No, not a typo, I thought y'all appreciated irony. Pardon, comrade.
> > the struggle between financial circuits
> >of K and "productive" circuits.
> You're right that I'm skeptical of any analysis that draws too sharp
> a distinction, and especially one that spies a serious conflict,
> between the two. Under capitalism, there's no economic act that's
> undertaken except for money. Production presupposes the existence of
> earlier profits in monetary form, and, if all goes well, throws off
> new profits in monetary form. If expected M' isn't greater than the
> initial M, then there's no production of commodity, C.
We're way beyond M-C-M' here, in crude M-M' territory. Look, there must be some basis for us to agree about both the process and phraseology here, Doug. Shall we revert to a common bible? From Das K, vol 3, chapters 27-33, we find all sorts of quotes showing how the banks' "tremendous concentration of the money-lending business... must therefore already accelerate in and of itself the accumulation of loanable capital, as a form separate from genuine accumulation... Loan capital accumulates at the expense of both the industrial and commercial capitalists."
The ability of financiers to centralise and allocate funds ("social capital") independently of productive capital is the basis for ruinous speculation arising at the peak of a business cycle: "A great part of the social capital is applied by those who are not its owners, and who therefore proceed quite unlike owners who, when they function themselves, anxiously weigh the limits of their private capital." Moreover, as a crisis of productive capital emerges, there is a shift of power towards financiers, away from other capitalists. It is the financiers who gain the upper hand at a key point in the accumulation process:
The credit system, which has its focal point in
the allegedly national banks and the big
money-lenders and usurers that surround them,
is one enormous centralization and gives this
class of parasites a fabulous power not only to
decimate the industrial capitalists periodically
but also to interfere in actual production in the
most dangerous manner--and this crew know
nothing of production and have nothing at all
to do with it.
(Now where have I heard this before?)
> ...
> There's little question that Mahathir's capital controls "worked" in
> the technical sense. But it shouldn't be forgotten that he's a
> repressive bigot. Critiques of international capital that amount to
> defenses of national capital can get very ugly.
Hear hear. I also wince when otherwise-wonderful Naderites do these left-right populist deals, as I think you know. (Maybe I should put up Rob Weissman's recent justification to the e-debate list though, to be fair.) The SA version of right-populism was particularly virulent, well before sanctions. Afrikanerdom as we know it--as a "nation" and identity--was in fact distilled early this century, according to tribe historian Herman Gilliomee, from a rabid hatred of the Standard Bank of Britain (actually founded in SA's Port Elizabeth, itself a short way, incidentally, up the beautiful Indian Ocean coast from Russell G's lovely beachhouse, in 1857). Standard did massive foreclosing on loans to rural "boers" (white farmers of Dutch/French descent who through the 19th c remained very close to peasant status), which gave it the nickname "that gigantic devilfish" and compelled the Broederbond to start setting up their own little country banks. See there, a material basis for yucky identity politics.
> Leaving aside the
> heavy artillery of Naziism, in your part of the world, Patrick, we
> had capital controls and severe autarky under apartheid SA and
> Smith's Rhodesia.
Yes, and even if the anti-apartheid sanctions campaign could never claim to have imposed any kind of autarky on SA (though at the end foreign finance was a wee bit harder to come by), capital controls across the Limpopo worked wonders (so commented a key UNCTAD researcher, even), and were responsible for 61% of Rhodesia's 9.5% annual GDP growth from 1966-74 (so judged an Overseas Development Institute economist).
> So when you talk about making alliances with
> "capitals" it puts me in mind of the downside.
No, I'm not advocating that. That's an active project. Some in the SA labour movement try this occasionally, usually to their regret. I think more passively along these lines, namely that pushing hard on capital controls will bring on board some fractions of capital who have been badly burned by the bear-raiders. One of them--an insurance magnate for whom my university building ("Gordon") is named--said recently that SA's inadequate defense against foreign speculators since the mid-1990s amounted to the "financial equivalent of allowing hostile war boats free rein along our coast."
I just talked to a Cosatu technocrat a short while ago who says we may actually see some (probably brief, hotwinded) flurry of activity in this area in coming days. If anyone's still interested, I could continue posting dribs and drabs of what will no doubt be a debate full of comrador threats of impending financial disaster if we return to the 1985-95 dual-exchange rate, to which our team will have only Mahathir to fall back on, repression and all.
> In the U.S. I see
> Nader people too willing to make allowances for the right (someone in
> the Nader circle has declared me "not a progressive," by the way),
Ahah, not as thick-skinned as the average e-New Yorker, are you?!
> and the Fair Trade Campaign too reliant on money from the rabid Roger
> Milliken. I'm certainly not opposed to capital controls, but they do
> have a lot of bad associations.
As does the word socialism. But you're not afraid, are you?
> >Separately off-list, if you want, I'll send over a paper that the
> >Congress of SA Trade Unions recently commissioned on this very
> >point: how reimposition of capital controls can allow not just for
> >defensive currency support (as valuable as that would certainly be
> >against periodic bear-raiders), but also for proto-Keynesian
> >reflation.
> With what capital?
Lots. We're losing billions of dollars a year to capital flight (the Fine/Rustomjee study I mentioned estimated that at one point it was 7% of GDP per annum). To celebrate political liberalisation in 1990, the four major banks closed their dozens of branches in black townships and opened new offices in the Cayman Islands, Guernsey, Jersey, Isle of Man, Isle of Wright, Bahamas, Panama and Zurich. Moreover, there's more than $10 bn per year going into local pension and insurance funds, of which automatically about 15% (the current max on institutional investor capital export) gets popped into Wall Street and the City. We're looking at net negative fixed capital formation right now, partly thanks to a 12% real prime interest rate. And then there are the continual threats that since domestic savings rates are allegedly so low, SA will have to go begging to the IMF. So yes, a bit of capital control would go a long way to reflate an economy suffering stagnation since around 1974.
> What's domestic-grounded SV creation? Import substitution? Right now,
> real sector activity is deeply internationalized, with capital goods
> and workers coming from all over.
Let's not get bogged down in where and how much SV you can create (I'll have to pull out my Perelman on prices, values and crisis again). But in terms of national development strategies, increasing the local production of infant-industry capital goods is one possible route, a variety of studies have suggested. But I'd be more interested first in linking economic development to the social movements' demands for basic needs like a modicum of free water and electricity, where you have virtually no pressure on balance of payments and where you can get vast social multipliers (gender equity, positive environmental and public health externalities, more rapid geographical race/class desegregation) plus very strong economic spinoffs (productivity increases, SMMEs, etc). (This, by the way, is also where I hope the new Zimbabwe workers' party will move with its platform in coming months, prior to the parliamentary elections next April.)
And then there's social justice as a rationale. I could supply endless shock-stats on how many black South Africans lack access to water, sanitation, electricity (plus related day-to-day appliances), decent roads nearby, stormwater drainage, etc etc. Our Gini coeffeicient is worst in the world after Brazil, and while whites (and about a million blacks) live Canada-style, black HDI rates are at Congo level. But you get the point.
We allegedly can't do the cross-subsidies that would make this all possible, because of the dire need to zap Jamaican bauxite and the like with virtually-free electricity (we have a 30% oversupply thanks to vast coal reserves), so as to support the balance of payments (boosted by aluminum and steel and maybe zinc exports), which--here I could quote word for word some neolib bureaucrats (including Russell G's old NGO boss)--mean practically no subsidies are allowed to poor folk, so that in turn we have enough forex so we can continue to import luxury goods for whitey and repay odious apartheid-era debt to Citibank. That's one moment in the power relations which helps explain why so many of us here are so anxious to see the Wall Street-Treasury complex fuck off.
> What kind of immigration policy does a nationalist developmental
> strategy pursue?
Up to me? Aside from automatic entry to bored radical economists, open regionalism (as the first step in breaking down Africa's insane 1885 Berlin Conference borders). Free SA citizenship for all Southern African Development Community nationals who could demonstrate some recent domicile in SA. In fact, that was actually the policy adopted from 1994-96 because policing this place was impossible, so amnesty was an easy short-term "solution" (though in the process, it wrecked labour-remittances to Lesotho and other neighbouring countries). More recently, a nasty xenophobia has emerged in part because the ANC presided over a half million job losses from 1996-99 (as Russell pointed out so I don't need to repeat the rest of the tale), and Southern Africa nationals are, for now, the easy Other. Maybe next they'll come for me...
P.