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Argentina, austerity, ‘risk appetite’ by foreign investors, China, crude oil prices, debt crisis, global debt, IMF, Michael Roberts, rising interest rates, trade deficits
Argentina is seeking International Monetary Fund aid after a series of drastic interest rate rises failed to stop the slide in the peso, pushing the country towards a financial crisis. Mauricio Macri, Argentina’s right-wing, pro-big business president, announced the approach to the IMF in a nationally televised address, saying international assistance would enable the government to “avoid a crisis like the ones we have faced before in our history”. Asking the IMF for funds will mean more fiscal austerity and a hit to living standards. One foreign investor said “The most effective way would be to restrict wage hikes.”
In recent weeks, the right-wing government in Argentina has been forced to hike its policy interest rate (which sets the floor for all borrowing rates) dramatically from an already high 27% in April up to 40% last week. In January, the Argentine central bank had been experimenting with reducing its interest…
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Thanks for this, the wars are now heading towards economies, am waiting to see how Armenia is doing, very worrying, regime changes always invite the usual imperialist opportunists which only makes matters worse. If the US can destabilise China, Armenia and their current efforts against Russia it will go global(it already is)and the collapse of the petro dollar will be devestating for all – no winners.
Just curious where you stand on the sovereign money debate, Norman, and the current referendum in Switzerland to end the role of private banks in the creation of debt-based money?
https://global.handelsblatt.com/finance/swiss-sovereign-money-initiative-change-bank-lending-887259
On money, I would like to see an end of it altogether. The ‘medium of exchange,’ whether printed by private banks or issued by a central “public” authority (i.e., a capitalist state institution) is precisely the means by which ‘surplus value’ is captured in market exchange.
In a nutshell, I take my cue from Marx (and not because it is Marx that asserts it, but because of all the critiques of “money” as such that I have read and mulled over, it makes the most sense to me):
Quote begins:
Labor-time being the intrinsic measure of value, why should there be another external measure side by side with it? Why does exchange value develop into price? Why do all commodities estimate their value in one exclusive commodity, which is thus converted into a special embodiment of exchange value into money? That was the problem which Gray had to solve. Instead of solving it, he imagined that commodities could be related directly to each other as products of social labor. But they can relate to each other only in their capacity of commodities. Commodities are the direct products of isolated independent private labors, which have to be realized as universal social labor through their alienation in the process of private exchange, that is to say, labor based on the production of commodities becomes social labor only through universal alienation of individual labors. But by assuming that the labor-time contained in commodities is directly social labor-time, Gray assumes it to be common labor-time or labor-time of directly associated individuals. Under such conditions a specific commodity like gold or silver could not confront other commodities as the incarnation of universal labor, and exchange value would not be turned into price; but, on the other hand, use-value would not become exchange value, products would not become commodities and thus the very foundation of the capitalistic system of production would be removed. But that is not what Gray has in mind. Products are to be produced as commodities, but are not to be exchanged as commodities. He entrusts a national bank with the carrying out of this pious wish. On the one hand, society, through the bank, makes individuals independent of the conditions of private exchange, and on the other, it allows them to go on producing on the basis of private exchange. The logic of things, however, compels Gray to do away with one condition of capitalistic production after another, although he wishes to “reform” only the money system which results from the exchange of commodities. Thus he transforms capital into national capital,62 land into national property,63 and if his bank is to be watched closely, it will be found that it not only receives commodities with one hand and issues certificates for work delivered with the other, but that it regulates production as well. In his last work, “Lectures on Money,” in which Gray is anxious to demonstrate that his labor-money is a purely bourgeois reform, he gets tangled up in even more glaring contradictions.
Quote Ends.
Source: https://jupiter.ai/books/Wp1J/#Page_103
Commenting on this quote recently, I wrote:
“Money is necessary under capitalism because “social labor-time” or “social labor,” which is the basis of the production of the “labor-time equivalencies” in market exchange, is NOT “direct.”
If it was, the system of exchange would actually be a “bartering” system (and profit would be quite impossible).
In such a circumstance, it is obvious that ‘money,’ in its function as the expression of the magnitude of “value” in “exchange” under capitalism, loses its function as part of the mechanism (or operation or process) of “appropriation,” that is to say, of clinching the “appropriation of surplus-value” in exchange.
Under capitalist exchange, what breaks the “direct exchange” that is implicit to a bartering system, and that in that ‘break’ or ‘separation’ makes money both necessary and possible, is the interposing of the institution of “private property” between “the production of goods and services” and “their distribution.”
Although it employs “labor” that is “social” in the process of production, the private firm makes of the total product of work not merely goods and services to be exchanged, but “privately owned goods and services to be sold at a profit,” objects that are both by definition and in juridical fact “not social,” but that only become ‘social’ in and at the moment of market exchange. Money is not merely the expression of the “value” that is “labor-time,” but the expression of the gratuitous claim of “private ownership” on that “value.”
And that is why Marx in the quote at hand is able to say that if we assume, as Gray does (by conflating the categories of ‘social labor’ and ‘labor-time’), that ‘labor-time’ is ‘directly social’ under capital, and if this assumption were, in fact, correct (which most emphatically it is not), then ‘money’ becomes inexplicable. For if ‘labor-time’ was ‘directly social,’ it is obvious (to Marx if no one else) that “gold or silver [i.e. money] could not confront other commodities as the incarnation of universal labor, and exchange value [the content of which is ‘labor-time’] would not be turned into price [the expression of the magnitude of “value in exchange” whose essense is ‘labor-time’]” – in other words, where ‘labor-time’ is ‘directly social’ there is no need for ‘money,’ and in fact, there cannot be any ‘money.’”
The upshot for me, then, as pertains to the issue of money as such, is simply this: “money,” as a medium of market exchange, is exploitation in a reified and mystified guise. It must, therefore, be expunged entirely.
But that doesn’t and can’t happen until labor itself is de-commodified in an economic, political, and ideological sense (see, for example, these notes for a sense of what I understand as “the commodification of labor” and the sources from which I think I borrow the notion).
Money, capital (the hinge of which is ownership in the means of production), commodity exchange (for-profit production) and exploitation (wage labor) are all of a single piece. You cannot address any one of these aspects without at the same time addressing all of the others.