Henwood on globalization

Louis Proyect lnp3 at panix.com
Fri Nov 14 10:07:31 MST 2003

In the 2519 word article by Doug Henwood titled "Beyond Globophobia"
(http://www.thenation.com/doc.mhtml?i=20031201&c=1&s=henwood) the word
"imperialism" does not appear once.

Although the article is adapted from his new book "After the New
Economy", there is nothing particularly new in his analysis. Henwood has
been a critic of what he calls "globaloney" for more than a decade. On
his website you can find a 1996 article titled "Antiglobalization"
(http://www.leftbusinessobserver.com/Globalization.html) that makes
essentially the same points that he makes in his new book, but with
lip-service to Marxism. In the mid-1990s Henwood was widely perceived as
a Monthly Review Marxist and it was not too much of a stretch to see him
as the next Paul Sweezy or Harry Magdoff.

But events transpired in 1996 to move him in the opposite direction.
Alarmed by angry outbursts by graduate students in the audience hostile
to postmodernism, the organizers of the '96 Rethinking Marxism
conference persuaded Henwood to advise them on plenary speakers for
their next conference. As an outside consultant who reflected classical
Marxist thinking, Henwood was supposedly in a position to balance their
own postmodernist leanings. By the end of 1997, however, Henwood became
convinced by Rethinking Marxism organizers that they were more correct
than his allies at MR. He would soon drop all pretensions to classical

This transition has been marked by howling inconsistencies, however.
While Henwood has been enamored of the post-Marxism of the Amherst left,
he does not share their enthusiasm for Vandana Shiva who was a plenary
speaker in 1996. Nor does Hardt-Negri's globalization-like belief in the
obsolescence of the nation-state dampen his enthusiasm for their
autonomist beliefs.

It would be useful to start off with an appraisal of "globalization"
theory such as it is. I believe that it is essentially a form of
neo-populism that targets "corporations" rather than the capitalist
system in general and imperialism in particular. Like the populists of
the early 20th century, it is focused almost exclusively on the surface
manifestations of the system rather than the underlying structure. In
his 1996 article, Henwood quite rightly singled out David Korten, author
of "When Corporations Rule the World". Korten believes that in the past
"rich and poor alike...shared a sense of national and community
interest." He also believes that "the problem is not business or the
market per se but a badly corrupted global economic system that is
gyrating far beyond human control. The dynamics of this system have
become so powerful and perverse that it is becoming increasingly
difficult for corporate managers to manage in the public interest, no
matter how strong their moral values and commitment."

For those who have studied American history, it is obvious that Korten
has much in common with the small farmers of Tom Watson's age who
rebelled against railroads, oil companies, banks and other exploiters
but who failed to understand the systemic nature of the exploitation. It
should also be obvious that the global populism expressed by people like
Korten can make concessions to reactionary values as was the case in an
earlier era. For example, some of the trade unions that participate in
anti-globalization protests blame foreign workers for their plight, just
as the populists of the last century blamed African-Americans.

The antidote to all this mystification is Marxism. Unfortunately, in his
haste to distance himself from classical Marxism, Henwood has lost the
ability to put forward a powerful alternative drawn from its arsenal. In
the final analysis, Marxism is the only theory that can make sense of
imperialism, whose latest phase has been misidentified by people such as
Korten and others as a fundamentally workable system that has been
hijacked by greedy individuals.

Turning now to Henwood's article, we learn first of all that worldwide
trade and investment are nothing new. Henwood writes:

"International flows of investment capital were particularly robust in
the late nineteenth and early twentieth centuries, against a backdrop of
free trade and exchange rates fixed under the gold standard. Indeed,
flows to developing countries were larger in relation to the world
economy during this first 'golden age' of financial globalization than
they are today. Here in Australia, capital flows financed half of all
domestic investment in the late 1880s."

This observation is obviously meant to reinforce the argument that
economic penetration by one country into another might not be such a bad
thing. It is implicit in Henwood's formulation that Australia's
emergence as a prosperous nation in the 20th century was somehow
attached to all those "capital flows". He continues:

"The relation is far from perfect, but if anything, more globalized
countries are less unequal than less globalized ones. Western European
social democracies are more globalized than the United States but less
unequal--as is Canada, to a lesser degree. South Korea is much more
globalized than Brazil but less unequal; so is Mexico. The point is not
that promoting globalization would promote equality, but that the
foregrounding of globalization as the cause of inequality isn't a simple
case to make. Income distribution depends more on domestic institutions
like unions and welfare states than on internationalization."

You will note that despite his disdain for "globalization" discourse,
Henwood is all too eager to utilize it in his analysis above. To start
off, what in the world is a "globalized" country? This is a singularly
unhelpful unit of analysis. Henwood states, "South Korea is much more
globalized than Brazil but less unequal; so is Mexico." By shifting the
emphasis to "domestic institutions" such as "unions and welfare states",
a clumsy formulation that must have eluded his editor, Henwood seems to
be saying that economic nationalism is a diversion. In other words, as
long as you spread the wealth around, it is not such a bad thing to be
the recipient of "capital flows". I am reminded of what piggish TV
newscaster Tex Antoine said in 1970: "When rape is inevitable, relax and
enjoy it".

Missing from this menu is a free South Korea, Brazil or Mexico that can
enjoy development in other than an ameliorative framework of trade
unions and the welfare state. Cuba, which has neither a welfare state
nor an economy permeated by "capital flows", has much better social
indicators than most 3rd world countries. Of course, to hold Cuba up as
some kind of positive example would raise eyebrows at the University of
Massachusetts and Duke.

Although Henwood does not openly challenge the Marxist theory of
imperialism, he does seem to target one of its central tenets, namely
super-exploitation. He writes:

"If you look at the distribution of investment by US multinationals
abroad, several things stand out. First, such investments are
overwhelmingly located in rich countries. Over half is accounted for by
Western Europe, Canada adds another 10 percent and the richer countries
of Asia, 8 percent. So more than two-thirds of the total stock of US
foreign direct investment is in countries with incomes roughly
comparable to ours. Throw in the four classic Asian Tigers, and you've
got more than three-quarters of the total. The poorer countries of
Europe are home to less than 1 percent of US foreign investment, and
China, even less. Mexico accounts for just 3 percent of the total stock,
not much of an increase from 1980. That's not to say that Mexico isn't
important in certain industries (like autos and electronics), or that it
isn't an important club that employers use to scare workers--but the
relocation of production to Mexico isn't quite the driving force of
economic evolution that it's sometimes thought to be.

"The poorer countries aren't the profit gushers one might expect either.
Rates of return in Mexico are high, but Switzerland's are higher, and
Latin America's overall figure is below Canada's and Western Europe's."

Now the logical person might read the above and ask themselves whether
these "poorer" countries might press for more foreign investment so that
they can move on up in the world. Indeed, Henwood made the case for this
a while back in an article on the war on terrorism:

"Afghanistan is an extreme example of this - it's almost completely
outside the global circuits of capital. It seems crude and rude to put
it this baldly, but the country would probably have been better off with
a few maquiladoras than with what it has now, which is little more than
rubble. That, of course, wasn't Afghanistan's choice; no country can
choose its role in the global economic hierarchy the way we choose our
dinner. But it is further proof of the truth of economist Joan
Robinson's old observation that under capitalism, the only thing worse
than being exploited is not being exploited at all."

This formulation about the need to be exploited reminds once again of
Tex Antoine. It is entirely possible to operate outside this framework
altogether. Somehow, Henwood seems to have forgotten about other views
associated with economist Joan Robinson. For her, North Korea's growth
rate in the 1960s demonstrated that, "All economic miracles of the
postwar world are put in the shade by these achievements." Of course, as
evil as Cuba is, North Korea is off the map entirely. In the parlor
socialism world, this country functions much as Satan functioned in
Salem, Massachusetts in 1692.

Henwood chastises anti-globalization activists for retaining some kind
of nostalgia for the nation-state, as do his co-thinkers Hardt and Negri:

"Among some antiglobo activists, there's a strange nostalgia for the
nation-state, as if it's one of the innocent structures that
globalization is undermining. At least two aspects of the nostalgia for
the nation are worth picking apart. First, in the narrow economic sense,
fond memories of the pre-1980 protectionist regimes are often evoked.
Like many nostalgias, the historical record doesn't justify the
sentiment. Even the most protected developmental state is shaped by
external forces; the height of the tariff walls and the vigor of the
state intervention themselves are testimony to that. But they seem to
flourish in particular historical enclaves, like the Latin American
import-substitution model from the 1930s through the debt crisis of the
early 1980s, and run into trouble when their moment passes."

Once again his argument suffers as a consequence of neglecting Marxism.
Of real interest in understanding the pre-1980 period is not the extent
of tariffs, but the degree to which a government is driven by an overall
*nationalist* agenda. Henwood refers to their "moment passing" as if it
were a sun-shower. Those who have studied the history of Argentina, for
example, understand that we are not dealing with a change in the weather
but a systematic imperialist campaign to punish and ultimately overturn
*nationalist* governments. Since Hardt and Negri view such experiments
as "poisoned pills", it is no surprise that Henwood finds little to
inspire him as well. Of course, a new chapter is opening up in Chavez's
Venezuela that might not only summon up nostalgia for the nation-state
but a hope for a better future as well.


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