[OPE-L:1270] Re: monetary inflows versus capital accumulation

From: Gerald Levy (glevy@pratt.edu)
Date: Fri Sep 17 1999 - 09:15:44 EDT

Re Rakesh's [OPE-l:1266]:

> The example (German cooperation with the US in late 60s-early 70s) is
> hardly trivial or irrelevant; it shows how the US has parlayed military
> hegemony into financial resources in the past. It sheds light on how
> such a process can and has worked.

As you pointed out, the support by Germany for the US military was largely
related to the Cold War and the perceived threat from the USSR (and the
Red Army). Yet, this example *is* irrelevant as it relates to
contemporary Japan unless one were to argue that Japan fears an invasion
or nuclear attack from Russia.

Even *if* that were the case -- which I sincerely doubt -- Russia (and
Japan and the US and every other power in the world) understands that the
US government would not stand still for such an aggression for *its* own
reasons. That being the case, Japan has no reason to believe that
financial support for the US military, or other concessions, are required.
> >Moreover, I have no doubt whatsoever that had Japan refused to reimburse
> >the US for military expenses, the war would have been fought the same.
> Then, Jerry, why did Japan reimburse the US for its efforts in the Persian
> Gulf? Why does it pay for US soldiers to occupy its territory? You then
> suggest that Japan does so to ward off US protectionism--which seems to
> underline my point, no?

In answer to the last question: not really. You were asserting that
Japan was paying for the US military for its own
political/strategic/non-economic reasons. My answer was that such payments
are related to the balance of trade between the US and Japan.

However, you have still not answered the question I addressed. Do you not
believe that the US had *its own* reasons for initiating the Gulf War
independently of what Japan did or did not want (or would be willing to
pay for)?
> You believe that there is no reason to take seriously any threat of
> Chinese or Russian aggression in the modern world?!

Not *against Japan* at the present time.

Again: even *if* Russia or China attacked Japan militarily, the US can be
expected to react -- independently of whether Japan is willing to make
concessions to the US for any "defense" effort.

> It still relies on the US keeping, e.g., S Korea and Indonesia
> friendly to Japanese FDI and imports since the US exerts influence (and
> control in the case of S Korea) over the military.

The US would have a military presence in Korea regardless of whether it
was in Japan's interest or not.

In your looking for clout that the US has over Japan for military
protection, you -- repeatedly -- ignore what the US sees as its own
strategic interests.

> But Japan is not the king kong that it is imagined to be in the orientalist
> US. Not only is Japan military dependent, it cannot compete with the US on
> the cutting edge of high tech industries (microprocessors,software,
> biotech, aerospace, etc).

Japan is not a military power. But, it is one of the leading *imperialist*
powers in the advanced capitalist world.

At least in terms of economic power, the US no longer has the hegemony
that it once did. Japan and Germany (and the EU) are major competitors on
the international scene.

> For example, its electronics business is top
> heavy with standard memory chip production and computer games while the US
> dominates the most advanced and application specific microprocessor
> business.

I question that assessment.

> Japan obviously lags far behind the US in software.


> The yen seems
> now even less of a threat to the dollar in its function as a reserve
> currency. But if the pyramid scheme built out of the public infusion of
> money into the banks comes down, Japan is quite big enough to catapult the
> world economy into depression.

On the last point, we are in agreement.

In solidarity, Jerry

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