Saturday, 6 August 2011

Downgrading US Debt

Incidentally, a perfect example of the "vicious circle" we just discussed below is the "downgrading of US debt" by S&P. As you can see, S&P grade US debt according to the perceived ability of the US to repay it. The "rule" indicates that investors should bail out of US debt and move their capital to "safer" investments. But the fact of the matter is that not only is US debt the "safest" investment anyhow - but also that it is the "safest" investment not in terms of "return on capital" but rather of "return OF capital"!

In other words, S&P, acting from "within the rules" of capitalist calculation (of the "game") fail to see that the "game" and its "rules" are themselves dependent on the "political realities" of capitalist social relations - and that therefore it is impossible to apply a "meter" to.... the "meter" itself! How long is a piece of string?

This is the question that Nietzsche posed: if "truth" is a "value", how then do we "value" truth itself? And if "truth" is Will to Power (Wille zur Macht), the question then becomes one of how this "power" is constituted and how it is exercised. Precisely what we should ask about the capitalist "rules of the game"! In other words, governments pretend to go along with S&P and other "rating agencies" with the charade that their decisions are "technical" in nature: that there is an "economic science" whose "rules" they must obey! But then, the "markets" punish governments for not making the "correct" decisions!!! Can you see the difficulty in this argument?

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