>>> Rob Schaap <[EMAIL PROTECTED]> 05/11/99 11:30AM >>>
If it was an opportunistic 'warning' or reprisal - to be understood as such
by Beijing, while allowing Beijing a way out of shooting back to save face -
it was one delivered in global circumstances of excess capacity (Germany,
Britain and SE Asia are all gradually trending to higher productivity and
higher production - but not a word is being said about the fact that
consumption is not matching these increases in those regions - inventories
are growing and profitability is not following productivity up - not yet at
least). In fact, we are also talking underconsumption as far as most of the
globe is concerned. America is responsible for 62% of the world's growth
(over the last 12 months), and it is a false growth for the most part - as
in Oz, it's mostly consumer-led stuff. Structurally short-term and very
hard on the current account.
Charles: Rob, have you thrown this and the figs underlying it at the economists on
Pen-L ? Some of them can't find any economic motive for the war on Yugoslavia. The
FROP is "ideological" to them , I think.
(((((((((((((((((((((((((
I've suggested before that a salient determinant behind the SE Asian crisis
of 97/98 (I'm tempted to add '99) was that the inclusion of the Euro-Commie
bloc into world capitalism actually constituted the addition to the
capitalist world of hundreds of millions of impoverished workers. They may
not have been particularly productive as cheap labour goes, but they were
for the most part very poor. Loads of productive capacity entered the
scene, but relatively little effective demand attended it. The chooks came
home to roost where world capital could most easily deflect them - SE Asia.
All this while, Japan was experiencing a structural crisis of unprecedented
proportions. Japanese consumers are also workers - workers well aware that
the dramatic restructuring required within the groaning keiretsu economy
would eventuate in some pretty hideous cost-cutting. That means big
unemployment numbers in a culture unused to such nonsense. Japan got doubly
hit - first by a domestic market that would rather save than buy, and then
by dirt-cheap imports from the defanged tigers of Asia.
American excess capacity is still of the order of twenty per cent, too.
Here in Oz, capital equipment, which we generally import now that we've
consigned so much of our manufacturing sector to a rusty death, is still not
being bought. We are 'growing', but we are growing without investment
growth to match - and this as prices are at long-time lows.
What all this adds up to for me is that America really doesn't stand to lose
if China withdraws from its charge into world markets. A billion more
workers, but only a few tens of millions new buyers. Could be just what
world capitalism does not need right now, eh?
On top of that, a belligerent relationship with China might help nicely when
it comes to tugging at the US tax-payer's pocket. Another enemy, another
reason to build up a new-generation military capacity, another dent in that
excess capacity. 'Military Keynesianism' the economists call it. 'Profits'
General Dynamics calls it. 'Election funding' the Democrats call it.
'Another cold war' the rest of us would call it.
I don't pretend there aren't big prices to be paid for antagonising both the
Russians and the Chinese (IMF defaults, a few hot baths for entrepreneurs
who have already put the house on China, the spectre of global destruction,
and all that), but it might not make for bad foreign policy just now.
Is this speculation above and beyond the call of reason?
Charles: Sounds like a very good hypothesis to me.
Charles Brown
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