On Wed, Aug 27, 2008 at 3:56 PM, <dredmond at efn.org> wrote:
> On Sat, August 23, 2008 5:54 pm, Julio Huato wrote:
>
>>> The developmental state is the gateway of 21st century
>>> socialism. This is the fundamental reality of contemporary geopolitics.
>>
>> This is a very interesting idea. Could you elaborate on it?
>
> I wouldn't call the boost in oil prices a bubble - there's been
> speculative froth on top of a genuine increase in demand, due to fast
> growth in China, Eurasia, Eastern Europe and Latin America.
>
You can fail to call it a bubble, but you'd be wrong. Oil prices doubled in a year. Growth in the periphery simply does not explain that. It's a bubble that's deflating.
> What's happening is truly world-historic. After the bitter experience of
> 30 years of neoliberal immiseration, the semi-periphery has broken its IMF
> shackles
This is true, except what they have accomplished is largely what the IMF suggested in the first place: make the currency more stable by focusing on exports and limiting inflationary subsidies relative to other forms of investment.
They also stabilized the currency through more-transparent and more sophisticated processes of valorization.
But it should be pretty obvious that there were two enormous forces helping them do that: the Wester credit bubble and, later, the Western commodities bubble
>and is forging institutions (developmental states) capable of
> channeling its export and energy surplus into indigenous development.
"Capable of" - maybe, in theory, as measured by labor-value. However, the institutions of regulation, exchange and valorization are not there yet. Should the Western institutions supplying these capacities fail, these countries will find themselves in a heck of a spot.
> There isn't any single model for these states, they're quite different in
> scale, scope and sophistication, but they exist, and are evolving with
> amazing speed. Check out the scale and scope of the sovereign wealth
> funds:
>
> http://www.swfinstitute.org/funds.php
The problem with this list is that it doesn't match the countries we're talking about.
I know Norway has a strong "development state". So do all European countries, but it's not exactly what you're talking about here.
Abu Dhabi? Saudi Arabia? Kuwait? These are "indigenous" development states? No, these are examples of states where the elite dominate and supress indigenous development states by dint of their wealth and political power - which is a problem everywhere, including Brazil, Russia, India and China.
What are these "development states" you speak of comprised of? Don't tell me what models there aren't, just tell me what institutions you're talking about - formal, semi-formal, cultural, whatever. Because if it's a two and a half trillion dollars worth of commodities-profits money you're talking about, you're practically making my argument for me.
>
> Throw in massive foreign exchange reserves, and the semi-periphery now has
> the economic muscle and political coordination to industrialize.
>
> -- DRR
"Massive foreign exchange reserves" in what currency? Dollars. Why not rupees? Why not real, rubles or renminbi?
Look, I will admit that years ago you were right about the euro - in some ways - and I was wrong. The euro has been a smashing success. But even the euro is not growing against the dollar as a reserve currency. Don't you think that after the euro would be the yen then maybe the venerable pound? Swiss franc?
So aren't these currencies at least two away from displacing the dollar?
Someone can buy almost anything she needs to buy from India from America in U.S. dollars. What can I buy from American in rupees? Not very much.
What can I buy, from India, from China in rupees? Not very much. I won't go through all the other countries.
The point is that the institutions of trade are still Western institutions. No reasonable person could or would even want to deny that the BRIC countries have seen revolutionary growth. But the discussion here is about whether or not they represent a new pole in the global order.
I read about it here and in Newsweek and the Washington Post and even USA Today, but nobody seems to be able to tell me where it's happening. They just assure me that it is.
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