Division and turmoil growing between the global capitalist class. Without nuclear weapons, there'd have been a world war already.

Left: what capitalism means for everyone, but it won't last forever. If we don't rid ourselves of it it will destroy the environment and life as we know it.

I haven’t read Christopher Hill’s, “The World Turned Upside” down although I am sure it’s as good as those books of his I have read. But this morning’s Financial Times has an article about the upcoming meeting of the G20 in Seoul that reminded me of the term.

At the meeting of the G20 finance ministers last month, the U.S. made it clear that it was after setting a cap on countries’ current account surpluses and deficits at 4% of GDP.  The current account balance is a major measure of the nature of a country's trade with the rest of the world, of the relationship between what a country imports and what it exports.

The US is a deficit country with regards to the rest of the world. Its deficit with China is a contentious and much analyzed issue and anyone that reads the papers would be aware of continuing efforts by the US to get China to increase the value of its currency and stimulate domestic demand. The Chinese have a very high national savings rate also, reaching 52 percent of GDP in 2006.

China’s economy is export driven and the US wants to change the ratio of exports to imports between the two countries. A stronger Chinese currency with respect to the US dollar will increase prices of Chinese imports in to the US and make US exports more competitive, so the story goes.

The Chinese have resisted but have now “curtly dismissed” the idea of caps, and this is what I mean by the world turning upside down. China's deputy foreign minister has accused the US of wanting to return, “to the days of planned economies.” Caps would inevitably mean that countries would be forced to take measures that they are not taking now, like re-valuing their currency for example. The Tea Party folks must feel relieved having the Chinese in their camp against creeping US socialism.

The US Federal Reserve, faced with a continuing economic malaise, has handed out more cheap cash pumping $600 billion in to the U.S. financial markets. The Federal Reserve is basically lending the US government/taxpayer, money in an effort to drive down interest rates and jump-start the economy.

The action by the US violates all sorts of little deals they have with each other that don’t amount to a hill of beans when it comes to national interests; they all do it. By further stimulation, the Germans, who are also one of the dominant exporting nations, complain that the US’s move runs, “counter to the pledge made by G20 finance ministers to refrain from uncoordinated responses” (to the crisis). The US hasn’t had much luck pushing China around and unable to get them to re-value their currency, is resorting to these measures that will take a different route.

Flooding the world with more dollars to drive down interest rates might cause investors to flee to other currencies global competitors argue. For a country like China that holds billions in US dollars, any decline in the value of that currency means huge losses. And we are again seeing how capitalism, despite subjective desires of participants, heads toward crisis. This can create a bubble in the bond market just like there was a bubble in the mortgage/home market Fannie Mae and Freddie Mac are both government agencies that sell bonds. From my understanding, Treasury notes and treasury bonds are basically the same thing the difference being the times to maturity.

So this is increasing government debt which is another issue in itself, mortgaging the future on the one hand and risking an economic disaster through defaults etc. But the fascinating thing for a layperson like myself reading the major capitalist journals is understanding the unstable and inherently destructive roller coaster that is the capitalist economy. And who would have dreamed 25 years ago that the Chinese bureaucracy would be attacking the US for introducing “command economy” policies.

This scenario and the turmoil within the G20 is a constant reminder of the slow but definite dimming of the once bright US star. The mentality of the US bourgeois since their unification of the country after the civil war has been that they can go where they want on behalf of their interests and simply kick some ass. This is not longer the case. China is not Grenada and the existence of nuclear weapons have altered the landscape---the US never invaded North Korea.

But we can see if we follow the details of the interactions between the representatives of the various nation states all the economic and political wars that traditionally precede military ones as they scramble for profits and control of the world’s resources.

It is important for workers to understand the economy in which we live and the place to start is Marx’s great work, Capital. It is not always easy to read but some important sections are easier than others. It also is better if we discuss what we read. I have never really been able to get very far with academic types who tend to have a difficult time explaining concepts to working people which is a bummer for someone who believes that only working people can change society, but a lot of them don’t seem to care about that.

The other thing is that it is not necessary for every one of us to understand every aspect of Capital, of how the system works; and things change over time. What is crucial is that we understand the general processes. How capital exploits Labor. Where profit comes from. How is the value of a commodity determined, what is the difference between the price and value of a commodity that we buy and how are prices determined? If we raise our wages does it automatically mean that the bosses will simply raise prices like they and all their academic mouthpieces claim? These are good starting places.

Other than capital I can think of a couple books that I found not alienating as a worker.
Ernest Mandel’s “An Introduction to Marxist Economic Theory
David Harvey: The Enigma of Capital (he has a decent video on his website)
The Great Recession by Michael Roberts
Engels wrote some good stuff too including in Anti-Duhring

There are many more that are readable, but grasping the basics of how capitalism works is a liberating thing.