The UK had an apparently important financial event today. The Labour government’s finance minister (called the Chancellor of the Exchequer, a feudal royal term), Rachel Reeves presented the government’ s tax and spending measures for the year (and years ahead). It was billed as a ‘make or break’ budget for the Labour government which is languishing badly in the opinion polls – its share of support has halved from an already low election result of 34% in July 2024 when Labour won a landslide of seats. 

The usual joke about the United Nations Climate Change Conferences (COPs) is that each one is a ‘cop-out’. Each time there is a failure to agree on ending fossil fuel production as the source of energy, even though it is now well established that carbon and other greenhouse gas emissions come mainly from the use of fossil fuels. Each time there is a failure to agree to significant planned and implemented reductions in emissions from all sources, production, transport, wars etc.

Chile has a general election today. Around 15m voters can take part in the first round to elect a new president, the lower house and half the seats of the senate. Incumbent President Gabriel Boric, who was elected in 2021, is constitutionally barred from seeking a consecutive second term. So all is up for grabs. Boric was a former student activist who got a decisive victory in 2021.

In this part two, I resume my review of the Historical Materialism conference in London with a look at some of the sessions on climate change, ecology and the impact of artificial inteliigence – as well as on the state of the world economy. As the climate crisis worsens globally, naturally there were several sessions on how capitalism is destroying humanity, other species and the planet itself.

Every year the Historical Materialism journal holds a conference in London. It is attended by (mostly) academics and students to discuss Marxist theory and critique capitalism.  This year the conference seemed very well attended and the best organised ever. There was a huge range of sessions and plenaries on economics, culture, technology, imperialism, war and gender issues. There were many ‘streams’ of presentations on fascism, technology (AI), imperialism, climate change and, of course, Marxist theory. 

Let the Financial Times sum it up: “US stocks ride AI hype and trade truce to 6-month winning streak S&P 500 and Nasdaq post longest runs of monthly gains in years.” The FT points out that US stocks have hit their longest monthly winning streak in four years as AI hype, declining interest rates and Donald Trump’s move to dial back his trade war led the way.

The latest economic activity indicators called purchasing managers indexes (PMIs) confirm that the major economies are still crawling along – neither slipping into slump nor picking up pace. The global PMI stands at 52.4 in September (any score above 50.0 means expansion, any score below means contraction). Source: JPM In effect, the major economies remain in what I call a Long Depression that started after the Great Recession of 2008-9. 

The US stock market continues to hit new record highs; the bitcoin price is also close to highs and the gold price has rocketed to all-time highs. Investors in financial assets (banks, insurance companies, pension funds, hedge funds etc) are wildly optimistic and confident about financial markets. As the chair of Rockefeller International, Ruchir Sharma put it: “Despite mounting threats to the US economy — from high tariffs to collapsing immigration, eroding institutions, rising debt and sticky inflation — large companies and investors seem unfazed.

This week the price of gold in US dollars hit $4000 per troy oz. This is an historic high (at least in nominal dollars). But even that high looks set to be surpassed, with investment bank Goldman Sachs forecasting $4900 per oz by year end. And the gold price in other major currencies has also been rising. What is behind this unprecedented rally? 

Güney Işıkara and Patrick Mokre have published an insightful book that explains how Marx’s theory of value operates to explain the trends and fluctuations in modern capitalist economies. Called Marx’s Theory of Value at the Frontiers - Classical Political Economics, Imperialism  and Ecological Breakdown, the title tells the reader that the book is about taking Marx’s law of value towards what they call its ‘frontiers’, namely markets and trade; imperialism and the global environmental crisis.

Last week US Treasury Secretary Scott Bessent offered a $20bn swap line to Javier Milei’s government in Argentina and pledged to buy its bonds, as the Trump administration moved to shore up its ideological ally. The measures temporarily halted a rout in Argentine foreign exchange and bond markets triggered by the rapid depletion of the country’s foreign reserves as Milei sought to defend an overvalued currency.

The 80th edition of the United Nations General Assembly (UNGA 80) opened yesterday in New York.  The theme this year is: 'Better together: 80 years and more for peace, development and human rights', highlighting the urgency of delivering on the Sustainable Development Goals (SDGs) and reinvigorating 'global cooperation'. When the United Nations was born in San Francisco on June 26, 1945, the overriding goal of the 50 participants who signed the UN Charter was stated in its first words: …

The 2025 conference  of the International Initiative for thePromotion of Political Economy (IIPPE) just took place in Ankara, Turkey.  The IIPPE was founded in 2006 with the aim of “developing and promoting political economy in and of itself but also through critical and constructive engagement with mainstream economics, heterodox alternatives, interdisciplinarity, and activism understood broadly as ranging across formulating progressive policy through to support for progressive movement.”

US economy has a widening gap: between rising inflation on the one line and employment on the other. According to mainstream Keynesian theory, that should not happen. That’s because a weakening labour market should lead to a fall in wage increases and in consumer demand and price inflation will subside. The experience of the 1970s economies disproved that theory supposedly supported by the so-called Phillips curve (ie a trade-off between price rises and unemployment).

Norway has a general election today. In a country of 5.6m people, some 4m are entitled to vote and there is usually a high turnout by international standards – over 75%. Indeed, early voting has become increasingly popular, with up to 60% voting before the official day. Norwegians are probably the richest nation in the world – if you measure that by average income per person . 

In 2019, economics professor Gita Gopinath left the halls of Harvard University to become the chief economist at the International Monetary Fund (IMF). Three years later, she made an unprecedented jump from economic analysis to policy management, becoming the first ever ‘deputy managing director’ — or the IMF’s effective number two – the right-hand (woman) of IMF managing director, Kristalina Georgieva.

US President Donald Trump announced that he had fired Lisa Cook, a member of the Federal Reserve Board of Governors. Trump says that she committed mortgage fraud by taking out two mortgages, claiming both properties as her primary residence, back when she was a professor at Michigan State, before joining the Fed. Naturally, Cook dismissed these charges, and as Keynesian economist Paul Krugman said on his blog,

Every August, the regional Kansas City Federal Reserve holds a symposium for the world’s central bankers to consider their role in economic policy and important developments in the world economy.  The head of the US Federal Reserve usually presents a summary of how he (or she) sees the state of US economy and what action the US Fed should take in trying to meet its set targets of keeping price inflation moderate (no more than 2% a year) and achieving ‘full employment’.

It’s mid-summer in the Northern hemisphere, so I thought it might be the time for a quiet review of some books on the trends in the world economy. These are short reviews without much depth and I am excluding new books coming up that deserve fuller accounts. Let’s start with a couple of books that deal with US economic hegemony and the dollar. 

A recent article in the UK’s Financial Times got very excited about the rise of intangibles. The author Tek Parikh said that “50 years go, the assets held by top 500 US companies were predominantly ‘tangible’ — factories, equipment, inventory et cetera. But today, it is estimated that most of their assets are ‘intangible’ ie. intellectual property (knowledge and software), branding value and marketing networks." …

Last weekend the 18th Congress of the World Association of Political Economy (WAPE) took place in Istanbul, Turkey.. WAPE is a Chinese-run academic economics organisation, linking up with Marxist economists globally. “Even though that might seem like bias, the WAPE forums and journals still provide an important outlet to discuss all the developments in the world capitalist economy from a Marxist perspective.

Last week, the mega tech companies – the so-called Magnificent Seven – presented their latest earnings results.  They appeared to be ‘blockbuster’. They painted a picture of a booming economy, supporting President Trump’s assertion that America “is the hottest country anywhere in the world”. (He was not referring to global warming).  At the same time, Trump announced his latest round of tariff measures on goods exports from other countries into the US. 

The Magnificent 7 stocks — NVIDIA, Microsoft, Alphabet (Google), Apple, Meta, Tesla and Amazon — now make up around 35% of the value of the US stock market, and NVIDIA's market value makes up about 19% of the Magnificent 7. The S&P 500 has never been more concentrated in a single stock than it is today, with Nvidia representing close to 8% of the index.

Tomorrow, a key election takes in the G7 economy, Japan.  The focus is on whether the ruling coalition of the Liberal Democratic Party (LDP) and its junior partner Komeito, which together suffered a major defeat in last autumn's lower House of Representatives election, can maintain a majority in the upper House of Councillors. The coalition government must win 50 of the 125 seats (half of the House seats) that are up for grabs. 

“Bitcoin is a speculation and not an investment. Not regulated, not backed by any asset, only worth what someone is willing to pay." — Matthew Stephenson “It’s totally absolutely crazy, stupid gambling” — the late Charlie Munger, speaking in 2023. “Cryptocurrencies are highly volatile and therefore not really useful stores of value and not backed by anything,...