5. Withdrawing Consent
The root of these class factions, Robinson and Harris believe is the cracks that have come to the surface within the Washington Consensus39. Since the Mexican Peso crisis, the Asian flu, the Russia/Brazil debacle, contradictions have emerged within the consensus; the monopoly has fractured into an oligopoly of factions. John McMurtry sees this as an "return of male gangs, seeking to dominate the world" - in a sense, it marks the return to medievalism in the relations between states. 40 Currencies that have traditionally been second-place to the dollar - the German Mark and Japanese Yen - are consolidating themselves with lesser currencies farther below Cohen's pyramid to emerge as competitors in the global arena. The implementation of the Euro and the possibility of an Asian regional currency mark two new potential entrants into the market able to challenge the global monopoly currently held by the US dollar.What, then, is the force that supports the US dollar above any other currency in Cohen's Pyramid? Largely, it is an issue of the Dollar's role as an international reserve currency, its monopoly in oil pricing and, finally, the TCC, operating through the TNSA, maintaining the existence of a debt system denominated in US funds. The TCC maintains its hegemony largely due to the willing consent of lesser nations to accept loans denominated in US funds. Any discussion of third world debt must not begin by addressing the conditionalities on loans, the repayment schedules or debt restructuring; instead, it must begin by asking from whence these funds came, who gets to create them and why nations are structurally forced to use them.
Adam Smith, as based upon a repressed archetype as he may have been, also made an important note - even in his day, no national government had ever repaid its debt. This is because loans are issued from money that does not exist, and require the repayment of money not yet created. Money is debt, and repayment of debt automatically shrinks the supply of money, which is the means of repaying that debt. Largely, such questions are glossed over with simplistic whitewash explanations which explain the issue of global debt in terms of 'debt we owe to each other". Incurring debt also serves to increase the social overhead that a nation must service from its productive surplus; when a point is reached where the nominal value of debt assets exceeds the real economic surplus value, a collapse ensues.41 This is because debts are not subject to natural, physical laws, but increase mathematically, year by year, at so much per annum independent of what happens in the productive economy.42 Seen in this light, any attempts by Structuralist and Regulationalist factions to keep the current debt based system in place seems to be more assurance that their debts will be repaid, and their economic and political hegemony consolidated over lesser classes and nations.
Be Sure to Continue to Page 10 of "E Pluribus Unum: Dollar Hegemony and Money Creation in IPE".