Archive for the ‘BRICS’ Category

Marikana massacre of workers carried out by ANC government, August 16, 2012; the single most number killed by any Slouth African government in a single action since the 1960 apartheid regime massacre of black civil rights protesters at Sharpeville

Billionaire Cyril Ramaphosa has been made president of the ANC, although Jacob Zuma will continue as president of the country.

Ramaphosa says the ANC will spend 2018 reconnecting with the people and making up for its mistakes.

The idea of this super-rich capitalist reconnecting with the masses is a hoot.  Ramaphosa, who supported the massacring of mine workers just a couple of years ago, leveraged his time as a militant trade union leader to get into business and epitomises everything that went wrong with the ANC in the first place. 

by Peter Manson

Readers will know that president Jacob Zuma was replaced by Cyril Ramaphosa as leader of the African National Congress at the ANC’s elective conference in December.

Zuma will remain South African head of state, however, until a new president is elected by the national assembly following the 2019 general election – unless, of course, action is taken by the ANC and parliament to remove him earlier, which is a distinct possibility.

Just before the elective conference, commentator Peter Bruce pleaded to ANC delegates:

The fact is that policy uncertainty is crippling foreign investment … And try not to think of foreign investors as fat, white capitalists smoking cigars in a club somewhere and deciding which ideological friends to finance … They’re investing the savings and pensions of people like you … They need a return on those people’s money, just like you need a return on yours.1


Such commentators wanted Zuma out – and were equally opposed to his replacement as ANC president by his former wife, Nkosazana Dlamini-Zuma, who was seen as a mere continuation of the current corrupt regime. Zuma not only stands accused of using state funds to upgrade his private residence, and of allowing the Gupta family to exert huge influence over government appointments – so-called ‘state capture’ – but he still has no fewer than 783 charges of corruption, fraud and money-laundering hanging over him. These are connected to the multi-billion-dollar arms deal finalised in 1999 just after Zuma became deputy president. His financial advisor at the time, Schabir Shaik, was jailed in 2005 for facilitating those bribes and, while Zuma faced charges too, they were conveniently dropped just after he became president in 2009.

During the pre-conference campaign Ramaphosa repeatedly insisted that all those implicated in ‘state capture’ and corruption must be (more…)


Tony Norfield

Below is an interview which Redline was recently able to do with Tony Norfield, whose book The City: London and the global power of finance is an examination of the role of finance in the global economy today.  It is published by Verso on April 12, ISBN: 9781784783662.  It will also be published the same day as an e-book, ISBN: 9781784783679.

Philip Ferguson: Could you tell us a little bit about your political background and how you chose to do your PhD on British imperialism today?

Tony Norfield: The PhD that I completed in 2014 was titled ‘British imperialism and
finance: a contribution to the theory of contemporary imperialism’. I thought I had something new to The City, front cover of Verso booksay on these questions, both because ‘British imperialism’ was a term that nowadays seemed to be used only for the colonial period and because, as far as I could see, nothing had been done on this topic relating to the UK since the 1980s, ie before the recent decades in which the financial system had become such a major issue. I have long had an interest in ‘finance’ and capitalism, since well before I ended up, much to my surprise, in getting a job in a bank dealing room.

I have always been interested in how things work economically/socially. Initially, as a teenager, this led me to be a left-wing Keynesian, as I thought the capitalist economy could be more progressively managed. Later, at university, I was attracted by Marxist analysis as it made much more sense! I have been a Marxist ever since. My jobs have also been in economics and business, and these have provided so-called ‘real world’ experience with which to judge and develop Marxist theory.

Phil F:  The book seems to have a wider remit than just British imperialism. What made you expand your area of analysis?

Tony N: I think that any particular country can only be understood as part of the (more…)

unnamed (1)by Michael Roberts

The business media is full of the meltdown of the Chinese stock market, the credit bubble and impending crash in the Chinese economy.  But less well announced is the dangerous economic slowdown and already unfolding debt crisis in ‘emerging economies’ in general.

So for the first time since the emerging market crisis of 1998, all the large so-called BRICS (Brazil, Russia, India, China and South Africa) are in trouble.  And so are the next range of ‘developing’ economies like Indonesia, Thailand, Turkey, Argentina, Venezuela etc.

Previously rising commodity prices in oil, base metals and food led to fast growth in many of these economies.  This in turn led to a flood of capital from advanced capitalist economies by banks and companies looking for higher profits than available in their economies.

unnamed (2)

But the commodity boom has collapsed.  Global commodity prices continue to plunge. Bloomberg’s commodity price index, tracking gold, crude oil and other raw materials, is (more…)

economic-woes-290by Michael Roberts

Speaking at the close of the G20 summit of world leaders in Brisbane Australia, British Prime Minister David Cameron exclaimed that “red warning lights are flashing on the dashboard of the global economy”, threatening another recession.

Of course, Cameron was not talking about the UK economy, which is going great guns, according to the British government, with six months to go a general election. Instead, he was covering his back, so that if any downturn in the British economy took place it could be blamed on the rest of the world. You see, as Cameron put it in an article for the Guardian, don’t blame me, you lefty liberals. If things go wrong from here, it will be because of the Eurozone that you all like so much. “The Eurozone is teetering on the brink of a possible third recession, with high unemployment, falling growth and the real risk of falling prices too.”

But he had to admit also that “emerging market economies which were the driver of growth in the early stages of the recovery are now slowing down. Despite the progress in Bali, global trade talks have stalled while the epidemic of Ebola, conflict in the Middle East and Russia’s illegal actions in Ukraine are all adding a dangerous backdrop of instability and uncertainty.”

In effect, Cameron was accepting that capitalism is now global and no one country can escape if there is a crisis or slump in another large one or neighbour. If the Eurozone stays in depression and other major economies in the G20 also slip back into a slump, the UK economy will join them.

The G20 leaders announced that they were pledging to boost real GDP growth in the world economy by an extra $US2trn, or a cumulative 2%, by 2018. This pledge was full of (more…)

imagesby Tony Norfield

Nobody wants to be one of the PIIGS, but membership of the BRICS is highly valued. Both acronyms were devised in the City of London, the former by analysts describing a group of crisis-hit euro countries, the latter by Goldman Sachs in a 2001 paper that identified several countries that had come to prominence in the global economy. The Goldmans formulation came at an opportune time: slower growth in the major capitalist powers was being outpaced by developing countries that also appeared to have brighter economic prospects. Its author called for including Brazil, Russia, India and China more formally in global economic decision-making (South Africa was added later), and this was an adept investment bank marketing tool to attract business both from and into the relevant emerging powers, ones that craved recognition.

The BRICS are evidently diverse countries, geographically, socially, economically, politically and in terms of their potential power in the world economy. However, they share some common interests that the original Goldmans formulation did not anticipate. Rather than them all simply wanting to be included in the current hegemonic structure of global decision-making – being included in forums like the G7, for example – what has happened over the past decade is that they have (more…)

Brazil-protests Demonstrators protest while holding crosses bearing the names of construction workers who died while building World Cup stadiums.

Brazil: Protesters hold crosses bearing the names of construction workers who died while building World Cup stadiums.

by Harley Filben

Football has been a very political sport in Brazil: at times, it has been a focal point for nation-building and state prestige; at others, for democratic resistance to military rule. The appointment of managers to the national team has been loaded with political significance. And the 2014 World Cup is probably even more political for Brazil than it usually is for the host country.

By the time Brazil gained independence from Portugal in 1825, the latter was already almost defunct as a first-rank world power. It had been reduced to a dependency of the British empire, a sort of imperial sub-contractor and, as Spanish and Portuguese colonies in Latin America separated themselves off from their Iberian masters, they immediately found themselves falling under British influence – a pattern of semi-colonial dependence that has, since World War II, become very familiar to us.

British influence manifested itself, naturally, not only through global political alignment, but also through far more important matters – British expatriates brought with them their football. The Brazilian elite identified itself as white and European, unlike the masses. Football, at that time, was still heavily associated with the English public school system: an interregnum between its origins as a peasant sport and later existence as a mass, popular phenomenon.

Apocryphally, the Duke of Wellington is supposed to have said that the battle of Waterloo was won on the playing fields of Eton; English sport in this form was admired by those with an attachment to aristocratic elitism, including also Pierre de Coubertin, founder of the modern Olympics. As an ex-colony with aspirations to greatness, Brazil’s metropolitan elites took to football very rapidly.

Rapidly, as well, it spread out to wider society. The first football clubs in Brazil had been founded in the 1890s; by 1910, São Paulo railway workers founded Corinthians FC, named after a London club touring the country. By the end of the 1930s, Brazil was fielding a (more…)

imagesby Michael Roberts

Back in early December, I wrote that injections of money by the major central banks of the world through what is called quantitative easing (QE) was causing not inflation of prices in goods and services but, instead, in financial assets.  Stock markets were booming as banks and (large) companies were flush with cheap credit and cash.  Rather than lend to businesses or invest in new productive capacity, they preferred to look for higher returns in fictitious capital (property, stocks and bonds).  House prices have jumped back up everywhere, while governments get the banks to buy their bonds and keep interest rates low.  It’s a circular process in fictitious capital expansion.

One extra aspect of this was the boom in commodities (base metals, gold, food crops etc)* for emerging economies, where most of the world’s raw materials for production are.  Also, as yields are much higher for bonds and equities in emerging economies, much of this cheap credit flew to these economies, driving up financial asset prices and to some extent, inflation of goods prices too . Because central banks there were not ‘sterilising’ these foreign currency cash inflows, they led to sharp rises in domestic money supply and falling interest rates that engendered property price booms and rising inflation.

But then last summer, the US Federal Reserve, the leader in quantitative easing, decided that the time had come to begin to (more…)