Am I tripping or does this paper sort of imply that U.S. imperialism reaps superprofits from neo-colonies, and the authors are detecting these superprofits in a sort of analogy to the way that astronomers detect dark matter way , way out in the wild blue yonder ?
Vladimir Ilych-Ulyanov
^^^^^
Michael Pollak
On Wed, 21 Dec 2005, Doug Henwood wrote:
> But just how does the US role as imperial hegemon increase FDI returns?
In the long version of the paper
http://www.ksg.harvard.edu/cid/cidpublications/darkmatter_051130.pdf
they actually list 3 things that they think give rise to dark matter:
1) Superior FDI performance 2) Seignorage 3) The differential in return between Treasury bonds and bonds for the rest
of the world
even though the op-ed version seems to only emphasize (1).
With (2) and (3), it seems clear the profit comes from being the reserve currency that other countries have to hold, even though it gives bad returns.
And on page 10 of that paper, they list other authors who have put forth variant forms of their theory that take this even farther, and blow up the hegemonic profit aspects and ignore the FDI differential entirely.
-clip Or in Daniel's words, the dark matter could all go poof. In which case, it ain't dark matter, it's fictional matter.
But if you leave those two parts out -- admittedly the stuff they are most chuffed about -- their central contention is kind of stunning. For all these years, mainstreamers have said that being the reserve currency doesn't
get you more than a risible seignorage. But these two guys are now saying that in fact it leads to an unbelievably enormous profit -- a profit they can quantify (or could if they were thinking clearly): the difference between the cumulative net investment income outflow the US should have experienced over the last 25 years if investment yields were equal -- and zero, which is what we've experienced.
This seems like beyond the claims of the wildest Luxembourgeois. I thought it was pretty stunning to hear it be considered such a respectable idea.
Re-parsed, this might be possibly be something that could come in handy, no?
The idea that we're sucking value from the rest of the world and using it to
feather our nestmansions has been tossed around a while, but usually with the implicit suggestion that we'll have to give it back. If I follow these guys correctly, we actually don't give it back. We may pay in agony if the system collapses. But they don't get their money back. We spent it.
Michael