Date: Wed, 15 Oct 1997 16:28:50 -0500 From: Doug Henwood <dhenwood-AT-panix.com> Subject: Re: M-I: Re: M-TH: Liberalism and Fascism Rakesh Bhandari wrote: >1. What is the status of the attempt to price oil in terms of a "basket of >currencies", instead of dollars? Would this be necessary to complete the >transition out of the dollar that Dennis argues is inevitable? As far as I know, on hold for now, with the dollar strong and the Gulf War not yet forgotten. >2 How has the devaluation of several third world currencies helped the US >run this import surplus? It's amazing to me how much analysis one can read >about the gyrations of the major imperialist currencies, what little >political analysis there has been of several major devaluations in terms of >who wins, who loses--much less the whys of exchange rate determination. >Carchedi seems to be one of the few Marxists who has put this central >problem of global capitalism at the center of his analysis. I am going to >re-read his "The EMU, Monetary Crises and the Single European Currency" in >Capital and Class, no 63 Autumn 1997. I can't remember if I've touted Anwar Shaikh's analysis of exchange rate determination here, but it boils down to differential productivity growth creating the central tendency and capital flows the "short-term" (defined rather liberally) gyrations around the trend. I don't think the devaluation of third world currencies had much to do with the U.S. continuing to run a giant current account deficit. Most Third World currencies are nearly worthless in international trade and finance. The U.S. has gotten away with it because almost all our trade is invoiced in dollars, and foreigners are still happy to buy US$ bonds. >3. My friend Geoff suggests to me that perhaps the US remains a >neomercantalist power. Drawing again from Joyce Kolko (Restructuring the >world economy), he writes: > >"I've heard that if the cross-border flow of goods from multinational >producers >is factored in (that is, in government accounts, GM-USA exports to >GM-Mexico aren't considered US exports) then the trade deficit is actually >a trade surplus. Leftist Eisnerians such as Chomsky are fond of this >argument, which calls for caution, but my Virgil, Joyce Kolko, says much >the same thing: "The so-called increasing dependence of the US economy on >foreign trade, reported to be 25 percent in1980, double the 1970 level, >really therefore reflects transfers within US TNCs" (214, RTWE). I've written about this several times in LBO - this view of intrafirm transfers is grossly exaggerated, though an article of faith among globalizers. Exaggerated both in scope and kind. The share of intrafirm transfers in U.S. trade is nowhere near as high as people think - 29% of U.S. trade was of that sort in 1994, compared with 30% in 1977. And about half that trade is the transfer of finished goods to foreign sales subsidaries (or vice versa, for foreign MNCs in the U.S.) Just 13% of U.S. trade in 1994 consisted of partly finished goods for further processing abroad, up from 12% in 1977. >As for Eisner's belittlement of the problem of the debt and the magnitude >of interest payments, Geoff writes: > >To let my historical imagination run wild, I imagine what if prior to the >English or French revolutions, or in 1848, when the bankruptcy of the state >was precipitating revolutionary events, there existed a coterie of >Eisnerians among the radicals, assuring everbody that the system was >solvent if we just tinkered with it this way or that ... U.S. budget deficits are now pretty small and tending towards 0, though who knows if they'll reach it, much less stay there (especially given all the tax cuts for the fat boys scheduled to kick in in 2002 and after). The U.S. has the "best" fiscal figures in the G-7, and maybe second-best in the OECD (Norway is running a surplus), and scores better on the Maastricht debt/deficit criteria than any EU country. (Actually I think the U.S. exceeds those standards, but I haven't checked the numbers in a while.) Of course, U.S. households are in pretty dodgy financial shape, with record debt and personal bankruptcy levels, and there's plenty of junk finance lurking in the corporate sector awaiting a recession to smoke it out, but the U.S. state has pulled far far back from the brink of bankruptcy. Was that long enough for you Jerry? Doug --- from list marxism-international-AT-lists.village.virginia.edu ---
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