Capital Solutions

Patrick Bond pbond at
Sun Nov 14 20:14:31 MST 1999

On 14 Nov 99, at 2:10, Dennis R Redmond wrote:
> On Sat, 13 Nov 1999, Patrick Bond wrote:
> > deindustrialises. I read this not as a reflection that economic crisis
> > has been prevented in the North and West, but rather that global
> > overaccumulation (and all that it implies) has been carefully moved
> > around (geographically and temporally) -- and, particularly,
> > devalorisation has been displaced to the South and East. Our
> > problems have been part and parcel of your solutions.
> Have they, really? The 2nd/3rd Worlds owe $2 trillion in hard currency
> debt; but the credit system of the US/EU/Japan is probably close to $70
> trillion by now.

Yes, the temporal displacement -- extending the bubble through
time via credit creation -- has been more important in absolute
terms, obviously (even if your figure looks quite a bit high). But
that's a) fairly traditional (time overwhelms space when it comes to
fictitious capital formation, considered across the last four or five
global debt cycles) and b) just the beginning of the story. For with
growing Third World debt repayment pressure has come the export
push, which has driven commodity prices down more dramatically --
 following the 1970s global slowdown -- than at any other time
since the Great Depression. I don't have figures handy but a circa-
1990 World Bank study showed non-oil commodity prices were off
88% from their 1973 peak. That's got to be responsible for a good-
sized contribution to Northern GDP increases.

> ... One could argue that the underdevelopment of the planet
> is actually harmful to the extended reproduction of capital;

Yes, sure, but who says K acts in its medium-long-term interests
during periods of crisis? When overaccumulation hits and the
search for alternative investment portfolios intensifies, what we
know of as "regimes of accumulation" break down and the time
horizons for most firms' investment portfolios (and extended
reproduction strategies) get very short indeed.

> it's a
> barrier on market penetration. And hasn't the collapse of 3rd world
> developmental regimes had much to do with the emergence of local
> capital/comprador elites, busily looting the local economy so they can
> feast on global luxury commodities -- a la the privatization of that
> great-grandmother of all developmental states, the Soviet Union? If so,
> this has drastic consequences for strategies of global resistance to
> capital. Among other things, it helps to distinguish the global bankers --
> the EU and Japan -- from the global rentiers in the US; often the latter
> will be more interested in long-term investment and will be willing to put
> up with strong developmental states, whereas the rentiers simply want to
> rape everything in sight. On the other hand, no external force can create
> indigenous developmental states; correct me if I'm wrong, but isn't this
> exactly the problem in South Africa, where a corrupt, hideously
> rentierized financial elite is keeping interest rates high and domestic
> investment low?

All true enough.

My point was simply that pressure on -- and depression in --
Southern countries is not disconnected from Northern success,
these past couple of decades.
Patrick Bond
(Wits University Graduate School of Public and Development Management)
home: 51 Somerset Road, Kensington 2094, Johannesburg
office: 22 Gordon Building, Wits University Parktown Campus
mailing address: PO Box 601 WITS 2050
phones:  (h) (2711) 614-8088; (o) 488-5917; fax 484-2729
emails:  (h) pbond at; (o) bondp at

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