[Peace-discuss] Re: Euro vs. Dollar

[Tom Mackaman]

This is an important discussion, as it gets to the heart of the problem of war and peace.  
 
The declining value of the dollar vs. the euro is doubtlessly a manifestation of accelerating economic decline.  The US seeks to offset this relative decline by seizing geostrategic advantage, in the form of militarily appropriating markets (esp oil) and establishing unquestioned military hegemony over all rivals.  Through this cleary contradictory and likely suicidal venture, the US elite hope to be able to dictate terms to rivals in Europe and Asia.  The venture is contradictory because, to the extent that the US accelerates along the path of militarism and war, it intensifes those same economic problems-- indebtedness, lopsided balance of payments, and social inequality in the US--that have propelled it toward war in the first place.  Furthermore, to properly manage its pursuits, the US would be required to invite the Europeans on board, as we have already seen attempted halfheartedly in Iraq.   But this would also mean giving a significant say-so to the Europeans in the division
 of the spoils of war, which would defeat the purpose of the entire project.  US capitalism has no way forward from this blind alley; only more war and repression.    
 
The entire problem points to the essential contradiction of capitalism:  the opposition of the social and international character of commodity production, on the one hand, to the political forms arising from parasitic capitalist accumulation, on the other-- above all else, the nation-state.  In periods of economic decline, there is no way forward for capitalism but to attempt a hostile reorganization of the world's resources for the designed benefit of this or that rival group of capitalists.  In the process, humanity is dragged into war, with world war a distinct possibility.         
 
Taken in the longview, the US is nearing the catastrophic end--not the beginning-- of a protracted economic decline.  At the end of WWII, the US accounted for over half of global economic output.  It reconstructed its defeated rivals in its own image so as to avert revolution in Europe and East Asia, and so as to find markets for the enormous production of its factories and fields.  Dollars far more than arms determined US mastery.  In accordance with this effort, the US set up a vast web of international organizations and trade agreements.  Is it not significant that the US, once the bedrock of world capitalism, is now the state that is trampling upon the UN and amping up trade tensions to levels not seen since the 1930s?    
 
In regard to the specific question of the euro vs. dollar, the rise of the former is a dangerous and unprecedented problem for the US.  The US has long been able to "slide by" with balance of payment and debt structure that would, for any other country, have necessitated an economic overhaul, as occurred with disastrous consequences in Argentina recently.  The reason for this has been that the dollar has also functioned as the world reserve currency, which central bankers as well as private investors have long been gladly willing to accumulate in their vaults.  The danger now arises that the dollar will face increasing pressure as the choice international currency, which might bring US capitalism towards its day of reckoning.  This factor contributed to the decision to invade Iraq.  Had Iraq reentered the world economy, which was likely to happen, it undoubtedly would have done so in the economic orbit of western Europe.  It would have financed its considerable international oil
 trade in euros, thus putting new pressure on the dollar, US capitalism, and setting an unacceptable precendent.      
 
But we must draw the implications from such an analysis.  For the peace movement to be successful, it must direct itself toward the root causes of war and police-state repression:  capitalist expropriation and its political byproducts, including the nation-state.   
 
 
Best regards,
 
Tom
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