RE: [OPE] David Harvey on stimulus failure[MESSAGE NOT SCANNED]

Gerry

Unless and until workers' savings are so dramatically decreased by
inflation
and the crisis that they are nominal, raising the demand to decrease
those
savings to a "comparatively modest sum of the order probably of
$10,000"
would be widely resisted by the significant segment of the working class

which has lifetime savings greatly over this amount.

Do they really?

In cash, or deposit accounts?

Remember I am only talking about debt, not about equities in the short
run.

Pension schemes based on equities would not be affected badly.

Of course in the long run socialism is impossible if we have to preserve
the indirect

Shareholdings of everyone.

That is why one needs to argue for pension schemes based on taxation.

Also one really has to have some hard data here, are the working classes
really net

Debtors or net creditors. I would guess the latter.

________________________________

From: ope-bounces@lists.csuchico.edu
[mailto:ope-bounces@lists.csuchico.edu] On Behalf Of GERALD LEVY
Sent: 13 February 2009 14:11
To: Outline on Political Economy mailing list
Subject: RE: [OPE] David Harvey on stimulus failure[MESSAGE NOT SCANNED]

Paul C:
 
 
Unless and until workers' savings are so dramatically decreased by
inflation
and the crisis that they are nominal, raising the demand to decrease
those
savings to a "comparatively modest sum of the order probably of
$10,000"
would be widely resisted by the significant segment of the working class

which has lifetime savings greatly over this amount. Indeed, I would go

so far as to suggest that this - if workers saw it as actually an
immanent
possibility - could push large segments of the class over to fighting
- in the streets, on the barricades if necessary - on the other side.
 
 
Let's suppose a government was considering do as you suggested.
Let's think through together what would happen and when. At the time
when
workers feel that it is just about to become law, what do they do with
all
of their savings over $10,000? Well, of course, they remove the savings
from
the banks and spend it ... ALL. This would cause hyper-inflation. This
would be a
great bonanza for sellers since they would know that there was
excessive
demand for the goods they sell (especially if they were selling luxury
goods), they could charge
almost any price they wanted. The revenues received from sales could
then be simply
invested abroad. This would be a great gain for capitalists and a loss
for workers.
(NB: If you say that a prohibitively high sales tax should be imposed to
prevent this, I think that
would simply create a black market.)

You could tell them:
 

> It would be necessary to introduce a German or Swedish style pension
scheme at the same time.

and that would find a lot of support among workers, but _not_ if it
_also_ meant taking away

their lifetime savings.

> Savings are eventually illusory -- they feed of the illusion that
consumption refrained from now

> can be called upon in the future.

Savings aren't _simply_ illusory. What is illusory is the belief that
real savings will

_necessarily_ increase: i.e. the illusion is that the market is without
risk and uncertainty.

Yet, it is the case also that workers know that under _ordinary_
circumstances, an

increase in savings can lead to future increases in consumption. If it
is an 'illusion',

then it is a necessary illusion for workers because, in many capitalist
social formations,

their long-term reproductive needs require a certain amount of savings.

In solidarity, Jerry

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Received on Fri Feb 13 10:48:50 2009