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Re: <nettime> history lesson
Brian Holmes on Sun, 21 Jan 2007 20:32:31 +0100 (CET)

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Re: <nettime> history lesson

Keith Hart wrote:

>I have left out the camouflage provided by Armageddon in the Middle East 
>for the economic upheavals unleashed by the current devaluation of the 
>dollar in the face of a cumulative transfer of economic power from West 
>to East. 

Keith this is all tremendously clear and useful (few things in there I 
knew nothing about!) and particularly some expansion on this last point 
would be great. On the one hand, we know that the capitalist labor force 
has practically doubled since 1989 (well, your text makes it clear 
that's an exaggeration, since part of the former communist bloc was 
already working for the west, but still it's an enormous new labor 
pool), we know that there's tons of fixed capital investment going on to 
make that labor productive and what this has always meant in the past is 
that the regions where development takes place soon outstrip or at least 
rival with their developers. But then the developers (the US in 
particular) always have ways of fighting back too, like the monetary 
turn in the early 80s was a way of fighting back at the rise of Europe 
and Japan. If I understand, one way to read the devaluation is as a way 
to just cut off some US debt by making dollar holdings functionally 
smaller. But what does that really mean?

I read in the New Left Review an article by a guy named R. Taggart 
Murphy called "East Asia's Dollars." He says this:

"There is no secret about the identity of the biggest dollar holders. 
They are the central banks and other Financial institutions of Japan, 
China, South Korea, Taiwan, Hong Kong, Saudi Arabia and the Gulf 
Emirates. If the dollar is going to crash, one or more of these places 
is going to have to change its stance towards the American currency. 
They display such a seemingly reflexive commitment to accumulating and 
retaining dollars that some commentators have described the current 
global financial order as ???Bretton Woods II??????a continuation by other 
means of the dollar-centred international order that prevailed in the 
postwar decades. The label does not itself explain why these states 
behave as they do. But it suggests that, for whatever reason, they have 
motives other than maximizing returns on their foreign-currency 
holdings; that they have a vested interest in the continuation of a 
US-led ???nancial system." (1)

What he also says (and I found this really interesting) is that the 
biggest dollar-holder by far and away, when you factor in not just the 
central bank but also the corps and private banks, is still Japan - and 
he thinks the Japanese oligarchy has a vested interest in the system and 
will basically continue to hold it up. In fact one of the guys in 
Multitudes - a Japanese Althusserian named Yoshiko Ichida - described 
this once in an article as "the Imperial monetary circuit," (2) which I 
think was one of the best uses made of the notion of Empire as a 
network, by our gang anyway. The same could be said for the Saudis and 
the other Gulf states, though the Saudis are surely the most exposed to 
internal turmoil. So how do you see the tensions playing out if the 
monetary system actually holds? I think it will... for quite a while 

>It may be that the American public needs educating about its 
>own passive role in generating this nightmare. 

I think they do (or we do!) and I also liked Kimberley de Vries' idea 
that we oughtta actually do something with all the discussion on the 
subject. But what? An open letter to the Americans on the eve of their 
(our) next godawful election? I lay at bed last night (Ok, I'm a little 
feverish) thinking about the chances of a nettime-organized bot-net 
revolution massively spamming the US population with the most finely 
tuned and clearly worded explanation ever dreamable of why the whole 
world-system is sick and what can be done about it.... Tactical 
economics anyone?

best, Brian

1. It's NLR 40, July Aug 2006 and I can send it to anybody who wants.

2. http://multitudes.samizdat.net/Circuit-monetaire-imperial-ou.html

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