From: Michael Eldred (artefact@T-ONLINE.DE)
Date: Wed Apr 30 2003 - 16:33:59 EDT
Cologne 30-Apr-2003 rakeshb@STANFORD.EDU schrieb Wed, 30 Apr 2003 07:47:47 -0700: > 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. Rakesh, What is an empire and what is imperialism? My conjecture is that the US are not getting a free ride, but perhaps are offering the best ride in town under the circumstances (see below). The foreigners exchange their goods and services for dollar assets with the prospect of gain. > 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. Certainly the willingness of much of the world to hold US assets does contribute to a stronger dollar. Why are they willing? (see below) > 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) . Aren't there limits to central bank manipulation, viz. by setting interest rates. The foreign exchange markets are driven by self-interest, which is the life-blood of capitalism. As far as Japan is concerned, my inkling is that Japan has ceased to be a capitalist economy. By that I mean that the principle of capitalism, viz. money capital advanced to make more money, has been suspended in Japan through the collectivization of losses through the banking system, sanctioned and abetted by the Japanese government, whose main party, the LDP, stays in power by keeping its clientele happy. This clientele consists in large part of small and medium-sized firms (as well as very big ones) which are basically insolvent, but are kept afloat by the banks, which are in turn kept in business in the last resort by the BoJ. If the Japanese economy as a whole is making a loss and only living off its immense wealth accumulated in previous decades, then investing in US treasuries is a great investment by comparison. And the US economy continues to make real capitalist profits on the rough-and-tumble of the markets and to adapt to the exigencies of profit-making. The Sozialstaat in Germany has a somewhat similar function, although not quite so dramatic as in Japan. Basically loss-making capitalist companies are prevented from going bust by the system of redistribution of social wealth organized by the Sozialstaat. An example of this would be the circa one million Arbeitsbeschaffungsmassnahmen (ABM work-creating-measures) jobs which are subsidized by the state to keep people off the dole. Furthermore, the population at large is involved in the game of pilfering the Sozialstaat by knowing all the tricks, legal, semi-legal and illegal, to get money and material benefits from the social welfare apparatus. Self-interest is thus played out not so much on the market, but through the detour of the welfare state, including the trade union system of cozy co-determination. Thus, the German economy too is not a very profitable affair. It is crippled by huge social welfare benefit levies which are then redistributed through non-transparent bureaucratic rigmarole, shifting money obscurely from one pot to another. E.g. the old age pension system has long since ceased to pay for itself, but continues unchanged because of the political fall-out which would ensue from thoroghly overhauling it. Resistance to change runs under the unbeatable, vote-catching slogan of Social Justice. In Germany, one is thus on the road to ruin with a consciousness of moral superiority over raw capitalism. > 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! What means of coercion do you have in mind? > 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! As far as I am concerned, the most basic relation of capitalism is the exchange relation based on self-interest. This includes, of course, the wage-labour relation. As Nietzsche saw, self-interest is the most basic of human motivating forces. There is both freedom and coercion to make money and earn a living under capitalism. That's the beauty of it. But where a huge social welfare state apparatus is built up over decades by siphoning off the gains made by money-making activities in the broadest sense, the state itself becomes a major polit-economic factor which thoroughly muddies the workings of the simple principle of capital, viz. M -- C -- M+dM. The cleansing crises (Reinigungskrisen) _essential_ to turbulent capitalism are prevented politically for the sake of 'social peace'. As you know, the Germans are world champions in peace. Greetings from Germany, Michael _-_-_-_-_-_-_- artefact text and translation _-_-_-_-_-_-_-_-_-_ _-_-_-_-_-_-_-_-_-_-_-_- made by art _-_-_-_-_-_-_-_-_-_-_-_-_-_ http://www.webcom.com/artefact/ _-_-_-_-artefact@webcom.com _-_ _-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_ Dr Michael Eldred -_-_- _-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_
This archive was generated by hypermail 2.1.5 : Fri May 02 2003 - 00:00:01 EDT