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Εγχειρίδιο χειρισμού κρίσεων λόγω πολιτικών ΔΝΤ από τη CIA! / Already confirmed: Civil liberties under attack! / Greece's creditors gone completely insane! / How the global financial mafia sucked Greece's blood / ECB's economic hitmen / Η Μέρκελ επιβεβαιώνει τα σχέδια των γραφειοφασιστών! /Greece: the low-noise collapse of an entire country/ How the neoliberal establishment tricked the masses again, this time in France / Ενώ η Γερμανία προετοιμάζεται για τα χειρότερα, η Ελλάδα επιμένει στο ευρώ! / Ένας παγκόσμιος "proxy" πόλεμος κατά της ελευθερίας έχει ξεκινήσει! / McCarthyism 2.0 against the independent information / Ο επικεφαλής του "σκιώδους συμβουλίου" της ΕΚΤ επιβεβαιώνει ότι η ευρωζώνη είναι μια χρηματοπιστωτική δικτατορία! / Venezuela case as an emphatic example of why the mainstream media propaganda in the West was so successful in previous decades / Δημοψήφισμα για Grexit: η τελευταία ευκαιρία να σωθεί η Ελλάδα και η τιμή της Αριστεράς / Populism as the new cliche of the elites to stigmatize anyone not aligned with the establishment / Δεν γίνεται έτσι "σύντροφοι" ... / Panama Papers: When mainstream information wears the anti-establishment mask / The Secret Bank Bailout / The head of the ECB “shadow council” confirms that eurozone is a financial dictatorship! / A documentary by Paul Mason about the financial coup in Greece / The ruthless neo-colonialists of 21st century / First cracks to the establishment by the American people / Clinton emails - The race of the Western neo-colonialist vultures over the Libyan corpse / Επιχείρηση Panama Papers: Το κατεστημένο θέλει το μονοπώλιο και στις διαρροές; / Operation "looting of Greece" reaches final stage / Varoufakis describes how Merkel sacrificed Greece to save the Franco-German banks / France officialy enters the neo-Feudal era! / The US establishment just gave its greatest performance so far ... / A significant revelation by WikiLeaks that the media almost ignored / It's official: the US is funding Middle-East jihadists! / Οι αδίστακτοι νεο-αποικιοκράτες του 21ου αιώνα / How to handle political unrest caused by IMF policies! / Πώς το νεοφιλελεύθερο κατεστημένο ξεγέλασε τις μάζες, αυτή τη φορά στη Γαλλία / Οι Γάλλοι νεοαποικιοκράτες επιστρέφουν στην Ελλάδα υπό 'ιδανικές' συνθήκες

26 August, 2017

After Neoliberalism, what next?

The crisis consists precisely in the fact that the old is dying and the new cannot be born; in this interregnum a great variety of morbid symptoms appear. (Antonio Gramsci)

by Jayati Ghosh

Part 4 - Profit-Led Costs

The collapse in Northern export markets that followed the recession brought that process to a halt, and recent moves towards more protectionist strategies in the US and elsewhere, as well as the persistent mercantilist approach of surplus-producing countries like Germany, have made it more difficult since then. In any case, such a strategy is unsustainable beyond a point, especially when a number of relatively large economies use it at the same time.

In this boom, domestic demand tended to be profit-led, based on high and growing profit shares in the economy and significant increases in the income and consumption of newly-globalised middle classes, which led to bullish investment in non-tradeable sectors such as financial assets and real estate as well as in luxury goods and services.

The patterns of production and consumption that emerged meant that growth also involved rapacious and ultimately destructive exploitation of nature and the environment. The costs – in terms of excessive congestion, environmental pollution and ecological degradation – are already being felt, quite apart from the implications such expansion has on climate change.

There have been other negative impacts. Within developing Asia, for example, it led to an internal ‘brain drain’ with adverse implications for the future. The skewed structure of incentives generated by the explosive growth of finance directed the best young minds towards careers that promised quick rewards and large material gains rather than painstaking but socially necessary research and basic science.

The impact of relocation of certain industries and the associated requirement for skilled and semi-skilled labour led to increased opportunities for educated employment, but it also led bright young people to enter work that is typically mechanical and does not require much originality or creativity, with little opportunity to develop their intellectual capacities.

At the same time, crucial activities were inadequately rewarded. Farming in particular became increasingly fraught with risk and subject to growing volatility and declining financial viability, while non-farm work did not increase rapidly enough to absorb the labour force even in the fastest growing economies of the region.

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[1] [2] [3] [5] [6] [7] [8] [9]

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