Doug, I started my part of this exchange by saying that the magnitude of activity of speculative capital had dwarfed the magnitude of productive capital. You challenged that statement. In your latest response to my response, you provide information that confirms that that magnitude of speculative to productive activity is much larger than I had tentatively hypothesized. Then you provide data on export/GDP ratios, presumably responding to an argument that someone else was raising. Then you apply the coup de grace: "No one disputes that there's lots of furious, pointless, even destructive speculative activity going on. How, precisely, is it malignant, though? Merely describing its magnitude is not to make the case." Forgive me, but aren't we quibbling a bit here? What is the analytical importance of the difference between the terms "destructive" and "malignant"? I was making what I thought was a rather straight forward point: that this manic speculative activity of such a huge magnitude was a symptom of the fact that the power of finance capital had overtaken that of productive capital, thanks at least in part to the breakdown of the internation regulatory mechanism that was Bretton Woods. Quick question: are we in agreement or disagreement here? Cheers, Sid >The IMF estimates that foreign exchange transactions are more than $1 >trillion daily, while trade volumes are in the $3.5 trillion ballpark >annually. > >If trade volumes are 5% of the total of the world's domestic output (a >*very* conservative estimate), then the aggregate of the world's real output >would be in the neighbourhood of $70 trillion per year. Actually, gross global product was around $25 trillion in 1994, according to the World Bank, making trade around 14% of output. Let's look at some export/GDP ratios for 1980 and 1994 for evidence of some globalizing "revolution." Of course it's always possible the revolution started after 1994; someone check with Ed Herman on this. EXPORTS AS PERCENT OF GDP 1980 1994 "developing" countries 23% 22% Latin Amer/Caribb 16 15 Brazil 9 8 Mexico 11 13 S Africa 36 24 S Korea 34 36 Canada 28 30 Japan 14 9 Norway 47 33 Sweden 29 33 UK 27 25 U.S. 10 10 source: World Development Report 1996, table 13 >(If trade volumes >are a somewhat larger portion of domestic production in the aggregate, then >the world's aggregate production is somewhat smaller.) By comparison, >aggregate international financial transactions come in at more than $300 >trillion per year. > >By these calculations, the aggregate of international *financial* >transactions >are more than four times the dollar magnitude of *real* production. It was >on the basis of this observation that I made the statement that speculative >activity had dwarfed the activity of productive capital. No one disputes that there's lots of furious, pointless, even destructive speculative activity going on. How, precisely, is it malignant, though? Merely describing its magnitude is not to make the case. Doug