[OPE-L:1336] Re: Re: monetary inflows versus capital accumulationm

From: Rakesh Bhandari (bhandari@phoenix.Princeton.EDU)
Date: Thu Sep 23 1999 - 12:24:55 EDT

Jerry wrote:

> True enough. On the other hand, China has a veto vote in the Security
> Council of the United Nations and the US wants China to go along with key
> US policy positions at the UN. And that is a bargaining chip in China's
> hands (of course, this same chip is held at the present time by Russia).
> The ability to control UN policy, after all, was a key aspect of the
> so-called "New World Order" began by Pres. Bush. And it was the failure of
> the US to maintain that bloc in the UN after the Gulf War which signaled,
> IMO, the demise of the NWO.

The US bypassed the UN for the recent strikes on the Balkans and Sudan, so
working through the UN may not be as important as you suggest.
Not only was China's agreeement in the Security Council not
sought, its embassy was bombed, remember?Moreover, the US has been quite
successful in winning at least Chinese abstension on important Security
Council resolutions.

At any rate, I do sense agreement on my major point that any discussion of
the sustainability of a current accounts deficit requires analysis of the
political and military tools available to particlar state, especially a
reserve center. This type of analysis is not well developed. And
unsurprisingly there is very little honest discussion of US imperialism in
the US.

Another example: While there is no doubt that the present growth of the US
current account deficit is unsustainable (the hegemon ran it up to save
Asia a la Kindelberger theory) and politically unacceptable in an election
year (though I don't think export growth is that sensitive to a dollar
devaluation), I do think the US is allowing the dollar to fall
precipitously vis a vis the yen (and only then yen it should be
emphasised) for political and classically imperialist reasons, i.e., to
force further trade and especially financial liberalisation ('structural
reform')on Japan. It seems that the US has already racked up a major
victory this week. As I already noted, Summers actions here may be
similar to Baker's in 1986.

> No, the checks are issued by the government of the United States, not
> Japan.

I will check into the financing.

> Due to these domestic political considerations, the US wanted to show that
> other countries ("Allies") were willing to (co)pay for US military actions
> that they supported.
> >From that perspective, one might argue that the shift to using the US
> military as mercenaries (in the sense that other countries would
> partially subsidize the US military) could be seen as part of the US
> vision of the "New World Order".


Yours, Rakesh

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