Excess of Monetary Capital

Iwao Kitamura ikita at st.rim.or.jp
Fri Aug 25 23:38:27 MDT 1995


Rakesh:

>But I have one immediate request for clarification. I do not understand
>what the  essential factor is that is appearing as widening of an
>international trade imbalance.  Or why this essential factor takes this
>appearance.
>
>Thanks
>Rakesh
>
>
>> There was also seen an increase in organic
>>composition of capital caused by introduction of automation.
>>So the law of decline of profit rate appeared. On surface, such essential
>>factor appeared as widening of international trade inbalance. It led to
>>the collapse of the currency system named Brettonwoods regime.
>>The present difficulties for capitalists come from here.
>

Thank you for your attention.
Obviously my words lack of explanation. Sorry.
In my understanding, the decline of profit rate forces capitalists to
widen public debt and workers debt where thier excess money should be
put on. In practical sense, stimulating fiscal policy and financial
policy are employed in order to revive economy from depression. This
is not only a temporal thing found in a sphere of depression but also
a long-term trend as long as profit rate falls in general.
_On surface_, motion of profit rate are diffrent among imperialist
countries, then there must be inbalance of stimulating policy.
Lower the average profit rate becomes, greater the influence of _difference_
of stimulating policies by those countries. That widens trade inbalance.
The explanation of fixed exchange rate system told us that trade inbalance
would be avoidable because of approproate fiscal and financial policies would
be forced to be adopted for diffrent business conditions respectively under
the system. It was wrong. If the problem were only a diffrence of motion
od business cycle in advanced countries, there would be no problem as such
explanation told us.
Finally capitalists accepted the foat and learned how to manage it.
So the liberalization of financial system was required.

in solidarity,
------------------------------------
Iwao Kitamura
a member of theoritical study group
Socialist Association (Japan)
E-mail : ikita at st.rim.or.jp
personal web: http://www.st.rim.or.jp/~ikita/


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