[Marxism] The Economic Consequences of War

Steve Palmer spalmer999 at yahoo.com
Wed May 28 23:47:27 MDT 2008

Oh dear ... what a muddle ...

--- Pance Stojkovski <pance at rogers.com> wrote:
>  	Dr. Schmidt started out by telling us about military spending in
> Canada and the USA. Canada will spend $15 Billion this year, the U.S. $511
> Billion. Although this seems like a lot of money, Dr. Schmidt said that it
> is relatively insignificant economically. In Canada it is only 1.2% of GDP,
> and 3.8% of GDP in the U.S. (compared to 10% of GDP and 15% of GDP
> respectively for health care).
Wrong ratio (for Marxists) - since war expenditure comes out of surplus value,
it should be compared with (eg) corporate profits. In the US this is 48.6% of
post-tax corporate profits, hardly trivial.

> Thus, military spending is not the
> critical factor causing the economic effects of war that we must be
> concerned about.
Non sequitur, since the effects do not depend purely on the amount.

>  	The real problem, Dr. Schmidt suggested, has to do with oil prices,
> exchange rates, and Pentagon Wall Street Capitalism.
These are symptoms, not causes. The "real problem" is with the profit rate. The
rate has stalled and begun to decline - see Table 1 and Chart 1, p20 of this
month's Survery of Current Business. The relative fall became absolute in 2007
(Table 2, p21).
>  	What is this Pentagon Wall Street Capitalism? The Pentagon's role,
> we learned, has been to provide the security for companies to access
> resources and maintain supply chains around the world.
Way too conspiratorial. This doesn't explain why the United States has attacked
Haiti, Iraq, Afghanistan, Yugoslavia etc.

> This has been
> essential for the relocation of production to areas where labour is cheaper,
> and environmental and safety standards are lower.
So ... Mexico, China, India, South-East Asia, yes?

> Wall Street has a double
> role. One is to direct capital internationally in order to spur on global
> economic growth. The other, by riding on a wave of debt and speculation, is
> to funnel money into the coffers of U.S. financial companies.
Wall Street has ONE job which is to screw as much money as it can out of
everybody else. It doesn't care about whether or not that results in global
growth. In fact, draining profits and interest from everyone else will reduce
not expand global growth. It does not allow money to moulder in coffers, but
lends it on (or attempts to).

>  	The rich people inside Pentagon Wall Street Capitalism accumulated
> enormous wealth, workers in the rich countries suffered from the
> neo-liberal onslaught on the welfare state, which went hand-in-hand with
> Pentagon Wall Street Capitalism, and workers in poor countries suffered
> outright economic and social devastation.
Workers - and peasants - in poor countries have been suffering devastation long
before the 'neo-liberal' onslaught. Immigrant workers in rich countries
generally have been forced into a lower standard of living than the
non-immigrant workers long before this 'onslaught'. The only new thing is that
the better off non-immigrant workers have recently begun to suffer.

>  	But, Dr. Schmidt reminded us, the Pentagon is having trouble
> maintaining secure access for the rich to the world's economic resources.
Our boys and girls are bogged down in Mexico, China, India, South-East Asia,
yes? Incredible how the media censors the news ...

> The "War on Terror", an ideological disguise for capitalists' desire to
> control the world economy, has been escalating: from Iraq in 1991, to the
> Yugoslavian wars in the 1990s, to Afghanistan and Iraq today, there is now
> permanent war and the Pentagon is not winning. They are very capable of
> destroying whomever they declare an enemy, but they have been incapable of
> installing effective governments of their liking. Trust in the Pentagon's
> military capacity to provide security and stability is being questioned,
> and therefore, capital flows into the U.S. are diminishing.
WTF??? ROFLMAO ... just look at the real rate of return on Treasuries ...

>  	Wall Street is having its problems too, Dr Schmidt told us. Low
> interest rates in the U.S. in the early 2000s triggered a U.S. housing boom
er ... try Japan ... the 'housing boom', presumably the price bubble, began in
the mid-90s ...

> and world economic growth. However, drastically increasing U.S. imports and
> current account deficits had to be matched with ever increasing capital
> imports. 
Because ... ?

> To attract these capital imports, U.S. interest rates were
> increased during the course of the boom. As a result, ever more U.S.
> households found it difficult to pay their mortgages. Thus, the housing boom
> went bust and triggered an economic crisis.
WTF??? It was subprimes, not regular mortgages that 'triggered' the current

> This crisis in the U.S. affects
> all its partners, including Canada.
>  	Two other economic factors that are influenced by war and are
> specific to Canada, said Dr. Schmidt, are oil prices and the Canada/U.S.
> dollar exchange rate. In 2001, before the attacks on Afghanistan and Iraq, a
> barrel of oil cost US $20. Today, the price is US $130 per barrel.
So the soaring demand of China and India have absolutely nothing to do with it,
nor does speculation?

> It is
> only at these higher oil prices that getting oil from the tar sands in
> Canada is profitable.

"I study a lot. That is one of the responsibilities of every revolutionary." Hugo Chavez.


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