The year 2016 started pretty badly for global capitalism. In the first couple of weeks of January global share prices fell sharply—at one point they were 20 percent below the high they reached last year. Subsequently markets regained a degree of stability (for reasons to which we will return). But by early March the average decline in equity price indices in 2016 was over 6 percent, implying a loss in companies’ capitalisation of over $6 trillion, 8.5 percent of global GDP.1
The economic bad news has continued. Ahead of a meeting of G20 finance ministers in February, the International Monetary Fund warned that the world economy was slowing down, and called for “bold multilateral actions to boost growth and contain risk”. United States treasury secretary Jack Lew responded complacently: “This is not a moment of crisis. Don’t expect a crisis response in a non-crisis environment”.2
But the IMF repeated its call. David Lipton, managing director Christine Lagarde’s number two, said in early March: “The IMF’s latest reading of the global economy shows once again a weakening baseline. Moreover, risks have increased further, with volatile financial markets and low commodity prices creating fresh concerns about the health of the global economy”. In the face of a spreading perception that governments were unable or unwilling to do anything, Lipton urged: “For the sake of the global economy, it is imperative that advanced and developing countries dispel this dangerous notion by reviving the bold spirit of action and cooperation that characterised the early years of the recovery effort”.3
Lipton was referring to the determined response by states to the financial crash in autumn 2008, when they poured money into the banks and into fiscal stimuli in an effort to prevent total economic collapse. According to the economic historian Adam Tooze, the US Federal Reserve Board (or Fed) extended over $10 trillion in credit lines to other central banks and to Wall Street in 2007-10.4 It seems likely that these actions helped to ensure that the Great Recession of 2008-9 didn’t develop into a prolonged global economic contraction comparable to the Great Depression of the 1930s. As the economic historian Barry Eichengreen puts it, “global GDP dropped by a disastrous 15 percent between the peak in 1929 and the trough in 1932. In 2008 and 2009, in contrast, it fell by a fraction of 1 percent, and growth resumed already in 2010. Even in the advanced countries hit hardest, the fall in 2009 was 3.5 percent of GDP, and growth turned positive again the next year”.5
In the state drive to overcome the Great Recession, China played a central role. The Chinese government instructed the banks (which are still state-owned) to lend on a massive scale, fuelling a huge investment boom that revived not just the Chinese economy but others supplying it with complex manufactured goods, food and raw materials. But now China is in trouble. Featuring heavily in the stock market scare in January were sell-offs on the Chinese exchanges that followed an earlier wave in August. The markets are anxiously monitoring the drop in China’s vast foreign exchange reserves, from a high of $3.99 trillion in June 2014 to $3.2 trillion (still a mammoth sum) in early 2016. The Bank for International Settlements estimates that capital flight—mainly wealthy Chinese households moving their money offshore—surged in 2015, shifting from a net inflow of $12 billion in the first quarter to outflows of $17 billion in Q2, $106 billion in Q3 and $168 billion in Q4.6
And the problems aren’t confined to financial flows, but affect the giant productive machine that a generation’s rapid capital accumulation has built up in China. Chinese exports fell at an annual rate of 25.4 percent in February, the biggest drop since early 2009, at the height of the post-crash slump.7 The Chinese economy is slowing down: the government is committed to an annual growth target of 6.5 percent for the next five years—less than the headlong pace of the past 30 years but still unrealistic according to many economists. But other “emerging market” economies, for example Brazil, are actually contracting. World trade in goods shrank last year by 13.8 percent, again the worst figure since 2009.8
Even some establishment figures are concluding that the crisis that began in 2007-8 isn’t over. Andy Haldane, chief economist of the Bank of England, has posited “a three-part crisis trilogy. Part One of that trilogy was the ‘Anglo-Saxon’ crisis of 2008/09. Part Two was the ‘Euro-Area’ crisis of 2011-12. And we may now be entering the early stages of Part Three of the trilogy, the ‘Emerging Market’ crisis of 2015 onwards”.9
But rather than simply a sequence of crises, each with a different geographical focus, what we are experiencing is that the problems that caused the crash and the slump between 2007 and 2009 remain unresolved, and indeed have been exacerbated by the methods used to prevent economic collapse. The immediate origins of the crash and the slump lie of course in the financial bubble that developed in the United States and Europe in the mid-2000s. But the bubble itself represented the displacement of a more fundamental problem—the long-term fall in the rate of profit throughout the major capitalist economies in the 1960s and 1970s.
Neoliberalism was a concerted, but only partially successful, attempt to overcome the crisis of profitability by driving up the rate of exploitation and squeezing more surplus value out of workers. But the recovery of the rate of profit in the US peaked in 1997. There developed instead a reliance on what Riccardo Bellofiore has called “asset-bubble-driven privatised Keynesianism”.10 In other words, monetary authorities, especially the Fed, became increasingly tolerant of the development of financial bubbles that pushed up the price of particular assets—shares in the late 1980s and again in the late 1990s, real estate in the mid-2000s.
Through the “wealth effect”—in other words, the ability of more prosperous households to borrow against the higher monetary value of their assets and therefore to spend more—aggregate effective demand was maintained at relatively high levels. The atomised decisions of households to borrow and spend achieved the same overall effect in maintaining growth and employment that Maynard Keynes had argued that centralised spending by the state would produce. But as the bubble ballooned out of control in the mid-2000s, sucking in the entire Western banking system to feed the demand for credit, the conditions were created for a crash that, when it developed in 2007-8, brought down the whole world economy.11
Concerted state action prevented the Great Depression developing into an economic slump on the scale of the 1930s. But even mainstream economists such as Lawrence Summers and Paul Krugman acknowledge that the recovery in the US and the European Union has not been marked by the sharp increase in output and relatively rapid resumption of pre-crisis growth rates characteristic of the “normal” business cycle of boom and recession. This has led to a debate about “secular stagnation”—ie Summers’s thesis that slow growth in the old “core” of advanced capitalism represents not a temporary aberration but a structural change.12 A more radical version of the same idea has been articulated by the post-Keynesian economist James Galbraith (an adviser to Yanis Varoufakis during his brief time as Syriza’s finance minister). He argues that the entire economic model on which the US has based its global hegemony since the mid-20th century is exhausted.13
Michael Roberts has contended both in this journal and on his blog that global capitalism is caught in what he calls the “long depression”—in other words, a protracted period in which growth rates fall below their long-term average. And he traces the cause of this depression to the chronic problems of profitability faced by the advanced capitalist economies: “From 1997 the US rate of profit entered a downward phase. Since the end of the Great Recession profitability revived from lows in 2009 but is still below the level reached in 1997. It fell in 2014”.14
Roberts’s analysis centres on the rate of profit, in other words the relationship between the mass of surplus value extracted from workers and the total capital advanced in order to secure these profits. According to Marx, it is the rise in the organic composition of capital, which reflects rising productivity and the resulting growth in the means of production per worker, that is the ultimate cause of the fall in the rate of profit. But there is evidence that the absolute mass of surplus value is currently falling in the US. The JP Morgan economic research team reported in February:
The squeeze on US margins is most severe and downside risks are the greatest. Along with the dollar’s 21 percent cumulative rise since mid-2014, the US is a significant energy producer. At the same time, stagnant productivity has produced sufficient labour market tightening to move wage inflation modestly higher. Against this backdrop, this week’s larger-than-expected productivity drop in 4Q15 points to a 10 percent drop in corporate profits from year-ago levels. A double-digit decline in profits is a rare event outside recessions, having been recorded only twice in the last half century.15
The JP Morgan diagnosis points to a number of short-term factors involved in the profit squeeze. The deeper forces behind the crisis of profitability are interacting with the legacy of the crash to drag the global economy down. As the reference to the dollar indicates, the monetary policies of the leading states are a big factor here. The bailouts led to a surge in state indebtedness. This was defined by the reviving financial markets and by neoliberal politicians as a deathly threat that needed to be urgently addressed. The result was the spread of austerity policies that sought to slash public spending from Europe to other parts of the world, notably the US.
As articulated by a range of forces from the German political elite to the Republican right in the US, austerity represented an attempt to exploit the crisis to push through more radical neoliberal policies. Thus, at stake in the confrontation between the EU and the Syriza government in 2015 was a new drive for labour-market “reforms” aimed especially at France and Italy. From the standpoint of the German ruling class, Greece’s torment is just collateral damage.16
If austerity had been given free rein, then the “long depression” might indeed have been on the scale of the 1930s, or worse. But it has been at least partially compensated for by what Tory chancellor of the exchequer George Osborne calls “monetary activism”. One of the most important consequences of the crisis has been the way in which it has enhanced the power of the central banks, already freed from control by government ministers in setting interest rates earlier in the neoliberal era. The Fed—“the world’s central bank”, as Leo Panitch and Sam Gindin put it—has led the way in using monetary policy to prop up the financial system and more broadly the global economy.17
Among other measures, this has involved cutting interest rates to zero or near-zero levels and quantitative easing (QE)—buying government and corporate bonds as a way of putting money into the banks. The US example in introducing QE was quickly followed by the Bank of England, then by the Bank of Japan after the Liberal Democrats under Shinzō Abe won the Diet elections in December 2012, and sluggishly and reluctantly (because of German opposition) by the European Central Bank in March 2015. The idea was that the banks would lend the extra money on to firms who would invest and thereby increase output and employment.
QE is justified by one of the central dogmas of neoclassical economics, the quantity theory of money, according to which the money supply determines the price level. This theory presupposes that any increase in the money supply will be spent. But Marx argued that the money supply fluctuates in response to the needs of the circulation of commodities and therefore of the broader accumulation process, and so economic agents may decide to hoard the money they hold rather than spend it.18 Western banks have hung onto QE money in order to rebuild their reserves or have lent it to governments and firms in the “emerging market” economies while they were booming, pleading that domestic entrepreneurs are reluctant to invest and so haven’t been knocking on their doors demanding loans. Probably the most important effect of QE has been to promote waves of currency devaluation—first of the dollar, and more recently and sporadically of the yen and the euro, which promotes growth by cheapening exports.
QE has come under increasing fire, partly because of the evidence that it has been ineffective. But stricter neoliberals fear that it is all too effective, and that, by increasing the money supply it will lead to a take-off in inflation, even hyper-inflation, particularly given that the US economy has recovered comparatively strongly. There is no evidence of this happening: the trend in the advanced economies is in the opposite direction, towards deflation, where the absolute level of prices falls. But the Fed has found itself under increasing pressure to “normalise” monetary policy, as its chair, Janet Yellen, puts it. So on 16 December it raised interest rates for the first time since 2006, by 0.25 percent. This timid step still left US interest rates at historic lows of between 0.25 and 0.5 percent, but it was intended to mark the beginning of a steady upward movement in rates.
What has happened since Christmas has indicated that Galbraith is probably right to argue that the old “normal” is dead. Indeed, one explanation of the stock market falls is that it is a delayed reaction to the way in which the Fed and other central banks have been manipulating the financial system. Thus the Financial Times quoted a note by Tad Rivelle of the TCW investment group in which he argued “that the Fed had ‘systematically suppressed rates and volatility’ and warned that payback was now due”. He continued: “The Fed has ignored Mr Market for a very long time and he has felt neglected and marginalised. Don’t be too surprised if his anger upends the best laid plans of mice and Fed”.19
But the share selloff also suggested that “Mr Market” still wants to hang onto nurse. The markets calmed down in mid-January after European Central Bank president Mario Draghi said the bank might do more to stimulate the eurozone economy. The eurozone expresses in a concentrated way the plight of global capitalism today. Economic and monetary union provided the framework in which the European version of the mid-2000s bubble developed. The convergence of eurozone interest rates at low levels reflected the markets’ mistaken belief that Germany would bail out any member state that got into trouble. This allowed governments and companies in the weaker eurozone economies to borrow heavily, fuelling property bubbles in, for example, southern Ireland and the Spanish state. After the crash, austerity was imposed on heavily indebted states in large part to bail out the French and German banks that had done the bulk of the lending.20
The bailouts were intended in part to give the banks time to restructure and rebuild their profitability. But this happened much more aggressively in the US than in the eurozone. Among the main victims of the stock market selloffs were the shares of banks, particularly in Europe. The European behemoth Deutsche Bank saw its shares fall humiliatingly to €17 at the beginning of February, compared to €100 nine years earlier, before the crash. A couple of weeks later the economic commentator Wolfgang Münchau wrote: “The rout in European financial markets last week was a watershed event. What we saw—at least here in Europe—is the return of the financial crisis…the banking system has not been cleaned up, there are plenty of zombie lenders around and in contrast to 2010 we are in a deflationary environment.” Munchau went on to argue that we are seeing
the return of the toxic twins: the interaction between banks and their sovereigns. Last week’s crash in bank share prices coincided with an increase in bond yields in the eurozone’s periphery. The pattern is similar to what happened during 2010-12. The sovereign bond yields have not quite reached the same dizzy heights, though Portugal’s 10-year yields are almost 4 percent.21
The banks are particularly vulnerable to the next stage of monetary experimentation. This is the introduction of negative interest rates—in other words, charging depositors rather than paying them interest with the aim of forcing economic agents to spend by making it expensive for them to sit on their money. This policy has already been tried in Sweden and Switzerland and has been more recently taken up by the Bank of Japan and the ECB. The introduction of negative interest rates has taken the form mainly of charging banks for the reserves they hold in central banks. In Japan, for example, ordinary depositors are not being charged for fear they will just hoard cash at home. The effect is to squeeze the banks’ profits—not something most people will worry about but it could increase the fragility of the financial system. Some economists advocate another, more adventurous step—“helicopter money”, named after Milton Friedman’s hypothetical example of a helicopter dropping dollars over a community, whose inhabitants quickly collect and spend the money. Martin Wolf of the Financial Times, for example, suggests giving central banks “the power to send money, ideally in electronic form, to every adult citizen”.22
Behind these expedients is the fear of deflation. During the Great Depression, the economist Irving Fisher argued that falling prices increase the real value of debts and therefore encourage economic actors to cut spending. The effect can be to force the economy into a downward spiral in which falling output pushes prices down more, increasing real indebtedness and further shrinking the economy.23 Contemporary “unconventional monetary policy” is intended to counter this process by forcing up the rate of inflation. Friedman himself, in line with the quantity theory of money, thought that the helicopter drop would ultimately cause prices to rise.24 But, in a situation like the present, where nominal interest rates are very low, inflation would have a positive effect, by making it cheaper to borrow and thereby stimulating spending.
It’s hard not to disagree with Richard Koo, chief economist for the Nomura Research Institute, when he writes: “the adoption of negative interest rates is an act of desperation born out of despair over the inability of quantitative easing and inflation targeting to produce the desired results”.25 He argues that the world economy is emerging from a “balance sheet recession” that results from the huge accumulation of debt in the bubble years. Private firms and households are saving to pay off these debts rather than taking on new ones, so making it cheaper to borrow won’t get them to spend more. This argument has the merit of challenging the mainstream idea that increasing the money supply will mechanistically lead to rises in spending and output, but the fall in profitability also means that firms don’t have an incentive to borrow and invest, even if interest rates are very low.26
Negative interest rates, helicopter money and the like all underline the dependence of a sluggish financial system on increasingly desperate measures by the central banks. But this is interwoven with problems in the system of production itself. The two most important are oil and China. Since late 2014 the price of oil has collapsed. Two particular factors are at work. The first is that the slowdown in China and other “emerging market” economies has cut down the demand for oil. Secondly, on the supply side, till recently the Saudi Arabia government refused to cut production to limit the price fall. Its aim was to drive out of business the US shale-oil producers who have increased the global supply of oil but whose expensive methods of extraction make their profitability dependent on a relatively high price.
Views differ on who’s winning this battle. Initially Western governments and economists celebrated the fall in the price of oil and related gas products because lower energy costs should boost incomes and spending. But this reaction ignored three things. First, the fall in the oil price exacerbated the deflationary tendencies in the advanced economies with which, as we have seen, the central banks are struggling. Secondly, a significant chunk of the American economy has reoriented around supplying the shale industry and its workers. Many firms in the sector expanded by accumulating heavy debts and are now under water. So the fall in the oil price has had a depressive effect on the US economy at a time when expectations of rising interest rates were pushing the dollar up and so helping to make exports more expensive. Thirdly, the weaker oil-producing economies, from Russia and Iran to Venezuela and Nigeria, have also been squeezed.
China’s slowdown is one factor in the decline in the price of oil and indeed of other raw materials that enjoyed a spectacular boom in the 2000s, feeding its rapidly expanding economy. It’s important not to exaggerate the significance of the stock market selloffs in China’s economic difficulties. The mainland Chinese stock exchanges are dominated by the shares of big domestic companies; these are mostly still state-owned enterprises (SOEs) that have been able to finance their investments through cheap bank loans. The authorities promoted rising shares in part as a way of helping better-off Chinese households make a bit of money on the stock market when savings earn very low interest rates as a way of keeping these loans cheap. Similarly the flight of capital is partly motivated by the efforts of wealthy Chinese to get their money out of the country in president Xi Jinping’s ferocious anti-corruption campaigns. So politics is the main factor at work in these cases rather than economics.
But there are bigger issues involved as well. One section of the Chinese leadership is seeking greater integration in the world economy. It enjoyed a limited victory in November 2015 when the renminbi was recognised by the IMF as one of the basket of reserve currencies used to calculate its members’ Special Drawing Rights. This is a largely symbolic move, but the Chinese authorities have been taking steps to allow the renminbi to float in the currency markets more freely, a necessary condition for it to become a genuine reserve currency. These actions were misread by the financial markets and contributed to the recent waves of turbulence.
This episode underlined that the more China becomes integrated in global markets the more its economy will come under external scrutiny. The markets are focusing remorselessly on the build-up of surplus capacity thanks to the huge surge in cheap credit that pulled China out of the Great Recession. There is, to begin with, the huge real estate bubble that developed in the past few years, transforming Chinese urban skylines. Jamil Anderlini writes in the Financial Times:
Today, some analysts describe the Chinese real estate market as the single most important sector in the global economy—and the biggest risk factor. This is less fantastic than it sounds when you consider that in two years—2011 and 2012—China produced more cement than the US did in the entire 20th century… The building boom of recent years has led to enormous excess inventory but the true scale is impossible to estimate because developers and local governments are offered incentives to under-report the problem. Despite a slowdown in 2015, real estate investment in China rose by 1 percent, even as average house prices in the
70 largest cities fell.
Similarly, Chinese commodity imports in volume terms increased last year, as price collapses caused a large import contraction in value terms.
In other words, China’s economy has slowed by a couple of percentage points and global commodity prices have plummeted even before any correction in the country’s property sector begins in earnest. An outright decline in real estate investment, which is surely coming, will also have profound implications for the rickety, debt-laden Chinese financial system. Analysts estimate that more than 60 percent of Chinese bank loans are directly or indirectly tied to real estate.27
For The Economist, however, the real problem is industrial over-capacity:
China’s surplus capacity in steelmaking, for example, is bigger than the entire steel production of Japan, America and Germany combined. Rhodium Group, a consulting firm, calculates that global steel production rose by 57 percent in the decade to 2014, with Chinese mills making up 91 percent of this increase. In industry after industry, from paper to ships to glass, the picture is the same: China now has far too much supply in the face of shrinking internal demand. Yet still the expansion continues: China’s aluminium smelting capacity is set to rise by another tenth this year. According to Ying Wang of Fitch, a credit-rating agency, around two billion tonnes of gross new capacity in coal mining will open in China in the next two years…
A detailed report released this week by the European Union Chamber of Commerce in China reveals that industrial overcapacity has surged since 2008… China’s central bank recently surveyed 696 industrial firms in Jiangsu, a coastal province full of factories, and found that capacity utilisation had “decreased remarkably”. Louis Kuijs of Oxford Economics, a research outfit, calculates that the “output gap”—between production and capacity—for Chinese industry as a whole was zero in 2007; by 2015, it was 13.1 percent for industry overall, and much higher for heavy industry.28
According to the same report, Chinese firms are struggling with debt and with aggregate profits that are falling for the first time since 2000. It may be a symptom of this situation that more cash-rich companies are busy taking over foreign firms in search of higher returns than they can obtain in China: according to Dealogic, overseas spending by Chinese buyers has already reached $102 billion this year, compared with $106 billion in the whole of 2015.29 The scale of this mergers and acquisitions wave (a contributor to the capital outflow) indicates that the Chinese economy is not on its knees yet.
The Economist’s solution to the problem of overcapacity is plain enough: shut the zombie firms down. It’s unlikely to get its way. China, despite its growing integration in the world market, retains considerable elements of state capitalism, in which the government is still in control of the “commanding heights”, especially the banks and large firms. The signs are that the Xi Jinping leadership intends to merge and rationalise SOEs rather than shut them down altogether.
But Chinese workers may well be asked to pick up the tab for the bubble. There is talk of another wave of mass redundancies like those in the late 1990s when the leadership of Jiang Zemin sought to reduce the debt burden on banks and industrial firms by closing large swathes of the north-eastern rustbelt. Up to six million jobs could be lost in this latest restructuring. In mid-March the police flooded into the mining town of Shuangyashan close to the Russian border after miners mounted protests at not being paid for four months. Their employer, Longmay Coal, is a big loss-making SOE. The government is setting aside $15.4 billion to “resettle” coal miners and steelworkers.30
The slowdown in China and the other “emerging market” economies then reacts back on advanced capitalism by cutting demand for its exports. But Roberts argues that they are still not big enough to precipitate another global recession:
In dollar terms, emerging economies have only 40 percent of world GDP. Sure, that share has doubled since 2002, but it is still the case that just the top seven major capitalist economies have a greater share than all the emerging economies, with 46 percent. And in the last two years, that share has stabilised. While China’s share of world dollar GDP has rocketed from just 4 percent in 2002 to 15 percent now, it is still much smaller than the share of world GDP for the US. That has fallen from 32 percent in 2002 to 24 percent now.
These figures show the tremendous expansion of the Chinese economy. But they also show that the US remains the pivotal economy for a global capitalist crisis, particularly as it dominates in financial and technology sectors.31
Whether or not a recession is on the cards in the US in the short term is an open question. The Fed is worried enough to scale back its projected interest rate increases. But what is clear is that none of the problems that precipitated the crisis in the first place have been solved. Global capitalism struggles with chronic overaccumulation and low profitability, to which is added the new burden of a badly damaged financial system heavily dependent for life support from the central banks. When we turn to the political problems faced by the leading Western capitalist states—the infernal cycle of war and intervention in the Middle East and its by-product in the refugee crisis that has thrown an already highly dysfunctional EU into overload—the picture is grim indeed.
From this perspective, the announcement by David Cameron’s government of a referendum on Britain’s EU membership on 23 June couldn’t be worse-timed. For Washington and Berlin the Brexit debate is a parochial diversion reflecting Cameron’s inability to control a Tory party deeply divided over Europe. The depressing impact of the announcement on sterling and the stock exchange gave a good indication of where the leading sectors of capital stand on the issue. Whatever the substance of the deal Cameron won at the European Council, it confirmed Britain’s semi-detached status in the EU, with access to the single market but free enough to follow along in US geopolitical adventures and for the City to remain as the main international financial centre. Brexit, by destroying this delicate balance, would threaten the interests of the banks and corporations that use Britain as a platform for their European operations.
This in itself would be a strong reason for revolutionary socialists to back a vote to leave the EU. But, as we argued at length last autumn, the EU has developed as an engine for imposing neoliberalism, in increasingly cruel forms, both within and beyond its borders.32 This has become the core of the integration process, and any honest assessment of the merits of EU membership must start from it. The predominant argument within the trade unions and the Labour Party that EU membership is a guarantor of progressive reforms is based on falsehood and amounts to an evasion of their own responsibility to fight to defend the interests of working people. The claim, which probably sways many people on the left towards the Remain camp, that the EU is less bad on the issue of migration is hard to sustain in the light of Angela Merkel’s efforts to close Europe to refugees by making a deal with the increasingly autocratic regime of Recep Tayyip Erdoğan in Turkey. The duty of revolutionary socialists is not to apologise for the EU but to build a left, internationalist opposition to it.
Osborne’s latest budget, unveiled in mid-March, contained a vicious attack on the teaching unions by announcing a plan to turn all schools into academies outside local government control. But the overall tone was one of caution, both for fear of destabilising a fragile Tory party and because lower estimates of the size of the economy and of productivity growth have greatly reduced the probability he will meet his target of achieving a budget surplus by 2019-20. A commentator close to the chancellor painted a sombre picture the next day:
In its dullness, the Budget was a tribute to the referendum. In its darkening economic projections, its still-daunting figures for debt, its general aroma of a world toying with crisis, it told us that the referendum does not end the government’s problems or the country’s uncertainties. Mr Osborne might have to conduct what is left of his consolidation while managing a downturn and an increasingly fractious party.33
In the event, of course, the budget backfired when Iain Duncan Smith resigned as work and pensions secretary, ostensibly in protest against cuts to disability benefit, in reality to scupper Osborne and the Remain campaign. The Tory party now faces its worst crisis since the mid-1990s, leaving the Cameron government very vulnerable. This is an additional, more tactical reason than the principled ones set out above for a left campaign to exit the EU.
1 Donnan, 2016b.
2 Donnan, 2016a.
3 Donnan, 2016b.
4 Tooze, 2016, p138.
5 Eichengreen, 2015, p281.
6 Johnson, 2016.
7 Donnan, Giles, and Wildau, 2016.
8 Donnan and Leahy, 2016.
9 Haldane, 2015.
10 Bellofiore, 2010. See also, on an earlier stage of the process, Brenner, 2002.
11 Harman, 2009 and Callinicos, 2010. The stress on the role of low profitability in this analysis is, of course, controversial among Marxist political economists. It is defended by Joseph Choonara elsewhere in this issue (Choonara, 2016b). See also Callinicos and Choonara, 2016.
12 Teulings and Baldwin, 2014.
13 Galbraith, 2014.
15 Scutt, 2016. Productivity problems are most likely the consequence of low investment, itself caused by low profitability: see Roberts, 2016c.
16 Callinicos, 2015, pp121-127.
17 Panitch and Gindin, 2012, p239.
18 Marx, 1971, pp136-137.
19 Wigglesworth, McKenzie, Lewis, and Hughes, 2016.
20 Callinicos, 2015, pp116-121.
21 Münchau, 2016.
22 Wolf, 2016.
23 Fisher, 1933.
24 Friedman, 2006, pp5-7.
25 Koo, 2016.
26 See Koo, 2008, and, for a Marxist perspective, Roberts, 2016b.
27 Anderlini, 2016.
28 Economist, 2016.
29 Weinland, 2016.
30 Hornby, 2016, and Shepherd and Hornby, 2016.
31 Roberts, 2016a.
32 Callinicos, 2015, and see now Choonara, 2016a.
33 Ganesh, 2016 (this passage is only in the print edition).