Pole-star political party edition. Saint-Petersburg, moScow, Bryansk. Member of the «sTar confederation»

Issue № 1 (69) ...................................................................................................... 22.04.2009

Black Hole adjacent to dollar

I am hereby responding to my colleague Mr.Chernyshev rather late (see "Veche" № 1(68), 19.03.2006) yet hoping that the conversation is still open since it is a high time to expose some nonsense in world accounts called by politicians and economists as the crisis. And it really is a crisis since life of simple people in poor and poorest countries is getting worse. Growth of unemployment and shrinkage of accumulation and development both for individuals and whole countries – they all are being cut and crushed by greedy and insatiable dollar.

First of all this crisis is a financial one. I mean that its source is in finances, in main world currencies. The source and main party at fault for the crisis, in common opinion – is the United States of America. In May 2007 they first encountered mortgage debt problems . As it was explained to the world, insolvent simple Americans, below middle class, had taken too many mortgage loans that couldn’t be repaid.

It is all that simple? Let’s turn it over in our minds. Well-read blockheads repeat from every quarter that money must and will make money. Why ? For what reason ? Money never makes money . Money is a means of payment and settlement, means of exchange without independent value. They cannot create anything themselves . Without world of commodities with labour force being the most important one. Labour force creates new value , new commodities . Commodity – is a material substance produced by workers in material production. Money – is its reflection. Or better to say, money is a promise of a commodity or a service. And nothing more.

So what forms wealth if it is not money? Same as hundred and two hundred years ago – workers and peasants –are those who involved in material production and with their labour create the world of commodities, create new value consisting of salary (required labour according to Marx) and profit (surplus labour). There are no other sources of wealth. Service and infrastructure just increase the cost of produced commodities yet never create new value. They form environment and/or conditions for circulation, turnover of goods and service originated from material production. So how is the US economy organized, economy of the country that is guilty for the world financial crisis? She is remarkable!

Material production amounts only to 20% from annual GDP. It is the right time to rename "Gross Domestic Product" into "Gross Domestic Revenue" containing only 1/5 of proper product. Everything else is service and work of infrastructure that is consumption of commodities of material production. Formula of surplus material product is not a subject of much controversy between Mr. V. Chernyshev and me so far. I agree with Marxist labour value approach. But our discussion is still open for mutual criticism.

Let me remind that balanced development of any national economy as well as world economy requires enough surplus of material product. Such surplus should be big enough to finance infrastructure as well ( transport, communication, power engineering, gas-, heat-, water supply, financial, retail networks, all enterprises of nonproduction sphere, and also government activity). Otherwise financing thereof would be deficit, at the cost of public debt, for instance.

The formula shows it as difference between the sum of the whole salary and profit of the first division of economy (production of means of production) and material costs, capital inputs of the second division (production of commodities). The matter, as you understand, concerns material production. The formula is still the same - I(V+M) – IIC (see legend below).

This, in fact, is a difference resulting in increase of material product originated only in sectors of material production. They include agriculture, mining, construction and industry. Inside material production itself there must be some interchange between first and second division that is between production of means of production and production of commodities: I (v + m) + II (v + m) - II (c + v + m) . You can see the simplified (light) formula above. The results of difference calculations for the last nine years, with complete data, in billion US dollars are given below.

	1999 г.	2000 г.	2001 г.	2002 г.	2003 г.	2004 г.	2005 г.	2006 г.	2007 г.
I(V+M) - IIC	-37,80	-20,90	-32,30	-11,30	-45,60	-91,70	-188,00	-173,40	-245,40
I - Infrastructure	7 314,70	8 633,50	8 801,80	8 985,40	9 413,80	10 183,30	11 032,20	11 821,90	12 475,70
NP – nonmaterial production	1 547,20	1 749,90	1 857,00	1 980,70	2 108,90	2 250,50	2 386,00	2 535,30	2 692,90
I + NP	8 861,90	10 383,40	10 658,80	10 966,10	11 522,70	12 433,80	13 418,20	14 357,20	15 168,60
G ( Government )	1 685,50	1 898,80	2 019,20	2 155,50	2 300,20	2 437,20	2 582,80	2 741,60	2 914,00
I + NP + Government	10 547,40	12 282,20	12 678,00	13 121,60	13 822,90	14 871,00	16 001,00	17 098,80	18 082,60
Taxes to be deducted from I+NP+G	-721,91	-819,88	-835,15	-908,28	-993,11	-1 099,73	-1 224,49	-1 232,42	-1 277,21
" US Deficit Financing”	-9 863,29	-11 483,22	-11 875,16	-12 224,62	-12 875,40	-13 862,98	-14 964,51	-16 039,78	-17 050,79
nvestments in fixed assets :	1 700,80	1 983,50	1 970,10	1 914,50	2 005,80	2 202,80	2 440,60	2 597,80	2 596,80

For clear understanding of hugeness of figures we should mind that so called profit and salaries as well as capital inputs in infrastructure and productive industries are to be calculated as a minus from surplus material product , what they really are , not plus . Even if enterprises of those industries work as absolutely ordinary profitable ones – they all exist at the expense of surplus material product. All their activity is increase of public spending, adding to cost (not to value) of already produced commodities, changing conditions and means of consumption. Again – minus , not plus .

It is obvious that a hole of 17 billion dollars by the end of 2007, covered with nothing but ambitions of world finance capital, seriously undermined the world economy. Somebody must pay for the States’ 18 billion dollar spending by 2011, right? The rest of the world pays. As if all world must work hard to compensate activities of American infrastructure and service worldwide. Should the one take it all, whereas the other gets nothing?

Fortunately so far the economies of other countries (except for offshore territories) differ from the US by the distinctively small share of services in their economies whereas real production of goods is much more. In such a way the world economy floats at the expense of the poorest countries and peoples having a share of material production (agriculture, industry and construction) in some cases more than 2/3 of produced GDP. In course of international settlements including so called “debts” and “loans” usually registered in dollars occurs successive flow of values created by workers in material production of poor (and not only poor) countries in favour of the US economy. Dollar is growing stronger . In such way the black hole of negative mass becomes temporally covered by real, not virtual, economic mass. Until new portion of fresh blood from “dollar-dependent” economies will come to save it.

Dollar, like a Naked King or obsessed to dress up in other currencies, pumping out their beneficial lining, continuously fed by new portions of values created in material production. Finally, in spite of that yawning abyss of economic substance deficit, the American dollar manages to annually increase in fixed assets that is tangible assets in its territory. In billion dollars it looks as follows:

	2000 г.	2001 г.	2002 г.	2003 г.	2004 г.	2005 г.	2 006 г.	2007 г.
Increment of Fixed Assets	1749,900	1484,900	1373,000	1695,700	3360,200	3667,400	3107,500	1553,200

The diagramed situation looks really dramatic even in its conservative extrapolation (1,5% per year) until 2011. There is no increase of surplus material production, whilst spending on infrastructure, service and government keeps diverging from the symmetrical curve of American economy cost deficit (reflected in defectiveness of dollar).

Basically there is nothing else to add here. Except for the fact that dollar using its extraterritoriality can exchange itself into commodities and services in all countries easily feeding its empty stomach and wealth of careless Americans. The other "poor" and "poorest", and "economies in transition" – a sad diagnosis – have to serve as production workshop, a agricultural plantation of their foreign masters, authors of “dollar-euro-SDR" project. People in these countries are doomed . Most them shall have to remain workers in production, a real curse according to Marx.
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Crisis ! Crisis ! In fact the crisis is only for those who didn’t pass face control, who do not have their own dollar-printing machine, IMF headquarters and World Bank in their territories. The rest of the world should pay in excess to America for the right to use its main commodity – a dollar.

USA have the right to pick the pocket of world economy with impunity. With impunity ! Until all main currencies of leading countries in some strange way are equaled to dollar via SDR (so called IMF’s paper gold created after crisis and dollar collapse 1971) while for other currencies it is forbidden even to think about equality to dollar. Only in subordinate position . Why , really ? Because American money make American money . And other countries must produce commodities for the growing mass of American money. Is it clear enough? Yes!
But reserves of world economy are not endless . How long can it bear spending on service (especially financial speculations and global “casinos”- stock exchanges). Let us see ?

The red curve – is a world material production. The blue curve – world GDP. The curve of material production volumes of world economy has almost approached to the figure comparable to black hole in American economy. So what’s next? Will all world keep recalculating overall product as it is today in light-weight dollars or will it calculate otherwise? Will it keep crediting dollar and its greedy and insatiable gang of "main currencies", financial instruments and derivatives that beneficiate financial parasites? Or will the world hit upon idea to write off all debts and credits and back-bill USA and their allies for decades of robbery and theft of value in their economies?

It is clear that we will never hear about it at global conferences. Because they would have to confess that Marx’ theory is true as before (as it used to be). They won’t have the heart to say that it is correct. Not for nothing they call him "rude philosopher". Of course one cannot call a capitalist a robber in decent society. But how not to call? You may loose everything!
This Titanic of world financial parasitism shall take you down. Already 17 trillion US dollars of unsecured American money! The money which does not exist in a real economic nature! For example, only in the United States! Who shall hide more? (А.Bradbury, 22/04/2009)

Elements of the Formula can be find there:

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