The news that the Fed arranged a transfer loan of $50 billion dollars to
European central banks to keep the international economy circulating,
suggests absolute resolution to keep the capitalist global economy
functioning. While the move may be entirely rational in terms of short term
liquidity to bridge deals that could not be completed because of the
closure of Wall Street, it imperceptibly blurs the boundary between
monetarism and global Keynesianism. Indeed the virtual agreement of the
major central banks to reduce interest rates in coordination probably next
week, is also equivalent to the injection of a large amount of capital into
the global economy - not of course in any progressive direction, such as a
global Marshall Aid plan, but for the maintenance of the battered
metropolitan western economies.
The UK Daily Telegraph reports:
Europeans braced for Dow plunge
http://portal.telegraph.co.uk/money/main.jhtml?epollResult=true&view=DETAILS&grid=M3&xml=%2Fmoney%2F2001%2F09%2F15%2Fcndow15.xml&menuId=-1&_requestid=185221
This estimates that European stocks fell 9% last week. And the assumption
is that the Dow will fall by a similar amount. Unless of course the Central
Banks of capitalism think the situation is sufficiently grave that this is
the moment to act.
But in marxist terms how will a further injection of cash into a stumbling
economy actually create any more value?
Perhaps Bush's ringing declaration today of war - protracted war, could
give the world the real economic boost it requires. The occupation of
Kabul, if the Taliban do not hand over Bin Laden, would be a very
substantial undertaking, and would require the expenditure of vast
resources on a continuing basis.
Then again, perhaps they may decide it was a mistake not to continue the
gulf war through to the dethronement of Saddam Hussein....
A coup by fundamentalists in Saudi Arabia, would have to be crushed by
force of arms because of the oil flows. This would also have the merit of
dealing with the fact that most of the people named in connection with the
terrorist attacks were of Saudi and Egyptian origin. As would indeed be an
occupation of Egypt after the overthrow of the present regime.
But if these failed to prevent one suicide bomber getting into Manhattan
and finishing off Wall Street with a nuclear suitcase bomb of the sort that
they have been planning since 1993, this would clearly require the
expenditure of a vast programme of funds for reconstruction of the
heartland of capitalism. Not to mention the cost of rebuilding all
skyscrapers to ensure they will not collapse as a result of fire.
But now that the budget surplus has just disappeared, this could be a
cogent excuse to raise taxes to generate a revival in global economic
activity by placing the US economy on a war footing. If US consumers
suddenly turn nervous about maintaining their expenditure other sectors of
the economy need to increase their spending.
NMD clearly is not enough. This is perhaps after all not the time for the
US defence forces to decide they can wage war on only one front at a time.
Chris Burford
London
