Wall Street, Small Business, and the Limits of Corporate Personhood

January 29th, 2012

An Interview with Doug Henwood, published on ZNet, by Sasha Lilley, January 25, 2012.

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 … //

… 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.

(full long interview text).

(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), now available for free download here, and After the New Economy (2004). 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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