York prof examines war and capitalism

“The coming war in Iraq is certainly about oil, but not in the way most people think,” argues Prof. Jonathan Nitzan, who teaches political economy in York’s Department of Political Science.

At a seminar entitled “Accumulation Through Crisis? Financial Capitalism and the New Wars”, Nitzan explored the impact of the new wars on financial capitalism.

According to Nitzan, whose book The Global Political Economy of Israel has been recently published by Pluto Press, financial capitalism does not always thrive on growth. “Just look at what happened in Russia during the 1990s,” he says. “Industrial production fell by 70 per cent and there was hyperinflation. And yet, this was the period when the greatest Russian fortunes were made.”

This type of accumulation through crisis and redistribution is by no means exceptional, he says. It happened in Europe in the 1920s, in the United States in the 1970s, and in Latin America in the 1980s. It is happening now in Turkey and Israel.

In Nitzan’s view, capitalism may be entering a prolonged period of stagflation (combined stagnation and inflation) similar to the 1970s and early 1980s. Such development will be disastrous for most people, he says, but the leading corporate groups will benefit tremendously through redistribution.

“If you read the financial press,” says Nitzan, “everyone is talking about the risk of deflation. In other words, what they want is some inflation. And that could well be what they”ll get if a US attack on Iraq pushes up the price of oil.”