0
How much are capitalists high on their own supply, and how much of their actions have a logic we just haven’t figured out yet? (hexbear.net)
submitted 11 months ago by spacecorps_writer@hexbear.net to c/marxism@hexbear.net
3 comments fedilink hide all child comments

Freud said that there are no accidents. Think about deporting migrant workers: the US economy obviously relies on these people. Why would you ever want to get rid of them? Wouldn’t that drive up the price of labor? But maybe not. If you terrorize migrant laborers, aren’t the ones who escape ICE more likely to work for less money, to argue with you even less than they already do? Maybe ICE and the concentration camps don’t entirely exist to kick immigrants out of the country. Maybe they’re there to just keep wages down. This can help explain why liberals only care about this issue when Republicans are in power: liberal business owners depend on migrant labor just as much as conservative ones.

In discussing capitalists and their running dogs, maybe we should assume that they aren’t stupid (even though they are). We should assume that everything they do is about maximizing profits. Musk buying twitter, for instance, looks stupid (and is stupid). But there’s a logic to what he did: the “anti-woke” wing of the bourgeoisie clearly thinks that the “woke” wing of the bourgeoisie is being too inclusive to non-whites and queer folks, and that this inclusivity is not only wasting money and hurting production, but also threatening capitalism itself (which is why fascists call Democrats communists). The “woke” wing of the bourgeoisie likewise believes that the “anti-woke” wing threatens capitalism by not being inclusive: if you don’t include at least a few minorities in your little project, these people are more likely to pursue revolutionary means to achieve their ends (this is why Democrats call Republicans communists). Musk buying twitter is the “anti-woke” wing seizing a crucial means of social reproduction from the “woke” wing in order to (in the eyes of the “anti-woke” wing) increase profits and cut out waste. A seizure like this might appear to cost money, but the gamble here is that it will pay off in different ways: by, for example, random white shitheads embracing the Nazi salute and reminding everyone of capitalism’s true nature as a project that never could have succeeded without white supremacy. Nazi salutes scare poor folks, so the thinking goes, and this will put them in their place. This can also be viewed as a reaction to the rise of the global south: the “coloreds” around the world are uniting against the bourgeoisie (China is wrecking profits with electric vehicles, deepseek, discount diamonds and caviar, whatever), so the bourgeoisie has decided to get rid of or terrorize the untrustworthy enemy within (people of color living inside the imperial core).

The reality, of course, is that capitalism is fucked regardless of how inclusive it is.

top 3 comments
sorted by: hot top new old
[-] immuredanchorite@hexbear.net 0 points 11 months ago

Although I think they are suffering from believing their own propaganda (high on their own supply), I actually think that these latest moves are more grounded in reality than Biden's and recent actions are a more sober attempt to preserve US empire for its ruling class. There is a saying I remember a CPC official bringing up to describe the state of the US political class that I think is sort of relevant. I think it was something like, "Weasels giving birth to mice, each litter worse than the last" meaning that the quality and aptitude of US functionaries has worsened over time.

However, what we are seeing isn't random, although there are some actions that are simply being used to build political capital and shield their actions from accountability-- (e.g. "anti-woke" "anti-die" ) most of these things also have a function that works in the interests of a new strategy. There has been a major shift in the alignment of the ruling class. They understand US imperialism is doomed, and they are changing things up in an attempt to reverse it. The bourgeoisie also knows that the climate catastrophe is upon us, but they believe they can shield themselves from the consequences. I remember reading that scientists estimate an additional 700 million refugees by 2050. Eco-fascist ideology, or something approaching that, is the solution for the capitalist class. What exactly does that mean? Increasing oppression at home, close up the borders, punish and blame the victims of the climate catastrophe as a diversion from the fire-sale of public resources and welfare. The deportations aren't entierly against the interests of the entire capitalist class, as the deportations themselves don't stop immigration, they simply make that labor more precarious and easily exploitable. However, if they do succeed eventually, they can re-proletarianize an increasingly desperate and incarcerated imperial core subject.

The other long-term vision of this ruling class, ostensibly, is to create a legitimate vision for the capitalist class to continue its operations. Prior to this, they used the bourgeois republic to hold to legitimacy at home and abroad they used heavy propaganda, petrodollar carrots and sticks, and Neo-liberal regime change abroad in order to maintain their imperial ambitions. Now they have hit a limit, and they see the dismantling of China's socialist system, its subjugation to foreign capital, and the elimination of China's development alternative (OBOR), as a necessity to maintain their ambitions. They must make it seem like they have a realistic alternative to this, which is difficult because the two economies are so intertwined, so they are pivoting to a more direct and coercive form of imperialism, using the threat of tariffs and sanctions to explicitly control and force submission. The tariffs will either put money in the US coffers (that the president might be able to use without congressional authority, and also offset the costs of tax cuts for the ultra wealthy) or other countries will submit and allow for the increase in export of capital in line with their own interests and to the detriment of China and the sovereignty of the global majority. It is win-win for them, or at least for now. They revel in the confusion that their actions and words cause, because it keeps any opposition guessing and wasting their energy, while they continue to pursue their real aims.

[-] xiaohongshu@hexbear.net 0 points 11 months ago* (last edited 11 months ago)

and the elimination of China's development alternative (OBOR)

This is not quite accurate. China’s Belt and Road Initiative was never a real threat to American capital, for the fact that most of the debt was denominated in dollar. It is in effect dollarizing those regions for the US.

When the US ended its QE in 2013 which led to the end of China’s miracle twin surplus, export revenues fell while the dollar gained relative strength against the yuan. China used its dollar reserves to invest in the BRI to 1) curb capital outflow due to the mounting pressure of the dollar against the yuan; 2) keep Chinese workers employed by investing into infrastructure building to prevent a recession at home; and 3) hope to recoup the losses of dollar revenue long term that accompanied the dwindling import from Western countries.

The BRI thus paradoxically created an opposition against the internationalization of the yuan itself, but it made sense at the time as a stopgap measure to prevent recession due to the reasons above.

The key mistake here was to export Chinese capital investment before a strong domestic consumer market has been developed. This causes the BRI countries to accumulate dollar debt that forced them to sell their export goods to the US to earn the dollars to repay Chinese creditors, and over the long term, created its own competition as the BRI export economies

Because China has no domestic consumer market that can absorb the industrial goods from the BRI economies that they themselves have invested (and because China’s central bank has no mechanism to create new money for their people to spend without first accumulating foreign reserves/collateralize their own assets), this has effectively led to the dollarization of BRI (contrary to Western propaganda, China created a debt trap in those countries not to itself, but to America!) and in effect building the supply chain for the American empire that no longer has the capacity to build those itself.

To break out of this mold, China needs to develop its consumer market and this requires its central bank to be able to inject net new financial assets into the economy without accumulating hard currencies first. But this would first require Chinese economists to first break out of the ideological indoctrination by neoclassical economics taught to them by Western universities.

[-] RedWizard@hexbear.net 1 points 11 months ago* (last edited 11 months ago)

That is a very interesting insight to the BRI and its consequences. I'm not exactly sure China's aims are to internationalize the Yuan. Instead, there appears to be a large realignment happening within China's business sector that is focused on upstream supply chain partnerships and ownership. For example, Coffee has been on the rise in China, and with this rise, they have rapidly created processing facilities within China and procured exclusive supply contracts with producers around the world. In the span of two years, China went from the 20th to 6th largest buyer of Brazilian coffee, and that gap is still closing. Four years ago, Brazil exported only $80 million worth of coffee to China, and just two years ago it increased to 280 million, and In June 2024, Luckin Coffee has formalized another $500 million. By the end of 2024, Luckin Coffee doubled down on acquiring 240,000 tones of coffee from Brazil to the tune of 1.5bil. Instead of going to a commodity exchange, they go to the source and negotiate a fully exclusive, right of first refusal contract that guarantees them everything that's being produced. With over a billion people in the country, when tastes shift, they shift big and absolutely saturate supply chains. The buying power of China in these markets drives the prices through the roof and can keep them there for a long time, squeezing western markets.

This becomes an issue, however, when the supply chains are already dominated in an area, pulling the raw materials out to some western processor only to be sold back to China through comity exchanges. Cocoa is an example of this. Africa has shown that it is interested in performing the value added production on the raw Cocoa themselves, instead of selling their product to western companies that will process the product and retain the added value. Countries in the Ivory Coast and Ghana have been seeking funding from China to build new processing plants so they can grow, harvest, and then process the Cocoa right in their own borders, employing more of the citizens and keeping that value within their domestic economy. In return, China is securing long term buying contracts from these new facilities to the tune of 40% of what they produce. The Ivory Coast countries are hoping to sell 100% of the value-added cocoa from their facilities, where previously they were only performing 35% of that labor. As African producers make these direct deals with Chinese firms, it pulls that product off the market for the west and slows business for their processing plants. Swiss companies have been seeing a steady increase in their business with the Asia Pacific region, even as global sales drop, and the Chinese market as taken notice. As a result, they are shooting to cut out the western chocolate makers so they can capture the regional demand instead. As a result of all this activity, the prices of Chocolate have gone vertical, surging more than 250% last year. The result of all this is a historic deficit to the global cocoa market, as China lands huge direct purchasing contracts with the Ivory Coast.

Natural Resource supply regions are looking to move down the chain and capture the value-added production revenues for themselves instead of allowing them to be expropriated by western capital. China is poised to facilitate this transition with its unreal market size and a pure fire hose of dollars and Euro to lend. The trading surpluses between China and the EU rests somewhere around $1b euro a day. This is why China uses Euro and USD to fund BRI projects, the risk is far less than doing it in Yuan. One of the things they've been doing recently is drastically lowering their holdings of US Treasury bonds, and then dumping that money into Africa and South America on projects that allow China's domestic businesses make exclusive deals that secure them massive amounts of product that fully undercut the western markets.

The net result of all of this can be seen in China's FDI to North America, which is currently crashing through the floor. While on the other side of the coin, their FDI for the Middle East, Africa, and Asia rises, and it rises in the raw materials sectors. China is already one of the largest holders of some of the world's most valuable raw materials, and it knows it can leverage this position. They leverage this position to capture raw material supply chains for their own factories, while cutting off the supply within their borders to the US and EU. There is a currency devaluing effect that happens when a country operates a trade deficit with another country, and that country doesn't reciprocate with equivalent investment. With so much of Chinas efforts focused on reconfiguring the global supply chain, it is going to leave places like the US and EU out maneuvered. These moves have been happening for a very long time, and not any individual western nation has the capital or market to drive these kinds of changes the way China does. One of the lowest performing sectors for FDI in America is mining, which means that it will be even more difficult for America to try and play catch up. This, I think, is part of the reason why securing mineral rights in Ukraine is suddenly what the whole thing was about. Europe gets something like 80% of its rare earth minerals from China, and the US is decades away from being able to have viable mines to replace Chinas. Now, with this "deal" in Ukraine, the west can shore up some of these losses by turning Ukraine into a veritable mining colony.

Taking the Yuan international in the way that the US made the Dollar international comes with heavy contradictions. One of those contradictions is that, to operate as the "World's Bank" with your own national currency, is that it would require other nations to hold your currency, which in turn places liquidity obligations on the national currency. Often, the measures of combating inflation with a national currency is to attempt to implement deflationary measures, which ultimately undermine the buying power of the national currency. When the buying power of the world's liquidity reserve drops, it shakes confidence in the holders of the currency, and they will begin to pull out of holding, to seek stability elsewhere. This isn't just economic theory, this has happened several times in America's past.

And indeed, in 1971 there was a sudden exit from the dollar (ERP, 1974: 144). It was ‘the cumulation of successive and mutually reinforcing layers of evidence and analysis’. The most fundamental was the inability of the United States ‘to finance its entire set of external policy commitments – on mutual security, on trade, on development aid, on capital mobility – except through the steady issuance of liquid dollar obligations’ throughout the 1960s. This disequilibrium was now demanding recognition and was beginning to prevail over biases against the devaluing of the world’s only source of liquidity. A second view was that ‘the poor wage–price–productivity performance of the US economy between 1965 and 1969’ required corrective devaluation. Finally, there was ‘the belief that developments in the conduct of monetary policy here and abroad (and hence in relative short-term interest rates) would induce large outflows of short-term capital from the United States to Europe’ (ERP, 1972: 144–5).

Like its predecessor, the Nixon Administration also saw the second of the three problems – of solvency, productivity and credibility – as the key to resolving them all, though it pursued different policies to do so. However, it remained confined to macro-economic policy, and soon faced the essential conflict between using these policies to increase growth and imperial obligation. As long as the dollar’s gold value had to be maintained, expansive fiscal and monetary measures to remedy ‘[a] rate of expansion and a level of employment less favourable than policy had projected’ could not be taken for fear of stimulating ‘the still lively expectations of continuing or even accelerating inflation [which] would have speeded up the flight from the dollar’ (ERP, 1972: 22). This contradiction, rather than any breezy IFIH wager on private confidence holding up the unbacked dollar, led to the closing of the gold window on August 15, 1971. Only now would HST retrospectively recast the troubled decades reviewed in this chapter as an era of US hegemony and a stable dollar.

-- Geopolitical Economy, section 'Our currency, your problem'?

The collapse of the gold-backed system was a result of the incompatibility between the USA's domestic goals, and it's international goals. The same can be said about the 2008 Housing Market Crash, since the sub-prime mortgage racket was being used to prop up international liquidity, and it is why the crash of the US housing market had international ramifications. China, with its massive trade surpluses between the EU and the USA, has been able to leverage that capital inflow to secure supply chain access in Africa and the Global South without having to risk any of its domestic policies with the Yuan. In many ways, Chian's approach to world investment is that of a mirror to the way the west has operated. They have sheltered their domestic currency from the contradictions that lay within the world market, allowing them to manage their national economy in isolation, without impacting their investment capabilities in the global market.

this post was submitted on 26 Feb 2025
0 points (NaN% liked)

marxism

3958 readers
1 users here now

For the study of Marxism, and all the tendencies that fall beneath it.

Read Lenin.

Resources below are from r/communism101. Post suggestions for better resources and we'll update them.

Study Guides

Explanations

Libraries

Bookstores

Book PDFs

founded 5 years ago
MODERATORS
Alaskaball@hexbear.net
invalidusernamelol@hexbear.net