Re: [Pen-l] Counterfeit Nation

[Doug Henwood <dhenwood@xxxxxxxxx>]

On Dec 22, 2008, at 11:16 AM, Louis Proyect forwarded a piece by  
Stephen Mihm:

Thanks for re-posting this, Lou. The current mess - fraudulent boom  
followed by crushing bust - is as American as gun violence.

Re: this quote...

> Perhaps the current wave of debt machinations will end badly. Then  
> again, in the long run, it may not. Consider the impressions of  
> another novelist, the British writer Frederick Marryat, who visited  
> the United States in the wake of the panic of 1837. As he surveyed  
> the wreckage of broken banks and worthless paper, he came to a  
> surprising conclusion. “If all the profits of the years of healthy  
> credit were added up,” he wrote, “and the balance sheet struck  
> between that and the loss at the explosion, the advantage gained by  
> the credit system would still be found to be great. The advancement  
> of America depends wholly upon it. It is by credit alone that she  
> has made such rapid strides, and it is by credit alone that she can  
> continue to flourish.”

...a gloss from Capital, vol. 3 (somewhere around p. 570 of the  
Vintage/NLB edition):

"[Credit is T]he principal lever of overproduction and excessive  
speculation in commerce, this is simply because the reproduction  
process, which is elastic by nature, is now forced to its most extreme  
limit; and this is because a great part of the social capital is  
applied by those who are not its owners, and who therefore proceed  
quite unlike owners who, when they function themselves, anxiously  
weigh the limits of their private capital. This only goes to show how  
the valorization of capital founded on the antithetical character of  
capitalist production permits actual free development only up to a  
certain point, which is constantly broken through by the credit  
system. The credit system hence accelerates the material development  
of the productive forces and the creation of the world market, which  
it is the historical task of the capitalist mode of production to  
bring to a certain level of development, as material foundations for  
new forms of production. At the same time, credit accelerates the  
violent outbreaks of this contradiction, crises, and with these the  
elements of dissolution of the old mode of production.... The credit  
system has a dual character immanent in it: on the one hand it  
develops the motive of capitalist production, enrichment by the  
exploitation of others' labour, into the purest and most colossal  
system of gambling and swindling, and restricts ever more the already  
small number of the exploiters of social wealth; on the other hand  
however it constitutes the form of transition towards a new mode of  
production. It is this dual character that gives the principal  
spokesmen for credit, from Law through to Isaac Péreire, their nicley  
mixed character of swindler and prophet."


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