Re: Information requested: US finance capital? which fraction ofthebourg

Hi Ros,

>Roslyn Bologh wrote:  > >> Could you elucidate the German critique of the
gold standard and >> internatinal financial practices (and Keynes similar
position if you know >> it)?  The proponents of the gold standard are
still with us today and ready >> to jump in with their "solution" any time
there is a financial or economic >> crisis.  Greenspan was a "gold bug" 
and may still be partial to the gold >> standard. 

My understanding of the gold standard is broadly associated with the
"money capital" concept that underlies the liberal internationalism of
British capitalism and the classical liberal doctrine of early capitalism.
Note that I was citing Van der Pijl who argues that this capital "rose to
prominence with the internationalization  of the circuit of money capital,
which generalized a rentier ideology among the bourgeoisie, both in Europe
and in the United States". While the distinction between money-capital
and productive-capital is somewhat unclear given specific historical
circumstances under which they occur (for example, think about the
protectionist faction of the British bourgeosie supporting Joseph
Chamberlain),the distinction developed by Marx, and later historicized by
Pijl, is still useful to distinguish different units of capital with
seperate functions and class interests.

Money-capital, that is used as a frame of reference to finance capital
(bank capital) represents the capital used for the exchange of goods. As
Chris Niggle mentioned, finance capital "appears in the form of financial
assests(stocks, bonds, bills, deposits), which circulates in Marx's M-M'
circuit" on the market. The institional form of money-capital is bank
capital. In abstract terms, unlike productive capital, money-capital does
not directly enter into production process and is used by Marx to refer to
the notion of "fictitious capital" which appears "as a concentrated,
organized mass, which, entirely, unlike real production, is subject to the
control of bankers representing social capital". This is not to suggest
that Marx arbitrarily seperates money-capital from productive capital
since both forms of capital represent appropriation of surplus value. 
Furthermore, the rise of money capital at the begining of early capitalism
gave way to centralization of production, facilitating the accumulation of
_real_ capital by corporations engaging in barrowing and lending. 
Historically speaking, money-capital is a precursor to industrial capital.

You will notice that, like Marx, Hilferding too made this distinction,
defining finance capital as the "mobilization of all unproductive income
through credit as capital". Under the circumstances of 20th century 
capitalism, however (the time Hilferding was writing 1910) finance capital
had already superseded its British liberal connotation of capital as
money-capital. The new relationship Hilferding observed between the banks
and the state--"the centralization of credit" was the "lever
whereby such non-productive income could be moblized for a
relauching of productive industrial capital" (Mazzini, p.99).Fusion of
banks with joint stock enterprises marked a transitory phase of
capitalist development with financial oligarchy forming a new rentier
class.

What have these all got to do with 1)German nationalist critique of
money-capital and the gold standard 2)and Keynes' critique of
international financial practices?

As Pijl argues, traditionally, although not always, money-capital
interests represent the "internationalist" (cosmopolitan imperialist) 
faction of the bourgeosie (speculative financiers, bankers,money lenders,
foreign investors, trading classes, etc..). Following the principle of
economic liberalism and classical liberal doctrine (British), these groups
aim at " the establishment of a self-regulating market, relying on the
support of the trading classes and using largely laissez faire and free
trade as it methods" (p.10). They are highly critical of trade unions and
state interventionism, and advocate a liberal doctrine in international
relations (free trade capitalism).

In the British world, liberal ideology was associated with rationalism
and utilitarian individualism. In the 19th century, this doctrine
charecterizing the emerging capitalism, was criticized by German authors
and ruling classes as "selfish" on the assumption of threatening national
interest. One can see this reactionary nationalism in the German
denunciations of the Versailles system (war reperations), which, according
to Germans, was responsible for subordinating Germany to debtor nation
status in the liberal world economy (Keynes anticipated this too).
Opposing international finance capital, but NOT capitalism per se,
anti-semitism of the Nazi movement formed a potential ideological force,
mainly of corporatist-capitalist inspiration,mobilizing the
German industrial capital against the internationalist faction of capital.
This  anticipated the beginings of inter-imperialist rivalry and the
demise of international economic order architectured and precipitated by
British capitalism.

Regarding Keynes' critique of international financial pratices, I did not
particulary aim to draw similarities between his ideas and the German
capitalist critique of classical liberalism. In the final analysis, of
course, New Deal liberalism, was able to form a relatively democratic
synthesis between productive capital and money-capital, between state
interventionism and liberalism, without falling into pariochialism of the
kind fascists endorsed. Keynes though that, self-regulating market, left
to its own, tended to produce a rentier class (financiers) responsible for
maldistribution of wealth, and speculative bubbles, so he assigned a role
to activist state in correcting market failures and protecting the market
from petty money interests for the general welfare of the public
(prudent state rhetoric). Keynes though that the financial
conservatism dictated by the money capital concept and gold standard had
to be "replaced by a strategy of capacity utilization", including
government borrowing on the market, in order to guarantee industrial
capital an easy access to money capital. However mind you that
American bourgeoisie applied Keynesian demand side policy to war time
conditions, using the state for financing war expenditures, and under
Roosevelt, switching Keynesianism to a global liberal hegemony headed
by the US. On the economics side of the  New Deal liberalism, it was
capitalist Ford, (whose name was printed on the front page of anti-semite
publications like _International Jew_) who anticipated Keynes' argument
for "the inflationary financing by the state", and expressing the need
to expand "industrial management" to mass production and consumption
(Pijl, 19)...

Mine Doyran
Phd student
Political Science
Phd student
SUNY/Albany

and John O'Donnel wrote: 

>I can't offer you any comment on other's [German, Keynes's, Greenspan's]
perspective of a gold standard ut I can suggest that much of the
foolishness that surrounds the issue.

First is the oft made confusion between "backing" and
"standard." The "gold bugs" stance always argues for a
standard but simultaneously demands backing. A little
examination of the differences of the two will dispel this
error. By insisting that money must be backed by gold [or
any other commodity] the proponents destroy the ability of
the selected commodity to be a standard. That is, because
the price of the selected commodity for backing of money can
be established by the monetary authority at any value
between that which would result in all the commodity being
held by the monetary agent [i.e. -- A price higher than that
of all others desiring the commodity.] and a price that
would result in all the commodity being held by the public.
[i.e. -- A price sufficiently low that the entire supply of
the commodity is desired by the public.] Therefore, the
actual value of the currency in terms of relevant goods and
services people actually want ultimately has nothing to do
with the "standard" so manipulated. This is, of course, the
same problem that governments now have with diminishing the
stocks of gold held idle in government vaults. Try to sell
it and the price will fall to some intolerably low price and
the gold mining industry will collapse.

Second comes the simple fact that only one ultimate purpose
is required to give value to government issue and since
governments require that they be paid in their own issue,
any further "backing" becomes redundant to that purpose. 

Third is the problem of giving meaning to the standard of
value. While it would be possible to use a single commodity
as the standard of value [And such a choice would have the
advantage of immediacy and continuity of measurement.] the
only way such a choice would continue to be meaningful would
be if the monetary authority and all other government
agencies were forbidden from buying any of the commodity
thereby leaving control of the supply of money as the only
available mechanism for maintaining the value of the
currency in terms of the standard. A better choice of
standard, even with its difficulty of frequent measurement,
is an index based on a meaningful basket of goods and
services such as that used for the CPI. 

-- 
                        -- jbod

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