Re: (fwd from Stijn Oosterlynck) Biel and Stiglitz

[Louis Proyect <lnp3@xxxxxxxxx>]

> This then links back to the hegemonic crisis triggered by the Asian crisis
> (and later to Joseph Stiglitz).  The Asian crisis awakened part of the
> neoliberal elite to the dangers of unstable global capital markets for the US
> global economic hegemony.  It is in this context that the criticisms of the
> IMF and the Washington Consensus of neoliberals such as Paul Krugman, Jeffrey
> Sachs and Joseph Stiglitz become understandable.  They seem to realise the
> limits of neoliberalism as the economic doctrine of US hegemony.
(clip)

> Best regards,
> Stijn Oosterlynck
Interesting question. I believe that we are dealing with cognitive dissonance when it 
comes to the sort of Keynsianism put forward by Sachs, Krugman, Stiglitz (and Soros) and 
the underlying logic of this phase of capital accumulation which *requires* 
neoliberalism. If you read Biel's book, the one thing he makes very clear is that 
contradictions in the world capitalist economy in the early 1970s necessitated a 
different relationship between the core and the periphery and between core states. These 
new policies had to dispense with all the "wisdom" of the welfare state. 
Despite some pockets of well-being (the new Chinese bourgeoisie, people who benefited 
from the stock market bubble, etc.), there has been a pronounced erosion of living 
indicators.

In the face of such erosion, there are pockets of resistance. From Palestine to 
South Africa, you see the beginnings of a new worldwide revolutionary movement. 
People like George Soros are much more class-conscious than the drooling 
imbeciles that occupy the White House. They are nervous about losing the whole 
pie, just as were elements of the ruling class who threw their weight behind 
FDR.

The problem is that Keynsianism rests on a set of outmoded assumptions, namely 
that the capitalist class has the ability to pull an economy up off the ground 
with its own bootstraps. The laboratory for this has been Japan over the past 
10 years which remains mired in a kind of low-grade depression. When the USA 
evolves into this kind of condition as it surely will, the shit will hit the 
fan since this country is far less homogeneous than Japan and has already seen 
a new rebellious mood on the campus and in the labor movement.

The sort of counsel that Krugman proffers to the ruling class, however, cannot 
be acted on. They have chosen global aggression that evokes the behavior of 
Nazi Germany or Japan prior to WWII. But Germany and Japan were weaker 
imperialist economies who sought to redivide the pie more favorably. In 
distinction the USA has the most powerful capitalist economy in world history 
and control over an empire that makes Victorian England looks paltry by 
comparison. Like buzzards, the other imperialist powers stand on the sideline 
and watch the USA feed on its prey. They hope to get their claws on some scraps 
that the lion leaves behind.

So when Stiglitz and company use their op-ed columns to persuade Washington to 
straighten up and fly right, it is like advising Hitler to implement a minimum 
wage for Polish workers. US politics has shifted far too the right. The only 
party that has a vision of what it wants and will fight for it is the 
Republican Party. The Democrats are Republican Light. The only way that 
Stiglitzian meliorist policies to take effect is for some huge upsurge in the 
labor movement to pose such a threat that some section of the ruling class 
figures out that it is necessary to reverse course. However, given the 25 years 
or so of reactionary dynamics in the USA, it is more likely that this ruling 
class will have to be removed by revolutionary violence. The sooner the better 
as far as I am concerned.



--

Louis Proyect
www.marxmail.org




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