After reading and commenting on David Graeber’s post at the Guardian, I feel it necessary to comment more broadly on the problem the euro-zone faces in the crisis, as well as the problem posed by the austerity regime being pursued by the member nation of the European Union. My point is to show that the errors of the bourgeois economists Reinhart and Rogoff are not, as is commonly believed, a simple math or spreadsheet error. Behind these errors is concealed the fact that the euro-zone itself is founded on a fundamental structural flaw resulting from the monetarist economic theory on which it is constructed. This flaw was nothing more than an attempt to obstruct the working class majorities of the member nations from democratic control over their economies — a flaw that is now haunting the euro-zone and will likely cause its collapse.
Part Two: “Lies, damned lies and statistics”
In part one of this series I made four points:
- Critical socialism is not the same thing as socialism proper: the first is a political criticism of capitalism, the second is a process created by capitalism itself.
- Socialism proper is nothing more than a transition from individual production and exchange to directly social production and results from the historical action of the capitalist mode of production itself on the conditions of labor.
- As against Mises’s argument that inequality of talents and abilities among the members of society is the precondition and determining force of social life, Marx argues the development of the productive forces obscures religious, social, intellectual and individual differences.
- When confronting this universal leveling power of the productive forces, the old dying order makes futile attempts to check or break it by political means, i.e., by employing the state power to protect its privileges.
In this part, I will show how Mises falsified empirical evidence, misrepresented Marx’s theory of capitalist concentration and centralization of capital, and some thoughts on why I think the Austrian school as a whole serves only as ideological cover for the apologists of the fascist state. The Austrian school provides these fascists with a conveniently pessimistic model of the real state of society in the absence of the state that is employed solely to discourage the working class from recognizing the need for its abolition. In short, Austrian theory reinforces the argument that there is no alternative to the fascist state.
Since Zak Drabczyk has been having a lot of fun stomping on the basic and sacred arguments of the Austrian-school-type regressive anarchist trend centered on the Mises Institute, I thought I would pile on and get in a few punches on my own. So, at the request of an anarchist on twitter, @adamblacksburg, I wrote up this two part critique of Ludwig von Mises’ SOCIALISM. I will post the second part of this critique by Friday.
In his book, “Debt: The First 5000 Years”, David Graeber levels the accusation against the Left, that it lacks imagination to see beyond present society. I think Graeber’s accusation is accurate and can be seen in his own antistatist (i.e., anti-political and anti-economic) argument. Contrary to Graeber’s argument that money has no essence, it is precisely because money has an essence that fascist state issued debt monies (treasuries) represent a world historical money-form: this debt-money implies money itself has become obsolete.
Based on what I have described of Bernanke’s policy failure so far, is it possible to predict anything about the future results of an open ended purchase of financial assets under QE3? I think so, and I share why in this last part of this series.
I stopped my examination of Bernanke’s approach to this crisis and the problem of deflation after looking at his 1991 paper and his speech in 2002. I now want to return to that series, examining two of his speeches this to discuss the problems confronting bourgeois monetary policy in the crisis that began in 2007-8.
The world market had been shaken by a series of financial crises, and the economy of Japan had fallen into a persistent deflationary state, When Ben Bernanke gave his 2002 speech before the National Economists Club, “Deflation: Making Sure “It” Doesn’t Happen Here”. Bernanke was going to explain to his audience filled with some of the most important economists in the nation why, despite the empirical data to the contrary, the US was not going to end up like Japan.