Hillel Ticktin, or is there an economic crisis ? Reply to Nicholas

Jurriaan Bendien bendien at tomaatnet.nl
Mon Sep 1 07:42:10 MDT 2003

Nicholas wrote:

"This is so orthodox I expect Jurriaan to rip me to shreds while I'm gone,
if he can be bothered."

No, why should I "rip a fellow socialist to shreds" ?

 The world picture is one of increasing surplus capital which is not
invested in expanding the base of material production in order to satisfy
basic human needs, and we all know what they are. It is invested in and
circulates in the financial sphere - securities, debt securities, bonds,
derivatives, overvalued shares, real estate, luxury goods, obligations,
other forms of digital money, currency trade, futures, desposits and God
knows what else there is in fictitious capital, a whole treasure trove of
claims on wealth. And apart from that, in the weapons industry. There are
many legal and semi-legal financial claims on the social surplus product
which in practice are only a sort of "money of account". Storing your
financial assets and claims safely is a sort of art.

I have explained very simply the reasons for that already: basically you can
make more profits faster with less labour elsewhere, these days, and the
productivity in industry and agriculture is so high, that in the "North"
output is more than adequate, releasing the large majority of workers from
the primary and secondary sector to work in the tertiary sector. The bulk of
"globalisation" in terms of transactions actually occurs between Europe,
Japan, and the USA, with a few links to China, Brazil, Mexico and other
industrialising capitalist countries etc.

The other side of the picture is that in order to modernise the poor
countries in a capitalist way, you have to establish capitalist social
relations there, and you need a polity and a population committed to
capitalist modernisation. But this is simply very difficult to do, to
implement that primitive accumulation process. It is a question of social
organisation and political unification for a modernisation project. I
commented on this before, for example, how do you get that productive,
thrifty, creative, civilising middle class going, to provide an exemplar for
how the society should be ? Can you get socialists to mobilise the poor in a
capitalist modernisation project ?

Trotsky would recommend permanent revolution, which is difficult to achieve,
but a capitalist "revolution" based on regime change is difficult to achieve
as well. In the past, they thought they could make changes with development
aid and financial bribes, but it did not work in an aggregate sense, even if
it helped some social strata get ahead. The injection of funds can be
destabilising the the social fabric, advantage one social class at the
expense of another, and generate more corrupt practices.

The idea of "regime change" might sound good, but if the population fights
back, then it becomes very costly. If they're just like rabbits, it's okay.
But if one war costs 1 percent or more of US GDP, then you cannot have too
many wars, unless you militarise and regiment your own society into a
permanent war economy. And there is strong resistance against that idea. The
main thing is to get some experience with efficient wars.

The problem with the growth of the military industry is, that more and more
countries have more and more weapons. Therefore any big effort at regime
change could not only run into stiff armed resistance, but also escalate. If
military warfare spreads and develops its own dynamic, then more and more
societies begin to militarise and regiment their own population.

Nobody really wants that scenario at present, because, for example, that
tends to bring financial markets crashing down, and you get debt defaults,
and then there is a threat that the international banking system starts to
crash, not just because of the defaults themselves, but because of the
uncertainty generated by the total packet of consequences. Armed populations
can get out of hand. You can contain a financial crash maybe, but nobody can
fully predict all the consequences of it, because of economic
liberalisation; you are dealing not just with economic effects, but with
social, cultural, military and political effects.
Another possible scenario is that you gradually get more and more
Argentina's and Liberia's over time, in which case part of the world gets
cordoned off from the "civilised world".

So the general bourgeois philosophy is that you try to have quick precision
wars with minimum casualties, maximum profits and beneficial effects, in the
sense of letting people know who is the boss around here (strength) - and if
those poor countries do not see the benefits of fostering capitalist
economic growth in their societies, then they are just being 'stupid' in a
world-historical sense. You need to have a very good perception and
judgement of strength here, so you don't overestimate nor underestimate the
effects of social conflicts and wars.

For the rest, the winners are the people who can impose a strong, resilient
mode of social organisation on a society and keep it that way, whatever that
mode happens to be. The big incomes belong to those people who can
effectively organise a large number of other people (and we hope that they
will not be corrupt themselves, or become so). The ethic of the bourgeois
philosophy is that you just gotta love capitalism, otherwise you don't get
your incentives and you don't get your goodies. You might die. One way of
looking at it, is that in the end you might only have a choice of dying,
fighting, or capitalism.

The main protest people have against this "event horizon" is to live their
lives they way they want and cooperate as little as possible with things
they don't like. That is okay, as long as you have access to money. If the
money system breaks down, then social organisation starts to break down,
because of the reliance on trade. In that case, you get more countertrade
and barter. Acccording to Murray Brennan, countertrade accounts for 8
percent to 30 percent of world trade, Ernest Mandel estimated it at about
10-13 percent or so (difficult to measure statistically).


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