> 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.
Yours is standard neo-liberal rationalization. Currency traders do not just make profit from their counterparties. They make their real money from the futures markets in anticipation of currency devaluation and volatility they engineer. By saying that devaluation of currencies is not artificial, you are saying the market forces are at work. This claim is simply a neo-liberal myth and is not supported by field data of the past 20 months. First World capitalists clearly did well during boom, but they will be in a even better position after the bust and the recovery, with more open markets and more cheaply acquired assets. Please give the reasons why you think First World capital using devaluation to buy Third and Second World assets cheaply is "overstated"- is it the same as the evils of slavery is overstated? It is the openly stated IMF strategy, and privatization and foreign acquisition data in Thailand and Korea are plain for all to see. DaimlerCrysler and Renault are competing for a stake in Nissan that is expected to close by the end of March. Merril Lynch is acquiring large positions in the Japanese financial service sector. The reason it has not occurred as much as expected is merely because Western capital is still waiting prices to hit bottom. You will be hard put to find any informed person in Asia agreeing with your neo-liberal views, or even from with in the World Bank.
> 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.
This may be simplistic. Marxism does not lack strategies or understanding for credit creation. Even in the 50s, the Soviet Union operated on national policies of long term credit. Many Marxists on this list will find your remark condescending.
> 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.
This is again a neo-liberal line that sophisticated economic theory is a non-Marxist property. Similar arguments were used to defend imperialism, that Marxism does not offer a better alternative. This is the Rubin/Greenspan argument: neo-liberal market fundamentalism is not perfect, but all other alternative are worse - the Churchillean argument in defense of Western representative democracy. When it comes to an operative theory of money, capitalist economists are mired in confusion on the subject. That does not prevent them from expression the views on how to save the world. It is possible that Marxist economists have been silent because they view the Asian/global financial crises as a factional struggle between national and global capitalism and that they see no benefit in helping either side. The point of my post is to draw attention to the socio-political fall out of the financial crises which can be viewed as an extension of Lenin's observation of industrial capitalism's causal linkage to imperialism. The Third World rejected capitalism not because it was inefficient, but because it was part and partial of imperialism. It is obvious that socialism cannot flourish without a political context. Neither can capitalism for that matter, but the political context of capitalism is so well entrenched historically that the myth of its being human nature is widely accepted. The causal linkage between neo-liberal globalism and a new Western economic imperialism is increasingly clear to large number of people outside of the First World, without the need of esoteric theorizing. People are experiencing the evil impacts in their daily lives. A window of opportunity now exist to provide Marxist socio-economic-political alternatives before national socialism exploits the opportunity. Make no mistakes about it: anti-globalism, anti-finance capitalism and anti-Western sentiments are on the rise all over the world.
Henry C.K. Liu