Re: [ox-en] Re: Money as a dominant social relation
- From: Paul Cockshott <wpc dcs.gla.ac.uk>
- Date: Thu, 17 Jul 2008 10:56:07 +0100
[1 <text/plain; ISO-8859-1 (7bit)>]
One has to realise that in third world countries the system of tax raising
is often not efficient enough for them to enforce the validity of their
own currency.
This is especially the case because a small part of the population hold
the larger part of the surplus income ( that which can be taxed without
threatening social survival ), and this portion of the population is
also policitally influential.
The government of Venezuela for example, has for example considerably
tightened up its tax system, but it is still far in efficiency from the
tax system of Sweden for example. This has led to the paradox of inflation
and currency black markets even in a state that is oil rich and is running
a large trade surplus - see my article in Junge Welt a few months back:
https://www.jungewelt.de/loginFailed.php?ref=/2008/01-21/014.php
In developed countries it was possible to eliminate unemployment during
the years that keynesian/chartalist policies were followed - say up
to the mid 1970s in Europe. After that one saw two developments
1. A prolonged period of economic growth raised the capital/output
ratio making the rate of return very low.
2. To allow continued investment, the state banks had to keep the
interest rates even lower.
3. But to do this they had to inject more money into the system
than they were taking out as tax, which led to inflation.
The problem was that they still relied largely on private firms
to undertake production with the state limiting itself to meeting
social needs. If private firms would not invest, even with lower
interest rates, they were stuck -- one sees the same situation in
Japan now.
There were basically two courses that the governments of europe
could have taken in the 80s,
1 they could have expanded production
by publicly owned companies moving directly into new areas of technology,
or
2 the alternative actually taken, largely abandon the post WWII commitment
to full employment, hand over the process of money creation to the financial
sector and return to free market economics with minimal state intervention.
This was the path pioneered by Thatcher, after being prototyped by
General Pinochet
The decision between these two paths has been essentially political, though
the alternatives have not always been explicitly stated. In France the
attempt by the state to addopt Thatcherite policies has been blocked
until now, and even now meets strong public opposition.
Christian Siefkes wrote:
Paul,
Paul Cockshott wrote:
Depends what you mean by money.
If you mean coinage or banknotes and all that follows, these have a clear
origin with Lydia in the west in the 8th C bc and with the spade and hoe tokens
issued by the chinese empire.
The origin of money is closely linked with state finance. It is a myth that
it originates with barter.
Inghams book 'The Nature of Money' gives a good account, see also the work
of the economist Randall Wray.
A summary is in http://pavlina-tcherneva.net/papers/Arestis-Sawyer-Chapter%2005.pdf
Reading this paper makes you wonder why the "developing" countries haven't
catapulted themselves out of their economic misery by simply state-employing
all of their inhabitants, since apparently states can do that. Or why there
is still considerable unemployment in Germany, despite all government
attempts to reduce it.
Very funny.
Obviously, you (or the authors you quote) are vastly over-estimating both
the role and the power of the state.
Best regards
Christian
[2 wpc.vcf <text/x-vcard; utf-8 (7bit)>]
_________________________________
Web-Site: http://www.oekonux.org/
Organization: http://www.oekonux.de/projekt/
Contact: projekt oekonux.de