http://mrzine.monthlyreview.org/2015/images/eneko_euro.jpg The use of the fiscal instrument therefore is prevented in neo-liberal capitalism, marked by the hegemony of international finance capital. Monetary policy, within which interest rate policy has the pride of place, becomes the sole instrument for promoting growth. . . . We thus have a competitive easing of monetary policy everywhere which actually camouflages a competitive drive not to be upstaged on the exchange rate front. It is thus the modern version of the 1930s spectre of competitive devaluations. In the process however an enormous amount of liquidity gets built up in the world economy, which has the potential to destabilise it and precipitate a worsening of the situation for all, reminiscent of the 1930s. . . . Competitive easing of monetary policy in short is located within a capitalism that is structurally crippled; and this is so for at least three reasons: one, the scope for overcoming crises in the metropolis by inflicting "de-industrialisation" on the colonies (which amounted to "stealing" employment from the third world) no longer exists, for, third world markets are already penetrated, and in any case too meager in today's world to provide a solution. Two, the Keynesian prescription of using the fiscal instrument, which was never acceptable to finance capital, is particularly ruled out in contemporary capitalism where finance capital is internationalised and therefore has the upper hand. Three, the internationalisation of capital has made the vector of real wages everywhere in the world subject to the baneful effect of the massive third world labour reserves, so that this vector does not increase even as labour productivity increases all over the world, causing an ex ante tendency towards global over-production. In the face of this structural malaise the only offsetting factor that capitalism has is the emergence of occasional "bubbles". The easing of monetary policy is a means of stimulating such a "bubble"; but it cannot force a "bubble" to arise, which is why, despite all this easing, world capitalism remains stuck in a crisis even eight years after it first broke, with little hopes of any recovery in the foreseeable future. "Beggar-my-neighbour" policies arising in the context of this crisis can only make it worse, as would a rise in the interest rate in the US.

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