In fact, Japan is a dramatic financial disadvantage these days and you don't have to ask my word for it. You can ask the Japanese. Let's remember that America hadn't nearly the empire that England had in the 1880's and only 30-40 years later New York surpassed London. And by the way let's consider why it was England and not France, Germany or Italy on which the "sun never set" and which led the Industrial Revolution.
In fact, the Cayman Islands are a great example of the importance of finance but a far better one is Singapore - hardly a world military power. Military power does not automatically attract liquidity. Russia has an outsized military and huge oil reserves but they are sucking wind economically. Why hasn't their military influence translated into money?
The world's wealthy people are free to invest where they want and yet the world saves more than half its money in dollars and their savings almost inevitably pass through our system at some level. That is not inflicted militarily.
The old, tired Leninist model is just uninformed and Marx lived in the stone age of modern finance. Finance is not just a system of expropriation, it's a system of cooperation, albeit among capitalists (that pretty much goes without saying). Cooperation is hard to foster. It takes work and innovation to realize a cooperative ethic. Economies are not a zero-sum game with the biggest army taking the most. It's not about distribution, it's about cooperation.
BTW, Japan WAS very innovative financially when they developed their big industries. They got tremendous buy-in to their system from the Japanese bourgeoisie and thus tremendous liquidity and cooperation. They hit a wall, however. Meanwhile America has been able to borrow more and more and more from the world at excellent rates. Japanese bonds weren't seen as less safe that American bonds in the past ten years or so because there was some implicit greater military threat to Japan. People stopped trusting the Japanese banking system.
boddi
On 12/7/05, Travis Fast <tfast at yorku.ca> wrote:
> And how pre tel did they do this. Boddi cmon. You are trying separate
> the inseparable. The New York was able to become the center of the
> financial world because it was the center of the new world and the
> financial center of the American continental empire. And despite the
> size of New York clearing houses in the 1880s the US dollar was far from
> being the international currency. Why do you think the Yen still bats
> below its weight as international reserve currency despite being the
> second largest economy in the world. Wait I know they lack financial
> innovation. Put it this way, do you think that if the Cayman Islands
> were develop the most sophisticated and innovative financial instruments
> it would become the destination of global savings and become the default
> international currency?
>
> Travis
>
> boddi satva wrote:
>
> >It's also a mistake to ignore the fact that America has been a
> >tremendous financial innovator, even while it di dnot have the
> >dominant position it does now.
> >
> >Here is one example from a "Cyclopædia of Political Science, Political
> >Economy, and the Political History of the United States by the Best
> >American and European Writers" published in 1881 (can be found at:
> >http://www.econlib.org/library/YPDBooks/Lalor/llCy0.html )
> >
> >________________________________________________________________
> >
> >—The largest clearing house in the world is in the United States, and
> >that country has the greatest number of clearing houses.
> >
> >—New York now surpasses London, the oldest clearing centre. in the
> >amount of its average daily clearings. In 1880 the total clearings of
> >the London clearing house were, in dollars, $28,197,659,227; those of
> >New York were $38,614,448,223.06. But the largest clearings in one day
> >up to the end of 1880 were those of Nov. 17, at London, which amounted
> >to $302,900,000. The transactions of the New York clearing house in
> >1880 were the largest ever made in any room on earth, and exceeded the
> >sum of the payments ($18,334,854,202) and the receipts
> >($18,570,348,647) of the United States government since its
> >foundation. All this immense business was done without the loss of a
> >cent, and with no errors. The largest clearings made in New York,
> >before 1872, were $35,541,088,264, in 1869, when one-third of them
> >were due to gold speculation. London's largest clearings were
> >$29,544,268,442 in the year 1873. The New York clearing house was
> >founded Oct. 11, 1853, with 52 banks. This number was reduced after
> >the panic of 1857, to 47; rose to 60 in 1873; in 1880 was 57; and in
> >June, 1881, was 59, at which time the capital of the clearing house
> >banks was $60,875,000. New York does 78 per cent, of all the clearings
> >made in the United States.—"The American," Mr. Ellis said, in his
> >paper on 'The Clearing House System,' read before the English Bankers'
> >Institute, Feb. 16, 1881, "seems to be the character most suited to
> >the adoption of centralizing and clearing principles."
> > ______________________________________________________
> >
> >America came out of WW1 a creditor nation, again showing a tremendous
> >capacity to raise money and New York thereafter surpassed London as
> >the world investment capital.
> >
> >boddi
> >
> >___________________________________
> >http://mailman.lbo-talk.org/mailman/listinfo/lbo-talk
> >
> >
> >
>
>
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