Re: [A-List] article and notes

[Mark Jones <mark.jones@xxxxxxxxxxxxx>]

At 24/12/2001 12:36, Stan wrote:

>  I have to admit that Henry's and Anne's posts have lost me, not being an
> economist... Is there a user friendly glossary around for twits like me
> to help us figure this stuff out, and a kind of Econ 101 that can put
> this together?  I have more than just selfish reasons for this.  A number
> of us here in NC want to put together a one-day workshop, aimed at
> working class folks with, say, a 7th grade reading level, called Economic
> Literacy, that *begins* to demystify this stuff.  That means we have to
> become literate ourselves.

This is a must-do I should have thought. Thanks to Anne and Henry, and also
to Rob Schaap and others, we've managed to at least raise some key
underlying issues arising from the Enron debacle. Gold and money,
derivatives and financial markets, energy markets and spot traders v.
energy monopolies, are interlocking sets of questions about the way the
system works and what it has in store, but it's a bit like lifting the
bonnet on a modern car and staring at the mass of tubes before trying to
fix something with your Swiss Army knife--not very productive so far. I
also have Stan's feeling that we are not doing justice to the Enron fall-out.

Very big changes in the scenery are becoming apparent now the dust of 9/11
is beginning to settle. But some of the machinery has come adrift from its
moorings and there is still a lot of grinding and graunching from the
imperial gearbox (sorry for laboured metaphor). So the final outcome of
things like status-jostling between Russia and Iran in the Caspian, the
permanence of the US presence there, the rapprochement between Russia and
Nato, etc, may still not be discernible, and there is also the question of
more terrorist outrages on nuclear power stations and the like, so maybe
the current surface calm is just apocalypse postponed anyway.

There obviously is some kind of social and economic revival going on in
Russia (no depression lasts forever) but the emerging 'long view' of
Russian history--the palpable sense now that the Soviet era was an
interlude which contained, expressed and preserved many sometimes-hidden
continuities in Russian life and culture--does not hide the equally facts
of the drastic and qualitative diminution in the global importance of
Russia; it is a revival of sorts from a  very low baseline, and probably no
more than an inflection in a long-term decline. This is certainly true of
Russian oil. The recent increases in Russian production (as shown in
Laherrere's paper and also Colin Campbell's, both which I posted here)
represent no more than a return to the normal trend of depletion following
the cataclysm of the early 90's. Russian oil and gas are both in sharp
decline and that is the basal fact for any appreciation of the strategic
implications of Russian posturing and bullishness. (Also, it's wrong to
compare Russian reserves with Saudi reserves by lumping oil and gas
together; that makes nonsense of the whole idea of conventional oil
reserves. In any case there is no logistical comparison between Russian
oil, which comes from far away and from inhospitable places, to the oil we
get from al-Ghawar. When Ghawar dies, western civilisation dies. And
*that's* critical dependence if you like).

Early next year I plan to post a series of papers on the theory of money,
the money form of value, and the general question of fiat money, commodity
money and gold as money and store of value. In all the discussion we have
had so far there has been no reference to gold's costs of production, but I
personally am not yet buying off on neoclassical ideas about value. Gold is
a store of value because it is extremely expensive to produce, ie a lot of
socially-necessary labour-time is congealed in every ingot. Gold does not
decay, and is therefore a convenient store of labour-time. But it's
physical charm and incorruptibility is not the source of its value. Today,
there is a big disconnect between the value of gold and its price in the
market, mainly because the market, as Anne and others point out, is rigged.
When the price and value of gold reconnect it is going to have the
explosive force of particles of matter and anti-matter colliding, but
before we can understand what the implications of this are, and how the
crisis will play out, there has to be a clearer understanding of how gold
as money works in the first place.

Finally, I asked Leo Panitch if the Socialist Register people would like to
jointly host with the A-List an on-line seminar on the theme of state,
democracy, crisis and socialism (broad enough?). Leo agreed in principle,
but wants to consult. So in the same amicable spirit I am now consulting
you all. Think about it.

Now I gotta run, Chrsitmas is here, sorry for any logical disconnects in
any of the above, have a good one.

best to all as ever

Mark