[PEN-L:4674] Re: Trond's Debt/Asset polarization model

[Patrick Bond <PBOND@xxxxxxxxxxxxxxxxx>]

Trond, your recent post that the debt cycle `caused' stagnation from
the late 1970s appeared to me as a cart before the horse. The
argument I've been more closely drawn to is that the emerging problem
of overaccumulated capital in the advanced industrial countries found
a temporary means of displacement into financial circuits.

Theoretically, this is consistent - from the starting gate - with the
divergent expositions of Marx, Hilferding and Grossmann. Discussing
it in posivitist terms would entail tracing the rise of excess
productive circuit capacity in the late 1960s and early 1970s,
assessing the mechanisms by which flows of funds switched around
institutionally and geographically (such as into petrodollars), and
in turn relating these gyrations to the financial innovations,
deregulation and liberalization that seem to have pushed the debt
cycle into a qualitatively different stage since the late 1970s.

I've done this exercise for the Zimbabwean and South African
economies (which follow this line of argument), and I've seen works
by Mandel, Clarke, Harvey and Armstrong et al that are consistent at
the global scale. Haven't Pollin, Burkett, Dymski or other lefty
financial economists explored these relationships in the US?

But if you do have cause and effect backwards, Trond, does that
matter for your broader argument about polarization? Probably not...

Patrick Bond
Johns Hopkins