Parts W - Z in the Insider's Economic Dictionary War: Economically, the major cause of national debt and inflation, and often of postwar deflations. Politically, war serves as an excuse to centralize control of government in the hands of the few, and in the Executive Branch of government. Washington Consensus: The neoliberal “conditionalities” imposed on debtor countries by the IMF and World Bank since 1980, forcing their governments to sell off the public domain to U.S. and other international finance capital. Its greatest success was achieved in Russia after 1991, supporting the kleptocrats to privatize – and then sell off – the nation’s mineral and oil wealth, dismantle industry, and impose monetarist austerity rolling back wage levels and living standards, leading to severe depopulation and capital flight. Watered costs: A form of fictitious ...

Parts U-V in the Insider's Economic Dictionary Underdevelopment: The term coined by Andre Gunder Frank to describe the policies which former European colonies and more contemporary third-world countries have been turned into indebted raw-materials exporters rather than balanced economies capable of feeding themselves. (See World System.) Unearned income: See Free Lunch. Unexpected. Whenever bad economic news is announced in the United States, the media almost always attach the adjective “unexpected” to it. This is because it is deemed politically incorrect to expect bad news – to expect unemployment to rise, or to expect retail sales to be down. To accurately expect bad news may be realistic, but to anticipate this reality is something like becoming a premature anti-fascist. So it has become almost obligatory for reporters to show that their heart is “in ...

Part S in the Insider's Economic Dictionary S-curve: The typical shape of growth in nature, such as human beings whose height tapers off as they reach maturity. They also typify most business cycles, which taper off after an upswing as employment, raw-materials and resource limits are approached and wages and commodity prices rise, slowing profits. The demand for specific products likewise tapers off as markets become saturated. Meanwhile, the fact that financial claims and debts tend to grow at compound interest means that financial dynamics tend to outrun the S-curve of production and consumption, creating business crises which end the upswing. Saint-Simon, Claude Henry de (1760-1825): French reformer best known for recognizing the need to replace debt relations by turning saving into equity (stock) investment. Among his followers, the Pereire brothers helped ...

The latest instalment to the Insider's Economic Dictionary. Race to the bottom: A term for dog-eat-dog competition by which countries compete by cutting wage levels so as to produce in the cheapest market, not by raising wages and labor productivity. The effect is to shrink the circular flow between producers and employee-consumers, leading to declining living standards. Under these circumstances productivity is increased only by working the existing labor force more intensively and cutting back medical insurance, old-age pensions and other social welfare expenditures. (See Free Market.) The state of Alabama shows the inner contradiction inherent in this policy. When the state cut back educational and health spending in order to minimize taxes, ostensibly to attract business, global companies pulled out on the ground that its labor force was too low-skilled and ...

Part P in The Insiders Economic Dictionary. Panic: The abrupt culminating stage of the business cycle, in which inflated asset prices collapse in price as financial securities and properties are sold to pay off debts. Parallel Universe: The objective of modern economic methodology. A hypothetical exercise in science fiction depicting a world that conceivably could exist, given a sufficient number of internally consistent assumptions. (See Neoclassical Economics.) Parasite: A “free luncher,” from the Latin word meaning an uninvited guest brought along to a meal or crashing the party. Parasites avoid detection by camouflaging themselves as part of the host itself, and then disable the host’s brain to prevent it from taking counter-measures to protect its own growth. The economic analogue most often cited as parasitic is rentiers. The objective of such rent-seeking activity ...

Part N, O in The Insiders Economic Dictionary. Neoclassical economics: The school that arose in the last quarter of the 19th century, stripping away the classical concept of economic rent as unearned income. By the late 20th century the term “neoclassical” had come to connote a deductive body of free-trade theory using circular reasoning by tautology, excluding discussion of property, debt and the financial sector’s role in general, taking the existing institutional environment for granted. (See Marginalism and Parallel Universe, and contrast with Structural Problem and Systems Analysis.) Neoconservatives: Ideologues who oppose government authority and taxation of wealth, except where governments are controlled by the financial and property sectors. Neoconservatives view democratic governments that impose progressive income taxes to finance public infrastructure and other economic welfare as being as reprehensible as the ...

Part L in The Insiders Economic Dictionary Labor: The labor theory of value resolves the value of products and capital goods into labor costs, while Say’s Law focuses on how employees spend their wages. Hence, labor often is euphemized as “consumers” rather than focusing on the terms of their employment by capital. Labor capitalism: Industrial capitalism is based on employing labor to produce goods to sell at a profit. The essence of “labor capitalism” is to extract money from labor by deducting payroll income for the purpose of inflating stock-market prices. First used by the Chilean dictator Augusto Pinochet, the term was adopted by British Prime Minister Margaret Thatcher as a populist label for her policy of channeling labor’s paychecks into the stock market while at the same time breaking the backs ...