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Learn more about Karl Marx at barnesandnoble.com
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Slaves to the game
By Isaac Zaur
Once the violent world of video games seeped into our friendships, there was no going back
(12/18/98)

Acadamentia
An Internet inquisition?
(12/18/98)

God save the president?
By Jackie Stevens
An anti-impeachment gathering of New York's intellectual hotshots may not do much for the country, but at least it made them feel good about themselves
(12/16/98)

Ask Camille
By Camille Paglia
Wise words for an inner city teacher: Toss out the tutorials on self-esteem and send your students on an adventure to the distant past
(12/16/98)

Harassment backlash
By Matthew Dallek
When Angelo Armenti embarked on a witch hunt for professors accused of indiscretions, he became a case in point for why sexual harassment policies just don't work
(12/14/98)

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THE MARXIST WALL STREET COULDN'T IGNORE | PAGE 1, 2, 3
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"One of the reasons I started the newsletter was that I thought most leftist economic theory was really dull or out-of-touch. But then the journalism was all of a moral exhortatory style. I wanted some combination of being aware of history and theory, mixed with a journalistic engagement with the present. I really do admire the scientific method; I admire the whole mode of investigation which you might call institutionalized skepticism." It's this devotion to scientific rigor and skepticism that shapes the LBO's content, which is often illustrated by charts, graphs and statistical calculations. You won't find any foamy predictions of spontaneous revolution in its pages, nor will you find wishful screeds about how the stock market is just a weird but irrelevant growth on the body of the "real" economy. You will, however, find clear explanations of why bonds become more valuable when interest rates drop; investigative reports on the so-called "social investment" strategies of firms like Working Assets; and informed coverage of everything from why the Mexican stock market collapsed to the latest census statistics on race and work.

Henwood is skeptical of accepted wisdom on both the left and the right. "One of the most embarrassing inheritances of Marxism is the idea that the system has to collapse inevitably into our waiting arms. It's a substitute for politics. If you assume there's a scientific inevitability, then you don't have to do anything." This lesson -- that there will probably be no inevitable flaming demise for capitalism in our near future -- became hair-raisingly obvious to Henwood during the 1980s savings and loan disaster and accompanying stock market crash. "In 1987, I thought that the crash was the end of the world," Henwood says ruefully. "I thought it was the beginning of another depression. That's why I'm so measured now. When the depression didn't happen in the late '80s, that made me really rethink why it didn't, and I came to appreciate the power of state bailouts."

Bailouts are on Henwood's mind right now, as he prepares a series of his recent essays for a possible new book with Verso Press. "Wall Street" has sold more than 20,000 copies, a gargantuan run for the small, progressive publishing house, and Henwood's editor is eager for more.

Although he's leery of making market predictions -- it would make him too much like the market analysts he loathes -- Henwood is clear about what he thinks are bad economic choices. Privatizing Social Security, as he explains in "Wall Street," is a "horrible" idea; it will likely result in smaller Social Security checks for the poor, which will get even smaller when the market is shrinking.

And the idea that we can improve the financial market through socially conscious investing (à la Ben & Jerry's or the Body Shop) is also flawed. There is almost no way to engage in large-scale corporate production and not deal with supposedly "bad" industries like logging and steel. After all, to choose just one example, Ben & Jerry's needs cardboard for its ice cream containers and metal for the chairs in its shops. Ben & Jerry's may be buying brownies from Vermont collectives, but ultimately it's also dealing with clear cutters when it buys thousands of yards of cardboard containers for Chocolate Brownie ice cream.

"Back in the '80s I used to play the market in stocks and options," Henwood admits. "I actually made quite a lot of money in the crash, but after that I sold all my stocks. What money I've got now -- which isn't much -- is in government bonds. Ethical investment is just like military justice. It's a contradiction in terms."

"No activity under capitalism is undertaken unless you can make money at it," Henwood notes. "Markets are political institutions in the broadest sense -- they're about organizing ownership and control. Through the bond markets, a small number of investors control public policy, and through the stock markets, the same small group exercises control over corporate policy. One might conclude wrongly that you can separate 'virtuous production' out of all this. But you can't."

As for the future of capitalism as we know it, Henwood is cautious. He admits we're in a time of unprecedented flux, but isn't about to suggest where this might lead us. "The great bull market of 1982 is at best in its late phases. Earlier this year it had reached a phase of total wackiness, with speculative manias and a kind of Ponzi structure. But then Asia just fell apart. And it's very hard to point to an external cause, unlike Mexico a few years ago when interest rates rose and so Mexico collapsed. You could understand that by traditional methods. Asia collapsed out of nowhere," he says. "It shouldn't have had such a radical collapse, just a minor adjustment. We can see empirically that something went wrong. And yet financial leaders still can't figure out that unregulated markets are simply by their nature destructive. They want to blame cronyism, not the nature of markets themselves."

Henwood leans back on the sofa and sighs. My roommate wanders into the room where we're talking and offers the latest news about his leftist punk band, the Christal Methodists. He and Henwood swap tales of the music underground. This is just another of Henwood's contradictions: He's respected in the worlds of finance and punk rock.

But what about the next stage of the free market, of capitalism itself?

Henwood shrugs. "People have realized that something is fundamentally wrong, but they don't want to take the next step and control capital and regulate. No one really knows what re-regulation would look like, who would do it or what political forces would be mobilized. There's a sense that the old order is dying but there's nothing new being born yet."
SALON | Dec. 21, 1998

Annalee Newitz is a freelance writer living in San Francisco.