Re: [OPE] Beijing People's Daily comments on American "blamegame"[MESSAGE NOT SCANNED]

I find the question

'How can capitalism solve this crisis then?'

rather odd.... surely the question is how can the working class stop this
mad system from turning into a new and deepening disaster for themselves?

Paul B.

----- Original Message -----
From: "Paul Cockshott" <wpc@dcs.gla.ac.uk>
To: "Outline on Political Economy mailing list" <ope@lists.csuchico.edu>
Sent: Saturday, January 31, 2009 2:45 PM
Subject: RE: [OPE] Beijing People's Daily comments on American
"blamegame"[MESSAGE NOT SCANNED]

The chinese neo-bourgeoise are side stepping here.
At the root cause of this crisis is the entry of chinese capitalism into the
imperialist stage of capital export.
The rate of exploitation in china is so high, that despite an investment
rate approaching 50% of gdp the
chinese economy does not provide a sufficient market to realise all the
surplus value produced there.
Thus a part of the surplus product has to be exported, and the chinese
bourgeoisie has to export
capital ( mainly loan capital ) to finance the purchases of these products.

Since at the same time the low wage rates in china have caused US
manufacturers to shift production
to china, it is not possible to export the capital to the US productively.
Instead it is exported as usurers
capital, financing unproductive consumption in the USA - either consumer
goods bought on credit or
the arms expenditure of the Pentagon.
Eventually the creditworthyness of the unproductive consumers met its
limits.

How can capitalism solve this crisis then?

If we assume capitalist production relations remain unchanged there are the
following changes
possible:

1.
A sharp rise in wages in china to reduce the rate of surplus value. Not
likely till the latent reserver army of migrant labour from the country is
exhausted ( say 10 to 15 years time at earliest).
2.
A big cut in the trade deficits of the US and UK, in response to credit
being no longer available from China. This could occur either by a massive
recession and fall in consumption, or by large scale devaluation, which is
already occuring for the Pound. The effect of either is to produce a big
fall in current real cosumption levels. But if this occurs, the Chinese
economy too will go in serious recession because of inability to realise
large portion of surplus value.
3.
The UK, Ireland, Iceland, the Baltic states are in a particularly difficult
situation in that devalutation can be used to releive the internal burden of
debt, but not their foreign currency debts. If things go to severely there
may be sovereign defaults, or general defaults by the private banking system
on overseas debt, In these situations the most anti-popular policies
possible are those of Iceland Ireland and the UK or nationalising the debts
of the failing banks, We should argue for the banks being allowed to fail,
and for debts owed to the banks also to be cancelled
4.
A shift in Chinese capital export from the North American and UK markets to
Africa leading to a rapid development of that continent as subcontractors
for China.

It seems to me that the effect of the USA being financially constrained will
have a big impact on the feasibility of funding US defence expenditure. The
USA may find itself in the same situation as the UK in the early 60s unable
to afford the costs of empire.

Paul Cockshott
Dept of Computing Science
University of Glasgow
+44 141 330 1629
www.dcs.gla.ac.uk/~wpc/reports/

________________________________

From: ope-bounces@lists.csuchico.edu on behalf of Jurriaan Bendien
Sent: Fri 1/30/2009 10:36 PM
To: OPE@lists.csuchico.edu
Subject: [OPE] Beijing People's Daily comments on American "blame
game"[MESSAGE NOT SCANNED]

If we compare the U.S. economy to a car, emerging markets have somehow
served as windshields amid the battering of the financial storm. Can we
blame the windshields for the failure of a car? Imbalances in global trade
and investment did have a role in the crisis but were not at the root of the
problem. Loose supervision that helped pump excessive dollars into
circulation was the root cause. When a morally upright person is mired in
difficulties, he or she will engage in introspection rather than shift
responsibility. China has moved to cope with the problem with a stream of
measures and so have other large world economies. It is not time to play a
blame game. Regulators in the United States might not want to miss the
chance that they failed to seize before the crisis, when property companies,
investment banks and insurance companies juggled various financial products
and Wall Street "elites" snatched tens of millions out of the bubble.
http://english.people.com.cn/90001/90778/90858/90864/6569743.html

sometimes you're the windshield
sometimes you're the bug
sometimes it all comes together baby
sometimes you're a fool in love
sometimes you're the louisville slugger
sometimes you're the ball
sometimes it all comes together baby
sometimes you're going to lose it all

- Dire Straits, "The Bug"

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Received on Sat Jan 31 11:48:03 2009