Geo-temporal Displacment via Fictitious Profits (reply to Comarde Bond)

Rakesh Bhandari bhandari at phoenix.Princeton.EDU
Tue Nov 3 09:06:29 PST 1998


Doug, I deeply appreciate your criticisms of Mattick's arguments. I think he was right but since he is so totally ignored, I have missed the criticism that is necessary to really develop one's views.

To your two queries about the debt and the post War boom:

1. The US could only realize a budget surplus by savage cuts; the rather insane debt to GDP ratio was increasing until 1995, and whether it resumes its upward incline in a downturn--a great liklihood, no matter how low Greenspan pushes interest rates-- I still maintain that govt cannot freely play the fiscal card in the next recession or depression because of its indebtedness. That is, the issuance of massive new govt debt will not be available as a temporal displacement in a deep crisis of overaccumulation, given the interest payments that already have to be made (at present around 14% of the budget). Given that this way out will not be available, the working class must prepare its strategy for a painful and horrific downturn. I also wonder if the emergence of the euro will kill some of the appetite for US govt securities.

Now in broad tersm what a Marxist argues is that those who claim that they can use fiscal policy to promise continued growth and conquest of the business cycle cannot afford to see the truth. Their roles as intellectual or political leaders of leftist parties, which command votes and monetary contributions, depends on their ability to promise the goods through their control of the purse strings; for them to recognize that they cannot deliver prosperity would mean they have to give up their priviliges as leaders in the game of respectable bourgeois electoral politics. What a Marxist strives to do is give the workers sufficient insight that they can see through the operations of the economic system so that they are left with little faith in the security promised by "liberalism", democracy and reformism. At the same time, Marxists have failed historically--and I think Ken is correct here--to develop an adequate theory of the human actor they seek to represent, i.e. an adequate social psychology and empirically grouded analysis of the sociological changes taking place in the working class. (I am basically quoting here from Ron Eyerman's analysis of Neumann's critique of the SPD and KPD in his fascinating book False Consciousness and Ideology in Marxist Theory. Humanities Press. 1981)

2. Patrick has already quoted Grossmann on how wars by destroying capital set the stage for a new upturn. So for Mattick as well the stage for the post world war II upturn was set by the massive destruction of capital in World War II. This upswing was fueled by the fictitious prosperity from Keynesianism. I should have clarified this.

best, rakesh



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