Good questions. 1. I don't know (no-one does) when a degree of diversification implies something qualitative re autonomy re the dollar. I'd argue however, that some degree of diversification is in fact functional (increases stability without fundamentally challenging american dominance) just as the rise of Europe and Japan ultimately eroded the absolute advantage of the US but in the process became more integrated into the AMerican-led empire.
2. You're right about the structural power of finance. I only meant that it was itself part of the deeper structural power of the US. For example, in the late 70s the power of Wall Street was already increasing but rather than strengthening the US, capital flowed out. It only returned as part of the American state asserting that it had the capacity to impose discipline and contain inflation - not as an immediate policy but as a new social parameter. It was the combination of financial and broader US capacities that gives the american empire such structural power [extent of control over labour, new supplies of labour, extent of property rights, extent of capital restructuring and innovation, military (including subsidization of tech via military), state and international administrative/managerial capacities, etc]. Note that this involves being honest about American power, not arguing there are no contradictions and openings - only that the contradictions may not be sontained in the trade deficit and the international commitment to the dollar. 3. I don't doubt that there are dreamers (and plotters) within the ECB. I think however that moving seriosuly towards hegemony involves a very major and conscious cultural shift among the elites - while everything we can see suggests how fragmented Eruope remains and how reluctant it is about taking on the burdens of empire. PArt of the reason is that capital in Europe is not distinct from American capital - it includes GM and Ford, it wants to not only trade with the US but to invest in the US and not risk any backlashes there, it will look to US support when instability really threatens operations aborad (eg Latin America), etc. We need to distinguish between 'tensions' and fundamental challenges and between redefining a role within the American empire as opposed to working to replace that empire. ----- Original Message ----- From: "Dickens, Edwin" <[EMAIL PROTECTED]> To: <[email protected]> Sent: Monday, January 31, 2005 1:59 PM Subject: Re: [PEN-L] Deficits, the Dollar, and IEDs > Sam Gindin wrote: > >>The Euro may give Europe some degree of autonomy from the dollar but it is >>not a challenge to the dominance of the dollar (and is integrated into the >>dollar - eg European-US insitutional developments in private finance). > > What seems to be weakening the dollar is that hedge funds are betting that > the Chinese central bank plans to move toward a portfolio of 90% > dollar-denominated assets and 10% euro-denominated assets. You may or may > not want to call this a challenge to the dominance of the dollar. But > please do tell when taking actions to secure some degree of autonomy > becomes > a challenge. > > >> That dominance is not simply something 'financial' but reflects the >> structural power of the American empire - something the European elite >> may >>not like but has absolutely no intention of challenging (witness how they >>became more flexible re Iraq as opposed to mounting and mobilizing any >>real >>opposition). > > These types of distinctions between financial and real or structural power > perplex me. What is more structural than the power of a monied > aristocracy > to demand a significant share of value added every year in the form of > dividends and interest payments on fictitious capital? It certainly beats > the structural power of the old feudal aristocracy that had to maintain > possession of so much territory to get a comparable share of value added. > > >>The ECB is holding tough in large part to enforce American style >>restructuring within Europe (it may also require more of a consensus to >>act >>on reversing the dollar's fall). > > I agree. But this does not exclude the possibility that the ECB also > dreams > of an international role for the euro. Central banks often try to > strengthen capital as a whole as against labor and at the same time > strengthen certain fractions of capital as against other fractions. > > Tom Dickens >
