Re: [Marxism] Grossman

[Patrick Bond <pbond@xxxxxxxxxxx>]

Rakesh (and cc to Rick Kuhn who has authored the seminal study on
Grossman),

Is it not the case, that what we would want to recover from Grossman's
magisterial work on finance, so aptly published just before the 1929
crash, is his rooting of financial bubbles in real-sector
overaccumulation? If so, we would end up with a strong position on
financial sector vulnerability, in contrast to Hilferding's
then-dominant Finanz Kapital thesis (which so influenced Lenin's
Imperialism).

In my reading of the recent debates (which I summed up in two ZNet
articles in December 2004 and another in December 2006), a similar
conflict has been evident within comrades  active in Socialist Register,
Historical Materialism and other journals. Some stress US imperial
power, especially emanating from financial sector dynamics; others
stress vulnerability. (In the former category, I saw Leo Panitch at the
Left Forum in NYC a few weeks ago and he said, "Don't say 'I told you
so'" with his characteristic guffaw.)

(I think John Bellamy Foster has got it right in his current MR article;
and in a seminar at Univ of Sydney Dept of Poli Econ last Monday, he
also endorsed "overaccumulation", which I see as distinct from the
traditional MR position from Sweezy, i.e., "underconsumption".)

The front page of today's Business Day (Johannesburg) has SA as 11th
most vulnerable economy to sub-prime mortgage contagion. So if it's time
for chicken little to come out again and squawk a bit, do say, comrades.

Cheers,
Patrick

Rakesh Bhandari wrote:
> Grossman's book was based on lectures given in 1927, though the book was
> published in 1929.
> I defended Grossman's book in the last Science and Society (also drew from
> him for a piece on wage labour in latest HIstorical Materialism).
> there is a difference in our situation though. The Fed was set to reverse
> rate reductions in 2003 but after the war began dropped rates once again,
> did not raise them for a year, and then began more modest reductions than
> it otherwise would have to hide the costs of the war. Interest rates
> dropped to historic lows. Greenspan still advised people to take variable
> mortgage rate loans on even though 30 year loans could be had at 5.5%.
> Again he wanted all the economic stimulus he could have to hide the costs
> of the war. He also turned a blind eye to abuse in the sub prime mortgage
> market which really exploded after 2004.
> The fact that war spending was providing no stimulus (what stimulus from
> US military contractors hiring Philipino workers in Iraq) and ruining the
> economy from the skyrocketing futures prices of oil was hidden by the
> Fed's  actions.
> Now rates are being reset, the bad loans are manifesting themselves. And
> we are on the verge of the worst financial crisis in decades.
> The costs of this war has been the moral, financial and real economic
> deterioration of the United States.
> Grossman could not have analyzed that. But Stiglitz and Bilmes say
> something interesting things about just this in their book on the trillion
> dollar war. What has not gone reported is the losees they report suffered
> by the Iraqi people.
>
>
> ________________________________________________
> YOU MUST clip all extraneous text when replying to a message.
> Send list submissions to: Marxism@xxxxxxxxxxxxxxxxxxx
> Set your options at: 
> http://lists.econ.utah.edu/mailman/options/marxism/pbond%40mail.ngo.za
>
>
>   


________________________________________________
YOU MUST clip all extraneous text when replying to a message.
Send list submissions to: Marxism@xxxxxxxxxxxxxxxxxxx
Set your options at: 
http://lists.econ.utah.edu/mailman/options/marxism/archive%40archives.econ.utah.edu