On Jan 13, 2008, at 11:50 AM, Patrick Bond wrote:
> And so where are the *crucial*
> factors that have pulled reinvestable resources out of value
> circulation
> and into financial speculation? Declining rates of profit in
> manufacturing; the rise of inventories and general overaccumulation of
> fixed capital; political power shifts that give higher rates of return
> to finance via monetarism; stagnant wages that generate consumer
> pressure for credit innovation; new unregulated financial instruments;
This is all a bit of a jumble.
If investment rates are consistently low then how can there be an overaccumulation of capital? If rates of return are so low then why do capitalists keep investing?
Inventories are not high by historical standards - that's the whole point of the just-in-time revolution in manufacturing and of Wal- Mart's inventory strategy in retail.
"Monetarism"? Where? The Greenspan Fed? Dr Bailout was a monetarist? Volcker pretended to be a monetarist for a couple of years, but it was all an act. The ECB is kind of monetarist, but they've got a bigger manufacturing sector and higher levels of real investment than the U.S.
And what, exactly, is "speculation"? A business startup is a speculation of a sort; does that make venture capitaists speculators? Is it "speculation" when Procter & Gamble hedges its currency exposure? When a bank hedges interest rate exposure? This landscape is very complicated and you reduce it all to a handful of slogans.
Doug