Editorial Note, Nov-Dec, 2016

The world capitalist crisis which began in 2007-08 persists, with no end in sight. Its persistence has to do with two major developments, both related to the phenomenon of globalization: the first is a change that occurs in the role of the State. The globalization of finance in a world of nation-States implies that the State must bow before the demands of finance to “retain the confidence of investors” and prevent financial outflows causing a crisis; this implies eschewing fiscal deficits and taxes on the rich, and hence prevents State intervention for boosting demand. The second change is a tendency for the share of surplus in world output to rise, which causes an ex ante tendency towards over-production and against which the system has no defences, except for possible and occasional asset-price “bubbles”.