Re: AUT: questions

[Chris Wright <cwright@xxxxxxxxxxxxxxx>]

mj,

This is a great question, IMO.  I don't know as I have a concrete
answer.  My sense is that the uncertainty of war is a contributing
factor to an already weak and skittish market.

Two other factors are involved, however.

First, the rest of the world outside of the US and Britain do not
support this war, primarily, IMO, because it will primarily benefit the
US, which obviously intends to take over Iraqi oil fields for its own
profit and weaken OPEC, again to its benefit.  This is especially
important as the major buyers of Iraqi oil were Japan and France (Iraq
prior to 1991 provided something like 35% of their oil.)  This would
give capital tied to the US, especially the oil companies, which are
hugely wealthy and in control of the fuel for most industrial
operations, including those for IT, also happen to run the wealthiest
industry in the world.  Oil is just huge in wealth and phenomenally
pivotal in the world economy.

Second, this war is not likely to generate additional surplus value of a
magnitude that will offset its total cost in the short run.  This could
generate increased economic instability on a world scale.  A severe
drain on US financial resources right now would have a potentially
drastic impact on the rest of the world, which is in rather worse shape
than the US.

Competition is entirely connected to class composition, since the motive
here is a recomposition of the capital-labor relation in the
oil-producing countries, esp. in the short term in Iraq, but this will
give the US much greater leverage over OPEC as a whole, including the
now indebted and increasingly troublesome Saudi regime and over
Venezuela, which is why the US has backed all attacks on the Chavez
regime.

So, IMO, the TNCs are worried because they are TNCs and worldwide
fluctuations brought on by the more 'national' oil companies carries
some risk to them.

Finally, who knows what kind of powderkeg effect this war might have?  A
groundwar with the removal of Hussein in mind is a very different
process from 1990-1.  And the US military has already stated their
intent to bomb Iraq into submission with a massive set of first strikes,
aimed not only at the military, but also at the population.  The removal
of Hussein therefore does not mean a cake-walk for the US, which will
have to deal with a potentially very hostile population (over both the
war and the reorganization of the oil industry), no reliable opposition
government and therefore prolly a somewhat extended and financially
draining occupation.

That is what I think accounts for the current uneasiness in financial
markets over the war threat.

As for the media, I think they understand this to some degree at least
and they do not want to panic the financial markets, so they act rather
ho-hum about it.  But that is just my feeling.

Cheers,
Chris

On Mon, 2003-01-27 at 10:52, Michael_E_Jackson@xxxxxxxxx wrote:
> Hi all,
> I'm young and thus this is the first time this has happened under my watch, so I have two timely questions:
>
> 1. Why do markets for fictitious capital (especially MNC stocks) go down with news of impending war?
>
> 2. Why does the bourgeois media acknowledge this and even present the relationship as natural?
>
> I know this list exists to discuss working class recomposition and not just to gossip about bourgeois factionalism, so I'm sorry to continue this trend by bringing up something as removed from reality as the animal spirits of the market. But it does seem (in my mind) to be relevant to recent discussions about ultraimperialism and such, and I'd be interested to hear if anyone thinks this illustrates something helpful or whether it's a totally irrelevant quirk of the system.
>
> mj
>
>
>
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