I would invite our friends to take a long hard look at the discussions below because they dis-close the many ways in which the ideas that the capitalist bourgeoisie utilises to interpret reality easily explain how the bourgeoisie then seeks to act on that reality, how it tries to shape it.
As we have argued repeatedly below, the current "crisis" is not simply one that involves the "operation" of a separate entity called "the economy" - for there is no such "entity". The capitalist economy is nothing other than the series of "behaviours", the social relations of production, that determine the manner in which social resources are defined and how they are used (or not used at the moment). Therefore, a "crisis" indicates that there is an insuperable "conflict" between the antagonistic "interests" that constitute our "social relations of production" and that the existing "theories or ideas" that are used to filter and to act upon this "reality in crisis" are also themselves in a critical situation!
But this "crisis of economic theory" cannot be ascribed solely (as does Paul Krugman in his recent address to the Eastern Economic Society) to some intellectual fault or inclination - but also and above all it must be attributed to the very "antagonistic interests" of the economists who are evidently "paid" by the bourgeoisie to explain and interpret reality in a "pro-capitalist" manner!
As you may know, last night an ECB member from the Bundesbank, Jurgen Stark, resigned in obvious disagreement with the ECB purchase of EU member bonds - in effect "monetising" the debt of these "peripheral" countries such as Spain and Italy. What the German bourgeoisie has never accepted is that the balance of payments is an accounting identity so that one country's "surplus" (on current or capital account) must be another's "deficit". That does not mean that trade and capital flows are a "zero-sum game" because the capitalist economy can function in terms of "relative exploitation" (see our entry on "Absolute and Relative Exploitation" from last month). But what it means is that the "exchange rate" serves to regulate the level of "profitability" (and partly of sovereign risk) between countries - or in other words, the level of "conflict" measured in terms of inflation and unemployment within separate capitalist nation-states.
Obviously, if a national bourgeoisie (say the Italian) is having problems with its workers, it can "regulate" the level of social antagonism by lowering its exchange rate with Germany which means that, at that time, its exports will be cheaper and its imports dearer, with differential effects on its "competitivity" and "profitability". Exchange rates allow individual capitalist national bourgeoisies to buy time in terms of "adjustment" of their balance of payments deficits. By the same token, ideally, exchange rates also allow "surplus" bourgeoisies (like Germany's) to expand domestic demand gradually to accommodate the "adjustment" in the "deficit" countries.
This kind of "sharing" of "the burden of adjustment" is something that the German bourgeoisie - which has had "imperialistic" tendencies aimed at exporting its goods to the rest of the world by exploiting the ideological compactness but political weakness of its working class - has never accepted and the chief reason why it sought to prevent its European neighbours from using "competitive devaluations" by "disciplining" them through the fixed exchange rates that were "cemented" with the birth of the euro!
What made this German strategy easy to sell to the rest of the European bourgeoisies was the mistaken belief that capitalism works through "competition", that is, by setting one set of workers against another, one group of capitalists against another. You can see easily how this kind of "philosophy" will eventually lead to international conflict and even to civil war! (The two world wars were started by "the European civil war", of course.) Already, we have disputes in Spain (between Catalunya and Castille, and the Basque region and so on), in Italy (Padania and "the South"), in Belgium (Flemish and Walloons) and so on. Germany once again benefits from the relative "compactness" of its "Volk" - a dangerous notion, as we know.
So European capitalism is now at the cross-roads - and European workers know what they have to do. Divisions and conflicts are extremely dangerous. A resolution must be found, and for this to be done the German elites (political, financial and industrial) have to explain to their workers (or "people" as they dangerously call them) that the deficits of "the periphery" are as much the "fault" of their "productivity" and banking "loans" as they are of the "laziness" or indolence of Greek and Spanish workers (which in large part is a myth and reflects only different cultural and political histories). Good week-end to all!
As we have argued repeatedly below, the current "crisis" is not simply one that involves the "operation" of a separate entity called "the economy" - for there is no such "entity". The capitalist economy is nothing other than the series of "behaviours", the social relations of production, that determine the manner in which social resources are defined and how they are used (or not used at the moment). Therefore, a "crisis" indicates that there is an insuperable "conflict" between the antagonistic "interests" that constitute our "social relations of production" and that the existing "theories or ideas" that are used to filter and to act upon this "reality in crisis" are also themselves in a critical situation!
But this "crisis of economic theory" cannot be ascribed solely (as does Paul Krugman in his recent address to the Eastern Economic Society) to some intellectual fault or inclination - but also and above all it must be attributed to the very "antagonistic interests" of the economists who are evidently "paid" by the bourgeoisie to explain and interpret reality in a "pro-capitalist" manner!
As you may know, last night an ECB member from the Bundesbank, Jurgen Stark, resigned in obvious disagreement with the ECB purchase of EU member bonds - in effect "monetising" the debt of these "peripheral" countries such as Spain and Italy. What the German bourgeoisie has never accepted is that the balance of payments is an accounting identity so that one country's "surplus" (on current or capital account) must be another's "deficit". That does not mean that trade and capital flows are a "zero-sum game" because the capitalist economy can function in terms of "relative exploitation" (see our entry on "Absolute and Relative Exploitation" from last month). But what it means is that the "exchange rate" serves to regulate the level of "profitability" (and partly of sovereign risk) between countries - or in other words, the level of "conflict" measured in terms of inflation and unemployment within separate capitalist nation-states.
Obviously, if a national bourgeoisie (say the Italian) is having problems with its workers, it can "regulate" the level of social antagonism by lowering its exchange rate with Germany which means that, at that time, its exports will be cheaper and its imports dearer, with differential effects on its "competitivity" and "profitability". Exchange rates allow individual capitalist national bourgeoisies to buy time in terms of "adjustment" of their balance of payments deficits. By the same token, ideally, exchange rates also allow "surplus" bourgeoisies (like Germany's) to expand domestic demand gradually to accommodate the "adjustment" in the "deficit" countries.
This kind of "sharing" of "the burden of adjustment" is something that the German bourgeoisie - which has had "imperialistic" tendencies aimed at exporting its goods to the rest of the world by exploiting the ideological compactness but political weakness of its working class - has never accepted and the chief reason why it sought to prevent its European neighbours from using "competitive devaluations" by "disciplining" them through the fixed exchange rates that were "cemented" with the birth of the euro!
What made this German strategy easy to sell to the rest of the European bourgeoisies was the mistaken belief that capitalism works through "competition", that is, by setting one set of workers against another, one group of capitalists against another. You can see easily how this kind of "philosophy" will eventually lead to international conflict and even to civil war! (The two world wars were started by "the European civil war", of course.) Already, we have disputes in Spain (between Catalunya and Castille, and the Basque region and so on), in Italy (Padania and "the South"), in Belgium (Flemish and Walloons) and so on. Germany once again benefits from the relative "compactness" of its "Volk" - a dangerous notion, as we know.
So European capitalism is now at the cross-roads - and European workers know what they have to do. Divisions and conflicts are extremely dangerous. A resolution must be found, and for this to be done the German elites (political, financial and industrial) have to explain to their workers (or "people" as they dangerously call them) that the deficits of "the periphery" are as much the "fault" of their "productivity" and banking "loans" as they are of the "laziness" or indolence of Greek and Spanish workers (which in large part is a myth and reflects only different cultural and political histories). Good week-end to all!
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