Re: [A-List] Global economy: ECB intransigence

["Michael Keaney" <michael.keaney@xxxxxx>]

John Gulick asks:

In other words, do demands for German financial market
liberalization play into the hands of a hegemonic U.S., or would it be
a weapon for the EU in its two steps forward-one step back rivalry with the
U.S. ?

Please forgive the ignorance contained herein: I am still flummoxed by the
money circuit of capital.

-----

You and me both. And trying to understand what is happening in Germany at
the moment is fraught with difficulty. I posted something on that a while
back but nobody took the bait either here or on the Marxism list. In my view
Germany is one of the most important arenas of struggle today, and ought to
be the subject of close scrutiny. I have tried to employ the work of Nicos
Poulantzas in understanding what is going on there

e.g. http://lists.econ.utah.edu/pipermail/a-list/2002-September/020309.html
http://lists.econ.utah.edu/pipermail/a-list/2002-September/020317.html
also http://archives.econ.utah.edu/archives/a-list/2002w45/msg00006.htm

It is unsatisfactory as it stands, but time constrains me from further
developing it just now. However it seems clear that there is a ruling class
split in Germany, and that the main cleavage appears to be between the
Mittelstand companies (the SME sector traditionally financed by long term
relationships with banks) and monopoly capital, which is eager to get a
piece of the action touted by potential and actual US rivals and their media
cheerleaders, many of whom include influential voices in the German
financial press (as featured in Financial Times Deutschland). This, despite
the fact that many of the losses provoking the apparent crisis in German
banking have been incurred not because of the excesses or stupidities of the
Mittelstand, but instead are due to the efforts of Deutsche Bank and others
to get involved in all the fictitious capital activities normally the
preserve of Wall Street and the City of London. Those paying the price for
this are the Mittelstand companies, who now complain of a capital shortage.
Apologists like Daniel Bögler excuse this as a necessary "modernisation" of
Germany's "outdated" relational financing model, which needs to be succeeded
by a more commercially competitive (i.e. US-type) model.

One of the most contradictory elements in this is the position of the US,
which simultaneously applauds the adoption of US characteristics whilst
dreading the consequences of this -- namely, head-to-head competition on
terms approximating equality. In other words, should Germany remain tied to
traditional forms of capitalism, then it will remain subordinate to US
imperialism and therefore compliant, but the US cannot countenance this
because it is an inferior form of capitalism (so the ideology goes) and
deprives US cherry-pickers access to whatever goodies lie ready for the
taking (so the reality goes). However, if Germany is transformed into USA mk
II then the big German banks and finance houses will be better able to go
head-to-head with those very same US banks and finance houses -- in other
words, in becoming more like the US, German banks and finance houses will be
competing directly and globally, thereby intensifying inter-imperialist
rivalry.

I'm sure there is plenty to pick away at here, but I'm hoping that others
more knowledgable of the situation will jump in here and help us out. As you
say, getting our heads around the money circuit of capital is not easy
especially when it's overdetermined by the state structures and institutions
that further complicate matters.

Michael

ps Another major difference between the eurozone and the US is that
interest rates in the former should still encourage some saving, whereas US
consumers are still being encouraged to spend their way out of recession
(memo to Jim Callaghan, please) whilst sitting on a mountain of debt
accumulated during the past decade. Together with corporate debt and the
mounting fiscal deficit (cemented by the projected "permanent" tax cuts to
be approved by the Republican Congress), the entire US financial edifice
looks very shaky indeed. "Dim" Wim? Greenscam, more like.