Capitalism's survival needs growth and expanded reproduction that are hard to satisfy as the ecological debacle and the unfavorable condition of realization of the accumulated capital. The major or even the only way out is through very low interest rate private indebtedness. The Federal Reserve's QE trick plays such an enforcement role as to inculcate desperate livelihoods to borrow as much as they need to beef up the aggregate demand. The number of these kinds of borrowers increases with inflation as planned by the Fed.
When the ruling class and/or upper strata feel the difficulty to remain ruling the way they used to, the bourgeois rule is then at the brink to make changes that usually give the normally obedient ruled chance to help change in their favor. Without the upper strata's uneasiness of reign or perturbation, the lower strata would remain obedient.
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Guest Lecture SYSTEMIC FEAR, MODERN FINANCE AND THE FUTURE OF CAPITALISM Jonathan Nitzan & Shimshon Bichler
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ABSTRACT:
Is capitalism about to collapse? Like every other mode of power, capitalism rests on confidence in obedience: the confidence of the rulers in the obedience of the ruled. Emperors are sure of their rule over obedient subjects and slaves; lords are certain they can rule their obedient vassals and serfs; and capitalists trust the obedience of their underlying masses. The confidence of rulers is mediated through their dominant dogma: when the dogma holds, the rulers are hubristic, steadfast and ruthless; when the dogma disintegrates, the rulers, gripped by systemic fear, become hesitant and lose their ability to rule.
Systemic fear often culminates in systemic collapse. The downfall of the last Babylonian emperor, Belshazzar, the collapse of Easter Island, the French Revolution against the ancien régime, the fall of Soviet Union and many more such episodes were all preceded by systemic fear: for whatever reason, the rulers lost faith in their dogma and confidence in their subjects' obedience. But their systemic fear remained elusive: we know of it only anecdotally, subjectively, and always retrospectively -- after their mode of power lies in ruins.
Modern finance has made systemic fear transparent. For the first time in history, we have an objective, numerical measure of the rulers' confidence in obedience -- and this measure is available not in retrospect, but here and now. The indicator in question is forward-looking capitalization: the financial ritual with which capitalists discount to present value their expected future profit. This ritual stands at the heart of the modern capitalist dogma, and it is currently broken: for the past decade, capitalists have been looking not forward to the future, but backward to the past. In other words, capitalists no longer trust their own dogma: they are no longer confident in the obedience of the ruled or in their own ability to rule.
VIDEO & TEXT: http://bnarchives.yorku.ca/299/
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Jonathan Nitzan Political Science York University 4700 Keele St. Toronto, Ontario, M3J-1P3 Canada Voice: (416) 736-2100, ext. 88822 Fax: (416) 736-5686 Email: nitzan at yorku.ca Website:http://bnarchives.net
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