On Dec 10, 2006, at 8:03 PM, Patrick Bond wrote:
> I posted more than my limit on Sunday but here in Durban it's
> Monday. And Doug, sorry about sig.card - it's gone now I think.
>
> Doug Henwood wrote:
>> How can the system as a whole conjure value merely out of
>> exchanging virtual titles to wealth? The profits of financiers
>> come ultimately from interest and fees paid by business and
>> consumer debtors, even if there are countless steps between
>> producers & reciipents.
> Yes, of course the key word is 'ultimately', but in the meantime a
> temporal fix - credit to permit the generation of surpluses at some
> future time to repay funds required to mop up overaccumulated
> capital today - kicks in.
That "temporal fix" you keep talking about has been fixing temporally for decades! E.g.:
ratio of household debt to disposable personal income, US
1945 19.5% 1950 34.8% 1960 56.0% 1970 63.1% 1980 69.3% 1990 84.3% 2000 103.3% 2006 135.5%
Where's it end?
>> Many of the examples you cite are of stocks of capitalized income
>> flows, not the flows themselves.
> Doesn't matter for the purposes of the argument, which is about the
> financial system's delinking from reality.
It does matter if you're talking about consequences of that delinking. If it's just pure money of the mind with no real world consequence, then what does it matter?
>> But if those are to be converted into actual cash, then the cash
>> has to come from incomes derived (by capital or labor) from the
>> production of goods & services. And what would all those profits
>> mean if they couldn't be converted into actual consumer or
>> investment goods?
> It would mean a hyperactive M-M' circuitry, which can in turn mean
> a nasty bubble from time to time, you'd agree?
It does. Bubbles inflate and burst, to be succeeded by new bubbles. As I've been saying since, oh, 1991, some day the Big One may come, but so far it's been repeatedly deferred.
>> There's something a little retro and moralizing about the
>> prominence accorded p.a. in your & Harvey's analyses that wants to
>> look away from actual production and focus instead on "gambling"
>> and "parasitism."
> Hopefully one would look at not just finance and the point-of-
> production but everything in capitalist society, if skills and
> capacity to do so were in greater supply (and while Harvey has
> looked carefully at production and nearly everything else, I can't
> say that I have even begun). But there was something a little retro
> about KM's moralizing about capitalism/capitalists - rentier,
> landed, bourgeois and otherwise - too, I hear you saying? Or
> consider the frontispiece to Wall Street (which coincidentially I'd
> used a bit earlier in the same place, in Uneven Zimbabwe): "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." — Marx, Capital, vol. 3, chap. 33
That's in large part about finance and power. Far from "delinking," I'd say that the owning class has increased its control over the productive side through financial mechanisms.
Doug