Apple Inc and moribund capitalism

by Tony Norfield

Apple Inc is the world’s largest company by market capitalisation, with a value of nearly $800bn on 19 May 2017. It does not produce most of the world’s smart phones, coming in a poor second behind Korea’s Samsung, and it is not that far ahead of China’s Huawei in terms of market share. Neither is it necessarily the biggest player in other consumer electronics markets. But so far it has managed to corner the premium section of these markets, managing to get enough loyalty from customers who will pay a lot more for a product that is not so different from the (much) cheaper ones that are not quite so ‘cool’.

That is principally why Apple, with fewer than 120,000 staff and itself producing very little of the final product that it sells to consumers, can be worth in capitalist markets so much more than Foxconn. Also known as Hon Hai Precision Industry Co, the latter Taiwan-based company is its main assembler, employing more than one million workers, and is currently valued at a relatively minuscule $60bn in terms of market capitalisation. In 2016, Apple’s operating income was $60bn compared to some $4bn at Foxconn, endorsing the market valuation ratio ($800/$60bn).

These points are another sign of the distortion of social value by imperialism, and another day I may write more about the social and economic mechanisms behind this. For now, though, I want to focus on the financial aspects of Apple’s business, mainly using information from its latest annual report.

Most radical, critical commentaries on Apple focus, reasonably enough, on how it uses cheap labour in Asia to boost its profits. What I want to deal with instead are the details in

Trump’s election victory, the liberals’ response to it and the tasks facing the US, EU and British workers

Below is an article submitted to Redline by Alec Abbott written 18 April 2017

1. A quintessentially liberal cycle: from smugness to despair, from despair to hope and from hope to smugness

The initial blow

Trump’s election victory left the liberals reeling with shock and incomprehension. Detached from the poverty and discontent around them, and supremely confident in the Democratic Party’s electoral machine, they saw Hillary Clinton as unassailable. Her defeat did little to diminish their disdain for ordinary working people, or to improve their grasp of US realities.

Rather than consider the socio-economic forces that brought Trump into office, the liberals focused almost exclusively on his personality, his egocentric greed for power, money and fame. Some went so far as to detect the sinister hand of Moscow at work. When asked how he viewed Trump’s relationship with Russia, Bernie Sanders, always hovering between radical liberalism and mild social-democracy, replied:

‘The American people are astounded that when you have an authoritarian like Putin who is moving Russia more and more towards an authoritarian society, President Trump has only positive things to say about this authoritarian figure. What hold does Russia have over the President? We know that Russian oligarchs lent Trump and his associates money. Does that have anything to do with Trump’s relationship with Russia?’ (CNN News, 30/3/2017)

From the start of the election campaign, liberals viewed Trump as an impulsive maverick, a right-wing bigot who has little regard for civilized norms of behaviour. Only by pandering to the worst prejudices of disaffected Americans, they maintained, would he succeed in capturing the presidency. The great unknown was how this relative new-comer to politics would behave once in office. Would he adapt his election pledges to political reality or would he pursue his outlandish agenda to the bitter end? That was the question on the minds of liberal commentators as Trump assumed the position of the 45th president of the US.

In no time at all the liberals gave vent to their despair. Maggie Lake, CNN commentator and political analyst, bewailed: ‘He hasn’t changed. There was the expectation that the office changes the man but we have not seen this with Donald Trump.’ (CNN News, 23/3/2017) Not long after, The Los Angeles Times, a prominent liberal organ, delivered the following lamentation:

‘Like millions of other Americans, we clung to a slim hope that the new president would turn out to be all noise and bluster, or that the people around him in the White House would act as a check on his worst instincts, or that he would be sobered and transformed by the awesome responsibilities of office. Instead … it is increasingly clear that those hopes were misplaced.’ (4/4/2017)

Finance and the imperialist world economy

Tony Norfield will be giving a lecture next week at King’s College, London, on Wednesday 8 February.

The session is from 6pm to 8pm, and is part of a series of seminars at King’s on Contemporary Marxist Theory.

The seminars are open to the public, but arrive in time to get signed in if you want to attend.

Venue details:
342N Norfolk Building (entrance on Surrey St)
King’s College London, Strand, London WC2R 2LS

Summary:
This paper discusses how the financial system both expresses and reinforces the power of major countries. Developing Marx’s theory by examining bank credit creation, bond and equity markets, the paper shows how what Marx called the ‘law of value’ is modified by the evolution of finance. To understand imperialism today, one has to recognise how financial markets help the centralisation of ownership and control of the world economy. They are also an important way in which the US and the UK siphon off the world’s resources. The question of Brexit and the City of London is also discussed.

Tony Norfield on the global financial system, modern imperialism, why ‘neoliberalism’ is a misleading term and much more. . .

Excellent interview/podcast by Tom O’Brien with Tony Norfield, here.

Tom’s Alpha and Omega site, where the interview also appears, is here.  There’s also an excellent interview there with Michael Roberts.

Our interview with Tony is here.

The long depression and Marx’s law of the tendency of the rate of profit to fall

by Michael Roberts

Pete Green has now taken up the cudgels in the debate that Jim Kincaid and I have begun over the causes of regular and recurrent crises in capitalist production and in particular the Great Recession.  He makes a welcome and considered critique of my views, as expressed in my book, The Long Depression and in recent discussions at the Historical Materialism conference in London earlier this month.  I think he raises some new and important points in his critique, which, as he says, will require further debate and research.

Like Pete, I cannot deal with all arguments in this short reply on my blog but I’ll do my best to take up some key ones, but it still makes this post long enough!

The data is actually clear

Pete starts by saying he is not going to dispute the data on the rate of profit that I have presented, mainly for the US, but also for other economies.  But apparently he “shares Jim Kincaid’s scepticism about reliance on US national income accounts as source for corporate profitability”.  Actually, I am not sure Jim is sceptical of the official data.  Indeed, he has said that I have used the data accurately and as Pete says, “there is no adequate alternative available for those engaged in empirical investigation”.

And that is what the bulk of my research is: engaging in empirical investigation to verify or otherwise particular theories or laws.  In my view, too many Marxist economists have ignored empirical work and concentrated on interpreting (and re-interpreting) Marx’s writings and ‘what he meant’, rather testing his laws of motion of capitalism to see if they best fit the facts.

Luckily, I am not alone in doing empirical investigations – Andrew Kliman has done prodigious analysis, Anwar Shaikh’s new book is a gold mine of empirical studies, G Carchedi has also tested Marx’s law with the evidence.  And there is a host of new young scholars internationally doing such work.  Carchedi and I will be

How finance makes claims on the world economy

François Chesnais, Finance Capital Today: Corporations and Banks in the Lasting Global Slump, Brill, Leiden, 2016; reviewed by Tony Norfield

This book is well worth reading. It is written in a clear and accessible style and discusses key points about the limitations of capitalism and the role of contemporary finance. Perhaps its most important point is how the financial system has accumulated vast claims on the current and future output of the world economy – in the form of interest payments on loans and bonds, dividend payments on equities, etc. These claims have outgrown the ability of the capitalist system to meet them, but government policy has so far managed to prevent a collapse of financial markets with zero interest rate policies, quantitative easing, huge deficits in government spending over taxation, and so forth. The result is an unresolved crisis, a ‘lasting global slump’, in which economic growth remains very weak and vast debts remain in place.

There are two related points in his approach to the world economy and finance that distinguish Chesnais from many other writers, and for which he deserves to be commended. Firstly, he states clearly that we are in a crisis of capitalism tout court (pp1-2), not a crisis of ‘financialised’ capitalism – the latter being one that could presumably be fixed if only the evil financiers were dealt with by a (capitalist) reforming government. Secondly, he takes ‘the world economy as the point of departure’ for his analysis, although that is ‘easier said than done’ (p11). While he shows the central role of the US, he avoids the wholly US-centred analysis common to radical critics of contemporary capitalism, and instead highlights how the other powers also play a key part in the imperial machine.

Finance Capital Today helps the reader’s understanding of the realities of contemporary global capitalism by

Imperialism study group news

We’ve been a bit tardy in reporting the continuing discussions of the Imperialism Study Group.  Some updates should go up over the next week.

Our next international hook-up will be the second weekend of October, when we’ll be joined by John Smith, the author of Imperialism in the 21st Century.  There is a Redline interview with John, here.

See also our interview with Tony Norfield, a member of the study group and author of The City: London and the power of global finance, here.

And check out the anti-imperialist manifesto produced by the old MidEast Information & Solidarity Collective in 2001, here.