Analysis of the newspaper article A Crisis of Capitalism

A Crisis of Capitalism is a newspaper article from The Guardian written by Riccardo Bellofiore in September 2011.

Starting from the title, the reader can find two key words: “crisis” and “capitalism”. The word “capitalism” does not only refer to goods or financial products, but to an entire system of thought, so the reader may think the topic will be analyzed through different perspectives.

The title is followed by a short introduction, meant to focus the reader’s attention on the main problem: the reasons for the European and Italian crisis, which may be found in a “global attack of labour”.

The text begins with a quotation by Karl Marx, who said that history repeats itself, first as a tragedy, then as a farce; the statement is applied to Italy, where politicians appear to be like clowns, and, according to Bellofiore, this has caused other countries to have a deformed vision of Italy.

The Italian crisis is analyzed under an international perspective, so the issues affecting Italy are reflected by the corresponding European problems:

the lack of a political sovereignty,

the restrictions imposed by the ECB and

the absence of a public budget at a European level.

Other problems come from wrong policies, such as

• the ECB's decision to raise the interest rate against inflation and
• the German decision to take advantage of the crisis in other countries to become richer.

The journalist does not remain neutral: he expresses a strong opposition, using strong language like “obsessive” or “pertains more to psychiatry than economics”.

A reproach towards the German policy of profiting of the crisis, neglecting its European duties is also expressed straightforward-

In the following paragraph the problem is seen from a wider perspective from a European  to  a global one: Germany is again accused of causing stagnation over the continent, while Keynesianism is blamed for having caused the European growth to implode.

As the reader may have expected right from the beginning, Bellofiore condemns  Keynes' vision of t economy to have been a primary ingredient of the current crisis.

Keynes believed that private decisions may badly influence the macroeconomic sphere, often expanding  consequences to the public sphere. 

Accordingly,  the private debt crisis has become a public debt one, and deficits in budget are not caused by investments intended to produce future development, but by real stagnation.  In addition, the journalist once again accuses European countries for their unwise behaviour about national debts. He does not approve of the unwillingness of refinancing  countries like  Greece or Ireland, something he cfinds senseless considering  their share in the euro area debt was very low, if compared to the GDP.

It follows that it becomes obvious to the reader that Mr. Bellofiore is accusing European countries of not behaving as a united force, since they just preserve their local interests. All that  caused markets and rating agencies to profit of the European divisions, and as a result  European leaders exasperated the already difficult situation by approving austerity programs.

The subsequent fear caused the spread to reach foolishly high levels, and Italian growth to fall.

The second part of the article focuses his attention on  the Italian situation.

According to the journalist, Italy has been experiencing economic fallings since the Sixties, all that resulting in a decrease of productivity; it followed that capitalists withdrew their investments. The private market narrowed, and while the State had to assist a collapsing economy, debt became larger and larger.

Mr. Bellofiore states that flexibility policy provided the final stroke since it caused widespread unemployment.

The following cuts and high taxes imposed by the Italian government are defined with harsh words: “savage cuts”, “regressive taxes”. Moreover, if Italy exits from the Euro area, there will be an enlargement of the crisis.

In the first and main section of the article, the journalist analyzes the European and Italian crises; in the following one, he proposes a solution. He sees Eurobonds as a way to escape the “domino effect”, and he hopes the European Left to rebuild economy on other bases: the control of capitals and the intervention of the State in the economy.

This is a vision totally alien to Capitalism, since Capitalistic doctrine requires a free market with no or little State control.

In conclusion the reader can best understands the article title “A crisis of capitalism”, and Mr. Bellofiore also shows a socialist-like position.

According to him, “internationalisation” may be the key word to get out of the crisis.