Letter to Living Room Radio on Doug Henwood interview

posted to www.marxmail.org on November 25, 2003

Dear C.S Soon and Sasha Lilley,

I want to start off by thanking you for your very fine radio show and would recommend Living Room radio's archives to everyone at: http://www.livingroomradio.org. Just yesterday I listened to your fascinating interview with Margaret A. Lindauer on the Frida Kahlo phenomenon. As Sasha knows, I depended on Lindauer for my own attempt to get past the mythologizing of this great artist and radical who was depicted as a moon in Diego Rivera's orbit in standard biographies and the Selma Hayek film.

This morning I listened to your interview with Doug Henwood on his new book "After the New Economy". Although I understand your reluctance to ask questions that a guest might find offensive, I was somewhat troubled by a tendency to lob softball questions. While we are all part of the broad left movement to change society, the movement does need serious debate about the issues that confront us.

So let me pose some follow-up questions that were prompted by this interview.

To begin with, it occurs to me that Doug's advocacy of free trade is not very new, despite his obvious skill at burnishing it as something leading edge. One gets the impression that he views opponents of the WTO, etc. as moldy figs who would smash products made in other countries as a matter of principle. He says that he likes his Japanese television, for example. So it would seem that progress can be measured by the amount of goods that flow across borders with the least amount of harm. If Japan can make good TV's and Guatemala can make good coffee, who is to quibble except hair-shirts like Ralph Nader.

I am not sure whether Doug is aware of it or not, but his position is simply a variant on the "comparative advantage" theory first developed by David Ricardo. His colleague Brad DeLong, a former official in the Clinton Treasury Department, explains it this way on his website:

The most misunderstood concept in Economics is the concept of "comparative advantage." First developed early in the nineteenth century by David Ricardo, "comparative advantage" holds that we should export not those commodities that we can make more efficiently than people in other countries can make them, but those commodities that we can make most efficiently relative to the efficiency with which we make the average good or service. This principle has a corollary: we should import not those goods and services that we make less efficiently than other people make them, but those goods and services that we make less efficiently than we make goods and services in general.

http://econ161.berkeley.edu/movable_type/archives/000129.html

This sounds very nice on paper, but it is deeply flawed. One of the most high-profile critics was Argentine UN economist Raul Prebisch who put forward the notion of "import substitution", which Doug seemed to be alluding to when he spoke of nationalist experiments in the 1940s. The story here is more complex. Despite being associated with the "dependency theorists" at MR, Prebisch was hostile to Juan Peron and backed the regime that overthrew him, an early predecessor to Pinochet's but with somewhat less brutality.

You alluded to the problem by referring to inequalities between Ghana and the USA, which Doug skillfully evaded. As you probably are aware, he believes that countries like Ghana would benefit from more maquilas and has quoted Joan Robinson's "under capitalism, the only thing worse than being exploited is not being exploited." He seems less fond of her other quote about the North Korean economy of the 1960s being one of the world's miracles.

However, the problem with setting up a dichotomy between "free trade" and "protectionism" is that it accepts the framework of bourgeois property relations. In the fifteen minutes or so that Doug spent rhapsodizing about the WTO, I would have interjected a question about what relevance that has to Marxism, something of course that he has a rather dodgy relationship to nowadays. Cuba, for example, is totally outside the framework of such international trade agreements but manages to provide G7 living indicators for its population.

Doug has often adopted the mantle of Marxist orthodoxy around these questions since Marx himself did support free trade in 1848. This is the Karl Marx of Lord Meghnad Desai, whose Verso book "Marx's Revenge" argues thusly:

“In the triumphant resurgence of capitalism and indeed its global reach, the one thinker who is vindicated is Karl Marx. The demise of the socialist experiment inaugurated by October 1917 would not distress but cheer Marx if, as an atheist, he occupies any part of Hell, Purgatory or Heaven. Indeed, if it came to a choice between whether the Market or the State should rule the economy, the modern libertarians would be shocked as much as the modern socialists to find Marx on the side of the Market.”

Of course, such an analysis ignores the phenomenon of imperialism that was actually anticipated in Marx's writings on Ireland, no matter what position he took on free trade in 1848. By the 1870s Karl Marx had concluded that Great Britain was acting as a thief in India--effectively contradicting his 1850s Tribune articles that saw some kind of progressive role for colonialism. Without understanding imperialism, it is very difficult to get these questions right. Indeed, it is probably no accident that in Doug's Nation Magazine article on "Globaphobia" that is adapted from his chapter on globalization in the new book that the word does not occur once.