In yesterday’s post – On global warming and AI for profit – I cited a meme often attributed to Slavoj Žižek; viz, that it’s easier for us to imagine the end of the world than that of capitalism. Below the line and apropos that meme, Dave Hansell linked to a piece entitled The economy, the mess we’re in …
It opens:
Everything here descends from one mechanism Michael Hudson identified in Super Imperialism: when the United States ended gold convertibility in 1971, foreign central banks holding dollars no longer had a gold exit and were pushed toward recycling those dollars into U.S. Treasury securities. That shift became what Hudson and later summaries describe as the Treasury Bill Standard, a system in which payments-surplus nations financed American deficits by holding U.S. government debt.
That is the beginning of the chain of thought. The United States was able to run external deficits, sustain military reach, and avoid the normal discipline imposed on debtor nations because the rest of the world had to keep absorbing dollar claims and Treasury paper. Hudson’s own description is that the Treasury Bill Standard obliged surplus nations to extend what were, in effect, forced loans to the U.S. government. Once that mechanism was in place, America gained a historic privilege: it could finance power, imports, and fiscal looseness without having to preserve the kind of productive discipline that other nations must preserve if they expect to survive.
The significance of a fiat dollar in the hands of the world’s most powerful empire ever – yet for all that, one flailing in a toxic decline of which men like Trump are symptoms not causes – is one I return to over and over on this site. With its creditors obliged to hold trade surpluses in dollars or Treasury bonds, America has since Reagan and arguably Nixon been the only nation in history to make debt pay. Now though, Greek tragedy fashion, Washington’s efforts to cling to post-USSR unipolarity by, inter alia, weaponising SWIFT and ‘confiscating’ the Western held assets of disobedient states – serve instead, as overplayed hands will, to hasten its demise. As Russia, China and even Japan are incentivised to shed dollars, and Russia and China to build alternative cross border payment systems, the global south watches from the stalls as an epic struggle takes alarmingly overt and kinetic forms. Still in the imperial orbit, and noting the lawless ease with which Russian, Iranian and Venezuelan assets in the West were by unspoken edict ‘frozen’, the world’s semi-colonies drew appropriate conclusions for their own holdings, should they too displease Washington, but remain too exposed to the punitive reach of Uncle Sam to fully embrace multipolarity and BRICS.
Moreover, if we buy Yanis Varoufakis’s argument, which with one critical caveat I do, the end of capitalism has arrived in the form of corporate revenues decreasingly dependent on extracting surplus value from wage labour. Rather, they look to a monopoly ownership akin to the feudal lord’s ownership of the land. 1 I speak of rent-seeking services, be they financial, insurance, real estate or – think Apple and Microsoft – the licencing of intellectual product. And, of course, of private monopolies on subterranean assets like oil.
(My caveat being that while the West, with its increasingly FIRE driven home economies, has long been headed towards what Yanis calls ‘techno-feudalism’, the basis for recycling super-profits in the hyper-financialised West remains the extraction of surplus value amid conditions wherein the capital-labour relations studied by Marx have become relations between global north and south. A contradiction me, thee and others have noted – one highlighted by materiel shortages in the criminal wars on Iran, and on Russia in Ukraine – is that offshoring wealth creation to the global south has weakened the West’s ability to see off by armed force – as in decades of carnage in the Middle East and Latin America – all and any challenges to so one-sided a distribution of global wealth.)
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- In the world’s first industrial capitalist economy the role, by early nineteenth century a reactionary obstacle to production, of a feudal aristocracy with monopoly ownership of the land was challenged in popular form by the Anti Corn Law League and in intellectual form by David Ricardo. At this point in time, capitalism was still a progressive force and bourgeois economics not yet debased by apologetics nor debarred by obscurantism born of political expedience from understanding its most vital concern; the nature and origins of profit.
Meanwhile, in what might as well be a Galaxy far, far away as far as what passes for the Collective Worst’s operating paradigm is concerned……..
https://www.youtube.com/watch?v=aXIf2dkT5z4
https://warwickpowell.substack.com/p/chinas-biomimetic-membrane-and-the
https://warwickpowell.substack.com/p/chinas-co-to-jet-breakthrough-and
……..the Uni-polar ‘end of history’ has proven to be a double-edged sword. With no incentive to improve and progress – because the West had, according to its own internal folklore monologue narrative reached the pinnacle of history from which no further improvement was necessary – the majority outside which the West considers to be backwards and deplorable, were doing a practical reworking of the tortoise and the hare fable.
Food for thought – and not just for the lower ranks on the USS Lincoln carrier group.
I have a sense of déjà vu here since I think I pointed this out before, but the source of that “end-of-the-world”/“end-of-capitalism” quote was critic H. Bruce Franklin’s essay on J. G. Ballard. The point is made here:
https://qlipoth.blogspot.com/2009/11/easier-to-imagine-end-of-world.html
And the Franklin essay is here:
https://www.jgballard.ca/criticism/ballard_apocalypse_1979.html