D Shniad wrote: >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? A bit of both, I think. I agree that financial activity can be destructive, but I don't think that case can be made simply by citing figures about turnover. I think it has to be made a lot more carefully than that (like with a 382-page book on Wall Street, for example). More specifically, I think the corporate indebtedness seen in the U.S. in the 1980s drained resources from investment, and the priorities imposed by increasingly assertive shareholders are inimical to long-term economic growth, not to mention human well-being. But making that point requires looking at the social/political institutions behind financial structures - not just looking at volume numbers. Another complicating example: the European monetary crisis of 1992. You could argue that the commitment to monetary union, and with it the absurd overvaluations of the currencies of the weaker countries, was a reflection of financial interests. Speculators eventually undid this arrangement, allowing the British economy some room for recovery. So, here "speculation" was an act of angels, though in heavy disguise, while the initial arrangement was a reflection of rentier-friendly institutional structures. Doug -- Doug Henwood Left Business Observer 250 W 85 St New York NY 10024-3217 USA +1-212-874-4020 voice +1-212-874-3137 fax email: <mailto:[EMAIL PROTECTED]> web: <http://www.panix.com/~dhenwood/LBO_home.html>
