Sowing Dragons

D.L. boddhisatva at mindspring.com
Wed Apr 12 06:29:47 PDT 2000


C. Redmond,

Look, I like the idea of state banks. In fact, my own opinion is that workable socialism will revolve around something very much like a state bank. I also think that the future socialist state banks will be more like what U.S. banks (and mortgage-lending agencies) are than what European and Japanese banks are.

You started the conversation by saying that the EIB was the financial arm of the EU. It's too small. The numbers aren't there. What's more I think your confidence in Euro-banks and keiretsus as instruments of socialist change is misgiven. I think these are structures of a completely bourgeois state. Moreover it seems to me that, as big as they are, they are currently unable to liberate enough capital from the bourgeoisie and inject it back into the system. I think that while the state-influenced Euro-Japanese bank is a better model for liberating accumulated capital than the U.S. bank of the 60's and 70's was, it is not as good as the securitizing/syndicating machines that U.S. banks (and mortgage-lending agencies) have become. I think the fact that Chase's '99 U.S. syndications equal almost 90% of their total assets indicates that.

It's not that I like the Anglo-American system - far from it - it's just that I don't think societies go backwards. I don't think Keynesianism will reassert itself. I don't think keiretsus will rise again. I think it's very likely that the Europeans and Japanese may improve on the Anglo-American model but I think they'll have to adopt it first, at least in principle. I'm even beginning to think that Rakesh is right about China and globalization - you oughtn't fight the inevitable.

I think you're probably right that the European and Japanese banks are more humane institutions and certainly that's important. As with globalization, it's essential to fight for the best terms even for entirely capitalist change. I also think that the way they do business is antiquated and not long for this world. They may be better people than American bankers but they just aren't getting that money moving fast enough, it seems to me.

peace



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