Spring of 2010 will be a new tipping point for a global capitalist crisis

[LeninistKing]

SPRING OF 2010 WILL BE A NEW TIPPING POINT FOR A GLOBAL CAPITALIST CRISIS

http://www.leap2020.eu/GEAB-N-40-is-available!-Spring-2010-A-new-tipping-point-of-the-global-systemic-crisis-When-the-slip-knot-around-public_a4093.html

LEAP/E2020 believes that the global systemic crisis will experience a new tipping point from Spring 2010. Indeed, at that time, the public finances of the major Western countries are going to become unmanageable, as it will simultaneously become clear that new support measures for the economy are needed because of the failure of the various stimuli in 2009 (1), and that the size of budget deficits preclude any significant new expenditures.

If this public deficit « slip knot » which governments gladly placed around their necks in 2009, refusing to make the financial system pay for mistakes (2) is going to weigh heavily on all public expenditure, it is going to particularly affect the social security systems of the rich countries in always impoverishing the middle classes and the retired, and setting the poorest adrift (3).

At the same time, the general context of the bankruptcy of an increasing number of states and other authorities (regions, provinces, federal states) will entail a double paradoxical event of increasing interest rates and the flight out of currencies towards gold. In the absence of an organised alternative to a weakening US Dollar and in order to find an alternative to the loss in value of treasury bonds (in particular US ones) all central banks will have, in part, to « reconvert to gold », the old enemy of the US Federal Reserve, without being able to state the fact officially. The bet on recovery having been, at this point, totally lost by governments and central banks (4), this Spring 2010 tipping point is thus going to represent the beginning of the huge transfer of 20,000 billion USD of « ghost assets » (5) in the direction of the social security systems of the countries which have accumulated them.

In GEAB N°40, the LEAP/E2020 team develops its anticipations on these various subjects, whilst also giving a detailed appraisal of its 2009 anticipations which achieved an overall success rate of 72% (6). Finally our researchers unveil their recommendations regarding this month in particular: commercial real estate, currencies and expatriates’ revenues.




http://www.leap2020.eu/photo/1767684-2400603.jpg?v=1260973615 (javascript:void(0)) The ten most vulnerable countries on a debt/GDP ratio (in blue; public debt; in orange: private debt) – Source: Crédit Suisse, 03/2009

Reality quickly fuelled GEAB N°39’s anticipation which indicated that 2010 would be a year noted for three trends, one of which would be state bankruptcy (7): from Dubai to Greece, via more and more worrying reports from the rating agencies on US and British debt, or the draconian Irish budget and the Eurozone suggestions for grappling with public deficits, states’ increasing incapacity to manage their debts is making press headlines. However at the centre of this press ferment, all the information isn’t of the same value: certain are no more than laborious works on the « finger » of the Chinese proverb (8), whilst others really stretch to the moon.

On the subject of laborious works on the « finger », this public announcement of the GEAB N°40 presents the case for its anticipations on Greece.




Greek debt crisis: A small problem for Frankfurt and a strong warning for Washington and London


Coming now to Greece, we find a theme similar to what our team showed up in the GEAB N°33 (http://www.leap2020.eu/Growing-Transatlantic-tensions-on-the-eve-of-the-G20-summit-An-illustration-of-Wall-Street-s-and-the-City-s-attempt-to_a2940.html) in March 2009, when the press gave widespread publicity to the idea that Eastern Europe was going to lead the European banking system and the Euro into a major crisis. We have explained that this « news » was not based on anything credible and that it was only « a deliberate attempt on the part of Wall Street and the City to create the belief of a crack in the EU and instill the idea of « deadly » risk weighing on the Eurozone, in continually publishing false stories on the « banking risk from Eastern Europe » and trying to stigmatise a Eurozone cowardness compared to American or British « willful » measures. One of the objectives is also to try and turn international attention away from the increasing financial problems in New York and London, all with the purpose of weakening the European position on the eve of the G20 summit ».

The Greek case is rather the same. Not that there isn’t a crisis in Greek public finances (that is the reality), but the supposed consequences for the Eurozone are overestimated, whereas this crisis indicates increasing tensions surrounding sovereign debt, the Achilles heel of the United States and Great Britain (9).





http://www.leap2020.eu/photo/1767684-2400612.jpg?v=1260973742 New sovereign debt issuance in 2009 (USD billions) – Source: PhoenixProject, 07/2009

First of all, one must remember that Greece remains the country above all others, which badly managed its EU accession. Since 1982, different Greek governments have done nothing but use the EU as an inexhaustible source of subsidies, without ever taking steps to modernise the financial and social framework of the country. With nearly 3% of GDP coming directly from Brussels in 2008 (10), Greece is indeed a country which has been on a European drip-feed for almost thirty years. The actual deterioration in the country’s public finances is, then, only another step in this drawn-out development. The Eurozone leaders have known for a long time that the Greek problem would materialise one day.

But with a country producing 2.5% of the Eurozone’s GDP (and 1.9% of the EU’s) we are far from a dangerous situation weighing on the single European currency and the Eurozone. By way of example, the California’s default (12% of US GDP) entails far more risks of destablisation of the Dollar and the American economy. Moreover, since the same analysts usually like to make lists of all the Eurozone countries facing up to a serious crisis in their public finances (Spain, Ireland, Portugal, to which we can add France and Germany), for the sake of completeness it should be pointed out that in the United States, besides the fact that the Federal State would be technically bankrupt (11) if the Fed weren’t printing Dollars in unlimited quantities for the purpose of buying, directly or indirectly, Treasury Bonds for an equal value, and besides California (the richest state in the Union teetering on the edge of the abyss for months), there are altogether 48 States out of 50 with growing budget deficits now (12). As summed up by the title of the December 14th edition of Stateline (http://cms.stateline.org/working/static/About+Us?contentId=443566), an American website specialising in the US States and municipalities, said « Nightmare scenarios haunt the States (http://cms.stateline.org/working/details/story?contentId=443566) », all the states of the United States are afraid of defaulting on their debt in 2010/2011.

The Eurozone, which has the largest gold reserves in the world (13), also includes countries which accumulated budget surpluses until last year, a foreign trade surplus and a central bank which hasn’t turned its balance sheet into a pool of « rotten or ghost » assets (contrary to the Fed in the last 18 months). So, if the crisis in Greek public finances clearly indicates something, it is not so much Greece’s situation or a specific Eurozone problem, but a wider problem which is going to become much worse in 2010: the fact that Government bonds are now a bubble on the verge of exploding (more than 49,500 billion USD worldwide, a 45% increase in two years (14)).

The deteriorating ratings published by US rating agencies since the Dubai crisis shows, as always, that these agencies don’t know how to (or can’t) anticipate these developments. Let’s remember that they didn’t see the sub-prime crisis coming nor the collapse of Lehman Brothers and AIG, nor the Dubai crisis. Because they are dependent on the US government (15), they are unable, of course, to directly blame the two at the heart of present financial system (Washington and London). However, they show from which direction the next big shock is going to come, State bonds… and in this field, the two countries with the most exposure are the United States and Great Britain.

Besides, it is very instructive to see the subtle change in the tenor of the articles published by these agencies. In a few weeks we have gone from the same old explanation stating that the intrinsic quality of these two countries’ (16) economies and their management removes all risk of default on the part of their respective governments to a warning that, from 2010, it will be necessary to demonstrate these qualities and management skills in order to keep the coveted Triple A rating which allows borrowing at the lowest cost (17). If even the rating agencies start to ask for proof, it’s because things are going really badly.

To finish on Greece’s case, our team feels that the current situation is a triple positive for the Eurozone:

. it requires it to seriously consider the solidarity measures to put in place in this type of situation. The watchers are thus going to have to make a clear choice: either they treat Greece as an isolated example, or they treat it as a component of the Eurozone. But they can’t do both at once, adding the weakness of an isolated Greece to a weakened Eurozone caused by Greece.


. it requires, at last, the Greek authorities to carry out an operation of « Truth » on the financial state of their country and allows the EU to push forward the necessary reforms, notably to substantially reduce endemic corruption and cronyism (18).

. it should serve as an example to European governments (and others) who fudge economic and social statistics more and more, demonstrating that such fudging only results in plunging a country into crisis even more. Sadly, we are more doubtful on the idea that other leaders will follow the Greek Prime Minister’s example… certainly not before a change of government in Great Britain, the United States, France, or Germany.

[Floyce White]

If anything, the tipping point of the crisis was the surrender of the Soviet Bloc that ended the Cold War--and the concurrent return of China to being a US neocolony.

One must not overreact to short-term crises such as the bursting of the high-tech stock bubble, the bursting of the credit/housing bubble, and so forth.

[Psy]

If anything, the tipping point of the crisis was the surrender of the Soviet Bloc that ended the Cold War--and the concurrent return of China to being a US neocolony.

One must not overreact to short-term crises such as the bursting of the high-tech stock bubble, the bursting of the credit/housing bubble, and so forth.
Actually the breakup of the Soviet Bloc delayed the current crisis as it allowed the huge expansion of fictional capital in the 1990's based on huge over estimations of the rate of profits in the 2000's. The material conditions of the current crisis dates back to the stagnation of the 1970's when the long boom ended, capitalists was never able to solve the falling rate of profit that started in 1970's and only able to postpone the crisis through the expansion of fictional capital. Capitalists even now are trying to postpone this crisis with a massive expansion of fictional capital but this is not restoring the rate of profit like it did before.

[Floyce White]

I agree with your fundamental analysis. But I'd say that the long-term stagnation was three whole six-year short cycles (1972-1989) and that the long-term depression was three whole six-year short cycles (1990-2007). However, history will decide if the depression is to be four short cycles.

The capitalists long since gave up on trying to repay debts. In theory, since the peak of the boom around 1965-66, and in practice, since the debacle of Versailles, their short-term tendency to be scoundrels actually coincided with the long-term interests of capitalism as a whole.

The current short-term crisis is that capitalists also want to give up on making payments on debts. I see no reason why they can't get away with it.

[Psy]

The current short-term crisis is that capitalists also want to give up on making payments on debts. I see no reason why they can't get away with it.

Fictional capital is grounded in the real economy and while finical capitalists gave up in paying their debts they force industrial capitalist to pay their debts which is why production has fallen off a cliff as finical capitalists call in the debts of industrial capitalists and industrial capitalist react by canalize their fixed capital to pay finical capitalists this is why Republican Windows and Doors shutdown that led to its workers to have a sit in strike to prevent the banks from liquidating its assets before the banks paid what Republic Windows and Doors owed its workers.

Meaning the crisis is being amplified by fictional capitalists disrupting the production of capital that is causing a negative feedback loop, the more fictional capitalists refuse to pay their debt while they force industrial capitalist to pay their debts the more downward pressure is put on the rate of profit. It is also causing industrial capitalists to become militant as well as workers thus why there is a growing rumbling of a reactionary fascist movement fueled by industrial capitalists that want a military coup to overthrow to finical capitalists more and more as the crisis deepens.

[Floyce White]

"financial" not "finical"
"cannibalize" not "canalize"

Anyway...

I don't agree that there is any difference between financial and industrial capital.

For the decade before the current financial crisis, GM's finance arm was its only profitable unit. GM's Ditech.com was a major player in the housing bubble.

General Electric created its GE Finance unit in the '80s. GE leveraged its manufacturing base in order to write loans. Now it's stuck with loads of bad debt. GE tried to sell its credit card business a couple of years ago. There were no offers to buy.

When the Cold War ended, Boeing, Halliburton, etc., ceased to have a reason to exist. They always were wards of the state--dependent on the decisions made by other capitals.

Exxonmobil, Chevrontexaco, BP, Shell: this Anglo-American cartel has a vise grip on world commodity markets.

[Psy]

I don't agree that there is any difference between financial and industrial capital.

Then you did not under stand Marx's capital. Industrial capitalists are the ones that extract surplus value from the proletariat through the production of commodities while financial capitalists extract surplus value from industrial capitalists by demanding rent for the capital they loan to the industrial capitalists.



For the decade before the current financial crisis, GM's finance arm was its only profitable unit. GM's Ditech.com was a major player in the housing bubble.

General Electric created its GE Finance unit in the '80s. GE leveraged its manufacturing base in order to write loans. Now it's stuck with loads of bad debt. GE tried to sell its credit card business a couple of years ago. There were no offers to buy.

When the Cold War ended, Boeing, Halliburton, etc., ceased to have a reason to exist. They always were wards of the state--dependent on the decisions made by other capitals.

Exxonmobil, Chevrontexaco, BP, Shell: this Anglo-American cartel has a vise grip on world commodity markets.
This just shows capitalism has been in decline for decades and has reached a point where it the finical capitalists are preventing the ability for capitalism to resolve the falling rate of profit.

[Floyce White]

"You don't understand" is not a useful argument.

American industry seems to have done everything conceivable to resist, delay, and minimize retooling, and to lower the total wage and benefit package. They used every political and economic pressure to keep selling obsolete junk.

What else do you think capitalism should have done to resolve the falling rate of profit?

[Psy]

"You don't understand" is not a useful argument.

American industry seems to have done everything conceivable to resist, delay, and minimize retooling, and to lower the total wage and benefit package. They used every political and economic pressure to keep selling obsolete junk.

What else do you think capitalism should have done to resolve the falling rate of profit?
Financial capitalism produces zero surplus value they just redistribute surplus value to themselves yet at a cost of in the rate of profit since financial capitalists still have pay the wages of their proletariat to redistribute the profits from the industrial capitalists, in other words financial capitalism is putting even more downward pressure on the rate of profit.

[ckaihatsu]

Financial capitalism produces zero surplus value they just redistribute surplus value to themselves [...] from the industrial capitalists


Or, in the vernacular, it's called a "shakedown".


= D

[cyu]

I don't agree that there is any difference between financial and industrial capital.

For the decade before the current financial crisis, GM's finance arm was its only profitable unit. GM's Ditech.com was a major player in the housing bubble.


Mortgage backed securities and derivatives were pretty profitable for a while too - key words: "a while" - just as pyramid schemes can also be profitable for a while. However, that doesn't mean they are doing anything useful.

I don't know what your definitions of finance versus industrial capital are, but I'd say there's a clear difference between assembly lines, equipment, and factories on the one hand, and paper money, IOUs, stocks, and bonds on the other. The first are tangible goods that have real value if you possess them. The second only have value if others are willing to enforce their claims to tangible goods or are willing to trade tangible goods for them.

If all you possess on hand is a lot of wealth that looks good on paper, but if nobody is willing to enforce your deeds or trade food for your stock certificate / fiat money, then your paper wealth / shiny rocks are basically worthless.

If what you're after is an economic revolution, then focus on the tangible wealth. The paper wealth can simply be ignored.

[Floyce White]

Let's see...Saab, Pontiac, Saturn, Oldsmobile...no one was willing to trade tangible goods for those either. So forget trying to sell Opel--GM won't find a buyer for that one either. Thousands of decrepit factories in the former Soviet Bloc also found that rust was the only force that wanted them. On the other hand, the US Government was willing to buy 36% of the $2 trillion of laughably inflated assets of Citigroup.

But enough of anecdotal evidence. Here's the theory:

A claim of property is a social relation--not a physical thing. Doesn't matter if the claim is over persons, places, things, or ideas.

Property is a relation of violence between people. Capital is a form of property. Capital is a relation of violence between people. Capital is not a physical thing. Thus, there is no "clear difference" between industrial capital and financial capital.

[ckaihatsu]

[T]he US Government was willing to buy 36% of the $2 trillion of laughably inflated assets of Citigroup.


Hey -- what th'... *I* never voted for that!!!!





but if nobody is willing to enforce your deeds or trade food for your stock certificate / fiat money, then your paper wealth / shiny rocks are basically worthless.


So *that's* why every business type I run into seems like they're trying to start their own personality cult...! (!!!)

[Psy]

Let's see...Saab, Pontiac, Saturn, Oldsmobile...no one was willing to trade tangible goods for those either. So forget trying to sell Opel--GM won't find a buyer for that one either. Thousands of decrepit factories in the former Soviet Bloc also found that rust was the only force that wanted them. On the other hand, the US Government was willing to buy 36% of the $2 trillion of laughably inflated assets of Citigroup.

But enough of anecdotal evidence. Here's the theory:

A claim of property is a social relation--not a physical thing. Doesn't matter if the claim is over persons, places, things, or ideas.

Property is a relation of violence between people. Capital is a form of property. Capital is a relation of violence between people. Capital is not a physical thing. Thus, there is no "clear difference" between industrial capital and financial capital.

Actually they are it is just a issue of overproduction and commodity devaluation. Finical capital is very different from industrial capital as finical capital has zero use-value (it does not exist in the matrial world where even art exists in the martial world) thus can't generate any surplus value as regardless of the socially acceptable labor value required to produce it as it can't be consumed as it is fictional. Of course it really does exists but financial capital is only a claim on industrial capital, like how nobility had a claim on feudal production and like feudalism you wouldn't say nobility produced weath you would say nobility redistrabuted weath to themselves and finincal capitalists do the exact same thing.

[Floyce White]

I hope you realize that I was being somewhat facetious in my last post. Cyu was misusing a generalization about all forms of capital to prove the difference between various specific forms of capital.

Industrial capital frequently financed its suppliers, distributors, and business customers. So industrial capital was always in the finance business to some degree. Since the early '80s (in America), industrial capital got into finance in a big way. It's easy to mouth the words "Chevrolet is industrial but GMAC is financial," but the corporate ledgers aren't that clear cut. There is no way to differentiate industrial from financial just by the name of a business unit.

Here's an example of what I mean. There are frozen yogurt restaurants opening up all over the place. One intersection might have two or three of them. They all have self-service machines and one cashier. The "industrial production" of soft-serve ice cream machines, and the sweetheart franchise deals, were a massive fraud to generate business-loan activity: loans that can never be repaid. Same as the Krispy Kreme scam.

At any rate, you never said what, if anything, you think that industrial capital can do "to resolve the falling rate of profit." I think that nothing can be done. So they're stuck with 2%, 1%, 0.5% profit, etc. How's that a problem?

[Jimmie Higgins]

At any rate, you never said what, if anything, you think that industrial capital can do "to resolve the falling rate of profit." I think that nothing can be done. So they're stuck with 2%, 1%, 0.5% profit, etc. How's that a problem?I think they've been doing just what you said in an earlier post: since the 70s they've been trying to restore some profit by reducing overall wages.

From my understanding, this can only go so far and the other card that the capitalists of the big nations hold for fixing the economy is by forcibly reorganizing the world economy through a war that changes the imperialist playing field. This is how they "fixed" similar problems in the past.

[Psy]

I hope you realize that I was being somewhat facetious in my last post. Cyu was misusing a generalization about all forms of capital to prove the difference between various specific forms of capital.

Industrial capital frequently financed its suppliers, distributors, and business customers. So industrial capital was always in the finance business to some degree. Since the early '80s (in America), industrial capital got into finance in a big way. It's easy to mouth the words "Chevrolet is industrial but GMAC is financial," but the corporate ledgers aren't that clear cut. There is no way to differentiate industrial from financial just by the name of a business unit.

Here's an example of what I mean. There are frozen yogurt restaurants opening up all over the place. One intersection might have two or three of them. They all have self-service machines and one cashier. The "industrial production" of soft-serve ice cream machines, and the sweetheart franchise deals, were a massive fraud to generate business-loan activity: loans that can never be repaid. Same as the Krispy Kreme scam.

At any rate, you never said what, if anything, you think that industrial capital can do "to resolve the falling rate of profit." I think that nothing can be done. So they're stuck with 2%, 1%, 0.5% profit, etc. How's that a problem?

The industrial capitalists of Germany backed the fascists to brutally nationalize Germany's finical capital under the thin veil of antisemitism, in other words fascism is a tool for industrial capitalists to slaughter financial capitalists (if financial capitalists have bullet holes in their heads then they can't exploit the industrial capitalists class and the industrial capitalists would make profits off manufacturing those bullets) while suppressing the proletariat.

[ckaihatsu]

[T]he other card that the capitalists of the big nations hold for fixing the economy is by forcibly reorganizing the world economy through a war that changes the imperialist playing field. This is how they "fixed" similar problems in the past.


So who's in the crosshairs, then -- China? Or am I stating the obvious here?

Or would the U.S. quietly slip away this time around, as is playing out with the Iraqi oil contracts?


Chris



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[Jimmie Higgins]

So who's in the crosshairs, then -- China? Or am I stating the obvious here?

Or would the U.S. quietly slip away this time around, as is playing out with the Iraqi oil contracts?


Chris
--

Well I think most of Africa is in China and the US's cross-hairs. But also there have been conflicts between small "shoulder-checks" between Russia and the US and the Russia and Europe. If a major war happens it will probably be between countries that want to maintain the current division of the world (the US and probably EU) and countries that are held back due to the imperial division of the world (emerging powers like China).

I would not be surprised if - as competition increases and the economic crisis drags on - that small conflicts in some regions become more like proxy wars. We already almost had a proxy conflict between Russia and the US in Gerogia, so I think that this is what imperialist competition will look like in the near-term with the various powers trying to either hold onto countries they have influence in or forcing themselves into new regions by intervening in local politics.

[cyu]

Saab, Pontiac, Saturn, Oldsmobile...no one was willing to trade tangible goods for those either. So forget trying to sell Opel--GM won't find a buyer for that one either. Thousands of decrepit factories in the former Soviet Bloc also found that rust was the only force that wanted them. On the other hand, the US Government was willing to buy 36% of the $2 trillion of laughably inflated assets of Citigroup.

What I'm talking about is the so-called "intrinsic wealth". The equipment used to produce any car has "intrinsic value" - even if you're not going to use it to produce cars or other goods, the scrap still has value. If the seller can't find a buyer, it's just a problem with the asking price. Somewhere between $0 and the asking price, almost anybody would take it.

As for the Obama regime sending money into various banks, I think we all know the real reason isn't because they consider them to have value - it is because the American political system has basically been corrupted by the wealthy. As Helen Keller said, "The country is governed for the richest, for the corporations, the bankers, the land speculators, and for the exploiters of labor."


Property is a relation of violence between people. Capital is a form of property. Capital is a relation of violence between people. Capital is not a physical thing. Thus, there is no "clear difference" between industrial capital and financial capital.

Pure semantics. If you want to differentiate between Proudhon's "property" and "possession" that's fine. Yes, I agree property claims are not physical things - they only have value as long as people agree with those claims. Because political revolutionaries are all about changing people's minds, then the "value" in property claims is very tenuous. When it comes to land, raw materials, equipment, office buildings, obviously those are all physical things - and yes, they do have value. The point is that if you're after an economic revolution, then focus on assuming democratic control of the physical things and ignore the property claims.

[Floyce White]

Psy, as Cyu said, the richest families are in firm control of the US. They don't need a radical-rightist movement to restore them to power or to prevent a loss of power to a petty-bourgeois radical-leftist movement. Thus, protestations about "the danger of fascism" are misplaced.

To whatever degree the banks are nationalized, it is under the capitalist method of "privatize profits, socialize losses."

Cyu, semantical struggle is one facet of the overall workers' struggle. For instance, economics is the social science that describes property and its exchange. Communists are not after an economic revolution. The communist revolution immediately ends economics and replaces it with sharing. Communists might temporarily support democratic control of some business functions during capitalism, but absolutely oppose the contination of democratic methods, and its coexisting twin, antidemocratic methods, after the revolution.

No one is going to dispute that land is useful. But Marx's "use value" meant only what was useful for the rule of capitalists over workers. I saw a wonderful video on PBS about a factory in China that made bead necklaces for Mardi Gras. The workers suffered much. When the workers learned what the beads were used for, and how trivial they were, the workers were deeply offended, ashamed, and hurt. Mardi Gras beads have use value. Saab doesn't.

I don't differentiate between "property" and "possession," but Proudhon did, which is part of the context of the discussion of the original post.

[Psy]

Psy, as Cyu said, the richest families are in firm control of the US. They don't need a radical-rightist movement to restore them to power or to prevent a loss of power to a petty-bourgeois radical-leftist movement. Thus, protestations about "the danger of fascism" are misplaced.

That is not the point of fascism in this cause it would be to overthrow financial capitalists in the interest of industrial capitalists and the military (as militaries is only interested in industrial might)



To whatever degree the banks are nationalized, it is under the capitalist method of "privatize profits, socialize losses."

Yet the rate of profit is still stagnant because the banks are still run by financial capitalists.

The point is that finance is not a productive capitalist endeavor as it generates no surplus value it only redistributes the surplus value industrial capitalists extract from their workers, meaning sooner of later financial capitalists will have to be scarified for the greater good of capitalism or capitalism will totally collapse.

[cyu]

Communists are not after an economic revolution. The communist revolution immediately ends economics and replaces it with sharing.

That sounds like merely semantics itself. As far as I'm concerned, replacing capitalism with "sharing" is economic revolution.


absolutely oppose the contination of democratic methods, and its coexisting twin, antidemocratic methods, after the revolution.

In your view, how would companies be run or resources be allocated in a post-capitalist world?


Mardi Gras beads have use value. Saab doesn't.

How so?

In any case, the point was about the process of actually making revolution. When we're talking about overthrowing capitalism, we can go about it many ways. Many Latin American nations may be controlled by the banking organizations to which they owe a lot of debt. Many Chinese companies may be controlled by shareholders in Hong Kong. So where do you go to make revolution? Do you attack the IMF / Wall Street / Hong Kong to seize the shares, debt obligations, and control stucture at the "root of capitalism"? That's just stupid - that's not the root of it at all. If you want to overthrow capitalism, you'd go to the actual companies in Latin America or China where the capitalists attempt to exert their power with remote control. That's where you help protect the employees when they assume democratic control and ignore their corporate tyrants.

If it is ownership of money and stocks that give capitalists power, then it is the goal of revolutionaries to cause a crash in both the money and stocks that they hold. Excerpt from http://everything2.com/title/Demand%20is%20not%20measured%20in%20units%20of%20p eople%2C%20it%20is%20measured%20in%20units%20of%20 money

If wealth is concentrated in stocks, then employees should assume democratic control over their companies, thus rendering stocks worthless.

Excerpt from http://www.infoshop.org/rants/yu1.html

Your nation may still have in its treasury the remnants of the capitalist financial structure - gold, other precious metals, paper money from nations around the world. Spend it - as soon as possible. Buy commodities - those things you need to survive and buy any equipment you need to produce the goods you need. That is the real wealth to people who actually have to do the work.

What happens in the rest of the world as the people of your nation are suddenly flooding it with various currencies and "precious" metals, while snapping up real goods? The supply of those currencies and "precious" metals go up, while the supply of real goods go down. These goods become more and more expensive, while "money" becomes more and more worthless. Thus, there is all the more reason to exchange your money as soon as possible for real goods you will need.

[Floyce White]

cyu: "...the point of fascism in this cause it would be to overthrow financial capitalists..."

The point of fascism, religious fundamentalism, monarchism, radical conservatism, and all other forms of radical rightism, is to restore to power, or to prevent the imminent loss of power, of the faction of biggest capitalist families. Saving the rule of the biggest capitalists is accomplished by a political revolution: an overthrow of the existing regime.

A major industrial corporation is always one of the largest investors and borrowers in at least one major banking corporation. A major banking corporation is always one of the largest loaners and investors in at least one major industrial corporation. They own large chunks of each other's stock. They have members on each other's boards of directors. They cooperate in industry organizations and projects. Many of the families of big capitalists have diversified holdings and are intermarried across various sectors. The extreme polarization of capitalists that you suggest--of financial versus industrial--does not exist.

cyu: "Yet the rate of profit is still stagnant..."

I already admitted that the original production of surplus value suffers from a declining rate of profit. Yet the volume of profit is so enormous, and the rate of turnover of an investment is so quick, that this small percentage funds all the manifold nonproductive activities.

cyu: "...capitalism will totally collapse..."

No. Changes do not occur "automatically" or "for no known reason." The actions of human beings are the sources of social phenomena, and of changes in social phenomena. The actions of human beings are rational. Class society is a set of social relations: of actions of human beings toward other human beings. Capitalists do not "accidentally" end capitalism through "unbendable laws" or "forces beyond human control" or "despite their wills to do otherwise." The human beings who are capitalists or workers do not "totally collapse" or "reach exhaustion" or "crumble under their own weight." They live on. They fight on. The struggle of the lower class ends capitalism. That is true even if many lower-class activists are coopted into fighting for some future new form of class society.

cyu: "In your view, how would companies be run or resources be allocated in a post-capitalist world?"

"Company" in the sense of "people who accompany one another" would do whatever they believed to be necessary to feed, house, and otherwise help each other. My opinion is that people will talk to each other about electrical power, water lines, and such, in the way that they talk about sports now.

When virtually everybody knows how to create and use fire, when fire is integrated into everyday culture, there is no mystery about how to make fire.

Floyce White: "Mardi Gras beads have use value. Saab doesn't."

cyu: "How so?"

Saab is no longer useful to the rule of capitalists over workers. The condition of universally more-expensive labor in developed countries must be replaced by universally cheaper labor in China.

cyu: "employees should assume democratic control over their companies"

I agree that the takeover is the key act of defiance of property relations that defines the worker revolt. Same with takeover of housing from landlords and mortgage banks. Same with takeover of schools by students, teachers, and staff. Same with takeover of military bases by soldiers and sailors.

[Decommissioner]

I saw a wonderful video on PBS about a factory in China that made bead necklaces for Mardi Gras. The workers suffered much. When the workers learned what the beads were used for, and how trivial they were, the workers were deeply offended, ashamed, and hurt. Mardi Gras beads have use value. Saab doesn't.

Does this happen to be online? I would like to see this.

[Psy]

cyu: "...the point of fascism in this cause it would be to overthrow financial capitalists..."

The point of fascism, religious fundamentalism, monarchism, radical conservatism, and all other forms of radical rightism, is to restore to power, or to prevent the imminent loss of power, of the faction of biggest capitalist families. Saving the rule of the biggest capitalists is accomplished by a political revolution: an overthrow of the existing regime.

The point of fascism is to reform capitalism by force be it the proletariat or other capitalists that are preventing the reform that the military sees are necessary reforms to save capitalism. Fascism establishes a military dictatorship over both the proletariat and capitalists in the name of capitalism.



A major industrial corporation is always one of the largest investors and borrowers in at least one major banking corporation. A major banking corporation is always one of the largest loaners and investors in at least one major industrial corporation. They own large chunks of each other's stock. They have members on each other's boards of directors. They cooperate in industry organizations and projects. Many of the families of big capitalists have diversified holdings and are intermarried across various sectors. The extreme polarization of capitalists that you suggest--of financial versus industrial--does not exist.

That wouldn't matter if fascists took control and dictated production through the military by taking over all means of production by the army and redistributing the means of production to capitalists loyal to the fascist state.



cyu: "Yet the rate of profit is still stagnant..."

I already admitted that the original production of surplus value suffers from a declining rate of profit. Yet the volume of profit is so enormous, and the rate of turnover of an investment is so quick, that this small percentage funds all the manifold nonproductive activities.

Wrong it is very significant which is why when the crisis occurred all the capitalists world wide responded by cannibalizing fixed capital.



cyu: "...capitalism will totally collapse..."

No. Changes do not occur "automatically" or "for no known reason." The actions of human beings are the sources of social phenomena, and of changes in social phenomena. The actions of human beings are rational. Class society is a set of social relations: of actions of human beings toward other human beings. Capitalists do not "accidentally" end capitalism through "unbendable laws" or "forces beyond human control" or "despite their wills to do otherwise." The human beings who are capitalists or workers do not "totally collapse" or "reach exhaustion" or "crumble under their own weight." They live on. They fight on. The struggle of the lower class ends capitalism. That is true even if many lower-class activists are coopted into fighting for some future new form of class society.

Capitalism like feudalism before it reaches points where reforms are required for it to survive, failure for the system to reform causes the entire system to collapse in on itself. For example if capitalism can't reform financial capitalists then the boom/bust cycle would become so massive that capitalism would become impossible as the rate of profit would eventually become overall negative meaning in the long run profits would be impossible as the system failed to reform in order to protect the rate of profit.

[cyu]

My opinion is that people will talk to each other about electrical power, water lines, and such, in the way that they talk about sports now.

People certainly talk about their favorite sports teams, but fans have almost no influence over the teams. I assume that's not what you want in a post-capitalist society. Say the economy has X amount of iron and Y amount of oil. What then? How would you like to see society determine how this iron and oil is allocated toward various industries?

Certainly everyone will discuss various arguments for resource allocation, but at some point, decisions will have to be made. I doubt you'd ever reach 100% agreement. If not, how would the decision be made? Say some people want more resources allocated toward starships, while others want more allocated toward marine agriculture. How would you reconcile the different parties?


Saab is no longer useful to the rule of capitalists over workers. The condition of universally more-expensive labor in developed countries must be replaced by universally cheaper labor in China.

So it seems you are speaking of Saab as an organizational structure. What about Saab cars? What about the assembly lines and other facilities used to produce Saab cars? You wouldn't say they have less value than beads, would you?

[ckaihatsu]

My opinion is that people will talk to each other about electrical power, water lines, and such, in the way that they talk about sports now.


Hey, can we run this past Marketing? (Pssst, you're *killing* us here, Floyce!)


x D

[Floyce White]

Mardi Gras: Made in China. Dunno if it's free anywhere, but I guess PBS will eventually show it again on POV.

Cyu, yes, I am saying that Saab's machinery has less use-value than beads. In recent years, some (electronic) chip plants became obsolete before they went into production. No capitalist would buy a factory--and take over its many financial and legal problems--just to get at a little scrap metal.

Cyu: "How would you like to see society determine how [raw materials are] allocated...? . . . How would you reconcile the different parties?"

How would people who want to do some plumbing in Los Angeles convince people in Tucson to mine and smelt and roll pipe for them? Probably by asking them nicely. The need for pipe seems honest and reasonable. The LA plumbers should have no problem describing what they need, by what date, and whether or not they have a severe shortage or emergency. Besides, Tucson would probably be getting requests for pipe, wire, and other copper goods from all over the world. The request by the LA plumbing supply warehouse would be a very typical and ordinary event.

I mean, how are people in Tucson going to spend their days? Throwing rocks at cactus? Might as well roll some pipe.

[Psy]

Cyu, yes, I am saying that Saab's machinery has less use-value than beads. In recent years, some (electronic) chip plants became obsolete before they went into production. No capitalist would buy a factory--and take over its many financial and legal problems--just to get at a little scrap metal.

When Marxists talk of use-value they are talking about potential use-value not current use-value since current use-value has little to do with market value, for example a train engine has the same potential use-value when it is deadheading (moving empty rail cars) to when it is moving arms for the military and just because a train engine is mostly use to deadhead doesn't mean a railway would value it less. Then you have labor value, railways value their rolling stock based on not only potential use-value but the labor that goes into maintaining and replacing them (epically for railways that manufacture their own rolling stock).

So Saab's machinery has more potential use-value then beads what changed is labor value due to over production in the market, meaning workers don't have to labor to build new machinery as capitalists have their pick of machinery built with dead labor.

[cyu]

yes, I am saying that Saab's machinery has less use-value than beads. In recent years, some (electronic) chip plants became obsolete before they went into production. No capitalist would buy a factory--and take over its many financial and legal problems--just to get at a little scrap metal.

You are assuming you're still operating in a capitalist structure, of course. I'd imagine post-revolution, that the employees of Saab would simply ignore the financial / legal problems created by the old capitalist rulers. So the next question becomes: for the hundreds or thousands of Saab employees that are laid off, do you think they'd rather have the machinery and assembly lines, or do you think they'd rather have 100 beads? 50 beads? 25 beads? 1 bead?


The LA plumbers should have no problem describing what they need, by what date, and whether or not they have a severe shortage or emergency.

Let's say there was a shortage in LA, but it's no life-or-death emergency, or even a mild emergency. Let's also assume there are no life-or-death emergencies or even mild emergencies in any part of the world. However, there is both a shortage in LA and Houston for merely purposes of "fun" or "exploration" - how then, would you imagine society determine where to allocate its economic resources in this case?

[Floyce White]

Psy: "When Marxists talk of use-value they are talking about potential use-value not current use-value since current use-value has little to do with market value, for example a train engine has the same potential use-value when it is deadheading (moving empty rail cars) to when it is moving arms for the military and just because a train engine is mostly use to deadhead doesn't mean a railway would value it less. Then you have labor value, railways value their rolling stock based on not only potential use-value but the labor that goes into maintaining and replacing them (especally for railways that manufacture their own rolling stock)."

Circular reasoning. An engine (or other machine) that is in use has use-value. Opel, Saab, Pontiac, Saturn, and Oldsmobile are taken out of use because their use-values decline sharply as the ability to sell their output approaches zero.

cyu: "You are assuming you're still operating in a capitalist structure, of course."

Yes. Communism has no economics; therefore, no such thing as use-value.

cyu: "So the next question becomes: for the hundreds or thousands of Saab employees that are laid off, do you think they'd rather have the machinery and assembly lines, or do you think they'd rather have 100 beads?"

You mean, would the Saab workers take over the plant and maintain production as part of a worldwide revolt? That's one possible solution. However, it suggests that workers should maintain and expand the existing system of automobiles, roads, and fuels. Without the need to earn wages, Saab workers no longer would need to make cars. They could and probably would do other things. Very few people would be such "car buffs" that they would want to build cars. The whole system of churning out soon-to-be garbage would end as former wage slaves simply refuse to waste their time in it. Beads included.

cyu: "Let's say...there is both a shortage in LA and Houston...how then, would you imagine society determine where to allocate its economic resources in this case?"

Problems of production and distribution are well known and easily handled. There must be some point you're getting at. No need to be so roundabout.

[Psy]

Psy: "When Marxists talk of use-value they are talking about potential use-value not current use-value since current use-value has little to do with market value, for example a train engine has the same potential use-value when it is deadheading (moving empty rail cars) to when it is moving arms for the military and just because a train engine is mostly use to deadhead doesn't mean a railway would value it less. Then you have labor value, railways value their rolling stock based on not only potential use-value but the labor that goes into maintaining and replacing them (especally for railways that manufacture their own rolling stock)."

Circular reasoning. An engine (or other machine) that is in use has use-value. Opel, Saab, Pontiac, Saturn, and Oldsmobile are taken out of use because their use-values decline sharply as the ability to sell their output approaches zero.

They are failing to sell because the capitalists can't get a high enough price in the market for them, for example it is not that houses use-value collapsed in this crisis that is causing houses to sit empty since there is actually growing demand for houses it is just the market value of houses are collapsing since the labor value is collapsing due to overproduction. Remember use value and labor value are to different sets of values), use value measures functionality while labor value measures the amount of labor required to produce said functionality.

[cyu]

Communism has no economics

Why do you make this assertion? What is your definition of economics, and why do you believe communism would not have it?


Without the need to earn wages, Saab workers no longer would need to make cars... Very few people would be such "car buffs" that they would want to build cars.

Sure, I'm all for voluntary work. However, regardless of whether we're talking about cars or not, there will be things that society feels need or should be produced. Those desires may change over time. Indeed I think beads are far less useful than cars, but to claim all cars would be unneeded and undesirable sounds like hippie naivete to me.


There must be some point you're getting at. No need to be so roundabout.

This is in response to your earlier claim that communists should "absolutely oppose the contination of democratic methods, and its coexisting twin, antidemocratic methods, after the revolution." You haven't actually explained how you want decisions to be made and how conflicts between different opinions to be resolved.

[ckaihatsu]

Remember use value and labor value are to different sets of values), use value measures functionality while labor value measures the amount of labor required to produce said functionality.


Yet labor value is *far* from being *accurate* or "true", because, like all other monetary values in capitalism, it is inextricably bound up with *exchange* values, or market values. Since the labor force is the most *independent*, determining factor for the economy and capitalism altogether, the current labor market values probably indicate / measure the balance of class forces in the class struggle more than anything else.





the labor value is collapsing due to overproduction.


In the absence of a stronger international labor solidarity movement (for better wages) the current labor market value *will* be almost wholly under the influence of market values, thus currently reflecting the effects of massive unemployment -- this is a working-class-sided economic *inflation* (decreasing value) in labor market value due to too-readily-available supplies of labor. (Meanwhile the ownership class is experiencing a *deflation*, or banking bubble of artificially *inflated* market values for *non-productive*, *speculative* assets like mortgages, junk bonds, and equity shares, due to the increasing risk of lending in a moribund productive ("real") economy.)

With a stronger labor militancy the cost of labor would *detach* from the market inertia and would reflect successful class-conscious struggles for better wages and benefits.

[Floyce White]

Psy: "[GM's failed divisions' cars] are failing to sell because the capitalists can't get a high enough price in the market for them"

You and I agree that industrial production has an extremely low rate of profit. For the sake of argument, let's say that GM's failed divisions made a whopping 4% profit on each $20,000 car. If the price declined a mere $801 to $19,199, GM would lose money on each car.

Leaving the hypothetical and going back to facts, GM used its economic and political power to artificially inflate its prices for decades. GM cars are not worth the sticker price. GM's cars have been unprofitable to produce for a long time. GM used its finance arm to suck profit out of circulation when it could not profit from production.

GM cars are inferior to other makes. So even if we thought that more cars should be produced, why should they be made at inferior GM plants?

Psy: "the market value of houses are collapsing"

Houses here are still very badly overpriced even after a 50% decline.

cyu: "What is your definition of economics, and why do you believe communism would not have it?"

Thought I posted that. No matter. Economics is the social science that describes property and its exchange. Communism is the absence of property. Please see my series of essays at Internet Archive, www.archive.org (http://www.archive.org) . Use Wayback Machine to find NOTALINKwww.geocities.com/antiproperty/index.htmlNOTALINK.

cyu: "to claim all cars would be unneeded and undesirable sounds like hippie naivete to me."

Ignoring your ad hominem about hippies, humanity survived just fine for millions of years without automobiles. You cannot prove that cars are essential to life, so why bother implying that you could base a premise upon such a thesis? Don't ignore solid material fact in favor of a bourgeois prejudice for its own culture.

Another point of view is that the technology of railways is superior to automobiles, but capitalist power struggles favored the latter.

cyu: "You haven't actually explained how you want decisions to be made and how conflicts between different opinions to be resolved."

I'm trying to tell you that decision-making is extremely simple and doesn't need any specialized conflict-resolution system. I doubt that tools such as logic and mathematics will be abandoned for some generations after the communist revolution. People are rational and will solve problems through calm discussions with well-chosen reasonings.

[Psy]

Psy: "[GM's failed divisions' cars] are failing to sell because the capitalists can't get a high enough price in the market for them"

You and I agree that industrial production has an extremely low rate of profit. For the sake of argument, let's say that GM's failed divisions made a whopping 4% profit on each $20,000 car. If the price declined a mere $801 to $19,199, GM would lose money on each car.

Leaving the hypothetical and going back to facts, GM used its economic and political power to artificially inflate its prices for decades. GM cars are not worth the sticker price. GM's cars have been unprofitable to produce for a long time. GM used its finance arm to suck profit out of circulation when it could not profit from production.

GM cars are inferior to other makes. So even if we thought that more cars should be produced, why should they be made at inferior GM plants?

You are mixing different values again, the value of the fixed capital in GM plants does not effect the use-value of GM cars at all, it only effects the labor value. For example lets say there are two tool makers that make identical sets of tools, one takes X hours to make 1 set of tools the other take 2X to make 1 set of tools, both sets of tools have the same functionality (use-value) the difference is the labor that went to their production.

[cyu]

If the price declined a mere $801 to $19,199, GM would lose money on each car.

And a big chunk of the money went to top executives and shareholders too, not to mention the various perks, trips, catering, and executive suites they got.

It has also been shown that democratic companies are more productive than authoritarian ones (see http://www.revleft.com/vb/studies-show-free-t125550/index.html ), thus without the capitalist power structure, they wouldn't be having so much trouble.


Economics is the social science that describes property and its exchange. Communism is the absence of property.

Sure, I have no problem with saying that there wouldn't be property under communism. However, I would use a different definition of economics: the production and distribution and consumption of goods and services and their management. Thus even without property, you'd still have production, distribution, and consumption. If you don't want to call that economics, it doesn't matter to me - just invent a new word for it, and I'll use your new word when discussing such things with you.


humanity survived just fine for millions of years without automobiles. You cannot prove that cars are essential to life... Another point of view is that the technology of railways is superior to automobiles

Sure, humanity also survived countless years without vaccines or even plumbing. And I have no problem with trains or buses or bicycles - still, are you inherently prejudiced against cars? Would you feel better if they were solar powered cars?


I'm trying to tell you that decision-making is extremely simple and doesn't need any specialized conflict-resolution system. I doubt that tools such as logic and mathematics will be abandoned for some generations after the communist revolution. People are rational and will solve problems through calm discussions with well-chosen reasonings.

Sounds to me like you're just hand-waving and not offering any real solutions. The more people there are in society, the less likely you'll be able to get 100% agreement on any decision, no matter how much logic you use or how much time you spend discussing things. Do you live in a family where all your decisions are discussed and eventually everyone agrees? If you even claim that, I'd assume in all probability, you were lying merely for the sake of argument.

[Floyce White]

Sure, I have no problem with saying that there wouldn't be property under communism. However, I would use a different definition of economics: the production and distribution and consumption of goods and services and their management. Thus even without property, you'd still have production, distribution, and consumption. If you don't want to call that economics, it doesn't matter to me - just invent a new word for it, and I'll use your new word when discussing such things with you.

The inherent problem in your position is that nobody goes around talking to boxes saying "I manage you." Management, and all forms of command and control, are explicitly management of the activities of people. In other words, management as a form of class society, management as a form of property relations.

The real problem with your argument is that you assume that people must go around trying to tell others what to do, and that anyone who disagrees with you is withholding something, deliberately lying, toying with you, and so on. Thus, you see my reasoning as just wordplay.

The difference between class society and classless society is not merely one of semantics. There is a fundamental difference in how people relate to one another. That difference is the presence or absence of telling others what to do. A democratic veneer of "everybody is telling everybody" what to do--or its oxymoronic political equivalent "everybody leads everybody"--fools no one into believing that he or she isn't being used.


...are you inherently prejudiced against cars? Would you feel better if they were solar powered cars?

How I feel is irrelevant.


Do you live in a family where all your decisions are discussed and eventually everyone agrees? If you even claim that, I'd assume in all probability, you were lying merely for the sake of argument.

Very bad step on your part. When I was growing up, an aunt was the matriarch of the family. Disagree with her, and you'd get your ear pulled. No one was too old to be dressed down.

[Floyce White]

You are mixing different values again, the value of the fixed capital in GM plants does not effect the use-value of GM cars at all, it only effects the labor value. For example lets say there are two tool makers that make identical sets of tools, one takes X hours to make 1 set of tools the other take 2X to make 1 set of tools, both sets of tools have the same functionality (use-value) the difference is the labor that went to their production.

An automobile represents a hefty social workload. If the GM car takes more effort to produce, lasts far fewer miles, and requires more maintenance, society has no use for its production. The Oldsmobile Alero, for example, did not have anywhere near the use-value of, say, a Toyota Camry.

Capitalists generally agree with the road/car/single-family house economy. They wouldn't be shutting down car plants unless they already ran them into the ground.

[Psy]

An automobile represents a hefty social workload. If the GM car takes more effort to produce, lasts far fewer miles, and requires more maintenance, society has no use for its production. The Oldsmobile Alero, for example, did not have anywhere near the use-value of, say, a Toyota Camry.

That a gross over-simplification, GM cars have more use-value then having no cars, also Toyota and other car manufactures have a peak rate of production so GM cars have a use-value as a supplement to Toyota cars. Also car factories can make other commodities far example narrow gauge railway rolling stock can be built in any car factory meaning GM workers could be put to work building narrow gauge rolling stock at their old factories for light mass transit.



Capitalists generally agree with the road/car/single-family house economy. They wouldn't be shutting down car plants unless they already ran them into the ground.
It is a problem of over-production not a problem of the fixed capital has been ran into the ground.

[cyu]

you assume that people must go around trying to tell others what to do

Just because you tell someone what you want them to do, that doesn't mean they have to do it. That's the difference between anarchism and non-anarchism.


anyone who disagrees with you is withholding something, deliberately lying, toying with you, and so on.

Well, there is that old joke: Never attribute to malice what can be perfectly well explained by stupidity.


How I feel is irrelevant.

Well, you do seem to appear to be against Saab for some reason, and I'm just curious as to why. Is it the brand name Saab? The organizational structure that calls itself Saab? The objects that are marked with the Saab label? The people who work or worked for Saab?


Disagree with her, and you'd get your ear pulled. No one was too old to be dressed down.

Exactly, and what would happen to your aunt in your vision of society? Would she have to be locked up or executed?

[Floyce White]

Psy: "GM cars have more use-value then having no cars"

Rhetorical device. You could say the same about Ford T models or Volkswagen Beetles. Doesn't prove that resurrecting production of those cars today would cause them to be useful to maintaining or extending the rule of capital today.

Psy: "Toyota and other car manufacturers have a peak rate of production so GM cars have a use-value as a supplement to Toyota cars."

Is that true? Didn't Toyota lose money for the first time since 1938? Isn't Toyota hurting for sales now?

Psy: "...car factories can make other commodities..."

Rhetorical device. Dog-food factories can make other commodities. Paperback-book factories can make other commodities. The mere possibility that a thing could be done is not an argument for or against that thing being done.

Since GM couldn't profitably manufacture cars in its factories, and couldn't profitably retool them to make modern cars, I doubt that the even-greater retooling to make other commodities would be better than just expanding production (if necessary) in plants that already make those items.

cyu: "Well, there is that old joke: Never attribute to malice what can be perfectly well explained by stupidity."

If you're so smart, why can't you say what conflict-resolution process and/or institution(s) that you support?

[Psy]

Psy: "GM cars have more use-value then having no cars"

Rhetorical device. You could say the same about Ford T models or Volkswagen Beetles. Doesn't prove that resurrecting production of those cars today would cause them to be useful to maintaining or extending the rule of capital today.

I'm just pointing out that a poor farmer in Africa probably think a GM truck is very useful, though they probably like the UAZ-452 better but GM factories could easily built such durible off-road vans, and if USSR factories in the 1980 could built durible useful off-road vehicles then surely GM factories could do the same.



Psy: "Toyota and other car manufacturers have a peak rate of production so GM cars have a use-value as a supplement to Toyota cars."

Is that true? Didn't Toyota lose money for the first time since 1938? Isn't Toyota hurting for sales now?

True but that doesn't change that Toyota have a peak rate of production it is just instead they have over-production. This means Toyota can't ramp up production indiffently if it was dictated to do so by a command economy.



Psy: "...car factories can make other commodities..."

Rhetorical device. Dog-food factories can make other commodities. Paperback-book factories can make other commodities. The mere possibility that a thing could be done is not an argument for or against that thing being done.

Since GM couldn't profitably manufacture cars in its factories, and couldn't profitably retool them to make modern cars, I doubt that the even-greater retooling to make other commodities would be better than just expanding production (if necessary) in plants that already make those items.

Yet we don't live in a planned economy, For example Obama didn't even order GM to retool to make APCs to make up for the APCs destroyed in Afghanistan and Iraq as the US is not a command economy where the US state dictates to its capitalists what to produce,where, how and in what quantities like the US state did in WWII, because the interest of industrial capitalism is no longer what drives bourgeois states like the USA.

GM auto factories could built everything from light tanks to light rail vehicles so they are far from use-less, they are key for everything from military conquests to building a social world of abundance.

[cyu]

If you're so smart, why can't you say what conflict-resolution process and/or institution(s) that you support?


Haha, well I certainly won't claim the following is the "smartest" system, but it's the best I've come across so far, but I certainly would be more than happy to find something I like even more:

Excerpt from decentralized democracy (http://everything2.com/title/decentralized%20democracy):

There is an anarchist concept known as decentralized democracy. That means the more someone is affected by a decision, the more say he has in that decision. If a decision barely affects 99% of the people, then none of them get to vote. The decision to kill someone affects the victim more than anyone else, so the victim should have more say in the decision than everyone else. The decision over what you eat for lunch barely affects anybody else, so obviously you don't have the entire society voting on what you have for lunch. In cases like these, it becomes a democracy of one - thus anarchy.

Supporters of decentralized democracy would use their own power to protect the right of others to make the decisions that most affect them. For example, this includes protecting other peoples' lives, whether it's from government or non-government forces.

Excerpts from equal pay for unequal work (http://everything2.com/title/equal%20pay%20for%20unequal%20work):

Instead of trying to convince people to want things they don't want, instead convince them to want to do things that actually need doing. Seems like a much more direct method to me and a much better use of the skills of our great advertisers.

I would imagine different people would give their support to many different organizations. Each of these organizations would be supporting advertising for different activities. The more people supporting one organization, the more advertising you'd see for the jobs supported by that organization.

If you're "lazy" and don't feel like doing anything, nobody forces you to work. You are free to stay at home and watch TV or surf the internet all day. However, instead of being constantly bombarded with ads trying to get you to want more stuff, you are instead bombarded with ads trying to get you to want to go out and do stuff that society thinks needs doing.

As long as people see value in doing something, they are free to support advertising for that kind of activity. Sports, for example, are good for people's health, and, in cases like swimming, can save lives. However, if some other activity could not only provide exercise, but also help out other people at the same time (for example, building a wheelchair accessible trail along a scenic mountain path), then I could easily see more people gravitating toward promoting that other activity.

[ckaihatsu]

CAPITALISM: U.S. Economy: Six Months To Live?
grok <[email protected]> Wed, Jan 13, 2010 at 11:15 PM

-----BEGIN PGP SIGNED MESSAGE-----
Hash: SHA1


This well-known petit-bourgeois commentator doesn't have a socialist
bone in his body, and enjoys the reputation of being somewhat of a
Cassandra, in the "mainstream" -- but the point is: this is mainly
because he calls `em like he sees `em. And he and the bourgeois
experts he analyzes have been seeing this slow-motion Mother Of All
Trainwrecks coming for the longest time... As have any real marxists.

The ability of the bourgeois strategists to continue rolling over
their crisis into 'new debt' is swiftly reaching the point where they
will simply be overwhelmed by their own long-term perfidy against us.
Of course -- we're all along for the ride too.
Enjoy it.


- -- grok.





- ----- Six Months To Live?


Clusterfuck Nation

by James Howard Kunstler

Comment on current events by the author of
The Long Emergency (2005)

www.kunstler.com (January 11 2010)

The economy that is. Especially the part that consists of swapping
paper certificates. That's the buzz I've gotten the first two weeks
of 2010, and forgive me for not presenting a sheaf of charts and
graphs to make the case. Just about everybody else yakking about
these thing on the Web provides plenty of statistical analysis:
Mish {1}, The Automatic Earth {2}, Chris Martenson {3}, Zero Hedge
{4}, The Baseline Scenario {5} ... They're all well worth visiting.

Bank bonus numbers are due out any day now. The revolt that I
expected around the release of these numbers may come from a
different place than I had imagined earlier - not from whatever
remains of "normal" working people, but from the thought leaders
and middling agents in administration (including the prosecutors)
who, for one reason or another, have been diverting their
attention, or watching and waiting, or making excuses for a couple
of years now. When Frank Rich of The New York Times starts calling
for Robert Rubin's head {6}, then maybe the great groaning tramp
steamer of media opinion is turning in the water and charting a new
course for the port of reality.

Anyway, the grotesque carnival of rackets and lies that the US
economy has become - held together with the duct tape of stimulus
cash, gamed accounting, mortgage subsidies, carry trades, TBTF
bailouts, TARPS, TALFS, shell-game BLS reports, and MSNBC "green
shoots" cheerleading - gives every sign of tipping into collapse at
a moment's notice. There are just too many obvious things that can
go wrong, and that means there are many less obvious, hidden things
that can go wrong, and isn't it tragically foolish to tempt
Murphy's Law {7}, since it operates so well without any help from
us? The call is even going out lately for criminal prosecution of
the current Treasury Secretary, Mr Geithner, for engineering AIG's
$14 billion credit default swap payoff to Goldman Sachs {8} as part
of the AIG bailout. Okay then, why not Paulson, Bernanke,
Blankfein ...?

But the other rings of the circus are fully occupied by clowns and
dancing bears, too. Even with sketchy-looking stock market
prospects for 2010, it's hard to explain why the world would run
into US treasury bonds, especially a few months from now, after the
initial rush-to-safety - that is, when you could just as easily buy
Canadian or Swiss franc denominated short-term bills. And then what
happens when the Federal Reserve has to eat all the uneaten
treasuries, while it's already choking to death on collateralized
debt obligations and related worthless toxic trash securities?
After all, the greenbacks we swap around are called Federal Reserve
Notes.

Why would anybody think that the housing market is going to keep
levitating? A big fat "pig" of adjustable rate mortgages (that is,
mortgages that will never be "serviced") is about to move through
the "python" of the housing scene, shoving millions more households
into default and foreclosure. Meanwhile, local and regional banks
are choking on real estate already in default that they are afraid
to foreclose on and have been keeping off the market through 2009
in order to not send the price of houses down further and put even
more households "under water" for houses worth much less than the
face value of their mortgage. I doubt that the banks are doing this
out of the goodness of their hearts, but whatever the motive, this
racket of just sucking up bad loans can't go on forever. At some
point, a banking system has to be based on credibility, on loans
actually being paid back, or it will break, and we are close to the
breaking point.

The pathetic truth at the center of the housing fiasco is that
prices have to come down further if any normal wage-earner will
ever afford to buy a house again in America on anything like normal
terms. Anyway, sooner or later the banking system is going to have
to upchuck the "phantom inventory" of un-foreclosed-on houses, and
sell them off for whatever they can get, or else a lot of banks are
going to go out of business.

They may go down anyway, because the catastrophe of commercial real
estate is following right on the heels of the fiasco in residential
real estate. The vast oversupply of malls, strip malls, office
parks, and other furnishings of the expiring "consumer" economy is
about to become the biggest liability that any economy in world
history has ever seen. Who will even want to buy these absurd
properties cheaply, when they will never find any retail tenants
for the badly-built structures, nor be able to keep up with the
maintenance (think: leaking flat roofs), or retrofit them for
anything? In a really sane world, a lot of these buildings would go
straight to demolition-and-salvage - except that it costs money to
do that, and who exactly right now will make a market for used
cinder blocks and aluminum window sashes? I expect these places to
become squats for the desperate homeless.

Then there are the bankrupt states, led by the biggest, of course -
California and New York - but with plenty more right behind,
whirling around the same drain (probably forty-nine of them with
the exception of that fiscal Nirvana, North Dakota!). Even if they
manage to con bailouts from the bailout-weary federal government,
the states are still going to have to winnow down the ranks of
their public employees (throwing more middle-class households into
foreclosure and penury), while they hugely reduce public services,
especially to the poor, the unwell, and the unable. That alone will
redound into very visible realms of daily life from public safety
(rising crime) to the decay of roads and bridges.

Perhaps the most troubling buzz in the air this first month of 2010
are rumors of coming food shortages due to widespread crop failures
around the world in the harvest seasons of 2009 - for example
Emergency Food Supply {9}, Food Crisis For Dummies {10}, 2010 Wall
Street Predictions {11}. If the US Department of Agriculture hasn't
flat-out lied about crop numbers in 2009, the signs are that their
statistical reports are at least inconsistent with real grain
storage numbers and commodities prices. And why would the USDA tell
the truth if every other federal agency is reporting gamed numbers?
Given the crisis in capital and lending, one also has to wonder how
farmers will be able to borrow money to get their crops in this
year.

Finally there's the global energy scene. The price of oil starts
this week over $83 a barrel. That puts it about $1.50 from the
price "danger zone" where it begins to kill economic activity in
the USA. Things and procedures just start to cost too much.
Gasoline. Deisel fuel (and, by the way, that means another problem
for food production going into the 2010 planting season). One
especially eerie situation the past few weeks has been the
de-coupling of moves upward in oil from moves in the value of the
dollar. Lately, oil has been going up whether or not the dollar has
gone up or down. Two weeks ago the dollar went below 1.42 against
the Euro and today it's above 1.45, and oil has been rising
steadily from the mid $70 range all the while. 2010 may be the year
that we conclusively realize that world oil demand exceeds world
oil supply - and that global oil production cannot hold above 85
million barrels-a-day no matter what we do.

These are the things that trouble my mind at three o'clock in the
morning when the wind rises and things bang around spookily. Gird
your loins out there for a savage season or two.

Links:

{1} http://globaleconomicanalysis.blogspot.com/

{2} http://theautomaticearth.blogspot.com/

{3} http://www.chrismartenson.com/blog

{4} http://www.zerohedge.com/

{5} http://baselinescenario.com/

{6} http://www.nytimes.com/2010/01/10/opinion/10rich.html?em

{7} http://en.wikipedia.org/wiki/Murphy%27s_law

{8}
http://www.bloomberg.com/apps/news?pid=20601087&sid=awMKjsrS8zYk&pos=3

{9}
http://theemergencyfoodsupply.com/archives/the-coming-world-famine-will-2010-be-the-year-the-world-runs-out-of-food

{10}
http://www.marketskeptics.com/2009/12/2010-food-crisis-for-dummies.html

{11}
http://www.newjerseynewsroom.com/economy/2010-wall-street-predictions-major-food-shortages-oil-to-rise-above-100-a-barrel-among-forecasts

http://kunstler.com/blog/2010/01/six-months-to-live.html


http://www.billtotten.blogspot.com
http://www.ashisuto.co.jp





- ----- End forwarded message -----

- --
The Financiers & Banksters have looted untold trillions of our future earnings.
Their bureaucratic police & military goons are here to make us all pay for it.
Forever.
Well FORGET THAT. Let's get it *ALL* back from them -- and more.

**Socialist revolution NOW!!**

Build the North America-wide General Strike.
TODO el poder a los consejos y las comunas.
TOUT le pouvoir aux conseils et communes.
ALL power to the councils and communes.

And beware the 'bait & switch' fraud: "Social Justice" is NOT *Socialism*...
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[S.Artesian]

Well, it is now Spring 2010. Perhaps we should revive the thread?

[jmlima]

It's amazing how these kind of articles ignore people's will to maintain their status quo, and how willing they are to be robbed by their governments to keep on buying plasma tv's and stealing benefits...

Governments have a still very deep source of income in further taxation, and they will use it, and you can bet, people will do nothing. You know why? because there will be always a new ipod down the road, and that, it is still seen as the most apetizing road.

[S.Artesian]

It's amazing how these kind of articles ignore people's will to maintain their status quo, and how willing they are to be robbed by their governments to keep on buying plasma tv's and stealing benefits...

Governments have a still very deep source of income in further taxation, and they will use it, and you can bet, people will do nothing. You know why? because there will be always a new ipod down the road, and that, it is still seen as the most apetizing road.

I disagree. I ignore nothing. First, I'm not about to claim people are going to automatically rise up and overthrow capitalism based solely upon impaired accumulation of capital. But regardless of what people do, we are asked to investigate that impairment and quantify and qualify it-- big, bigger, unbelievably huge; shrinking, expanding; cyclical, structural, or the conjuncture of both.

That's what I hope the thread will be about.

Now things aren't looking up for the bourgeoisie right about now. Whether or not that constitutes a "tipping point," will only be answered practically. But if it's debt we think is going to turn tipping into toppling, then things look even worse in 2011 and 2012 when the MBS issued in 2006 and 2007 come due; when private equity buyout firms have to refund their debt; when commercial real estate mortgage backed securities come due.

[jmlima]

...
Now things aren't looking up for the bourgeoisie right about now. Whether or not that constitutes a "tipping point," will only be answered practically. But if it's debt we think is going to turn tipping into toppling, then things look even worse in 2011 and 2012 when the MBS issued in 2006 and 2007 come due; when private equity buyout firms have to refund their debt; when commercial real estate mortgage backed securities come due.

I do disagree again. (sorry about that, not wanting to be difficult... ;) )

But , your point above ignores the fact that billions were made with the economic debacle, it also fails to acknowledge that many companies (and some countries such as China...) are making money as they never have before this challenging times. Things are indeed looking up for the bourgoise. They had a major hicup and not only survived it, as they emerged in a far better position, after the people showed their manifest desire to keep the status-quo above all other things and played nicely onto their hands.

Government debt will be cleared the same way it was the last time, by clever manipulation of figures and creative accounting. Personal debt , in the spectrum of this thread, is highly favourable to big finance, as only creates even more strings on people.

Besides , if you look in the overall picture what emerged from this 'crisis' is that the rich got again richer , and got richer by ransacking the poor. Just look at the absolutely immoral way in which governments bailed out failing banks. Just look what happened in the UK to the directors of RBS and HBOS.

My point still stands, this crisis only affect us, the poor. And what the text does not account for, is how poor people are willing to tolerate this state of things to keep their perks.

It also does not cover (or I missed it) , how some of the biggest world governments went cap in hand to ask money to other countries and the future implications of this in the geo-political balance. But maybe that was not the goal of the text.

[S.Artesian]

What causes the crisis? Have the causes been mitigated, extinguished? I don't think so.

The cause, IMO, was overproduction-- overproduction extending all the way to 1998. The 2003 recovery was built, and built by the US on 4 things-- devaluation of the dollar, invading Iraq to jack the price of oil, draconian restrictions on capital spending, driving wages below the 1998-2001 average.

Worked, too. But with all that liquidity from devaluing the dollars, and petro-money sloshing around and reduced capital spending, where was the finance industry going to get its share?

Consumer market. Banks in the US for example, shifted their balance of industrial/consumer loans from the usual 50-50 to 2:1 consumer-- and then of course comes the great revival of Enron economics-- securitizing debt, offering debt as the collateral to debt, and moving it of balance sheet to structured investment vehicles.

So far so good until... until industry [manufacturing, mining, construction] having consumed so much of its productive capital has to resume capital spending and to offset the rise in oil prices, has to increase production in the attempt to get just a little bit more of blood out of the shale. This starts in 2005, but really takes hold in 2006 when the rate of return in the US on investment peaks. Capital spending continues into 2007, with wages rates actually rising above the 2000 mark, and by 2007, US industry is on the down side of the rate of profit, particularly the US oil majors, leading to IMO the speculative blow out in the price of oil.

OK, has the overproduction been remedied. Have enough means of production been destroyed to "unimpair" accumulation? The US reports dramatic increases in profits in the 4Q 2009 vs. the 3Q, based on reductions in capacity and in workers, but revenues, total sales, remain below 2008 levels, much less 2007.

As for the debt markets, the bourgeoisie may have pushed out the due date, but the non-performing assets are still out there and it takes a torch to burn that much paper.

Yeah, I think something big-- conjunctural is underway with capital-- in a sense this is the depression that we should have had after 2000, but pushed back with the invasion of Iraq. In that same sense, this is the acute phase, of capitalism's slowdown, and impaired accumulation that began in 1970, after the rate of profit dipped then, and that led to intensified class struggle [and defeats without a doubt]. The strike wave in the US that peaked in 1974 was the most intense since the 1930s.

So capital has not resolved this acute phase; cannot resolve this acute phase without employing literal physical destruction of the accumulated means of production, and we all know how the bourgeoisie do that.

As for billions being made in the debacle, yes indeed, just like billions were made in the MBS markets 2004-2007-- all of which were wiped out in 2008, 2009.

But if your point is that we shouldn't buy into Kunstler's "end of the world"-mongering.... I am in complete agreement. As with everything this guy, and those like him write, writes, he writes it for a commercial purpose-- to make money. If panic-mongering makes him money, he's the first to yell "fire" in a crowded theater even though he's in water up to his neck.

[jmlima]

...
So capital has not resolved this acute phase; cannot resolve this acute phase without employing literal physical destruction of the accumulated means of production, and we all know how the bourgeoisie do that.

As for billions being made in the debacle, yes indeed, just like billions were made in the MBS markets 2004-2007-- all of which were wiped out in 2008, 2009.

But if your point is that we shouldn't buy into Kunstler's "end of the world"-mongering.... I am in complete agreement. As with everything this guy, and those like him write, writes, he writes it for a commercial purpose-- to make money. If panic-mongering makes him money, he's the first to yell "fire" in a crowded theater even though he's in water up to his neck.

I do agree with the above, and yes, that was my main point.

Re the billions though, I believe the point is not whether billions are made and then lost, but how much profit occurs in this operation. People do make profits from other people / companies losses. And a lot.

I do think though that this point below should be emphasized:


What causes the crisis? Have the causes been mitigated, extinguished? I don't think so.

That is where the hub of problem really lies for the future and for the present.

[S.Artesian]

Nice to have you aboard.

[ckaihatsu]

The following paragraph really caught my eye when I read it because it *encapsulates* the current economic condition:





David Roche writes in the Financial Times: “As all the AAA-rated nations in Europe have 70-80 percent of gross domestic product public debt ratios already—not far behind the ‘junk bond’ states (and worse than Spain)—we reckon the market will soon wake up to the fact that this deal is a form of contagion by official action.”

http://wsws.org/articles/2010/may2010/bail-m11.shtml


This description of our human-societal reality has the effect of revealing the "man behind the curtain" who's pulling the levers -- it takes a severe *valuation* crisis, like that of 2000 or 2008 or now, to exhibit the balkanization and potential *discord* among the members -- nation-states -- of the international bourgeoisie that breaks out when there's no payoff to financial cooperation anymore.

[ckaihatsu]

---







European Union finance ministers are pushing the European Central Bank to develop its own rating system for euro zone countries

The paper quoted one official saying the plan would free the euro zone from its dependency on international rating agencies such as Standard & Poors, Moody's and Fitch.

"The agencies have been completely wrong in the case of Lehman. Who can be sure that they won't be wrong again"

ECB policymakers have been made acutely aware of problems of the current system by Greece's growing troubles.
Were Moody's to downgrade Greece below the crucial 'A' threshold --as the other two main agencies have-- Greek debt would not be able to be used as collateral in ECB lending operations come the end of the year.

[ckaihatsu]

So here we're able to see that the *political assessment*, or value judgment, of the (arguably) objective financial numbers is an *arbitrary* one made by the powers-that-be -- "a form of contagion by official action", according to Roche.

So, in short, who's to say *how much* sovereign debt overhang is "acceptable" or "respectable" -- ??? This arbitrariness, of course, extends downward and applies to *any* entity or individual below this overall, *planetary* level...!

[ckaihatsu]

I gotta harp on this point some more, since the markets have already stumbled badly this month, 2008-style (go Greek and European working class!)(and Nepal communists!)....

News like that from this report below just continues to point out the festering scab that is capitalism, a sorry excuse for a "healing" of the body politic.





Merkel went on to declare that the German government would propose measures for a “debt brake” for European countries at an EU special meeting on Friday. A similar “debt brake”, which strictly limits the amount of debt a country can acquire thereby enforcing governments to impose strict spending programs, was introduced in Germany last year by the former grand coalition government.

http://wsws.org/articles/2010/may2010/fina-m21.shtml


If this doesn't reveal the crock of shit to the general public, I don't know what will -- now the European governments are pretending that they're going to *stop* digging deeper the holes that they're in. In reality there's *no objective limit* to the debt-to-GDP ratios that measure how financialized these economies are.

Why working people should suddenly be expected to freak out and work for free for the sake of *** fucking debt ratios *** I don't know. As long as the real economy could be somewhat maintained and a facade of normality given by the powers-that-be, most workers could at least go along with the pretense and try to live a life in it as well. But now that the *bourgeois leaders* are freaking out, they can't expect already-pissed-off workers to sympathize in the least with their freaking out. Numbers stuff is supposed to be handled by numbers-people, so why isn't it being handled?