February 7, 2008 at 11:36 am | Posted in Books, Economics, Financial, Globalization, History, Science & Technology | Leave a comment








Communist Manifesto

Marx & Engels

(Chapter 1)

The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together. Subjection of Nature’s forces to man, machinery, application of chemistry to industry and agriculture, steam-navigation, railways, electric telegraphs, clearing of whole continents for cultivation, canalisation of rivers, whole populations conjured out of the ground — what earlier century had even a presentiment that such productive forces slumbered in the lap of social labour?

A spectre is haunting Europe — the spectre of communism. All the powers of old Europe have entered into a holy alliance to exorcise this spectre: Pope and Tsar, Metternich and Guizot, French Radicals and German police-spies.

Where is the party in opposition that has not been decried as communistic by its opponents in power? Where is the opposition that has not hurled back the branding reproach of communism, against the more advanced opposition parties, as well as against its reactionary adversaries?

Two things result from this fact:

I. Communism is already acknowledged by all European powers to be itself a power.

II. It is high time that Communists should openly, in the face of the whole world, publish their views, their aims, their tendencies, and meet this nursery tale of the Spectre of Communism with a manifesto of the party itself.

To this end, Communists of various nationalities have assembled in London and sketched the following manifesto, to be published in the English, French, German, Italian, Flemish and Danish languages.




[German Original]

The history of all hitherto existing society(2) is the history of class struggles.

Freeman and slave, patrician and plebeian, lord and serf, guild-master(3) and journeyman, in a word, oppressor and oppressed, stood in constant opposition to one another, carried on an uninterrupted, now hidden, now open fight, a fight that each time ended, either in a revolutionary reconstitution of society at large, or in the common ruin of the contending classes.

In the earlier epochs of history, we find almost everywhere a complicated arrangement of society into various orders, a manifold gradation of social rank. In ancient Rome we have patricians, knights, plebeians, slaves; in the Middle Ages, feudal lords, vassals, guild-masters, journeymen, apprentices, serfs; in almost all of these classes, again, subordinate gradations.

The modern bourgeois society that has sprouted from the ruins of feudal society has not done away with class antagonisms. It has but established new classes, new conditions of oppression, new forms of struggle in place of the old ones.

Our epoch, the epoch of the bourgeoisie, possesses, however, this distinct feature: it has simplified class antagonisms. Society as a whole is more and more splitting up into two great hostile camps, into two great classes directly facing each other — Bourgeoisie and Proletariat.

From the serfs of the Middle Ages sprang the chartered burghers of the earliest towns. From these burgesses the first elements of the bourgeoisie were developed.

The discovery of America, the rounding of the Cape, opened up fresh ground for the rising bourgeoisie. The East-Indian and Chinese markets, the colonisation of America, trade with the colonies, the increase in the means of exchange and in commodities generally, gave to commerce, to navigation, to industry, an impulse never before known, and thereby, to the revolutionary element in the tottering feudal society, a rapid development.

The feudal system of industry, in which industrial production was monopolised by closed guilds, now no longer sufficed for the growing wants of the new markets. The manufacturing system took its place. The guild-masters were pushed on one side by the manufacturing middle class; division of labour between the different corporate guilds vanished in the face of division of labour in each single workshop.

Meantime the markets kept ever growing, the demand ever rising. Even manufacturer no longer sufficed. Thereupon, steam and machinery revolutionised industrial production. The place of manufacture was taken by the giant, Modern Industry; the place of the industrial middle class by industrial millionaires, the leaders of the whole industrial armies, the modern bourgeois.

Modern industry has established the world market, for which the discovery of America paved the way. This market has given an immense development to commerce, to navigation, to communication by land. This development has, in its turn, reacted on the extension of industry; and in proportion as industry, commerce, navigation, railways extended, in the same proportion the bourgeoisie developed, increased its capital, and pushed into the background every class handed down from the Middle Ages.

We see, therefore, how the modern bourgeoisie is itself the product of a long course of development, of a series of revolutions in the modes of production and of exchange.

Each step in the development of the bourgeoisie was accompanied by a corresponding political advance of that class. An oppressed class under the sway of the feudal nobility, an armed and self-governing association in the medieval commune(4): here independent urban republic (as in Italy and Germany); there taxable “third estate” of the monarchy (as in France); afterwards, in the period of manufacturing proper, serving either the semi-feudal or the absolute monarchy as a counterpoise against the nobility, and, in fact, cornerstone of the great monarchies in general, the bourgeoisie has at last, since the establishment of Modern Industry and of the world market, conquered for itself, in the modern representative State, exclusive political sway. The executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie.

The bourgeoisie, historically, has played a most revolutionary part.

The bourgeoisie, wherever it has got the upper hand, has put an end to all feudal, patriarchal, idyllic relations. It has pitilessly torn asunder the motley feudal ties that bound man to his “natural superiors”, and has left remaining no other nexus between man and man than naked self-interest, than callous “cash payment”. It has drowned the most heavenly ecstasies of religious fervour, of chivalrous enthusiasm, of philistine sentimentalism, in the icy water of egotistical calculation. It has resolved personal worth into exchange value, and in place of the numberless indefeasible chartered freedoms, has set up that single, unconscionable freedom — Free Trade. In one word, for exploitation, veiled by religious and political illusions, it has substituted naked, shameless, direct, brutal exploitation.

The bourgeoisie has stripped of its halo every occupation hitherto honoured and looked up to with reverent awe. It has converted the physician, the lawyer, the priest, the poet, the man of science, into its paid wage labourers.

The bourgeoisie has torn away from the family its sentimental veil, and has reduced the family relation to a mere money relation.

The bourgeoisie has disclosed how it came to pass that the brutal display of vigour in the Middle Ages, which reactionaries so much admire, found its fitting complement in the most slothful indolence. It has been the first to show what man’s activity can bring about. It has accomplished wonders far surpassing Egyptian pyramids, Roman aqueducts, and Gothic cathedrals; it has conducted expeditions that put in the shade all former Exoduses of nations and crusades.

The bourgeoisie cannot exist without constantly revolutionising the instruments of production, and thereby the relations of production, and with them the whole relations of society. Conservation of the old modes of production in unaltered form, was, on the contrary, the first condition of existence for all earlier industrial classes. Constant revolutionising of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones. All fixed, fast-frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away, all new-formed ones become antiquated before they can ossify. All that is solid melts into air, all that is holy is profaned, and man is at last compelled to face with sober senses his real conditions of life, and his relations with his kind.

The need of a constantly expanding market for its products chases the bourgeoisie over the entire surface of the globe. It must nestle everywhere, settle everywhere, establish connexions everywhere.

The bourgeoisie has through its exploitation of the world market given a cosmopolitan character to production and consumption in every country. To the great chagrin of Reactionists, it has drawn from under the feet of industry the national ground on which it stood. All old-established national industries have been destroyed or are daily being destroyed. They are dislodged by new industries, whose introduction becomes a life and death question for all civilised nations, by industries that no longer work up indigenous raw material, but raw material drawn from the remotest zones; industries whose products are consumed, not only at home, but in every quarter of the globe. In place of the old wants, satisfied by the production of the country, we find new wants, requiring for their satisfaction the products of distant lands and climes. In place of the old local and national seclusion and self-sufficiency, we have intercourse in every direction, universal inter-dependence of nations. And as in material, so also in intellectual production. The intellectual creations of individual nations become common property. National one-sidedness and narrow-mindedness become more and more impossible, and from the numerous national and local literatures, there arises a world literature.

The bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draws all, even the most barbarian, nations into civilisation. The cheap prices of commodities are the heavy artillery with which it batters down all Chinese walls, with which it forces the barbarians’ intensely obstinate hatred of foreigners to capitulate. It compels all nations, on pain of extinction, to adopt the bourgeois mode of production; it compels them to introduce what it calls civilisation into their midst, i.e., to become bourgeois themselves. In one word, it creates a world after its own image.

The bourgeoisie has subjected the country to the rule of the towns. It has created enormous cities, has greatly increased the urban population as compared with the rural, and has thus rescued a considerable part of the population from the idiocy of rural life. Just as it has made the country dependent on the towns, so it has made barbarian and semi-barbarian countries dependent on the civilised ones, nations of peasants on nations of bourgeois, the East on the West.

The bourgeoisie keeps more and more doing away with the scattered state of the population, of the means of production, and of property. It has agglomerated population, centralised the means of production, and has concentrated property in a few hands. The necessary consequence of this was political centralisation. Independent, or but loosely connected provinces, with separate interests, laws, governments, and systems of taxation, became lumped together into one nation, with one government, one code of laws, one national class-interest, one frontier, and one customs-tariff.

The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together. Subjection of Nature’s forces to man, machinery, application of chemistry to industry and agriculture, steam-navigation, railways, electric telegraphs, clearing of whole continents for cultivation, canalisation of rivers, whole populations conjured out of the ground — what earlier century had even a presentiment that such productive forces slumbered in the lap of social labour?

We see then: the means of production and of exchange, on whose foundation the bourgeoisie built itself up, were generated in feudal society. At a certain stage in the development of these means of production and of exchange, the conditions under which feudal society produced and exchanged, the feudal organisation of agriculture and manufacturing industry, in one word, the feudal relations of property became no longer compatible with the already developed productive forces; they became so many fetters. They had to be burst asunder; they were burst asunder.

Into their place stepped free competition, accompanied by a social and political constitution adapted in it, and the economic and political sway of the bourgeois class.

A similar movement is going on before our own eyes. Modern bourgeois society, with its relations of production, of exchange and of property, a society that has conjured up such gigantic means of production and of exchange, is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells. For many a decade past the history of industry and commerce is but the history of the revolt of modern productive forces against modern conditions of production, against the property relations that are the conditions for the existence of the bourgeois and of its rule. It is enough to mention the commercial crises that by their periodical return put the existence of the entire bourgeois society on its trial, each time more threateningly. In these crises, a great part not only of the existing products, but also of the previously created productive forces, are periodically destroyed. In these crises, there breaks out an epidemic that, in all earlier epochs, would have seemed an absurdity — the epidemic of over-production. Society suddenly finds itself put back into a state of momentary barbarism; it appears as if a famine, a universal war of devastation, had cut off the supply of every means of subsistence; industry and commerce seem to be destroyed; and why? Because there is too much civilisation, too much means of subsistence, too much industry, too much commerce. The productive forces at the disposal of society no longer tend to further the development of the conditions of bourgeois property; on the contrary, they have become too powerful for these conditions, by which they are fettered, and so soon as they overcome these fetters, they bring disorder into the whole of bourgeois society, endanger the existence of bourgeois property. The conditions of bourgeois society are too narrow to comprise the wealth created by them. And how does the bourgeoisie get over these crises? On the one hand by enforced destruction of a mass of productive forces; on the other, by the conquest of new markets, and by the more thorough exploitation of the old ones. That is to say, by paving the way for more extensive and more destructive crises, and by diminishing the means whereby crises are prevented.

The weapons with which the bourgeoisie felled feudalism to the ground are now turned against the bourgeoisie itself.

But not only has the bourgeoisie forged the weapons that bring death to itself; it has also called into existence the men who are to wield those weapons — the modern working class — the proletarians.

In proportion as the bourgeoisie, i.e., capital, is developed, in the same proportion is the proletariat, the modern working class, developed — a class of labourers, who live only so long as they find work, and who find work only so long as their labour increases capital. These labourers, who must sell themselves piecemeal, are a commodity, like every other article of commerce, and are consequently exposed to all the vicissitudes of competition, to all the fluctuations of the market.

Owing to the extensive use of machinery, and to the division of labour, the work of the proletarians has lost all individual character, and, consequently, all charm for the workman. He becomes an appendage of the machine, and it is only the most simple, most monotonous, and most easily acquired knack, that is required of him. Hence, the cost of production of a workman is restricted, almost entirely, to the means of subsistence that he requires for maintenance, and for the propagation of his race. But the price of a commodity, and therefore also of labour, is equal to its cost of production. In proportion, therefore, as the repulsiveness of the work increases, the wage decreases. Nay more, in proportion as the use of machinery and division of labour increases, in the same proportion the burden of toil also increases, whether by prolongation of the working hours, by the increase of the work exacted in a given time or by increased speed of machinery, etc.

Modern Industry has converted the little workshop of the patriarchal master into the great factory of the industrial capitalist. Masses of labourers, crowded into the factory, are organised like soldiers. As privates of the industrial army they are placed under the command of a perfect hierarchy of officers and sergeants. Not only are they slaves of the bourgeois class, and of the bourgeois State; they are daily and hourly enslaved by the machine, by the overlooker, and, above all, by the individual bourgeois manufacturer himself. The more openly this despotism proclaims gain to be its end and aim, the more petty, the more hateful and the more embittering it is.

The less the skill and exertion of strength implied in manual labour, in other words, the more modern industry becomes developed, the more is the labour of men superseded by that of women. Differences of age and sex have no longer any distinctive social validity for the working class. All are instruments of labour, more or less expensive to use, according to their age and sex.

No sooner is the exploitation of the labourer by the manufacturer, so far, at an end, that he receives his wages in cash, than he is set upon by the other portions of the bourgeoisie, the landlord, the shopkeeper, the pawnbroker, etc.

The lower strata of the middle class — the small tradespeople, shopkeepers, and retired tradesmen generally, the handicraftsmen and peasants — all these sink gradually into the proletariat, partly because their diminutive capital does not suffice for the scale on which Modern Industry is carried on, and is swamped in the competition with the large capitalists, partly because their specialised skill is rendered worthless by new methods of production. Thus the proletariat is recruited from all classes of the population.

The proletariat goes through various stages of development. With its birth begins its struggle with the bourgeoisie. At first the contest is carried on by individual labourers, then by the workpeople of a factory, then by the operative of one trade, in one locality, against the individual bourgeois who directly exploits them. They direct their attacks not against the bourgeois conditions of production, but against the instruments of production themselves; they destroy imported wares that compete with their labour, they smash to pieces machinery, they set factories ablaze, they seek to restore by force the vanished status of the workman of the Middle Ages.

At this stage, the labourers still form an incoherent mass scattered over the whole country, and broken up by their mutual competition. If anywhere they unite to form more compact bodies, this is not yet the consequence of their own active union, but of the union of the bourgeoisie, which class, in order to attain its own political ends, is compelled to set the whole proletariat in motion, and is moreover yet, for a time, able to do so. At this stage, therefore, the proletarians do not fight their enemies, but the enemies of their enemies, the remnants of absolute monarchy, the landowners, the non-industrial bourgeois, the petty bourgeois. Thus, the whole historical movement is concentrated in the hands of the bourgeoisie; every victory so obtained is a victory for the bourgeoisie.

But with the development of industry, the proletariat not only increases in number; it becomes concentrated in greater masses, its strength grows, and it feels that strength more. The various interests and conditions of life within the ranks of the proletariat are more and more equalised, in proportion as machinery obliterates all distinctions of labour, and nearly everywhere reduces wages to the same low level. The growing competition among the bourgeois, and the resulting commercial crises, make the wages of the workers ever more fluctuating. The increasing improvement of machinery, ever more rapidly developing, makes their livelihood more and more precarious; the collisions between individual workmen and individual bourgeois take more and more the character of collisions between two classes. Thereupon, the workers begin to form combinations (Trades’ Unions) against the bourgeois; they club together in order to keep up the rate of wages; they found permanent associations in order to make provision beforehand for these occasional revolts. Here and there, the contest breaks out into riots.

Now and then the workers are victorious, but only for a time. The real fruit of their battles lies, not in the immediate result, but in the ever expanding union of the workers. This union is helped on by the improved means of communication that are created by modern industry, and that place the workers of different localities in contact with one another. It was just this contact that was needed to centralise the numerous local struggles, all of the same character, into one national struggle between classes. But every class struggle is a political struggle. And that union, to attain which the burghers of the Middle Ages, with their miserable highways, required centuries, the modern proletarian, thanks to railways, achieve in a few years.

This organisation of the proletarians into a class, and, consequently into a political party, is continually being upset again by the competition between the workers themselves. But it ever rises up again, stronger, firmer, mightier. It compels legislative recognition of particular interests of the workers, by taking advantage of the divisions among the bourgeoisie itself. Thus, the ten-hours’ bill in England was carried.

Altogether collisions between the classes of the old society further, in many ways, the course of development of the proletariat. The bourgeoisie finds itself involved in a constant battle. At first with the aristocracy; later on, with those portions of the bourgeoisie itself, whose interests have become antagonistic to the progress of industry; at all time with the bourgeoisie of foreign countries. In all these battles, it sees itself compelled to appeal to the proletariat, to ask for help, and thus, to drag it into the political arena. The bourgeoisie itself, therefore, supplies the proletariat with its own elements of political and general education, in other words, it furnishes the proletariat with weapons for fighting the bourgeoisie.

Further, as we have already seen, entire sections of the ruling class are, by the advance of industry, precipitated into the proletariat, or are at least threatened in their conditions of existence. These also supply the proletariat with fresh elements of enlightenment and progress.

Finally, in times when the class struggle nears the decisive hour, the progress of dissolution going on within the ruling class, in fact within the whole range of old society, assumes such a violent, glaring character, that a small section of the ruling class cuts itself adrift, and joins the revolutionary class, the class that holds the future in its hands. Just as, therefore, at an earlier period, a section of the nobility went over to the bourgeoisie, so now a portion of the bourgeoisie goes over to the proletariat, and in particular, a portion of the bourgeois ideologists, who have raised themselves to the level of comprehending theoretically the historical movement as a whole.

Of all the classes that stand face to face with the bourgeoisie today, the proletariat alone is a really revolutionary class. The other classes decay and finally disappear in the face of Modern Industry; the proletariat is its special and essential product.

The lower middle class, the small manufacturer, the shopkeeper, the artisan, the peasant, all these fight against the bourgeoisie, to save from extinction their existence as fractions of the middle class. They are therefore not revolutionary, but conservative. Nay more, they are reactionary, for they try to roll back the wheel of history. If by chance, they are revolutionary, they are only so in view of their impending transfer into the proletariat; they thus defend not their present, but their future interests, they desert their own standpoint to place themselves at that of the proletariat.

The “dangerous class”, [lumpenproletariat] the social scum, that passively rotting mass thrown off by the lowest layers of the old society, may, here and there, be swept into the movement by a proletarian revolution; its conditions of life, however, prepare it far more for the part of a bribed tool of reactionary intrigue.

In the condition of the proletariat, those of old society at large are already virtually swamped. The proletarian is without property; his relation to his wife and children has no longer anything in common with the bourgeois family relations; modern industry labour, modern subjection to capital, the same in England as in France, in America as in Germany, has stripped him of every trace of national character. Law, morality, religion, are to him so many bourgeois prejudices, behind which lurk in ambush just as many bourgeois interests.

All the preceding classes that got the upper hand sought to fortify their already acquired status by subjecting society at large to their conditions of appropriation. The proletarians cannot become masters of the productive forces of society, except by abolishing their own previous mode of appropriation, and thereby also every other previous mode of appropriation. They have nothing of their own to secure and to fortify; their mission is to destroy all previous securities for, and insurances of, individual property.

All previous historical movements were movements of minorities, or in the interest of minorities. The proletarian movement is the self-conscious, independent movement of the immense majority, in the interest of the immense majority. The proletariat, the lowest stratum of our present society, cannot stir, cannot raise itself up, without the whole superincumbent strata of official society being sprung into the air.

Though not in substance, yet in form, the struggle of the proletariat with the bourgeoisie is at first a national struggle. The proletariat of each country must, of course, first of all settle matters with its own bourgeoisie.


In depicting the most general phases of the development of the proletariat, we traced the more or less veiled civil war, raging within existing society, up to the point where that war breaks out into open revolution, and where the violent overthrow of the bourgeoisie lays the foundation for the sway of the proletariat.


Hitherto, every form of society has been based, as we have already seen, on the antagonism of oppressing and oppressed classes. But in order to oppress a class, certain conditions must be assured to it under which it can, at least, continue its slavish existence. The serf, in the period of serfdom, raised himself to membership in the commune, just as the petty bourgeois, under the yoke of the feudal absolutism, managed to develop into a bourgeois. The modern labourer, on the contrary, instead of rising with the process of industry, sinks deeper and deeper below the conditions of existence of his own class. He becomes a pauper, and pauperism develops more rapidly than population and wealth. And here it becomes evident, that the bourgeoisie is unfit any longer to be the ruling class in society, and to impose its conditions of existence upon society as an over-riding law. It is unfit to rule because it is incompetent to assure an existence to its slave within his slavery, because it cannot help letting him sink into such a state, that it has to feed him, instead of being fed by him. Society can no longer live under this bourgeoisie, in other words, its existence is no longer compatible with society.

The essential conditions for the existence and for the sway of the bourgeois class is the formation and augmentation of capital; the condition for capital is wage-labour. Wage-labour rests exclusively on competition between the labourers. The advance of industry, whose involuntary promoter is the bourgeoisie, replaces the isolation of the labourers, due to competition, by the revolutionary combination, due to association. The development of Modern Industry, therefore, cuts from under its feet the very foundation on which the bourgeoisie produces and appropriates products. What the bourgeoisie therefore produces, above all, are its own grave-diggers. Its fall and the victory of the proletariat are equally inevitable.


Chapter 2: Proletarians and Communists


1. By bourgeoisie is meant the class of modern capitalists, owners of the means of social production and employers of wage labour.

By proletariat, the class of modern wage labourers who, having no means of production of their own, are reduced to selling their labour power in order to live. [Engels, 1888 English edition]

2. That is, all written history. In 1847, the pre-history of society, the social organisation existing previous to recorded history, all but unknown. Since then, August von Haxthausen (1792-1866) discovered common ownership of land in Russia, Georg Ludwig von Maurer proved it to be the social foundation from which all Teutonic races started in history, and, by and by, village communities were found to be, or to have been, the primitive form of society everywhere from India to Ireland. The inner organisation of this primitive communistic society was laid bare, in its typical form, by Lewis Henry Morgan’s (1818-1861) crowning discovery of the true nature of the gens and its relation to the tribe. With the dissolution of the primeval communities, society begins to be differentiated into separate and finally antagonistic classes. I have attempted to retrace this dissolution in The Origin of the Family, Private Property, and the State, second edition, Stuttgart, 1886. [Engels, 1888 English Edition and 1890 German Edition (with the last sentence omitted)]

3. Guild-master, that is, a full member of a guild, a master within, not a head of a guild. [Engels, 1888 English Edition]

4. This was the name given their urban communities by the townsmen of Italy and France, after they had purchased or conquered their initial rights of self-government from their feudal lords. [Engels, 1890 German edition]

Commune” was the name taken in France by the nascent towns even before they had conquered from their feudal lords and masters local self-government and political rights as the “Third Estate”. Generally speaking, for the economical development of the bourgeoisie, England is here taken as the typical country, for its political development, France. [Engels, 1888 English Edition]


February 7, 2008 at 10:05 am | Posted in Economics, Financial, Globalization, History, Military, Science & Technology, Third World, Zionism | Leave a comment









Re-Thinking the World

American policy will ultimately move from bloodshed and subjugation fantasies (neocon Zionism) to “developmentalism.” (Third World development)

Developmentalism will involve intensive Western coordination and negotiations with Arabs, Muslims, OPEC and will move Islamic finance and Islamic banking from the periphery of world development policy and practice more towards the center. The BIS (Bank for International Settlements) Basel, for example, is now intensively exploring both Islamic banking and finance and this is a “straw in the wind” that tells you about “tomorrow.”

The IMF quarterly publication, Finance & Development, December 2005, features an article called “Islamic Finance Gears Up,” where we find:

“Islamic finance is developing at a remarkable pace. Since its inception three decades ago, the number of Islamic financial institutions worldwide has risen from one in 1975 to over 300 today in more than 75 countries…Total assets are estimated to exceed $250 billion, and are growing at an estimated 15 percent a year…”

Zionism and Al-qaida are two radically violent “anti-systemic’ movements which want the West to “delink” from the Third World (Zionism) or the Third World to delink from the West (Al-qaida). These are two sides of the same coin trying to supplant globalization with bloodshed.

This delinking thrust will ultimately be replaced by West/Third World re-linking.

Blocking all such West/Third World “re-linking” is the Palestine problem, which is the microcosm of the world’s current “traffic jam.” Looked at in a global context, Zionism is at the center of this “traffic blockage” since the Israelization of Washington and hence world policy is at the heart of the paralysis.


The purpose of CFG is to rethink the world and hence to rethink “tomorrow.”

CFG sees the world as being in a particular historical crisis we will define as follows:

A historical crisis exists when:

1. the future is suddenly behind you.

2. the past is suddenly ahead of you.

The future was to be high-tech “blasting” the West away from the Third World towards “infinite stock prices” and infinite distance from the non-Western world. (ie. cellphones, etc means the West “flies away” from the rest of the world.)

The past—now ahead of you—is the opposite of this: high-tech will be married to “developmentalism,” whereby the West “flies into” the rest of the world and the world hybridizes. (cellphones, etc actually means more global integration, not less)

Bush-Cheney belligerence is a militaristic tantrum caught between points 1. & 2. above.

“Tomorrow” will ultimately see the rise of a post-Zionist “developmental world,” brought about by American violence, subterfuge, and deception, which are meant to obfuscate what is happening.

The main catalyst and accelerant for this process will involve “taking the ball away” from the Zionist pressure groups by introducing this CFG-type line of analysis in Washington, London and finally worldwide, ie creating “analytical and conceptual leadership.”


CFG Mission:

To analyze globalization, the Middle East & the world-system.


The CFG approach to macrohistorical forecasting is explained in more detail at the main website:


Click on: CFG Tomorrow on left side of screen.


February 7, 2008 at 4:24 am | Posted in Books, Financial, Globalization, History, Research, Science & Technology, Third World | Leave a comment











‘World Economy/Big Prediction’

(Kappa Publishing

Kobunsha, Tokyo, from 1984)

“As in their previous work, ‘World Economy/Big Prediction’ (Kappa Publishing, Tokyo, from 1984), the authors base their long-term view on the assumption that modernization of the developing world will be the engine of world economic growth in the future.”

The CFG perspective is that global imbalances are themselves caused by deeper “plate tectonics” which will lead to “seismic shifts.” A reviewer of some of our Japanese-language CFG books from the 1980’s says of our analyses of these tectonics and seismic shifts:

“As in their previous work, ‘World Economy/Big Prediction’ (Kappa Publishing, Tokyo, from 1984), the authors base their long-term view on the assumption that modernization of the developing world will be the engine of world economic growth in the future.”

(for the full review and our forecasts from as far back as the 1980’s, see:

“Even to a reader who doesn’t agree with this prediction, this book should be stimulating. For example, it sees a connection between the invasion of Lebanon by the Israeli army in the spring of 1982 and the default by Mexico in the summer of the same year. A “hypothesis” like this is well worth our notice. It is this kind of strategic thinking that views and understands international situations as an organic whole, without being fooled by the flood of information from the mass media, that the Japanese need today, and with which the book wanted to provide readers.”

Review from Asahi Shinbun in 5/86

Go to:

Click on:

About CFG link on left side of screen.

‘World Economy/Big Prediction’

Kappa Publishing, Tokyo, from 1984

Fuga Shobo, Publisher, 1994

‘World Economy/Big Prediction’


‘World Economy/Big Prediction’
Kappa Publishing, Tokyo, from 1984
Fuga Shobo, Publisher, 1994


February 7, 2008 at 1:53 am | Posted in Economics, Financial, Research, USA | Leave a comment









National Association of Home


February 6, 2008

By David F. Seiders

NAHB Chief Economist

Downbeat Economic Data Stoke Recession Worries

Growth of U.S. economic output (real Gross Domestic Product) slowed to a meager 0.6% annual rate in the final quarter of 2007, according to the “advance” estimate released by the Commerce Department on Jan. 30. The weakest parts of the economy in the fourth quarter were sectors affected directly or indirectly by the housing downswing. [more]

Housing Data Still Are Downbeat

Financial Market Stress Refuses to Go Away

Lending Standards at Banks Still Are Tightening

The Federal Reserve Pulls Out the Stops

An Economic Stimulus Package Is on the Way

There Are a Few Encouraging Leading Indicators of Housing Demand

Housing and the Economy Will Improve Later This Year

Want to Know the Housing Forecast for the Top 100 Metros?

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National Association of Home Builders

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Downbeat Economic Data Stoke Recession Worries

Growth of U.S. economic output (real Gross Domestic Product) slowed to a meager 0.6% annual rate in the final quarter of 2007, according to the “advance” estimate released by the Commerce Department on Jan. 30. The weakest parts of the economy in the fourth quarter were sectors affected directly or indirectly by the housing downswing.

Residential fixed investment (RFI) fell at an annual rate of 23.9%, the steepest decline yet in the two-year downslide, and growth of personal consumption expenditures (PCE) slowed to a 2% annual pace — presumably weighed down by loss of housing equity and by concerns about the course of house prices in some areas.

The labor market also shows serious recent signs of weakness, largely because of job losses in residential construction and related areas (including housing finance). Total payroll employment actually fell slightly — by 17,000 — in January as private payrolls were essentially flat while government payrolls declined. Furthermore, average weekly hours worked in the private sector contracted a bit, and aggregate hours worked in the nonfarm business sector contracted significantly — with negative implications for GDP growth in the first quarter.

Another shoe dropped on Feb. 5 when the Institute for Supply Management (ISM) released its index of activity in the nonmanufacturing sector for January — covering construction and private services (including finance). The index plummeted to a recession-like level (compared with 2001) and, although an upward revision is possible, fundamental weakness at the beginning of 2008 undoubtedly is being conveyed by the ISM measure.

The recent weakness of GDP, the labor market and the nonmanufacturing sector, along with systematic decline in the Conference Board’s index of leading economic indicators since last fall, have stoked recession worries among financial market participants and policymakers in Washington.

The probability of near-term recession certainly is elevated — close to 50% — and the actual outcome will depend on the true condition of various economic fundamentals, the performance of financial markets and the degree of near-term support provided by monetary and fiscal policy.

Housing Data Still Are Downbeat

Housing data received in recent weeks, pertaining primarily to conditions in late-2007, have yet to signal imminent stabilization of the housing market.

Sales of existing homes fell by 2.2% in December, reflecting declines in both single-family and condo markets and median sales prices were down by 6.0% (6.5% for single-family) on a year-over-year basis.

In the new-home market, sales were down by 4.7% in December and the median sales price was down by 10.4% year-over-year.

Inventory levels declined modestly in December for both new and existing homes, although inventory/sales ratios showed little change due to the fall in sales volume. The Commerce Department’s quarterly measure of vacant year-round housing units for-sale (whether new or existing) still was hanging around a record level in the fourth quarter of last year as was the measure of vacant units for-rent.

These inventory data, in conjunction with the weak pace of home sales, point toward further weakness in housing starts in coming months.

The downtrend in housing starts through the end of last year naturally translated into further declines in measures of construction put-in-place. Single-family construction (in nominal terms) fell by 5.4% in December and was down by 31% on a year-over-year basis. Multifamily construction also has been falling systematically, contracting by 1.9% in December and 20.6% on a year-over-year basis.

Spending on improvements to residential structures (additions and alterations) was essentially flat during 2007 and accounted for a lofty 37% of total residential construction at the end of the year.

Financial Market Stress Refuses to Go Away

The financial market turmoil that erupted last summer still is a major problem for the U.S. economy.

The severe liquidity problems in short-term funding markets (including interbank markets here and abroad) have eased to some degree since late 2007, due partly to the Fed’s new auctions of discount-window credit ― the Term Auction Facility.

The commercial paper market has improved in the process, particularly the beleagued asset-backed market, although this market still is not functioning normally.

Despite some easing of short-term liquidity issues, the stock market is being battered and the markets for longer-term credit remain under considerable stress. Quality spreads in corporate bond and mortgage markets still are quite elevated, and some components are essentially shut down (including the subprime and Alt-A mortgage markets).

In this regard, recent Federal Open Market Committee (FOMC) statements have stressed that “credit has tightened further for some businesses and households,” despite the Fed’s aggressive easing campaign since last fall.

It’s clear that investors here and abroad have been traumatized by the realization of risks embedded in many of the securitized vehicles they hold, particularly those with U.S. subprime mortgage exposure. They have turned extremely risk-averse — forcing down risk-free (government) interest rates but widening out quality spreads dramatically in private markets and shutting some down entirely.

It will take considerable time for Wall Street to develop (and rate) transparent securitized investments that investors will accept. In the meantime, the banking system will have to take up a good bit of the slack in the credit creation process.

Lending Standards at Banks Still Are Tightening

Mortgage interest rates are quite low at this time, at least on prime conventional conforming loans and FHA/VA mortgages. However, the Federal Reserve reports that bank lending standards are tightening in all major components of the conventional home mortgage market — prime, subprime and “nontraditional” including interest-only, payment-option, and Alt-A adjustable-rate loans.

The Fed’s January Senior Loan Officer Opinion Survey on Bank Lending Practices shows that standards have been tightening substantially for nearly a year on subprime and “nontraditional” mortgages, and standards started to tighten last fall on prime mortgages as well.

Indeed, a net 41% of banks said they had tightened standards for prime loans in the quarterly report released last October, and that proportion was up to 53% in the January survey.

The Fed’s survey also documents major declines in demand for home mortgages at commercial banks, particularly for subprime and “nontraditional” loans. A net 60% of banks also reported considerable weakening in demand for prime mortgage loans in the January survey, following a large decline in the previous quarterly report last October.

The Federal Reserve Pulls Out the Stops

On Jan. 22, the Federal Reserve announced 75 basis point cuts to both the federal funds rate and the discount rate. These definitely were “emergency” cuts, enacted just eight days prior to the next regularly scheduled meeting of the FOMC meeting. Indeed, this was the first intermeeting cut since September 2001 (in the wake of 9/11) and the single largest rate cut in 24 years.

The Jan. 22 FOMC statement cited weakening of the economic outlook (including deepening of the housing contraction) and deterioration of financial market conditions (other than short-term funding markets). The statement noted that appreciable downside risks to growth remained — even after the emergency rate cut. The statement also moved earlier inflation concerns well off to the sidelines.

The Fed cut short-term rates by an additional 50 basis points at the regularly scheduled FOMC meeting on Jan. 30, bringing the cumulative reduction in the funds rate so far this year to a whopping 125 basis points. The FOMC statement once again cited considerable stress in financial markets, deepening of the housing contraction and softening in labor markets.

The statement also reiterated concern about remaining downside risks to growth and pushed inflation concerns further into the background — opening the door to further monetary ease down the line.

We’re currently assuming an additional half-point cut at the March 18 FOMC meeting, followed by another quarter-point cut on April 30. These moves will push the nominal funds rate down to 2.25% and the real (inflation adjusted) funds rate below 1%.

The Fed could be even more aggressive if economic and financial market conditions demand even more monetary stimulus in the near term.

An Economic Stimulus Package Is on the Way

The White House and Congress are firmly committed to a short-term economic stimulus package that will help the weakened economy avoid recession in 2008, and Fed Chairman Ben Bernanke has endorsed the effort as a welcome complement to simulative monetary policy.


The House and the Senate still must reconcile some differences in their respective approaches, but this process should go quickly and the President apparently will sign legislation that comes out of conference — hopefully by mid-February.

The final bill apparently will contain about $150 billion in foregone tax revenue and federal outlays, dominated by rebates of personal income taxes and incentives for business investment in 2008. Businesses may also be permitted to carry-back net operating losses for a longer period than allowed under current tax law.


There may also be some help for the home mortgage market, in the form of increases in loan-size limits for FHA and the secondary market GSEs — Fannie Mae and Freddie Mac — and possibly also enhancements to the tax-exempt mortgage revenue bond program.

The impending economic stimulus package definitely will help strengthen the economy, primarily in the second half of this year, and the prospective enhancements to the housing finance system should benefit home buying and refinancing activity in reasonably short order.

Timely passage of such a stimulus package is a major factor behind NAHB’s housing and economic outlook for 2008. [

There Are a Few Encouraging Leading Indicators of Housing Demand

There are some tentative signs that the dramatic downswing in home sales since late-2005 may soon be approaching a bottom.

In this regard, measures of housing affordability have moved up significantly from their lows last summer — due to lower mortgage rates, lower house prices and higher levels of personal income. Furthermore, NAHB’s most recent survey of single-family builders in early February shows some pickup in builder assessments of traffic of prospective buyers, a critical first step in the eventual recovery process.

Buyer traffic doesn’t ensure home sales, of course, but surveys of consumer sentiment conducted through January by the University of Michigan suggest modest improvement in consumer attitudes toward home buying since the lows of late-2007.

Lower house prices are the key reason cited by consumers that now say buying conditions are “good.” The question is; when will conditions be good enough?

Housing and the Economy Will Improve Later This Year

NAHB’s forecast shows firming of overall economic activity and the beginnings of housing recovery during the second half of this year — with help from the Federal Reserve, Congress and the Administration.

Our forecast also assumes that oil prices will recede over the course of the year and that the economy will not be shocked by unforeseen events, such as a global stock market crash.

Our baseline (most probable) economic forecast shows GDP growth of less than 1% in the first half of this year, and a mild recession certainly is possible.

Our projected GDP pattern generates only meager growth of payroll employment and involves further increases in the unemployment rate during the next few quarters. But we expect GDP growth to rise to about 2.8% by late in the year, strengthening the job market and paving the way for solid economic performance in 2009.

We do not expect core inflation to be a serious problem at any time during the 2008-2009 period.

Our housing forecast shows substantial reductions in home sales, housing starts and residential fixed investment for 2008 as a whole, but we’re looking for stabilization of all three measures (in that order) during the year.

2009 stacks up as a solid recovery year, and there will be plenty of room for growth of the housing sector in future years as well.

National Association of Home Builders

February 6, 2008

By David F. Seiders

NAHB Chief Economist

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