From: rakeshb@STANFORD.EDU
Date: Wed Apr 30 2003 - 10:47:47 EDT
Dear Michael, I'll just respond to a bit, and quickly. You write: 'I don't think I misquoted Arrighi's talk of "tribute". I quoted it to object to the ill-fitting language of imperialism. I admit I have no explanation for why "Asian central banks seem to be willing to make less of a return on their dollar assets". But, in any case, it does not depend on the exaction of any tribute. It happens through markets.' 1. Of course you can't mean that the US has never been an imperial power; perhaps the US does not today command an empire, but the US is probably getting a free ride from foreigners who are willing to exchange their goods and services for dollar assets they may never cash in. In fact, it seems to me that the willingness of much of the world to hold US assets does contribute to a stronger dollar which means that the US can feast on cheaper foreign goods and services at its free lunch. I agree with Hans Ehrbar that a strong dollar brings greater advantages than disadvantages to American capitalism. 2. I do think the US has the coercive power to prevent an uncontrolled cashing in of US dollar assets which would drive the value of the dollar preciptiously down (the US dean of global political economy Robert Gilpin relates the history of the cooperation which the US has received from the German and Japan central banks in propping up the dollar--he doesn't mention the help provided by the Persian Gulf states through the recycling of petrodollars but his student David E. Spiro in the Hidden Hand of American Hegemony has written a book on just that). It may well be that foreign central banks would have no interest in the dumping of dollar assets anyway: there seems to be no better place to park their money than short term US Treasuries (your point?), and they seem happy with the export opportunities a strong dollar creates for them (yet the strong dollar then obtains not only through the operation of the market but in part through central bank manipulation thereof) . But I don't see why in simple economic terms they shouldn't develop an interest in diversification and why they wouldn't want to take a bet on better yielding assets. It would also seem possible a foreign central bank could threaten a dumping of US assets if that country was locked in some very important important trade war with the US. But foreign central banks don't even seem to make such threats against the US. The basis of US power is worth considering, and does not seem to me to reduce to economics or the blind operation of markets alone. But then Marxists have historically not been so good at theorizing the place of coercion in bourgeois social life! Just a digression: I think the Marxist failure to take coercion seriously (and most Marxists take it less seriously than even a legal realist like Bob Hale) stems from their acceptance of the bourgeois myth that the most basic relation of capitalist production (that is, the free wage labor contact) is free from extra-economic coercion unlike that of its historical counterparts in which violence was the explicit means by which the performace of surplus labor was compelled. The other reason Marxists undertheorize coercion is that too many have backgrounds as economists and have thus been marred from having been immersed in the Walrasian vision of markets! Yours, Rakesh
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