[Marxism] Al Greenspan on capitalist progress

["Jurriaan Bendien" <bendien@xxxxxxxxxxxx>]

In his Bundesbank speech on January 13, 2004, waxing optimistically about
the benefits of global capitalism, Al Greenspan, the brilliant Federal
Reserve chairman and moderate Republican (b. March 6, 1926) stated
"Globalization has altered the economic frameworks of both developed and
developing nations in ways that are difficult to fully comprehend.
Nonetheless, the largely unregulated global markets do clear, and, with rare
exceptions, appear to move effortlessly from one state of equilibrium to
another. It is as though an international version of Adam Smith's "invisible
hand" is at work."

In other words, we're back with Adam Smith and Say's Law.  How can Greenspan
explain the growth of financial credit far in excess of
employment-generating investment ?  Because the market does not clear,
credit is necessary. The US government is in the hock for US$6.3 trillion or
so, and total US debts outstanding (government, corporate, bank/financial
and household) is quite possibly five times that.

How do products appear on the market in the first place ? Well, workers made
them. But to work, workers need to reconstitute their ability to work. In
this regard, the FAO estimated that the number of chronically hungry human
beings around the world rose to 842 million in 2000, an increase of 18
million. Around 25 million human beings die annually from hunger. Developing
countries account for nearly 800 million undernourished human beings, and
this number is climbing at a rate of almost five million a year. About 34
million human beings are hungry in "marketised" countries of the former
Soviet bloc, followed by 10 million in industrialised Western countries.

Currently world unemployment is steadily increasing and stands at about 180
million people, according to the ILO, including 50 million in the
industrialised countries. A billion people (a third of the world's work
force) are unemployed or underemployed. Some 550 working poor live on US$1
or less per day. In the next decade, there will be 460 million young workers
streaming onto the job market. Climate change over the next 50 years is
expected to drive a quarter of land animals and plants (1 million species)
into extinction, according Chris Thomas, professor of conservation biology
at Leeds University, reporting in the magazine Nature (8 January 2004).

I suppose that cuts no ice with Al though, he just wants to think
positively, thinking of the upturn. He was inspired in his thinking by Ayn
Rand, who exults laissez-faire capitalism and promotes "rational
selfishness," the belief that people should live for their own rational self
interest. But what is that interest ? It's all in how you look at it.

Via Ayn Rand, Greenspan became an adviser to Richard Nixon during the 1968
presidential campaign. He advised President Nixon informally until he was
made chairman of the Council of Economic Advisers in 1974 under President
Ford. In general, Greenspan supported deregulation of the banking industry
and opposed government economic intervention, especially during the
recession yearsof the early 1990s. He was reappointed to the Reserve Board
to a full 14-year term in 1992. He opposed tax cuts, believing that they
would contribute to the growing federal deficit, and pressured Clinton into
deficit-reduction programs because he believed in reducing government
spending rather than tax increases.

Meanwhile fellow American Brian Price, who prepared 220 "last meals" for
prisoners on death row in the Huntsville (Texas) prison kitchen while an
inmate himself there before he was paroled, has written a 504-page book
featuring recipes for some of those last bites before oblivion. This
commodity, titled "Meals to Die For," will be published next month by Paige
Corp. of San Antonio, will have 42 recipes, and contain Price's personal
recollections of the execution day for each of the 220 killers whose last
meals he cooked (LA Times, 14 January 2004). It could be a prophetic book.

In reality, the "hidden hand" Greenspan talks about belongs to a worker, and
there is nothing secret about that fact, it is just the economists like
Greenspan, focused on prices, disappears the working class from economic
theory. Marx, on the other hand, includes the working class in economic
theory, making the creative powers of human work the very
centre-piece of economic thinking, the primary "productive force". Then why
does Greenspan pay no heed to Karl Marx ?

Because, I suppose, by looking at more than prices, Marx's analysis
demonstrates that part of the new value produced by is privately
appropriated by the owners of productive assets without equivalent, a form
of exploitation at the very foundation of the capitalist system, and that
the anarchy of capitalist world market generates system-immanent crises
which must culminate in some form of socialist collective planning or in
some form of barbaric regression. That doesn't jell well with Ayn Rand's
philosophy.

Just what barbaric regression looks like, was stereotypically symbolised
when the "hidden hand" was raised in a Hitler-salute in the 1930s. Greenspan
thinks a dynamic, vigorous capitalism is preferable to fascist barbarism or
decaying social democracy. But the "dynamism" mainly consists in more
frenetic activity by the financial sector, there is no sustained expansion
of real production - there is a more rapid increase in new financial claims
to what is produced (the wheeling and dealing in assets and claims on future
surplus-labour) than the increase in real production, which means debt
levels rise.

I suspect Al doesn't see look at it that way though. He remarried at the age
of 71, 44 years after annulling his first marriage. He is a renowned
"numbers cruncher" who keeps tabs on the most obscure details of economic
information. Robin Leight-Pemberton said that he was "likely to back up his
predictions by citing such obscure data as vacuum-cleaner sales in Iowa."

Alan Greenspan gained a BSc in economics in 1948, an MA in economics in
1950, and a Phd. in economics in 1977, all from New York University. He was
a graduate student at Columbia University. He's been a Corporate Director
for Alcoa, Automatic Data Processing, General Foods, JP Morgan,  Mobil,
Pittston. He is a trustee of the Rand Corporation and a Director of the
Institute for International Economics.

Michael Mussa, a fellow of the last-mentioned Institute, wrote in the
Financial Times recently that "The world economy is rebounding strongly,
generating optimism that real economic growth for 2004 is likely to reach
the 4.5 per cent rate of the boom of 1999/2000.... The US and emerging Asia
are leading the global recovery and aiding a respectable performance in
Japan. Growth is accelerating to a moderate pace in Europe, and Latin
America is poised for a decisive upturn."

Jurriaan



_______________________________________________
Marxism mailing list
Marxism@xxxxxxxxxxxxxxxxxxx
http://lists.econ.utah.edu/mailman/listinfo/marxism