Xxxx Xxxxxx xxxxxxxx at
Wed Feb 7 12:18:37 MST 2001

> From: Patrick Bond <pbond at>
> To: marxism at
> Cc: marty at; ecusers at
> Subject: Re: Africa
> Date: Wednesday, February 07, 2001 1:45 PM
> > From:          "Ulhas Joglekar" <ulhasj at>
> > Date:          Tue, 6 Feb 2001 22:03:27 +0530
> > Patrick:
> > > It's the cause! Specifically, at stake is investment that drives up
> > > the organic composition of capital, in a competitive frenzy, well
> > > beyond the point that the output can be consumed.
> > Is there any empirical basis to show that there was an abnormal rise in
> > organic composition of capital in East and South East Asia just before
> > crisis? And higher rate of surplus value can surely compensate for
> > organic composition of capital? Was the rate of surplus value same or
> > just before the crisis years?
>> The best english-language source on the region is surely the book by
> Burkett and Hart-Landsberg, "Development, Crisis and Class Struggle:
> Learning from Japan and East Asia" (St Martin's Press). It has
> lots of data on overproduction, but doesn't do a whole lot (beyond
> specifying Dept'1 v 2 in Japan) on OCC or s.v.rates. But Marty and
> Paul know the answers, I suspect, and I'll cc them.

I am reading Paul and Martin's book on Asian Crisis at the moment. It
provides a very good discussion on Asian capitalism, which includes topics
like the contradictions of Japanese miracle, state led capitalist
development, crisis of dependent development, etc... This being the case, I
have not seen any *table* in the book showing data on over- production. It
is included in the discussion, but not presented as a table . Although I
liked the theme of the book, there is very little discussion on finance
capitalism and its relation to over accumulation problem in the region. --
organic relations & contradictions between two forms of capital and how
tensions between the two unfolded the crisis. I have been looking for data
on indicators of  crisis:1) rise in paper money or purely monetary
transactions and 2) decline in profit levels in the real economy or low
capacity production. I could not find one in their book.

Regarding UIhas' question, crisis occurs when capital accumulates over and
above what can be reinvested profitably through established channels of
trade and production. According to Mandel, it occurs when the volume of
paper money increases more rapidly than the volume of material production.
In the case of Asia, there was a massive over -supply problem in
residential and commercial properties. Also related to uneven capitalist
development in the periphery,  *foreign capital inflows* did not go into
the productive sectors of the economy like manufacturing and agriculture,
but they instead went " to fuel asset-infllation in the stock market and
real estate, which were seen as the most attracttive in terms of providing
high yield with a quick turn around time. Indeed, the promise of easy
profits via speculation subverted the real economy-- the inflow of foreign
portfolio investment and foreign loans into real esate led to a
construction frenzy that has resulted in a situation of massive oversupply
of residential and commercial properties from Bangkok to Jakarta. By the
end of 1996, an estimated  $20 billion worth of the resiedential and
commercal property in bangkok remained unsold", Commercial banks total
exposure to collapse in real estate loans was 15 to 25 percent in
Philippines and 20 to 25 percent in Malaysia and Indonesia. Some of those
loans were non-performing by 1997 (Bello, "The End of a Miracle:
Speculation, Foreign Capital Dependence and the Collapse of the Southeast
Asian Economies", _Mutinational Monitor_, Vol 19, Feb 1998).

Xxxx Xxxxxx

>(If you are looking for an empirical example, I did the #s in my PhD
> study of Zimbabwe, published a couple of years ago by Africa World
> Press...)
> Cheers,
> Patrick

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