ALB
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Clever answer except that Marx didn’t call the “first phase” of communist society “socialism” as a distinct from “communism”. He called it just that “the first phase of communist society”, ie of the same society. It was Lenin who called it “socialism” (and confused it with state capitalism) and of course we are not Leninists. But at least Beck conceded that it wasn’t socialism as what Marx called “the highest phase of communist society”.
Our reply to Beck would be, in Venezuela it’s not the first phase of communist society either, as that, like the higher phase, is based in the common ownership of the means of life, with production solely for use — which of course is and was not the case in Venezuela, where there’s still production for sale, money, wages, etc.
Good news! The SNP seems to be in melt-down. Maybe we’ll now hear less of that irrelevant distraction of a separate Scottish capitalist state they say is their ultimate aim (while being a common or garden reformist party in the meantime).
More “democracy” in operation in Ukraine:
Easy, use your parliamentary majority to kick out opposition MPs.
Managed to access that article by another route and what it says about Marx is not bad:
“Throughout his work, Marx emphasized the revolutionary character of capitalism in its relation to existing social arrangements. It annihilates the “old social organization” that fetters and keeps down “the new forces and new passions” that spring up in the “bosom of society.” It decomposes the old society from “top to bottom.” It “drives beyond national barriers and prejudices” as well as “all traditional, confined, complacent, encrusted satisfactions of present needs, and reproduction of old ways of life.”
Or, as Marx observed in one of his most famous passages, the “bourgeois epoch” is distinguished by the “uninterrupted disturbance of all social conditions.” Under capitalism, “All that is solid melts into air, all that is holy is profaned, and man is at least compelled to face with sober senses his real conditions of life, and his relations with his kind.”
In context, Marx is writing about precapitalist social and economic arrangements, like feudalism. But I think you can understand this dynamic as a general tendency under capitalism as well. The interests and demands of capital are sometimes in sync with traditional hierarchies. There are even two competing impulses within the larger system: a drive to dissolve and erode the barriers between wage earners until they form a single, undifferentiated mass and a drive to preserve and reinforce those same barriers to divide workers and stymie the development of class consciousness on their part.” (my emphasis).This echoes any discussions about feminism, gay liberation, etc with some arguing that these are challenges to capitalism and so have a revolutionary potential. But it is clear that they are quite compatible with capitalism and even accord with its logic of only being interested in labour-power as such and not with the particular characteristics of its bearer, ie its drive “to dissolve and erode the barriers between wage earners until they form a single, undifferentiated mass.”
”Woke capitalism” is what you would expect. The likes of DeSantis are just backwoodsmen tilting at windmills.
Pity that New York Times is not on open access. The title suggesting DeSantis should read Karl Marx is intriguing. What does the article say?
Talk about counting your chickens before they’ve hatched. Normally victor’s justice is only administered after victory, but the International Court of Clowns has jumped the gun, besides ignoring similar war crimes committed by the Ukraine regime. What hypocrites.
MMT theorists don’t say that individual banks can make money out of thin air.
They share the mainstream academic view that only the whole banking system centred on the government Central Bank can do this. In a sense this is true as the monetary authorities can issue as much money-tokens as they want. The trouble is that, if they overdo it, this will lead to a depreciation of the currency and so to a rise in the general price level. No new wealth will be created (only the application of human labour to materials that originally came from nature can do that). All that happens is that the price of already-existing wealth goes up. What these days is called “inflation”.
MMT say that this is not much of danger, at least not below the full employment (of resources as well as workers) level. It’s a new version (with a different theoretical justification) of the Keynesian view that a government can spend its way out of a slump. Which of course has been tried — and failed. So you could say that the policy has been tried even if not as such.
If applied again, the result is likely to be no more than a short-lived boost to production. The longer term result would be a rise in the general price level (“inflation”) like that that occurred in the 1970s. Stagnation + Inflation, or Stagflation.
The result wouldn’t be so bad as if the currency crank theory about banks causing problems by creating too much money out of thin air was to be implemented. Artificially limiting the amount of loans that a bank can make when it has the money to make them would provoke a financial crisis and slump because it would restrict business investment, the driver of the capitalist economy. It would be impeding banks’ role as financial intermediaries between those with money to lend and those who want to borrow money.
I wonder how they would treat an objector who invoked socialist reasons for not wanting to be called up:
Interesting though.
The authorities in Ukraine have adopted a different approach:
That’s a clincher. If the Gnomes of Zurich can’t conjour up money from thin air then nobody can.
I notice that the chairman of Credit Suisse is called Lehmann. I am imagine he hopes he can avoid the fate of his brothers.
Hopeful Republican candidate for the next US presidential elections Ron DeSantis is describing the Ukraine War as a “territorial dispute” between Russia and Ukraine — which is some respects it is — adding that what’s going on there is not of vital interest to the US.
If elected, this could be the quickest way the slaughter there will end, as without US military and financial support Ukraine would have to sue for peace. If he does become the Republican Party candidate for president this will create a dilemma for devotees of the “lesser evil” doctrine since at the moment the Democrats are the war party.
Mind you, DeSantis wants to concentrate on confronting China which he still anachronistically calls “Communist”. Maybe he is stupid enough to believe that.
More on why SVB failed, showing that people in the City, as opposed to academia, know that banks can’t create money out of thin air and that they are financial intermediaries borrowing money at one rate of interest and lending it at a higher one.
From today’s Times:
“Banks are fundamentally precarious things, borrowing short and lending long”
“The bank [SVB] pumped money into long-dated bonds, whose value has collapsed in the past year, while having to pay out higher interest rates on skittish deposits.”
He’s certainly not turned out to be the lesser evil he was cracked out to be. But then if you are there to look after the affairs of a capitalist class you’ve got to do what you’ve got to do.
There’s a good explanation of why the Silicon Valley Bank failed here:
https://www.politico.com/news/2023/03/10/silicon-valley-bank-collapse-00086586
“Silicon Valley Bank has been bleeding deposits as the Federal Reserve has aggressively raised borrowing costs to fight inflation. Higher interest rates bludgeoned many of the tech businesses that had deposited their money with the bank. As venture capitalists retreated from offering companies fresh infusions of capital to sustain their businesses, startups needed to burn through the cash in their accounts to stay afloat. Deposits the bank had on hand have fallen steadily over the last several months, according to S&P Global Ratings. Higher rates also meant more investments offered an attractive yield, leading some clients to pull out their deposits and put them elsewhere.”
To try to compensate for this, the Bank sold off its holding of government and other bonds. Unfortunately for them, rising interest rates meant that the price of bonds went down and they couldn’t raise enough. And they went bust.
“When banks run into trouble, they can be forced to sell off investment assets, typically U.S. government debt and mortgage-backed securities, that they purchased to earn a return on their customers’ deposits. As interest rates climb, the price of those older securities fall — which means the banks sell those investments at a loss.”
If banks could, as some claim, simply create money to lend “out of thin air” and get interest on it, why would losing deposits make any difference? If a bank was short of money, all it would have to do would be create some more to lend and get the money as interest on them.
That this didn’t happen shows that banks cannot create money out of nothing but are only financial intermediaries borrowing money at one rate of interest to cover loans at a higher rate.
Our theory of the nature of banking stands confirmed. New wealth can only be created by humans applying their mental and physical energies to change the form of materials that originally came from nature, not by banks practising magic or financial alchemy.
