request for numbers (was: Re: Is capitalism reformable [Riesz])

Can the economists on the List please give us
their views on the following statement? RKM wrote:

<<... only 10% of today's global
wealth is related to the productive economy - production,
trade, etc.  90% of the world's monetary wealth exists in an
electronic world of leveraged speculative transactions >>.

I, for example, would like to know

(a) how one arrives at this 10/90 ratio
(b) when was this ratio 50/50 and 90/10
(c) who owns/controls this 90%
(d) what are the absolute figures and how they compare with, say, world
(or OECD) GNP and world (or OECD) market capitalization?

Regards,
Petros Haritatos, Athens

-----Original Message-----
From: Richard K. Moore <richard@cyberjournal.org>
To: World Systems Network <wsn@csf.colorado.edu>
Date: Τρίτη, 30 Ιανουαρίου 2001 1:12 μμ
Subject: Re: Is capitalism reformable [Riesz]


>
>1/29/2001, Paul Riesz wrote:
>    > I am pleasantly surprised, that you are willing to listen
>    to arguments that are contrary to some of the views, you
>    have been promoting very actively during a long time.
>
>
>I've been trying to practice harmonization. (:>)
>
>Here are your primary principles:
>    1. Reduce the influence of wealth on decision making.
>    2. An increased role of government in the economy.
>    3. Elect representatives to international organizations...
>       who understand that globalization must distribute the
>       benefits fairly.
>
>These sound very attractive indeed.  Let's suppose that
>these kinds of ideas gain wide acceptance, and that
>eventually in every nation candidates and parties come
>forward, Green/Nader style, supporting these principles.
>Further, let's suppose that all of these candidates and
>parties are voted into office on the same day in each of
>their nations.  In other words, let's suppose you 'get your
>wish'.  What do you suppose would happen next?  A global
>champagne party?  Perhaps not.  Consider...
>
>As I'm sure you are aware, only 10% of today's global
>wealth is related to the productive economy - production,
>trade, etc.  90% of the world's monetary wealth exists in an
>electronic world of leveraged speculative transactions.
>Even if many investors would be satisfied with more modest
>returns on their investments, the markets as a whole have a
>built-in structural requirement for ongoing expansion of the
>kind hyper-capitalism has been providing.  If that rate of
>expasion is seriously threatened, for whatever reason,
>speculative investments will plummet in value, and sell
>orders will flood the electronic international markets.  A
>universal 'Nader outcome', of the determined nature you
>describe, would be _very threatening to hyper-capitalism
>(that is your purpose, right?), and the collapse of these
>leveraged markets would follow inevitably.
>
>90% of the world's wealth would be wiped out in that way,
>and sell orders would then flood all other markets as
>investors sought to salvage something from the wreckage.
>Banks would begin to fail, for the same reasons they did in
>Great Depression, and this would have a domino effect
>causing the insovency of other banks, and finally of central
>banks.  Orders would be cancelled, factories would close,
>bankruptcies would loom... we'd be threatened with massive
>unemployment, unharvested crops, and total economic
>collapse.  Obviously our newly elected leaders would need to
>take prompt and drastic action.
>
>We could recover from such a collapse - societies have done
>that before.  Let's say we do.  If you the propose to retain
>capitalism, there would presumably be a lot of flexibility
>in how you accomplish that.  At one extreme, we might use
>government to get corporations and the economy running
>again, and then leave the corporations in the hands of their
>stockholders, thus saving the fortunes of our current
>wealthy elite.  That was FDR's program, when he faced a
>similar reconstruction project.  At another extreme, we
>could make all the corporate plants into locally-owned
>independent enterprises, competing for profits but under new
>enlightened regulations.  We could reimburse stockholders
>in some way, but without rebuilding their transnational
>corporate empires.
>
>I thank you for this dialog, Paul, and I beg your indulgence
>to ask you another question.  If you choose to dispute my
>collapse scenario, please explain how the current global
>financial system, with its dominant speculative component,
>could structurally survive a threat to ongoing high growth
>rates.  If on the other hand you are willing to entertain
>this scenario, I ask you for your prescription for
>reconstruction - summarized in the way you so eloquently did
>in your current posting.  Given the kinds of options I have
>suggested, what reconstruction program do you think would
>start the new society off in the direction you prefer.
>
>regards,
>rkm