"Third World Debt", loans etc.

[Faceless]

SO, Ive been thinking about this a lot recently and have had too many interesting ideas floating about to not discuss them.

OK, so my point of departure has been Rosa Luxemburg. I have been reading "the Accumulation of Capital" recently and I'll try to give a synopsis as best I can of what I have come to understand about the contradiction which appears to be in capitalism: (please, correct me if my interpretation is dodgy or if my logic is flawed)

Example:
A capitalist fronts £500 over a period as his capital, take him to be the capitalist class over all. At the end of that period he has £600 which have returned to him as money. He continually proves capable of this, he continually makes £100 surplus value over a period. The capitalist has to realise this quantity of value as money, so there must be demand for the surplus he produces. But who is this? The £500 capital includes wages, variable capital, so the £100 surplus is not realised by demand from workers. They merely pay back the money they were given in wages by buying products that they produced from the capitalist. The capitalist class then is the only other possible consumer in a purely capitalist society who can represent this demand. If the surplus is intended for consumption by the captalists, the £100 could be considered to be circulating within the capitalist class as they buy luxuries from eachother. But what if the capitalist wants to accumulate his capital? That is to say, what if the capitalist wants to save their £100 money such that they may spend it on new capital later. If capitalists abstain from consumption to "save", then where does the demand for their goods come from? Its not the workers, its not the capitalists, it must then be non-capitalist, foreign markets. It's in this frame, that the capitalists have to look towards these "backward", "underdeveloped" nations to find its demand. It's also in this light that I hope to look at world debt/lending, it's obvious that the capitalists have to realise their surplus in some way, through usury or otherwise...

Loans can play a big part in this sense. Often I've heard people say that a western organisation gives a loan for "development" but the government squanders it on arms with which it crushes its population. But this act is precisely in the interest of the western money lenders and helps to realise surplus into a money form. The squandered money funds the arms industry which itself supports other industries including metals, chemical etc. and the opressed population living under such cirumstances are then systematically robbed of their wealth in "debt service".

The win-win peacable debt reduction looks to me like nonesense in this context. Certainly the Blair-Brown-Geldof thing looks to do little more than scrape the surface on what could only ever be a short-term solution, debt running into the trillions after all. If the capitalists do cancel debt they will have to realise their surplus by resorting to further direct imperialist action a la Iraq anyway to somehow realise surplus amidst the ruins of the "underdeveloped world".

So, what do people think about it all eh?

[rebelafrika]

My view of the so-called "third world" debt and loans...

You don't steal everything I own (including the shirt off my back) and then, after a period of time has passed, turn around and say "Hey...I see you're screwed...how about I LEND you some money and inturn, you pay me back at an inflated interest rate?"

This is what the capitalists did to the so-called "third world." The so-called "third world" doesn't owe shit to capitalism as far as I am concerned.

[apathy maybe]

The biggest problem with loans to less developed countries the large amount of interest they have to pay. Many countries are now paying interest on interest, having long ago payed off the original loan.

I personally think that in this present system is very bad. Firstly of all, debt currently owed by the less developed countries should be cancelled. Secondly, more money should only be leant to those countries that have proved capable of using it wisely (not by the standards of the IMF and World Bank though). Thirdly, countries that do not use money wisely, should have other sorts of aid (food, goods, etc.) if they need it.

[Severian]

Rosa Luxemburg's analysis was debated at the time. I won't pretend to understand the theoretical issues involved.

But most of the countries in the world are predominantly capitalist economies now, so I'm not sure it applies anyway. Possibly one could make a case that means experience has disproved the "Accumulation of Capital" analysis...that is, capital keeps accumulating even though there aren't a lot of precapitalist markets left.

But in any case, I'm sure there's no win-win debt forgiveness, for straightforward reasons of profitability and potential meltdown of financial institutions and markets. The lenders seem willing to forgive only debts which they have little chance of collecting anyway.

[Faceless]

But most of the countries in the world are predominantly capitalist economies now, so I'm not sure it applies anyway. Possibly one could make a case that means experience has disproved the "Accumulation of Capital" analysis...that is, capital keeps accumulating even though there aren't a lot of precapitalist markets left.

Yes, Ive been considering to what extent this is true. Rosa Luxemburg does also mention one other province of accumulation; militarism. It certainly seems as if capitalism has achieved an almost global grip on world economies, but to what extent are there still simple commodity producers working in the world? Certainly all pre-capitalist institutions have been disrupted and commodity circulation has been introduced in its place. There is little land which can be described as "communal" etc. But to what extent does peasant economy continue to prevail? Its not something on which statistics seem readily available.

I'm also looking at to what extent can militarism can come to replace violent exploitation of non-capitalist markets. Does anyone else have any ideas on this? I'll try and give a more detailed analysis of militarism when I've got more time.

Also, anyone got information on the counter-arguements against Luxemburg?

[bolshevik butcher]

The third world debt is the continuation of imperiali$m and must be writeen off. Through it countries become even more dependant on the big capitalist countries.

[Faceless]

Severian said:


But most of the countries in the world are predominantly capitalist economies now, so I'm not sure it applies anyway. Possibly one could make a case that means experience has disproved the "Accumulation of Capital" analysis...that is, capital keeps accumulating even though there aren't a lot of precapitalist markets left.

Well, looking at China, which has 20% of the world's population which remains mostly rural, it could be argued that what is being seen in China is acting as the current engine for capialist accumulation. The semi-socialist elements in that society allow as a non-capitalist demand for capitalist produced goods. There is also, in progress, possibly the biggest mass migration to Eastern, coastal China occuring at the moment providing a continuos supply of labour power for the time being. However, I think the socialist elements in China will inevitably be privatized as capital gains control over the state, plundering itself is a quick and easy form of accumulation.