Jiang criticizes Soros by name.

David Bailey boddhisatva at mindspring.com
Sun Mar 7 07:25:13 PST 1999


C. Liu,

Remember that there were capitalists and traders on the other side of all those trades you are decrying. Players lost for all those who gained, although it may not have been fifty-fifty, certainly. Moreover, capitalists find no long-term benefit from destroying currencies as this undoes the basic capacity to do business and extract value in the affected countries. I disagree with your supposition that the devaluation of currencies, especially the ones you mention, are wholly artificial. Furthermore, the advantage that devaluation gives to a holder of goods for sale is not inconsiderable. As for first-world capital using devaluation to buy third and second world capital at below-market rates, I think that is overstated. The first world capitalists clearly did a lot better during the boom that during the bust.

I think the reason Marxism has so little *new* to say about finance capitalism is that Marxists lack strategies for (and often understanding of) credit creation. The Marxist concept, to which you alude, of expanded prosperity through better management and techniques is simplistic. The reason is simple when stated as a question: Where is the money to come from? The old answer is to simply create it by government fiat. This is effectively credit at zero interest rate with no requirement to pay it back, only the expectation of increased productivity overall. Such credit has no risk premium. Naturally, therefore, a lender under such conditions ties the "loan" with bureacratic strings in order to make sure the credit advanced is not simply squandered. Such a system then naturally breaks down to a competition among bureaucracies for resources. Unlike business firms trying to secure credit, bureaucracies suffer no ill consequences for securing more and more resources. After all they have no one to pay the resources back to.

Marxism's major theoretical and practical problem is one of money. Where will Marxists get it and how will they get more of it into the hands of working people to create a rapidly expanding and improving economy. Distribution is certainly a problem but the real political and theoretical problem for Marxists is to make the argument, and make it convincingly, that we can engender growth and prosperity better and faster than capitalists.



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