Re: [OPE] Two brief excerpts on the financial crisis

On 2010-05-26 01:19, Jurriaan wrote:
>
> > > Jayati Ghosh writes succinctly:
> > >
> > > ... there is no alternative to a major restructuring of the Greek
> debt,
> > > involving a loss taken by the international lenders who did not
> exercise
> > > due diligence in the act of lending in the first place. If it does
> not
> > > happen now, it will in any case have to happen at some time in the
> future,
> > > after creating a great deal of material distress in Greece. Why is
> such an
> > > obvious conclusion not even being talked about? A restructuring of
> the
> > > Greek debt would involve quite a large haircut for the German and
> French
> > > banks who lent extensively during the boom, and helped to create the
> > > imbalances that have made the Greek economy less competitive than
> that of
> > > Germany, for example. This cannot be allowed to happen, so the
> burden of
> > > adjustment is placed entirely on the Greek people, for several
> > > generations, in what will clearly be an unsustainable process.
> [...] The problem is that the
> > > power of finance - in politics, in media and in determining
> national and
> > > international economic policies - remains undiminished despite its
> recent
> > > excesses and failures. That is why the restructuring of public
> debts is
> > > not on the agenda; that is why talk of fiscal balancing so rarely
> even
> > > mentions taxes on capital, and much less on the same financial
> sectors
> > > that benefited from large publicly funded bailouts and are now
> holding to
> > > ransom the hands that have fed them.
> > >
> http://www.guardian.co.uk/commentisfree/2010/may/17/greece-debt-restructure
> >

I think Ghosh has been the economist that has put issue this most
clearly recently.

> As I have mentioned previously on OPE-L in reply to Paul Cockshott,
> effectively the financial sector has the economy "by the balls"
> insofar as
> it owns or controls the largest chunk of it. [...]
> And most leftists do not have much of a clue about finance,
> beyond rhetorics about the extraction of surplus value. A new
> generation has
> appeared which has very little experience of a serious political fight.
> Presumably therefore, if there is a political response, it will focus on
> "visible" targets such as particular politicians and businessmen, state
> institutions and on particular property. The ultimate weapon workers
> have is
> to go on strike, but the question is, whether a general strike can
> achieve
> anything, and how much support it can get.

I'd say we are broadly in agreement here. The Left forces need a clear
theory of rentier-dominated capitalism and a set of measures to deal
with the rentier interest. I think Dumenil and Levy have done some very
good work in this direction. Paul C and myself have tried to popularize
some of this too.

By contrast, despite all of Shaikh strengths as a researcher, in his
framework the balance of class forces -- and the rentier interest in
particular -- does not have any significant or explicitly theorized
impact in capitalism. At least this is what I could gather from his
presentation and discussion at the Historical Materialism conference
this year:

    http://www.hm2010nyc.org/audio-recordings/

But perhaps when he publishes this talk I will revise my opinion. The
same goes for Andrew Kliman's response in a different session. Finance
appears here more as an epiphenomenon, rather than the master in the
current configuration of the economy.

//Dave Z

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Received on Sat May 29 05:55:30 2010