

Sasha Lilley: Protests against Wall Street have inspired many people to move their money from big banks to smaller banks and credit unions and encourage others to do the same.  Why might you be skeptical of this effort?

Doug Henwood: There are several reasons.  First of all, I think a lot of the big banks wouldn’t be too sad to see some of these customers go.  One of the reasons that the Bank of America and other big banks were imposing the five-dollar fee for the use of debit cards was that they’re trying to drive a lot of small customers away.  They lose money on them and are happy to see them go.  So I’m not sure this is going to cause a lot of consternation in the executive suites.

SL: How do they lose money on them?

DH: Because it just takes them a few hundred bucks a year to process the accounts.  If the balances and transactions are small, then they’re just not worth the bother.

This will also present a problem for credit unions: if they get an influx of smaller accounts, they’re also going to be expensive and cause the credit unions problems to deal with.  But that’s just one issue.  I think there are larger ones as well.  The credit unions have for the most part more money than they know what to do with right now.  They’ve had a growth in assets, not merely just over the last few days — actually some of the numbers I have sound impressive, though on closer scrutiny they’re not that gigantic — but they’ve had an influx in assets over the last several years.  And more than half of that influx of assets has gone into things like Treasury bonds and Ginnie Maes.  They don’t have enough places to plough their money into locally or for the benefit of their members, so they buy securities.  And you don’t get any bigger or more irresponsible than the US government, but that’s where a lot of this money is going to go — into US government securities.  So if you’re going to put your money into a credit union, you should think about what the credit union is going to do with that money.

This is even more true for a lot of the smaller banks.  When Arianna Huffington started her Move Your Money campaign a year or so ago, I looked at some of the banks that she recommended for my own personal zip code 11238.  One was the Carver National Bank, which is black-owned, but has been financing the gentrification of neighborhoods in Brooklyn and Queens, and which has been partnering with Merrill Lynch to introduce wealth management services.  Another they recommended, the Apple Bank, had about three quarters of its money in US Treasury securities.  So you have to see where the money is going.  Small size is not automatically synonymous with virtue.

But also I think we’re evading some larger political questions.  We need a different financial system, for sure.  We need different relationships of ownership — relationships of property.  And the proper place to do that is at the political level, not at the level of individual portfolio allocations.  Now if people want to move their money into a smaller bank or credit union because the fees are lower or they like the service, that’s one thing.  But you’re not really doing anything all that virtuous by moving your money that way, I don’t think.  A consumer preference isn’t a political act.

SL: Does focusing on banking and finance as a realm unto itself give us a false sense of the role that finance plays within the larger capitalist system?

DH: Yes, there is a longstanding tradition, among particularly the populist side of the American left, of looking only at finance as bad, as if it was uniquely evil, and treating production as virtuous.  I can understand why people might do that in some sense.  Corporations do produce goods and services that make it easier for us to live our lives; there’s no question about that.  But they also are vast engines of exploitation and environmental destruction.  The corporation makes its money by paying workers less than the value of what they produce.  Although production may look virtuous, there is always going to be that relationship of exploitation, despite the alleged virtue of production.

I think finance kind of isolates, sort of purifies, the purely parasitic relationship of capitalist production.  It’s all about money — money expanding into more money.  But it hides the fact that the productive sector is all about that as well.  The productive sector only engages in production because they make money on it.  If they can’t make money on it, they’re not going to produce.  The whole system is about the expansion of money, not about the production of goods and services, or satisfying of consumer demand, or any of those sorts of things you hear about in economics textbooks or the recitations of publicists.

SL: Do you see the Occupy Wall Street movement and the movements it has spawned as choosing the right target here?  Clearly, you’re a critic of finance within the larger rubric of the system itself.  Do you see this movement as continuing in the tradition of leftwing populism that you just mentioned?  Or do you see it as potentially moving beyond that?

DH: I see it as a lot of things.  I’ve been critical of certain aspects of Occupy, but I want to make it clear I think it’s mostly the most wonderful thing to happen in a long time, has tremendous potential and possibilities.  It’s changed the political conversation in this country and even a good bit of the world remarkably.  I don’t want to make it sound that I’m kicking this thing around.  I’m filled with gratitude and admiration for the people who started it and all the people who are continuing it.

And I think it’s also in a phase where people are learning a lot.  People are talking, reading, they’re thinking.  Aside from being a movement, it’s a great effort of self-enlightenment, self-education, which is also wonderful.  The populists of the late 19th century did a lot of that.  You had farmers studying monetary theory, a hundred some odd years ago.  We’re back to some version of that.  People are really getting involved in the nitty-gritty of economics and finance in a way they haven’t in a very long time.

Finance is an appropriate target for several reasons.  Obviously the causes of the recent economic meltdown; Wall Street has a lot to do with that.  But what I would like people to focus on is not just that finance is about the movement of funds around the economic system — the flow of funds from savers to debtors or to borrowers or that sort of thing — but it’s also a system of ownership.  The financial markets are deeply political institutions in a lot of ways.  An awful lot of production is financed not by these markets; it’s not financed by the stock markets in particular.  Most companies finance themselves internally through their own profits, through their own cash flow.  When you look at the numbers of how much money comes from outside, for new firms who turn to venture capitalists, the numbers are quite tiny compared to the size of the gigantic trading apparatus that has grown up around them.

But what the markets are all about is the creation of instruments of ownership and control.  The shares in a corporation for example are certificates of ownership.  The shareholders are the legal owners of the corporation; they are the beneficiaries ultimately of its profitable production.  They’re completely useless people.  They contribute very little in the way of resources or wisdom, but they take lots of money out of the corporations for their own use, to do some more speculation or to finance Hamptons houses or a third Jaguar, or whatever they spend their money on.

I think it’s important to look at the financial markets not in the kind of way that economics textbooks do, as balancing savings and investment, but as really political instruments of control.

You can say the similar things about government bond markets.  We’re seeing, in particularly the European crisis now, the important role that government bond markets have in putting limits on government policy, of being instruments of austerity plans, of running entire national governments for the benefit of a small coterie of bondholders.  These are deeply political institutions.  This is another way in which just moving your money out of a large bank into a smaller credit union doesn’t address those larger issues.  Money, as Antonio Negri said in one of his more lucid moments, has one face: that of the boss.  We can’t get away from that too easily.

SL: I wonder if we can return to the populists of the late 19th century, whose ideas perennially bubble up.  They singled out finance as the source of much of the wrongdoing in society.  Who were the populists?

DH: In the United States, they were mostly rural, mostly farmers.  There were workers’ movements in the cities which were not really populist, a lot of them were traditional labor radicals or socialists, people we’d more or less recognize today.  But the rural populists hated the big cities, hated the bankers in the big cities.  They were also suffering from the economic environment of the time.  The late 19th century was a time of repeated economic panic and crisis.  About a half of the last few decades of the 19th century were spent in depression.  The price levels were relentlessly declining.  It was a period of the gold standard and of monetary austerity and relentless decline of prices, which was hell on the farmers.  The price of grain was in a long-term decline.  But part of the problem was that they were enormously productive, there was such a surplus of grain.  They were trying desperately to prop up prices and were looking for inflation to do that work for them.  This did not make them enormously popular with workers in the cities.  Workers in the cities were not too excited with the idea of seeing higher food prices when their wages were not so great either.  So there was a real problem of solidarity between the rural populists and the urban working class.

Some of the features of populism that have lingered over time throughout American history have been a real love of easy money, that is, easy credit.  In a lot of cases, that’s a really weak substitute for redistribution.  Instead of demanding ownership or demanding higher wages, you just demand easier credit terms.  We see a lot of that throughout American history.  The resentment of bigness alone, of urbanity, of the cities is very common in American populism.  And there’s also a strain in American populism that was anti-poor as well.  There was a producerist bias to a lot of it that saw people who work with their hands as the real producers of society.  The fancy pants in the cities were parasites in that sense, but also the poor could be seen as parasites as well.  So we see that a lot in the rightwing versions of populism: sometimes anti-rich but also sometimes anti-poor.  Obviously, this is not the Occupy Wall Street kind of populism, but it’s always there in American populism, partly because the economic analysis is kind of vague.  It’s against bigness, but it’s in favor of small business very often.  There’s no understanding of exploitation.

I was talking earlier about how productive firms — in the productive sector — make their money by paying workers less than the value that they produce.  That’s going to be true even with a small business — sometimes the working conditions of small businesses are worse than in big businesses: wages tend to be lower, security of employment can often be lower, often the work is more dangerous, the pollution is worse.  There’s really no great virtue in small business.  But you see that in a lot of populist thinking throughout American history.  And you see that even today.  A lot of the anti-corporate rhetoric around Occupy Wall Street partakes of that tradition of just hating bigness without really having analysis of the class structure of the capitalist system of production.

SL: During this economic crisis small business — through the small business lobby — has been pushing for the kinds of cuts and austerity that Occupy Wall Street opposes.

DH: Yes, the small business lobby in the United States has often been very rightwing.  A lot of the classic crazy rightwing stuff going way back has been funded by provincial ball-bearing manufacturers and such.  The John Birch Society was a society of small businessmen and even now a lot of the roots of the Tea Party movement and the populist right of the Republican Party are small business types.  They’re sometimes pretty good with the anti-big guy rhetoric and the anti-Wall Street rhetoric, but they’re really not very fond of the working class either.  So you have to be very careful with this stuff.  And also a romanticism about smallness and localism can be kind of provincial and reactionary, and we have to be honest about that — that small and virtue are not necessarily equivalents.  Where does a preference for the small and the local end and provincialism and xenophobia begin?

SL: Populism, both past and present, is fixated on gold.  What’s that about?

DH: That’s an irony, because the old populists of the 19th century hated the gold standard, for reasons I mentioned earlier.  It imposed a tremendous austerity and a general decline in the price level.  Which is great if you’re a bondholder because it means the value of your bonds is secure.  But if you’re a worker, that kind of austerity can be brutal.  And especially true if you’re a farmer or working in a commodity-producing industry, that can be deeply brutal.

But today’s rightwing populists love gold.  You see that Ron Paul and a lot of those libertarians who intersect with right populists in the Tea Party, but also in the margins of Occupy, want to get the state out of the money business.  I’m somewhat taken aback to see signs around Occupy Wall Street that say abolish the Fed.  A lot people who don’t fully understand what this is all about have picked up on that.  Ron Paul at least has a coherent political philosophy.  He wants the state out of everything.  He doesn’t like the Federal Reserve, but he doesn’t like Medicare or Social Security either.  And that at least is a consistent position, even if it’s not very congenial.  He wants the state out of the money business.  So if you get the Fed out of the money business, if you abolish the Federal Reserve, as he would like to do, he would like to replace it with the gold standard.  Libertarians love the gold standard because it’s a stateless form of money but also because the supply of gold grows at less than 2% a year.  That means that the supply of money could only grow only about 2% a year.

SL: So you couldn’t expand the supply of money in a pinch — in a crisis, for example.

DH: Right.  If you had a crisis, that would be absolutely verboten.  Which is one of the things the Federal Reserve was created to do, to be more flexible in a crisis.  Over the long term, just 2% a year means there’s almost no room for any kind of growth if the price level is going to stay stable.  It imposes an extremely austere standard.  Now, we may want to think about the unsustainability of growth as we experience it now over the long term, for sure, but as long as we’re under a capitalist system, slow growth is hellish and faster growth is a little better for the working class.  If we want to get to a post-growth economy, we need to get to a post-capitalist economy.  But that’s certainly not what the likes of Ron Paul want to do.

SL: What’s behind this idea that the Federal Reserve was the creation of a shadowy international conspiracy of bankers?  And why should we be alarmed by people within Occupy Wall Street and the Occupy movement embracing that notion?

DH: Well, there are several reasons for that.  First of all, just the history of it is at odds.  There’s a very nice book by James Livingston on the history of the emergence of the Federal Reserve and what he makes clear is that it was a project of many decades undertaken by the modern American ruling class: it was inseparable from the creation of the corporate form and complicated financial markets.  But it was not the work of just a small group of people done at a meeting on an island off Georgia, as you see in some of the conspiracy theories, e.g., Eustace Mullins, a guy who wrote several books about the Fed for the neo-Nazi Liberty Lobby, which you often see quoted by left populists as well.  Any time you see Eustace Mullins or the likes of him quoted, you have to be very, very careful.

But the agitation for the creation of the Federal Reserve was in large part a result of the intense instability of the late 19th century economy, which went through crazy boom and bust cycles, and had many, many deep panics and depressions, and the central bank was supposed to be a force for stabilizing that.  I think it’s hard to argue with that.  We may not like the class content of that agenda, but a more stable economy is better for just about everyone, and not just the corporate class.

In the present, the Federal Reserve did some pretty questionable stuff during the financial crisis, handed out a lot of money in very unaccountable ways — and I’m certainly no fan of that.  And I would be a fan of auditing it to see where all the money went and who benefited and why.  But, on the other hand, it is about the only force for stimulus in the world economy today.  Ben Bernanke is about the only economic policy maker of any significance who thinks that the economy needs more stimulus and not austerity.  He has actually been talking about the need for a more expansive fiscal policy, which is rather unusual for someone in his position.  He and some of his colleagues have given speeches in recent months talking about high and chronic unemployment as a social crisis of the first order.  They’re saying things that you’re not hearing anybody in Congress say.  From what I’m told — people who know people who know people who know Bernanke; it’s a couple of levels of remove, but not too many — he is afraid of being too explicit about calling for more stimulus because he’s afraid of being bashed by the yahoos in Congress and the rightwing commentariat.  But he made his academic reputation studying the Great Depression and financial markets in the propagation of the Great Depression and he is doing everything he can to try to prevent a rerun of that.  There are many other things I’d like to see being done.  I’d like to see a much more active jobs program, infrastructure investment, and all those kinds of fiscal things, but you’re not going to get through Congress and the President doesn’t even seem interested in pushing for those things even rhetorically.  So Bernanke is about the only simulative game in town right now.  It’s unfortunate that a lot of people don’t really understand that.

The Federal Reserve is an elite institution.  It’s the institution of a ruling class, there’s no doubt about it.  But taking it away and just throwing us on the mercies of the business cycle or the gold standard would be to throw us into a far more brutal regime than we live under right now.

SL: Bernanke aside, in the United States and Europe the prevailing wisdom seems caught in the 1920s.  Why do you think the very mainstream ideas of John Maynard Keynes — of putting people to work, rather than cutting jobs and keeping inflation down — are not being attempted at a time like this?  Do you think that it’s simply foolishness on the part of elites?  Or do you think that they see it as an opportunity to be exploited?

DH: That’s a really difficult question and I really haven’t figured the answer to that out.  The enabling legislation for the European Central Bank is very different from that under which the Federal Reserve is organized.  The Federal Reserve is under what is called a dual mandate, which is to promote both price stability and high levels of employment.  You see in their communications and speeches and such now they’re taking the employment part of that mandate seriously.  Which is something they didn’t do back during the Volcker days in the early 1980s, when they deliberately created the deep recession in order to break inflation and scare the bejesus out of the working class and kick off the entire and very successful class war from above that we’ve seen for the past thirty years.  The institution is behaving differently now from what it did thirty years ago.

The European Central Bank is under a mandate solely to promote price stability.  That comes in part from the German phobia about inflation.  This is always attributed to the German experience in terms of hyperinflation during the Weimar days.  And I don’t know; that’s what everyone says.  I don’t know if that’s true.  But that’s certainly the way they’re acting.  But also the previous head of the European Central Bank, who just left, Trichet, was a very anti-inflation guy.  His successor Mario Draghi from Italy — one might think an Italian might not be so enthralled to German doctrines of sado-monetarism — seems to be following more or less that same line.  The hard money types in Europe are deeply suspicious of southern Europeans, so an Italian like Draghi has to be more German than the Germans.  The Dutch within the European Central Bank also push that.  So it’s kind of a North-South divide, although the Italian now is siding with the Northern block of anti-inflationists.

I keep trying to figure out if there is some kind of material interest that the Germans have in creating collapse and depression on the Southern periphery of Europe — and I really can’t see one.  For a while the Germans thought they could compensate for the loss of markets in Spain and Italy and Greece by selling to China.  I don’t think they really believe that anymore.  Maybe the Germans want to buy up productive assets in Greece and Italy on the cheap — I don’t know.  It’s not clear what the country of Mercedes-Benz could envy in Greek industry.  The weakness of Greek industry is a major reason why the country is in trouble.  But I don’t really see any kind of material interest.  They seem much more driven by this — I normally find these explanations unsatisfactory, but I can’t find a better one — they seem driven by some kind of moral notion of austerity and enforcement of debt contracts.  Which is pretty funny because the main funders of all the borrowing that Greece and Ireland and Spain did were German and other northern European banks.  Now they’re getting on their high horse moralizing about reckless borrowers, but they were the reckless lenders.  But apparently they want to shift all the cost of adjustment onto Greeks and ultimately Italians.

Now Greece is a small place.  Greece has a tiny economy and not a large population.  Certainly the impact of these austerity programs is hell on the Greek population, but the impact on the outside world is fairly limited.  But Italy and Spain are large economies, and if they go through the kinds of implosions that Greece, Ireland, and Iceland have gone through, then the effects on the outside world will be enormous.  Italy needs to refinance €300 billion in bonds in 2012 — I have no idea where they’re going to get €300 billion.  I suppose the European Central Bank could help out, but so far the European Central Bank has been unwilling to do that sort of thing.  If the Italian bond market fell apart, then the European economy would implode and that could be very damaging to the outside world.

Now, coming back to the United States: you do have to wonder where this thinking comes from.  Keynes was discredited by the inflation of the 1970s.  A lot of people thought that Keynesian economies belong on the scrapheap along with ancient medical practices like bloodletting.  Yet it seems like the right thing, short of a comprehensive social revolution, to approach the present malaise.  But there are very few partisans of that sort of stimulus.  The Obama administration came in talking that way, particularly in the form of the advisors Christina Romer and Larry Summers.  Both those people have left and the Wall St wing of the administration has now taken the upper hand.  The Republicans in Congress, you could say that they have a cynical, partisan desire to make things as miserable as possible for the economy so they’re more likely to win in 2012.  But they also seem to believe a lot of their own propaganda.  They’re looking for this crisis as an excuse to cut Medicare and privatize Social Security, which is something that they’ve been dying to do for decades.  This is certainly the way the Tory Party in Britain has been approaching their economic crisis.  They initially thought, or said they thought, that cutting the budget and an austerity program would be ultimately stimulative because it would inspire confidence among business, which would then invest.  It hasn’t worked out that way.  The austerity in Britain has resulted in deeper recession.  Austerity in Greece has resulted in 15% unemployment.  Spain over the last five or six months has lost the US equivalent of two million jobs.  Austerity has just resulted in disaster, not stimulus, but that hasn’t really changed the thinking or the conversation here too much.

SL: Yet perhaps this is a gamble that is paying off.  When the Tories were elected as half of a Liberal Democrat-Conservative Party coalition in the UK, David Cameron’s advisors said that they had half a year to push through their agenda — which is finishing the legacy of Margaret Thatcher.  I know you’ve thought a great deal about the political orientation of the ruling class in this country.  Perhaps the chance to remake society might be worth the risk of throwing those societies into quite deep recession.  Could that be possible here?

DH: I think there’s no doubt that they want to use this crisis to finish the work of Thatcher and I think the Republicans here want to use this crisis to finish the work of Reagan.  Reagan for all his revolutionary political influence — or counterrevolutionary political influence — was never really able to go after the classic programs of Medicare and Social Security.  He was able to launch a war on the poor, which Bill Clinton completed with welfare reform, but he was never really able to go after middle-class programs like Medicare and Social Security.  I think that the likes of Paul Ryan would like to complete that work and undo the 1930s as well as the 1960s, undo the New Deal as well as the Great Society.  That certainly does look like what the Tories in Britain wanted to do, which is to finish off what was left of the welfare state after Thatcher had hacked at it.  But I think they actually believed, as far as I can tell, their rhetoric that austerity can be stimulative — that business people think that policy is going their way, they’re going to invest more and hire more.  That hasn’t worked that way at all.  It’s had exactly the opposite effect.  I don’t think that Cameron and Osborne want to create a depression in Britain, but if they carry through with their austerity they’re likely to do that.  I don’t think that Paul Ryan would like to create a depression in the United States, but if they’re successful with their policies they could well do that as well.

SL: Earlier you mentioned a project that was started about four decades ago, a project of restructuring class power in the United States and around the world.  It involved increasing the financialization of the system, which helped facilitate transactions relating to global production, as well as increasing the concentration of wealth and power.  Given all that, do you think the genie of finance could be put back in the bottle through regulation, without altering that project of class power in radical ways?

DH: I think not.  As I was saying earlier, the financial markets are instruments of class power, they’re political instruments.  If you want to regulate finance, that means really altering class relations.  That’s not easy to do.  People sometimes speak as if regulating finance is a rather simple thing.  I’m not talking about the technicalities of regulating finance — I don’t think those are.  I think those technical problems can be overcome.  But the problem is that if you’re going after finance, you’re really going after instruments of ruling class formation and ruling class power.  And that’s not easily done.  If you, for example, wanted to regulate what people call speculation, that means you’re really stepping on the toes of the owning class and their ability to move their money around freely.  And it’s going to take a very, very substantial political mobilization to do something like that.  It’s not just a technocratic matter; it’s a really a deeply political thing.

SL: Many progressives have become incensed by the notion that corporations should have the same rights that people do.  They point to the Supreme Court ruling in a case brought by Citizens United, which lifted restrictions on corporate spending for political campaigns.  Why do you think that opposing corporate personhood is not the best way for those of us who oppose the current system to direct our efforts?

DH: Well as it happens, I’ve just written a piece on this so it’s fresh in mind.  There are several issues about this that concern me.  There was a joke circulating a few weeks ago, I’m embarrassed to admit, on Facebook, and perhaps more embarrassing, traceable to Andy Borowitz, that went: “I’ll believe corporations are people when Texas executes one.”  I saw that and I thought: Hm, well, maybe that’s not such a bad idea.  Why not execute a corporation now and then?  They routinely get away with murder.  They seem to have all the rights and none of the responsibilities that people do.  That’s one issue.

The Citizens United decision means that corporations can spend money as freely as they want, without restrictions, if money is a form of speech and corporations are legally the same as individual persons.  The problem with that to me is not so much that corporations have the same rights as people do, but that people have the right to spend as much money as they do and that’s considered expressing their freedom of speech.  That seems to be the problem.  You could have the Koch brothers, everyone’s favorite emissaries of Satan, free to spend their personal billions as they like to pursue their nasty agenda — that seems to be the problem to me, not the corporate personhood.

Also, there is an economic issue around corporations and the organization of production.  I think a lot of people who do not like corporate personhood have, whether they know it or not, a kind of unexamined nostalgia for early 19th century America in which most economic activities were undertaken by individual proprietorships or small partnerships.  That’s just not appropriate for a large and complicated economy.  You need some kind of institution that has a degree of scope but also a degree of immortality to undertake complicated production.  You can’t have a small partnership or a small proprietorship manufacturing computers or locomotives for high-speed rail.  No one would buy an expensive, complicated, long-lived product from an enterprise that could die with the proprietor the day after tomorrow.  Nor does it have the resources to design or manufacture complicated stuff.  You need entities with scale and scope.  Just trying to undo corporate personhood or the corporate form is not going to be very helpful.  One of the reasons that the 19th century was such an unstable time economically speaking is that it was before the corporation had really taken its modern form and you had a lot of smallish units that didn’t have the resilience to withstand economic shocks.  There’s this passage in the third volume of Marx’s Capital where he talks about the creation of the modern corporation, one owned by outside stockholders and run by professional managers the stockholders hire.  And he described this as a kind of abolition of capitalist ownership within capitalist society.  It’s like the functions of the capitalist class have been divided between a set of owners and a set of managers, unlike the 19th century when the functions were combined in individual capitalists.  The shareholders hire professional managers and technocrats to run their corporate properties for them.  So you could do an interesting thought experiment, which is that if the shareholders can hire professional managers and technocrats to do the work for them, well, why can’t the workers do the same?  Why can’t workers own corporations instead of shareholders?  The corporate form does have a degree of promise: it’s just not a small nest of capitalists running the show, but it’s actually a complicated thing that could be run by workers, customers, neighbors, whatever.  Socialize the corporation — don’t try to take it back to 1837.

SL: Taking things back much further than 1837, there are those uneasy about the current arrangement of our economic system who perennially launch community money initiatives.  That is, they create a community currency that people can use for various local transactions, with the idea of keeping money within a community.  In your view, what’s wrong with such efforts?

DH: It runs into the same problems that I was talking about trying to go back before the corporate form.  You run into the problem of scale and scope.  The local currency might be appropriate for buying locally produced baked goods, but what about the flour, what about the wheat, what about the milling equipment to produce the flour?  It may be appropriate for haircuts, but what about scissors and the steel that makes the scissors?  Money isn’t just a substitute for barter.  Money is like a system of social organization.  It’s a way of organizing production on a large scale.  And I don’t see how creating little community currencies can solve that problem.  It can maybe mitigate things in a crisis, when there is a shortage of money, but as a principle of large-scale organization, it’s just not up to the task.

SL: Clearly, your skepticism about small banks, corporate personhood, and community money aren’t motivated by love of the established order.  If these solutions aren’t radical enough, what would be?

DH: Well, god, I don’t know.  Our imaginations have been so constricted by 30-35 years of reaction that it’s almost hard to think about these things.  And I think a lot of this smallish stuff actually is a symptom of 30-35 years of reaction.  We think in terms of smallness, rather than bigness and boldness.

It would be almost utopian to have a half-decent welfare state in the United States; we have nothing of that sort here.  I would certainly like to see that.  Full employment is something that the bourgeoisie can’t stand.  They don’t like it because it gives workers confidence and gives them the boldness to demand more and makes them less willing to accept the dictates of the boss.  But that’s only a beginning.  Some of the things I was alluding to earlier: we need to think about different kinds of financial institutions, setting up different kinds of arrangements for people to keep their transaction accounts in, but also something different for financial institutions to do with the money they collect from their depositors.  What does that mean?  Does that mean funding different kinds of models of ownership, some kinds of worker-owned businesses, which traditional capitalist markets might not fund?

What about the corporate form?  How to think about socializing that in any meaningful way?  We’ve seen in periods of crisis that workers have been able to step in and take over firms and run them on their own.  That happened in Argentina about 10-11 years ago when Argentina had its economic crisis.  It happened after the Russian Revolution as well.  Workers took over the plants and began to deal with suppliers and customers on their own, certainly tried to hire their own engineers and experts to run the plants.  Those sorts of things have happened in crisis, but then when things go back to normal, that disappears.  A lot of the experiments about worker ownership in Argentina disappeared when the economy recovered and a lot of the experimental stuff disappeared in the Soviet Union when the Bolsheviks consolidated their power.  But you have to start thinking about how to get some kind of social control over corporations and financial markets.  And it’s not an easy thing to think about.  I’ve only begun to think about it myself and it makes me dizzy when I try to think about it in any kind of detail.  But I think one of the great opportunities of the present moment is that people are really open to thinking and talking about these things in ways that they weren’t in more normal times.  So we need to have a much more serious conversation about how to do these sorts of things, instead of falling back onto fanciful notions of going back to a simpler world that really never existed.

SL: There’s been a fair amount of debate over whether or not the Occupy movement should articulate demands.  Where do you fall on this?  Can demands play a role in building a movement that is explicitly anti-capitalist and looking toward a post-capitalist future?

DH: One of the inspiring things about this is that it has inspired other people to do all kinds of things.  Here in New York, parents have been interrupting meetings of Bloomberg’s school advisory board, to try to challenge the privatization, charter schools, and testing agenda.  We’ve seen marches against police brutality in the city that were inspired by OWS.  People have been doing these things for a long time, but really they got a jolt of energy from the Occupy movement.  Unions have been showing some signs of life as a result of this.  One of the things the movement is doing, even if the people sitting in Zuccotti Park and similar encampments around the country are not themselves making demands and forming organizations, it’s inspiring other people to do those things, perhaps in more specialized realms.  It’s focused attention on these sorts of issues in ways that have been extremely inspiring and surprising.  Some friends who live in my apartment building — who were not at all political people, though they’re personally wonderful — they’ve just been fascinated by this and can’t stop talking about it.  There are some people who are involved in Parents for Occupy Wall Street, just regular folks who’ve gotten involved because they were disgusted with the status quo and were inspired to do something different.  So one of the ways this is having such a good effect is it’s such a catalyst to think and act differently and ask a lot of questions.  Even if the movement itself doesn’t make these demands, it’s really inspiring an awful lot of other people to think about a different world and making it happen.

It’s all rather fluid and I hope it doesn’t evaporate as fluids can sometimes do.  But I’m not sure if the occupiers are the ones themselves who are going to coalesce into organizations and make demands.  I was involved for a little while with the Demands Working Group of Occupy Wall Street.  They even developed a demand for a large-scale jobs program and investment in infrastructure and a single-payer health plan.  This is all wonderful stuff, and it was controversial with a lot of people around Occupy Wall Street because they didn’t like the idea of making demands for some reasons I find depressing, like: only terrorist make demands; by making demands of the state you’re legitimating the state; by talking about taxing and spending, you’re legitimating the money form.  That’s not the position that I would take, but I could see that there were significant obstacles to getting the Occupy Wall Street itself to think that way.  And also there are very opaque mechanisms of governance.  Despite all the claims of horizontality and consensus, there also seems to be a little cabal of insiders running a lot of this stuff.  None of that is very explicit or transparent.  But I think what it’s done is energize a whole new way of thinking and acting.  It’s been very impressive to see the way the mainstream has had to respond to it.  It’s really changed the political conversation very dramatically in less than two months.  I think that’s where the energy is and I don’t know if the occupiers themselves are going to be the ones making these demands.

Doug Henwood edits Left Business Observer, a newsletter he founded in 1986.  He also hosts Behind the News, a weekly radio show covering economics and politics on KPFA, Berkeley, which is rebroadcast on several other stations across the US and has a worldwide audience via its Internet archive.  He is the author of three books: The State of the USA Atlas (1994), Wall Street (1997), and After the New Economy (2004).  Wall Street is now available for free download here.  He’s at work on a study of the American ruling class, whoever that might be.  Sasha Lilley is a writer and radio broadcaster.  She hosts the critically acclaimed program of radical ideas, Against the Grain, and is series editor of PM Press‘ political economy imprint, Spectre.   She is the author of Capital and Its Discontents and co-author of the forthcoming book Catastrophism: The Apocalyptic Politics of Collapse and Rebirth.  This interview was conducted in mid-November 2011.

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