Giovanni Arrighi "Tracking Global Turbulence" NLR Mar-Apr/03

From: rakeshb@STANFORD.EDU
Date: Wed Apr 30 2003 - 10:47:47 EDT

Dear Michael,
I'll just respond to a bit, and quickly.

You write:

'I don't think I misquoted Arrighi's talk of "tribute". I quoted it to
object to the ill-fitting language of imperialism.

I admit I have no explanation for why "Asian central banks seem to
be willing to make less of a return on their dollar assets". But, in
any case, it does not depend on the exaction of any tribute. It
happens through markets.'

1. Of course you can't mean that the US has never been an
imperial power; perhaps the US does not today command an
empire, but the US is probably getting a free ride from foreigners
who are  willing to exchange their goods and services for dollar
assets they  may never cash in. In fact, it seems to me that the
willingness of much of the world to hold US assets does
contribute to a stronger  dollar which means that the US can feast
on cheaper foreign  goods and services at its free lunch. I agree
with Hans Ehrbar that a strong dollar brings greater advantages
than disadvantages to American capitalism.

2. I do think the US has the coercive power to prevent an
uncontrolled cashing in of US dollar assets which would drive the
value of the dollar preciptiously down (the US dean of global
political economy Robert Gilpin relates the history of the
cooperation  which the US has received from the German and
Japan central banks in propping  up the dollar--he doesn't mention
the help provided by the Persian Gulf states through the recycling
of petrodollars but his student David E. Spiro in the Hidden Hand
of American Hegemony has written a book on just that). It may well
be that foreign  central banks would have no interest in the
dumping of dollar assets anyway:  there  seems to be no better
place to park their money than short term  US Treasuries (your
point?), and they seem happy with the export opportunities  a
strong dollar creates for them (yet the strong dollar then obtains
not only  through the operation of the market but in part through
central bank manipulation thereof) .

But I don't see why in simple  economic terms they shouldn't
develop an interest in diversification and why they wouldn't want to
take a bet on better  yielding assets. It would also seem possible
a foreign central  bank could threaten a dumping of US assets if
that country was  locked in some very important important trade
war with the US. But  foreign central banks don't even seem to
make such threats  against the US.  The basis of US power is
worth considering, and  does not seem to me to reduce to
economics or the blind operation of markets alone. But then
Marxists have historically not been so good at theorizing the place
of coercion in bourgeois social life!

Just a digression: I think the Marxist failure to take coercion
seriously (and most Marxists take it less seriously than even a
legal realist like Bob Hale) stems from their acceptance of the
bourgeois myth that the most basic relation of capitalist production
(that is, the free wage labor contact) is free from extra-economic
coercion unlike that of its historical counterparts in which violence
was the explicit means by which the performace of surplus labor
was compelled. The other reason Marxists undertheorize coercion
is that too many have backgrounds as economists and have thus
been marred from having been immersed in the Walrasian vision
of markets!

Yours, Rakesh

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