File spoon-archives/marxism-thaxis.archive/marxism-thaxis_1997/marxism-thaxis.9710, message 416


Date: Wed, 29 Oct 1997 07:37:01 +0000
From: Chris Burford <cburford-AT-gn.apc.org>
Subject: Re: M-TH: Corrective


At 11:07 AM 10/28/97 -0500, you wrote:
>Rakesh Bhandari wrote:
>
>>Carchedi analyzes the limited impact of stock market crashes and himself
>>underlines that they are not 'catastrophic': "Stock exchange crashes are
>>not violent destructions of wealth; they are violent redistributions of
>>wealth." Frontiers of Poltical Economy, p. 209.
>
>>From whom, to whom?
>
>>  Anwyays the stock market is only the show the bourgeoisie presents to the
>>world, while marxists know that the drama is really in the fields,
>>factories and mines.


While I appreciated Rakesh picking up this thread and taking it further, I
too hesitated over this last sentence above. If Carchedi argues, as sounds
right to me, that stock exchange crashes are violent redistributions of
wealth, real drama can be in them too. No?

What violent redistribution of wealth is going on now?

Dimly, from my determined stance as a non-economist, the things that make
most sense from the commentators to me are

1. That there is a glut of overproduction by the Asian tigers and the
strength of their competitive economic model compared to the USA has been
over-estimated and "corrected".

2. That the economies of the USA and the UK which repositioned themselves
to combine the advantages of a wide wage range (ie access to low wages)
with the advantages of large modern companies capable of research and
marketing, are seen as a bit more resilient at this moment (low inflation,
low unemployment)

3. That the technical vulnerability of Hong Kong is linked to the political
strengths and weaknesses of its restored mother country. While for
political reasons all sides wanted the Hong Kong Dolllar to remain linked
to the US dollar, which makes it vulnerable to speculation, behind it is 80
billion dollars of China's exchange reserves, not that anyone has yet
discussed China bailing out the Hong Kong dollar. But even if Hong Kong
partly bounces back, the size of the fluctuations undermine its credibility
as a financial centre, and emphasise the competitive advantages of
capitalism that is strong financially as well as commerically. And this
means in the modern world, a financial strength that is supported by
government policy, (whether that policy is red, pink or blue). Long term,
my guess is therefore that Hong Kong's position has slipped a little
relative to that of Shanghai, which will be more significant in the 21st
century, for other reasons as well.

So I do not offer this contribution to the debate to say these are provable
assertions, but if Carchedi's formula is correct, then I suggest these are
the *sort* of questions that may be relevant.

Chris Burford

London.



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