crisis is closely linked to key sectors of the economy, and when it occurs, the main pressure falls on the production of various goods and services. The financial crisis of 2008 was notable for both its depth and scope - it was perhaps the first time since the Great Depression that it swept the whole world. The “trigger” that triggered the crisis mechanism was problems in the US mortgage lending market. However, the underlying causes of the crisis are more fundamental, including macroeconomic, microeconomic and institutional ones. The leading macroeconomic cause was excess liquidity in the US economy, which, in turn, was determined by many factors, including:
General decline in confidence in emerging market countries after the 1997-1998 crisis;
Investing in US securities by countries accumulating foreign exchange reserves (China) and oil funds (Gulf countries);
The policy of low interest rates, which was pursued by the Fed in 2001-2003, in an attempt to prevent a cyclical downturn in the US economy.
Under the influence of excess liquidity, the process of formation of market bubbles has intensified - a distorted, overestimated various kinds assets. In some periods, such bubbles formed in the real estate, stocks and commodities markets, which became an important integral part crisis mechanism. According to cross-country studies covering long time periods, credit expansion is one of the typical conditions of financial crises. Thus, the risks of a crisis developing as a result of the weakening of monetary policy, which materialized in 2008, are not an exception, but a general rule.
2.1 Causes of the 2008 global financial crisis
An economic crisis is an imbalance of supply and demand within a country for goods and services. The global economic crisis is the spread of such imbalances to a large part of the world economy.
The crisis manifests itself:
in an absolute decline in production;
underutilization of production capacities;
in the growth of unemployment;
in violations in the monetary and credit and financial spheres
A sociological survey was conducted in the United States among the population, in which the question was asked: "What do you see as signs of the global financial crisis?" Respondents' answers are shown in Figure 1:
Rice. 2. Signs of the global financial crisis
It can be concluded that a person is more interested in those indicators that affect his well-being.
All socio-economic processes are interconnected. The economy of one country in the era of globalized commodity-market relations cannot do without the participation of another. That is why, as soon as the crisis manifested itself in one of the countries (especially one of the world's leading economies), a chain reaction of its manifestation in others began. It is worth noting that it is the strong economic situation of the country that causes an equally strong manifestation of the crisis. Progress, wealth, striving forward, powerful development with inadequate social organization gives more intense crisis results. The above applies in full measure to the United States, which today occupy a leading position in the world economy.
The main reason for the global economic crisis is the overproduction of the main world currency - the US dollar and the cheapness of mortgages in the United States, fueled by the annual increase in real estate prices, in the period from 2001 to 2005 led to an unprecedented demand for housing, including the one that the population planned be used as a short term investment. Requirements for borrowers were reduced, as all banks were sure that in the event of a loan default, real estate could be withdrawn and sold with great profit. In addition, huge amounts of money were circulating in this area from insurance companies that provide insurance for both borrowers and banks in the event of a loan default.
The crisis began with a panic in Western stock markets and a decline in oil prices. The first led to an outflow of Western capital from the Russian market and a decrease in the value of shares, the second led to a direct decrease in the value of shares. As a result, cheap money immediately became scarce. If we take into account that the decrease in the value of shares registered as collateral for loans to Western banks led to a number of payment requirements, then there was not enough money. This is the very liquidity crisis - bank assets are simply not enough for efficient operation. The result is the curtailment of lending programs for the population and businesses, an increase in interest rates and other measures to retain assets.
The impetus for the crisis was the collapse of the US mortgage system. The number of home sales began to fall and the issuance of loans increased. October 2005 was marked by significant inflationary pressure, with the average cost of borrowings for non-standard lenders rising by 2.25 percentage points in 40 days. As early as November 2005, lenders raised interest rates for borrowers, as loans with low interest rates have become uninteresting for investors. Against the background of the beginning crisis, the US housing market is reassessing the ability of borrowers to service non-standard loans and tightening lending conditions.
Rice. 3. The beginning of the recession in the US economy - 2007
Gradually, the financial crisis in the United States began to spread throughout the world. American corporations have begun an urgent sale of assets and the withdrawal of money from other countries.
Events in the US economy had a negative impact on stock markets in developed and developing countries. Figure 2 shows the dynamics in 2007-2008. one of the main US stock indexes S&P 500 and the stock index for emerging markets MSCI EM, developed by Morgan Stanley (the data in the figure does not reflect the intra-month dynamics of the indices).
Figure 4. US and Emerging Market Indices
In 2007, the stock markets of developing countries grew faster than those of developed countries, which was facilitated by portfolio investments from the world's leading economies. In 2008, the massive influx of funds from abroad to emerging markets stopped, and the dynamics of the stock index for developing countries practically repeats the dynamics of the leading US stock index. In 2008, the S&P 500 index fell by almost 40%, and the MSCI EM index - by more than 50%.
One of the causes of the current global financial crisis is the discrepancy between the principles of the world monetary system and the conditions of reproduction and the new configuration of forces in the world economy. Historically, dollarization of the world economy took place and another disproportion was clearly expressed - the overproduction of the main world currency - the US dollar. Since the mid-70s, in the process of transition from the Bretton Woods to the Jamaican currency system and the abolition of the dollar's link to the gold content, dollars began to be printed by the Fed for the whole world (except the USA!) in unlimited quantities and there was no control over the issue of the American currency. have neither the countries of the world nor the US government. The expansion of paper money loses connection with the needs of the circulation of real goods and services. From 1971 to 2008, the volume of the dollar supply in the world grew tenfold, many times exceeding the real volume of goods and services. This situation is extremely beneficial for the United States, which has been living largely at the expense of the rest of the world for almost 40 years.
According to some economists, with a GDP of 10 trillion. dollars (20% of world GDP), the United States consumes 40% of world GDP, in the same amount, emitting harmful waste into the atmosphere, into the environment. Who pays the difference is quite obvious. This is the rest of the world, which in exchange for Natural resources produced in different countries goods that require the expenditure of labor, resources, capital, receive unsecured pieces of paper called dollars. This is reminiscent of the exchange between the conquerors of the American continent and the natives, when Manhattan was bought for $24 worth of candy wrappers and beads, each square millimeter of which is worth more today. In the future, dollars earned on the export of natural resources, goods and services by other countries form temporarily free financial resources of private entrepreneurs and states (in the form of gold and foreign exchange reserves and state stabilization funds, known as sovereign wealth funds - SWF), which are directed to the purchase of American shares and bonds. And then, in the process of financial shocks, US debt obligations become cheaper and, as the practice of the 2000s shows, the rest of the world finances the US free of charge by 5-7 trillion. dollars.
The global financial and economic crisis of 208, on the one hand, had the following reasons:
out of control growth of securities;
distribution of obviously irrevocable mortgage loans;
multi-level "repackaging of risks", which insured the risks of investors.
On the other hand, the reasons were:
the greed of the American economy (and, accordingly, the world economy as a whole) is an ever-increasing inflation of the "speculative financial bubble";
wrongly chosen by the government course of the economy;
orientation of mankind to technological progress, in the absence of orientation to self-development (intellectual, spiritual, etc.)
From the above, conclusions can be drawn about the causes of the 2008 global financial crisis more specifically:
The main cause of the global economic crisis is the overproduction of the main world currency - the US dollar. It was from 1971, when the dollar was pegged to the gold content provided by the US gold reserve, that dollars began to be printed in unlimited quantities. The purchasing power of the dollar was provided not only by the US GDP (as it happens in every normal country), but also by the GDP of countries around the world. Everything would be fine, but those states whose economies began to provide the strength of the dollar never had and do not have control over the volume of dollar emission. The US government does not really have this control either. Only the US Federal Reserve has this right.
The US Federal Reserve System (in other words, the US Central Bank) is a private organization owned by 20 private US banks. This is their main business - to print the world's money. To achieve this, the current owners of the Fed have spent a lot of time - decades, or rather centuries, and efforts - here the 1st and 2nd World Wars and the Bretton Woods agreements of 1944, etc. and, of course, the very creation of the Fed in 1907. Thus, a group of private individuals finally acquired the right to issue dollars into circulation, determine the volume, timing of issue, etc. From 1971 to 2008, the volume of the dollar supply in the world grew tenfold, surpassing by many times the real volume of the mass of commodities in the world.
This state of affairs was extremely beneficial, first of all, to the owners of the FRS as a private organization, and secondly, to the US itself as a state. And among the benefits of the United States is the possibility in general since 1944, and especially since 1971, i.e. for the last 37 years to live beyond their means, i.e. largely at the expense of the rest of the world.
Since the US GDP is 20% of world GDP, and consumes 40%, then after all, someone has to pay for this? Really paying, this someone - the rest of the world, which gives America their goods in exchange for unsecured pieces of paper. At the same time, there is a huge redistribution of world wealth in favor of the United States.
The next reason, or rather a step into the abyss of the crisis, is the bursting of the bubble of unsecured mortgages.
Another version is the theory of large cycles by N.D. Kondratiev. At a certain period, the economy opens up opportunities for intensive growth - improving technologies, increasing the efficiency of using available resources - and then, as a result of this process, opportunities for extensive growth open up, covering new markets and territories, while few people are interested in efficiency.
Then again the extensive growth hits the wall, the frontier is mastered, and the intensive cycle begins. What is observed today. A change in growth models is a change in business strategies, a 90-degree turn, which is almost always accompanied by large-scale crisis phenomena. The extensive cycle began in the 1970s, the previous intensive cycle in the 1930s with that great and terrible depression. And now, in fact, the same natural process of restructuring in an intensive way. The question remains only in the duration and intensity of this process.
Summarizing the many views on the cause and nature of the 2008 crisis, we can state that the global financial and economic crisis is a multifactorial process that is formed under the influence of the cyclical nature of scientific and technological progress and the scientific and technological revolution, the totality of monetary factors, the relationship between supply and demand at the macro level of the economy, as well as many other factors.
Indisputable, in our opinion, is the conclusion that as a result of the 2008 crisis there was another large-scale redistribution of world wealth from the countries affected by the crisis in favor of the United States due to the special role of the dollar in the world economy.
2.2 Fundamental problems of modern economic development
The economic crisis reflects the acute tension in the socio-economic environment. Exacerbations of the political situation can also serve as signs of an impending crisis. Problems in politics always develop into problems in the economy, since all attention is focused on solving the first, while the second remains in the background.
There is another row key issues, the significance of which mankind especially acutely felt in the 20th century. and which will greatly influence the life of mankind in the 21st century.
The first of these challenges is the growing chasm between the world's richest and poorest countries (Figure 4):
Rice. 5. "Scissors of inequality" between the inhabitants of the richest countries in the world and the rest of the population of the planet
Share in population Share in consumption
The richest inhabitants of the Earth The rest of the inhabitants of the Earth
The fact is that the population of the poorest countries is growing at a faster rate than the volume of their gross domestic product. Although the latter is increasing even faster than in the most developed countries of the world (respectively 3.2 and 2.3% per year during 1965-1987), but the high birth rate nullifies all the results of production growth. As a result, according to the UN, if in 1960 the income of 20% of the citizens of the Earth living in the richest countries exceeded the income of 20% of the citizens of the poorest countries of the world by 30 times, then in 1989 this excess was already 59 times.
If we use the criteria once proposed by Ernst Engel (see "Pages of the Economic History of Humankind"), we can find that the poorest countries in their development lagged behind the richest by about four centuries. Therefore, two civilizations really coexist on the planet: one has entered the 21st century, and the second only in the 17th century.
This disparity in wealth levels is becoming an increasingly serious cause of world instability. It is against the background of poverty that those local military conflicts and wars are born that became a disaster for mankind at the end of the 20th century. and for the elimination of which the largest countries of the world have to spend more and more significant funds, taking them away from their own economies. This problem is also acutely felt in Russia, which also has to spend a lot of money to prevent the spread of wars in its poor neighboring countries, otherwise these wars threaten to spread to its territory, and refugees have become a problem today.
In the XX century. the richest countries in the world tried to break the "vicious cycle of underdevelopment" by lending money to the poorest countries for development programs. However, the results of such financial assistance programs were not particularly significant. On the other hand, developing countries, among other things, found themselves in a huge debt to developed countries and international financial organizations - their creditors (Fig. 5).
Rice. 6. Developments in debt in developing countries
This problem most directly affects Russia. Our country has inherited from the USSR the rights to nearly $150 billion in debt from a number of developing countries. Consequently, almost 11% of the total debt of these countries is debts to Russia (which itself owes more than 100 billion dollars to the developed countries of the world).
There are other possible reasons crisis associated with the general characteristics of the world economy.
First of all, it is necessary to point to the unprecedented rates of economic growth, which made it possible to increase world GDP by a quarter in five years (2000-2005).
The rapid rise inevitably accumulates systemic contradictions, invisible behind the growth of prosperity. But even with the awareness of these contradictions, it is very difficult to intervene and correct anything: whenever in such boom situations someone begins to issue warnings or doubt the correct course, confident voices begin to sound from all sides, insisting that “on this time it's different Kenneth Rogoff and Carmen Rinehart have pointed out that the "this time it's different" trap for politicians dates back to the English default of the 14th century. And the crisis of 2008 can be fully considered innovative, since it is based on the emergence and rapid spread of financial innovations - new derivatives of the financial market.
It should be noted that at the present stage of the global development of capitalism, the financial sector functions independently, breaking away from production, from the real sector of the economy, where, in fact, money is earned and increased. The scale of such a "gap" of finances became critical already by the beginning of 2008. Some experts believed that only 2-3% financial transactions were associated with material production, while the rest of the money circulated and gave "live" profit - in the service sector, in banks, insurance, etc. According to estimates, on average, for every dollar that measures the value of the real sector of the world economy, about 50 dollars circulated in the financial sector at the beginning of the 21st century. Based on the foregoing, there is reason to assert that one of the sources of the global crisis was its separation from the “development” of the real economy, that is, from the economy for the production and sale of goods and services that satisfy the final needs of society.
Another, fundamental cause of the crisis was the emerging global imbalance, which for a decade was considered as the basis for the sustainability of world growth. Today, this problem plays a major role in the global financial system. In a narrow sense, the problem of global imbalances was discussed earlier in the context of the US trade deficit, accompanied by the growth of their external debt, and, in direct contrast to the situation in China and a number of other countries in Southeast Asia. In a broad sense, the problem of global imbalances affecting the economies of the United States, China, Japan, and the European Union is manifested in the dynamics of the exchange rates of major currencies and the value of foreign exchange reserves of different countries.
As a result, a regime was formed that was opposite to the model of globalization at the turn of the 19th-20th centuries. If, a hundred years ago, capital "moved" from developed countries to developing ones, now emerging markets have become centers of savings, and the United States and other developed countries have become mainly its consumers.
The unfolding crisis had another fundamental premise. In recent decades, the objective trend of corporate consolidation and the ensuing strengthening of the role of top managers has intensified in the world economy. As a result, an objective-subjective contradiction has developed, when the interests of managers do not coincide with the interests of owners. There has been a growing gap between the interests of owners and managers, whose behavior and motivation differ sharply. The target function of business has also undergone a major transformation. The growth of capitalization has become a key guideline for the development of corporations. It was this indicator that was of most interest to shareholders, and it is by it that the effectiveness of management is assessed today. Meanwhile, the desire for maximum capitalization comes into conflict with the real basis of socio-economic progress - an increase in labor productivity. The growth of capitalization is, of course, connected with it, but only in the final analysis.
However, it is necessary to report to shareholders annually, and to obtain beautiful annual reports, to maintain the current growth in capitalization, it is not at all the same that ensures productivity growth. Good reporting requires mergers and acquisitions, since an increase in the volume of assets contributes to the growth of capitalization. And, of course, backward enterprises should not be closed, since in the current period this leads to a decrease in capitalization. As a result, many large industrial corporations retain their old, inefficient production facilities. Thus, the strengthening of the role of managing managers with their inherent interests that do not coincide with the interests of the owners, as well as the transformation of the target function of the business, led to an increase in the level of managerial risks and was one of the fundamental causes of the current crisis. To this we must add the obvious failure of rating agencies that supply low-quality information products, which led to incorrect assessments of the risks of financial market participants. This situation also developed in Russian corporations by the beginning of the crisis.
Main conclusions:
Along with the problems of the functioning of individual markets for resources and goods, as well as the national economy as a whole, each country has to participate in one way or another in solving global economic problems. The first of these problems is the huge disparity in living standards between the world's richest and poorest countries. The growth of this difference is associated with the impossibility for the poorest countries to increase their GNP faster than population growth. The vast disparity in living standards has both economic and political consequences and is leading to growing tensions in the world. Therefore, in the XXI century. humanity will have to make great efforts to prevent a global economic catastrophe, fraught with the death of tens of millions of people from hunger and epidemics. It can be prevented only by accelerating scientific and technological progress, improving the economic systems in the poor countries of the world and reducing military spending, with the subsequent use of the saved funds for economic development.
At present, the economic problems of mankind are exacerbated by the fact that an increasing part of the resources have to be spent not on the development of production, but on saving the environment. Otherwise, its pollution begins to slow down the growth of the gross national product and the effectiveness of investments in its increase falls. However, so far only the richest countries in the world can afford large-scale programs to save the environment. The poorest countries cannot afford it. As a result, humanity has faced the need to choose one of the options for economic policy: either accelerating economic growth and increasing the material well-being of people while reducing the duration and quality of their lives due to environmental pollution; or improving the state of the environment and increasing the life expectancy of people while slowing down the growth of their material well-being. It is this dilemma in the 21st century. will determine economic policy many countries and mankind in general.
https://www.site/2018-10-10/razrazitsya_li_novyy_globalnyy_ekonomicheskiy_krizis_i_kakovy_budut_ego_posledstviya
"The threat of world war is real"
Will a new global economic crisis break out and what will be its consequences
Kremlin Pool/Global Look Press
On October 10, 2008, the business world of the planet counted the losses of the most difficult stock exchange week in the post-war period. The United States experienced an unprecedented collapse in stock indices. The global financial and economic crisis, which began a year earlier with the mortgage crisis in America, flared up like a world fire. Analysts were talking about the onset of a new Great Depression.
Ten years later, the eccentric billionaire George Soros again frightens with a "major financial crisis." But not only him. Gurus such as Paul Krugman and Mark Mobius, as well as Bank of America and the World Bank, are making worrisome predictions. The International Monetary and Financial Committee, an advisory body to the IMF's board of governors, also acknowledges that "we must prepare for more difficult times." For what reasons and when will they come?
The global economy: in anticipation of a recession
In 2016, for the first time since 2010, synchronous growth of world economies began. The growth of the seven largest of them - the USA, China, Germany, Japan, France, Great Britain and India - ranged from 1.5 to 7%. Dozens of other advanced and developing economies also grew. Experts believe that the strengthening of the global economy will continue for a couple more years. According to official IMF forecasts, growth will be 3.9% in 2018 and 2019. The United States will show about 3% growth, China 6.5% each, record figures are attributed to India: about 7.5%.
The downside is that last year alone, governments introduced more than 640 protectionist measures, almost twice as many as in 2010 (more than 140 measures, 60% more than a year earlier, were introduced by the United States). The closure of borders for goods and investments, of course, aggravates the situation of the world economy as a whole.
Photo by M. B. M. on Unsplash
It is expected that in the current situation, most central banks will choose a course to raise rates and curtail monetary stimulus. As a result, a decrease in business activity, a decline in the stock markets, undermining consumer confidence and opportunities.
“When the recession comes (and it will), it will most likely be sharper,” the World Economic Forum in Davos stated earlier this year.
USA: money is running out
US stocks have been rising almost non-stop since 2008, and the first year of Donald Trump's presidency brought America's stock market a 50 percent gain, the economy expanded by 2.5%, the unemployment rate hit a 17-year low (4%), a 2.4 million jobs. However, what is presented by the American president as a success, in reality, can turn into problems.
The fact is that the recovery of the American economy is supported by tax cuts and loans, and this is the same pattern of overheating of the economy that led to the crash of 2008. The spending and debts of American consumers have already exceeded the levels of the pre-crisis 2007, the volume of the stock market has almost doubled.
Jerry Mennenga/ZUMAPRESS.com
The wake-up call rang in early February, when, at intervals of several days, first the American exchanges sank (the fall turned out to be the most significant since 2011), and then the world ones. Per day the richest people the world lost $114 billion, and the loss of American households amounted to $1.5-2 trillion.
Against this background, the Federal Reserve raised three times during the year key rate(with the last increase at the end of September, it is at the maximum level since the crisis of 2008), it is possible that in December there will be a fourth increase. Economists recall that it was with the rate hike that the longest and most exhausting Great Depression in 1929-33 in US history began.
And now, they point out, there is less money in the American economy, and they are getting more expensive. At the same time, the US is growing and will continue to grow in the coming years. budget deficit. Taken together, these factors can lead to a fall in the value of US stocks and assets of the population, a reduction in jobs and wages, and the desire and willingness to take out loans and spend money among Americans will noticeably decrease. Namely, spending by the population provides 70% of the growth of US GDP. The American economy, the largest on the planet, will slow down, followed by the world economy.
China: bubbles that could burst
China also continues to provide economic growth with borrowed funds. More than half of loans go to the real estate market - it provides, respectively, about half of GDP growth (according to forecasts, 6.7% this year). But if the “bubble” in the Chinese real estate market, as well as similar “bubbles” in the securities and government bond markets burst, it will not seem like much to anyone. China is the second (and by some parameters already the first) economy in the world, and if it sinks, the first thing to suffer will be the suppliers of raw materials, primarily energy carriers. Among them, of course, Russia.
Lu Boan/Xinhua
The overheating of the Chinese economy, its possible slowdown is evidenced by the fact that in January-September the stock index of the Shanghai Stock Exchange collapsed by a quarter, mainly Chinese industrial and high-tech companies suffered. Infrastructure investment is declining, Chinese companies are finding it harder to turn a profit, and Chinese consumers are spending less and less willingly.
Trade wars: the main threat
The arrival of Donald Trump to the White House has dramatically changed the economic policy of the United States. From stimulating open world trade, the United States has moved on to reindustrialization and, as we say, import substitution - to the return of jobs from Mexico and Southeast Asian countries (this is facilitated by robotization, leading to cheaper production and increased productivity), to a significant increase in investment in the infrastructure of the country.
The natural limitation of Trump's policy is the fact that in the structure of US GDP the share of the manufacturing industry is less than 12%, and about 80% belongs to the service sector. Therefore, Trump resorts to measures that give the most rapid effect, such as protective import duties, quotas.
Donald Trump's protectionism manifested itself on the very first day of the presidency of the current head of the White House: he signed a decree on the US withdrawal from the Trans-Pacific Partnership, a US trade agreement with 11 other countries. This was followed by the withdrawal of the United States from the Paris climate agreement and from the nuclear deal with Iran, attacks on European and Japanese automakers, a doubling of duties on aluminum and steel from Turkey, a renegotiation of trade agreements with Canada and Mexico on new terms favorable to the United States. In general, everyone got it - both bosom enemies and traditional allies.
Well, the most intense process of the year in the global economy remains the trade war between America and China.
The trade war between the US and China is the main phenomenon affecting the global economy Christian Ohde/imago stock& people
According to Trump, Beijing is sinful in that it steals American technology, provides unfair support to its exporters - with the help of an artificial undervaluation of the yuan and subsidies from the state budget, and does not allow American banks to enter its financial market. As a result, the US trade deficit with China reached $375 billion. Trump's demand is to close the gap to $200 billion by 2020.
In mid-March, the US President imposed duties on imports of steel (25%), aluminum (10%), washing machines and solar panels (by the way, Canada and Mexico, the main suppliers of these raw materials to America, suffered more from duties on metals, in response they applied similar measures for American goods). The White House then released a list of more than 1,300 Chinese high-tech and industrial goods - from computers to cars - subject to a 25 percent duty. The price of the issue is 50 billion dollars: this is the volume of the corresponding imports from China. Literally a few hours later, Beijing “rolled out” to Washington a response list for the same amount, the list includes products from the agricultural, automotive, and engineering industries.
The spring attempt of the parties to reconcile failed. Moreover, in September, Trump imposed additional tariffs worth $200 billion. Xi Jinping, apparently, is not going to retreat: Beijing responded with its own portion of duties and the refusal to import American oil and gas. Thus, things are heading towards an all-out trade war, when the US and China will impose duties on all counter flows of goods and interrupt mutual business cooperation. (Observers believe that Washington's next step is accusations of cyberattacks and election interference, imposing political sanctions similar to those against Russia and Iran).
Not only that, duties lead to a rise in the cost of production (for example, in the automotive industry, in the construction industry) and goods. Theoretically, the following picture is possible: China, in retaliation, throws into the market American debt obligations, of which it has accumulated the most in the world - almost $ 1.2 trillion. Then the yield of US bonds and, therefore, US debt will rise, and global demand for dollars will be undermined. The US Federal Reserve will be forced to sharply raise the key rate, which again will lead to a cooling of the US economy and an outflow of funds from emerging markets. At the beginning of the year, Beijing, which has recently been actively building up gold reserves, hinted at a readiness to stop buying US bonds, which was enough to lower their market and demand for the dollar.
Another way to undermine the leadership position of the United States is to devalue the yuan or transfer payments for oil exports from dollars to yuan (China is the world's largest exporter of hydrocarbons). In March, after 25 years of preparation, China finally launched yuan oil futures. Further de-dollarization and increased use of the yuan will also reduce demand for dollars and US government bonds.
It is remarkable that it is not the aggressiveness of China or other exporters that leads to the US foreign trade deficit (and this is the root cause of the US-China trade war), but the very nature of the dollar as the main reserve currency, because in order to maintain the global hegemony of the dollar, its expansion, America is forced to buy more than sell. That is, in order to "bring debits to credits," the United States would have to stop imposing the dollar as the primary unit of account in international trade. But it is on such a dollar that the power of the American empire is based.
European Union: economic slowdown amid internal problems
Clouds are gathering in the Old World over Germany. First, Trump's duties on steel and aluminum hit her: Germany is the only one in Europe that is among the ten largest suppliers of these metals to the United States. Secondly, Trump threatens to raise import duties on German cars by a quarter to a third, and also demands an increase in the costs of Germany and other Europeans to maintain NATO, inclines to buy not Russian, but American gas (although it is 20% more expensive than ours). The European Union, which is actually led by Germany, has promised to respond with duties in the amount of 3-4 billion dollars. What negative consequences the trade war leads to, we see in the example of relations between the United States and China. Thirdly, Germany and the European Union will suffer if the Chinese economy weakens. Over the past 10 years, China has invested about 320 billion dollars in Europe: it has acquired companies, airports, ports, power plants, real estate, football clubs. The slowdown in the growth of the Chinese economy will naturally reduce investment flow from the underworld.
Bernd von Jutrczenka/dpa/Global Look Press
The position of Germany is overshadowed by the internal problems of the EU. Germany is the first economy in Europe, the largest exporter, which has enough resources to dictate its will to other EU member countries. It's not just about the migration policy of Germany, which raised half of Europe against German Chancellor Angela Merkel. For example, Czech employees of Volkswagen are outraged that they receive three times less than their German counterparts. The Czechs are convinced that the Germans owe them their high standard of living.
European visionaries do not rule out that dissatisfaction with German dominance and selfishness will lead to a split, the withdrawal of Austria and Hungary, Italy and Greece from the EU. (It seems fantastic, but until 2016 the exit from the European Union of Great Britain looked like a fantasy). Then the euro will be overtaken by a strong devaluation, and Europe by a debt and financial crisis. In a domino effect, it will spread to the entire planet.
Emerging Markets: A Turbulent Zone
In a clearly vulnerable position, and for decades, is Argentina. Traditional problems (a backward, monopolized economy, strong state influence, an acute shortage of investment, swollen public debt, etc.) were supplemented by capital flight from the Argentinean stock exchange due to higher yields on US government bonds. The result is a two-fold devaluation of the national currency, the peso, during the year, inflation is above 25%, the highest discount rate in the world is 60% (!), depletion reserve funds, rising prices. To pay off old debts, Argentina gets into new ones, even more unsustainable due to the devaluation of the peso. And there is no way out. At the same time, Argentina is one of the largest economies in South America, and its default, like those that erupted there in the early 2000s, could pull down the whole of South America, and with it the emerging markets of the world, some experts believe.
In addition to Argentina, the "weak links" of the world economy are called Turkey (which survived Trump's attacks this year, a strong, more than one and a half times, devaluation of the lira, a sharp increase in the discount rate and bank interest), as well as Brazil, Mexico, and South Africa. As soon as such a giant as, for example, China staggers, capital will flee from these countries, bringing down stock markets and national currencies, spreading panic, defaults and crisis to half of the globe.
Crisis and war?
Hypothetically, other factors can also worsen the global economic situation. The withdrawal of the United States from the nuclear deal with Iran and the collapse of oil production in Venezuela create the preconditions for an oil shortage and, accordingly, for a further increase in oil prices, which, of course, will slow down the growth of the world economy (however, Saudi Arabia, Russia and the US shale oil companies promise promptly increase oil production and prevent shortages).
Experts do not exclude that the trade confrontation between the US and China will develop into a military one. The most likely arena for clashes is the South China Sea, in which China is building artificial islands and actively building military infrastructure, which confuses neighbors from Japan to Vietnam. Beijing's task in the South China Sea is to protect the stability of energy supplies through the Strait of Malacca. Another potential hotspot is the Strait of Hormuz, through which Middle Eastern oil rushes to foreign markets. If Iran's confrontation with the US and Saudi Arabia escalates to a state of war, the Strait of Hormuz, and therefore oil supplies, could be blocked, which would also drive up oil prices.
Potential Starting Point for a New War - South China SeaZha Chunming/Xinhua
And it's not the darkest picture yet. “The world has entered the ebb of globalization. It is fraught not only with protectionism and trade, but also with "hot" wars. The threat of world war is real. It is bad that we have ceased to be afraid of world wars, believing that they have gone down in history. Didn't leave. There is no guarantee of deterrence from the use of nuclear weapons,” stressed Alexander Auzan, dean of the Moscow State University Faculty of Economics, speaking recently at the Yeltsin Center.
Among the threats to the global economy are the collapse of cryptocurrencies and hacker attacks on government and corporate networks.
As for the timing of the upcoming global crisis, analysts give us no more than 2-3 years of a more or less calm life and foreshadow the beginning of a new cyclical downturn in 2020-21. A sign of the approaching trials is the growth of major stock indices and government bond yields that has not stopped for several years. The next step is collapse. The American financial holding JP Morgan suggests that the shares emerging economies will fall in price by almost half, their currencies - by almost 15%, US stocks - by 20%, and energy resources - by 35%.
Although, of course, there are optimists who say that Soros deliberately sows panic in order, as always, to get rich on stock speculation. That the American economy is growing steadily and there are no reasons for the collapse of the stock markets and the banking sector, and the February breakdown is just a “steam release”, accumulated excess energy. That the United States and China will certainly agree, as they are firmly tied in trade, mutual investment and industrial ties. That new consumer markets are opening up for the world economy in Asia and Africa, so there will be no crisis of overproduction, no overheating.
Whom to listen to and with whom to be - with pessimists or optimists - "everyone chooses for himself." And you will get recommendations on how to behave as investors, and.
On February 18, 2009, a regular meeting of the Nikitsky Club of Scientists and Entrepreneurs took place in Moscow on the topic “Non-economic factors of the global crisis”. This article is an expanded version of the report made by the editor-in-chief of Capital Country at this meeting.
The financial crisis that began in 2008 and developed into a full-fledged economic recession surprises many with its suddenness and force. But is it really that surprising?
How long can the crisis last? And why do we hear negative forecasts that the crisis will last for a long time? Why can't business circles quickly understand the situation and regroup their forces?
All these questions still do not find a simple and adequate explanation. Let's try to understand some cause-and-effect relationships.
1. Crisis as the lack of an effective business space for capital. What are the specifics modern crisis? How is the current mortgage bubble, for example, different from the Internet bubble of the turn of the century, which went relatively painlessly for the world?
The development of the economy, as you know, goes from bubble to bubble. When one bubble bursts, a crisis arises and an active search for a new economic niche begins, where another bubble could be inflated. In the early 2000s, when the Internet bubble burst, world capital was pumped into housing construction. This was done quickly enough, in connection with which the world did not fall into a protracted and deep crisis. In principle, global business was well aware that this was not an area where it was possible to inflate a “full-fledged” bubble, but there was nothing to choose from. It was necessary to reorient world capital, which was done. The housing construction market was quite saturated and everyone understood this, but it should have been enough for a few years. It turned out that it was enough for about six or seven years, and this, perhaps, is even a little more than one might expect. What now?
Now the huge capital accumulated in the world has exhausted its possibilities for obtaining high profits: all known markets are saturated to the limit, their growth is limited, and the rate of return on capital in these markets becomes minimal and does not satisfy the capitalists. Capital holders in a panic - where to "pump" the multibillion-dollar mass of money? Where will such investments pay off? Where will the return on capital be high, stable and long-term?
Alas, there are no answers to these questions yet. And this is a very dangerous situation, because until intelligible answers are received, capital will literally run amok in search of promising economic zones for further capitalization. And here a sacramental question arises: how long will the crisis last? The answer is simple: until new niches for effective investment of world capital are discovered. Today, no one sees these new niches yet, and therefore the accumulated capital cannot be “tied up” and they are “overheating” more and more. This fact can be formulated as follows: the current crisis is a consequence of the absence of new sectors of the economy, where global capital could rush.
2. War as a way to eliminate the economic crisis. What is the danger of the current situation?
The fact that a prolonged prolongation of the crisis is not just hard for the population, but hard for capital, because it must "work" and not "idle." Overcrowded and oversaturated markets deprive capital high percentage , which is unacceptable. Even more terrible for capital is inflation. If is growing prices, and the capital lies without movement, this means that it simply depreciates. But in this way, after a while, it can generally “evaporate” gradually. But then what is the point of capital and its accumulation?
In short, capital stagnation is unacceptable. But capital can still wait for a while, but not too long, because there is a limit to everything. And what should the owners of capital do if their patience is exhausted? But markets are still needed and they need to be “gotten” from somewhere.
Considering that a crisis is always an excess supply of goods, services and capital, this situation needs to be changed. But if people no longer need anything, because they already have everything, then this state of affairs can be artificially “corrected”. This can be done with the help of such a great tool for the destruction of material wealth as war. Its destructive effect will have a “beneficial” effect on the market, because the excess of goods will quickly be replaced by their shortage, there will again be a shortage, and thus capital will again be able to begin the activity of recreating these goods. The problem is that the markets in which capital will operate will be the same as before, and therefore there will be no economic innovation and the production-trade spiral will simply repeat itself again. Moreover, the loss of life and suffering in itself speaks of the undesirability of war.
A prolonged crisis is indeed very dangerous. For example, the Great Depression of 1929-1933, which dragged on for 4 years, gave its result - the formation of Nazism. Moreover, its roots grow, oddly enough, from the most democratic country in the world - from Holland. Then he found his logical continuation in Italy and Germany. This is understandable: if you do not have a job for a year or two, or maybe even four, then the question arises, who and why needs such capitalism and who needs economic freedom?
By the way, it is the Great Depression that is also responsible for the formation of the communist regime on a global scale. For example, when Western engineers had no work and literally had nothing to eat, then at the same time, Soviet Russia was building for a century and could lure good specialists to itself, if only because it could feed them. Subsequently, many Western intelligence officers went over to the side of the Soviet Union, and not for money, but for ideological reasons, sincerely believing that the future belongs to this country. The result of such "support" for Nazism and communism was the Second World War with all the ensuing consequences. The stronghold of Nazism (Germany) and the stronghold of communism (USSR) clashed with each other, but their very creation takes its foundation in the Great Depression. Subsequently, after the war, the Soviet Union was able to steal the secrets of the atomic bomb from the United States with the help of sympathetic American physicists. Consequently, the psychological shock from the crisis of the 1930s lasted about 20 years, thus demonstrating the strength of the depressive effect.
Thus, the long-term impact of the Great Depression was very strong and truly terrible. The reason is the same - the lack of new markets in conditions of unprecedented material abundance. Now the situation strongly resembles the described dramatic events of the past. Summary: the longer the search for new markets goes on, the longer the crisis will last and the greater the likelihood of a war.
Here I would like to specifically dwell on a moment that is often focused on when discussing the modern world financial system. This is a statement about the virtuality of money and finance, about the separation of symbols from the real economy. All this is true, but at the same time, something else must be taken into account: capital is a real force that nothing can resist today. We can deny this power, we can consider that all this capital is not real and the whole economy is virtual, but when it comes to the consequences of the crisis and what happens in the absence of "reservoirs" capable of containing this supposedly fictitious capital, then he very quickly proves his power and effectiveness, sweeping away everything in his path. And war is just one of the tools for "binding" capital. Of course, this is the "instrument of last resort", but still it is real tool, a channel to ensure the health of capital.
In addition to the danger from big capital, there is another danger coming from below. It is connected with the search for earning opportunities by ordinary economic agents. And in conditions of total unemployment and the absence of legal and meaningful ways to generate income, various criminal activities begin to intensify. These are the trade in arms and drugs, the actions of military groups on the territory of sovereign states. The latest and, perhaps, the most striking manifestation of such trends was the activation and high efficiency of the actions of Somali pirates. This kind of activity creates a favorable background for more global military operations.
3. Inflation and capital: the problem of deep connection. Oddly enough, but practically nowhere is it said about the fatal connection between capital and inflation. Meanwhile, this connection is very simple and absolutely fundamental. What is it and how can it be represented on the fingers?
Let's start with some important facts. First, today economic world operating in a positive inflation environment. Virtually no country in the world experiences deflation in normal times, when prices would have a steady downward trend. You can talk about low inflation rates close to zero, you can talk about hyperinflation, but inflation itself is almost always present. Secondly, some price reduction is observed during crisis periods. However, this pattern is often violated: deflation was more characteristic of the classic crises of the past, and now it is observed only in the developed countries of the world, and even then not too often. Third, high inflation has a devastating effect on the real economy.
These facts lead to the simplest question: why and who needs inflation and where does it come from?
Our answer to this question is somewhat subjective, but on the whole it is quite consistent with reality. Inflation is the driving motive of development in the sense that it forces world capital to constantly "turn around". If you simply freeze your capital, hoard it, try to simply store it, for example, in a safe deposit box or at home, then with 10% annual inflation, this will mean that in a year your capital will decrease by 10%. If you extend the period of passive lying of capital, then the losses will be even greater. In other words, during inflation, passively lying capital simply “evaporates”, and this, by definition, is unacceptable. Therefore, inflation spurs the owner of capital to take active steps to find channels for investing money, and the percentage of each monetary unit should not only be non-zero, but also such as to cover the inflation rate. Only in this case will there be an increase in capital, its self-expansion. In this case, time will work for the holder of the capital, and not against him, as in the case of passive conservation of money.
Thus, in normal times, inflation does not allow the capitalist to relax and sit quietly on money. This is what the deep meaning of inflation is in the depreciation of capital. In the event of a crisis, when it is not possible to find effective channels for the investment of capital, deflation is sometimes observed, i.e. price drop. This is also clear from the previous diagram: if capital has nowhere to go and it inevitably has to passively “lie down” for some time, then high inflation will simply destroy it, which is unacceptable. Accordingly, deflation is beneficial for capital at this time, when even the simple preservation of capital means its increase, because during deflation its purchasing power increases. We can say that deflation is a mechanism by which capital can afford a temporary reprieve.
I must say that in recent years the mechanism of deflation is becoming weaker and weaker. In fact, this means that Today, the requirements for the dynamism of capital have increased in the world, and even in times of crisis, it must continue to move.. This is one of the features of the modern economy.
Economists believe that a new era is coming, when deflation in the developed countries will be accompanied by inflation in the developing world. It is believed that this phenomenon is extremely important and will be studied by the next generations of research economists. However, in this case, what is important is that a transition to a heterogeneous world of inflation is now planned. But why is there such a stratification of the world?
If we ignore high theory, then the explanation can be given again in terms of the interests of big capital. Centers of the capitalist world (developed countries), where world capital is concentrated, must save themselves from inflation and it is beneficial for them to form a deflationary development regime. Periphery capitalism (underdeveloped countries), where foreign capital from other countries work, do not suffer from capital overflow, and there the deflation regime is not so much needed. In fact, we are talking about the fact that the centers of capitalism act as a kind of harbor where world capital can “settle” for some time in the event of crisis shocks in the world economy. That's what the deflation mode is for. Even if capital developing countries becomes too bad, then he will simply go to the center and sit out a difficult time there. Now it is difficult to say how sustainable this model of relations will be, but its configuration is quite reasonable from the point of view of saving large capitals.
Now the question is why the world cannot function in a deflationary environment. In principle, one could assume that central banks able to pursue a fairly tight monetary policy, in which the supply of money would be less than demand, which would stimulate a decrease in prices. However, in practice, such a policy leads to the suppression of economic activity. Injections of money into the economy should be ahead of the process of creating a mass of commodities, because they serve as a kind of incentive for production activity. But even a slight advance in cash injections into the economy leads to a temporary surplus of money, which gives rise to inflation.
Turning to figurative comparisons, we can say that money for the economy is like fuel for a car: first they fill in the fuel, and then they drive. Of course, you can fill up the fuel and not go anywhere or stand still, warming up the car idly, but you cannot demand that the car first go, and then add gasoline to it as needed along the way. This logic is manifested in the economy at all levels. For example, to start production, you must first invest a certain capital, and then produce something; the opposite is impossible. Failure in manufacturing process means that the invested money has not received the appropriate commodity equivalent, which will sooner or later manifest itself in the form of inflation. Given that failure is the norm of capitalist entrepreneurship, there are always "wrong" injections of money into the economy.
4. Crisis in science as the threshold of the financial crisis. We have covered a few points above. First, capital cannot stop its expansion, for which there must always be channels for its profitable investment. Secondly, if there is a problem in finding channels for investing capital, then over time the likelihood of war increases as a way to start the development of traditional markets anew. Thirdly, at present, channels for profitable investment of capital are not visible.
Below we will dwell in more detail on the third aspect of the problem, namely: why are there no channels for global capital, who is to blame for this, and what should be done?
Opening this issue, we must proceed from the fact that the entrepreneur and investor, as holders of capital, can do a lot, but not all. They can set up new production, they can market new products, they can even build a new brand. If necessary, they can negotiate with officials, find the necessary personnel and purchase the most advanced equipment. But they can do all this only when it is already clear where to invest capital. But the holders of capital cannot determine these directions, because they do not know the technological capabilities of the modern world. But then who should show them the vector of development?
The answer suggests itself: those who deal with new technologies. This class of innovators, which grows from the bowels of science. It is science that opens up new horizons of development, it is scientists who offer technological and managerial innovations. It is they who should guide the business where to move when the traditional paths have been exhausted.
Well, why, one wonders, do they not do this when the whole world expects it from them?
Here we come to a very important point, namely the assertion that long before the financial crisis of 2008, science itself fell into a state of crisis in which it still resides. What does this mean?
The fact is that investments in science are, although specific, but still the same capital investments that must have a certain return. Even if the state invests money in science, it takes this money from the population, collecting extra taxes from them, which are then spent on science. As a rule, the state acts as a strategic investor. This means three things. First, it takes on such high risks that private capital in most cases refuses to take. Second, the state is content with a low rate of return on invested capital; such a return can rarely satisfy the holders of private capital. Third, the state has a long planning horizon and can tolerate very long payback periods; private capital does not agree to such terms. However, despite the indicated specifics, the state is an investor and must return the money invested in science with a profit.
The return of funds occurs by generating new business proposals by science. The problem of today is that science has become a loss-making project, i. it cannot offer anything really interesting to the state and business. Science produces many theoretical developments, but does not give practical recommendations. In the language of economics, this means that the supply of a scientific product exceeds the demand for it. A scientific product of this quality becomes useless to anyone. This does not mean that there is nothing fruitful in modern science. It only means that there is not enough of this fruitful for the mass of capital that is accumulated in the world today. Therefore, just as an ordinary economic crisis is a chronic oversupply of goods and services, so the crisis of science is a chronic oversupply of scientific (theoretical) research. Just as it is impossible to sell the produced goods in a normal market in a crisis, so it is impossible to find application for ongoing research in the scientific market.
Let's explain what we are talking about. Today there is a clear crisis in the field of energy, the whole world needs gas and oil, but science does not offer any constructive new methods of obtaining energy. Meanwhile, physicists are actively developing the theory of superstrings, which, for all its complexity and fundamental nature, does not promise any interesting practical proposals. Currently, huge financial and human resources are being invested in the development of this exotic branch of physics, while the problems of practical energy have long been undeservedly forgotten.
Against this background, some recent events look rather paradoxical. For example, due to Ukraine's manipulations with the valves of the Russian gas pipelines passing through its territory, Europe found itself in a very difficult situation for about a week. Moreover, the situation was so difficult that it was about the survival of its population in the harsh winter. In fact, Europe turned out to be dependent on Russian energy resources against the backdrop of gigantic research into unproductive areas of physics. Against this background of the almost complete absence of its own energy, the construction of the Large Collider looks rather strange, which, most likely, will not give any fundamentally new knowledge, and most importantly, will not be able to heat Europe.
We emphasize that the crisis of science is not just inefficient investments. In the end, any losses can be written off, but that's not the point. New proposals were expected from science, but it did not give them - and this is a fundamental point. Roughly speaking, in science, “sights were shot down” and natural priorities in research were violated. Creation general theory strings can wait, while energy can no longer wait. If today's financial crisis escalates into an energy crisis, followed by a massive war, then string theory may not even get to the point.
Two decades ago, science introduced the world to personal computers, the Internet and mobile communications. This was enough to inflate a powerful investment bubble, create a completely new segment of the world economy and change the face of the planet. Today, nothing of the kind is yet to be seen.
The above is only one side of the issue, but there is another. The fact is that science has become divorced from business, and business from science; between them there is very weak communication, accompanied by mutual misunderstanding. Here we observe a typical failure in the work of feedbacks. Thus, the reduced return on science leads to the fact that its funding is reduced with a proportional decrease in the income of researchers. As a result, many of them become, if not poor, then not very wealthy. Representatives of the business world consider it simply dangerous to entrust such people with their huge capital and take risks on their tip. In response, there is a wave of distrust on the part of researchers who perceive businessmen as nouveaux riches, embezzlers of public funds and intellectually bankrupt people. With such mutual rejection, dialogue becomes either very difficult or impossible at all. Accordingly, researchers are passive and do not go to business with their proposals, while business closes in its self-sufficiency and does not turn to science with questions. Under such conditions, even if something interesting appears in the scientific field, it may simply not be noticed by the business community. (This is not about researchers running after entrepreneurs, but about their fruitful dialogue. An example of such constructive activity is N. Tesla, who always had sponsors for his fundamental research. Something similar was demonstrated by T.A. Edison, but with less intensity of scientific fundamentality.)
Thus, the excess of theoretical developments in science as the primary stage of the crisis has already degenerated into the next stage - in mutual distrust of key groups of economic agents(researchers and investors). It is clear that in such conditions the search for new areas for effective investment is very complicated.
Now we can return to the question we formulated earlier: how long will the crisis last? The answer can be specified: until science indicates a new technological vector for the development of society. AND the longer science delays the birth of this notorious technological vector, the longer the crisis will last and the greater the likelihood of a global war.
5. Cycles of rationality of thinking. The disruption of the normal connection between business and science is determined by the fact that both of these areas are subject to strong mystification. For example, science insists on the expansion of fundamental research, fitting anything under this definition. Business often flaunts its social responsibility by including its own needs. However, in reality, all this turns out to be much more complicated. Let us consider this issue in more detail in relation to science.
Let's touch on the differences between fundamental and applied science. Where is the line between them? Now these concepts are completely obscured. For example, funds mass media we are entertained by reports that supposedly obtained final evidence of the existence of a black hole in our galaxy. And this is presented as a fundamental discovery. But is it? This question may not even have an answer.
What do string theorists do? There is already a point of view according to which the result of their activity is the construction in the head of the researcher of a complex network of neural chains that reflect connections in the physical world. Thus, the usefulness of studies in the field of string theory exists, but it concerns only the researcher himself and does not affect the general social strata of the population. Can such activity be interpreted as fundamental science? Again, the answer remains open.
At the same time, the problems of modern energy are on the periphery of fundamental science. It is more of an applied science. But is it? For example, today there is still no clarity regarding the nature of ball lightning. Meanwhile, many experts argue that it is this phenomenon that promises new opportunities in building alternative energy. How many physicists today are concerned about the study of ball lightning? No. And why? Because this direction lies away from the main road of fundamental science. But is everything so simple?
If we turn to the history of science, we will see that all the great scientists of the past paid tribute to ball lightning. Even Mikhail Lomonosov was engaged in its research. Later, this object attracted the attention of Nikola Tesla, and even later, the “father of modern physical optics” Robert Wood paid attention to her. Were all these eminent researchers engaged in a petty applied problem? Most likely, the case of ball lightning indicates that the division of research into fundamental and applied has exhausted itself and it is necessary to move on to a more holistic picture of science.
However, outside of our consideration remained main question: why did theoretical thought prevail in science compared to applied?
In our opinion, the answer lies in the peculiarities of human thinking as such. The essential property of consciousness is its rationality, but this property is not constant, once and for all given. It pulsates: sometimes rationality increases, sometimes it decreases. Decreased rationality can take the form of irrationality and even irrationality. It seems, the dynamics of such pulsations of human consciousness is of a civilizational nature and is still poorly understood. At certain stages of the development of society, the rational principle prevails in the intellect of people. At this time, a pragmatic approach in science triumphs and research is constructive with clearly expressed positive practical results. At some point, pragmatism leads thinking to a dead end, it is necessary to rise above current problems and move on to larger-scale theorizing. At this time, abstract knowledge is growing, which can sometimes take the form of bizarre irrational theories that have nothing to do with the real world. However, even here, at some point, theoretical thought comes to a dead end, being unable to answer the burning questions of being. And then it is necessary to return to the original pragmatism.
Thus, one can say about the existence of certain irregular cycles in the level of rationality of people's thinking. A particular case of reflection of this regularity is the cycles of the level of pragmatism in scientific research. It seems that now the world has passed the maximum point in theorizing and needs more concrete and constructive knowledge. This circumstance, apparently, is largely due to the current scientific and financial crises.
6. What to do? The considered features of the dynamics of the world economic system lead to the sacramental question: what to do and how to prevent possible local and global conflicts?
A detailed answer to this question would require a lot of space, so we confine ourselves to the main theses.
First, it is necessary to restructure science and orient it towards the search for real promising directions for the development of production technologies. To do this, it is necessary to change the structure of science itself and activate its connection with business on the basis of the scientists' attempt to understand business and speak to it in its language. It is possible that it will be necessary to freeze some theoretical areas of research for some time and transfer resources to more pressing problems.
Secondly, it is necessary to improve the mechanism of dialogue between business and science. It seems that business should have in its personnel arsenal people who are able to provide an effective interface with science. Business should open itself to science, and not close itself on its already mastered issues.
Thirdly, all these transformations must be carried out in a short time. It is clear from what has been said before that the crisis should not last more than two years. otherwise, the probability of war will greatly increase and its prevention will be in question. Consequently, all reforms should be carried out literally in a year and a half. Speed will decide, if not everything, then a lot.
7. Cycles or end of story? All of the above is based on one simple hypothesis that the current crisis is just one in a long line of past and future crises. Therefore, after it, humanity will continue its movement forward. However, this position is not the only one, and there is an alternative opinion, according to which this crisis will be the last one, because we are entering a post-singular arm of history, where external evolution ends and something completely incomprehensible begins.
Here we are faced with a serious methodological dilemma: which version of history to accept?
In our opinion, no end of history is yet planned, although it would be pointless to deny the peculiarity and exclusivity of the present moment. An important analogy can be used here. For about a century and a half, the share of the public sector throughout the world has followed a uniform growth trend. However, at a certain point - in different countries at different times - this trend changed to a cyclical pattern, when the share of the public sector began to periodically increase and decrease. In other words, a certain stage in the development of the public sector has ended and a new stage has begun, associated with the inclusion of a more flexible mechanism for competition between the public and private sectors of the economy. It seems to us that something similar will happen after the current crisis: perhaps there will be frequent but minor crises that initiate adjustments in economic development. Of course, if the world manages to avoid a global war with unpredictable consequences.
By the way, in the context of what has been said, it can already be argued that the liberal model of the economy, which has now undermined its authority, will retain its positions. Simply, as it should happen in times of crisis, the role of the public sector will increase for a certain moment, and when the economy is stabilized, large-scale privatization will begin again and the entire capitalist cycle will resume.