RE: [OPE] David Harvey on stimulus failure

Date: Fri Feb 13 2009 - 09:10:42 EST

Paul C:
Unless and until workers' savings are so dramatically decreased by inflation
and the crisis that they are nominal, raising the demand to decrease those
savings to a "comparatively modest sum of the order probably of $10,000"
would be widely resisted by the significant segment of the working class
which has lifetime savings greatly over this amount. Indeed, I would go
so far as to suggest that this - if workers saw it as actually an immanent
possibility - could push large segments of the class over to fighting
- in the streets, on the barricades if necessary - on the other side.
Let's suppose a government was considering do as you suggested.
Let's think through together what would happen and when. At the time when
workers feel that it is just about to become law, what do they do with all
of their savings over $10,000? Well, of course, they remove the savings from
the banks and spend it ... ALL. This would cause hyper-inflation. This would be a
great bonanza for sellers since they would know that there was excessive
demand for the goods they sell (especially if they were selling luxury goods), they could charge
almost any price they wanted. The revenues received from sales could then be simply
invested abroad. This would be a great gain for capitalists and a loss for workers.
(NB: If you say that a prohibitively high sales tax should be imposed to prevent this, I think that
would simply create a black market.)
You could tell them:

> It would be necessary to introduce a German or Swedish style pension scheme at the same time.
and that would find a lot of support among workers, but _not_ if it _also_ meant taking away
their lifetime savings.
> Savings are eventually illusory -- they feed of the illusion that consumption refrained from now
> can be called upon in the future.
Savings aren't _simply_ illusory. What is illusory is the belief that real savings will
_necessarily_ increase: i.e. the illusion is that the market is without risk and uncertainty.
Yet, it is the case also that workers know that under _ordinary_ circumstances, an
increase in savings can lead to future increases in consumption. If it is an 'illusion',
then it is a necessary illusion for workers because, in many capitalist social formations,
their long-term reproductive needs require a certain amount of savings.
In solidarity, Jerry

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Received on Fri Feb 13 09:12:34 2009

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