Julien wrote:
>>This is very easy to explain with bourgeois economics: too much saving and
not
enough spending on the back of a broken speculative bubble. We would call this
overaccumulation but this is only another way to talk about
underconsumption.<<
Describing symptoms in other terms does not add up to an explanation, it is
just another description. Why is there too much saving, and what defines too
much in any case? What is finally determinant, ie what is the determining last
instance?
In any case Japanese over-saving is *itself* only a sypmtom not a cause of the
underlying crisis.
The determining last instance in the capitalist world system is and has always
been the prevailing rate of exploitation, ie rate of surplus value extraction,
and the secular direction of change of that rate. The system runs into
realisation problems when the rate of exploitation is too low to valorise both
existing capital and newly-created capital in each cycle. The problem will get
worse thru time until a general crisis liquidates "excess" capital and
restores equilibrium at a new level of social productivity and within a new
historical matrix (ie, when the value-produiction process is embedded in an
new, transformed set of global production relations).
The world market has been unified as a *capitalist* world market for almost
500 years. It has continued to mutate as different hegemons have waxed and
waned and as the general level of social productivity has risen, but the
fundamental characteristics of the unified world market are essentially
invariant; only their forms of appearance alter thru time.
>>Is Japan really about to go down the tubes, like
>>Russia
>No.
Werll, we might agree on this but what's interesting is that it's not me but
the Washington Post which is suggesting it.
>>This article reports on a comment by Japan's
>>finance minister, that "Japan's public finances
>>are very near collapse."
>This is a routinely used political trick that neoliberals and other fans of
"small
>states" like very much. People are only paying attention to it because of the
>prevailing gloomy mood.
I think this seriosuly misses the point about what is happening in Japan.
Today the Nikkei is down to below 12k. That's an unprecedented debacle and
effectively means the bankrupting of huge swathes of Japanese finance and
industrial capital, and the utter and undeniable failure of a whole strategy
for governmental "minding" of big business which goes back to the 1950s. It is
a desperate crisis for Japan and it also shows that Asia never recovered from
the 1998 meltdown, which, as we now see, was merely the harbinger for much
worse things yet to come. It is hard to overestimate the scale of the crisis
now unfolding in Asia or its implications for the West.
>>Deficit-spending on public works schemes has also been tried,
>>as a way of siphoning off surplus capital, equally unsuccessfully. The only
>>other Keynesian option left would seem to be the one tried by Hitler, and
his
>>economics and finance lieutenants, Speer and Schachtmann, in the 1930s,
copied
>>then by Japan: put simply, a massive rearmament programme based on autarky
>>and temporary withdrawal from the world market.
>Nonsense. Deficit-spending works. It only has not been tried hard enough,
>for trying >hard enough would mean not borrowing but printing money.
Deficit spending works? So Milton Friedman and monetarism really were just
arbitrary and unnecessary innovations after 1973, and Keynesian pump-priming
really had not resulted in massive inflationary crisis, huge public deficits,
unmanageable disequilibria in global payments, and chronic corporate
unprofitability? I don't want to turn this list into IPE or PKT, but it seems
fairly clear that deficit spending does not always work. As for printing
money, that's been tried too, with mixed results. Why would printing money
encourage a risk-averse public which saves too much, to stop saving and start
consuming? Why would it bale out Japanese corporations which already can
borrow money for free, and do not have the problem of having to produce
transparent accounts?
>BTW, deficits needn't be spent on public works. The state can also invest in
>energy, research, education, foreign aid, or whatever.
The Japanese have been doing all of that, and their investing strategy was the
primary motor driving the Asian Tigers on, as well as sustaining *US* mass
consumption levels; so, taking the world system as a whole, which is the
proper way to do it, it can hardly be said that there has not been a
decades-long attempt to get accumulation going again, and this has even been
successful, in some places and for some fo the time. US boom is the obverse of
Japanese deflation. But the question is which process will in the end win out,
which will be the 'determining last instance': will the deflationary forces at
work ultimately prevail, or will the system get kickstarted again into a new
upwave, a new long cycle of accumulation, as Anwar Shaikh, Doug Henwood and
others have argued? IMO, there is no doubt about the answer, and the disatrous
New Technology bubble is yet more evidence for the still-unconvinced. There
will be no huge new upwave, on the contrary, the system is heading for deep
and prolonged depression. Certainly, there are powerful counter-tendencies and
insofar as depression will help contain rising energy prices, doomsday will be
postponed: but not postponed forever.
Mark
_______________________________________________
CrashList website: http://website.lineone.net/~resource_base
