2014 has seen a range of commentators proclaim that Britain is fully on the path to healthy growth. The OECD estimated that this year will see the UK economy outpace its European neighbours Germany, France and Italy. The IMF has made similarly positive predictions. With business investment and consequent growth taking place at the most sustained pace since 2007, it looks like we may finally be making our way back to pre-crisis levels of dynamism.
But just how dynamic was the economy before the financial crisis? Investment as a share of GDP had been tumbling downward since the early 1970s; GDP growth had fallen below zero in each major recession since 1970, which never happened in the preceding 20 years; and the mean unemployment rate was higher between 2000-2007 than in the ‘dark days’ of the 1970s. This picture is very similar across many of the world’s advanced economies. In other words, there was something very wrong with the underlying global economy in the years leading up to the 2008 financial crash.
Recently, this has been acknowledged by remarkably centrist economists. In November last year, former US Treasury Secretary Larry Summers told the IMF that Western economies may have been suffering prolonged weak growth or ‘secular stagnation’ since the turn of the millennium. Such weak growth in real production has provoked governments to slash interest rates in an attempt to encourage growth – the unintended consequence of this being a great increase in debt and an influx of money into speculative financial markets. Such high-risk, high-reward bubbles have given advanced economies the illusion of health.
The Financial Times’ Martin Wolff, former US government economist Jared Bernstein and Nobel Prize winners Paul Krugman and Edmund Phelps have all lent support to this view. Krugman went further than Summers, suggesting that this thesis has “arguably been true, although perhaps with increasing severity, since the 1980s”. Phelps went further still: “It’s surprising when people suddenly are talking about stagnation when we’ve been in stagnation since 1972”.
Discussing the problems of our current financial system without talking about these troubles in the underlying economy can lead to very unsatisfactory explanations for the 2008 crisis. We should all be familiar with them by now: the bankers were too greedy; the financial culture too hedonistic; the regulations too lax. Of course we should not exclude these factors, but a comprehensive explanation for the bloated state of finance today must begin with an understanding of what drives capitalist economies in the first place.
An Angry Person’s Guide to Finance starts at exactly this point. The engine of capitalism is profit – it is the sole motive of investment and an absolute necessity for any business. However, there is no guarantee that profitability across the whole economy will rise or even remain stable over long periods. In fact, it has been stagnating and even falling on average since the middle of the 20th century (various economists’ data is presented here). It is for this reason that we have seen a slowdown in investment, growth and employment across the advanced capitalistworld in recent decades. This is also the key to understanding why money has been increasingly channeled into financial ventures.
This pamphlet traces, in layperson’s terms, exactly how weak profits in the production of goods and services has led to a transformation in the workings of global banking through the processes of disintermediation, securitisation and the expansion of derivatives trading. It then shows how headline-grabbing things like credit rating agencies and bank bailouts are linked to these important processes. Finally, this pamphlet discusses the meagre state of financial reforms and raises questions about the possibility of any real, lasting regulation of a capitalist financial system.
It is no longer sufficient to have a public discussion about the banking system that neglects the economy as a whole: finance and production. It is also no longer reconcilable with the principles of democracy to leave so many people in the dark about these issues by masking them in jargon. An Angry Person’s Guide to Finance endeavors to tackle both of these problems – something that must be done if we are to avoid bringing the same man-made disasters down upon our heads time and time again.
The snap general election represents a unique opportunity to defeat this terrible government. We believe that visual artists have a crucial role to play!
Drax is the UK's biggest source of CO2 emissions – and we're paying for it, writes Almuth Ernsting
For the past 3 years, Barby Asante and members of London-based artists' collective, sorryyoufeeluncomfortable, have been responding directly to the vision of James Baldwin. Ahead of the nationwide release of a new film about the American activist and author, they reflect on the enduring relevance of Baldwin in Britain today.
Housing campaigners' gains in Bristol are spurring on a national movement to build a renters' union, writes Stuart Melvin
A new Espionage Act threatens whistleblowers and journalists, writes Sarah Kavanagh
We need an anti-austerity alliance, not a vaguely progressive alliance, argues Michael Calderbank
Rahila Gupta talks to Kimmie Taylor about life on the frontline in Rojava
It may seem as though these apps are working for us, but we are also working for the apps, writes Kurt Iveson
It's over 100 years ago that domestic workers began to organise to demand the same rights as other workers. Yet with LSE cleaners on strike this week, historian Laura Schwartz asks: how much has really changed?
Omar Barghouti asks whether Donald Trump, in his recent break with America’s long-standing support for the two-state solution, has unwittingly revived the debate about the plausibility, indeed the necessity, of a single, democratic state in historic Palestine?
Red Pepper’s race section: open editorial meeting 24 May
On May 24th, we’ll be holding the third of Red Pepper’s Race Section Open Editorial Meetings.
Our activism will be intersectional, or it will be bullshit…
Reflecting on a year in the environmental and anti-racist movements, Plane Stupid activist, Ali Tamlit, calls for a renewed focus on the dangers of power and privilege and the means to overcome them.
West Yorkshire calls for devolution of politics
When communities feel that power is exercised by a remote elite, anger and alienation will grow. But genuine regional democracy offers a positive alternative, argue the Same Skies Collective
How to resist the exploitation of digital gig workers
For the first time in history, we have a mass migration of labour without an actual migration of workers. Mark Graham and Alex Wood explore the consequences
The Digital Liberties cross-party campaign
Access to the internet should be considered as vital as access to power and water writes Sophia Drakopoulou
#AndABlackWomanAtThat – part III: a discussion of power and privilege
In the final article of a three-part series, Sheri Carr gives a few pointers on how to be a good ally
Event: Take Back Control Croydon
Ken Loach, Dawn Foster & Soweto Kinch to speak in Croydon at the first event of a UK-wide series organised by The World Transformed and local activists
Red Pepper’s race section: open editorial meeting 19 April
On April 19th, we’ll be holding the second of Red Pepper’s Race Section Open Editorial Meetings.
Changing our attitude to Climate Change
Paul Allen of the Centre for Alternative Technology spells out what we need to do to break through the inaction over climate change
Introducing Trump’s Inner Circle
Donald Trump’s key allies are as alarming as the man himself
#AndABlackWomanAtThat – part II: a discussion of power and privilege
In the second article of a three-part series, Sheri Carr reflects on the silencing of black women and the flaws in safe spaces
Joint statement on George Osborne’s appointment to the Evening Standard
'We have come together to denounce this brazen conflict of interest and to champion the growing need for independent, truthful and representative media'
Paul O’Connell and Michael Calderbank consider the conditions that led to the Brexit vote, and how the left in Britain should respond
On the right side of history: an interview with Mijente
Marienna Pope-Weidemann speaks to Reyna Wences, co-founder of Mijente, a radical Latinx and Chincanx organising network
Disrupting the City of London Corporation elections
The City of London Corporation is one of the most secretive and least understood institutions in the world, writes Luke Walter
#AndABlackWomanAtThat: a discussion of power and privilege
In the first article of a three-part series, Sheri Carr reflects on the oppression of her early life and how we must fight it, even in our own movement
Corbyn understands the needs of our communities
Ian Hodson reflects on the Copeland by-election and explains why Corbyn has the full support of The Bakers Food and Allied Workers Union
Red Pepper’s race section: open editorial meeting 15 March
On 15 March, we’ll be holding the first of Red Pepper’s Race Section open editorial meetings.
Social Workers Without Borders
Jenny Nelson speaks to Lauren Wroe about a group combining activism and social work with refugees
Growing up married
Laura Nicholson interviews Dr Eylem Atakav about her new film, Growing Up Married, which tells the stories of Turkey’s child brides
The Migrant Connections Festival: solidarity needs meaningful relationships
On March 4 & 5 Bethnal Green will host a migrant-led festival fostering community and solidarity for people of all backgrounds, writes Sohail Jannesari
Reclaiming Holloway Homes
The government is closing old, inner-city jails. Rebecca Roberts looks at what happens next
Intensification of state violence in the Kurdish provinces of Turkey
Oppression increases in the run up to Turkey’s constitutional referendum, writes Mehmet Ugur from Academics for Peace
Pass the domestic violence bill
Emma Snaith reports on the significance of the new anti-domestic violence bill
Report from the second Citizen’s Assembly of Podemos
Sol Trumbo Vila says the mandate from the Podemos Assembly is to go forwards in unity and with humility
Protect our public lands
Last summer Indigenous people travelled thousands of miles around the USA to tell their stories and build a movement. Julie Maldonado reports
From the frontlines
Red Pepper’s new race editor, Ashish Ghadiali, introduces a new space for black and minority progressive voices
How can we make the left sexy?
Jenny Nelson reports on a session at The World Transformed
In pictures: designing for change
Sana Iqbal, the designer behind the identity of The World Transformed festival and the accompanying cover of Red Pepper, talks about the importance of good design
Angry about the #MuslimBan? Here are 5 things to do
As well as protesting against Trump we have a lot of work to get on with here in the UK. Here's a list started by Platform