Are We Heading towards a Synchronised Global Slowdown? T Sabri Öncü

When the International Monetary Fund (IMF) issued its World Economic Outlook Update in January 2018, the future looked bright. Indeed, even the title of the update was very optimistic: Brighter Prospects, Optimistic Markets, Challenges Ahead. And under the cheer-leadership of the IMF, an overwhelming consensus was formed. The cyclical upswing underway since mid-2016 had continued to strengthen, producing in 2017 the broadest synchronised global growth upsurge since 2010, and the growth would last as far as the eye could see. Here, what is meant by global growth is the growth of the world gross domestic product (GDP) or the world income. It turned out…

Justice in the Age of Finance C. P. Chandrasekhar

The big news late in June 2017 was that the Serious Fraud Office (SFO) in the UK had charged four former senior executives of Barclays bank, including its former chief executive, John Varley, with fraud committed almost a decade earlier, during the global financial crisis of 2008. This is the first chief of an institution embroiled in the 2008 financial crisis who faces criminal (as opposed to civil) proceedings. How long the investigation will take and what the punishment will be is yet to be seen. But being the first criminal prosecution of a small number of the large group…

The Age of Anxiety: The crisis of liberal democracy in a post-hegemonic global order Ziya Onis

The crisis of liberal democracy has been accelerated by the global financial crisis of 2008 with its dislocating effects in the established democracies. Relative stagnation and rising inequality and unemployment, coupled with mass migration and terrorist attacks, have instigated the rise of right-wing radical populist sentiments. As Western powers lose their influence, liberal democracy is challenged by the rise of strategic models of authoritarian or hybrid capitalism in a changing global context. Age_of_Anxiety (Download the full text in PDF format)

Finance Capital and the Nature of Capitalism in India Today C.P. Chandrasekhar

A distinctive feature of the current phase of capitalism is the growing role of finance capital as an instrument to establish capitalist hegemony and facilitate the appropriation of surplus. In the developed countries this transition towards financial hegemony was the result of the inflationary crisis and stagnation that affected the OECD countries after the late 1960s. The contractionary fiscal and monetary policy response to inflation intensified the deceleration in real growth. This together with the low real interest rates on bank deposits adversely affected banking business and profits. These developments triggered a process of deregulation and liberalisation in the financial…

And Now, Price Deflation in India and China? C. P. Chandrasekhar and Jayati Ghosh

Ever since the Global Financial Crisis, advanced economies have been grappling with the spectre of deflation. While this was very clearly a reflection of the downswing in economic activity in the aftermath of the crisis, such price deflation has proved remarkably impervious to the most expansionary monetary policies and liquidity expansion that the world economy has yet seen. This has had adverse consequences in terms of producers’ expectations, which in turn have kept investment low. It has not benefited working people because wages have stayed low or continued to fall. And it has generated tendencies of the debt deflation-type that…

Coverage of Prudential Measures in the GATS: Some conclusions of a WTO Appellate Body Andrew Cornford

Since issuance of the framework of the General Agreement on Trade in Services (GATS) as part of the results of the Uruguay Round negotiations, there has been a continuing controversy as to the scope which it provides for financial regulation. The principal focus of this controversy has been the so-called of the “prudential carve-out” or “prudential exception” of paragraph 2(a) of the Annex on Financial services. This provides latitude under GATS rules for measures taken by members for prudential reasons affecting their financial sectors, notwithstanding other provisions of the GATS. A recent dispute between Panama and Argentina was the occasion…

No Clue to the Future C.P. Chandrasekhar

Meeting in mid-April on the side lines of the spring sessions of the World Bank and the International Monetary Fund at Washington D.C., Finance Ministers of the G20 countries seemed overcome by a combined sense of despair and fear about the state of the world economy. The Communiqué issued after the meeting describes that state thus: “Growth remains modest and uneven, and downside risks and uncertainties to the global outlook persist against the backdrop of continued financial volatility, challenges faced by commodity exporters and low inflation.” When translated that seems to say the recovery is yet to occur and the…