ALB
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It looks as if it is not only God that is on both sides in this war but the Devil too:
https://www.swissinfo.ch/eng/medvedev-says-russia-is-fighting-a-sacred-battle-against-satan/48030508
Well, in my book saying that capitalism is “viable”, ie works successfully, is praise. That it is extant is of course an in incontrovertible fact. So is that it can never be made to work in the interest of the majority class of wage workers and their dependents.
That’s not logical. To say something is the “only” game in town is higher praise than saying it is the “best” game in town as this suggests that there are at least two other games about. No?
Got my increased winter heating allowance of £250 and interest rates on savings are going up to 3%. Lizzie must be right that capitalism is the best game into town.
It certainly shows that capitalism cannot exist without a state and that a pure “free market” capitalism is just a libertarian pipe dream. It has never existed and fortunately never will.
On the question of a “permanent arms economy” see this recent article (scroll down to the second item):
The shape of things to come even if the whole of Britain gets a Labour government. They’ll be forced to make cuts just like the Tartan reformists in office in Edinburgh are.
In the end reformists governments can’t be any different from conservative ones — because they both accept the capitalist economic system and have to work within its constraints. They can only act as caretakers for capitalism.
Lenin talked about waiting for “all the people”. But only “most” people need be in favour of socialism before they can establish it. Lenin was just caricaturing the case against his view that a minority — a vanguard party — could. It couldn’t of course because of the nature of socialism as a participatory democracy — and look what his view led to when he tried to carry it out.
We all know that the aim of the Labour Party is for its leading members to be the government. That is their priority and everything else is subordinate to it. Policy doesn’t come into it except as vote-catching promises. Once in office they may begin by trying to improve things but will soon find out that all they can do is manage the day-to-day affairs of the capitalist state in the context of a capitalist economy whose operations no government can control. That won’t worry them particularly since, as career politicians, they will have achieved their ambition of becoming government ministers. And there are people calling themselves socialists who say we should vote for this particular bunch of careerists. Yes, we mean you SWP, SPEW, CPB, etc, etc, etc
If you hang around long enough Ken might lend you the £100 Alice borrowed from the bank and then you can lend it to Mike. It’s one of the other games in town.
We are agreed on this:
The key point here is that Barclays does not need to have £100 in its vaults when it grants Eve an entitlement to £100. However, Barclays must be able to get its hands on £100 when payment in actual money is demanded, i.e. when satisfying payment demands with promises to pay does not suffice. Barclays’ ability to grant credits and collect interest on them is premised on its success in managing its income streams and financial assets.
That is, banks do not simply take possession of cash and then hand it out for a fee (emphasis added).But not on this:
they create ability to pay. A bank cannot create ability to pay “out of thin air” but it creates it out of its and other financial institutions’ power and success in turning credit advances into financial assets and out of the thus produced creditworthiness.
We might even be able to accept the first half of this with some amendment to make it clear that the central bank can “create ability to pay” and pass this on to the clearing banks. But it would need to be specified that, as with Hilferfing’s Austrian guilder, if this resulted in more being created than the prices of what was for sale this would result in a depreciation of the currency and so not be an effective new “creation”. If it happened to be more or less what the economy required then there would be no depreciation and no rise in the general price level (everybody would be happy except the G7 and the states that follow its leads who want their currencies to depreciate by 2 percent a year).
What is beyond the pale is the claim that, even without the intervention of the central bank, banks can “create” even an ineffective “ability to pay” by “turning credit advances into financial assets”. That would be double counting.
From our/my experience I can recommend starting a reading group on finance capital.
I don’t think Alan will like that and the rest of us know it all already !
Anyway, there are more urgent things to do. I will have to miss Michael Roberts’ exposition of his value theory of inflation because we need to leaflet an anti-climate change demonstration fixed for the same time outside the Shell Centre on the other side of the Thames.
As for the rest of your post, I struggle to see how it connects.
You want me to save you the trouble of re-reading Hilferding by quoting what he wrote? Ok, here goes.
“we should be on guard against the error of double counting with regard to the capital which banks supply to producers by discounting their bills. The greater part of bank deposits belong to the productive capitalists who, as the banking system evolves, keep the whole of their liquid money capital in the banks. This money capital, as we have seen, is the basis for the circulation of bills. But it is that class’s own capital, and the class does not receive any new capital through the discounting of bills. All that has happened is that capital in one money form (as a private promise to pay) has been replaced by capital in another money form (as a promise to pay by the bank, ultimately in cash).”
“We have seen earlier how credit money originates in circulation. We are now dealing with money which lies idle. But money can only perform the functions of money, and can do so only in circulation. Credit, therefore, can do no more than put non-circulating money into circulation. As capitalist credit, however, it puts money into circulation only in order to withdraw more money. It puts money into circulation as money capital in order to convert it into productive capital. Thus it expands the scale of production, and this expansion presupposes the expansion of circulation. The scale of circulation is enlarged not by the injection of new money, but simply by the utilization of old, previously idle money for the purposes of circulation.”
“Austria had an inconvertible paper currency from 1859. Silver guilders were at a premium in relation to paper. More paper was issued than was required in circulation. A condition was thus brought about similar to the one described above. The purchasing power of a guilder no longer depended on the value of silver, but on the value of commodities in circulation. If the value of the quantity of commodities in circulation equalled 500,000,000 guilders but 600,000,000 paper guilders were printed, the paper guilders would then purchase the same volume of commodities as were formerly purchased by 5/6ths of that quantity of paper money.”
Elvis, as originally a poor southern White (like most of them), ok but are you sure about the Beatles? Didn’t they usher in the end of Rock and Roll?
“We criticised this mistake of identifying the economics of a capitalist loan with that of a consumer loan in our piece”.
So why are we talking about loans of £100 to Alice and not tens of not millions of pounds of loans to big capitalist enterprises? Long term loans which won’t enter into the daily clearing process. These couldn’t be covered on the interbank lending market or by loans from the central bank. In fact many of such loans will be made by investment banks, which are not clearing banks.
There can be no doubt that such loans are not made from money that a bank didn’t already have.
Part 1 of Rudolf Hilferding’s 1910 book Finance Capital is a quite good analysis from a Marxian point of view of promissory notes and “bank credit” at that time when gold was the international currency, as it was too 50 years previously in Marx’s time.
As someone from Austria he also dealt with the situation of a currency, such as was then the case in the Austro-Hungarian empire, that was not convertible into gold (or silver) at a fixed rate (the situation everywhere today) and of how the over-issue of such a currency led to its depreciation.
He had no doubt that banks couldn’t lend what they didn’t have. His view was that the money banks lent to capitalists came from the past profits of capitalists (that they didn’t want to to re-invest for the time being) or from the idle money of the non-capitalist privileged (eg landowners).
https://www.marxists.org/archive/hilferding/1910/finkap/index.htm
