What is the purpose of restricting public spending other than to protect the profitability of private investments?
I mean, if there is physical capacity to make things - workforce, machinery, materials, know-how - that capacity can be 100% utilized to produce social benefits, as needed. There are no material factors that prevent the full deployment of that capacity, at least in principle. There is of course the issue of choice how to deploy that capacity most efficiently, but that issue is irrelevant if that capacity is underutilized i.e. less than 100% is engaged - which is true of most developed countries most of the time since WW2.
That means that government or some other public authority can simply "commandeer" all the unused productive capacity and engage it in the production of social benefits of one sort or another - railroads, schools, housing, hospitals, cultural and recreational facilities, etc. By "commandeer" I simply mean hire and print money to pay people engaged in the production process - in principle, that is.
Of course, that is not what is happening in the real world. In the real world, there is not "enough money," we are told by economists, to pay for engaging this extra productive capacity, or that printing money to pay for that capacity will make the sky fall. This econo-babble strikes me as utterly absurd, however. It is pretty much the same as if, say, you asked a tailor who has the material, the tools and the know-how to make you a suit, and he would reply that he cannot because he does not have enough inches on his measuring tape. The length of his measuring tape is immaterial - if the one that he has is too short, he can simply get a longer one to do the job. End of story.
So the real reason why public authorities do not engage productive capacity to its full extent is not the shortage of money - which is nothing but an instrument measuring material capacity - but the consequence of that engagement for private investors. If the government simply started printing money, this would have little effect on the consumption of people engaged in the productive capacity - who use money as coupons they redeem for other goods and services. Even if government printing money would cause "inflation," this is nothing but a a simple change of metric to measure material capacity.
It is like switching from miles to kilometers to measure distance - it may have more digits on road signs showing the distance, but it is still the same distance. Likewise if one earned $1,000 and hour and paid $500 for a loaf of bread, nothing really changes from the current situation when one has to work 30 minutes for a loaf of bread that costs $5.
So the dreaded by economists inflation is nothing more than changing units of measurement - something that people using computers do all the time without thinking twice. As I see it, the only reason why it is dreaded is that it would devalue to some extent private investments made in the past. So it follows that the protection of private investor profits is the main and only reason why inflation is dreaded by economists, and why public authorities are constrained from full deployment of material productive capacity in printing money to facilitate that deployment.
I further follows that any mechanism that restricts government expenditure introduces inefficiency as it constraints the full use of productive resources to protect the interests of financial aristocracy. This is fundamentally the same as feudal land ownership restricting the introduction of more efficient methods of cultivation.
As I see it, that is all that is to it - capital owners restrict productive use of material resources to protect profits from their capital, end of story.
What I find absolutely perplexing is that most otherwise rational people do not see it and instead parrot the bullshit spoon fed to them by economists and politicians telling that government is running out of or using too much measurement units (money) to procure goods and services that people desperately need. Those people would be ROTFLOL if they were told that a plumber does not have enough inches to replace their leaky pipes, yet they accept the same bullshit line as words of wisdom if it applies government. Mind boggling.
How does that apply to Greece? I wonder what would happen if the Greeks elected a truly socialist government worthy its name and that government said "Fuck Maastricht" and started spending like a drunken sailor. And if the EU complained too much, the true to its name socialist government would say "Fuck your Euro, we will be quite happy printing the drachmas again." Of course, private investors would lose big time on such a development - but then, fuck the investors they are a net drain on the productive capacity of modern economy. The only bad outcome of this course of action would be the investor class wanting to launch a war on Greece, but I do not see the EU having the necessary capacity. Bombing a backward third world country is one thing - but they could not pull the same stunt against Greece or for that matter any other "underperforming" EU country. A more likely scenario is German, French and Dutch governments reining their banksters in and frantically writing checks to keep Greece in the Eurozone.
Wojtek
On Tue, Jun 7, 2011 at 2:58 PM, Mark Bennett <bennett.mab at gmail.com> wrote:
> Michael Hudson (the old one) has published some decent piece in Counterpunch
> lately. I like Hudson a lot, but I may be a fool:
>
> http://www.counterpunch.com/hudson06062011.html
> http://www.counterpunch.com/hudson06032011.html
>
>
> On Tue, Jun 7, 2011 at 11:53 AM, <123hop at comcast.net> wrote:
>
>>
>> Can anyone point me to something reliable on the genesis of the Greek
>> situation?
>>
>> Thanks,
>>
>> Joanna
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