Commentary on Political Economy

Tuesday 9 August 2011

Bernanke's Fed And 'Rooseveltian Resolve'

The action taken today by Ben Bernanke and his Princeton-constellated Fed is magnificently right. It is exemplary both for its 'decisiveness' and for its 'effectuality'. What Bernanke has done is something that neither the President (surely one of the weakest and 'indecisive' that America has ever produced) and the Congress (one of the most 'fractured' in US history, for the reasons we have addressed repeatedly on this site) were able to take, so that it fell to a "technocratic, statutory body" tosee through the formal rules of the game of capitalism and enforce instead its reality of power.

Those who think that capitalism is a set of "competitive rules", the result of a "science of choice" or of "rational behaviour" understand precisely nothing of the antagonistic force of this system of production. Consequently, it is precisely the most inveterate "fundamentalist" believers in the "market forces" who pose the greatest 'internal' danger to this system for two main reasons.

The first reason is that they fail to understand that the vital engine, 'the motor' of capitalism is the labour force, its workers who, with their 'antagonism' to the wage relation "drive" and "push" the system forward according to the dynamic of "relative exploitation" that we explained on this site.

The second reason is that those countries that, like the US and Europe, rely on "relative exploitation" necessarily have relatively "democratic" or "representative" political institutions and as a result are at great risk of being abused and undermined by countries (such as the Chinese dictatorship, the German ruling elite and the Japanese) that rely on a regime of "absolute exploitation" (what Paul Krugman has called "the mobilisation of resources").

By deciding to engage in a fresh bout of Quantitative Easing, Ben Bernanke is showing yet again that he has a deep understanding of the political foundations of capitalism and capitalist investment and industry, no less than of its political class structure. The message Bernanke is sending to the enemies of the US, and therefore of capitalist democracy, such as the Chinese, German and Japanese elites is loud and clear:

We will not be bled to death. We will not quietly sit and watch while our industrial base is slowly enervated and wasted away by the "competitive devaluations" of the yuan, of the euro, and of the yen. We will not tolerate that our living standards are debased by a process of 'Asianisation' whereby workers' living standards and conditions are repressed, domestic demand is suppressed, and your capitalist elites enjoy cheap access to capital and markets in a vicious downward spiral of deflationary depression.

Enough is enough! Either the Chinese dictatorship, the German post-Nazi industrial elites, and the quasi-totalitarian Japanese elites accept that "relative exploitation" is the only "democratic" way forward for capitalism, that the State has to regulate and even supervise the conduct and structure of capitalist enterprise for the benefit of its people, or else we will declare open war on your "systems" and drive you to economic, financial and political ruin!

Harsh stance. But absolutely necessary at this juncture for Western capitalism and the destiny of our world.

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