Is Bill Gross a ghost writer for the World Socialist Web Site?
If we accept that money / capital within capitalism is power – nothing more and nothing less, and I think we must, then we surely understand why it is that billionaire tycoon Bill Gross is so horrified by the “serial QE offenders” who, by printing money, are threatening the very basis of capitalist power itself. Gross has been waging a war for quite some time now against this exercise of democratic monetary power and he’s obviously quite frustrated since there’s really nothing he or the “markets” can do if the governments controlling each of the major global currencies continue their offensive behavior.
For the abused populations of the world, though, all living under the heel of an austerity that can’t be reversed without the democratic control of money / power and the public creation of money this would entail, the issue isn’t at all about monetary creation per se. It’s that the money being created is used almost totally to inflate financial assets rather than promote living standards.
I find it, then, very hard to understand why a well respected institution of the radical left, the World Socialist Web Site (WSWS.org), would appear to join forces with Gross in condemning, not only the specifics of how money is spent, but the very idea of monetary creation itself.
In fact, the Fed’s money-printing spree, which pushes down the dollar on world currency markets, giving US exports an advantage over its trade rivals, has triggered parallel policies in one country after another, threatening to undermine any stable world currency system and unleash competitive currency devaluations and trade war. Earlier this month, the meeting of the G20 leading economies in Russia was dominated by fears of currency war, following the decision of the new Japanese prime minister, Shinzo Abe, to print yen so as to devalue the country’s currency and make its exports cheaper on world markets.
Is Bill Gross a ghost writer for the WSWS? It seems there are a fair number of Marxists out there who retain a completely inappropriate view of money that’s rooted in quantity theories and even the gold standard. The WSWS is certainly correct in criticizing the US and Japan for their aggressive international behavior and the way in which public funds are spent. But it’s completely inappropriate for an institution of the radical left to criticize “money-printing sprees” in themselves since they are perhaps the very largest weapon we have against consolidated capitalist power. It would be just as logical for the WSWS to criticize the very concept of taxation because they objected to how some of the funds were used.
Much of the analysis of the WSWS is of great value but when it comes to their understanding of monetary issues, one of the bedrocks of capitalism, they need to do a bit of homework.
Update: I’d add that the policy of maintaining very low interest rates, in itself, is of great merit in that it reduces the unearned sums that are regularly paid to such barons as Gross. Does it increase asset prices? Yes for the short term as values adjust to the low rates, that’s the nature of capitalization. But after the one-time adjustment, what do we have? A financial universe in which the riskless rate of return has largely been eliminated – a very positive development. Is the WSWS in favor of riskless returns to capital?