> A good article called 'In
> Love With Disaster', which accuses capitalism of producing poverty alongside
> wealth, alienation for all, periodic destructions of productive capital,
I didn't get the sense that this was what the article was about ...
> and, of late, some lefties who content themselves with predicting imminent
> systemic self-destruction without lending themselves the credibility of
> first producing detailed and coherent explanations for our apparently
> expansionary times hitherto, or explaining why hard times should indeed turn
> society left when the evidence since the war has been that such social
> shifts have attended the good times more often than the bad.
Rather, this is the major thrust of his article.
> Now this might well be an outrageous load of bollocks, Jerry
Not at all. Indeed, I think it is a valid criticism of many on the Left
who seem to think that every decline in GDP, increase in the trade
deficit, the rate of unemployment, or even daily declines in stock prices
is an indication of impending doom. Not only is such a perspective wrong
on the face of it, but it is rather a odd perspective for Marxists to hope
for and rejoice over the possibility of another depression -- a depression
in which the lives of millions of working people would be grievously
harmed. It, indeed, reminds me of the pessimism of Raptis (Pablo) who
believed that socialism would arise out of the ashes of thermonuclear
> - all the more
> likely for the fact that I find it utterly compelling - but it's all we have
> to go with while we await your own analysis and guidance. Time to step
> forth, Augustus-like to your Philippi, Jerry! What do YOU reckon?
So, it is "all" we have to go on, is it? C'mon, Rob: even Doug might
appreciate a more critical stance towards his writing.
My perspective, in a nutshell, is that while there is a lot of validity to
what he writes, Doug bends the stick too much in the opposite direction.
Thus, he replaces the "optimism" of those who anticipate an immanent
depression, with the pessimism that the capitalist state has shown that it
can overcome crises and maintain social-economic stability. The
"ultra-leftism" of the former and the reformism of the later are opposite
sides of the same coin. To overcome this, what is needed is a *theory*
that explains late capitalism rather than a set of empirical/historical
observations *alone*. And, Doug's article is woefully lacking in giving
any theoretical explanation for this subject.
> Here's the article (as I submitted it - there may have been minor
> editing changes in the published version, but I didn't do a
> word-by-word comparison). Judge for yourself.
Thanks for making the article available: I've read a lot worse.
Of course, I note that you side-stepped the whole issue of _LM_ -- a
magazine that I recall you were rather sharply critical of in the past.
Is my memory failing me or isn't that correct? What happened to change
your perspective on _LM_?
Now that you have taken on the role of being a tragic-comic figure, you
are almost likeable. You would be still more likeable if you weren't an
> - ----
> In love with disaster
> by Doug Henwood
> Back in 1992, I wrote an article in the newsletter I edit
> <http://www.panix.com/~dhenwood/Financial-crisis-averted.html> saying
> that it was pretty likely that the U.S. financial system wasn't going
> to implode. After the roaring eighties peaked around 1989, the U.S.
> economy fell into stagnation, and bank failures and bankruptcies
> reached frightening proportions. Since by most ordinary measures, the
> financial structure was as bad as or worse than 1929's, it wasn't at
> all alarmist to fear the worst.
> But George Bush's government came up with hundreds of billions (no
> one really knows for sure how many) to save the wrecked savings &
> loan industry, and Alan Greenspan's Federal Reserve pushed real
> interest rates down to 0% and kept them there for years. State action
> saved capital from itself, and I thought it was time to say that
> there would be no second Depression. Saying so evoked a fair amount
> of mail and phone calls, ranging from those expressing concern about
> my sanity to those expressing outright hostility.
> Last fall, I said pretty much the same thing about the Asian
> financial crisis - that, thanks to state intervention (mainly an
> indulgent U.S. Fed and the ministrations of the IMF), the worst of
> the 1997-98 melodrama was probably behind us. I made it clear that I
> didn't think the worst was over for the workers and peasants of Asia
> - - just that the systemic meltdown of the global financial system was
> looking pretty unlikely. This too evoked reactions similar to 1992's
> all clear.
> I recount this not to brag about my prescience; I've made lots of bad
> calls in my life too, though they're a lot less pleasant to think
> about. One of those bad calls was to take the 1987 stock market crash
> all too seriously - I thought it was the overture to a rerun of the
> 1930s, when it turned out to be the financial equivalent of a summer
> thunderstorm. That made me think a lot about catastrophism.
> The left, Marxist and non-Marxist, has long shown an unhealthy
> affinity for disaster. Bank runs, currency crises, oil spills get
> radicals' blood running. But this hasn't proved a very fruitful
> passion. Of course it goes without saying that a system so prone to
> crisis - where it's become routine that a major country go under
> every couple of years - has, by definition, serious systemic
> problems. But despite the turmoil and misery that come with these
> crises, capitalism has shown a remarkable capacity to heal itself,
> and even to turn crisis to its advantage. The bourgeois state has
> become remarkably skilled at socializing losses, and shifting the
> burdens of adjustment onto the poor and the weak. The terminal
> crisis, the death agony of capitalism, just refuses to arrive.
> Let's think back for a moment on some of the great financial
> disasters of the last 20 years.
> * There was the Third World debt crisis, that even respectable people
> thought might be a system breaker. Instead, the creditor countries,
> led by the U.S. Treasury and the IMF, used the crisis to force debtor
> countries to dismantle protectionist development machinery, open up
> to foreign trade and capital flows, and privatize state enterprises.
> The human consequences have been severe - massive impoverishment and
> polarization - but the system emerged not merely intact but
> * There was the (now-forgotten) U.S. leveraging mania of the 1980s,
> which I mentioned at the beginning of this article. Not only were
> several hundred billion dollars of public money expended with almost
> no debate - at a time when we were constantly told there was no money
> available for social spending - the Fed's low-interest-rate policy
> set the stage for the great bull market in stocks of the mid- and
> late-1990s. That bull market has not only greatly enriched the 5% of
> shareholders who hold 95% of all stock, it's also contributed to the
> broad prestige of U.S. capitalism. That prestige and the bull market
> probably won't last forever, but it's been quite a lovely run so far.
> * And there were the two great "emerging market" disasters - Mexico
> in 1994-95 and Southeast Asia in 1997-98 - both of which looked like
> potential system-breakers, especially the Asian melodrama. But again,
> the combination of emergency funding and engineered depression in the
> crisis countries kept the system together. Mexico was further
> "liberalized," and the developmentalist state regimes of Southeast
> Asia, particularly Korea, have been placed under siege. It's too
> early to tell whether Asia will undergo a complete neoliberal
> renovation, the way Latin America did during its years of crisis, but
> Western banks and multinationals have been buying up choice
> properties that were long off-limits to foreign investors.
> Now I'd never want to argue that this approach to crisis will work
> for all time. Capitalism has throughout its history has gone through
> quite a few smashups, and the dismantling of a lot of the stabilizing
> mechanisms of the Keynesian era may eventually take a toll on the
> system's capacity to reproduce itself. But it's important both
> theoretically and practically to recognize that despite many claims
> to the contrary coming from both Marxists and Chicago-school
> free-marketeers, state bailout managers have become quite
> accomplished at forestalling the day of reckoning that many persist
> in declaring inevitable.
> So does that mean I've made peace with capitalism? No, far from it.
> It's still a system that produces poverty alongside wealth, and
> alienation even among its winners. Bailouts frequently require that
> productive capacity be destroyed and real incomes be halved to
> preserve the paper wealth of the creditor class. Many catastrophists
> share this analysis, but I think they let their desires get the
> better of them: because they hate the system, they embrace disaster
> scenarios. They feel politically powerless to transform the system
> they hate, so they posit its inevitable self-destruction.
> That faith in inevitable self-destruction has deeply unfortunate
> political consequences. You end up looking profoundly silly for
> saying that the sky is falling when the firmament remains
> well-attached. In the 19th century U.S., about half our economic time
> was spent in recession or depression - but since World War II, only
> about a quarter of our time has been. If you don't have a critique
> adequate to periods of expansion, chances are three to one you're
> going to sound pretty off-key. And the belief that hard times will do
> good revolutionary work lacks empirical support. There was a lot more
> troublemaking going on during the Golden Age of the 1950s and 1960s
> than there's been ever since, and the depression endured by much of
> the so-called Third World since the early 1980s has sparked little
> discernable political resistance. If you find capitalism appalling,
> and you can't tune your critique to those moments when it's working
> reasonably well, you might as well give up.
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> End of marxism-thaxis-digest V2 #1003
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