> a) prohibit the $130 trillion trade in derivatives altogether. It is not a $130 trillion "trade" in derivatives, if you want to be precise. The trade is a contractual assurance exchanged for a fee. That BIS estimate, refers to the value of the underlying asset (tangible or financial), which is itself not part of the trade. The actual appropriation of gross income from hedge contracts would be more like a tenth of that value, but even if that is correct, the amount is still astronomically and gigantically big. It means many things, e.g. that the deregulation is not just lucrative, but also raises total costs from the point of total social capital and that it adds to the capital which is tied up in activities which do not create additional employment. The topic of derivatives is extremely important to understand from the point of view of how the bourgeoisie aims to solve the world debt crisis. Financialisation means that you can transfer the financial burden of asset ownership to somewhere else in space-time, that is the point.
People do not understand the significance of derivatives, also, because they do not understand the gigantic difference between currencies in rich countries and in poor countries. Even a value of US$1 billion is a gigantic, astronomical amount, from the point of view of poor countries, as regards real buying power. With that sort of money, you can have a gigantic effect in poor countries. Suppose that you would revalue food imports into the USA according to price norms applied by American food producers. The difference would be gigantic. At the moment in India, derivatives are being used as an instrument to encourage primitive accumulation, no less. It is better than selling kidneys, of course. Naturally my friend Melvin would dispute all this, but yep, in the real world it's happening. In the old days, you might go to the pawnshop, but these days, there is a derivatives pawnshop and it's global. What used to be called pawning is now called derivatives or another fancy label, but the important thing to understand is that pawning could now occur on a very large scale, in fact, it is possible to "pawn" a whole country financially. The "development/underdevelopment" discussions in the haute bourgeoisie are in truth different from what Marxists think they are. J.
