Hi, hope no one minds, but I forwarded Doug's critique of Ed Herman's Z
article to Ed, and here's his reply. Elaine
----------------------------Original message----------------------------
Dear Elaine: I've put up a few notes on Henwood's defense of his citation
of Larry Summers. Can you put it into circulation on Pen-L (if that's the
right web site)?
Best, Ed Herman
PS: I did write to Robert and Ethel after last talking with you.
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Reply to Doug Henwood's defense of his reliance on Larry Summers:
1. Henwood says that Summers is not always wrong and has "done a
lot of very useful academic work..." But Henwood fails to note
that that academic work was many years ago--Henwood cites Summers
as of 1991, in his World Bank employment role that preceded his
phase as a Clinton administration official. So his academic work
would seem pretty much irrelevant; his commitment to the
principles--and principals--of the New World Order in 1991 and
after would seem obvious. A "political agenda" supportive of FDI
and globalization as beneficial would also seem a requirement for
the kind of work Summers has been doing. Would Henwood suggest that
Summers could take a position questioning free trade and FDI? If
not, is Henwood not neglecting "context" in citing Summers as a
presumably objective scholar?
2. Henwood says I rely on "assertion" and don't bother with the
substance of his argument or "evidence." But my article has more
"evidence" in it than Henwood's, and much of his evidence is a
quoting of qualitative opinions, notably by Summers. I give
evidence on financial flows that Henwood largely ignores, but which
are vastly more important than 30 years ago, and far more important
than in 1913 in effects on policy. Henwood's evidence is also dated
and backward, not forward looking. For example, his quote from the
1991 Summers statement asks whether the telecommunications
revolution has really had a major impact? But we are in the midst
of a telecom revolution that is advancing rapidly (and has gained
further strength from the recent WTO deal getting scores of
countries to agree to privatize). Furthermore, even if
manufacturing hasn't been "fundamentally altered" (whatever that
means), cross-border integration of production keeps growing in
importance. And while sellers have always tried to "locate
production at the lowest cost location," you would think a leftist
would recognize that the increased mobility of capital, greater
power of IMF and World Bank, and new agreements protecting
investment rights, are widening options for sellers and that a
"reserve army" that runs from China to Russia to Indonesia to
Mexico (etc.) represents something a bit different and worth
noting.
The economist Richard DuBoff, who also wasn't too keen on
Henwood's analysis of globaloney, sent Henwood a detailed statement
with a lot of "evidence," to which Henwood hasn't yet replied.
3. Henwood says that globalization "is often held up as the reason
things can't get any better." But if it is an important fact, we
can't deny its reality because it is used is some particular way.
Furthermore, why do a Larry Summers and the conservative Martin
Wolf go along with Henwood in denying a powerful negative effect of
globalization? It is because if it were admitted to be having
damaging effects on the incomes of the majority and killing social
democratic policy there would be a political demand for bringing it
under control. I made this point in my Z article, but I haven't yet
heard Henwood come to grips with it.
4. He repeats his statement that the focus on globalization
"deflects attention away from the causes of globalization," etc.
This is not true--as I point out in my article, it focuses
attention on the particular forms of capitalism that are important
in the age of globalization, like the rise in power and spread of
TNCs, financial flows and speculation, the role of the IMF and
World Bank in serving the TNCs and the like. On the other hand, the
Henwood position, which denies the importance of globalization,
deflects attention away from globalization and its damaging
capitalist--institutional causes to vague generalities like "the
quest for higher profits and stock prices." Beyond that, if as
Summers and Henwood agree, "the revolution is merely incremental,
and not something all so fundamentally new," why worry about
transnationalization, global mergers, IMF rules, and the like?
"Natura non facit saltum" was the rule for neoclassical economist
Alfred Marshall and his successors as well, including Summers, and
apparently Henwood.
---Edward S. Herman
