In our century, one of the most important problem which humanity lives, is definitely the environmental pollution. So many points that are shown as a reason for this environmental pollution such as profit ambition, power dash, market failure, property rights and also the capitalism as a mode of production. There are so many definitions in different disciplines of environmental pollution. In that case, we should categorize it in an economical terms. Moreover, to do this, we should undertake the capitalist system as a whole and then analyze its effects on the environmental pollution very deeply.
When we look at the historical process of the environment issue in an economic concept, we see that this notion has almost a new characteristic in it from the beginning period of mid-20th century. Environmental economics is a subfield of economics that relates to the with the environmental problems. As National Bureau of Economic Research Environmental Economics Program quotes that Environmental Economics undertakes theoretical or emprical studies of the economic effects of national or local environmental policies around the world. Particular issues include the costs and benefits of alternative environmental policies to deal with air pollution, water quality, toxic substances, solid waste and global warming. Righ along with this quotation, in general, it combines the welfare economics and the theory of economic growth with more recent perspectives on the political economy of choosing policy tools and the ideas of sustainable development. There is a point in an environmental economics that so important to analyze its gravity which consists of the externalities as one of the most critical element of market failure. The common definition is that an externality exists when a person makes a choice that affects other people that are not accounted for in the market price. On the other hand, the basic definition comes from also by Heller and Starrett that defines externality as a situation in which the private economy lacks sufficient incentives to create a potential market in some good and the nonexistence of this market results in losses of Pareto efficiency. In an economic literature, externalities mean in which the unfettered market does not create an efficient output. Thence, to correct this such market failures, it gives some solutions which are advocated for some externalities include environmental regulations, qoutas on pollution, taxes and tariffs on pollution and dirty subsidies. Just at that juncture, the concept of negative externalities take a very important place to understand and analyze the environmental pollution/degradation. As we know that the negative externality is an action of product on consumers that imposes a negative side effect on a third party; it is a social cost. Many of these costs are related with a deep environmental consequences such as climate change, global warming, systemic risk, air pollution, water pollution, soil contamination, radioactive contamination, increasing rate of greenhouse gas, carbon emission and so on... These different kinds of environmental pollution goes into the atmosphere causes progressive natural instability, disorder and discomfort to the ecosystem. For example, apart from its death effects on the human body, for an environmental effects, the carbon dioxide emissions cause ocean acidification, the emissions of the greenhouse gases leads to global warming which also affect the ecosystem in so many ways and soil can become infertile and unsustainable for the plants. We can accrue these examples in so many different types of causes. Because of these negative externalities and its death effects, many nations worldwide has come together in many times and different forms to protect the environment from the adverse effects of pollution and thus to regulate various types of pollution as well as to cut back the high levels of pollution. Although there are lots of pollution types, the greenhouse gas emission is a leading one both for economic discipline and the environmental degradation.
Generally speaking, greenhouse gas emission is a kind of gas that absorbs or emits radiation. This is also a fundamental cause for the greenhouse effect. The primary greenhouse gases in an atmosphere are carbon dioxide, methane, nitrous oxide and ozone. Contribution of the each gases to the greenhouse effect is affected by the characteristics of the gas, its abudance and its indirect effects. The carbon dioxide is one of the most important greenhouse gases. It is also the basic one in an analysis of the environmental economics to understand the binary relations between economic concept and the environmental degradation concept. It should also ascertains more deeply to understand the relations between nations on the issues of the emissions trading, environmental tariffs and taxes environmental pricing reforms, tradeable pollution permits, personal carbon trading and low carbon economy as well as importance of the other greenhouse gases. Admittedly, the problem is related with the economics to a large extent. That's why, the negative externality engages an important place in that situation. In this way, the difference between the social marginal cost and the marginal cost (supply) to a position of demand shows an imbalances also for an economics and environmental degradation. When a negative externality occurs then social marginal cost exceeds marginal private cost (price) and therefore private optimal output is higher than the social optimal output. This divergence between them is also resulted with an inefficieny in resource allocation. Producers of the externalities don't have consider the effects of their actions on others. Especially within the globalization process, these negative effects have started to limit with some agreements and deals worldwide. In this regard, Kyoto Protocol has one of the most important deal for all industrialized and industrializing countries.
The Kyoto Protocol is a protocol to the United Nations Framework Convention on Climate Change (UNFCCC), aimed at struggling global warming. It is an environmental treaty achieving the stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous interference with the climate system. It was adopted on 1997 in Kyoto, Japan, at first hand and entered into force on 2005. Literally, 191 nations have signed and ratified the Kyoto Protocol as of September 2011. Under Protocol, 38 countries which are termed as ''Annex I countries'' commit themselves to a reduction of four greenhouse gases (the most important one is carbon dioxide) and all member countries give general commitment. They agreed to reduce their collective greenhouse gas emissions by %5.2 from the 1990 level. These countries have limited to the 16 billions tons of carbon dioxide in years 2008-2012 because of the increasing importance of global warming. However, if the nation which is not disposed this limit then it can sell its permits to another countries within an open market operations. In contrary to this, if the nation which is come to limit then it can purchase permits from another countries with the same way of open market mechanisms. However, in this position, there come into being a considerable problem which is these permits put a new face on things such as being a financial assets like something that can be sell or purchase. That's the reason, it brings the question what are the main weaknesses and the strengths of Kyoto Protocol. For a deeper analysis and understanding, it should have fallen to heart of the main points and should also have compare with the other pollution control methods related with in mitigating the greenhouse gas emissions and protecting the global climate as a whole. First of all, I can start with some weaknesses of the Kyoto Protocol. In my opinion, the main causes of the weaknesses lay down on the flexibility mechanisms of the Protocol. These are emission trading and joint implementation which defined under the Kyoto Protocol intended to lower the overall costs of achieving its emissions targetings. These mechanisms enables countries to achieve emissions reductions or to remove carbon emissions for the atmosphere with cost-effectively and also to allow 38 Annex I countries to meet their greenhouse gas emission limitations by purchasing greenhouse gas emission reductions credits from elsewhere through four different; financial exchanges, environmental finance, projects that reduce emissions in non-Annex I countries and from other Annex I countries. However, the problem starts with this cost-effective/minimizing concept because in some ways, it results with creating negative externalities and disequilibrium between private marginal cost/benefit and the social marginal cost/benefit. First of all, the emission trading is most widespread one between the other mechanisms. Definitely, it is a market-based approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants. Generally, a government authority sets a limit on the amount of a pollutant than can be emitted. These limits sold to firms in the forms of emission permits. However, the total number of permits don't exceed the limit. Firms that need to increase their emission permits must buy from those who require fewer permits. In that point, there can be created an issue because it shows the difference of pollution levels among the developed countries and developing countries. Because the developed countries can use the cost-efficient mechanisms with high rate of technologies then they sell their permits in which have low-level technologies countries. In effect, the buyer is paying charge for polluting, on the other hand, the seller is being rewarded for having reduced emissions. It reminds one thing. Although there is a limit on pollution, the situation of the pollution have a continuity. For example, some corporations, firms moves for having a high rate of profit even if they pollute under the limt, they sell it. In many cap-and-trade systems and carbon trading mechanisms, organizations which do not pollute may also participate such as for a firms in United States as a seller. Some economists urge that the use of market-based tools like this emission trading to adress environmental problems instead of prescriptive command and control regulation. It is criticized for being into three reasons: (1) for being excessively rigid, (2) insensitive to geographical differences ,and (3) for being ineffecient. However, they argue that emission trading requires a limit to efficiently reduce emissions and the limit has a governmental regulation mechanisms so if there is a failure to reduce emissions is often punishable which increases the costs of production. Thus the firms choose least-cost way to abide with the pollution regulation. Related with the emission trading, there are two important criticisms which also support our views. First of all, Lohmann in New Scientist magazine of science argues that trading pollution allowances should be avoided as a climate change policy. He gives reasons because, firstly, he supports that global warming require more radical change than the modest changes driven by previous pollution trading schemes. That's why, he also suggests that it requires nothing less than a reorganization of society and technology that will leave most remaining fossil fuels safely underground. His suggestions, in my opinion, is accurate because carbon trading or emission trading as a whole encourages business as usual as expensive long-term structural changes will not be made if there is a cheaper source of carbon credits. Furthermore, another one of the most important criticism come from Annie Leonard emphasized three factors: (1) unjust financial advantages to major polluters resulting from free permits, (2) an uneffectiveness of the system caused by cheating in connection with carbon offsets, and (3) a distraction from the search for other solutions.
Emission trading is the fundamental flexible mechanism in a Kyoto Protocol and I think that the most important weakness for an accurate application to the greenhouse gas emissions control and to stop the global warming which was briefly summarized above paragraph. However, there is also another mechanism that those reduce the power to foreclose the benefits of Kyoto Protocol which is the Joint Implementation. In general, it helps countries with binding greehouse gas emissions targets meet their obligations. For exmaple, a joint implementation suggests that any 38 countries for Kyoto Protocol can invest in emission reduction projects in any other developed countries as an alternative to reducing emissions domestically. Thus, countries can lower the costs of complying with their protocol targets by investing in greehous gas reductions in any other developed countries where reductions are cheaper and then applying the credit for those reductions toward their commitment goal. However, in that position, I have some criticisms about this because it restricts the targets and benefits of the Kyoto Protocol and also restricts the amelioration of global warming. First of all, it can cause concern of imitiated emission reductions. In that situation, leakage is very important that if joint implementation project implies increased emissions elsewhere then the net effect on emission reductions of that project may be limited. Secondly, its complexity as in the process of credit mechanism for Joint Implementation project is another one. It may release the low degree of coordination between joined countries to a portocol. Finally, it brings the question that who will bear the risk of uncertainties among countries.
Thirdly, the last weakness of the Kyoto Protocol is related with the coercion of the environmental effectiveness of the protocol includes three aspects: (1) proposals to allow emission credit for agricultural activities, forest degradation and regrowth, (2) ''unlimited'' use of Clean Development Mechanism (another flexibility mechanism of the Kyoto Protocol; I think that it has some benefits but its unlimited using cause degradation) would allow industrial countries to increase their own mechanism with no guarantee that emissions were reduced elsewhere by a compensating amount and (3) unlimited hot air emission trading threatens to undermine the integrity of the emission trading system as well as increase emission more than would otherwise be the case. Finally, by the way, the Kyoto Protocol calls for the industrialized countries to mitigate greenhouse gas emission %5.2 below 1990 levels by 2012 but the U.S. as a largest producer of greenhouse gases, emiting %20 of the world's total, isn't part of it.
Contemporary production processes use fossil fuels such as oil, which release risky amounts of greenhouse gas emissions into our atmosphere. Moreover, these emissions from agricultural practices, land use change and forestry, and other industrial activities have led to immensely increases in an atmospheric concentrations of different gases, the most important ones are as we know carbon dioxide and methane. As we mentioned above that the Kyoto Protocol is one of the most important formation acting globally to stop the climate change and global warming within a limitation of greenhouse gases. Besides the weaknesses of the protocol, there are also a strengths of the Kyoto Protocol. The potential benefits from Kyoto, basically, are captured by the avoided damages from climate change. Some damages for climate change can be organized as rises in average temprature, less potable and clean water, less biodiversity and severe weather changings. I think that the four principals of the protocol are the most important strengths of the future environmental issues.
1) The principal of commitments. These are related for both countries which are binding to the Kyoto Protocol. This lies mainly in the establishing commitments for the reduction of the greenhouse gases that are legally binding. Separating the countries in different parts makes an important attitude to control the global degradation with making commitments possible.
2) The principle of implementations. The countries are required to prepare policies and measures for the reduction of the greenhouse gases. Furthermore, they are required to increase the absorption of these gases and utilize all policies.
3) Minimizing impacts on developing countries by establishing an adaptation fund for climate change.
4) The principle of compliance. Establishing a committee to enforce compliance with the commitments under the protocol.
These four different principle also shows the consolidation of so many different countries against the climate change. Thanks to this, the utmost importance of the Kyoto has its own power to put together these countries to stop the climate change and makes binding policies for both countries as accepted globally. Moreover, Kyoto does not only make a point of developed countries, but also features on the developing countries and industrializing countries. One of the most important mechanism and strength of the Kyoto is the clean development mechanism which is related with this issue. Definitely, the purpose of the clean development mechanism is to promote clean and sustainable development in developing countries. It is one of the Protocol's project based mechanism in which is designed to promote projects that reduce emissions. It is based on the idea of emission reduction production. The economic basis for including developing countries in effects to reduce emissions is that emission cuts are thought to be less expensive in developing countries than developed countries. It is designed to start off developing countries on a path towards less pollution, with industrialized countries paying for these reductions. There are two main concerns about this mechanism which are additionality of emission reductions produced by the clean development mechanism and imposing projects that are contrary to the development interests of host countries.
Moreover, clean development mechanism plays three important roles in reducing the amount of future climate changes: improves the cost-effectiveness of the greenhouse gas mitigation policies in developing countries, helps to reduce leakage of emissions from developed to developing countries, and finally the boosts transfers of clean, less polluting technologies to developing countries.
OTHER TYPES OF POLLUTION CONTROL MECHANISMS IN ADDITION TO KYOTO PROTOCOL AGAINST THE CLIMATE CHANGE
1) Environmental taxes: It refers to taxes intended to promote environmentally sustainable activities via economic incentives. The policy of proposal may attempt to maintain overall tax revenue by proportionally reducing other taxes (like human labour and renewable resources). These taxes are looked like a Pigovian taxes (attempt to make the private parties involved feel the social burden of their actions). We know that the existence of externalities have a negative effects on environment. To the extent that these environmental taxes, firstly, correct for externalities such as pollution, greenhouse gases. Taxing the negative externalities usually are needed exerting a burden on consumption, and somewhat since the poor consume more and save less a share of their income. Moreover, an environmental taxes can have a future design in which modest consumption levels are priced low and higher consumption levels are priced at a higher levels.The basic one, similiar concept to pollution tax, is a cabon tax:
Carbon Tax: It is kind of environmental tax levied on carbon content of fuels and form of carbon pricing. Since greenhouse gas emissions caused by the combustion of fossil fuels, a tax on these emissions can be levied by taxing the carbon content of fossil fuels. These taxes offer a potentially cost-effective means of reducing greenhouse gas emissions. Also, it is like a Pigovian tax similar to another environmental taxes. They help to address the problem of emitters of greenhouse gases not facing the full social costs of their actions. It affects disproportionately low-income groups. These taxes, in other words, using tax revenues to favour low-income groups. Thus, it would bring the prices closer to the social degrees. In that situation, it aslo shows its efficient characteristics. In an economic concept, the carbon taxes of its social cost is the marginal cost of emitting one extra tons of carbon dioxide. So, if social cost estimates are complete, a carbon tax should be set equal to its social cost. Emission permits can also have a value equal to its social costs. Although a number of countries have implemented carbon taxes, there are some difficulties with these taxes. According to the Carbon Trust, a carbon tax suffers from combining a set price for carbon along with a transfer of revenue from industry to government. As a result, a revenues can be misguided or it can increase the level of poverty related with an unequal distribution. Secondly, these taxes are whether the emission reductions they bring about actually exist; that is, additionality of emission reductions according to Carbon Trust.
2) Environmental Tariff: It is an import and export tax placed on products being important form, or also being exported to countries with substandard environmental pollution controls. They can be used as controls on global pollution and also be considered as corrective on climate change. It is used because there are some debates on the role that increased trade as internationally plays in increasing pollution. U.S. was the originator of a legislative proposal suggesting an environmental tariff be applied against exporting countries whose exports gained significant cost advantages due to less stringent environmental regulations. This proposal stated as ''International Pollution Deterrence Act of 1991''. On the other hand, these kinds of tariff were not implemented in the past because they were not sanctioned by multilateral trade regimes such as WTO and GATT so that now in so many countries it criticizes considerable and calls for reform for it. For instance, many newly industrialized countries and underdeveloped countries thinks that impose pollution control like tariffs as suspicious. They see that as threat to growth, decreasing impacts on standards, and tactics for developed countries like U.S., China and for Western Europe.
3) Environmental Pricing Reform: It is the process of adjusting market prices to include environmental costs and benefits. For this theory, externality exists where a market price omits environmental costs/benefits. So, self-interested economic decision in some concepts can lead to environmental harm. Thus, environmental pricing reform can be economy-wide, or more focused on environmental issues, mainly climate change like environmental tax or tariff. It includes green tax-shifting, tradeable pollution permits, or the creation of markets for ecological services. Those are both related with the economic instruments for environmental protection.
TURKEY CASE IN KYOTO PROTOCOL
Turkey is always placed as a special characteristics for its geographical and environmental position all over the world. That's why, it is opened to some difficulties of environmental problems.
Besides its geographical position, the most of the environmental problems for Turkey are basically caused also by the fact that it is developing country for many decades. From the beginning of the time period of development, the governments has supported rapid industrialization, so it has sometimes caused unregulated urbanization and environmental problems. Of course, in this process, environmental regulations were blow over. In Turkey, industrial pollution control is often seen as an exchange among clean environment and economy in terms of employment, production and growth. Thus, the firms are continued to pollute rather than turn back to environmental mentality. However, after a sharp pressures from the side of European Union in the beginning of 21th century, this mentality has been slightly changing at the end. So, the the road of the Kyoto Protocol appeared. Turkey announced in June 2007 its intention to sign the accord but without having any emission targets which was first agreed upon by world governments in 1997. The government postponed signing it for more than a decade because of concerns about the cost to the economy. Signing the Kyoto Protocol does not put an additional burden on Turkey until 2012. It is not obliged to reduce their greenhouse gas emissions to 1990 levels between 2008 and 2012 like the other 38 Annex I countries. Turkey will get involve in climate change decisions post-2012. However, by signing the Kyoto Protocol, Turkey has undertaken the responsibility of passing the necessary legislation to lay the infrastructure for fighting climate change after 2012. Economically, its estimated cost of changes in infrasturcture 58 billion euros. Also, long-term success requires national and international multi-disciplinary efforts by Turkey. Turkey felt an exchange among clean environment and economic-industrial development.
In my opinion, Turkey should have a special position like Annex I countries because albeit it does not emits as much as these countries, turkey has specific geographic location so it affects their ecological system profoundly. First of all, to being in a Mediterranean region is a considerable risk. The most striking effects of climate change on Turkey are expected to be water scarcity, deforestration, drought (especially in Anatolia) and ecological degradation. It is vulnerable to the potential effects of the climate changes. That's the reason, I think that two of the flexibility mechanisms which are tradeable emission permits and joint implementation, should be restricted for Turkey. For example, if Turkey does not exceed the limit of the emission, it should not act as a buyer from other countries' surplus. On the other hand, the protocol should have specified some acute punishment if the limit exceeds. For instance, these punishments can be in a production areas and can also be in an international trade areas with restrictive policies. On the other hand, countries like Turkey's position can be supported in various types such as finacially to change its production mode into green-technologies. Furthermore, Turkey should adopt into more renewable resources. These kind of resources are so important for Turkey because its geographical position also restricts to abate its wastes within a professional way. These wastes can mainly cause air pollution which has a serious problem leading relatively high social and economic costs in Turkey. Moreover, Turkey should use different types of pollution control devices in their industries. The basic ones are dust collection systems, industrial wastewater treatment and scrubbers (baffle spray scrubber, mechanically aided scrubber). Finally, there should be constructed a special regulation and monitoring pollution institutions to determine environmental taxes and tariffs for Turkey. In a conclusion, as a new country, Turkey, in a Kyoto Protocol, for now its regulations and policies have an initial quality. However, in future period of the environmental issues, the above mentioned rules or tools should have mentioned in these protocol for Turkey. Because the increasing rate of average temprature has began to cause water shortages in major cities as well as agricultural areas. Also, this factors may lead food scarcity and poverty in the near future that create pressure for migration that can cause social instability.
13 Kasım 2011 Pazar
3 Kasım 2011 Perşembe
Marxist and Non-Marxist Theories of Economic Crisis ( A different perspectives to analyze)
In every growth, supporters of capitalism claim that crisis tendency causing trouble in capitalist system is overcome. However, when growth is interrupted, economists fall out with each other to make explanations about the issue. The general conclusion drawn from explanations of capitalist system supporters is the fact that every crisis has a different reason reduced to human error, but not affiliated with internal dynamics of capitalism. Bourgeois economists are required to refuse that crisis is specific to the social structure of capitalist production, because all economy theory is established on the basis of following three points:
- Capitalist system arranges itself (it shall be balanced under any condition and situation)
- Main task of theoretical economist is to define the best conditions under which self-organization can be sustained.
- By this way, it will be possible to define any collapse as a consequence of exceptional deviations from norm.
Normal processing of supply and demand powers always guaranties a tendency towards general balance. This means that crisis may emerge as a result of external shocks or internal disturbances preventing and collapsing market balance process.
In the framework of general balance theory, capital acts between production branches as a respond to changes within profit rate arisen due to imbalance between supply and demand. This capital movement is a means for sustainability of rated relation between various branches of competition and correction of disproportions preventing accumulation by smooth relation between supply and demand.
All supply and demand balance in neo-classic theory is provided by mutual relations between interest rate and profit ratio. If any investment deficiency is in question, demand for investment funds shall decrease due to decrease in interest rate re-stimulating the investment. Stable money policy shall guaranty sustainability of this balance. In case of excessive price explosion causing inflation, tight money policies of money authorities are applied to eliminate this situation; whereas, in case of shrinkage (decrease in production, deflation ...), reserve entries applying loose money policies are permitted. Despite overall mathematical details, crisis explanations presented by today’s economists are not different than those introduced in the beginning of 19th century. Regular continuity of economical crisis should be explained and analyzed as a normal part of development tendencies of capitalist production style. This is the task undertaken by Marxism while trying to prove that the crises are specific to the communal structure of capitalist production. Distinguishing feature of Marxist crisis theories is their emphasis on crisis requirements defining objective limits of capitalism and necessity of socialism and representing basic and indestructible features of capitalist production style.
If crises have a contingency nature or they state transition from an accumulation stage, regime or communal structure to any other stage or structure, objective necessity of socialism and communal base of socialist movement do not exist. In this sense, historical materialism theory of Marx is refused. If a reformed capitalism meets needs of labor class, class struggle loses its objective basis. Socialism is reduced to ethical ideal defining set of moral values not having special relation with needs and aims of labor class, not having privileged class base and not having more moral validity than any other capitalist theory. Crisis theory has a central role in Marxism ideology and cannot be understood out of ideological scope. However, it is not sufficient to support Marxist crisis theory on the basis of ideological bases. In this context, it is required to analyze criticisms and seasonal necessities of crisis consisting of capitalist production style in which Marx is considered in general sense without explaining details in a more practical framework. While achieving this, it is important to benefit from theories of philosophers coming after Marx, who analyzed scientific socialism and dynamics of crisis. Crisis theory of Engels and Kautsky, explanation of Tugan Baranowsky regarding crisis necessity, deficient consumer crisis theory, crisis theories about declining profit rate of Rosa Luxemburg and finally, excessive consumption and explanations about crisis are the main theories required to be considered. In following section, these theories shall be described and by this way, internal irregularity of capitalism shall be understood:
Kautsky and Crisis Theory
Excessive production theory was considered as tangible tendency of capitalist development by Kautsky and its base was deficient consumers, although it was not developed well. He reinforces this theory with following statement: “Large scaled modern crisis shaking world markets arise due to excessive production and deficient consumption”. But significant point is relating this statement to market anarchy, not consumption. Kautsky approaches crisis as a side of commercial cycle sustained by successive invention of new markets and their saturation. Kautsky states that only limit of capital accumulation finds markets for raw material supply and products and continuous, as well as excited impulse regarding opening of new markets to provide new buyers emerges accordingly. According to his point of view, source of crisis tendency is lack of information on producers’ side regarding demand for their products as “estimation task of demand for their products is left to their responsibility”. Supply and demand imbalance in any branch of production causes crisis when complex buying and selling network collapses. The reason is anyone does not have buying power, except for producers of metals on which money is printed. Increasing complexity of mutual dependency means increasing risk of crisis. Finally, credits providing unmatched promotion to capitalist development increases possibility of crisis. Kautsky does not propose a deficient consumer or excessive production theory regarding crisis, but proposes a business cycle theory not having distinctive Marxist features (In this scope, it seems similar to Keynesian approach). Flexibility and expandability of modern production means obtainment of credit flexibility and large scaled secondary labor group and rapidly responding a stimulus in which capital increases production and gains profit. According to Kautsky, as opening of new markets triggers explosion of renewed capitalist activities providing new peaks to capitalist production, commercial cycle plays a significant role in sustainability of capitalist accumulation against tangible excessive production trend. Therefore, alternative of trade cycle is not balanced and sustainable economical growth, but it is chronic recession as market limit restricts capital accumulation consistently. This necessity conditions of crises and deepening of successive crises point mandatory collapse of capitalist system and necessity of socialism.
Tugan Baranowsky and Inevitability of Crisis Theory
The most effective commentator of deficient consumption crisis theory is Tugan Baranowsky, who is not actually Marxist, but who uses re-production schemas of Marx developed within second volume of Capital. These schemas are developed to invent mutual relations between production and consumption as to define source of demand for increasing product corresponding with increasing positive values captured by capitalists. Marx showed that source of increasing demand was purchasing of production means and workforce by capitalists in order to increase their capital by re-investing. Conclusion drawn by Tugan is any obstacle may not be in question in front of expanded product, if appropriate proportional relations between various branches of production are sustained. If production branches producing source of income of labors grow more than limits of consumption demand of labor class, crisis may occur. However, this case was a special disproportion case causing not due to limited consumption of labor class (how this can be achieved at subsistence wage level), but due to extraordinary growth of income means. Tugan states that only possible reason of crises is disproportion between production branches and concludes that sustainable accumulation can only be achieved by continuity of proper proportional relation between various branches of production. Tugan believed that commensurateness shall be achieved, because market anarchy means that proper distribution of new investments between various branches of production is not guarantied. Accumulation may continue for a certain period due to credit increase, despite increasing disproportions; but credit cannot sustain these disproportions for an infinite time period. Tugan’s criticism highlights that result of excessive production is not deficient consumption, but disproportion arises when some production sectors grow faster than others. Therefore, crisis arises together with the possibility of generalization of collapse as a chain reaction at a certain branch where production reaches excessive production limits. Disproportion theory of Tugan does not emphasize a tangible tendency theory regarding increasing deficient consumption, but emphasizes a business cycle theory as crises re-establish proportionality and secure new accumulation conditions. As Tugan affiliates disproportion with excessive production tendency, his theory explains that investment planning and proper credit arrangement may improve or destroy seasonal tendencies of accumulation in principle. Most Marxists represent their criticisms by claiming that consumption may provide driving force of capitalist accumulation. To illustrate, Kautsky does not refuse basic issues, but re-interprets orthodox theory by highlighting that disproportionality of deficient consumption is a coincidental feature and necessary tendency of capitalist development. Hilferding states that Tugan analyzes economical categories of capitalist production style of Marx, which was an irrelevant issue, but caused arise of a unusual production system concept for production. Criticisms of Tugan created a gap between those highlighting deficient consumer orthodoxy and those utilizing objections of Tugan to improve disproportion approach.
Rudolf Hilferding and Disproportionate Crisis Theory
Hilferding repeated deficient consumption criticism of Tugan based on the idea that deficient consumption is a special condition of disproportionality. He developed a crisis theory arisen due to disproportionate. His theory is based on trust and cartels, credit and finance institutions. According to Hilferding, new period of capitalism is defined as dominancy of financial capital stating integration of banks and industrial capitals under leadership of banks. This improvement is identified with increase in importance of fixed capital blocking large amounts of capital for a long time period. This decreased mobility of capital and flexibility to respond given to economical fluctuations and disproportinalities. According to Hilferding, this obstacle in front of equalization of supply and demand was a source of crises. Tendency of financial capital is not adjust production with respect to social needs, but it was establishment of central control of banks on production to maximize profits. According to Hilferding, source of this disproportionate was existence of fixed capital. His finance capital theory might be used to reinforce explanation of Engels regarding disproportionate trend; because, it is expected that as role of fixed capital increases, investment decisions shall be more dependent on production conditions and less dependent on temporary imbalances within the market. Hilferding states that crises arise due to unsuccessful mechanisms providing sustainability of complex proportionate relations required to be available in production. Failure of this proportionality causing emergence of crises highlights that proportionality is specific to advanced finance capital stage, not capitalist production style. In general, crisis appears together with emergence of general excessive production. Hilferding states that this has not a relation with missing consumption, but arises due to a decrease following decrease in profit rate of investment. He seems to relate decrease in profit rate with increase in organic composition of capital, but he also adds his pre-crisis observations regarding long welfare period during which prices and profits are high. Hilferding presents a rich cycle statements including deficient consumption, decreasing profit rate, disproportinality and production anarchy. He also criticizes each of these theories. In addition, Hilferding accepts central role of money and credits within the cycle and states that money movements reflect real accumulation conditions. He claims that increase in interest rates before crisis and requirement to secure credit shows suppression of explosion by money deficient suppresses. He also criticizes each of these theories unilaterally. Besides, Hilferding accepts role of money and credit within central cycle and states that money movements reflect real accumulation conditions. He claims that increase in interest rates before crisis and requirement to secure credit shows suppression of explosion by money deficient suppresses. In conclusion, disproportionate theory is excluded by orthodox Marxists in a reformist manner, as it states that failures of capitalism arise only due to market anarchy and may be eliminated by an advanced level of coordination.
Deficient Consumer Crisis Theory of Rosa Luxemburg
While Hilferding develops his disproportionate crisis theory on the basis of Tugan’s deficient consumption criticisms, Rosa Luxemburg attempts to establish deficient consumption theory on the basis of a solid base. He utilized reproduction schemas of Marx to highlight impossibility of capital accumulation in case of non-availability of external markets. Main significance of Luxemburg’s claim is shifting orthodox theory of Kautsky towards a pure deficient consumer theory. This deficient consumption was used to explain imperialist attempts trying to expand the market by destroying production in worldwide before capitalism and to define limits identifying inevitable collapse of capitalism. Luxemburg initiated his works by sharply separating tangible tendencies of capitalist accumulation and its cyclic shape. He explained cyclic accumulation structure as a coincidental consequence of market anarchy, but he claimed that efforts presented to eliminate reproduction problem as a feature of seasonality of crises were a means of coarse economy. Problem highlighted by Luxemburg is what the source of demand is regarding increasing product of capital corresponding with added value increased. This was not a matter for theorists thinking that capital accumulation has its own dynamics, because competition enforces producers to strengthen their powers regardless of market limits as a result of which excessive demand arises due to other capitalists purchasing production means and employing more workers until markets are saturate and crisis emerges. However, Luxemburg claims that if a final market for increase of consumption meta produced by these production means is available, other capitalists shall employ more workers and demand more production means as a result of which investment anticipates an ordinary increase in consumption. When Luxemburg defines consumption as a driving force of capitalist production, it shall be problem to explain how capitalism arises, not how capitalism collapses. Analysis of Luxemburg generally is generally criticized as a misunderstanding of reproduction schemas of Marx. He accepts utilization of reproduction schemas to establish structural possibility of capitalist reproduction of Tugan, but claims that the main problem is dynamic of the impact causing expansion of reproduction of capital.
Crisis Theory of Engels
Economy politics criticism of Engels focuses on economical and ethical malice arisen due to competition. Competition is explained as a consequence of private ownership of production means and as a base of class awareness and periodical crises on which capitalism criticism of Engels is based. Crisis theory of Engels is mainly based on market anarchy. Producers have no knowledge about consumer needs being realized by increase and decrease in prices. Increase and decrease in prices not causes soft balance arrangements of economists, but causes successive depressions arisen due to excessive production and price decreases manipulated by price increases. However, Engels highlights another basic factor that also emerges as a base of crisis tendency. Capitalism is identified with excessive production tendency triggered by competition pressure, which makes crisis tendency systematic, not random. Crises are the most dramatic sign of dynamism of capitalism and tangible excessive production tendency representing the source of historical limits of capitalism. Engels defines displacement of effort within replacement of seasonal growth and depression as a main mechanism making proletariats a reformist class. Economy politic criticism of Engels was an attempt to show that private ownership was the reason of badness of capitalist system. Base of his effort was confliction of economical interests arisen due to private ownership. Private ownership does not only establish the community on the basis of confliction of interest, but also it identifies permanent imbalance between supply and demand. First explanation of Engels regarding this imbalance and crises was presented in terms of instability of arrangement phase occurred due to unawareness of economic actors. Supply is larger or fewer as not to stand up to demand; because, nobody knows size of demand or supply in case of lack of knowledge. Although Engels explains periodical crisis in terms of ignorance of economic actors, it becomes then obvious that supply and demand imbalance is systematic and causes due to continuous tendency towards excessive production as a mandatory consequence of competition. Struggle of capital against capital, effort against effort and land against land makes production excessive downwarding all natural and rational relations. Engels does not explain why excessive growth of production under pressure of competition causes excessive production, but he states that capitalists, labors or land owners consider themselves as unnecessary, as stronger wins and weaker is excluded.
Hobson and Crisis Theory
Reaction against Say Law lies on the basis of objections of Hobson derived of empirical realities, not intangible theoretical base. Consequence of objections and criticisms of Hobson was mobbing of opposite side in associated period during which marginalist cult took the place of classical economy policy and was depending on a point of view perceiving importance of crises less on the basis of principle about effective functioning of market. He claimed that excessive saving in economy cause deficient consumption and accordingly, crises (Hobson was a liberal and Keynes respected his views and included his ideas in his General Theory named book). In his articles, Hobson emphasizes that economy science prioritizes analysis of production process and evaluates consumption as a passive role in terms of production. He highlights that realization of production to perform production activity only cannot be imagined in any community. He also states that economists acknowledge that main objective of production is consumption and meeting final products of community and marginalist cult prioritizing consumption after classical economical policy is not different than classical cult in this sense. Hobson presented relation between development of modern industry and deficient consumption regularly and as a matter of excessive saving and he also presented this claim in same style with Keynes, which increased his importance. According to Hobson, tight competition during free competition period causes emergence of various monopolies and trusts and less accumulation of capital (Monopoly). Expenditure level of this extremely rich group was not as high as their increasing income. Therefore, this group was automatically causing an extraordinary saving increase. Investing these savings to other industrial branches caused facilitation of same centralization in these branches and similar consequences were arising here. Rapid population increase and increase in consumption standards of the community was eliminating consumption deficiency against these savings and investments at certain level, but size of savings were remaining inadequate when techniques using capital in much more efficient way were considered. During last period, Hobson stated that monopolies prevented decrease in prices, as well as increase of consumption. Excessive investment during free competition period was causing excessive production crises and large scaled price decreases caused bankruptcy of many companies as a result of which crisis were emerging. However, while monopolies were realizing capital savings on the basis of more efficient methods, they were creating added capital required to be reinvested by monopoly profits, but preventing decrease in prices and increase in consumption. As a consequence, seasonal crises were arising as their effort regarding investment of their increasing profits in domestic market caused troubles for other investors. According to Hobson, all imperialist policies were harmful not only for weak countries and colonies exposed to crises, but also for countries applying imperialist policies. These imperialist policies in fact consist of methods not creating profit for the community and imposing all loads to taxpayers, increasing power of community classes, not producers, as well as causing social recession. Hobson states that the reason of excessive saving is excessive imbalance in income distribution. He also adds that if income level of workers or working class increases and if more balanced income distribution is achieved, excessive saving and deficient consumption shall be prevented in the community. In conclusion, it was the first time that Hobson presented an analysis of deficient consumer theory explained on the basis of excessive saving. Although his claims, such as saving-investment balance supporting that saving are converted to investment making therefore investments excessive remain in the scope of old classical frame, he presented basis of views of Keynes while interpreting crises.
The Law for the Tendency of Rate of Falling Profit
Law for the tendency of rate of profit to fall can be considered both as the oldest and newest crisis theory. This theory is emphasized as one of the largest internal conflictions of capitalist accumulation limiting itself and its relation with crisis was identified before Marx, by Adam Smith and Ricardo. Such that, economists have no doubt about decline of profit rates as capital accumulation progresses. These cults also include “declining efficiency law” and tendency to initialization of profit rates in economical profit sense. This profit in neo-classical economy is an extra profit remaining after distribution of share of each production factor. However, Marx explains law for the tendency of rate of profit differently under light of capitalist crises. In general sense, average profit rate in a community declines, because it increases as ratio of fixed capital in production to live effort, in other words, as stated by Marx, as organic composition of capital increases. That is, more capital matches with unit effort. However, according to value theory of Marx, live effort materialized in a product creates added value during production process. Idle effort can only transfer live effort amount materialized in it during its production stage to a new product. Residual value increasing value of outputs against inputs in production and representing the main objective for realization of production is created by live efforts. According to Marx, capitalists always direct towards new techniques to decrease costs due to pressure of competition. These techniques are generally create labor saving. In other words, labors are replaced by machines. By this way, rate of dead labor increases against live effort within a product. This also means increase of labor efficiency. Increase of labor efficiency can also be interpreted as more meta production by a unit effort; but this means materialization of less labor force within each product, whether they are live or dead. Therefore, price of products shall decrease and decrease in live effort shall cause decline in profit rate on the basis of certain residual value (rate of exploitation). It is obvious that objective of capitalist accumulation is profit. Accumulation is made to gain profit; if profit rate decreases, accumulation (capital accumulation) decreases. Accordingly, Marx supports that real limit of capitalism is not external matters like competition and natural resources, but it is internal logic, as stated by Ricardo and Smith. Marx sees how temporal is capitalism as a historical production style. According to his point of view, main importance of law for tendency of the rate of profit lies in this statement. This interpretation causes strengthening of his claims about end of capitalism. However, Marx states that this law is not absolute, but it is based on tendencies. In other words, tendencies functioning contrary to this law are also available. Real progression of profit rate consists of power balance between this tendency and opposite tendency. Marx states that this law is balanced by opposite tendencies and new cycles are initiated by events, such as crises. Marx indirectly developed his crisis theory on the basis of law for decline of profit rate; but he perceived the theory as a proof for end collapse, as he acknowledged capitalism as a finite community structure.
Bibliography
1) Akman, Cüneyt. Marksist Kriz Teorileri Işığında Küresel Kriz. 1st ed. Kalkedon Yayınları, Istanbul, 2010.
2) Clarke, Simon. Marx'ın Kriz Teorisi (Marx's Theory of Crisis). 1st ed. Otonom Yayıncılık: Istanbul, 2009.
3) Ollman, Bertell. Marxism: An Uncommon Introduction. 1st ed. New Delhi: Sterling, 1990.
4) Sweezy, M.Paul. Four Lectures On Marxism. Monthly Review Press, New York, 1981.
5) Burns, Emile. What is Marxism?. 4th Australian ed. Melbourne: International Bookshop: 1962.
6) Myers, Allen. Marksist İktisat El Kitabı (Marxist Economics: A Handbook of Basic Definitions). 3rd ed. Yordam Kitap: Istanbul, 2010.
7) Marx, Karl. Ekonomi Yazıları. 1st ed. Hil Yayın: Istanbul, 2004.
8) Balibar Etienne. Marx'ın Felsefesi (La Philosophie de Marx). 4th ed. Birikim Yayınları: Istanbul, 2010.
9) Kazgan, Gülten. İktisadi Düşünce veya Politik İktisadın Evrimi. 14th ed. Remzi Kitabevi: Istanbul, 2009.
10) Ali, Ferhat. Marksist Kriz Teorisi. 1st ed. Umut Yayımcılık: Istanbul, 2009.
11) Fine, Ben and Saad – Filho, Alfredo. Marx's Capital. 4th ed. Pluto Press, 2004.
- Capitalist system arranges itself (it shall be balanced under any condition and situation)
- Main task of theoretical economist is to define the best conditions under which self-organization can be sustained.
- By this way, it will be possible to define any collapse as a consequence of exceptional deviations from norm.
Normal processing of supply and demand powers always guaranties a tendency towards general balance. This means that crisis may emerge as a result of external shocks or internal disturbances preventing and collapsing market balance process.
In the framework of general balance theory, capital acts between production branches as a respond to changes within profit rate arisen due to imbalance between supply and demand. This capital movement is a means for sustainability of rated relation between various branches of competition and correction of disproportions preventing accumulation by smooth relation between supply and demand.
All supply and demand balance in neo-classic theory is provided by mutual relations between interest rate and profit ratio. If any investment deficiency is in question, demand for investment funds shall decrease due to decrease in interest rate re-stimulating the investment. Stable money policy shall guaranty sustainability of this balance. In case of excessive price explosion causing inflation, tight money policies of money authorities are applied to eliminate this situation; whereas, in case of shrinkage (decrease in production, deflation ...), reserve entries applying loose money policies are permitted. Despite overall mathematical details, crisis explanations presented by today’s economists are not different than those introduced in the beginning of 19th century. Regular continuity of economical crisis should be explained and analyzed as a normal part of development tendencies of capitalist production style. This is the task undertaken by Marxism while trying to prove that the crises are specific to the communal structure of capitalist production. Distinguishing feature of Marxist crisis theories is their emphasis on crisis requirements defining objective limits of capitalism and necessity of socialism and representing basic and indestructible features of capitalist production style.
If crises have a contingency nature or they state transition from an accumulation stage, regime or communal structure to any other stage or structure, objective necessity of socialism and communal base of socialist movement do not exist. In this sense, historical materialism theory of Marx is refused. If a reformed capitalism meets needs of labor class, class struggle loses its objective basis. Socialism is reduced to ethical ideal defining set of moral values not having special relation with needs and aims of labor class, not having privileged class base and not having more moral validity than any other capitalist theory. Crisis theory has a central role in Marxism ideology and cannot be understood out of ideological scope. However, it is not sufficient to support Marxist crisis theory on the basis of ideological bases. In this context, it is required to analyze criticisms and seasonal necessities of crisis consisting of capitalist production style in which Marx is considered in general sense without explaining details in a more practical framework. While achieving this, it is important to benefit from theories of philosophers coming after Marx, who analyzed scientific socialism and dynamics of crisis. Crisis theory of Engels and Kautsky, explanation of Tugan Baranowsky regarding crisis necessity, deficient consumer crisis theory, crisis theories about declining profit rate of Rosa Luxemburg and finally, excessive consumption and explanations about crisis are the main theories required to be considered. In following section, these theories shall be described and by this way, internal irregularity of capitalism shall be understood:
Kautsky and Crisis Theory
Excessive production theory was considered as tangible tendency of capitalist development by Kautsky and its base was deficient consumers, although it was not developed well. He reinforces this theory with following statement: “Large scaled modern crisis shaking world markets arise due to excessive production and deficient consumption”. But significant point is relating this statement to market anarchy, not consumption. Kautsky approaches crisis as a side of commercial cycle sustained by successive invention of new markets and their saturation. Kautsky states that only limit of capital accumulation finds markets for raw material supply and products and continuous, as well as excited impulse regarding opening of new markets to provide new buyers emerges accordingly. According to his point of view, source of crisis tendency is lack of information on producers’ side regarding demand for their products as “estimation task of demand for their products is left to their responsibility”. Supply and demand imbalance in any branch of production causes crisis when complex buying and selling network collapses. The reason is anyone does not have buying power, except for producers of metals on which money is printed. Increasing complexity of mutual dependency means increasing risk of crisis. Finally, credits providing unmatched promotion to capitalist development increases possibility of crisis. Kautsky does not propose a deficient consumer or excessive production theory regarding crisis, but proposes a business cycle theory not having distinctive Marxist features (In this scope, it seems similar to Keynesian approach). Flexibility and expandability of modern production means obtainment of credit flexibility and large scaled secondary labor group and rapidly responding a stimulus in which capital increases production and gains profit. According to Kautsky, as opening of new markets triggers explosion of renewed capitalist activities providing new peaks to capitalist production, commercial cycle plays a significant role in sustainability of capitalist accumulation against tangible excessive production trend. Therefore, alternative of trade cycle is not balanced and sustainable economical growth, but it is chronic recession as market limit restricts capital accumulation consistently. This necessity conditions of crises and deepening of successive crises point mandatory collapse of capitalist system and necessity of socialism.
Tugan Baranowsky and Inevitability of Crisis Theory
The most effective commentator of deficient consumption crisis theory is Tugan Baranowsky, who is not actually Marxist, but who uses re-production schemas of Marx developed within second volume of Capital. These schemas are developed to invent mutual relations between production and consumption as to define source of demand for increasing product corresponding with increasing positive values captured by capitalists. Marx showed that source of increasing demand was purchasing of production means and workforce by capitalists in order to increase their capital by re-investing. Conclusion drawn by Tugan is any obstacle may not be in question in front of expanded product, if appropriate proportional relations between various branches of production are sustained. If production branches producing source of income of labors grow more than limits of consumption demand of labor class, crisis may occur. However, this case was a special disproportion case causing not due to limited consumption of labor class (how this can be achieved at subsistence wage level), but due to extraordinary growth of income means. Tugan states that only possible reason of crises is disproportion between production branches and concludes that sustainable accumulation can only be achieved by continuity of proper proportional relation between various branches of production. Tugan believed that commensurateness shall be achieved, because market anarchy means that proper distribution of new investments between various branches of production is not guarantied. Accumulation may continue for a certain period due to credit increase, despite increasing disproportions; but credit cannot sustain these disproportions for an infinite time period. Tugan’s criticism highlights that result of excessive production is not deficient consumption, but disproportion arises when some production sectors grow faster than others. Therefore, crisis arises together with the possibility of generalization of collapse as a chain reaction at a certain branch where production reaches excessive production limits. Disproportion theory of Tugan does not emphasize a tangible tendency theory regarding increasing deficient consumption, but emphasizes a business cycle theory as crises re-establish proportionality and secure new accumulation conditions. As Tugan affiliates disproportion with excessive production tendency, his theory explains that investment planning and proper credit arrangement may improve or destroy seasonal tendencies of accumulation in principle. Most Marxists represent their criticisms by claiming that consumption may provide driving force of capitalist accumulation. To illustrate, Kautsky does not refuse basic issues, but re-interprets orthodox theory by highlighting that disproportionality of deficient consumption is a coincidental feature and necessary tendency of capitalist development. Hilferding states that Tugan analyzes economical categories of capitalist production style of Marx, which was an irrelevant issue, but caused arise of a unusual production system concept for production. Criticisms of Tugan created a gap between those highlighting deficient consumer orthodoxy and those utilizing objections of Tugan to improve disproportion approach.
Rudolf Hilferding and Disproportionate Crisis Theory
Hilferding repeated deficient consumption criticism of Tugan based on the idea that deficient consumption is a special condition of disproportionality. He developed a crisis theory arisen due to disproportionate. His theory is based on trust and cartels, credit and finance institutions. According to Hilferding, new period of capitalism is defined as dominancy of financial capital stating integration of banks and industrial capitals under leadership of banks. This improvement is identified with increase in importance of fixed capital blocking large amounts of capital for a long time period. This decreased mobility of capital and flexibility to respond given to economical fluctuations and disproportinalities. According to Hilferding, this obstacle in front of equalization of supply and demand was a source of crises. Tendency of financial capital is not adjust production with respect to social needs, but it was establishment of central control of banks on production to maximize profits. According to Hilferding, source of this disproportionate was existence of fixed capital. His finance capital theory might be used to reinforce explanation of Engels regarding disproportionate trend; because, it is expected that as role of fixed capital increases, investment decisions shall be more dependent on production conditions and less dependent on temporary imbalances within the market. Hilferding states that crises arise due to unsuccessful mechanisms providing sustainability of complex proportionate relations required to be available in production. Failure of this proportionality causing emergence of crises highlights that proportionality is specific to advanced finance capital stage, not capitalist production style. In general, crisis appears together with emergence of general excessive production. Hilferding states that this has not a relation with missing consumption, but arises due to a decrease following decrease in profit rate of investment. He seems to relate decrease in profit rate with increase in organic composition of capital, but he also adds his pre-crisis observations regarding long welfare period during which prices and profits are high. Hilferding presents a rich cycle statements including deficient consumption, decreasing profit rate, disproportinality and production anarchy. He also criticizes each of these theories. In addition, Hilferding accepts central role of money and credits within the cycle and states that money movements reflect real accumulation conditions. He claims that increase in interest rates before crisis and requirement to secure credit shows suppression of explosion by money deficient suppresses. He also criticizes each of these theories unilaterally. Besides, Hilferding accepts role of money and credit within central cycle and states that money movements reflect real accumulation conditions. He claims that increase in interest rates before crisis and requirement to secure credit shows suppression of explosion by money deficient suppresses. In conclusion, disproportionate theory is excluded by orthodox Marxists in a reformist manner, as it states that failures of capitalism arise only due to market anarchy and may be eliminated by an advanced level of coordination.
Deficient Consumer Crisis Theory of Rosa Luxemburg
While Hilferding develops his disproportionate crisis theory on the basis of Tugan’s deficient consumption criticisms, Rosa Luxemburg attempts to establish deficient consumption theory on the basis of a solid base. He utilized reproduction schemas of Marx to highlight impossibility of capital accumulation in case of non-availability of external markets. Main significance of Luxemburg’s claim is shifting orthodox theory of Kautsky towards a pure deficient consumer theory. This deficient consumption was used to explain imperialist attempts trying to expand the market by destroying production in worldwide before capitalism and to define limits identifying inevitable collapse of capitalism. Luxemburg initiated his works by sharply separating tangible tendencies of capitalist accumulation and its cyclic shape. He explained cyclic accumulation structure as a coincidental consequence of market anarchy, but he claimed that efforts presented to eliminate reproduction problem as a feature of seasonality of crises were a means of coarse economy. Problem highlighted by Luxemburg is what the source of demand is regarding increasing product of capital corresponding with added value increased. This was not a matter for theorists thinking that capital accumulation has its own dynamics, because competition enforces producers to strengthen their powers regardless of market limits as a result of which excessive demand arises due to other capitalists purchasing production means and employing more workers until markets are saturate and crisis emerges. However, Luxemburg claims that if a final market for increase of consumption meta produced by these production means is available, other capitalists shall employ more workers and demand more production means as a result of which investment anticipates an ordinary increase in consumption. When Luxemburg defines consumption as a driving force of capitalist production, it shall be problem to explain how capitalism arises, not how capitalism collapses. Analysis of Luxemburg generally is generally criticized as a misunderstanding of reproduction schemas of Marx. He accepts utilization of reproduction schemas to establish structural possibility of capitalist reproduction of Tugan, but claims that the main problem is dynamic of the impact causing expansion of reproduction of capital.
Crisis Theory of Engels
Economy politics criticism of Engels focuses on economical and ethical malice arisen due to competition. Competition is explained as a consequence of private ownership of production means and as a base of class awareness and periodical crises on which capitalism criticism of Engels is based. Crisis theory of Engels is mainly based on market anarchy. Producers have no knowledge about consumer needs being realized by increase and decrease in prices. Increase and decrease in prices not causes soft balance arrangements of economists, but causes successive depressions arisen due to excessive production and price decreases manipulated by price increases. However, Engels highlights another basic factor that also emerges as a base of crisis tendency. Capitalism is identified with excessive production tendency triggered by competition pressure, which makes crisis tendency systematic, not random. Crises are the most dramatic sign of dynamism of capitalism and tangible excessive production tendency representing the source of historical limits of capitalism. Engels defines displacement of effort within replacement of seasonal growth and depression as a main mechanism making proletariats a reformist class. Economy politic criticism of Engels was an attempt to show that private ownership was the reason of badness of capitalist system. Base of his effort was confliction of economical interests arisen due to private ownership. Private ownership does not only establish the community on the basis of confliction of interest, but also it identifies permanent imbalance between supply and demand. First explanation of Engels regarding this imbalance and crises was presented in terms of instability of arrangement phase occurred due to unawareness of economic actors. Supply is larger or fewer as not to stand up to demand; because, nobody knows size of demand or supply in case of lack of knowledge. Although Engels explains periodical crisis in terms of ignorance of economic actors, it becomes then obvious that supply and demand imbalance is systematic and causes due to continuous tendency towards excessive production as a mandatory consequence of competition. Struggle of capital against capital, effort against effort and land against land makes production excessive downwarding all natural and rational relations. Engels does not explain why excessive growth of production under pressure of competition causes excessive production, but he states that capitalists, labors or land owners consider themselves as unnecessary, as stronger wins and weaker is excluded.
Hobson and Crisis Theory
Reaction against Say Law lies on the basis of objections of Hobson derived of empirical realities, not intangible theoretical base. Consequence of objections and criticisms of Hobson was mobbing of opposite side in associated period during which marginalist cult took the place of classical economy policy and was depending on a point of view perceiving importance of crises less on the basis of principle about effective functioning of market. He claimed that excessive saving in economy cause deficient consumption and accordingly, crises (Hobson was a liberal and Keynes respected his views and included his ideas in his General Theory named book). In his articles, Hobson emphasizes that economy science prioritizes analysis of production process and evaluates consumption as a passive role in terms of production. He highlights that realization of production to perform production activity only cannot be imagined in any community. He also states that economists acknowledge that main objective of production is consumption and meeting final products of community and marginalist cult prioritizing consumption after classical economical policy is not different than classical cult in this sense. Hobson presented relation between development of modern industry and deficient consumption regularly and as a matter of excessive saving and he also presented this claim in same style with Keynes, which increased his importance. According to Hobson, tight competition during free competition period causes emergence of various monopolies and trusts and less accumulation of capital (Monopoly). Expenditure level of this extremely rich group was not as high as their increasing income. Therefore, this group was automatically causing an extraordinary saving increase. Investing these savings to other industrial branches caused facilitation of same centralization in these branches and similar consequences were arising here. Rapid population increase and increase in consumption standards of the community was eliminating consumption deficiency against these savings and investments at certain level, but size of savings were remaining inadequate when techniques using capital in much more efficient way were considered. During last period, Hobson stated that monopolies prevented decrease in prices, as well as increase of consumption. Excessive investment during free competition period was causing excessive production crises and large scaled price decreases caused bankruptcy of many companies as a result of which crisis were emerging. However, while monopolies were realizing capital savings on the basis of more efficient methods, they were creating added capital required to be reinvested by monopoly profits, but preventing decrease in prices and increase in consumption. As a consequence, seasonal crises were arising as their effort regarding investment of their increasing profits in domestic market caused troubles for other investors. According to Hobson, all imperialist policies were harmful not only for weak countries and colonies exposed to crises, but also for countries applying imperialist policies. These imperialist policies in fact consist of methods not creating profit for the community and imposing all loads to taxpayers, increasing power of community classes, not producers, as well as causing social recession. Hobson states that the reason of excessive saving is excessive imbalance in income distribution. He also adds that if income level of workers or working class increases and if more balanced income distribution is achieved, excessive saving and deficient consumption shall be prevented in the community. In conclusion, it was the first time that Hobson presented an analysis of deficient consumer theory explained on the basis of excessive saving. Although his claims, such as saving-investment balance supporting that saving are converted to investment making therefore investments excessive remain in the scope of old classical frame, he presented basis of views of Keynes while interpreting crises.
The Law for the Tendency of Rate of Falling Profit
Law for the tendency of rate of profit to fall can be considered both as the oldest and newest crisis theory. This theory is emphasized as one of the largest internal conflictions of capitalist accumulation limiting itself and its relation with crisis was identified before Marx, by Adam Smith and Ricardo. Such that, economists have no doubt about decline of profit rates as capital accumulation progresses. These cults also include “declining efficiency law” and tendency to initialization of profit rates in economical profit sense. This profit in neo-classical economy is an extra profit remaining after distribution of share of each production factor. However, Marx explains law for the tendency of rate of profit differently under light of capitalist crises. In general sense, average profit rate in a community declines, because it increases as ratio of fixed capital in production to live effort, in other words, as stated by Marx, as organic composition of capital increases. That is, more capital matches with unit effort. However, according to value theory of Marx, live effort materialized in a product creates added value during production process. Idle effort can only transfer live effort amount materialized in it during its production stage to a new product. Residual value increasing value of outputs against inputs in production and representing the main objective for realization of production is created by live efforts. According to Marx, capitalists always direct towards new techniques to decrease costs due to pressure of competition. These techniques are generally create labor saving. In other words, labors are replaced by machines. By this way, rate of dead labor increases against live effort within a product. This also means increase of labor efficiency. Increase of labor efficiency can also be interpreted as more meta production by a unit effort; but this means materialization of less labor force within each product, whether they are live or dead. Therefore, price of products shall decrease and decrease in live effort shall cause decline in profit rate on the basis of certain residual value (rate of exploitation). It is obvious that objective of capitalist accumulation is profit. Accumulation is made to gain profit; if profit rate decreases, accumulation (capital accumulation) decreases. Accordingly, Marx supports that real limit of capitalism is not external matters like competition and natural resources, but it is internal logic, as stated by Ricardo and Smith. Marx sees how temporal is capitalism as a historical production style. According to his point of view, main importance of law for tendency of the rate of profit lies in this statement. This interpretation causes strengthening of his claims about end of capitalism. However, Marx states that this law is not absolute, but it is based on tendencies. In other words, tendencies functioning contrary to this law are also available. Real progression of profit rate consists of power balance between this tendency and opposite tendency. Marx states that this law is balanced by opposite tendencies and new cycles are initiated by events, such as crises. Marx indirectly developed his crisis theory on the basis of law for decline of profit rate; but he perceived the theory as a proof for end collapse, as he acknowledged capitalism as a finite community structure.
Bibliography
1) Akman, Cüneyt. Marksist Kriz Teorileri Işığında Küresel Kriz. 1st ed. Kalkedon Yayınları, Istanbul, 2010.
2) Clarke, Simon. Marx'ın Kriz Teorisi (Marx's Theory of Crisis). 1st ed. Otonom Yayıncılık: Istanbul, 2009.
3) Ollman, Bertell. Marxism: An Uncommon Introduction. 1st ed. New Delhi: Sterling, 1990.
4) Sweezy, M.Paul. Four Lectures On Marxism. Monthly Review Press, New York, 1981.
5) Burns, Emile. What is Marxism?. 4th Australian ed. Melbourne: International Bookshop: 1962.
6) Myers, Allen. Marksist İktisat El Kitabı (Marxist Economics: A Handbook of Basic Definitions). 3rd ed. Yordam Kitap: Istanbul, 2010.
7) Marx, Karl. Ekonomi Yazıları. 1st ed. Hil Yayın: Istanbul, 2004.
8) Balibar Etienne. Marx'ın Felsefesi (La Philosophie de Marx). 4th ed. Birikim Yayınları: Istanbul, 2010.
9) Kazgan, Gülten. İktisadi Düşünce veya Politik İktisadın Evrimi. 14th ed. Remzi Kitabevi: Istanbul, 2009.
10) Ali, Ferhat. Marksist Kriz Teorisi. 1st ed. Umut Yayımcılık: Istanbul, 2009.
11) Fine, Ben and Saad – Filho, Alfredo. Marx's Capital. 4th ed. Pluto Press, 2004.
31 Ekim 2011 Pazartesi
Arrighi's The Long Twentieth Century and Hilferding's Finance Capital (A short comparison)
Arrighi's The Long Twentieth Century which is also the name of his research, is the last circle of the chain of phases in the world capitalist economy. As yet to this circle, he specifies the combination of the European world capitalist economy within both the world system with the long centuries and partly growing with getting up on the phases. These centuries and the phases get up on each other because for his thesis, institutions and structures of each accumulation cycles predominate the world capitalist economy at the time of the former financial expansion (CM') period. In general, he identifies four such cycles, each containing a long century:
- a Genoese-Iberian cycle (15th and early 17th century)
- a Dutch cycle ( late 16th to late 18th century)
- a British cycle ( mid-18th century to early 20th century)
- a United States cycle (late 19th to current century)
Each accumulation cycle is defined by the particular complex of governmental and business agencies that led the world capitalist system towards first the material expansion (MC: money capital (M) evokes an increasing extent of commodities such as labor power and natural resources) then the financial expansion (CM': an expanded extent of money capital (M') sets itself free from its commodity form and accumulation proceeds through financial deals (MM')) (Arrighi, 2005: 86).He concludes that these two epochs constitute a systematic cycle of accumulation (MCM'). Consecutive systematic cycles of accumulation overlap with one another at their beginnings and ends because epochs of financial expansion have not only been the ''autumn'' of major developments of world capitalism but also have been the epochs of new leading governmental-business complex emerged (Arrighi, 2005: 87). For him, material expansion occurs because of the emergence of a particular bloc of governmetal and business agencies capable of leading system towards a new spatial fix that creates the conditions for wider and deeper divisions of labor. In addition, he continues that the reason to transition from material to financial period causes from the ever-growing mass of profits in trade and production and then results with the reducing profit margins. In other words, he points out the increasing competition for trade and production. The prospects of recouping the capital invested in trade and production decrease, and capital agencies tend to keep in liquid form a larger proportion of their incoming cash flows so the period is thus set for the change of phase from material to financial expansion (Arrighi, 2005: 87). Moreover, particularly that point indicates the starting place of crisis and change hands of the hegemony of world capitalist system and also the new starting period of material expansion for another country. This financial expansion also tends to deepen rather than to solve the underlying accumulation crisis. They thereby exacerbate economic competition, social conflicts and interstate rivalries to levels that it beyond the incumbent centres powers to control (Arrighi, 2005: 88). In this brief part, the main characteristic of time profil of historial capitalism (Wallerstein) is being the same structure for both long centuries. More detailed, both expansions, material and financial, embrace three different periods:
(1) the first financial expansion period that consists the new accumulation regime within the former accumulation regime with their expansions and contradictions.
(2) the development period of the new accumulation regime with its institutions in the world system and expansions within their material concepts.
(3) The second financial expansion period that its contradictions within the current accumulation regime and formation of the other rival and alternative regime which is going to be taken place of its regime.
For example, in an American systematic cycle of accumulation, these three phases are:
1870-1930: an ongoing process from the indicator crisis to decisive crisis of an England accumulation period
1930-1970: an ongoing process from England decisive crisis to the American indicator crisis
1970-now: an ongoing process from the indicator crisis to decisive crisis of an American accumulation period
On the other hand, Arrighi points out the other important factor: Diminishing time period of hegemonic power. For Genoese, it is appproximately 220 years; for Dutch, it is 180; for England, it is 130 and for America, it is 100 years. Even the periods have diminished, the scale of the institutions and the organizational complexity has ceaseless increased.
(1) Republic of Genoese: It had a city state that small as scale and simple as institutional and a spot of military power. It also had a profound social division. It was a slight relations with the major territories. However its power was coming from the importance of being a nation and apprehending the link of trade and finance to cope with the major territories. Finally, it controlled the situtation of the liquid capital successfully.
(2) Dutch: It was a type of hybrid organization as an increasing characteristics of nation state compounding with the properties of the city state. Furthermore, it was an organization which gave its independence from Spain and converted the sea power and the territorial empire to a profitable trade position.
(3) England: It was not only a developed nation state and a more complex structure but also a state which established a power on trade as world hegemon with its managerial groups. Thanks to this, it was a state that kept under control of the liquid capital universal.
(4) United States: It conveys more than the developed nation state. Furthermore, it is a powerful military-industrial synthesis on the scale of continent and also of world-wide. It provides to internalize the cost of transaction all but the internalizing of cost of protection and production with its territorial hegemony, isolated position and power of their natural resources.
In the Arrighi's concept, Marx's general formula of capital is not commented as a mere example for an individual investment logic but also commented as a characterization of repeated historical capitalism for the world system. However, in that point, there is a visible abstraction which obscures an inner alternation dynamics of the capital and conceals the interaction with other types of capital and the production cycle in the creation phase of the surplus value. In other words, it postpones the value of labor power fact. As a part of the competition to understand the concept of the profit, it makes difficult to analyze the relationship among the profit and surplus value and its historical alternation at the same time. Whereas Hilferding's point of view for the creation of capital process at the time of late 19th century when the concentration of the capital is more complex, is much more different from Arrighi's thesis. The process of a monopolization in the midst of capital circulation domination is considerably different from the frame of capital in the historical capitalism, however, it has also comprehensive quality to all capital creation extents. It can be also understood by his examples of the differentiations on the C/V and an increasing rate of the organic composition of capital. It is also a net indicator to analyze the alteration of the creation techniques of the surplus value and the logic of the labor power in an ever-differing form of the world capitalist development process.
The second difference between them consists of the Arrighi's expression in a point of controlling the hegemonic power to the world capitalist relations solely by the financial aspect which is also enclosed the change of hands of the accumulation regimes in a financial expansion part. The theoric base of the MM' phase presents this to us clearly. However, the different concept which gets out in Hilferding's presentation, is much contrast and inclusive according to Arrighi. First of all, the fact that Hilferding does not conduct his theories upon the hegemonic power in the development process of the world capitalism, is much more important to ascertain the alternation of the composition and the structure of the entire capital. Of course, I should add that Hilferding takes some countries as a base however, in that situation the actual consideration is getting the whole capital to analyze its layers. Secondly, the other point is that in the phase of the developing financial expansion with its growing institutions such as large banks and financial intermediaries has a close integration within the production sector. As a description of finance capital is, in a strict sense, the transformation of competitive and pluralistic liberal capitalism into monopolistic finance capital. But in a more deeper sense, it refers to the domination and close integration of financial capital as a bank capital on the industrial capital. It can be in a three different ways which are increasing rate of joint-stock company, personal connections in an establishment of corporate management and by financial transactions. Namely, he differs from Arrighi with these two points but mainly with the second one, in the definition of the finance capital. Arrighi is pointed this more in his work, ''The Long Twentieth Century'': withdrawal of the European banker of Dutch from the trade and industry in the financial expansion cycle; its continuity by the England as a money capital surplus at the end of the industrial revolution attack and equally the continuity of this situation in the U.S. systematic cycle of financial expansion starting at the end of 1970s as isolated of industry by the finance sector. As such, Hilferding contrast to Arrighi with its comprehensive quality of monopolization and cartelization both to two different sector (but by the hegemony of finance) and with its evaluation of liquid capital world-wide. Finally, Hilferding stresses on the diminishing effect on competition of monopolization and cartelization but on the other hand, Arrighi points that the increasing rate of competition at the time of transition from the material expansion to financial expansion cycle. He also contrasts with the Hilferding by his argument which is the severe competition on the liquid capital in the financial expansion cycle.
Thirdly, the other different point is that the starting point of the ''finance capital'' concept, namely, Arrighi assumes that the finance capital shows itself in the previous financial expansion cycles following Braudel in a sense in opposition to the starting point of late 19th century which is espoused by Hilferding. At this juncture, the difference starts. According to me, Arrighi's assertion can be predicated reclamation as not the finance capital but as financial capital (acquisition money from money). Because the concept of finance capital indicates the elaboration period of the capitalist mode of production according to Hilferding. The period of finance capital becomes important by the extension of capitalist production to the whole world scale and by the dominance on the industrial capital. These points enclose just a small-scale companies and low-frequency liquid capital for both expansion cycles in the Genoese and Dutch accumulation regimes. In summary, the feudal relations of production did not allow to the formation term of finance capital for both regimes. However, the financial capital, in other words the process of acquisition money from money, is always existed for capitalist class.
In conclusion, Arrighi assumes that the concept of nation-state is disappeared with the development of the accumulation regimes. However, even though Hilferding does not add the concept of the nation-state to his theories, he highlights the importance and continuity of this upon the capital. Of course, the nation-state concept implies a different meaning from the period of the England accumulation cycle however, at the same time, in a general sense, the nation-state concept is still continued the impact on the capital. We briefly order it with these four factors:
(1) National currency: Every nations have a national currency intrinsically and from this beings there is also a balance of payments mechanism. The being of the national currency, it gives specifics to the connection of the world economy of the nation state. These specifics finds its expression in the exchange rate as a price.
(2) Fiscal system: Every nations has a public budget as an expression with incomes and expenditures, depending on this they have also taxation system and central bank.
(3) The class relations regime
(4) General economic structure
- a Genoese-Iberian cycle (15th and early 17th century)
- a Dutch cycle ( late 16th to late 18th century)
- a British cycle ( mid-18th century to early 20th century)
- a United States cycle (late 19th to current century)
Each accumulation cycle is defined by the particular complex of governmental and business agencies that led the world capitalist system towards first the material expansion (MC: money capital (M) evokes an increasing extent of commodities such as labor power and natural resources) then the financial expansion (CM': an expanded extent of money capital (M') sets itself free from its commodity form and accumulation proceeds through financial deals (MM')) (Arrighi, 2005: 86).He concludes that these two epochs constitute a systematic cycle of accumulation (MCM'). Consecutive systematic cycles of accumulation overlap with one another at their beginnings and ends because epochs of financial expansion have not only been the ''autumn'' of major developments of world capitalism but also have been the epochs of new leading governmental-business complex emerged (Arrighi, 2005: 87). For him, material expansion occurs because of the emergence of a particular bloc of governmetal and business agencies capable of leading system towards a new spatial fix that creates the conditions for wider and deeper divisions of labor. In addition, he continues that the reason to transition from material to financial period causes from the ever-growing mass of profits in trade and production and then results with the reducing profit margins. In other words, he points out the increasing competition for trade and production. The prospects of recouping the capital invested in trade and production decrease, and capital agencies tend to keep in liquid form a larger proportion of their incoming cash flows so the period is thus set for the change of phase from material to financial expansion (Arrighi, 2005: 87). Moreover, particularly that point indicates the starting place of crisis and change hands of the hegemony of world capitalist system and also the new starting period of material expansion for another country. This financial expansion also tends to deepen rather than to solve the underlying accumulation crisis. They thereby exacerbate economic competition, social conflicts and interstate rivalries to levels that it beyond the incumbent centres powers to control (Arrighi, 2005: 88). In this brief part, the main characteristic of time profil of historial capitalism (Wallerstein) is being the same structure for both long centuries. More detailed, both expansions, material and financial, embrace three different periods:
(1) the first financial expansion period that consists the new accumulation regime within the former accumulation regime with their expansions and contradictions.
(2) the development period of the new accumulation regime with its institutions in the world system and expansions within their material concepts.
(3) The second financial expansion period that its contradictions within the current accumulation regime and formation of the other rival and alternative regime which is going to be taken place of its regime.
For example, in an American systematic cycle of accumulation, these three phases are:
1870-1930: an ongoing process from the indicator crisis to decisive crisis of an England accumulation period
1930-1970: an ongoing process from England decisive crisis to the American indicator crisis
1970-now: an ongoing process from the indicator crisis to decisive crisis of an American accumulation period
On the other hand, Arrighi points out the other important factor: Diminishing time period of hegemonic power. For Genoese, it is appproximately 220 years; for Dutch, it is 180; for England, it is 130 and for America, it is 100 years. Even the periods have diminished, the scale of the institutions and the organizational complexity has ceaseless increased.
(1) Republic of Genoese: It had a city state that small as scale and simple as institutional and a spot of military power. It also had a profound social division. It was a slight relations with the major territories. However its power was coming from the importance of being a nation and apprehending the link of trade and finance to cope with the major territories. Finally, it controlled the situtation of the liquid capital successfully.
(2) Dutch: It was a type of hybrid organization as an increasing characteristics of nation state compounding with the properties of the city state. Furthermore, it was an organization which gave its independence from Spain and converted the sea power and the territorial empire to a profitable trade position.
(3) England: It was not only a developed nation state and a more complex structure but also a state which established a power on trade as world hegemon with its managerial groups. Thanks to this, it was a state that kept under control of the liquid capital universal.
(4) United States: It conveys more than the developed nation state. Furthermore, it is a powerful military-industrial synthesis on the scale of continent and also of world-wide. It provides to internalize the cost of transaction all but the internalizing of cost of protection and production with its territorial hegemony, isolated position and power of their natural resources.
In the Arrighi's concept, Marx's general formula of capital is not commented as a mere example for an individual investment logic but also commented as a characterization of repeated historical capitalism for the world system. However, in that point, there is a visible abstraction which obscures an inner alternation dynamics of the capital and conceals the interaction with other types of capital and the production cycle in the creation phase of the surplus value. In other words, it postpones the value of labor power fact. As a part of the competition to understand the concept of the profit, it makes difficult to analyze the relationship among the profit and surplus value and its historical alternation at the same time. Whereas Hilferding's point of view for the creation of capital process at the time of late 19th century when the concentration of the capital is more complex, is much more different from Arrighi's thesis. The process of a monopolization in the midst of capital circulation domination is considerably different from the frame of capital in the historical capitalism, however, it has also comprehensive quality to all capital creation extents. It can be also understood by his examples of the differentiations on the C/V and an increasing rate of the organic composition of capital. It is also a net indicator to analyze the alteration of the creation techniques of the surplus value and the logic of the labor power in an ever-differing form of the world capitalist development process.
The second difference between them consists of the Arrighi's expression in a point of controlling the hegemonic power to the world capitalist relations solely by the financial aspect which is also enclosed the change of hands of the accumulation regimes in a financial expansion part. The theoric base of the MM' phase presents this to us clearly. However, the different concept which gets out in Hilferding's presentation, is much contrast and inclusive according to Arrighi. First of all, the fact that Hilferding does not conduct his theories upon the hegemonic power in the development process of the world capitalism, is much more important to ascertain the alternation of the composition and the structure of the entire capital. Of course, I should add that Hilferding takes some countries as a base however, in that situation the actual consideration is getting the whole capital to analyze its layers. Secondly, the other point is that in the phase of the developing financial expansion with its growing institutions such as large banks and financial intermediaries has a close integration within the production sector. As a description of finance capital is, in a strict sense, the transformation of competitive and pluralistic liberal capitalism into monopolistic finance capital. But in a more deeper sense, it refers to the domination and close integration of financial capital as a bank capital on the industrial capital. It can be in a three different ways which are increasing rate of joint-stock company, personal connections in an establishment of corporate management and by financial transactions. Namely, he differs from Arrighi with these two points but mainly with the second one, in the definition of the finance capital. Arrighi is pointed this more in his work, ''The Long Twentieth Century'': withdrawal of the European banker of Dutch from the trade and industry in the financial expansion cycle; its continuity by the England as a money capital surplus at the end of the industrial revolution attack and equally the continuity of this situation in the U.S. systematic cycle of financial expansion starting at the end of 1970s as isolated of industry by the finance sector. As such, Hilferding contrast to Arrighi with its comprehensive quality of monopolization and cartelization both to two different sector (but by the hegemony of finance) and with its evaluation of liquid capital world-wide. Finally, Hilferding stresses on the diminishing effect on competition of monopolization and cartelization but on the other hand, Arrighi points that the increasing rate of competition at the time of transition from the material expansion to financial expansion cycle. He also contrasts with the Hilferding by his argument which is the severe competition on the liquid capital in the financial expansion cycle.
Thirdly, the other different point is that the starting point of the ''finance capital'' concept, namely, Arrighi assumes that the finance capital shows itself in the previous financial expansion cycles following Braudel in a sense in opposition to the starting point of late 19th century which is espoused by Hilferding. At this juncture, the difference starts. According to me, Arrighi's assertion can be predicated reclamation as not the finance capital but as financial capital (acquisition money from money). Because the concept of finance capital indicates the elaboration period of the capitalist mode of production according to Hilferding. The period of finance capital becomes important by the extension of capitalist production to the whole world scale and by the dominance on the industrial capital. These points enclose just a small-scale companies and low-frequency liquid capital for both expansion cycles in the Genoese and Dutch accumulation regimes. In summary, the feudal relations of production did not allow to the formation term of finance capital for both regimes. However, the financial capital, in other words the process of acquisition money from money, is always existed for capitalist class.
In conclusion, Arrighi assumes that the concept of nation-state is disappeared with the development of the accumulation regimes. However, even though Hilferding does not add the concept of the nation-state to his theories, he highlights the importance and continuity of this upon the capital. Of course, the nation-state concept implies a different meaning from the period of the England accumulation cycle however, at the same time, in a general sense, the nation-state concept is still continued the impact on the capital. We briefly order it with these four factors:
(1) National currency: Every nations have a national currency intrinsically and from this beings there is also a balance of payments mechanism. The being of the national currency, it gives specifics to the connection of the world economy of the nation state. These specifics finds its expression in the exchange rate as a price.
(2) Fiscal system: Every nations has a public budget as an expression with incomes and expenditures, depending on this they have also taxation system and central bank.
(3) The class relations regime
(4) General economic structure
23 Ekim 2011 Pazar
The Dominance of Financialization over the era of Nonfinancial Sector
Financialization, as it can be assumed one of the most current debated phenomenon of the economic discipline, has begun to lose out its gravity in that global crisis. However, the basic question in my opinion is that how come that the prominence of the finance has mislaid its power, from the period of 1980s to 2010s, especially in this economic turbulence. Of course, so many social scientists accuse the financial sector for causing to that crisis but once to understand this, we can primarily conceive the concept of financialization and what it refers to. Thus, the historical process and different perspectives are going to give us so many substantial informations. Before the beginning of these perspectives, financialization action implies some of the dimensions and characteristics. Briefly, we can categorize some of these just as economic factors below:
- The diminishing role of the government in an economic process
- Deregulation of free markets and privatization of public goods
- The abolishment of the borders for capital
- Free of the interest rates
- Incentive to the international financial connections and incentive to increase for technology and innovation for financial sector actors
These are some of the basic characteristics, particularly from the period of 1980s of Reagan and Thatcher's applications for the hole economic system to nowadays. Apart from the characteristics, there are so many important perspectives within the historical process which has laid different definitions to what is financialization. I am going to identify and discuss the fact within these bounds.
First of all, Greta Krippner gives us a comprehensive acquirements in a context of history of the financialization with pros and cons of the different meanings. For Krippner herself, the fact of finance indicates to the ''pattern of accumulation in which profit making occurs increasingly through channels rather than through trade and commodity production'' (Krippner, 2005). Moreover, she also gives weight to her definition by this argument ''financialization refers to the growing importance of financial activities as a source of profits in the economy'' (Krippner, 2011). She points that the financial sector is not employment-intensive and the outputs of this sector do not appear so clearly in an economical statistics. Simply thanks to these three but close related informations, we can apprehend to be sidelined of the real sector and overtaking it expressly. But is it suffice to understand the fact? Because of this reason, she broadens their financial viewpoint by analyzing it into three industries which are manufacturing, FIRE and services by questioning where profits are generated in the context of U.S. economic structure. She argues from her datas that services sector has increased its functions as a structural in lieu of the manufacturing. This point also espouses by the differences among the portfolio income (total earnings gathering by interest, dividends, realized capital gains) and corporate cash flow (profits plus depreciation allowances) to show the financialization process. From the beginning of 1980, the results prove that the nonfinancial firms corporate cash flow declines below to the portfolio income. Moreover, the dispersion of rate of profits among nonfinancial and financial sectors gives us some important clues about the way of financialization. For Krippner, besides the increasing weight of financial activities in generating revenue streams for nonfinancial firms, she also points mainly that the financial sector itself has become a central heart of accumulation for capital. From the beginning of 1950s, the firms difficulties related with the liberalization of depreciation allowances has made a downward effect on the corporate cash flows against the portfolio income. So, depreciation allowances were not evenly distributed, but would be highest for firms in capital-intensive industries, such as manufacturing (Krippner, 2011). I think that also because of this downward sloping rates, especially in leading sector which was a manufacturing, show a transference of capital from nonfinancial to financial firms. Hence, it mentions the increasing dominance over the nonfinancial firms and was being a central point to enhance to start again the previous levels of productivity. In conclusion, albeit her article stresses on the centric of the U.S., the general image after the 1980s in worldwide that the aspects of her for financialization ''pattern of accumulation in which profit making occurs increasingly through financial channels rather than through trade and commodity production'' somewhat protects up to dateness. Alongside I find her financialization refers, it can be sticked up for the Epstein and Palley's financialization principles.
Epstein defines that ''financialization refers to the increasing importance of financial markets, financial motives, financial institutions, and financial elites in the operation of the economy and its growing institutions, both at the national and international level'' (Epstein, 2011). The common point of these writers are the effects of the system on growth rates, fragility and unsustainability and its dimensions, income distribution, political and economic policy and commonly the macroeconomic changes. Refer to the Palley, financialization has transformed the functioning of the economic system for both of the micro and macro components. He specifies its principal impacts are:
(1) Elevate significance of the financial sector relative to the real sector
(2) Transfer income from the real sector to the financial sector
(3) Contribute to increased income inequality and wage stagnation (Palley, 2007)
These are, especially the first and second impacts, similar what Krippner showed in an evidence among the dispersion between industries; manufacturing, FIRE and services. James Crotty adds a similar point of view ''for the United States, the profits of financial institutions rose dramatically relative to the profits of non-financial corporations after 1984'' (Crotty, 1990). Moreover, Dumenil and Levy espouses the U.S. example for the France case that to the case of France, he indicates that the sources of increasing profit is the doubled of real interest rate between 1970 and 1990. For the third principal impacts, the Palley's countenance by the Epstein and Jadayev that they shows from the investigation of OECD countries data that the shape of national income accruing to financial institutions and holders of financial wealth. Also they add that the structural shifts of dramatic proportions took place in a number of countries that led to significant increases in financial transactions, real interest rates, the profitability of financial firms, and finally the distribution of income accruing mainly by the financial sectors, offers another similar meaning and evidence like in Krippner's viewpoint for her sectoral shares among financial and nonfinancial sectors. In addition to the Palley's agreement for the finacial sector's fragility and unsustainability, Dumenil and Levy suggests the same agreement that they argue finance benefits handsomely from the same process that create economic crises. Furthermore, these complications foster by the economic and political policies as Epstein identifies that ''important government policies that help to account for these significant increases in rentier income in OECD countries'' (Epstein, 2001). Furthermore, Palley refers that this unsustainability marked by more and more increasing household debt-income ratios and corporate debt ratios. For example, the defining characteristic of financialization in the U.S., the total debt rose from 140 to 328.6 percent of GDP (Palley, 2007). However, the period also shows that finacial sector debt rose much more than nonfinancial sector as 9.7 to 31.5 percent of total debt (Palley, 2007). These results, on the other hand, has somewhat adequate to be a similar with the Krippner and her financialization analysis. There is also another important evidence that is about the increasing rate of transference of resources from financial to nonfinancial sectors. It emanates from two different sources: usurious rise in household debt ratio/GDP and nonfinancial debt ratio/GDP. Between 1973 to 2005, firstly, the household debt ratio speed rose sharply by %45.2 to %94.0 respectively. Secondly, the other nonfinancial debt ratio speed rose by %30.3 to %42.4 (Palley, 2007). It is clear that the household debt ratio rose more than than the speed of nonfinancial debt ratio. However, in that situation, the main point is that the resource transference from household and nonfinancial sector to financial sector, is very obvious. Apart from the features of the fragility and unsustainability of the economy as a whole, there is also another important effects of financialization on the annual per capita income growth rates. Once again from the Palley's work, there is an important datas that shows from different industrialized countries such as U.S., Japan, Germany, France, Italy, U.K. and Canada among the 1960-2005 years, the general trend is a downward sloping in both countries for per capita income growth rates. That's why, it also supports the capital transference to financial sector. As a result, we can collect of these definitions an data evaluations into pot what Palley also summarizes:
(1) a slight shift in income toward capital ( it can be commented as the resource transfer from households and nonfinancial sector to financial sector)
(2) a change in the composition of payments to capital that has increased the interest share ( it can be assumed as a change of composition of growth rate of income shares)
(3) an increase in the financial sector's share of total profits (Palley, 2007) (finally, it can be pointed to the increasing hegemony of financial sector over real sector).
Nevertheless of the fundamental definitions and characteristics to seize to the financialization in the concept of systematical changes from real sector to financial sector in writings of Krippner, Epstein and Palley, I think that there are also another considerable and complementary observations to apprehend the context of financialization. Ronald Dore who wrote the Financialization of the Global Economy, specifies that financialization is being dominance over the real economy which is in itself a phenomenon that needs examining. In his article he traces ''the source of this dominance not just to the increasingly leveraged and increasingly incomprehensive forms of intermediation between savers those in the real economy who need credit and insurance, but also to the increasingly universal doctrine that maximizing ''shareholder value'' is the sole reason of the firm and the promotion by governments of an ''equity culture''. Some of the social consequences of financialization are exacerbating inequalities, greater security, misdirection of talent, and the erosion of trust'' (Dore, 2008). Even though his argument of financialization is somewhat different point of view but in my opinion it is also contributory to the arguments of systematic changes for financialization of Krippner, Epstein and particularly of Palley. When we approach to the case of the increasing dominance of financial sector over the real sector, his comments and method of approach to this issue is very advisable such as he denotes ''the increasing dominance of the finance industry in the sum total of economic activity, of financial controllers in the management of corporations, of financial assets among total assets, of marketised securities and particularly equities among financial assets, of stock market as a market for corporate control strategies, and of fluctuations in the stock market as a determinant of business cycles'' (Dore, 2002). Here as a footnote that it gives us another perspective to analyze in that way which is the increasing rate of impact on corporate government because of the finance triumph on real sector. Moreover, Stockhammer's diagnosis has a supportive quality to the dominance factor of finance: ''financialization is used to encompass phenomena as diverse as shareholder value orientation, increasing household debt, changes in attitudes of individuals, increasing incomes from financial activities, increasing frequency of financial crises, and increasing international capital mobility'' (Stockhammer, 2010). Finally, Kevin Phillips, in his 2006 book: American Theocracy, comments on the financialization term which is corroborative approach that it is a process whereby financial services, broadly construed, take over the dominant economic, cultural, and political role in an economy as a whole.
In a conclusion, both articles from two different perspectives of changes, systematic and corporate weighted, has an important quality to support each other. However, there is another prominent approach to use the financialization is Arrighi who specifies long waves of economic development in global capitalism that involve hegemonic and geographic shifts. He assumes that upward movement in an economy is indicated by the increasing rate of manufacturing and trade activity; however, in the downward movement, the financialization process is occured. Although, it has a broad explanation about financial process but also captures the real expansion for nations in a history of capitalism, as a subjective I prefered to use Epstein, Krippner and Palley's works together contributing of Dore, Stockhammer and Phillips' arguments about the financialization for analyzing size and profility of financial markets, income distribution among two sectors, total debt rates in the economy and its shares, the falling out of the hegemony of financial sector over real sector and finally the changing process in decision-making of corporate governance.
Bibliograhy:
Crotty, J; Structural Causes of the Global Financial Crisis: A Critical Assessment of the ''New Financial Architecture'', Cambridge Journal of Economics (2009), 33, pp.563-580.
Dore, R; Financialization of the Global Economy, ICC (2008), 17(6), pp.1097-1112.
Epstein, G.A.; Introduction: Financialization and the World Economy, Political Economy Research Institute (2005), pp.1-16.
Krippner, G.R.; Capitalizing on Crisis: The Political Origins of the Rise of Finance, 1st ed., Harvard University Press, 2011.
Krippner, G.R.; The Financialization of the American Economy, Socio-Economic Review (2005)3, pp.173-208.
Orhangazi, O.; Financialization and the U.S. Economy, Edward Elgar Publishing, 2008.
Palley, T.I.; Financialization: What It Is and Why It Matters, The Levy Economics Institute and Economics for Democratic and Open Societies, Working Paper No:525, 2007
Phillips, K.; American Theocracy, 2006.
Stockhammer, E.; Financialization and the Global Economy, Political Economy Research Institute (2010), No:240.
- The diminishing role of the government in an economic process
- Deregulation of free markets and privatization of public goods
- The abolishment of the borders for capital
- Free of the interest rates
- Incentive to the international financial connections and incentive to increase for technology and innovation for financial sector actors
These are some of the basic characteristics, particularly from the period of 1980s of Reagan and Thatcher's applications for the hole economic system to nowadays. Apart from the characteristics, there are so many important perspectives within the historical process which has laid different definitions to what is financialization. I am going to identify and discuss the fact within these bounds.
First of all, Greta Krippner gives us a comprehensive acquirements in a context of history of the financialization with pros and cons of the different meanings. For Krippner herself, the fact of finance indicates to the ''pattern of accumulation in which profit making occurs increasingly through channels rather than through trade and commodity production'' (Krippner, 2005). Moreover, she also gives weight to her definition by this argument ''financialization refers to the growing importance of financial activities as a source of profits in the economy'' (Krippner, 2011). She points that the financial sector is not employment-intensive and the outputs of this sector do not appear so clearly in an economical statistics. Simply thanks to these three but close related informations, we can apprehend to be sidelined of the real sector and overtaking it expressly. But is it suffice to understand the fact? Because of this reason, she broadens their financial viewpoint by analyzing it into three industries which are manufacturing, FIRE and services by questioning where profits are generated in the context of U.S. economic structure. She argues from her datas that services sector has increased its functions as a structural in lieu of the manufacturing. This point also espouses by the differences among the portfolio income (total earnings gathering by interest, dividends, realized capital gains) and corporate cash flow (profits plus depreciation allowances) to show the financialization process. From the beginning of 1980, the results prove that the nonfinancial firms corporate cash flow declines below to the portfolio income. Moreover, the dispersion of rate of profits among nonfinancial and financial sectors gives us some important clues about the way of financialization. For Krippner, besides the increasing weight of financial activities in generating revenue streams for nonfinancial firms, she also points mainly that the financial sector itself has become a central heart of accumulation for capital. From the beginning of 1950s, the firms difficulties related with the liberalization of depreciation allowances has made a downward effect on the corporate cash flows against the portfolio income. So, depreciation allowances were not evenly distributed, but would be highest for firms in capital-intensive industries, such as manufacturing (Krippner, 2011). I think that also because of this downward sloping rates, especially in leading sector which was a manufacturing, show a transference of capital from nonfinancial to financial firms. Hence, it mentions the increasing dominance over the nonfinancial firms and was being a central point to enhance to start again the previous levels of productivity. In conclusion, albeit her article stresses on the centric of the U.S., the general image after the 1980s in worldwide that the aspects of her for financialization ''pattern of accumulation in which profit making occurs increasingly through financial channels rather than through trade and commodity production'' somewhat protects up to dateness. Alongside I find her financialization refers, it can be sticked up for the Epstein and Palley's financialization principles.
Epstein defines that ''financialization refers to the increasing importance of financial markets, financial motives, financial institutions, and financial elites in the operation of the economy and its growing institutions, both at the national and international level'' (Epstein, 2011). The common point of these writers are the effects of the system on growth rates, fragility and unsustainability and its dimensions, income distribution, political and economic policy and commonly the macroeconomic changes. Refer to the Palley, financialization has transformed the functioning of the economic system for both of the micro and macro components. He specifies its principal impacts are:
(1) Elevate significance of the financial sector relative to the real sector
(2) Transfer income from the real sector to the financial sector
(3) Contribute to increased income inequality and wage stagnation (Palley, 2007)
These are, especially the first and second impacts, similar what Krippner showed in an evidence among the dispersion between industries; manufacturing, FIRE and services. James Crotty adds a similar point of view ''for the United States, the profits of financial institutions rose dramatically relative to the profits of non-financial corporations after 1984'' (Crotty, 1990). Moreover, Dumenil and Levy espouses the U.S. example for the France case that to the case of France, he indicates that the sources of increasing profit is the doubled of real interest rate between 1970 and 1990. For the third principal impacts, the Palley's countenance by the Epstein and Jadayev that they shows from the investigation of OECD countries data that the shape of national income accruing to financial institutions and holders of financial wealth. Also they add that the structural shifts of dramatic proportions took place in a number of countries that led to significant increases in financial transactions, real interest rates, the profitability of financial firms, and finally the distribution of income accruing mainly by the financial sectors, offers another similar meaning and evidence like in Krippner's viewpoint for her sectoral shares among financial and nonfinancial sectors. In addition to the Palley's agreement for the finacial sector's fragility and unsustainability, Dumenil and Levy suggests the same agreement that they argue finance benefits handsomely from the same process that create economic crises. Furthermore, these complications foster by the economic and political policies as Epstein identifies that ''important government policies that help to account for these significant increases in rentier income in OECD countries'' (Epstein, 2001). Furthermore, Palley refers that this unsustainability marked by more and more increasing household debt-income ratios and corporate debt ratios. For example, the defining characteristic of financialization in the U.S., the total debt rose from 140 to 328.6 percent of GDP (Palley, 2007). However, the period also shows that finacial sector debt rose much more than nonfinancial sector as 9.7 to 31.5 percent of total debt (Palley, 2007). These results, on the other hand, has somewhat adequate to be a similar with the Krippner and her financialization analysis. There is also another important evidence that is about the increasing rate of transference of resources from financial to nonfinancial sectors. It emanates from two different sources: usurious rise in household debt ratio/GDP and nonfinancial debt ratio/GDP. Between 1973 to 2005, firstly, the household debt ratio speed rose sharply by %45.2 to %94.0 respectively. Secondly, the other nonfinancial debt ratio speed rose by %30.3 to %42.4 (Palley, 2007). It is clear that the household debt ratio rose more than than the speed of nonfinancial debt ratio. However, in that situation, the main point is that the resource transference from household and nonfinancial sector to financial sector, is very obvious. Apart from the features of the fragility and unsustainability of the economy as a whole, there is also another important effects of financialization on the annual per capita income growth rates. Once again from the Palley's work, there is an important datas that shows from different industrialized countries such as U.S., Japan, Germany, France, Italy, U.K. and Canada among the 1960-2005 years, the general trend is a downward sloping in both countries for per capita income growth rates. That's why, it also supports the capital transference to financial sector. As a result, we can collect of these definitions an data evaluations into pot what Palley also summarizes:
(1) a slight shift in income toward capital ( it can be commented as the resource transfer from households and nonfinancial sector to financial sector)
(2) a change in the composition of payments to capital that has increased the interest share ( it can be assumed as a change of composition of growth rate of income shares)
(3) an increase in the financial sector's share of total profits (Palley, 2007) (finally, it can be pointed to the increasing hegemony of financial sector over real sector).
Nevertheless of the fundamental definitions and characteristics to seize to the financialization in the concept of systematical changes from real sector to financial sector in writings of Krippner, Epstein and Palley, I think that there are also another considerable and complementary observations to apprehend the context of financialization. Ronald Dore who wrote the Financialization of the Global Economy, specifies that financialization is being dominance over the real economy which is in itself a phenomenon that needs examining. In his article he traces ''the source of this dominance not just to the increasingly leveraged and increasingly incomprehensive forms of intermediation between savers those in the real economy who need credit and insurance, but also to the increasingly universal doctrine that maximizing ''shareholder value'' is the sole reason of the firm and the promotion by governments of an ''equity culture''. Some of the social consequences of financialization are exacerbating inequalities, greater security, misdirection of talent, and the erosion of trust'' (Dore, 2008). Even though his argument of financialization is somewhat different point of view but in my opinion it is also contributory to the arguments of systematic changes for financialization of Krippner, Epstein and particularly of Palley. When we approach to the case of the increasing dominance of financial sector over the real sector, his comments and method of approach to this issue is very advisable such as he denotes ''the increasing dominance of the finance industry in the sum total of economic activity, of financial controllers in the management of corporations, of financial assets among total assets, of marketised securities and particularly equities among financial assets, of stock market as a market for corporate control strategies, and of fluctuations in the stock market as a determinant of business cycles'' (Dore, 2002). Here as a footnote that it gives us another perspective to analyze in that way which is the increasing rate of impact on corporate government because of the finance triumph on real sector. Moreover, Stockhammer's diagnosis has a supportive quality to the dominance factor of finance: ''financialization is used to encompass phenomena as diverse as shareholder value orientation, increasing household debt, changes in attitudes of individuals, increasing incomes from financial activities, increasing frequency of financial crises, and increasing international capital mobility'' (Stockhammer, 2010). Finally, Kevin Phillips, in his 2006 book: American Theocracy, comments on the financialization term which is corroborative approach that it is a process whereby financial services, broadly construed, take over the dominant economic, cultural, and political role in an economy as a whole.
In a conclusion, both articles from two different perspectives of changes, systematic and corporate weighted, has an important quality to support each other. However, there is another prominent approach to use the financialization is Arrighi who specifies long waves of economic development in global capitalism that involve hegemonic and geographic shifts. He assumes that upward movement in an economy is indicated by the increasing rate of manufacturing and trade activity; however, in the downward movement, the financialization process is occured. Although, it has a broad explanation about financial process but also captures the real expansion for nations in a history of capitalism, as a subjective I prefered to use Epstein, Krippner and Palley's works together contributing of Dore, Stockhammer and Phillips' arguments about the financialization for analyzing size and profility of financial markets, income distribution among two sectors, total debt rates in the economy and its shares, the falling out of the hegemony of financial sector over real sector and finally the changing process in decision-making of corporate governance.
Bibliograhy:
Crotty, J; Structural Causes of the Global Financial Crisis: A Critical Assessment of the ''New Financial Architecture'', Cambridge Journal of Economics (2009), 33, pp.563-580.
Dore, R; Financialization of the Global Economy, ICC (2008), 17(6), pp.1097-1112.
Epstein, G.A.; Introduction: Financialization and the World Economy, Political Economy Research Institute (2005), pp.1-16.
Krippner, G.R.; Capitalizing on Crisis: The Political Origins of the Rise of Finance, 1st ed., Harvard University Press, 2011.
Krippner, G.R.; The Financialization of the American Economy, Socio-Economic Review (2005)3, pp.173-208.
Orhangazi, O.; Financialization and the U.S. Economy, Edward Elgar Publishing, 2008.
Palley, T.I.; Financialization: What It Is and Why It Matters, The Levy Economics Institute and Economics for Democratic and Open Societies, Working Paper No:525, 2007
Phillips, K.; American Theocracy, 2006.
Stockhammer, E.; Financialization and the Global Economy, Political Economy Research Institute (2010), No:240.
16 Şubat 2011 Çarşamba
Sorunsuz Ekonomi(!) Diyenler İçin
Finansal krizin geride bıraktığımız 2. yılı itibariyle 2010 ekonomi verileri de yavaş yavaş sonlanmaya ve şekillenmeye başladı. Dünya genelinde dillendirilen, finansal krizin üstesinden gelmiş en iyi(!) ülkeler arasında bulunan Türkiye için verilere şöyle bir bakmak gerekir diye düşünüyorum.
1) Öncelikle, kronikleşmiş Cari Açık sorunu ciddiyetini gün be gün arttırmaktadır. 2010 sonu itibariyle 48 milyar dolar olan açık, 2010 OVP(Orta vadeli plan) de ki hedefleri bile sollamış durumdadır. Cari Açık/GSYIH oranı 6.5 olmakla birlikte, oranın 2011 yılında daha da artması olası. Krizin başlangıcından bugüne kadar tekrarlanan yüksek faiz düşük kur politikası bu verilerden sonra sonunda her kesim için anlaşılmıştır ki bu böyle gitmez. Tabi bunun sonucunda ciddi bir biçimde merkez bankasının baş meselesi haline gelen bu açık sorunu, faiz indirimleri ve munzam karşılık oranlarının düşürülmesi gibi önlemler çerçevesinde halledilmeye çalışılmaktadır. Ama işte burada ki çelişkiyi de anlamak lazım: Büyümenin öndeliği sıcak para girişleridir. Sıcak paranın doğrudan yatırımları epey bir solladığı bu ortamda uygulanan bu önlemler büyümeyi durduracaktır. İhracat ve ithalat kalemlerine baktığımızda da durum farklı olmayacaktır. Çünkü bu önlemlerle kapanacağı umulan yüksek ticaret açığı kapanmayacaktır. Nedeni ise Avrupa Birliği içinde ki talep yetersizliği, büyümenin düşük olması, işsizlik ve yüksek borç oranlarıdır. İhracatın %76 oranı gibi bir payının Avrupa Birliği ülkelerine yapıldığını düşünürsek, ne demek istediğimiz anlaşılabilir.
2) Gelelim işsizlik sorununa. Cari açık kadar bir diğer önemli sorunda işsizlik sorunu olup, 2010 sonu verilerine göre %11 seviyesinde seyretmektedir. Tabi bu görünen... Görünmeyeni de eklersek bu oran %18 ler, %20 ler gibi bir üst noktaya tırmanmaktadır. Dünya genelinde işsizlikte başı çeken Türkiye için cari açık gibi bu da kronik bir hal almıştır. Önemli nokta şu ki sıcak para cazibesi ve kolaylığı yüzünden çok düşük seviyelerde olan doğrudan yatırımlar işgücünü arttırmaktan, dolayısıyla işsizlik üzerinde ki etkisinden mahrum kalmaktadır. Ayrıca, sanayi sektörünün durgunluğu, teknik ilerlemelerin yerlerde süründüğü ve şirket kapanmalarının sıkça yaşandığı şu ortamda eğer ekonomi işgücü adına iyi gidiyor, yok 2010 IV. çeyrek'te işsizlik %0.2 azaldı gibi mini minnacık oranlarla iyi ise ne diyelim. Nitekim, size bir iyi haber(!) enflasyondan. Bilindiği gibi 2011 için enflasyon sepeti değişti. Neler eklendi; mesela Toto Loto... O kadar gelirimiz var ki yani sormayın. Her neyse, enflasyon düştükçe düşüyor diyorlar, desinler. Doğru da. Ama şeytan ayrıntı da gizlidir. İşsizliğin had safhada olduğu bu ortamda gelir, kazanç ne durumda? Sonuçta mallara talep az. Peki şimdi soruyorum, işsizliği azaltın, enflasyon ne durumda olacak, asıl buna bakmak gerek... Her 5 gençten birinin işsiz olduğu, milyonlarca kişinin yatağına aç girdiği, küçük yaşta çalıştırılan çocukların oranının arttığı bu ortamda ne diyelim.
3) Son olarak pek açıklanmayan ama ciddi bir düzeyde bulunan ülkesel borç sorununu hatırlatalım. Aslında bunu açıklamaktan yoruldum desem yalan olmaz. Sıcak para dolayısıyla büyüme dinamiğinin diğer ülkelere görece yüksek tutulması amacıyla uygulanan yüksek faiz oranları ekonomiyi bakalım ne zaman sonra sınıra taşıyacak. Bundan dolayı da borç birikmekte, ödemeler her geçen gün artmakta. Finansmanın sağlayıcısı ise nasıl olacak sorulup durmakta. Şu an için Dış Borç/GSMH düzeyi %42 dolaylarında. Nitekim, borcu borçla kapatmakta genel mantık ve hedef olduğuna göre izleyip ne olacağını göreceğiz.
Cari Açık, Ticaret Açığı, Büyüme de ki negatif yön, İşsizlik ve Dış Borç. Ne kaldı başka? Sorunsuz ekonominin bir de şu noktaları var: Bütçe artış göstermeye devam etmekte. Kısaca şunu sorabiliriz ki bu artış nereden gelmektedir? Hemen söyleyelim, bütçe gelirlerinde KDV ve ÖTV payının %56-60 arası olduğu bir ortamda büyük lokmanın nereden geldiği belli. Bir de baş tacı yapılan şu bankaların yıllık net kar oranları var. En son Garanti'nin 3.4 milyar TL net karı açıklandı. Buna ne demeli artık, sömürü almış başını gitmekte, yoksul halk, emekçi eli kolu bağlı izlemekte. Ama unutulmamalıdır ki emek gücü herşeyin başıdır.
1) Öncelikle, kronikleşmiş Cari Açık sorunu ciddiyetini gün be gün arttırmaktadır. 2010 sonu itibariyle 48 milyar dolar olan açık, 2010 OVP(Orta vadeli plan) de ki hedefleri bile sollamış durumdadır. Cari Açık/GSYIH oranı 6.5 olmakla birlikte, oranın 2011 yılında daha da artması olası. Krizin başlangıcından bugüne kadar tekrarlanan yüksek faiz düşük kur politikası bu verilerden sonra sonunda her kesim için anlaşılmıştır ki bu böyle gitmez. Tabi bunun sonucunda ciddi bir biçimde merkez bankasının baş meselesi haline gelen bu açık sorunu, faiz indirimleri ve munzam karşılık oranlarının düşürülmesi gibi önlemler çerçevesinde halledilmeye çalışılmaktadır. Ama işte burada ki çelişkiyi de anlamak lazım: Büyümenin öndeliği sıcak para girişleridir. Sıcak paranın doğrudan yatırımları epey bir solladığı bu ortamda uygulanan bu önlemler büyümeyi durduracaktır. İhracat ve ithalat kalemlerine baktığımızda da durum farklı olmayacaktır. Çünkü bu önlemlerle kapanacağı umulan yüksek ticaret açığı kapanmayacaktır. Nedeni ise Avrupa Birliği içinde ki talep yetersizliği, büyümenin düşük olması, işsizlik ve yüksek borç oranlarıdır. İhracatın %76 oranı gibi bir payının Avrupa Birliği ülkelerine yapıldığını düşünürsek, ne demek istediğimiz anlaşılabilir.
2) Gelelim işsizlik sorununa. Cari açık kadar bir diğer önemli sorunda işsizlik sorunu olup, 2010 sonu verilerine göre %11 seviyesinde seyretmektedir. Tabi bu görünen... Görünmeyeni de eklersek bu oran %18 ler, %20 ler gibi bir üst noktaya tırmanmaktadır. Dünya genelinde işsizlikte başı çeken Türkiye için cari açık gibi bu da kronik bir hal almıştır. Önemli nokta şu ki sıcak para cazibesi ve kolaylığı yüzünden çok düşük seviyelerde olan doğrudan yatırımlar işgücünü arttırmaktan, dolayısıyla işsizlik üzerinde ki etkisinden mahrum kalmaktadır. Ayrıca, sanayi sektörünün durgunluğu, teknik ilerlemelerin yerlerde süründüğü ve şirket kapanmalarının sıkça yaşandığı şu ortamda eğer ekonomi işgücü adına iyi gidiyor, yok 2010 IV. çeyrek'te işsizlik %0.2 azaldı gibi mini minnacık oranlarla iyi ise ne diyelim. Nitekim, size bir iyi haber(!) enflasyondan. Bilindiği gibi 2011 için enflasyon sepeti değişti. Neler eklendi; mesela Toto Loto... O kadar gelirimiz var ki yani sormayın. Her neyse, enflasyon düştükçe düşüyor diyorlar, desinler. Doğru da. Ama şeytan ayrıntı da gizlidir. İşsizliğin had safhada olduğu bu ortamda gelir, kazanç ne durumda? Sonuçta mallara talep az. Peki şimdi soruyorum, işsizliği azaltın, enflasyon ne durumda olacak, asıl buna bakmak gerek... Her 5 gençten birinin işsiz olduğu, milyonlarca kişinin yatağına aç girdiği, küçük yaşta çalıştırılan çocukların oranının arttığı bu ortamda ne diyelim.
3) Son olarak pek açıklanmayan ama ciddi bir düzeyde bulunan ülkesel borç sorununu hatırlatalım. Aslında bunu açıklamaktan yoruldum desem yalan olmaz. Sıcak para dolayısıyla büyüme dinamiğinin diğer ülkelere görece yüksek tutulması amacıyla uygulanan yüksek faiz oranları ekonomiyi bakalım ne zaman sonra sınıra taşıyacak. Bundan dolayı da borç birikmekte, ödemeler her geçen gün artmakta. Finansmanın sağlayıcısı ise nasıl olacak sorulup durmakta. Şu an için Dış Borç/GSMH düzeyi %42 dolaylarında. Nitekim, borcu borçla kapatmakta genel mantık ve hedef olduğuna göre izleyip ne olacağını göreceğiz.
Cari Açık, Ticaret Açığı, Büyüme de ki negatif yön, İşsizlik ve Dış Borç. Ne kaldı başka? Sorunsuz ekonominin bir de şu noktaları var: Bütçe artış göstermeye devam etmekte. Kısaca şunu sorabiliriz ki bu artış nereden gelmektedir? Hemen söyleyelim, bütçe gelirlerinde KDV ve ÖTV payının %56-60 arası olduğu bir ortamda büyük lokmanın nereden geldiği belli. Bir de baş tacı yapılan şu bankaların yıllık net kar oranları var. En son Garanti'nin 3.4 milyar TL net karı açıklandı. Buna ne demeli artık, sömürü almış başını gitmekte, yoksul halk, emekçi eli kolu bağlı izlemekte. Ama unutulmamalıdır ki emek gücü herşeyin başıdır.
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