Jerry,
My experience is that leftwing people typically have very little understanding of the mathematics of debt, except that more mature people understand mortgages, hire-purchase and that sort of thing. I do not pretend to know everything about it myself, but by studying national accounts and socio-economic statistics I came to the view that you always have to put these things in correct proportion. Often, the data to do so is readily available, if you ask the appropriate questions which lead you to it. Just even by studying budget data you can learn a great deal.
Where I agree completely with Eric Touissaint is that the quantities have quite a different meaning for a rich person or a poor person. For a poor person, money is a scarce resource, and if you don't have enough of the stuff, this has very direct and important consequences for your everyday life. Rich people have so much money, they don't know what to do with it, or they philosophise about it, although they obviously do do something with it. So Touissaint is quite correct to point to the human consequences of debt problems for ordinary folks, which can be horrific.
But anyway if a student has an alarmist emotional story about "trillions of dollars of debt" I am inclined to be skeptical, because first of all I want to know what the quantities referred to mean, and what the real effects are. Of course in capitalism, people often want to reap where they did not sow, and live like there is no tomorrow, and credit makes this possible. It makes it possible to shift the burdens of debt around very flexibly to the advantage of those in a strong bargaining position and to the disadvantage of those in a weak bargaining position, displacing the consequences of current activity in space and time, so that you can live now and pay later. And it enables you to privatise the benefits and socialize the costs.
But make no mistake, the ruling classes of today are the richest there have ever been in history, and if their system is threatened, they're going to pull out all the stops to save their system, whatever money it takes. If necessary, they will reorganise the whole accounting system if it says that there is a deficit, so that the account is in credit, changing contractual and property arrangements. The main problems have little to do with lack of funds - there is a lot of "slack" in modern capitalism, i.e. a lot of idle funds, hoards etc. ("surplus capital"). They will say that they have no money, but they have loads of it. The real problems have more to do with political-ideological problems, i.e. whether you can get some sort of unity among the propertied classes for a recovery strategy that safeguards their wealth. That's also why they're interested in Mr Obama, because he has proved that he can unite people - he isn't particularly radical, but sufficiently sensible to be credible. The main problem with Mr Bush's archaeo-christianist fanaticism was that it disunited the elites, pitting them against each other, and that is the problem they now seek to overcome.
Jurriaan
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Received on Wed Nov 26 02:02:56 2008
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