> I get the feeling that the international financial system is perhaps the
> weakest link in the whole world economy.
That is a very long story, and, apart from requiring further research, in
one mail I can only do a bit of justice to your important economic question.
The question I would ask, is why is the international financial system weak
?
The way I think about it is: the international financial system is based on
a very complex system of financial claims and entitlements which makes the
relationship between ownership and control of private assets and products
very complex and opaque. We are talking about an ownership of things far
removed from the person in space and time.
Since the the lynchpin of the capitalist order is the defense of specific
private ownership and consequently the urge to privatise and marketise, the
question then arises, how can you effectively defend something that you
cannot actually practically possess (i.e. you only have a legally sanctioned
entitlement or claim) ? The whole thing ultimately depends on engendering
societal trust and confidence, about which Fukuyama wrote a book.
That is the weak link (Marx in fact mentions, "the vice I excuse most is
gullibility"). Hence also a trend to invest in tangible assets when economic
insecurity increases. The future of capitalism depends on the trust and
confidence of the working class in their exploitation, that their
exploitation is beneficial and that they gain from it just as much as
capitalist who make money from the results of their work.
Yet the autonomisation of circulation processes from production processes,
together with deregulation of money markets and capital markets, actually
exascerbates Minskyan risk, uncertainty and instability. Capitalism is
developing increasingly on borrowed time, that is I think the essence of it,
as I indicated in a previous PEN-L post.
This means, that some people consume more than they produce, and others
produce more than they consume, and in aggregate, the value of financial
claims to output (through trade and credit) exceeds real output. That
creates a situation of excess capital from the point of view of private
accumulation: the contradiction of productive forces and production
relations is mediated by credit. All the financial resource is there, all
the productive capacity is there, but there's structural overcapacity, a
maldistribution of income, and profitability is higher in trading assets or
products than in tangible production of new products.
The real problem for the bourgeois classes is then: how do you expand the
market such that you get a cumulative, steady net increase in real output ?
The only way they can think about that, is by an "enclosures movement", i.e.
privatising what was held in common: you separate something from a person,
and sell it back to him. But just have a look at what the result of that is
in the modern imperialist system - look at Russia, look at Iraq, look at
Liberia or Sierra Leone or Argentina.
The ultimate problem is that you cannot exchange something and transfer
private ownership rights for money-making purposes if you haven't got
something to exchange in the first place. To get that something, you must
(1)either produce it or (2) appropriate it from somewhere else.
(1) poor people, workers and peasants have to produce stuff, and then you
can exchange it, and make money out of that exchange. The problem then is
how you get poor people to produce stuff under conditions of extreme
socio-economic inequality to which Michael Yates refers, so that you can
privately appropriate the product of their work. How can you be an
entrepreneur if you have nothing to be an entrepreneur with, and if the
social framework for it is lacking ? This is the mystery of primitive
accumulation to which I referred in previous posts. The "carrot" option is
to foster "new middle classes" who show the way.
(2) The "stick" option is (a) militarisation, to force a change in social
relations such that new regions are subordinated to capitalist private
property relations. We can inject purple politics and christianity to
confuse the real issue, but that is what it is, and real socialists aren't
confused about that, (b) economic coercion through exercising sanctions
which force people to sell or buy.
Proudhon's critique was that capitalism is based on legalised theft. Marx
develops a more "nuanced, dialectical critique", but the important thing to
understand I think is that Proudhon and Marx both agree capitalism is always
based on "getting something for nothing", and because of the fact that we
must all appropriate something we haven't created, the real social relations
are mystified. Postmodernist discourse then focuses on the cultural modes
through which entitlement to ownership is established. The central question
of the bourgeois epoch in which we live is "how can people get something for
nothing" while maintaining the status quo ?
It is however completely false to think that capitalism collapses if output
stagnates, because you can still trade in already existing assets and make
money out of that. The social fabric may be torn apart, but capitalism can
survive. Hence Lenin mentioned "there are no absolutely hopeless situations
for capitalism" at the 2nd Comintern Congress, it must be consciously
overcome through a change in actual ownership relations. Socialists believe
we can never correctly discuss exchange, unless we're clear about who
actually owns what.
The foundation for a socialist transformation of society is however a
consciously understood set of principles for ownership entitlement grounded
in a socialist morality. That is the challenge for intellectuals: a theory
of socialist ownership and institutions, and a theory of socialist ethics.
What bourgeois ideology does is divide the discussion of economic efficiency
from the discussion of ownership entitlement, and it just promulgates the
ideology that private ownership is always more efficient, as a dogma. But in
reality this is not so, and even intelligent capitalists admit this.
Here's a lyric from George Harrison to explicate the point further:
{Refrain}
Give me love, give me love
Give me peace on Earth
Give me light, give me life
Keep me free from birth
Give me hope to help me cope
With this heavy load
Trying to touch and reach you
With heart and soul
/ D Dmaj7 / Em A / Gm A / C G / :
My Lord
Please, take hold of my hand
That I might understand you
Won't you please, oh won't you
/ D - Dmaj7 - D7 - G G7 / / E - A - / - - /
{Refrain}
My Lord
Won't you please, oh won't you
{Refrain twice}
Jurriaan
