After the new economy

Submitted by AWL on 9 April, 2005 - 9:09

Doug Henwood's book After the New Economy in review (New York, The New Press, 2003)

Doug Henwood, is an independent leftwing economic commentator and critic of capitalism. He edits of the Left Business Observer web site which he founded in 1986. According to Znet he was "briefly a conservative and a member of the Party of the Right, which manoeuvred his election as Secretary of the Political Union, but he quickly came to his senses."

In After the New Economy Henwood raises some interesting questions and offers a few insights about the "less-than-lustrous reality beneath the gloss of the 1990s". First of all Henwood deals with the concept of the New Economy – that computer based economic activity in a globalised world that was to supposedly enrich all those who "want to work" and put an end to class struggle. He states that "Sure, poverty fell and incomes rose after years of stagnation and decline, but those developments now look like the lucky by-products of an unsustainable bubble."

The ‘Income’ chapter contains a lot of analysis to show that the rich did indeed become richer and the poor poorer during the latter decades of the last century. Based on US data Henwood concludes that "had the growth in the top 1%’s share been distributed among the bottom 20%, their income would have more than doubled from $8,800 to a respectable $20,000." In fact the bottom 20% suffered a negative growth of -1.5% share of total income while the top 1% enjoyed a +5.65 change according to the data presented. For a work by a "leftwing" critic of capitalism the conclusion of this chapter is disappointing. The best solution to the increasing grinding poverty explored in the preceding 64 pages is bringing on (or a return to) the welfare state:

"There’s no great mystery to making the poor less miserable and the middle more secure. You start with unions, add vigorous antidiscrimination programs, and finish with a civilised welfare state."

One interesting insight comes in the chapter on 'Work'. Henwood exposes all the bosses talk about "skills development" – something we do not hear about so much these days, in the new century. But readers may remember how much "skills development" was key to finding jobs for the jobless in the burgeoning new economy in the latter part of the last century. The Hawke/Keating years were full of such talk. There is nothing wrong with education and re-training, of course, but in this case the words had a different meaning. In this case the challenge to educators was to produce that kind of workers who are better adapted "to be the architects of their own exploitation" in empowerment programs and in "leaderless teams". But typically, what we got was a lot of casualised work in call centres which were in fact highly regimented.

Today this idea coincides somewhat with the John Howard inspired debate on "values education". The question is always "whose values?" Is it a "shareholder value" being instilled? In order to produce the super exploitation required by modern capitalism "It is not enough that employers control your time; they should control your mind as well." Well, maybe that’s what capitalism has always tried to do. So of course capitalism has always tried to inculcate its ‘shareholder’ values through education, the media, religion, popular culture and so on. ‘Greed is good’ was the capitalist catchcry of the 1980s.

In such a world working class values built upon acts of solidarity must not be allowed to prevail. Through such acts the self emancipation of the working class can begin to be won in the class (or a good part of it) becoming aware that it is indeed a Working Class apart from and opposed to the Ruling Class

Writing about Globalisation Henwood finishes on this note: "Using the word (globalisation) makes it harder to talk sharply about things like the intensified rule of money, the dismantling of social protections, and the exercise of imperial power." However Henwood gives too much credit to the Michael Hardt and Antonio Negri "autonomist" view of "Empire" (in the book of the same name). He accepts the Hardt/Negri thesis on the "dispersed nature of power today". But as much as capitalism is increasingly global in reach it is still fundamentally rooted in its national boundaries.

Henwood’s agrees with Hardt & Negri that "individual workplaces don’t really count for much these days; the entire world is now an integrated workplace, a giant "social factory". He goes on in the Hardt & Negri tradition, "political power is also dispersed." But if individual workplaces don’t count how are we to organise? In any case the working class response however much it should and could become global it too is still rooted in unions and other class organisations bounded by the nation state and the workplace. It is basic Marxism to begin (but not finish) where the class is today.

Henwood does some service to left wing criticism of capitalism by challenging the Hardt and Negri program, (which) "like much of their analysis is a bit thin on the details"......... "They exaggerate the decline of the nation state". While having written a book which deserves to be read unfortunately Doug Henwood does not really provide the way forward needed for our times.

Doug Henwood
Left Business Observer

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