From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Sat Jul 15 2006 - 18:04:56 EDT
Would it not have been more informative to have included Desai's
contributions to the dialogue?
________________________________
From: OPE-L [mailto:OPE-L@SUS.CSUCHICO.EDU] On Behalf Of Rakesh Bhandari
Sent: 13 July 2006 17:51
To: OPE-L@SUS.CSUCHICO.EDU
Subject: [OPE-L] Route of all Evil The Political Economy of Ezra Pound
Meghnad Desai
"Money puzzles the mind because its power seems to have no visible
support. Why
should pieces of metal and, much worse, pieces of paper, command real
resources way
beyond their physical weight or apparent worth? What gives money value
since it is pretty
useful for anything other than buying things? Why does paper acquire
value if it is printed with certain words but not others? Is gold more
valuable if it is minted into coin rather than in lump
form?" Desai, p. 46-47
Very well worded questions, should be very helpful for teaching.
I wrote to Professor Desai about this book, and I have had a very
interesting discussion with him (I do not include his important
responses)
Dear Professor Desai:
I just read your stimulating book on Pound. I am a bit skeptical
of the argument. If it took the war to turn Pound from humane
monetary reformer to raving anti-semite, then why did his
guru Major Douglas make the transition even
before the war? Wouldn't it be simpler to say that anti-semitism
was implicit in the ideas of monetary cranks from the start,
and as their ideas met resistance or their implementation failed,
the monetary cranks simply stopped being polite.
As I wrote on the OPE-L list serv in 2004: the attempt to reform
capitalism through the abolition of interest payments or the euthansia
of the rentier is rooted in the surface appearance of capital itself.
The interruption of commodity circulation appears as a shortage of
money, appears as unwillingness of banks to lower interest rates such
that there will be borrowing and hence creation of the media with which
to circulate commodities. The (apparently) natural economy seems to come
to a halt because of shortage of money. Here is the basis for the wish
of the natural, the concrete, use values to do away with the fetish,
the fetish and power of money. The problem seems to be rooted in the
money changers; they become the demon personification of capital and
Jews the face of that personification in this demonology.
Free credit appears to be the solution--this tradition, developed in
the great depression by Major Douglas, has its roots in Proudhon as
Dudley Dillard perceptively recognized more than sixty years ago. While
reduction of interest rates and repression of rentier activity can spur
economic activity, i.e. accumulation through the exploitation of wage
labour, the Great Depression proved that it is not a panacea for a
crisis of general overproduction. Joan Robinson went so far as to say
Marx was proven not to have been incorrect to have ignored the rate of
interest altogether (though of course he did not).
As William J Blake noted: "It is can be stated as an historic axiom
that any group that seeks to divert attention from the material power of
the capitalist class to that segment of their power dependent on finance
operations (abstracted from the interplay of these monopolies) is almost
invariably anti semitic and nationalistic. That is it serves as a shield
for the Fords, Rockefellers, Mellons and even Morgans and other
international 'Gentiles" by assuming the true oppression of labor to
rest in the counting houses of only Jewish arbitraguers, exchange
dealers, note brokers and private investment banker...It is always
needful to take the mind of the peasant from the landowner, the worker
from the boss, so as to divert the class struggle from reality into a
cryptic world. In the Middle Ages it was religion, today it is 'the
monetary mechanism.'" New Masses, vol 19
1936, p. 20
We see this at work in Keynesian obsessions over the secrets of the
temple (ie the ominpotent and autonomous Fed) and the putative
hegemony of the rentier through Wall Street.
Dear Professor Desai:
Well this is the point! After 1850, and by the time Pound inherits the
tradition of the monetary cranks,
it has been thoroughly infused with anti-Semitism.
In the Origins of Nazi Violence Enzo Traverso has recently elaborated
Moishe Postone's efforts to connect anti-Semitism to the demagogy about
the omnipotence of finance capital... as can be seen from this
instructive quote from an early leader Adolph Stoecker of the socialist
movement in Germany:
"We distinguish however between useful and harmful capital We seek to
promote the useful and restrain the harmful. Useful capital, in our
opinion, is that which is put to work in agriculture and in industry,
where it creates livelihoods for millions of workers. Useful capital
operates in honest trade the function of which is to collect the world's
goods and offer them for sale everywhere thus enabling the whole of
mankind to participate in the progress of civilization. Useful capital,
we think, is present in the form of savings which represent the fruit of
an industrious life. Useful capital increases on modest scale only after
real labor has been spent on increasing it. But harmful capital grows
beyond all limits without doing real work, setting the stage for frauds
and swindles that rob trusting people. Such capital may be found at the
stock exchanges, and it is certainly no fault of ours that this capital
is mostly in Jewish hands."
I think you are making Major Douglas and Pound out to be more innocent
characters than they
really were. See the quote from Blake in my last note.
Dear Professor Desai:
But this does not seem to be any way out of the confusion. It just
concentrates fury on the putatively
unproductive, yet necessary, system of speculation--currency trading for
example is unavoidable. Moreover, it makes a scapegoat of speculative
capital for all the woes and miseries of a turbulent capitalist system.
It is not the most important source of jobless growth or absolute
declines in employment levels in formal mfg. Yet demagogues turn
attention on the monetary mechanism.
And here I am reminded of Franz Neumann...
In his classic study of fascism Behemoth: The Structure and Practice of
National Socialism, Franz Neumann wrote:
National Socialist anti-capitalism has always exempted productive
capital, that is, industrial capital, from its denunciations and solely
concentrated on 'predatory' (that is, banking) capital...On 14 Oct 1930,
the National
Socialist parliamentary group introduced into the democratic parliament
a draft bill demanding the confiscation without indemnity of the 'entire
property of the bank and stock exchange barons, of the eastern Jews, and
of other foreigners who had entered after 1 August 1914, and of all
additional property acquired thorugh war, revolution, inflations, or
deflation after that date.' When the Communists and Social Democrats
declared their
intention of voting for the bill, the National Socialists quickly
withdrew their motion. Still the attack against 'predatory' as opposed
to 'productive' capital did not cease;; on the contrary, it increased by
leaps and bounds. The slogan was no doubt popular--a bank is always a
creditor
of the small and little businessman and therefore hated as a creditor
usually is. Interests on loans are no doubt not the outcome of
productive labor, though they are necessary within the capitalistic
system. Finance capital as identified with banking capital has always
beenthe target of all pseudo-socialist movements, movements that never
dared to touch the foundations of capitalist society but rather sought
a reform that would brake the poisonous teeth off the the capitalist
system and direct the deep resentment of the masses against exploitation
toward certain concrete symbols. Whether the chosen symbol is John
Pierpont Morgan or a Jewish banker is immaterial.
"In singling out predatory capital, National Socialism treads in the
footsteps of Proudhon, who...demanded the liquidation of the Banque de
France and its transformation into a institution of 'public utility'
together with a lowering of interest to one-half or one-fourth of 1
percent. The Communist Manifesto had already denounced that type of
socialism, the so-called 'True Socialism', as specifically Germanic.
Marx, in a letter to Engels on 8 August 1851, had, with supreme wit,
denounced Proudhon's fight against banking capital and interest as a
sham. He had already pointed out that the so-called 'social
liquidation' is 'merely the means of starting afresh the healthy
bourgeois society.' The theory expresses the longings of every
non-industrial capitalist to become an
industrial capitalist-- a quite understandable wish. The anti-finance
capitalistic propaganda may have had even a certain amount of truth in
it when banking capital was really decisve, when banks could control,
merge
and acquire industries, when money alone represented economic power.
But, as we shall see, that period is far behind us, and it is important
to realize that Natl Socialist anti-capitalism and its fight against
predatory
capital was raised to the rank of the supreme economic priniciple in a
period when banking capital has lost its significance, when the
investment banker has lost his power, when money alone cannot found
economic empires,
when, in short, industry has become financially almost self-sufficient,
when it not only finances its own expansion by its own means but even
penetrates into banks and insurance institutions and subjugates them to
the
needs of the industrial capitalists." p. 320-321
Dear Professor Desai:
Yes but can't Keynes own thought be understood to have evolved away from
a focus on money alone? Didn't Keynes himself understand the limits of
the monetary mechanism?
Nor should Keynes be forgiven for his unclarity especially regarding his
calls for the euthanasia of the rentier and socialisation.
Since the commercial banks are indispensible in a capitalist
system, Keynes would have to propose a complete socialisation of the
banks since if their services were to be offered gratis their costs
would have to be covered out of general taxes. but this is not what
Keynes meant by a
somewhat comprehensive socialisation of investment, yet that would be
the only way to abolish interest as a cost on firms. And if Keynes meant
to abolish the rentier class, he should have advocated 100% tax on all
income from property, or nationalisation and socialisation of all income
yielding property. But this he did not do either. So it seems that no
meaning can be derived from his famous call for euthanasia of the
rentier or a somewhat comprehensive socialisation. To some extent,
Keynes seems to have been a confused and confusing man, perhaps a first
rate intellect who became so mentally unsettled and unstable by his
catastrophic times that he descended into the true underworld of
demagogues
and cranks.
Yours truly, Rakesh
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