BRICS And The Fundamental Paradigm Shift in the Political Economy of the World

"one of the biggest stories in the world and nobody is talking about it"

As a marxist, I’ve always known that an indispensable resource for understanding what is happening in the political economy of the country and the world is the business press. It’s the place where capitalists are required to rigorously and honestly take stock of the present state of, and ongoing developments in, what we call the infrastructure.

Thus, I came across this video from a channel called Inside China Business, by a guy named Kevin Walmsley, who has lived and worked in China since 2012 for a company called Direct Equipment. The video is entitled, bluntly, “The BRICS trading system is already wiping out US farmers, as global price discovery is destroyed” and it gives a concrete analysis, which surprised me, of how the BRICS system has already upended the global commodities trading system that was “for a hundred years” based on the U.S. dollar and essentially managed from Chicago. As he says, “This is one of the biggest stories in the world, and nobody is talking about it”—because few people know how. He knows how.

He talks about how the BRICS are developing

a new global trading system, which is completely independent of the U.S.-led system based on U.S. dollar trading and the SWIFT bank system. the system that we use in western countries … that has obvious advantages to us and obvious disadvantages to everyone else. If we're honest with ourselves there is no logical reason why a farmer in Brazil who's selling soybeans to China should use an American bank or the exchange in Chicago to make the deal happen, or need U.S. dollars to do so….Now, China, Brazil, and the other BRICS have the technology to build their own system, buying and selling directly without U.S. dollars, without Western banks, and without going through commodities traders and going through exchanges in Chicago.

Behind the Money Curtain: A Left Take on Taxes, Spending, and Modern Monetary Theory

Taxes do not fund government spending.

That’s a core insight of Modern Monetary Theory (MMT) whose radical implications have not been understood very well by the left. Indeed, it’s not well understood at all, and most people who have heard or read it somewhere breeze right past it, and fall back to the taxes-for-spending paradigm that is the sticky common wisdom of the left and right.¹

This, despite the fact that the truth of the proposition is obvious if you think through just a few steps about the process of money-creation. What makes it hard to see is the dense knot of conventional theory and discourse in which we are entangled, and which seems impossible to cut as cleanly as MMT suggests.

But the discussion around the newly-enacted Republican tax bill has brought the issue of tax policy to the forefront again, and it’s time for the left to realize how fundamentally wrong that common wisdom is, and how continuing to argue within the phony terms of the taxes-for-revenue paradigm occludes and reproduces a persistent reactionary fiction regarding what taxes are for.

The Bailout Created the Debt,Not Vice-Versa

Take a look at this graph, from an interesting post (and follow-up) by documentary filmmaker David Malone on his blog Golem XIV. It shows that everything we've been told about the 2008 financial crisis and the resulting bailout is a complete crock of shit. It's the bailout that created the public debt crisis, not public debt that created the need for a bailout. The bailout, in every one of these countries, was a means for the financial elite to preserve its own enormous wealth by shifting its unsustainable private debt onto the shoulders of the public.

As Malone points out:

The green bars are debt as percentage of GDP before the bank bail outs and the blue bars are after. .... Notice Ireland. Its debt to GDP was down at 27%.  The ONLY thing that altered between 2007 and 2010 was the bank bails outs. Ireland’s ENTIRE debt problem is due to bailing out private banks and their bond holders. ... the fact is that all European nations apart from Portugal were either reducing their debt-to-GDP level or at least not allowing it to grow. Most of Europe was reducing government debt to quite manageable and historically low levels. ...Almost  every European country was keeping debt to GDP even or going down – before the banks were bailed out that is. The exceptions, of course, were Greece and Italy ..

The sudden explosion of European sovereign debt is the direct and indisputable result of all our political parties deciding they would safeguard their mates’ and their own personal wealth (it is the top 10% who hold the bulk of their wealth in the financial products which would be destroyed in a bank collapse. NOT the rest of us!) by bailing out the private banks and piling their unpaid debts on to the public purse.