[Marxism] Doug Henwood, Anwar Shaikh, and financial crisis

Matthew Russo russo.matthew9 at gmail.com
Sat Dec 6 13:29:13 MST 2008

Also posted as a comment to
but with some corrections and additions.

I've commented on this before on Marxmail. Henwood in my view is not a
Marxist, but a left Keynesian. His claim that "If the credit markets could
not function properly, the economy would grind to a halt and cause immense
suffering to those who could least afford it" is clearly false, since it is
being shown to us every day since August 2007 that the intermediation of the
"credit markets" can be replaced by the direct financial intermediation of
the state. Unfortunately, actual state intervention is being perverted into
intermediation for the purpose of preserving the position of the financial
sector in the economy rather than for the benefit of the economy as a whole,
not even for the benefit of capitalist sectors excluded from the charmed
circle of military-financial parasitism, much less for the rest of the

But since state intervention IS occurring on a massive scale in full public
view (if except for the details of the diversion of enormous sums from the
U.S. Treasury), why not call for direct state intermediation NOW (Doug!) and
cut out the middleman who, after all, precipitated the crisis. These "too
big to fail" operations should, of course, be taken over, shutdown, broken
up, their officers imprisoned and the remainder restricted to public utility

But no, Henwood can't even bring himself to support this minimal reform
because there is no "realistic" chance of it occurring. But it is precisely
this diversionary hijacking of the Treasury that will now be an immense
barrier to any US economic restructuring that would constitute a "way out"
of the crisis, even in narrow capitalist terms. Henwood in his call to
support the AIG bailout therefore is calling for a worsening of mass misery,
not its alleviation. Henwood refuses to see that the immediate PROBLEM is
that the advancement of "future wages" in the form of credit in lieu of
actual wages earned (and actually stagnant and declining) - the "Payday Loan
Economy" - has exhausted itself at the point where significant sectors of
workers no longer earn actual wages to minimally pay the interest on this
credit, resulting in a profit crisis for finance and a massive devaluation
of financial capital.  Reinflation of the balloon will not address this
fundamental contradiction.

Dougs' call is now directly opposed to what should now be called for: the
reversal of the Treasury hijacking. Realize a stanza of the International: "
That the thief return his plunder". Without that there will be no class
struggle over where these funds should be going: in essence to bail out the
capitalists or the workers. They will all be gone down the financial
rathole. Instead this is the line at present in the class struggle and once
again Henwood is to be found on the other side of the front line as it
presently stands.

Comment by Matt <http://marxredux.blogspot.com/> — December 6, 2008 @ 8:12

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