Christian, here is a short response, and then I am off. Hopefully a real talent will arise in my absence to continue this discussion with you and Max. All best, rakesh
>But I don't know why. I would like to know how to go about constructing an
>explanation--or at least an explanation of why I can't come up with an
>explanation.
Well, I think Mattick provides one explanation. A shortage of surplus value cannot be overcome by debt financed government fiscal programs that will compound that shortage in the not so long run.
>I don't know enough about economics to have faith in deficits. (I'm
>serious--I'm not just trying to be passive aggressive.)
We're in the same boat. So we are lucky to have Doug, Max, Roger, and others who know about economics. I have read mostly in the Marxist critique of political economy, not economics.
I do know that,
>depending on what they are spent on, they can at least help transfer some
>wealth from the richest to the poorest.
I think Shaikh and Tonak have shown that the state carries out through taxation a net transfer from the working class to capital. Most redistribution seems to be within the working class. I think above authors refer to the myth of the social wage. Seems like damn important work.
> And Japan simply isn't in that position. The public debt
>isn't crowding out private debt, is it? Or put another way: that isn't the
>reason for sagging investment, is it? So I'm wondering which negative
>effects you think are relevant.
Christian, I referred to the negative effects that 1. inflation (from either mad money creation or even huger deficits) could have on the corporate form (encouraging massive, job destroying, inefficient conglomerates to internalise markets in the face of price uncertainty and volatility) and 2. the future tax burden from deficit financing could have on corporate flight. There are also questions to be raised about the destruction of money and the social consquences of monetary instability.
Although I'm still learning how to
>evaluate the evidence for these claims, it seems clear that Japan's current
>situation derives in no small part from the bubble economy of the late 80's,
>and not necessarily from the structure of its markets, etc, although those
>might not help.
Well, wasn't the bubble puffed up by lower interest rates in response to a rising yen post El Plazo (:) agreements. Why won't money creation have such an effect again?
>Under certain circumstances, as we know, Marx said he was all for free
>trade--let the markets rip, and everyone will see the leviathan for what it
>is. Sure. But who will bear the costs of adjustment to such crises if they
>don't topple the world system?
The costs of adjustment can be greater by the acceptance of many forms of government intervention today that leave the underlying relations of production untouched. Marxism provides a theoretical basis to clarify that; too bad the bourgeoisie doesn't stipend scholars to develop such arguments.
yrs, rakesh