Home > political-economy > How does capitalism end? (Part 4, or E Pluribus Ponzi)

How does capitalism end? (Part 4, or E Pluribus Ponzi)


Continued from here

To understand how the position of the dollar affected the development of our society, and became the scaffolding around which the human family has been recreated into a single community of individuals, we can begin by offering an assumption: According to Marx, money is not a thing, it is a relationship of dependence between and among the members of society – a material dependence.

So, we assume the dollar, having ascended to the position of world reserve currency, became, at the same time, the dominant form which wealth assumed in all nations, and turned entire national economies into mere appendages of the United States.

Meaning, entire national economies became as dependent as individuals within the United States on the flows of dollars throughout the global market – organizing their activities around these flows, and being organized by them.

According to the Wiki:

As the major epicenter of world trade, the United States enjoys leverage that many other nations do not. For one, since it is the world’s leading consumer, it is the number one customer of companies all around the world. Many businesses compete for a share of the United States market. In addition, the United States occasionally uses its economic leverage to impose economic sanctions in different regions of the world. USA is the top export market for almost 60 trading nations worldwide.

The Wiki, in the above passage, might lead you to believe the US exerts its economic power to grant or impose favors to nations which conform or oppose its desires through various policy decision, but this would be an incorrect conclusion. In fact the US exercise of such policy presupposes that a condition of dependency already exists.

And, this condition of dependency exists on both sides of the equation: The US is as dependent on these nations as they are on it.

For the US, this has been a mostly benficial experience, as we can determine by looking at a number of interesting statistics.

The US boasts:

  • 18.7.2% percent of all tractors used in agriculture
  • 22.7% of all electricity consumption
  • 21.78% percent of the imports among the top 25 importing nations
  • 25% percent of total government expenditures
  • 20.35% percent of person residing in a country other than the one where they were born
  • 28.3% percent of all paved roads on the planet

As one might expect, given this lopsided advantage, it also boasts

  • 44% percent of all global military expenditures
  • imprisons 23.6% percent of prisoners
  • and, contributes 28.2% percent of all the global warming carbon dioxide pollution released into the environment

These examples of waste and excess do not exhaust the list, of course, but serve to demonstrate the degree to which the entire global economy is organized around the concentration and accumulation of massive amounts of wealth in a few hands mainly located within the United States.

According to the Wiki, the dollars composes 64 percent of all reserve currencies held by nations:

The United States dollar is the most widely-held reserve currency in the world today. Throughout the last decade, an average of two thirds of the total allocated foreign exchange reserves of countries have been in U.S. dollars. For this reason, the U.S. dollar is said to have “reserve-currency status”, making it somewhat easier for the United States to run higher trade deficits with greatly postponed economic impact.

Nine nations use the dollar as their domestic currency, another four allow it to circulate freely, nine more have national currencies which are pegged directly to its value, and others peg theirs to it and a basket of other currencies.

Indeed, most currencies do not even exchange between nations, preferring to use the dollar as their nexus, or vehicle currency. According to one currency trading website:

The U.S. dollar is the most important vehicle currency in the world. The dollar has served as an important vehicle currency in part because it has remained remarkably stable over time. This stability is in part a result of the United States long history of flexible exchange markets and its commitment to improving capital market and trade access to the United States. As of 2004, the U.S. dollar was used in almost 89 percent of world currency transactions; its average turnover was over $1.5 trillion per day, more than twice as much as the next most-used currency, the euro. Most of this trading occurs outside of the United States.

Thus, the dollar organizes, shapes, and structures not only the relationship between the US economy and other economies, but among and between the national economies of all other nations. It is the universal bearer of value within the global market, and, therefore, the universal form of wealth.

And, this is true despite the fact it is mere fiat – created at will by Washington, lacking any value of its own: A merest fiction of real material wealth, which can be created in billions of units at the touch of a keyboard.

To be continued

Categories: political-economy
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