C. Rob,
You ask whether under Keynesianism "Is credit not always
available, and is that credit not generally available at much more stable
and realistic rates than 'free markets' can offer over time?" and I would
say "No" to both. In terms of rationality, how often are government
spending projects really rationalized to economic need? I would say not
often. That means that while credit is available in nominal amounts it is
not targeted to need. After all, there is only so much that can be done
with infrastructure and defense budgets.
As for adding to availability of credit, government credit is not
fungible. It pays for project X and waits for revenue to pay off the
debt. The authorities that "own" the bridges and tunnels, etc. are not
fungible capitals. You can't buy stock in them. The money is consumed
and not re-invested. Not to be supply-side about it, but credit in the
private sector does go into the big pool of capitalist accumulation
wherefrom it can be drawn as funding for new industry. The reason that
works is that capitalists don't keep their money under their beds. They
put it into savings instruments. That means that a huge proportion of
accumulated cash can re-circulate since wealth is predominantly paper. Of
course if too many capitalists demand cash for their paper, you have a
panic and a crisis. Absent crisis, you have the famous "multiplier"
effect, which is really just leverage, as I see it.
When the government invests, the best one can hope for is that
"profitable" government debt will simply reduce, after some period of
time, the indebtedness of the government. That *may* lower interest
rates, but it may not. In any event the total effect is small. Private
credit, on the other hand, can provide leverage. It seems to me that a
very small increase in the degree to which a nation's productive assets
are leveraged will dwarf even the most ambitious government spending
because, as we know, leverage begets leverage.
The way I see, it finance capitalism is simply a way to leverage
the productive assets of a country more effectively (under capitalism, of
course). One particular advantage finance capitalism has over Keynesianism
is that Keynesianism finances a few industries more than others. That
creates a "narrow" market. One of the worrisome (by which *I* mean
"delightful", at least to a Marxist) things about the present U.S. equity
market is that it's so narrow. A few years ago, the broader you bought
across the well-capitalized averages, the better you did. Germany, by
comparison, has been seeing run-ups in anything new that comes across the
tape. I think that within five years you will be able to pick stocks
blindly out of the Nikkei and do well.
As you suggested, the Japanese style of Keynesianism leads to
disaster and I think it is because when the government tries to broaden
out its investment, that leads inevitably to cronyism. There is not, at
present, a system that expresses the true economic will of the people
across the economy in the form of credit. Socialism anyone?
peace
