[lbo-talk] the Grundrisse and credit

Doug Henwood dhenwood at panix.com
Tue Jan 17 12:27:58 PST 2012


On Jan 17, 2012, at 3:18 PM, 123hop at comcast.net wrote:


> If debt = credit expansion, then it is central to the real economy only inasmuch as it permits economic expansion. For example, if credit were expanded to fund infrastructure renewal or a shift from fossil fuels to green energy, then I can see how it's central.
>
> But credit expansion can also be used to fuel speculation, in which case I don't see how it's central to anything except the ability of a few to gamble without risk.

It's not all speculation. Or, all capitalist activity contains some degree of speculation; the degree varies by time & place. But people use credit to buy houses, cars, get their teeth fixed, and go to college; firms use credit to buy raw materials and make payroll. As Marx sorta put it somewhere, it's a capitalist way of stretching the limits of capital.

You've got to look at the other side of the balance sheet too. One person's debt is another's asset. Reasonable debt writedowns can make everyone better off in the long term, but massive default would bring everything crashing down - including the savings of the half of the population that has savings.

Doug



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