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Crisis and Hope: Theirs and Ours

Noam Chomsky

This article is based on a talk delivered June 12, 2009, at an event sponsored by the Brecht Forum.

Perhaps I may begin with a few words about the title. There is too much nuance and variety to make such sharp distinctions as theirs-and-ours, them-and-us. And neither I nor anyone can presume to speak for "us." But I will pretend it is possible.

There
is also a problem with the term "crisis." Which one? There are numerous
very severe crises, interwoven in ways that preclude any clear
separation. But again I will pretend otherwise, for simplicity.

One way to enter this morass is offered by the June 11 issue of the New York Review of Books.
The front-cover headline reads "How to Deal With the Crisis"; the issue
features a symposium of specialists on how to do so. It is very much
worth reading, but with attention to the definite article. For the West
the phrase "the crisis" has a clear enough meaning: the
financial crisis that hit the rich countries with great impact, and is
therefore of supreme importance. But even for the rich and privileged
that is by no means the only crisis, nor even the most severe. And
others see the world quite differently. For example, in the October 26,
2008 edition of the Bangladeshi newspaper The New Nation, we read:

It's
very telling that trillions have already been spent to patch up leading
world financial institutions, while out of the comparatively small sum
of $12.3 billion pledged in Rome earlier this year, to offset the food
crisis, only $1 billion has been delivered. The hope that at least
extreme poverty can be eradicated by the end of 2015, as stipulated in
the UN's Millennium Development Goals, seems as unrealistic as ever,
not due to lack of resources but a lack of true concern for the world's
poor.

The article goes on to predict that World
Food Day in October 2009 "will bring . . . devastating news about the
plight of the world's poor . . . which is likely to remain that: mere
‘news' that requires little action, if any at all." Western leaders
seem determined to fulfill these grim predictions. On June 11 the Financial Times
reported, "the United Nations' World Food Programme is cutting food aid
rations and shutting down some operations as donor countries that face
a fiscal crunch at home slash contributions to its funding." Victims
include Ethiopia, Rwanda, Uganda, and others. The sharp budget cut
comes as the toll of hunger passes a billion-with over one hundred
million added in the past six months-while food prices rise, and
remittances decline as a result of the economic crisis in the West.

As The New Nation anticipated, the "devastating news" released by the World Food Programme barely even reached the level of "mere ‘news.'" In The New York Times, the
WFP report of the reduction in the meager Western efforts to deal with
this growing "human catastrophe" merited 150 words on page ten under
"World Briefing." That is not in the least unusual. The United Nations
also released an estimate that desertification is endangering the lives
of up to a billion people, while announcing World Desertification Day.
Its goal, according to the Nigerian newspaper THISDAY, is "to
combat desertification and drought worldwide by promoting public
awareness and the implementation of conventions dealing with
desertification in member countries." The effort to raise public
awareness passed without mention in the national U.S. press. Such
neglect is all too common.

It may be instructive to recall that
when they landed in what today is Bangladesh, the British invaders were
stunned by its wealth and splendor. It was soon on its way to becoming
the very symbol of misery, and not by an act of God.

As the fate
of Bangladesh illustrates, the terrible food crisis is not just a
result of "lack of true concern" in the centers of wealth and power. In
large part it results from very definite concerns of global managers:
for their own welfare. It is always well to keep in mind Adam Smith's
astute observation about policy formation in England. He recognized
that the "principal architects" of policy-in his day the "merchants and
manufacturers"-made sure that their own interests had "been most
peculiarly attended to" however "grievous" the effect on others,
including the people of England and, far more so, those who were
subjected to "the savage injustice of the Europeans," particularly in
conquered India, Smith's own prime concern in the domains of European
conquest.

Smith was referring specifically to the mercantilist
system, but his observation generalizes, and as such, stands as one of
the few solid and enduring principles of both international relations
and domestic affairs. It should not, however, be over-generalized.
There are interesting cases where state interests, including long-term
strategic and economic interests, overwhelm the parochial concerns of
the concentrations of economic power that largely shape state policy.
Iran and Cuba are instructive cases, but I will have to put these
topics aside here.

The food crisis erupted first and most
dramatically in Haiti in early 2008. Like Bangladesh, Haiti today is a
symbol of misery and despair. And, like Bangladesh, when European
explorers arrived, the island was remarkably rich in resources, with a
large and flourishing population. It later became the source of much of
France's wealth. I will not run through the sordid history, but the
current food crisis can be traced directly to 1915, Woodrow Wilson's
invasion: murderous, brutal, and destructive. Among Wilson's many
crimes was dissolving the Haitian Parliament at gunpoint because it
refused to pass "progressive legislation" that would have allowed U.S.
businesses to take over Haitian lands. Wilson's Marines then ran a free
election, in which the legislation was passed by 99.9 percent of the 5
percent of the public permitted to vote. All of this comes down through
history as "Wilsonian idealism."

Later, the United States Agency
for International Development (USAID) instituted programs to turn Haiti
into the "Taiwan of the Caribbean," by adhering to the sacred principle
of comparative advantage: Haiti must import food and other commodities
from the United States, while working people, mostly women, toil under
miserable conditions in U.S.-owned assembly plants. Haiti's first free
election, in 1990, threatened these economically rational programs. The
poor majority entered the political arena for the first time and
elected their own candidate, a populist priest, Jean-Bertrand Aristide.
Washington adopted the standard operating procedures for such a case,
moving at once to undermine the regime. A few months later came the
anticipated military coup, and the resulting junta instituted a reign
of terror, which was backed by Bush senior and even more fully by
Clinton, despite pretenses. By 1994 Clinton decided that the population
was sufficiently intimidated and sent U.S. forces to restore the
elected president, but on the strict condition that he accept a harsh
neoliberal regime. In particular, there must be no protection for the
economy. Haitian rice farmers are efficient, but cannot compete with
U.S. agribusiness that relies on huge government subsidies, thanks
largely to Reagan, anointed High Priest of free trade with little
regard to his record of extreme protectionism and state intervention in
the economy.

There
is nothing surprising about what followed: a 1995 USAID report observed
that the "export-driven trade and investment policy"-that Washington
mandated-will "relentlessly squeeze the domestic rice farmer."
Neoliberal policies dismantled what was left of economic sovereignty
and drove the country into chaos, accelerated by Bush junior's blocking
of international aid on cynical grounds. In February 2004 the two
traditional torturers of Haiti, France and the United States, backed a
military coup and spirited President Aristide off to Africa. Haiti had,
by then, lost the capacity to feed itself, leaving it highly vulnerable
to food price fluctuation, the immediate cause of the 2008 food crisis.

The
story is fairly similar in much of the world. In a narrow sense, it may
be true enough that the food crisis results from Western lack of
concern: a pittance could overcome its worst immediate effects. But
more fundamentally it results from dedication to the basic principles
of business-run state policy, the Adam Smith generalization. These are
all matters that we too easily evade-along with the fact that bailing
out banks is not uppermost in the minds of the billion people now
facing starvation, not forgetting the tens of millions enduring hunger
in the richest country in the world.

Also sidelined is a possible
way to make a significant dent in the financial and food crises. It is
suggested by the recent publication of the authoritative annual report
on military spending by SIPRI, the Swedish peace research institute.
The scale of military spending is phenomenal, regularly increasing. The
United States is responsible for almost as much as the rest of the
world combined, seven times as much as its nearest rival, China. There
is no need to waste time commenting.

                                                                            • • •

The
distribution of concerns illustrates another crisis, a cultural crisis:
the tendency to focus on short-term parochial gains, a core element of
our socioeconomic institutions and their ideological support system.
One illustration is the array of perverse incentives devised for
corporate managers to enrich themselves, however grievous the impact on
others-for example, the "too big to fail" insurance policies provided
by the unwitting public.

There are also deeper problems inherent
in market inefficiencies. One of these, now belatedly recognized to be
among the roots of the financial crisis, is the under-pricing of
systemic risk: if you and I make a transaction, we factor in the cost
to us, but not to others. The financial industry, that means Goldman
Sachs, if managed properly, will calculate the potential cost to itself
if a loan goes bad, but not the impact on the financial system, which
can be severe. This inherent deficiency of markets is well known. Ten
years ago, at the height of the euphoria about efficient markets, two
prominent economists, John Eatwell and Lance Taylor, wrote Global Finance at Risk,
an important book in which they spelled out the consequences of these
market inefficiencies and outlined means to deal with them. Their
proposals conflicted sharply with the deregulatory rage that was then
consuming the Clinton administration, under the leadership of those
whom Obama has now called upon to put band-aids on the disaster they
helped to create.

In substantial measure, the food crisis
plaguing much of the South and the financial crisis of the North have a
common source: the shift toward neoliberalism since the 1970s, which
brought to an end the Bretton Woods system instituted by the United
States and United Kingdom after World War II. The architects of Bretton
Woods, John Maynard Keynes and Harry Dexter White, anticipated that its
core principles-including capital controls and regulated
currencies-would lead to rapid and relatively balanced economic growth
and would also free governments to institute the social democratic
programs that had very strong public support. Mostly, they were
vindicated on both counts. Many economists call the years that
followed, until the 1970s, the "golden age of capitalism."

The
"golden age" saw not only unprecedented and relatively egalitarian
growth, but also the introduction of welfare-state measures. As Keynes
and White were aware, free capital movement and speculation inhibit
those options. To quote from the professional literature, free flow of
capital creates a "virtual senate" of lenders and investors who carry
out a "moment-by-moment referendum" on government policies, and if they
find them irrational-that is, designed to help people, not profits-they
vote against them by capital flight, attacks on currency, and other
means. Democratic governments therefore have a "dual constituency": the
population, and the virtual senate, who typically prevail.

In his
standard history of the financial system, Barry Eichengreen writes
that, in earlier years, the costs imposed by market inefficiencies and
failures could be imposed on the public, but that became difficult when
governments were "politicized" by "universal male suffrage and the rise
of trade unionism and parliamentary labor parties" and later by the
radicalization of the general public during the Great Depression and
the anti-fascist war. Accordingly, in the Bretton Woods system, "limits
on capital mobility substituted for limits on democracy as a source of
insulation from market pressures." There is a corollary: dismantling of
the Bretton Woods restrictions on capital during the neoliberal period
restores a powerful weapon against democracy.

The neoliberal
rollback of democracy-often called "democracy promotion"-has enabled
other means of control and marginalization of the public. One
illustration is the management of electoral extravaganzas in the United
States by the public relations industry, peaking with Obama, who won
the industry's award for "marketer of the year for 2008." Industry
executives exulted in the business press that Obama was the highest
achievement yet of those who "helped pioneer the packaging of
candidates as consumer brands 30 years ago," when they designed the
Reagan campaign. The Financial Times paraphrased one
marketing executive suggesting that the Obama triumph should "have more
influence on boardrooms than any president since Ronald Reagan, [who]
redefined what it was to be a CEO." Reagan taught, "you had to give
[your organization] a vision," leading to the "reign of the imperial
CEO" in the 1980s and 1990s. The synergy of running corporations and
controlling politics, including the marketing of candidates as
commodities, offers great prospects for the future management of
democracy.

For
working people, small farmers, and the poor, at home and abroad, all of
this spells regular disaster. One of the reasons for the radical
difference in development between Latin America and East Asia in the
last half century is that Latin America did not control capital flight,
which often approached the level of its crushing debt and has regularly
been wielded as a weapon against the threat of democracy and social
reform. In contrast, during South Korea's remarkable growth period,
capital flight was not only banned, but could bring the death penalty.

Where
neoliberal rules have been observed since the '70s, economic
performance has generally deteriorated and social democratic programs
have substantially weakened. In the United States, which partially
accepted these rules, real wages for the majority have largely
stagnated for 30 years, instead of tracking productivity growth as
before, while work hours have increased, now well beyond those of
Europe. Benefits, which always lagged, have declined further. Social
indicators-general measures of the health of the society-also tracked
growth until the mid-'70s, when they began to decline, falling to the
1960 level by the end of the millennium. Economic growth found its way
into few pockets, increasingly in the financial industries. Finance
constituted a few percentage points of GDP in 1970, and has since risen
to well over one-third, while productive industry has declined, and
with it, living standards for much of the workforce. The economy has
been punctuated by bubbles, financial crises, and public bailouts,
currently reaching new highs. A few outstanding international
economists explained and predicted these results from the start. But
mythology about "efficient markets" and "rational choice" prevailed.
This is no surprise: it was highly beneficial to the narrow sectors of
privilege and power that provide the "principal architects of policy."

                                                                            • • •

The
phrase "golden age of capitalism" might itself be challenged. The
period can more accurately be called "state capitalism." The state
sector was, and remains, a primary factor in development and innovation
through a variety of measures, among them research and development,
procurement, subsidy, and bailouts. In the U.S. version, these policies
operated mainly under a Pentagon cover as long as the cutting edge of
the advanced economy was electronics-based. In recent years there has
been a shift toward health-oriented state institutions as the cutting
edge becomes more biology-based. The outcomes include computers, the
Internet, satellites, and most of the rest of the IT revolution, but
also much else: civilian aircraft, advanced machine tools,
pharmaceuticals, biotechnology, and a lot more. The crucial state role
in economic development should be kept in mind when we hear dire
warnings about government intervention in the financial system after
private management has once again driven it to crisis, this time, an
unusually severe crisis, and one that harms the rich, not just the
poor, so it merits special concern. It is a little odd, to say the
least, to read economic historian Niall Ferguson in the New York Review of Books
symposium on "The Crisis" saying that "the lesson of economic history
is very clear. Economic growth . . . comes from technological
innovation and gains in productivity, and these things come from the
private sector, not from the state"-remarks that were probably written
on a computer and sent via the Internet, which were substantially in
the state sector for decades before they became available for private
profit. His is hardly the clear lesson of economic history.

Large-scale
state intervention in the economy is not just a phenomenon of the
post-World War II era, either. On the contrary, the state has always
been a central factor in economic development. Once they gained their
independence, the American colonies were free to abandon the orthodox
economic policies that dictated adherence to their comparative
advantage in export of primary commodities while importing superior
British manufacturing goods. Instead, the Hamiltonian economy imposed
very high tariffs so that an industrial economy could develop:
textiles, steel, and much else. The eminent economic historian Paul
Bairoch describes the United States as "the mother country and bastion
of modern protectionism," with the highest tariffs in the world during
its great growth period. And protectionism is only one of the many
forms of state intervention. Protectionist policies continued until the
mid-twentieth century, when the United States was so far in the lead
that the playing field was tilted in the proper direction-that is, to
the advantage of U.S. corporations. And when necessary, it has been
tilted further, notably by Reagan, who virtually doubled protectionist
barriers among other measures to rescue incompetent U.S. corporate
management unable to compete with Japan.

From the outset the
United States was following Britain's lead. The other developed
countries did likewise, while orthodox policies were rammed down the
throats of the colonies, with predictable effects. It is noteworthy
that the one country of the (metaphorical) South to develop, Japan,
also successfully resisted colonization. Others that developed, like
the United States, did so after they escaped colonial domination.
Selective application of economic prinicples-orthodox economics forced
on the colonies while violated at will by those free to do so-is a
basic factor in the creation of the sharp North-South divide. Like many
other economic historians, Bairoch concludes from a broad survey that
"it is difficult to find another case where the facts so contradict a
dominant theory" as the doctrine that free markets were the engine of
growth, a harsh lesson that the developing world has learned again in
recent decades. Even the poster child of neoliberalism, Chile, depends
heavily on the world's largest copper producer, Codelco, nationalized
by Allende.

In earlier years the cotton-based economy of the
industrial revolution relied on massive ethnic cleansing and slavery,
rather severe forms of state intervention in the economy. Though
theoretically slavery was ended with the Civil War, it emerged again
after Reconstruction in a form that was in many ways more virulent,
with what amounted to criminalization of African-American life and
widespread use of convict labor, which continued until World War II.
The industrial revolution, from the late nineteenth century, relied
heavily on this new form of slavery, a hideous story that has only
recently been exposed in its shocking detail in a very important study
by Wall Street Journal bureau chief Douglas Blackmon. During
the post-World War II "golden age," African Americans were able for the
first time to enjoy some level of social and economic advancement, but
the disgraceful post-Reconstruction history has been partially
reconstituted during the neoliberal years with the rapid growth of what
some criminologists call "the prison-industrial complex," a uniquely
American crime committed continuously since the 1980s and exacerbated
by the dismantling of productive industry.

The American system of mass production that
astonished the world in the nineteenth century was largely created in
military arsenals. Solving the major nineteenth-century management
problem-railroads-was beyond the capacity of private capital, so the
challenge was handed over to the army. A century ago the toughest
problems of electrical and mechanical engineering involved placing a
huge gun on a moving platform to hit a moving target-naval gunnery. The
leaders were Germany and England, and the outcomes quickly spilled over
into the civilian economy. Some economic historians compare that
episode to state-run space programs today. Reagan's "Star Wars" was
sold to industry as a traditional gift from government, and was
understood that way elsewhere too: that is why Europe and Japan wanted
to buy in. There was a dramatic increase in the state role after World
War II, particularly in the United States, where a good part of the
advanced economy developed in this framework.

                                                                            • • •

State-guided
modes of economic development require considerable deceit in a society
where the public cannot be controlled by force. People cannot be told
that the advanced economy relies heavily on their risk-taking, while
eventual profit is privatized, and "eventual" can be a long time,
sometimes decades. After World War II Americans were told that their
taxes were going to defense against monsters about to overcome us-as in
the '80s, when Reagan pulled on his cowboy boots and declared a
National Emergency because Nicaraguan hordes were only two days from
Harlingen, Texas. Or twenty years earlier when LBJ warned that there
are only 150 million of us and 3 billion of them, and if might makes
right, they will sweep over us and take what we have, so we have to
stop them in Vietnam.

For those concerned with the realities of
the Cold War, and how it was used to control the public, one obvious
moment to inspect carefully is the fall of the Berlin Wall twenty years
ago and its aftermath. Celebration of the anniversary in November 2009
has already begun, with ample coverage, which will surely increase as
the date approaches. The revealing implications of the policies that
were instituted after the fall have, however, been ignored, as in the
past, and probably will continue to be come November.

Reacting
immediately to the Wall's fall, the Bush senior administration issued a
new National Security Strategy and budget proposal to set the course
after the collapse of Kennedy's "monolithic and ruthless conspiracy" to
conquer the world and Reagan's "evil empire"-a collapse that took with
it the whole framework of domestic population control. Washington's
response was straightforward: everything will stay much the same, but
with new pretexts. We still need a huge military system, but for a new
reason: the "technological sophistication" of Third World powers. We
have to maintain the "defense industrial base," a euphemism for
state-supported high-tech industry. We must also maintain intervention
forces directed at the Middle East's energy-rich regions, where the
threats to our interests that required military intervention "could not
be laid at the Kremlin's door," contrary to decades of pretense. The
charade had sometimes been acknowledged, as when Robert Komer-the
architect of President Carter's Rapid Deployment Force (later Central
Command), aimed primarily at the Middle East-testified before Congress
in 1980 that the Force's most likely use was not resisting Soviet
attack, but dealing with indigenous and regional unrest, in particular
the "radical nationalism" that has always been a primary concern
throughout the world.

With the Soviet Union gone, the clouds
lifted, and actual policy concerns were more visible for those who
chose to see. The Cold War propaganda framework made two fundamental
contributions: sustaining the dynamic state sector of the economy (of
which military industry is only a small part) and protecting the
interests of the "principal architects of policy" abroad.

The
fate of NATO exposes the same concerns, and it is highly pertinent
today. Prior to Gorbachev NATO's announced purpose was to deter a
Russian invasion of Europe. The legitimacy of that agenda was debatable
right from the end of World War II. In May 1945 Churchill ordered war
plans to be drawn up for Operation Unthinkable, aimed at "the
elimination of Russia." The plans-declassified ten years ago-are
discussed extensively in the major scholarly study of British
intelligence records, Richard Aldrich's The Hidden Hand.
According to Aldrich, they called for a surprise attack by hundreds of
thousands of British and American troops, joined by one hundred
thousand rearmed German soldiers, while the RAF would attack Soviet
cities from bases in Northern Europe. Nuclear weapons were soon added
to the mix. The official stand also was not easy to take too seriously
a decade later, when Khrushchev took over in Russia, and soon proposed
a sharp mutual reduction in offensive weaponry. He understood very well
that the much weaker Soviet economy could not sustain an arms race and
still develop. When the United States dismissed the offer, he carried
out the reduction unilaterally. Kennedy reacted with a substantial
increase in military spending, which the Soviet military tried to match
after the Cuban missile crisis dramatically revealed its relative
weakness. The Soviet economy tanked, as Khrushchev had anticipated.
That was a crucial factor in the later Soviet collapse.

                                                                            • • •

But
the defensive pretext for NATO at least had some credibility. After the
Soviet disintegration, the pretext evaporated. In the final days of the
USSR, Gorbachev made an astonishing concession: he permitted a unified
Germany to join a hostile military alliance run by the global
superpower, though Germany alone had almost destroyed Russia twice in
the century. There was a quid pro quo, recently clarified. In the first
careful study of the original documents, Mark Kramer, apparently
seeking to refute charges of U.S. duplicity, in fact shows that it went
far beyond what had been assumed. It turns out, Kramer wrote this year
in The Washington Quarterly, that Bush senior and Secretary
of State James Baker promised Gorbachev that "no NATO forces would ever
be deployed on the territory of the former GDR . . . NATO's
jurisdiction or forces would not move eastward.'' They also assured
Gorbachev "that NATO would be transforming itself into a more political
organization." There is no need to comment on that promise. What
followed tells us a lot more about the Cold War itself, and the world
that emerged from its ending.

As soon as Clinton came into
office, he began the expansion of NATO to the east. The process
accelerated with Bush junior's aggressive militarism. These moves posed
a serious security threat to Russia, which naturally reacted by
developing more advanced offensive military capacities. Obama's
National Security Advisor, James Jones, has a still-more expansive
vision: he calls for extending NATO further east and south, becoming in
effect a U.S.-run global intervention force, as it is today in
Afghanistan-"Afpak" as the region is now called-where Obama is sharply
escalating Bush's war, which had already intensified in 2004. NATO
Secretary-General Jaap de Hoop Scheffer informed a NATO meeting that
"NATO troops have to guard pipelines that transport oil and gas that is
directed for the West," and more generally have to protect sea routes
used by tankers and other "crucial infrastructure" of the energy
system. These plans open a new phase of Western imperial
domination-more politely called "bringing stability" and "peace."

As
recently as November 2007, the White House announced plans for a
long-term military presence in Iraq and a policy of "encouraging the
flow of foreign investments to Iraq, especially American investments."
The plans were withdrawn under Iraqi pressure, the continuation of a
process that began when the United States was compelled by mass
demonstrations to permit elections. In Afpak Obama is building enormous
new embassies and other facilities, on the model of the
city-within-a-city in Baghdad. These new installations in Iraq and
Afpak are like no embassies in the world, just as the United States is
alone in its vast military-basing system and control of the air, sea,
and space for military purposes.

While Obama is signaling his
intention to establish a firm and large-scale presence in the region,
he is also following General Petraeus's strategy to drive the Taliban
into Pakistan, with potentially quite serious consequences for this
dangerous and unstable state facing insurrections throughout its
territory. These are most extreme in the tribal areas crossing the
British-imposed Durand line separating Afghanistan from Pakistan, which
the Pashtun tribes on both sides of the artificial border have never
recognized, nor did the Afghan government when it was independent. In
an April publication of the Center for International Policy, one of the
leading U.S. specialists on the region, Selig Harrison, writes that the
outcome of Washington's current policies might well be "what Pakistani
ambassador to Washington Husain Haqqani has called an ‘Islamic
Pashtunistan.'" Haqqani's predecessor had warned that if the Taliban
and Pashtun nationalists merge, "we've had it, and we're on the verge
of that."

Prospects become still more ominous as drone attacks
that embitter the population are escalated with their huge civilian
toll. Also troubling is the unprecedented authority just granted
General Stanley McChrystal-a special forces assassin-to head the
operations. Petraeus's own counter-insurgency adviser in Iraq, David
Kilcullen, describes the Obama-Petraeus-McChrystal policies as a
fundamental "strategic error," which may lead to "the collapse of the
Pakistani state," a calamity that would "dwarf" other current crises.

It
is also not encouraging that Pakistan and India are now rapidly
expanding their nuclear arsenals. Pakistan's were developed with
Reagan's crucial aid, and India's nuclear weapons programs got a major
shot in the arm from the recent U.S.-India nuclear agreement, which was
also a sharp blow to the Non-Proliferation Treaty. India and Pakistan
have twice come close to nuclear war over Kashmir, and have also been
engaged in a proxy war in Afghanistan. These developments pose a very
serious threat to world peace.

Returning home, it is worth noting
that the more sophisticated are aware of the deceit that is employed as
a device to control the public, and regard it as praiseworthy. The
distinguished liberal statesman Dean Acheson advised that leaders must
speak in a way that is "clearer than truth." Harvard Professor of the
Science of Government Samuel Huntington, who quite frankly explained
the need to delude the public about the Soviet threat 30 years ago,
urged more generally that power must remain invisible: "The architects
of power in the United States must create a force that can be felt but
not seen. Power remains strong when it remains in the dark; exposed to
the sunlight it begins to evaporate." An important lesson for those who
want power to devolve to the public, a critical battle that is fought
daily.

                                                                            • • •

Whether
the deceit about the monstrous enemy was sincere or not, if Americans a
half century ago had been given the choice of directing their tax money
to Pentagon programs to enable their grandchildren to have computers,
iPods, the Internet, and so on, or putting it into developing a livable
and sustainable socioeconomic order, they might have made the latter
choice. But they had no choice. That is standard. There is a striking
gap between public opinion and public policy on a host of major issues,
domestic and foreign, and public opinion is often more sane, at least
in my judgment. It also tends to be fairly consistent over time,
despite the fact that public concerns and aspirations are marginalized
or ridiculed-one very significant feature of the yawning "democratic
deficit," the failure of formal democratic institutions to function
properly. That is no trivial matter. In a forthcoming book, the writer
and activist Arundhati Roy asks whether the evolution of formal
democracy in India and the United States-and not only there-"might turn
out to be the endgame of the human race." It is not an idle question.

It should be recalled that the American republic was founded on the principle that there should be
a democratic deficit. James Madison, the main framer of the
Constitutional order, held that power should be in the hands of "the
wealth of the nation," the "more capable set of men," who have sympathy
for property owners and their rights. Possibly with Shay's Rebellion in
mind, he was concerned that "the equal laws of suffrage" might shift
power into the hands of those who might seek agrarian reform, an
intolerable attack on property rights. He feared that "symptoms of a
levelling spirit" had appeared sufficiently "in certain quarters to
give warning of the future danger." Madison sought to construct a
system of government that would "protect the minority of the opulent
against the majority." That is why his constitutional framework did not
have coequal branches: the legislature prevailed, and within the
legislature, power was to be vested in the Senate, where the wealth of
the nation would be dominant and protected from the general population,
which was to be fragmented and marginalized in various ways. As
historian Gordon Wood summarizes the thoughts of the founders: "The
Constitution was intrinsically an aristocratic document designed to
check the democratic tendencies of the period," delivering power to a
"better sort" of people and excluding "those who were not rich, well
born, or prominent from exercising political power."

In Madison's
defense, his picture of the world was pre-capitalist: he thought that
power would be held by the "enlightened Statesman" and "benevolent
philosopher," men who are "pure and noble," a "chosen body of citizens,
whose wisdom may best discern the true interests of their country and
whose patriotism and love of justice would be least likely to sacrifice
it to temporary or partial considerations," guarding the public
interest against the "mischiefs" of democratic majorities. Adam Smith
had a clearer vision.

There has
been constant struggle over this constrained version of democracy,
which we call "guided democracy" in the case of enemies: Iran right
now, for example. Popular struggles have won a great many rights, but
concentrated power and privilege clings to the Madisonian conception in
ways that vary as society changes. By World War I, business leaders and
elite intellectuals recognized that the population had won so many
rights that they could not be controlled by force, so it would be
necessary to turn to control of attitudes and opinions. Those are the
years when the huge public relations industry emerged-in the freest
countries of the world, Britain and United States, where the problem
was most acute. The industry was devoted to what Walter Lippmann
approvingly called "a new art in the practice of democracy," the
"manufacture of consent"-the "engineering of consent" in the phrase of
his contemporary Edward Bernays, one of the founders of the public
relations industry. Both Lippmann and Bernays took part in Wilson's
state propaganda organization, the Committee on Public Information,
created to drive a pacifist population to jingoist fanaticism and
hatred of all things German. It succeeded brilliantly. The same
techniques, it was hoped, would ensure that the "intelligent
minorities" would rule, undisturbed by "the trampling and the roar of a
bewildered herd," the general public, "ignorant and meddlesome
outsiders" whose "function" is to be "spectators," not "participants."
This was a central theme of the highly regarded "progressive essays on
democracy" by the leading public intellectual of the twentieth century
(Lippmann), whose thinking captures well the perceptions of progressive
intellectual opinion: President Wilson, for example, held that an elite
of gentlemen with "elevated ideals" must be empowered to preserve
"stability and righteousness," essentially the Madisonian perspective.
In more recent years, the gentlemen are transmuted into the
"technocratic elite" and "action intellectuals" of Camelot,
"Straussian" neocons, or other configurations. But throughout, one or
another variant of the doctrine prevails, with its Leninist overtones.

And
on a more hopeful note, popular struggle continues to clip its wings,
quite impressively so in the wake of 1960s activism, which had a
substantial impact on civilizing the country and raised its prospects
to a considerably higher plane.

                                                                            • • •

Returning to what the West sees as "the
crisis"-the financial crisis-it will presumably be patched up somehow,
while leaving the institutions that created it pretty much in place.
Recently the Treasury Department permitted early TARP repayments, which
reduce bank capacity to lend, as was immediately pointed out, but allow
the banks to pour money into the pockets of the few who matter. The
mood on Wall Street was captured by two Bank of New York Mellon
employees, who, as reported in The New York Times, "predicted their lives-and pay-would improve, even if the broader economy did not."

The
chair of the prominent law firm Sullivan & Cromwell offered the
equally apt prediction that "Wall Street, after getting billions of
taxpayer dollars, will emerge from the financial crisis looking much
the same as before markets collapsed." The reasons were pointed out,
by, among others, Simon Johnson, former chief economist of the IMF:
"Throughout the crisis, the government has taken extreme care not to
upset the interests of the financial institutions, or to question the
basic outlines of the system that got us here," and the

elite
business interests [that] played a central role in creating the crisis,
making ever-larger gambles, with the implicit backing of the
government, until the inevitable collapse . . . are now using their
influence to prevent precisely the sorts of reforms that are needed,
and fast, to pull the economy out of its nosedive.

Meanwhile
"the government seems helpless, or unwilling, to act against them."
Again no surprise, at least to those who remember their Adam Smith.

But
there is a far more serious crisis, even for the rich and powerful. It
is discussed by Bill McKibben, who has been warning for years about the
impact of global warming, in the same issue of the New York Review of Books
that I mentioned earlier. His recent article relies on the British
Stern report, which is very highly regarded by leading scientists and a
raft of Nobel laureates in economics. On this basis McKibben concludes,
not unrealistically, "2009 may well turn out to be the decisive year in
the human relationship with our home planet." In December a conference
in Copenhagen is "to sign a new global accord on global warming," which
will tell us "whether or not our political systems are up to the
unprecedented challenge that climate change represents." He thinks the
signals are mixed. That may be optimistic, unless there is a really
massive public campaign to overcome the insistence of the managers of
the state-corporate sector on privileging short-term gain for the few
over the hope that their grandchildren will have a decent future.

At
least some of the barriers are beginning to crumble-in part because the
business world perceives new opportunities for profit. Even The Wall Street Journal,
one of the most stalwart deniers, recently published a supplement with
dire warnings about "climate disaster," urging that none of the options
being considered may be sufficient, and it may be necessary to
undertake more radical measures of geoengineering, "cooling the planet"
in some manner.

As always, those who suffer most will be the
poor. Bangladesh will soon have a lot more to worry about than even the
terrible food crisis. As the sea level rises, much of the country,
including its most productive regions, might be under water. Current
crises are almost sure to be exacerbated as the Himalayan glaciers
continue to disappear, and with them the great river systems that keep
South Asia alive. Right now, as glaciers melt in the mountain heights
where Pakistani and Indian troops suffer and die, they expose the
relics of their crazed conflict over Kashmir, "a pristine monument to
human folly," Roy comments with despair.

The picture might be
much more grim than even the Stern report predicts. A group of MIT
scientists have just released the results of what they describe as

the
most comprehensive modeling yet carried out on the likelihood of how
much hotter the Earth's climate will get in this century, [showing]
that without rapid and massive action, the problem will be about twice
as severe as previously estimated six years ago-and could be even worse
than that.

Worse because the model

does
not fully incorporate other positive feedbacks that can occur, for
example, if increased temperatures caused a large-scale melting of
permafrost in arctic regions and subsequent release of large quantities
of methane.

The leader of the project says,
"There's no way the world can or should take these risks," and that
"the least-cost option to lower the risk is to start now and steadily
transform the global energy system over the coming decades to low or
zero greenhouse gas-emitting technologies." There is far too little
sign of that.

While new technologies are essential, the problems
go well beyond. We have to face up to the need to reverse the huge
state-corporate social engineering projects of the post-World War II
period, which quite purposefully promoted an energy-wasting and
environmentally destructive fossil fuel-based economy. The
state-corporate programs, which included massive projects of
suburbanization along with destruction and then gentrification of inner
cities, began with a conspiracy by General Motors, Firestone, and
Standard Oil of California to buy up and destroy efficient electric
public transportation systems in Los Angeles and dozens of other
cities; they were convicted of criminal conspiracy and given a slap on
the wrist. The federal government then took over, relocating
infrastructure and capital stock to suburban areas and creating the
massive interstate highway system, under the usual pretext of
"defense." Railroads were displaced by government-financed motor and
air transport.

The
programs were understood as a means to prevent a depression after the
Korean War. One of their Congressional architects described them as "a
nice solid floor across the whole economy in times of recession." The
public played almost no role, apart from choice within the narrowly
structured framework of options designed by state-corporate managers.
One result is atomization of society and entrapment of isolated
individuals with self-destructive ambitions and crushing debt. These
efforts to "fabricate consumers" (to borrow Veblen's term) and to
direct people "to the superficial things of life, like fashionable
consumption" (in the words of the business press), emerged from the
recognition a century ago of the need to curtail democratic
achievements and to ensure that the "opulent minority" are protected
from the "ignorant and meddlesome outsiders."

While
state-corporate power was vigorously promoting privatization of life
and maximal waste of energy, it was also undermining the efficient
choices that the market does not provide-another destructive built-in
market inefficiency. To put it simply, if I want to get home from work,
the market offers me a choice between a Ford and a Toyota, but not
between a car and a subway. That is a social decision, and in a
democratic society, would be the decision of an organized public. But
that is just what the dedicated elite attack on democracy seeks to
undermine.

The consequences are right before our eyes in ways that are sometimes surreal. In May The Wall Street Journal reported:

U.S.
transportation chief [Ray LaHood] is in Spain meeting with high-speed
rail suppliers. . . . Europe's engineering and rail companies are
lining up for some potentially lucrative U.S. contracts for high-speed
rail projects. At stake is $13 billion in stimulus funds that the Obama
administration is allocating to upgrade existing rail lines and build
new ones that could one day rival Europe's fastest. . . . [LaHood is
also] expected to visit Spanish construction, civil engineering and
train-building companies.

Spain and other
European countries are hoping to get U.S. taxpayer funding for the
high-speed rail and related infrastructure that is badly needed in the
United States. At the same time, Washington is busy dismantling leading
sectors of U.S. industry, ruining the lives of the workforce and
communities. It is difficult to conjure up a more damning indictment of
the economic system that has been constructed by state-corporate
managers. Surely the auto industry could be reconstructed to produce
what the country needs, using its highly skilled workforce-and what the
world needs, and soon, if we are to have some hope of averting major
catastrophe. It has been done before, after all. During World War II
the semi-command economy not only ended the Depression but initiated
the most spectacular period of growth in economic history, virtually
quadrupling industrial production in four years as the economy was
retooled for war, and also laying the basis for the "golden age" that
followed.

                                                                            • • •

Warnings
about the purposeful destruction of U.S. productive capacity have been
familiar for decades and perhaps sounded most prominently by the late
Seymour Melman. Melman also pointed to a sensible way to reverse the
process. The state-corporate leadership has other commitments, but
there is no reason for passivity on the part of the
"stakeholders"-workers and communities. With enough popular support,
they could take over the plants and carry out the task of
reconstruction themselves. That is not a particularly radical proposal.
One standard text on corporations, The Myth of the Global Corporation,
points out, "nowhere is it written in stone that the short-term
interests of corporate shareholders in the United States deserve a
higher priority than all other corporate ‘stakeholders.'"

It is
also important to remind ourselves that the notion of workers' control
is as American as apple pie. In the early days of the industrial
revolution in New England, working people took it for granted that
"those who work in the mills should own them." They also regarded wage
labor as different from slavery only in that it was temporary; Abraham
Lincoln held the same view.

And the leading twentieth-century
social philosopher, John Dewey, basically agreed. Much like
ninetheenth-century working people, he called for elimination of
"business for private profit through private control of banking, land,
industry, reinforced by command of the press, press agents and other
means of publicity and propaganda." Industry must be changed "from a
feudalistic to a democratic social order" based on workers' control,
free association, and federal organization, in the general style of a
range of thought that includes, along with many anarchists, G.D.H.
Cole's guild socialism and such left Marxists as Anton Pannekoek, Rosa
Luxemburg, Paul Mattick, and others. Unless those goals are attained,
Dewey held, politics will remain "the shadow cast on society by big
business, [and] the attenuation of the shadow will not change the
substance." He argued that without industrial democracy, political
democratic forms will lack real content, and people will work "not
freely and intelligently," but for pay, a condition that is "illiberal
and immoral"-ideals that go back to the Enlightenment and classical
liberalism before they were wrecked on the shoals of capitalism, as the
anarchosyndicalist thinker Rudolf Rocker put it 70 years ago.

There
have been immense efforts to drive these thoughts out of people's
heads-to win what the business world called "the everlasting battle for
the minds of men." On the surface, corporate interests may appear to
have succeeded, but one need not dig too deeply to find latent
resistance that can be revived. There have been some important efforts.
One was undertaken 30 years ago in Youngstown Ohio, where U.S. Steel
was about to shut down a major facility at the heart of this steel
town. First came substantial protests by the workforce and community,
then an effort led by Staughton Lynd to convince the courts that
stakeholders should have the highest priority. The effort failed that
time, but with enough popular support it could succeed.

It is a
propitious time to revive such efforts, though it would be necessary to
overcome the effects of the concerted campaign to drive our own history
and culture out of our minds. A dramatic illustration of the challenge
arose in early February 2009, when President Obama decided to show his
solidarity with working people by giving a talk at a factory in
Illinois. He chose a Caterpillar plant, over objections of church,
peace, and human rights groups that were protesting Caterpillar's role
in providing Israel with the means to devastate the territories it
occupies and to destroy the lives of the population. A Caterpillar
bulldozer had also been used to kill American volunteer Rachel Corrie,
who tried to block the destruction of a home. Apparently forgotten,
however, was something else. In the 1980s, following Reagan's lead with
the dismantling of the air traffic controllerss union, Caterpillar
managers decided to rescind their labor contract with the United Auto
Workers and seriously harm the union by bringing in scabs to break a
strike for the first time in generations. The practice was illegal in
other industrial countries apart from South Africa at the time; now the
United States is in splendid isolation, as far as I know.

Whether
Obama purposely chose a corporation that led the way to undermine labor
rights I don't know. More likely, he and his handlers were unaware of
the facts.

But at the time
of Caterpillar's innovation in labor relations, Obama was a civil
rights lawyer in Chicago. He certainly read the Chicago Tribune, which published a careful study of these events. The Tribune
reported that the union was "stunned" to find that unemployed workers
crossed the picket line with no remorse, while Caterpillar workers
found little "moral support" in their community, one of the many where
the union had "lifted the standard of living." Wiping out those
memories is another victory for the highly class-conscious American
business sector in its relentless campaign to destroy workers' rights
and democracy. The union leadership had refused to understand. It was
only in 1978 that UAW President Doug Fraser recognized what was
happening and criticized the "leaders of the business community" for
having "chosen to wage a one-sided class war in this country-a war
against working people, the unemployed, the poor, the minorities, the
very young and the very old, and even many in the middle class of our
society," and for having "broken and discarded the fragile, unwritten
compact previously existing during a period of growth and progress."
Placing one's faith in a compact with owners and managers is suicidal.
The UAW is discovering that again today, as the state-corporate
leadership proceeds to eliminate the hard-fought gains of working
people while dismantling the productive core of the American economy.

Investors
are now wailing that the unions are being granted "workers' control" in
the restructuring of the auto industry, but they surely know better.
The government task force ensured that the workforce will have no
shareholder voting rights and will lose benefits and wages, eliminating
what was the gold standard for blue-collar workers.

This is only
a fragment of what is underway. It highlights the importance of short-
and long-term strategies to build-in part resurrect-the foundations of
a functioning democratic society. An immediate goal is to pressure
Congress to permit organizing rights, the Employee Free Choice Act that
was promised but seems to be languishing. One short-term goal is to
support the revival of a strong and independent labor movement, which
in its heyday was a critical base for advancing democracy and human and
civil rights, a primary reason why it has been subject to such
unremitting attack in policy and propaganda. A longer-term goal is to
win the educational and cultural battle that has been waged with such
bitterness in the "one-sided class war" that the UAW president
perceived far too late. That means tearing down an enormous edifice of
delusions about markets, free trade, and democracy that has been
assiduously constructed over many years and to overcome the
marginalization and atomization of the public so that they can become
"participants," not mere "spectators of action," as progressive
democratic theoreticians have prescribed.

Of all of the crises
that afflict us, the growing democratic deficit may be the most severe.
Unless it is reversed, Roy's forecast may prove accurate. The
conversion of democracy to a performance with the public as mere
spectators-hardly a distant possibility-might have truly dire
consequences.


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Noam Chomsky

Noam Chomsky

Noam Chomsky is Institute Professor (retired) at MIT. He is the author of many books and articles on international affairs and social-political issues, and a long-time participant in activist movements. His most recent books include: "Who Rules the World?" (2017); "Power Systems: Conversations on Global Democratic Uprisings and the New Challenges to U.S. Empire" (2013 with interviewer David Barsamian); "Making the Future: Occupations, Interventions, Empire and Resistance" (2012); "Hopes and Prospects" (2012); and "Profit Over People: Neoliberalism & Global Order" (1998). Previous books include: "Failed States" (2007), "What We Say Goes" (2007 with David Barsamian), "Hegemony or Survival" (2004), and the "Essential Chomsky" (2008).

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