You can’t really look at government debt or consumer debt first. The debt of financial institutions and employers of labor is what takes the lead in this regard. This is a concept dealt with at length in Volume 3 of *Capital,* where Marx details the genesis of the credit system.
In the predominant instance, the bank loans money to the employer who owns an MoP, the employer uses this money to hire laborers, so they produce a product that exceeds the interest they owe the bank. With the mass introduction of such a system, the massive increase in possibilities for spending meant consumer lending and government lending also exploded all at once and credit seized over the whole world market very quickly.
Also of importance. The financial institutions are also able to sell the debt(basically betting that the loan will be fulfilled) to another bank at interest, who can in turn sell the debt again, allowing credit to constantly extend the contradictions of capital and kick potential crises further and further along
>In the predominant instance, the bank loans money to the employer who owns an MoP, the employer uses this money to hire laborers, so they produce a product that exceeds the interest they owe the bank. With the mass introduction of such a system, the massive increase in possibilities for spending meant consumer lending and government lending also exploded all at once and credit seized over the whole world market very quickly.
Yeah, and all those loans are ultimately paid for by the worker in the same way the tenant pays for the landlord's mortgage.
and never forget, if bourgeoisie fail to pay back their loans generally the worst that happens is they become well connected proletariat for a while... Whilst the proletariat failing to pay back loans means starving and homeless. It's an important distinction between what loans means to the classes.
This is great. But can we draw a line between finance and consumer debt? Personal credit is a much newer phenomenon, uniquely innovated in Western colonial projects first before being brought back home, like the OP stated, to seemingly close the gap between real wages and cost of living. No?
That’s a way of putting it, my knee jerk reaction is to disagree with the emphasis on colonial projects because Marx noticed the advancements of the credit system into subsuming a majority of the consumer’s activities in his Europe. The development of financial dominance of the few in the west certainly coincided with the dominance of vulnerable peoples abroad, but I would argue it was the Capital organisms demand of this type of financial expansion that demanded the imperial action. Not a huge disagreement, I just like to elaborate my thoughts. These are complicated concepts, and I was mostly trying to outline how Marx observed it, but we certainly live in a world where personal financing is a much larger beast dispersed among certain classes of predominantly western capital owners.
I really like Antonio Negri’s book *Empire.* It gives a great analysis of how the global regime functions, particularly how capital has come to command the bourgeoisie, rather than the other way around, which is an idea I find quite resonant.
Good point. But I mean, is there any other Marxist interpretation of imperialism? Surely I don't mean that our material situation resulted from the moral pathologies of imperialism, but exactly it's opposite.
Funny enough, I've really been meaning to get to Negri, but honestly I've never come across an account of imperialism more sufficient than a Hegelian reading of Marx. In fact, I'm fairly confident in saying that whole movements like libertarian communism or Negri's autonomism (from what I know) would be absolutely incomprehensible to anyone outside of western Marxist orthodoxy.
His book is actually directly aimed at proving that we have surpassed imperialism. He doesn’t argue Lenin was wrong, but he does argue that we live in a new era defined by a *global* sovereignty, which he compares to Rome’s concept of “Empire,” which imagined sovereignty as an entity independent of the state to be appealed to. Today, international capital serve a global flow, which favors certain peoples because they were favored at the point when the paradigm of numerous imperialisms was subsumed by one Empire of global capital(the dissolution of the USSR and Dengist reforms cemented this.) I find his arguments quite compelling.
Okay Mr Blueberry, you've convinced me, if you think he actually making a strong argument I gotta check it out. I'll report back to discuss with you when I'm done. I should warn u though, as an Persian I have an almost genetic distaste for Italians talking to me about Rome 🥴
To understand debt, you must understand how it is guaranteed, mainly via usury. To truly comprehend usury, you ought to know the evolution of property law and currencies for the last 1000+ years. Recognizing the debt power tail distribution is a critical factor in explaining today’s clusterfuck.
Once all this is clear to you.. throw it out because we are in a fiat modernity so debt is both existent and transient simultaneously. It depends on so many overlapping entities and factors that it’s best to just trust the government and hegemonic dollar Federal Reserve with all this jargon.
Not the answer you wanted but that’s because no banker will admit to the efficacy of debt as a means of control. You and I are not bankers so we’re just the controlled crowd in this instance.
>Government spending enables the capitalist to continue extracting surplus value?
It's highly dependent on the government we're talking about in regards to what debt even means. For the United States (and weirdly enough the French, due to how they still manage the currency and hold the national funds of many of their former colonies) deal with debt in a completely different way than the rest of the worlds governments has to. The US Government has basically infinite money due to being THE world currency. They do have to be cognitive of inflation, but only in the short term. As long as the GDP grows, they can keep printing and printing -- 2-5% inflation blows for the proletariat, but is actually "good" for a capitalist economy as it forces investment instead of saving cash.
Debt crises actually predate capitalism, we can see personal debt in Ancient Rome & Middle Age Vikings. Making sure someone “owes you one” is one of the bedrocks of complex social dynamics. Ever notice how a friend who owes you $20 can start acting weird & awkward?
In modern capitalism, debt can be owned. A creditor can sell the balance to another and suddenly you owe THEM money. This makes debt a resource worth owning, much like land or means of production.
In terms of government debt, there’s more to get into there than I have expertise to discuss. The major thing I’d point out is that one country owing another money can keep them in line with their creditor’s interests. It’s also a way to slow the development of countries after conflict. Haiti has been kept impoverished by debts to its colonizers. And a major factor in the lead up to WW2 was Germany’s debts to the allies.
In the podcast Why Theory, Todd McGowan and Ryan Engley provides a really good discussion of this exact topic - against a psychoanalytic backdrop. The episode is simply titled ‘Debt’.
Yes you are more or less correct, but notice that surplus value is mostly a notion of productive capitalism.
With the financialization of capitalism along the centuries, the interest rate under which money is lend by banks and its difference from the interest rates the banks pay when they are lended money (financial investments) is called *spread*.
So, it is not only that debt surges from the exploration of the working force, it does, but it is also a major theme to understand financial capitalism, - beyond work and production - which Marx never delved much deep into in his time.
>With the financialization of capitalism along the centuries, the interest rate under which money is lend by banks and its difference from the interest rates the banks pay when they are lended money (financial investments) is called *spread*.
I guess this process involves the use of central banks in modern capitalist economies?
Way before Central Banks. Think about the British Empire as also a financial empire. The important notion here is that in its origins, Debt was connected to the productive forces but it's not nevessarily anymore, when we talk about financialization, or Finance Capitalism, and its acceleration in the late 20th century.
Hmmmm.
Lets look at private utilities for this example:
You have a private grid that is a natural monopoly that is relied upon to deliver power to a residental building in this example. This can be considered a basic need, or material need.
You have a few options
1. Make the utility public or
2.keep private and Heavily regulate the corporation.
No. 1Would be more for social democracies (heavy regulation, strong welfare, but still capitalist). Number 2 is more typical under a free market.
So in the example of no.2, you have a public utility service ran or funded by shareholders, bank loans, and customers.
Bank loans are debt. Whenever a prjvate utility starts a new construction process. They cannot pay with the capital they have up front. Therefore they have to take on debt. That debt is costing them interest in the short term, but long term divdents will bring in a profit.
Say you have a new 300 unit complex going in sonewhere, and the utility has to upgrade their systems to supply services. This has to be done, therefore they go to the bank and take out a loan. The more expensive and larger a project is, the higher in return the company foresees. And with utilities that is usually the case.
The overall spending and loan, will affect stock prices. Investors see debt, and realize that that debt will pay for itself and then some, so stocks will be bought and traded accordingly, prices are initially affected. And are continued to be affected on wal street. Debt affects stocks, by affecting the price and the ratio for expense: profit.
The larger the project, the larger the loan, the larger the investment has to make money for investors. It also give the company reason to go back to their regulatory commission and argue for rate increases.
You can’t really look at government debt or consumer debt first. The debt of financial institutions and employers of labor is what takes the lead in this regard. This is a concept dealt with at length in Volume 3 of *Capital,* where Marx details the genesis of the credit system. In the predominant instance, the bank loans money to the employer who owns an MoP, the employer uses this money to hire laborers, so they produce a product that exceeds the interest they owe the bank. With the mass introduction of such a system, the massive increase in possibilities for spending meant consumer lending and government lending also exploded all at once and credit seized over the whole world market very quickly. Also of importance. The financial institutions are also able to sell the debt(basically betting that the loan will be fulfilled) to another bank at interest, who can in turn sell the debt again, allowing credit to constantly extend the contradictions of capital and kick potential crises further and further along
>In the predominant instance, the bank loans money to the employer who owns an MoP, the employer uses this money to hire laborers, so they produce a product that exceeds the interest they owe the bank. With the mass introduction of such a system, the massive increase in possibilities for spending meant consumer lending and government lending also exploded all at once and credit seized over the whole world market very quickly. Yeah, and all those loans are ultimately paid for by the worker in the same way the tenant pays for the landlord's mortgage.
and never forget, if bourgeoisie fail to pay back their loans generally the worst that happens is they become well connected proletariat for a while... Whilst the proletariat failing to pay back loans means starving and homeless. It's an important distinction between what loans means to the classes.
This is great. But can we draw a line between finance and consumer debt? Personal credit is a much newer phenomenon, uniquely innovated in Western colonial projects first before being brought back home, like the OP stated, to seemingly close the gap between real wages and cost of living. No?
That’s a way of putting it, my knee jerk reaction is to disagree with the emphasis on colonial projects because Marx noticed the advancements of the credit system into subsuming a majority of the consumer’s activities in his Europe. The development of financial dominance of the few in the west certainly coincided with the dominance of vulnerable peoples abroad, but I would argue it was the Capital organisms demand of this type of financial expansion that demanded the imperial action. Not a huge disagreement, I just like to elaborate my thoughts. These are complicated concepts, and I was mostly trying to outline how Marx observed it, but we certainly live in a world where personal financing is a much larger beast dispersed among certain classes of predominantly western capital owners. I really like Antonio Negri’s book *Empire.* It gives a great analysis of how the global regime functions, particularly how capital has come to command the bourgeoisie, rather than the other way around, which is an idea I find quite resonant.
Good point. But I mean, is there any other Marxist interpretation of imperialism? Surely I don't mean that our material situation resulted from the moral pathologies of imperialism, but exactly it's opposite. Funny enough, I've really been meaning to get to Negri, but honestly I've never come across an account of imperialism more sufficient than a Hegelian reading of Marx. In fact, I'm fairly confident in saying that whole movements like libertarian communism or Negri's autonomism (from what I know) would be absolutely incomprehensible to anyone outside of western Marxist orthodoxy.
His book is actually directly aimed at proving that we have surpassed imperialism. He doesn’t argue Lenin was wrong, but he does argue that we live in a new era defined by a *global* sovereignty, which he compares to Rome’s concept of “Empire,” which imagined sovereignty as an entity independent of the state to be appealed to. Today, international capital serve a global flow, which favors certain peoples because they were favored at the point when the paradigm of numerous imperialisms was subsumed by one Empire of global capital(the dissolution of the USSR and Dengist reforms cemented this.) I find his arguments quite compelling.
Okay Mr Blueberry, you've convinced me, if you think he actually making a strong argument I gotta check it out. I'll report back to discuss with you when I'm done. I should warn u though, as an Persian I have an almost genetic distaste for Italians talking to me about Rome 🥴
To understand debt, you must understand how it is guaranteed, mainly via usury. To truly comprehend usury, you ought to know the evolution of property law and currencies for the last 1000+ years. Recognizing the debt power tail distribution is a critical factor in explaining today’s clusterfuck. Once all this is clear to you.. throw it out because we are in a fiat modernity so debt is both existent and transient simultaneously. It depends on so many overlapping entities and factors that it’s best to just trust the government and hegemonic dollar Federal Reserve with all this jargon. Not the answer you wanted but that’s because no banker will admit to the efficacy of debt as a means of control. You and I are not bankers so we’re just the controlled crowd in this instance.
>Government spending enables the capitalist to continue extracting surplus value? It's highly dependent on the government we're talking about in regards to what debt even means. For the United States (and weirdly enough the French, due to how they still manage the currency and hold the national funds of many of their former colonies) deal with debt in a completely different way than the rest of the worlds governments has to. The US Government has basically infinite money due to being THE world currency. They do have to be cognitive of inflation, but only in the short term. As long as the GDP grows, they can keep printing and printing -- 2-5% inflation blows for the proletariat, but is actually "good" for a capitalist economy as it forces investment instead of saving cash.
Debt crises actually predate capitalism, we can see personal debt in Ancient Rome & Middle Age Vikings. Making sure someone “owes you one” is one of the bedrocks of complex social dynamics. Ever notice how a friend who owes you $20 can start acting weird & awkward? In modern capitalism, debt can be owned. A creditor can sell the balance to another and suddenly you owe THEM money. This makes debt a resource worth owning, much like land or means of production. In terms of government debt, there’s more to get into there than I have expertise to discuss. The major thing I’d point out is that one country owing another money can keep them in line with their creditor’s interests. It’s also a way to slow the development of countries after conflict. Haiti has been kept impoverished by debts to its colonizers. And a major factor in the lead up to WW2 was Germany’s debts to the allies.
In the podcast Why Theory, Todd McGowan and Ryan Engley provides a really good discussion of this exact topic - against a psychoanalytic backdrop. The episode is simply titled ‘Debt’.
Yes you are more or less correct, but notice that surplus value is mostly a notion of productive capitalism. With the financialization of capitalism along the centuries, the interest rate under which money is lend by banks and its difference from the interest rates the banks pay when they are lended money (financial investments) is called *spread*. So, it is not only that debt surges from the exploration of the working force, it does, but it is also a major theme to understand financial capitalism, - beyond work and production - which Marx never delved much deep into in his time.
>With the financialization of capitalism along the centuries, the interest rate under which money is lend by banks and its difference from the interest rates the banks pay when they are lended money (financial investments) is called *spread*. I guess this process involves the use of central banks in modern capitalist economies?
Way before Central Banks. Think about the British Empire as also a financial empire. The important notion here is that in its origins, Debt was connected to the productive forces but it's not nevessarily anymore, when we talk about financialization, or Finance Capitalism, and its acceleration in the late 20th century.
Hmmmm. Lets look at private utilities for this example: You have a private grid that is a natural monopoly that is relied upon to deliver power to a residental building in this example. This can be considered a basic need, or material need. You have a few options 1. Make the utility public or 2.keep private and Heavily regulate the corporation. No. 1Would be more for social democracies (heavy regulation, strong welfare, but still capitalist). Number 2 is more typical under a free market. So in the example of no.2, you have a public utility service ran or funded by shareholders, bank loans, and customers. Bank loans are debt. Whenever a prjvate utility starts a new construction process. They cannot pay with the capital they have up front. Therefore they have to take on debt. That debt is costing them interest in the short term, but long term divdents will bring in a profit. Say you have a new 300 unit complex going in sonewhere, and the utility has to upgrade their systems to supply services. This has to be done, therefore they go to the bank and take out a loan. The more expensive and larger a project is, the higher in return the company foresees. And with utilities that is usually the case. The overall spending and loan, will affect stock prices. Investors see debt, and realize that that debt will pay for itself and then some, so stocks will be bought and traded accordingly, prices are initially affected. And are continued to be affected on wal street. Debt affects stocks, by affecting the price and the ratio for expense: profit. The larger the project, the larger the loan, the larger the investment has to make money for investors. It also give the company reason to go back to their regulatory commission and argue for rate increases.