Uma entrevista reveladora

Compreendo a preocupação do João Valente Aguiar com a crítica que, acusando o sector financeiro de ser a fonte de todos os males que ocorrem nas sociedades ditas ocidentais, acaba por menorizar outras formas de exploração e subordinação características dos sistemas capitalistas. Sendo da opinião de que de maneira nenhuma devemos enveredar por essa via, optando antes por elucidar o que é comum aos diferentes processos de exploração dentro do sistema capitalista, de modo a que se torne claro que este não é um sistema reformável (em particular, que não é simplesmente com um maior controlo do sector financeiro que teremos uma sociedade mais democrática, justa e igualitária), não deixo de achar que é também importante ter presente que os sistemas capitalistas existem em diferentes declinações. E que estes sistemas têm sofrido, nas sociedades ditas ocidentais, uma evolução nas últimas décadas da qual resultou uma concentração de Poder nas mãos daqueles que controlam o sector financeiro (que não poucas vezes também possuem interesses na indústria). Se queremos elaborar uma estratégia capaz de produzir uma mudança sistémica, temos de conhecer a fundo as características do sistema que presentemente nos subjuga.

Esta muito interessante (e longa) entrevista feita a Michael Hudson por Dimitris Yannopoulos (Athens News), em Setembro de 2012, e que recentemente encontrei, permite compreender melhor a situação em que nos encontramos. Apesar de, como acima critiquei, nela não se encontrar uma crítica sistémica do capitalismo, sendo até patente alguma simpatia do autor pelo que denomina de capitalismo industrial.

Alguns extratos da entrevista, para quem não quiser ou tiver tempo para a ler por inteiro:

"The hope of banking in the 19th century was that banks would make productive loans to finance industry. This promised to be something new. In the past, banks had made loans to ship and market goods once they were produced, but not to finance new capital investment by producers. Investment always had been self-financed out of savings. The new idea of industrial banking was for loans to be invested to earn profits, out of which to pay the interest and the principal back to the lenders.

No such productive lending occurred in antiquity or the feudal period. And as matters have turned out, instead of allying itself with industry, banking has moved into a symbiotic relationship with real estate, mineral extraction, oil, gas and monopolies to lend against economic rent. This technical term is defined as unearned income, obtained by charging prices in excess of cost value. Economic rent has no counterpart in the cost of putting means of production in place. It is created by special legal privilege to install tollbooths on roads, education systems and other basic needs. Land is provided by nature. The only “cost” is the price of buying the right to charge rent on it. Owners aim to charge as much as they can, without regard for how this may affect overall economic growth and balance.

Banks have the privilege of creating credit and charging it. Most credit is extended to buy property or rent-seeking privileges already in place, not new capital investment. It is easier for investors to buy a privilege to extract charges without producing anything. So banks back the ability of their customers to make money without new capital investment. The easiest way to do this is to make loans for real estate at increasingly debt-leveraged, bank-inflated prices. The time frame of banks is too short-term to develop production facilities, mount a sales campaign and develop markets for new goods.

Classical economists from the Physiocrats down through the Progressive Era a century ago explained why land rent, natural resource rent and monopoly rent should be the source of tax revenue for cities, states and nations. But instead of extending credit to increase tangible capital investment, about 80 percent of bank credit in the United States and most English-speaking countries is to buy real estate. Instead of extending loans to build factories to employ people, bankers look simply at what can be pledged as collateral on which they can foreclose. Buyers pledge their rental income to pay interest to the banks. The more the tax collector shifts taxes off property onto wages, profits and sales, the more rental income is available to pay banks – for even larger loans. This is why banks back untaxing real estate and deregulating monopolies, to maximize the economic rent that can be paid as interest.

(...)

This is best understood in real estate, where the motto is “Rent is for paying interest.” A buyer will look at a property to see how much rent it pays off, and bid against other prospective buyers for a loan. The winner usually is whoever will anticipate earning the most rent from tenants to pay the interest – and promise to pay this to the bank.

For a corporate raider the motto is “Company profits are for paying interest.” What the speculator or long-term investor wants is a capital gain. Yet this gain (or loss) does not appear in the National Income and Product Accounts (NIPA), despite the fact that this is how banks get customers to borrow larger debts to buy homes they hope will rise in price. Borrowers thought they could get rich by becoming bigger bank customers. The larger the home they bought – with the largest mortgage loan – the more gains they would make.

The NIPA were not designed to analyze bubble economies making gains by inflating asset prices. They were designed to track direct investment to create tangible assets, along with profits and wages, government spending and taxes – but not financial phenomena that affect balance-sheet assets and debts. Yet financial engineering of balance sheets is what bubble economies are all about. That is what makes today’s finance capitalism so different from the industrial capitalism analyzed by the classical economists.

In this new world, property investors on credit appear not to be making any profit. They “expense” their revenue as interest, while their “capital” gains are invisible in the National Income and Product Accounts (NIPA). These asset price gains are taxed at much lower rates than are wage income and profits – and typically are not taxed at all if the gain is plowed back into buying yet more property. The effect is to divert investment away from tangible capital formation into financial speculation.

(...)

The ECB is not bailing out governments to maintain democratic programs but to change their policy in an aggressive manner. The aim is to replace democratically elected governments in Greece and Italy (and ultimately, everywhere) with oligarchy. German Chancellor Angela Merkel and other neoliberal leaders claim that democracy puts the interest of people ahead of paying bankers and bondholders. But there simply is not enough to maintain their living standards and sustain a growth in wealth at the top at existing rates, so something has to give. As far as the ECB, the U.S. Federal Reserve, Republicans and Democrats, British Conservatives and Labour are concerned, what should “give” are living standards, not the debt overhead. This is the leading demand of the oligarchic counter-revolution against democracy that plagues Europe and the entire Western world today.

Putting the interest of commercial banks first is what central banks do these days. That’s why the Federal Reserve Bank was made independent from the U.S. Treasury in 1913, and why the ECB is restricted to lending only to banks, not directly to governments to monetize their budget deficits. Central banks promote bank interests increasingly at odds with the rest of the economy – by “saving” them (and specifically, their bondholders) from having to suffer bankruptcy as a result of their bad loans. Buying government bonds from banks is a far cry from monetizing government spending directly. It gives banks interest returns on public debt that could be financed without such a charge. The central bank bails out bankers, not the economy – which is left debt-ridden. This makes the central bank pretense of acting to promote full employment hypocritical – because bailing out the banks while keeping debts in place has the effect of shrinking market demand and employment.

The first ploy to serve bankers and bondholders is to place technocrats (a scientific sounding euphemism for bank lobbyists) in place of elected governments in Greece and Italy. Today’s anti-democratic financial coup in Europe resembles the murder of the Gracchi and their supporters by oligarchic senators in Rome in 133 BC, inaugurating a century of financial war, which historians call the Social War. It was waged by the oligarchy (which had enriched itself largely by privatizing public land after the Punic Wars with Carthage, much as today’s oligarchy has grown rich by privatization and public-private financial “cooperation”). At issue was whether the economy should be run to enforce creditor “rights” by depriving the population of its liberty from debt bondage, or should annul the debts.

Advocates of debt cancellation (such as supporters of Catiline’s “conspiracy”) were killed, not unlike Chile in 1973 as General Pinochet enforced Chicago-style “free market” reforms at gunpoint. The Social War ended with a quarter of the population reduced to slavery. Today’s creditors do not put individuals formally into bondage, but leave them free to work and live anywhere they want – as long as they buy goods from privatized infrastructure squeezing out economic rent, pay their debts and pay taxes to subsidize high finance. That is the essence of neoliberal ideology, and explains why the banking sector subsidizes its pet politicians so well.

(...)

The same fate was threatened in Ireland. The problem is that neither Greece nor other eurozone countries have a central bank to monetize their budget deficits. So they need to borrow from bankers and bondholders, at interest rates that rise as the dysfunctional system grows more untenable. Risk increases as governments shift taxes off property, rent-yielding “tollbooth” assets and the wealthy their onto labor and industry, and finance the resulting budget deficits by cutting public employment and wages, axing social welfare and selling off the public domain. Neoliberals are using Greece’s debt crisis as an opportunity to pry away whatever its government owns: real estate and public buildings, oil and gas rights in the Aegean, port facilities, electric utilities and roads.

In times past it would have taken an army to carry out what the ECB is achieving in Greece. The new appropriators would have had to invade the country to take over its land and infrastructure. But the ECB is doing this without military force, simply by appointing technocrats as proconsuls. A lame attempt is made to frighten voters into believing that There Is No Alternative (TINA, as Margaret Thatcher liked to express her diktat). Propaganda sites blare out a message that all this is for the best. Writing down debts is said to cause a crisis and poverty, not liberate economies from their debt overhead and thus make them more competitive.

The appeal to foreign “cosmopolitan” power is reminiscent of what occurred in Sparta at the end of the 3rd century BC. A creditor oligarchy had taken over, and two kings – first Agis IV and then Cleomenes III – sought to cancel the citizenry’s debts. Neighboring oligarchies called in Rome, which subjugated populations from the Aegean to Asia Minor, establishing “peace” by imposing martial creditor rule.

Greece will be surrendering without even a fight if it goes along with this neo-imperial creditor policy. That is the political aim of the oligarchy: to win by ideological and political conquest rather than the more expensive military oppression of an outright police state.

(...)

Financialization escalates the class war. For the last hundred years people thought the war was simply between employers and employees over workplace conditions, wage levels and benefits. But the debt overhead adds a new dimension. Finance controls governments, and unions typically are strongest in the public sector. Financial lobbyists and the their pet academics they corrupt promote austerity to weaken the demand for labor and drive down wages to a degree that could not occur on the company-by-company scale of clashing industrial employers and their workers.

For a dress rehearsal, look at Latvia, where neoliberals have had a free hand. Two years ago, internal devaluation reduced its public sector wages by 30 percent. This helped drag down private-sector wages. Cutbacks in public spending shrank the domestic market and hence employment – and spurred emigration of young labor. Workplace rights are being rolled back in a way 19th-century industrialists never dreamed they could achieve under democratic governments.

(...)

Of course many banks will go under and many governments will be driven into insolvency. Big fish to eat little fish. That’s the objective. Banks that go under will sell off their debt claims on the cheap to vultures flying in from other countries to enjoy a field day, as they did in taking over Iceland’s banks. (That story has not been widely told.)

Financialization leads to the bankruptcy of local banking systems so that outsiders can swoop in for a huge property grab. Many countries have pension systems that can be looted after the manner perfected under Pinochet in Chile in the late 1970s. Many banks do indeed become casualties. The most highly criminalized U.S. banks – Countrywide Washington Mutual (WaMu) and their cohorts deepest into fraud in recent years – were absorbed by the five largest U.S. “too big to fail” giants.

Of course this will impoverish the economy. But the big banks and bondholders hope to be fast enough to take their money and run, to repeat the process somewhere else. Ultimately they face the problem that Alexander the Great faced: He cried when he found no more worlds to conquer. So finance capital will end in tears – first for the debtors, then for the creditors themselves. The parasite will die with the host. That is how the Roman Empire declined and fell.

(...)

At issue is how society will resolve the buildup of debts that can’t be paid. If governments let the financial sector foreclose, they will end up being forced to privatize the public domain under duress conditions at distress prices. They also will have to dismantle public administration and welfare services. The financial conquest is capped by turning tax policy over to financial lobbyists who claim to serve as objective technocrats. But their agenda is to make the economic polarization between creditors and debtors irreversible, ushering in a Dark Age of austerity and deepening debt peonage in which wages, profits and property rents are earmarked to pay interest – on loans that can’t be paid in a shrinking economy.

The alternative is write down debts to what can be paid, within the framework of a mixed public/private economy whose tax policy and monetary system aim to distribute wealth and income more equitably. The history of how societies have dealt politically with their debt overhead throughout history needs to be highlighted in the public consciousness and placed at the heart of the academic curriculum and media discussion."