Commentary on Political Economy

Sunday 31 July 2011

French Sensibilities - Michel Rocard and "the Fracture"

By far the sharpest recent analysis of "the Great Financial Crisis" to have appeared anywhere is this one by the ex-prime minister (President du Conseil) of France, Michel Rocard. The drawback is that it is in French, so I will have to take the non-French readers briefly through it for them to benefit.

Many of our friends will recognise in Rocard's "perceptive" analysis many of the analytical themes that we have developed on this site from a more "theoretical" standpoint. Rocard lacks the theoretical tools for a proper analysis, but his "perceptiveness" is impeccable (that's what we are saying). After decrying the inability of the G20 to deal decisively with the "crisis", Rocard magnificently draws the focus of this "failure of inter-national co-ordination" precisely on the fact that it is impossible for global capitalism to remain "global" while its "member countries" fail to agree on the role and function and structure of the "collective capitalist" (the nation-state) in the overall control and leadership of the "cycle", of the "crisis".

Not only, says Rocard, is there disagreement between capitalist States, but there is even greater disagreement "within" them! With the consequence that we have a rapidly growing "fracture" (something we have analysed here - see our othe entries) between and within national capitalist elites about precisely this requisite "role" of the capitalist State in what is "notionally" or "supposedly" a "private capitalist national and world economy"!

Rocard zeroes in on a particular "theme" of analysis - one that we have explored at length on this site: and that is, the role of central banks in ensuring strict monetary control of inflation, whilst at the same time "private capital" accumulated profits from the "emerging economies" that could not be "re-cycled" in the West except through "asset-price inflation"! The consequent spiral of speculative investments has led nation-states "to rescue" the systemic risk posed by "private" corporations that have grown "too big to fail" on the back of this "dynamic". And finally we find that nation-states are now indebted precisely at a time when the "old logic" of raising interest rates to restrain the role of the State in the "private" economy threatens to send both the State and the "capitalist system" bankrupt!

This is the "logic" that the Fed is trying to avoid in the US, but the ECB and the Chinese and Brasilian and Indian central banks have no choice but to enforce. Now, it is precisely this "logic" that is driving the global capitalist economy "to the edge" - and that no amount of "debt-ceiling negotiations" can fix! Cheers to all.

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