From: "Patrick Bond" <pbond at wn.apc.org> To: Doug Henwood <dhenwood at panix.com>, owner-lbo-talk at lists.panix.com Date: Sun, 7 Nov 1999 06:35:56 +0200 MIME-Version: 1.0 Subject: Re: Glass-Steagall Reply-To: pbond at wn.apc.org Priority: normal
On 6 Nov 99, at 20:41, Doug Henwood wrote:
>Look, I think it's time that folks on the American left, such as it
>is, rethought their relationship to the inherited wisdom of populism,
>one of whose sacred tenets is that a fragmented financial system is a
>beautiful thing. This is supposed to encourage dispersion of
>ownership and power. Has it?
Doug, surely the counterfactual - what would have happened without Glass-Steagall - is too horrible to contemplate? J.P.Morgan's heirs still in charge of Everything?
Some soc-dem countries took Hilferding's route: control the six ...(Stockholm, whatever)... banks and you control all ...(Swedish)... industry, through directed, cheap credit (UNTIL the deregulatory crisis, as everywhere). (And surely financial DEregulation combined with underlying crisis tendencies explain why most of the US financial bubbles burst these last two decades?)
So if your state is sufficiently influenced by a red-green coalition ala Sweden, maybe you don't need to worry so much about bank- stockmarket links. But if your state is as politically under capital's thumb as is the USA, then maybe Glass-Steagall helps release the pressure just a wee bit?
Surely there's theory somewhere - if you don't like Hilferding try Grossmann - to posit that not just geographical banking fragmentation but also investment fragmentation reduces centralised financial power. Isn't that the main issue Rob W. and Russell M. are driving at, namely the need to keep banks' hands off corporations and vice versa? Seems sensible to me...
Also, as a critic of uneven development, I'm pretty convinced that, as they say in SA, local is lekker. Keep savings circulating into local credit rather than sucked out to Head Office, and finance- amplified unevenness is minimised (my PhD on the topic, "Uneven Zimbabwe: A Study of Finance, Development and Underdevelopment," came out from Africa World Press, NJ, last year, and is terribly well documented on this point, you know, about a terribly obscure little country...)
P. Patrick Bond (Wits University Graduate School of Public and Development Management) home: 51 Somerset Road, Kensington 2094, Johannesburg office: 22 Gordon Building, Wits University Parktown Campus mailing address: PO Box 601 WITS 2050 phones: (h) (2711) 614-8088; (o) 488-5917; fax 484-2729 emails: (h) pbond at wn.apc.org; (o) bondp at zeus.mgmt.wits.ac.za