Noam Chomsky with David Barsamian, 18 March 2015 (on South America, Podemos and Syriza)

Noam Chomsky with David Barsamian, Conversation, 18 March 2015

(this is an excerpt) starts at 43:13

Barsamian: You were just in Argentina and met with some activists from the Podemos movement in Spain. What were your impressions?

Chomsky: Well, this was an international conference of activists from around the world, mostly South America but some from Spain, some from Greece, Syriza and others. And it reflects some of the positive developments in the world. One of the major positive developments internationally in the past, for a long time, has been what has taken place in South America over the past roughly fifteen years. South America for five hundred years since the early conquests had been dominated by foreign powers. The South American countries themselves were—the typical structure was that a small Europeanized, mostly-white elite, extremely wealthy, in the sea of misery and poverty. The elites were oriented towards the outside. They had their second homes in Riviera, they sent their money to Zurich and so on. There were little interactions among South American countries.

In the South American countries where the most religious students of the neoliberal policies, structural adjustment policies of the World Bank and the IMF and Treasure department, they were the ones who suffered most naturally. But in the last ten or fifteen years they pulled out of this for the first time. It’s a major change in world affairs. South America used to be regarded here as what's called our backyard. They did whatever we told them, we don't pay attention to them. Now, South America's out of control.

You take a look at the hemispherical conferences, the United States is isolated. In fact, the primary reason why Obama made some steps towards normalizing relations with Cuba is that the US was utterly isolated on that issue in the whole hemisphere. They were trying to get some kind of arrangements before the Summit of Americas which is coming up soon and they didn’t quite make it. But that's the goal. This is a huge change. And that's why the conference was in South America but there were participants from particularly Podemas and Syriza. These are in Greece.

Europe has been subjected to a program of…a kind of a savage economic program which has seriously undermined European democracy. It has been devastating for the weaker, peripheral countries. It's beginning to dismantle Europe's major post Second World War achievement. The social democratic welfare state programs, I think that’s the purpose of the policies, is economically destructive. These are the policies of austerity under recession, even the International Monetary Fund's is crazy from an economic point of view. But they make some sense from the point of view of class war. They are enriching the big banks and they're dismantling social programs and so on.

Well, there's a reaction. The reaction was from first in Greece, which has suffered most. And the German banks which are basically responsible for these crises are reacting in an absolutely savage way to try to prevent Greece from taking steps that might extricate itself from the disaster that's been imposed. Greece is calling for restructuring of its debt, delaying debt payments and so on.

This is particularly ironic because Germany in 1953 was permitted by the European countries to cancel its major debts. That's the basis for German recovery. That's why it's the dynamic center of Europe. Secondly, Germany practically destroyed Greece during the Second World War. Well, put all this together, Greece is now asking for a limited element of what Germany was granted in 1953. And the powers in Germany, the bank of Bundesbank, is just flatly refusing in a very savage way.

They may get away with Greece, because Greece is a pretty weak country. Spain is going to be harder nut to crack. That's a bigger country and a more powerful economy. In Spain, in the last couple of years, two or three years, a new political party developed. Podemas, which, by now, is running first in the polls. And it is also a party dedicated in a pretty pragmatic sensible way to reversing the austerity programs, sustaining, rebuilding the shadow economy, so-called welfare state programs, and moving the country towards constructive development. In Spain as well, the criminals, the ones who caused the crisis, were the banks. The Spanish banks and the German banks. But they want the population to pay.

Notice that none of them believe in capitalism. In a capitalist society, (to Barsamian) I lend money to you and since I know you, I know it’s a risky loan.(laughs) Therefore, I get a lot of interests and make a lot of money out of it. If to a certain point you can't pay, it's my problem in a capitalist society, but not in a society in which we live. The problem is your problem and your neighbors’ problem. Your neighbors didn't take that debt that they got to pay for it. That's the way our system works, radically anti-capitalist. It makes sense on class warfare grounds but has no resemblance to markets or capitalism.

And that's what's been going on but there is a struggle against it. And Podemos is worth keeping an eye on. They have sensible programs. They might win the next election which is coming up soon. And it's not going to be easy for the Brussels bureaucrats and the German banks, northern banks, to crush Spanish initiatives.

Barsamian: One last question. You grew up in the 30s at a time when solidarity meant something. There was mutual support. There was an active labor movement. What is it going to take in 2015 to rekindle that spirit of solidarity?

Chomsky: Well, remember what happened in the 30s. The labor movement was in fact in the forefront. There was CIO organizing, sit-down strikes and so on. They had a sympathetic administration. So, the Roosevelt administration was willing to accommodate to some extent to the pressures developing among the public labor movement spearheading it, which did lead to the New Deal legislations which were very beneficial to the population and to the economy. But go back to the 1920s, the labor movement had been destroyed. There was practically nothing left of it. One of the leading labor historians, David Montgomery, who died recently, has a book “Fall of the House of Labor.” And it's about the 1920s when there had been a lively vibrant active pretty radical American labor movement. But it had been crushed by a brutal attack.

 This is a very much business-run society. And the business classes are highly class conscious, constantly fighting class war, have state power supporting them. And they were able to crush and destroyed the labor movement. But it revived. And it can revive again. And other popular movements can as well too. And there is a basis for it. (applause)

The basis for it is the quite positive changes that have taken place since the 1960s. In many ways, it is a much more civilized society than it was at that time, in many issues. And I think that is a basis for recreating the kind of solidarity, mutual aid, working together, dedication and commitment. That is very necessary today. We can’t overlook the fact that we're in a moment of human history, which is entirely unique. For the first time in human history, we're at a position where the decisions that we will make will determine whether the species survives. That was not true in the past. It is very definitely true now. These are not small questions.

Barsamian: It is quite a sobering note. And as we bring this evening to a close, in Hindi there's a word called Sēvā. It means service. And I can think of no one who has performed more sēvā,  more service for humankind than you. Thank you very much.

Questions on Scottish Independence: Statehood and Power

https://www.youtube.com/watch?v=J7HpE4k5JLc

Q: If Scotland votes yes for independence this year, how do you think it will be perceived elsewhere in the world?

Well, I think international capitalism doesn’t like it and there may be some harsh reactions. But it may be another step towards the gradual fragmentation of the nation-state system in Europe. So, other things are happening elsewhere, like Catalonian may have a referendum. So far, it's not clear whether the government will permit it, certainly the population wants it. And there would be a referendum for greater degree of autonomy. Something similar may have happened in the Basque Country. There are other…part of the reaction to the centralization of the European Union has been a rise of regionalism and the local cultures, local languages, moves towards local autonomy. These are kind of conflicting processes. European Union policies have now been very heavily centralized. So much so that the national governments have virtually abandoned independent socio-economic policies handing over the Brussels bureaucrats. So, this is a natural reaction to it. UK’s is a little different because they were never totally absorbed into the European Union. So, they themselves have kept separate. But now, these are for their developments. It wouldn't surprise me terribly if something similar happened in Wales.

Q: Having reached the point of holding a referendum on ceasing the UK’s combined statehood, what do you think this means for a shared history the UK and empire?

The UK has been kind of a funny construct for a long time. I mean, just what Britain is is highly contested. Is it England?  Is it a federal collection? Even the so-called English constitution, of course, not a written constitution, is very ambiguous about that. And there is a lot of debate about it. But I think it’s…I mean the nation-state altogether, is a pretty artificial construct. Nation-states were established almost entirely by violence. And they bring together—and they force into a single mold of people who often have little to do with one another. They speak different languages, they have different cultures, they have different traditions, different religions, you know. And the effort to mold them into a single entity with the role subjected to the same fixed national culture and the social commitments, service to state power and so on, that's been pretty hard. Even the effort to establish borders has been very violent process. Europe was the most savage place in the world for centuries while the nation-state system was being imposed. Finally, Europe is now free from internal wars and there's a lot of debate about the reason in the political science literature, you know, talk about the democratic peace and so on. My feeling is—the basic reason is quite different. The Europeans did recognize, had to recognize in 1945 that if they ever tried to fight another war, they would just wipe out everything. You can't fight wars with that degree of destructive power until the end. So, therefore moves to a period of more or less peaceful integration. But if you look around the world where there are conflicts raging all over the place, virtually all of them have to do with nation-state systems and boundaries that were imposed by the imperial powers, almost everywhere. Say, take Iraq. The British carved out Iraq in their own interests, not in the interests of the people in the region. There are sharp differences among them, the Kurds, the Shiite, Sunni and so on. Furthermore, Britain drew the boundaries of Iraq for their own interests again. They drew the northern boundaries so that Britain, not Turkey, would be able to exploit the oil resources. They drew the southern boundaries so that Iraq would be almost landlocked. That's why the principalities of Kuwait were separated out. And if you look around, Africa is the same thing. Asia, you know. Say, take Pakistan. The British drew a line called the Durand Line separating what was India from Afghanistan, now separates Pakistan from Afghanistan. The line cuts right through the Pashtun area, a kind of Pashtunistan. Pashtuns never accepted it. Afghans never accept it. Now if people cross that border, we call them terrorists, they may be going home, you know. And the same is true just about everywhere.

Take say the US-Mexico border. That was established by a war of aggression which the US conquered half of Mexico. You take a look at the names in the cities in southwest and western United States. San Francisco, San Diego, and the Santa Cruz, I mean Spanish names. There was a pretty open border for a long time. People went up and back for work, for visiting relatives and cultural reasons, commercial, whatever. The borders have been slowly militarized. Sharp increase in militarization was actually in 1994. And that was connected with NAFTA, the so-called free trade agreement. US officials understood perfectly well and in fact said that the effective NAFTA will likely be to drive impoverished Mexicans across the border. NAFTA is going essentially wipe out Mexican agriculture. Mexican Campesinos can be perfectly efficient but they cannot compete with the highly subsidized US agribusiness. So they'll be driven off the land and that’s still happening. Right now, Campesinos are being driven off the land

What would they do? A lot of them come north. So, you are getting an illegal immigration problem, you have to militarize the border. Things like that are going on all over the world.

I remember it struck me very--not that I didn't know it but it struck me very dramatically sixty years ago. My wife and I were students when we were living in Israel. And we were kind of hitchhiking, you know, students, backpacks. And we were hitchhiking up in northern Israel and we're just walking one evening. And a jeep came along on a road behind us, and a guy got out of the jeep and started yelling at us. In Hebrew, he told us you got to come back. What happened was we walked into Lebanon. At that point the border was unmarked. Now I suppose it is bristling with, you know, tanks and so on. And the border was just artificially drawn right through Galilee by the British and French for their own purposes. That didn’t have to do with the people there. And the same is true almost everywhere.

And one of the reactions to all of this is the kind of coalescence of more or less coherent groups, you know, never totally so, into regions where they feel more comfortable and running their own affairs. And I think that’s pretty much what the Scotland referendum is about.

Q: The Scottish independence question has been agreed by the UK state and its devolved Scotland elements, with that in mind, what form of independence do you think is possible, and likely on offer, given global pressures on state restructuring, the preconditions of international treaties and regional/global inter-dependencies?

Not simple. I mean you can't separate yourself from the world these days. Maybe Bhutan can, but most states can't. So, Scotland, if it moves towards independence in some form, we don't know what form, would have to figure out ways of determining how it can become and be enmeshed in the international treaty system. That's not so simple. Like, take, go back a couple hundred years. When the American colonies separated themselves from England, one of their main tasks immediately was to become what was called “treaty worthy,” to be treated by the Europeans—the European powers were of course the dominant powers—to be treated by the European powers as a nation which could enter into their system, so that it would become treaty worthy, worthy of accepting treaties. That had a double-edge at the time. The colonies, American liberated colonies wanted it for two reasons: one to be accepted by the European powers to be treated, you know, by the international treaties of the day. The other was because the Westphalian system, you know, their reigning system permitted each state to operate freely without interference in its internal affairs. And for the American colonies, that was extremely important because they had two major tasks. One was to maintain slavery and the other was to wipe out the indigenous population.

And they didn't want interference with that. So if they became treaty worthy, they would be permitted to run their own internal affairs without European interference. That was not a small point. Like Britain said at the time, the major power, was moving towards abolition of slavery. It was moving there and had also been protecting the rights of Native Americans. But once the United States became treaty worthy, it was free from those external constraints. It’s a little bit like the current international system which (inaudible) principle says you are not allowed to interfere with affairs of other countries. Say, South Africa during the years when it was struggling to maintain Apartheid, its claim, which was not vacuous, was that “the UN Charter guarantees that each state can run its own affairs internally. So what does the world have to say about the apartheid?” That was their argument. It was actually accepted by the legal authorities for a long time.

Q: A recent Scotsman newspaper article reports that in 1990, following a speech on self-determination in Glasgow you said: “Is a movement for Scottish nationalism crazy? It depends what form it takes. If it takes the form of expressing cultural value and integrating people in a more full life, that’s fine. Nationalism has a way of oppressing others. One the other hand you want to make sure that a move towards devolution doesn’t lead to more pressure, which it could very well do.”

What are your thoughts today?

The same. I mean that’s—nationalism has its positive aspects but it can be very ugly. I don’t have to give historical examples. We have a plenty of them.

Q: With the Scotland referendum much has been made on the Left about this being the “smashing of the British state.” Is this really “smashing the system” or is it the system smashing itself—in a constant disruptive reorganization and is there a way for change to happen “without talking power”?

Well, my guess will be that if there is a move towards autonomy in Scotland, it'll be a mild reform. Nothing's going to be smashed. There will be slow evolutionary changes in the way Scotland will interact with England, with European Union, with the United States, with international treaties. And capital is efficiently internationalized. So there's going to be plenty of links and plenty of power. The power won’t devolve to the local level. The international financial system is just too powerful for that. So, until that is dismantled, all states are going be enmeshed in the webs that it develops. I mean, in the case of the European Union, it is extreme. The Bundesbank and Brussels bureaucrats are in effect dictating policies for states. Actually even The Wall Street Journal had an article pointing out that no matter what government wins in elections in Europe, communists, fascists, whatever they may be, they follow the same policies because policies are not being determined by the countries. In fact, we saw that pretty dramatically when George Papandreou hinted barely, that maybe there ought to be a referendum in Greece for people to decide if they want to accept EU policies, there was just uproar and fury, how can you ask the people, what do they have to do with it? I mean stuff is all determined by the bankers and the bureaucrats in Brussels. So without really substantial changes in the international order, any small state, like say, independent Scotland would have to accommodate itself to that somehow.

Q: Author James Kelman said: “No one is given freedom. The Irish people who didn’t already know that in 1918, had learned it by 1919. We assume it as a right and we take it as a right. How do we do it? Anybody with experience of the labour movement should know of at least we withdraw our labour, we withdraw from the process, we reject the ballot. We turn our back on the ballot box. We do not participate. That is a start.”

Withdrawing from the electoral process may appear to some as a passive engagement. But is this true?

Well, I read Jim Kelman’s comments. I mean if it’s simply withdrawing, it doesn't help much. If it's withdrawing in order to concentrate on other things which I presume you meant, like developing bigger social movements which will lead to, which will lay the basis for substantial socio-economic change, and if withdrawing means “Let's put our energy into that,” then it can be positive. If withdrawing simply means I'll stay home on the referendum day, it doesn’t mean anything.  

Q: Mark Fisher described a phenomenon of “capitalist realism” as: “Not only is capitalism the only viable political and economic system, but it is now impossible to even imagine a coherent alternative to it.” Is it impossible for populations of the “global north” to imagine a coherent alternative to capitalism? Are there a lack of alternative visions?

First of all, it is very easy to imagine because we live in an alternative to capitalism. Take, say, the big banks which have enormous power. Where do their wealth and power come from? Well, actually there was a study by the International Monetary Fund little while ago of the big banks in the United States. And it determined that their profits almost entirely derive from taxpayers. Their profits trace back to the--there's a government insurance policy. It's not formal, but it’s tacit. It’s called “too big to fail.” It means that if you get in any trouble, the taxpayer will bail you out. That provides the big banks with enormous profits. It's not just the bailouts, the visible bailouts. It means that they get access to cheap credit with inflated credit ratings, all sorts of mechanisms which are highly profitable to them. That also means that they can engage in risky transactions which tend to be profitable. And they don't have to worry too much because if it goes wrong you run cap in hand to the state and say bail me out. Is that capitalism? It’s very remote from capitalism. In fact, almost everything you do, say, you have a computer, I’m sure you use the Internet. Is that a capitalist development?  It was developed places like this. In fact, we were sitting under pentagon contracts for decades before it was handed over to a private enterprise to market. Bill Gates is the richest man in the world for basically… he introduced some marketing innovation undoubtedly, but the basic technology and hardware, the software, the big ideas, the hard work was mostly done in the state sector in one or another way, either directly or indirectly in one fashion. And he also has the monopoly rights. He managed to get in at a time which grants Microsoft something like monopoly rights for operating systems. If you buy a computer, you get Windows. Well, reliance on creative work in the state sector and on monopoly rights is pretty remote from capitalism. And we have a kind of mixed state capitalist system but it's not capitalism. Can you imagine alternatives to that? It’s very easy. It is actually capitalism would be an alternate but there are much better ones.

So for example, you can easily imagine systems in which the big banks do not maintain their profit on their ability to crash the system because of taxpayer munificent, easy to imagine. And in fact there are many other forms of organization of production and distribution and so on which are in fact being developed. So there are worker-owned enterprises in many places. In the old rust belt, there are many big cooperative movements, the Atlantic region and Canada and many other places. These are all alternatives, germs of another society. Imagining something more free and justice is not only not hard, but you can see bits and pieces of it developing.

Q: Do we need a unified revolution or should we instead be looking at what John Holloway calls the “cracks” in the system: “the multiple rebellions and alternative creations being connected by invisible or almost-invisible (and rapidly shifting) fault lines in society-what is important is to see the manifold forms of rebellion in everyday life”?

Well, you do what’s possible at a particular stage of history under particular circumstances. There's no point and there's no master answer to this. At different times, there are different things to do. There are times when it's possible to introduce a radical change in the society. The most dramatic case was 1936 in Spain, when a large part of Spain was taken over by partially coordinated peasant and worker movements which created the germs of the left libertarian society. It didn't last long not because it failed but because it was crushed by force. I mean the communists, the fascists, liberal democracies disagree on a lot of things but they agreed on one thing: we have to crush freedom. So, the first year of the Spanish Civil War, so-called, was basically a year devoted to crushing the libertarian forces of the left. Communists are in the lead but fascists and liberal democracies participating.

Orwell wrote about this, not entirely. As he said, he didn’t entirely understand what was happening. And there is much extensive work by now. But that's essentially what happened. Well, that was a moment when radical--those circumstances were ripe for radical change. And it wasn't just out of nothing, there was decades of preparation for it. Preliminary efforts, trials that were crushed, rebuild educational programs. People sort of had in their heads what you could do because of decades of struggle. That’s how things can happen.

It happens in other respects too. Take say, the American Civil Rights Movement, which was a partial success, not a huge success but a partial significant success. The background had been laid for decades of work most of which got nowhere or almost nowhere. In 1960, a couple of black students sat in the lunch counter, arrested. The next day, more students, pretty soon you had the Freedom Riders, a formation of SNCC, which was the forefront of the student nonviolent coordinating committee. It was a kind of forefront of the Civil Rights Movement. In prison, you had a mass movement. And the things changed. It was a moment. It took will and energy and effort but the time was ripe for it because of work of long periods. And I think that's the way changes take place.

Q In a conversation between Michael Foucault and Gilles Deleuze in 1972, Foucault said “we had to wait until the 19^th Century before we began to understand the nature of exploitation and to this day we have yet to fully comprehend the nature of power.” Do we yet comprehend the nature of power?

I think we comprehended it long before. People carrying out a slave revolution understood the nature of power very well. People struggling for their rights everywhere understood the nature of power. And we still understand there's nothing--I don't think there’s anything deep and invisible. The structures of power, those we have to unravel. Like say, the European Union, if you want to understand the structure of power in the European Union, you have to understand the way the bureaucracy works, the banks work and the Bundesbank works and so on. But the nature of power, I don't think that's very obscure.

Q: Is there a unifying theory to help understand and explain what is going on in the world today—with economics, war, revolution, etc?

The world is too complex with that. Lots of things are happening. I mean, there’s main, general comments you can make about them. So, for example, you can talk about the international treaties that are being created and ask what they are. Like right now, there’s two huge treaties are being negotiated at the Transpacific and Transatlantic Partnership. And you can ask what they are. Actually you can't really say in detail, because they're negotiated in secret. Of course, not entirely in secret, they’re not secret from the hundreds of corporate lawyers and lobbyists who were writing them, which tells what they are going to be, but they are secret from the general population, more or less. But you can study the nature of these, what they are doing, what has been done. There are good articles in Le Mond Deplomatic, Public Citizen and elsewhere. And when you unravel that, you discover a good deal about the structure of power.  If you read this morning's newspaper, you find that the United States and Japan have failed to impose on their populations something they were trying to do in secret. So far, it failed. Well, all of that can be studied. But there's no single, sort of phrase. I mean, you can make up for slogans, if you like, but there are no illuminating single phrases that capture the complexity of human life.

Questions by Gordon Asher, Leigh French and Stuart Platt

Film by Stuart Platt

Recorded at MIT, Boston 2014

"How to Ruin an Economy; Some Simple Ways"

https://www.youtube.com/watch?v=6mhj-j0z-fk

Filmed and edited by Leigha Cohen

(Noam Chomsky spoke at Third Boston Symposium on Economics on February 10th 2014, sponsored by the Northeastern University Economics Society http://www.northeastern.edu/econsocie... in Boston, MA.)

Let’s suppose that for some perverse reason, we’re interested in ruining an economy and  a society. So, to make the problem interesting, we should select a difficult case, I’ll say not a Central African Republic where it could be done very easily. So let’s pick a rich and powerful society. And best of all, let’s select the richest and most powerful society in history, one with incomparable advantages, one that’s fortunately close at hands, namely, our own.

So, a good way to start to ask what would be signs of a successful economy. Well, to begin with, it should have a people who are eager to work, plenty of badly needed work, that should be done, and ample resources to combine idle hands with needed work. And that picture helps us sketch what a failed economy would look like, the opposite in all respects. And we don’t have to look very far. Right here, there are tens of millions of people eager to work but with no jobs. Many of them have simply dropped out of the work force in despair. There are ample resources to provide employment but they are hidden away where they cannot be accessed in the overflowing pockets of the super rich and corporate sector, in particular, big banks which have been generously rewarded for having created the crises serious enough to have almost brought down the domestic and even the global economy. There are vast amounts of work to be done. The infrastructures collapsing; schools badly need repairs and teachers, the transportation, energy systems have to be radically reconstructed. And there’s a great deal of more ranging from construction work to scientific research.

But the system is so dysfunctional that it cannot put eager hands to needed work, using the resources that would be readily available if the economy were designed to serve human needs rather than wealth beyond the dreams of avarice for a privileged few.

It’s actually hard to think of a more serious indictment of a socio economic system. Well, as you all know, the dysfunctional economy has been accompanied by very highly concentrated wealth and with it, of course, political power follows at once from concentrated wealth that, in turn, yields legislation that drives the cycle forward. Inequality has reached historic heights. In the past decade, 95% of growth has gone to 1% of the population, actually, to a small proportion of those. Meanwhile the general population has faced stagnation or decline. Median real income in the United States is below its level in 1989. For male’s median real income is below what it was in 1968. The labor share of output has fallen to its lowest levels since World War Two. And poorer sectors have suffered severely. The United States has the highest poverty rate in the OECD aside from Turkey. That’s perhaps not too surprising because the US also ranks near the bottom in measures of social justice in the OECD.

For African Americans, household wealth has virtually disappeared during the latest crisis. We should recognize that the grim legacy of slavery which is one of the original sins of American society along with the virtual elimination of the indigenous population. That legacy has never been overcome. There was some amelioration, but not much.

These things didn’t just happen like a tornado. They are the results of quite deliberate policies over roughly the past generation, the period of the neoliberal, so-called, assault on population which has had similar effects elsewhere as well. That’s hardly surprising, either.

The fundamental doctrine of neoliberalism was well expressed by Adam Smith. What he called “the vile maxim of the masters of mankind.” All for ourselves and nothing for other people. And if the masters are given free reign, we should expect the kinds of social and economic disaster that we now see before our eyes.

Well, there are alternatives. Nobel laureate economist Joseph Stiglitz points out that “there are alternatives. But we will not find them in the self-satisfied complacency of the elites, whose incomes and stock portfolios are once again soaring. Only some people, it seems, must adjust to a permanently lower standard of living. Unfortunately, those people happen to be most people.” In short, the vile maxim at work. These developments should not be confused with idealized workings of capitalism and free markets. On the other hand, quite the contrary, the policies are carefully designed to protect the masters from market discipline. That’s always been true back to the 18th century and to ensure that they can rely on beneficence of the powerful nanny state that they carefully nurtured for their benefit.

But let’s continue the exercises of figuring out how to ruin an economy. Suppose we are intent on making the scandal even worse. There are some good ways to proceed. So, modern economies depend very heavily on R&D, research and development. Fundamental work comes primarily from the dynamic state sector on which the advanced economy heavily relies. Almost most of the IT revolution, biology-based industries and much else. Actually that’s a pattern that traces far back but it’ s become much more critical since the Second World War, as impact of science and technology on the society and economy have greatly expanded.

So, a good way to ruin an economy and a society would be to cut back on R&D and federal R&D. And we can read about how that is done from the first issue of the triple-A journal, the American Association for the Advancement of Science journal, Science the first issue in 2014. Here’s what it says. “The 2014 budget will continue what has been a “decades-long slide in the ratio of federal R&D budget to the GDP.” This ratio is often used as a measure of how much a nation values basic research. This ratio, which has fallen 25% in the last decade alone. And that’s continuing.”

“In the meantime, elsewhere internationally, investment in science is rising as nations throughout the world connect investment in R&D to the development of their human capital and their future prosperity. For example, the European Union’s flagship research program, Horizon 2020, is set to receive a nearly 30% boost in 2014. The Chinese government’s investment in R&D has been increasing by percentages in the double digits for the last several years and is poised to become the world leader.”

You can draw the consequences without any comment. What’s happening here is a very natural development of the imposition of the business model of seeking short term profit. The future and society, they’re someone else’s business.

Another way to undermine a healthy economy is to encourage the growth of financial institutions. Giving them free reign by deregulation and using state power to underprice risk. These are crucial features of the neoliberal era. From the 1970s and accelerating since, there’s been enormous expansion of the financial sector in economy. By 2007, right before the latest crush, it had reached about 40% of corporate profits. Well, economic growth has continued during this period, though not at the earlier pace. But it’s rather artificial. It’s sustained by repeated bubbles. The each decade had its bubbles, savings loan bubble under Reagan, the tech bubble in the late Clinton years and of course, the housing bubble under Bush. When the last of these boosts created a financial crisis, it has had severe consequences for much of global economy and near depression conditions persist for much of the domestic population. The cost of the latest housing bubble itself, in loss output, was estimated by the Congressional Budget Office to be around $20 trillion. That’s largely the fault of the FED, which was mesmerized by quasi-religious doctrines about efficient markets, and therefore could not comprehend what was very obviously happening right before their eyes as housing rate rose far beyond trend lines, going back a hundred years and the bubble that could have been predicted wasn’t.

Well, the primary mechanism for rewarding the agents of crises is the government insurance policy known informally as “too big to fail.” That guarantee goes far beyond the direct bailouts that it extends to cheap credit, artificially high credit ratings and many other devices. And the scale is huge. There’s recent IMF study which found that virtually the entire profit of the major banks traces to tacit government insurance, reaches the level of $83 billion a year according to analyses in the business press, the Bloomburg News. The insurance policy, of course, leads to underpricing of the risk. Hence, making the next crisis is more likely.

After the most recent crisis, several prominent economists, including Nobel Laureates, raised the question of the general impact of financial institutions in the Casino economy of the neoliberal period. And they also pointed out that it had not been much studied by economists. They suggest that inquiry would show that these institutions might be harmful to the economy. There are some who have gone much farther. So, perhaps the most respected financial correspondents in the English speaking world is Martin Wolf of the London Financial Times. He concludes that “an out-of-control financial sector is eating out the modern market economy from inside, just as the larva of the spider wasp eats out the host in which it has been laid.”

Well, as in other developed societies, the economy, the US economy—it’s actually state capitalist economy—but it’s partially market-based and markets have both positive and negative features. So, that tells another good way to ruin an economy and a society: undermine the positive features and amplify the negative features. And in fact, huge resources are devoted to these tasks. The great benefit of markets is that they’re supposed to provide consumer choice. It’s only partially true even in principle but put that aside. This beneficial consequence results from informed consumers making rational choices as you learned in your economic courses. That’s the core principle of the markets.

And as you all know, there’s an enormous industry which is devoted for undermining this principle by creating uninformed consumers who will make irrational choices. That’s known as the advertising industry. In a functioning market economy, ads would provide information to consumers about the products that are available. All you have to do is turn on the TV set to see the goal is exactly the opposite. It is to undermine markets by delusion and manipulation making sure that there are uninformed consumers who will make irrational choices.

And in part, these efforts reflect another tendency that undermines markets, that’s the rise of oligarpoly which has actually advanced considerably in recent years. That offers opportunities to avoid price wars by tacit collusion that shifts the goals of business to product differentiation which is often quite meaningless. And it requires massive advertising to delude consumers. From en economic point of view, that’s mostly waste and that’s enormous in scale. Well, these are among the ways to undermine the positive features of markets.

There’s negative features of markets intrinsic to them called market efficiency. That’s ignoring externalities. So, when a firm makes a risky transaction, if it’s paying attention, it takes care to cover its own risk. But it does not consider systemic risk. That is the risk that the loss will effect others and maybe bring down the market as, say, when AIG insurers collapsed, tanking the economy, or actually it would have tanked the economy, if the nanny state hadn’t ridden to the rescue. Here, the government insurance policy plays a crucial role in amplifying a harmful feature of markets. 

Actually, there’s a much more serious case of ignoring externalities, namely distraction of the commons. There’s a standard notion which you have heard called the tragedy of the Commons, which is supposed to mean that if the commons are held by the general public, they will be destroyed. So, therefore they have to be privatized. Actually if you take a look at the facts, the opposite is usually true. It’s privatizing that destroys the commons and for good reasons.

We should be aware of that today, the most significant case of destroying the commons is environmental catastrophe. Informed and rational people can hardly ignore the fact that the drive for short term profits is leading directly to severe economic threats. And imminent ones are within the next generation or two, but that’s another externality that is ignored. And in this case, there’s no one around who can bail out the perpetrators. They can’t run, cap in hand, to the nanny state and say bail me out. Or the future generations whose chances of decent survival, they’re placing it at great risk.

Well, a future historian, there may not be one in fact, but if there is one, such a historian will look back on the current scene with some amazement. There are some who are trying to impede the threat of environmental catastrophe. There are others who are devoted to accelerating it. Who are they? Well, in the forefront of the struggle to overcome the threat are those we call primitive. The first nations in Canada, indigenous people in Latin America, aboriginals in Australia, tribal communities in India and their counterparts all over the world. And the leading the latest disaster are the richest and most powerful countries in the world, the ones that have unique advantages, primarily the United States and Canada. Canada, in particular, has become the scrooge in the world with its activities ranging from tar sands to mining activities that are destroying much of the world. These are countries with unique advantages and they’re in the lead to the race to destruction.

The suicidal drive is conducted with considerably euphoria in what’s called the century of energy independence in which North America becomes the Saudi Arabia of the 21st century. The excitement is scarcely tainted by reflection on what the world would look like as fossil fuels are consumed with unrestrained exuberance. There’s even gloating of the fact that Europe is reducing its efforts to move toward sustainable energy. Reason? It can’t compete with U.S production based on the cheaper energy that is destroying the world and a society.

The corporate sector has announced quite openly that it’s carrying out major propaganda campaigns to convince the public that climate change, if it’s happening at all, does not result from human activity. These efforts are aimed at overcoming the excessive rationality of the public which continues to be concerned about the threats that scientists overwhelmingly regard as near certain and quite ominous. All of that makes sense, under prevailing ideology and prevailing institutional structure which is directed towards pursuing the viral maxim of the masters of mankind. And in this case, it goes well beyond ruining an economy.

He is coming to my country.

Noam Chomsky is coming to Japan in March, 2014. Here's a newspaper article reporting his visit.

http://www.japantimes.co.jp/news/2014/02/22/world/noam-chomsky-truth-to-power/#.Uwn014X7eSo

The title of the article "Truth to Power" reminds me of his saying that we don't need to tell truth to power because they already know it.


 He'll give two talks, one is on linguistics and the other is about capitalist democracy's prospect for survival. I'm attending both.

Q&A on Egypt with Noam Chomsky - Oct 2013

With Courtesy to MIT Egyptian Student Association(ESA)

October 4th, 2013 in Kresge Auditorium, MIT, Cambridge MA USA

7:00 Chomsky: The fact that I’m standing here in front of a large audience in a big auditorium may be misleading. So let me quickly allay any misimpressions. I’m here basically to open a discussion. I don’t pretend to have any deep understanding of the remarkable events that have been taking place in Egypt in recent years. I’ve followed them as closely as I can but haven’t researched them deeply. And many of the sources, the most important ones, ones that are in Arabic, I haven’t had access to.

Another reason for my own hesitation is that I find myself in kind of surprising disagreement with some of my old friends, good friends in Egypt, the people whose judgment I’ve always respected and whose actions I’ve regarded with much admiration. I’ll try to explain why as I proceed.

I’ll first give a quick review of some of the most important events which I’m sure you’re familiar with. So, beginning in January, 2011, the uprising or some called it revolution took place at the Tahrir Square. It was occupied, set in motion in a chain of spectacular events that led very quickly to the fall of the dictator, US-backed dictator. And many other achievements are [that] lively political atmosphere opened up, much opportunity and… which was made good use of for freedom of the association, interchange and speech. Some of the most important achievements were scarcely reported here except in the specialist literature.

That had to do with labor rights. Egypt had had quite a militant and active labor movement for many years outside the official framework. There was an official state union which, as usual, was more committed to controlling the workforce than working for their interests. But outside of the institutional structure, there was a militant labor activism taking place. It accelerated roughly ten years ago as the neoliberal programs were instituted more severely. As just about everywhere in the world, including here, as these programs were instituted, they had pretty standard consequences. One was that they were highly praised by the international financial institutions: World Bank, the IMF, US Treasury, many economists. And they had numbers that looked good. But underneath the numbers, they had usual consequences; we’re familiar with them here. Sharply rising inequality, very high concentration of wealth, elimination of social support systems, atomization of the population, extensive repression, unbounded corruption, usual effects around the world which have led to uprisings almost everywhere.

In Latin America, they’ve led to actually remarkable liberation of South America from 500 years of Western dominance. And what began in the Arab Spring, in Tunisia and Egypt, was in part an uprising against the imposition of the harsh neoliberal regime combined with opposition to a brutal dictatorship that of course, the US was strongly supporting. And there were major achievements in labor rights very quickly. Labor movement was not initially directly involved in the uprising in the Tahrir Square occupation but began to join very soon and provided substantial mass basis for it. The general strike was one of the main factors that impelled the military command, SCAF to decide to shelve the dictator, Mubarak. An independent union was formed for the first time outside of the framework of the legal structure. That’s broken the monopoly of the state labor union. The involvement of labor movement in uprising added social and economic demands to the narrower political goals. And they also made constructive and substantive achievements: a raise of the minimum wage, new unions, much else.

The scholar who does most of the work on this, Joel Beinin at Stanford, reviews it extensively and points out that one of the main achievements was perhaps more subtle. It was just simply providing human dignity and a voice to people who had been so suppressed and marginalized that they had none.

All of that was of great concern to the United States and its allies. They don’t like such developments. And that was particularly kind of accelerated by the studies of public opinion in Egypt at that time—in Egypt and much of the Arab world. And these were conducted by major US polling agencies and certainly well known to planners and elite elements. They were not reported and barely mentioned in the United States in the media, barely mentioned. But they’re interesting and revealing for us and helpful for understanding the US attitude toward the developments that were taking place. US official attitudes.

In what Egypt at the time of the Tahrir Square occupation, a major poll taken by one of the main US polling agencies found that a very high percentage of the population, roughly 80%, regarded the greatest threat that they face as being the United States and Israel. They dislike Iran. All through the Arab world, there’s a sharp dislike of Iran, but as elsewhere they didn’t regard Iran as much of threat. Maybe 10% regarded Iran as a threat. In fact, opposition to US policies were so strong among the population that a majority in Egypt actually thought that the region might be more secure if Iran developed nuclear weapons to offset US and Israeli power.

Well, if you have a really functioning democracy, the popular opinion is going to influence policy. And it’s pretty obvious that the United States doesn’t want these policies implemented. And, as usual, the fear of democracy guided much of US policy; both suppression of information for the public here but also the policy actions. That’s actually quite normal.

There were elections. The elections were won by Islamists mostly the Muslim Brotherhood. They had been the best organized group for many years. They were illegal most of the time under the dictatorship but they functioned. And the organization enabled them. That was one of the factors that enabled them to win the elections. 

The other was that there were many splits in the secular, left liberal quasi-coalition, which actually got a majority of the votes. More than half of the Egyptians voted for what was called “the revolutionary candidate,” candidates from those sectors in the last summer’s presidential elections. But there were six accredited candidates from those groups and that was split so the Brotherhood easily won, Salafists took a big roll.

They imposed a regime which was pretty harsh. The SCAF, the military command, maintained its very powerful role in dominating the society. The government made only limited efforts to share governance, became quite unpopular. By this year, there was a major uprising June 30^th, a huge outpouring of the people into the streets; petitions calling for the government to resign. A couple of days later came the military takeover on July 3^rd. Well, that’s part of the background.

My own personal aspirations and sympathies… and in fact friends, are mostly with the mass popular June 30^th uprising movement. But I think they’re making a serious error in their support for the military coup--or for many of them, even the outright denial that the coup took place--and in their faith in the commitment of the military to defend what they called “the people” against the Brotherhood. That’s a term that should be avoided. The people are badly split. Maybe you may not like them, the Brotherhood, you may not like their actions but they’re there. They’re substantial part of the population. And they can’t be written off. So, the reference to the people already tells you something is misleading and the commentary severely so.

Also mistaken, in my view, is their faith that the military is going to move to establish a democratic secular regime. And that’s highly unlikely. Much more likely is that the military will act the way the military acts everywhere. And historically in Egypt as well, it’ll impose, as they’ve already imposed, a harsh brutal regime. Its aim will be to reinforce their own power of the political system and also to sustain their control over quite substantial economic empire. It’ll crash dissidents and undermine civil and human rights. That’s already happening. My unpleasant expectation is that my friends, the secular liberal left opposition that has welcomed the military, are likely to be its victims pretty soon as it has happened in the past and as it’s beginning to happen now. 

One of the best informed international correspondents in the region, Patrick Cockburn, wrote recently after returning from Egypt that “Egypt is on the brink of a new dark age as the generals close in for the kill.” “With 10 retired generals and two police commanders from the Mubarak era being appointed provincial governors, Egypt is effectively under military rule.” And there’s of course huge support from Saudi Arabia and other elements of the most reactionary parts of the Islamic world. The West prefers them to the Brotherhood. The United States, like Britain before, it tended overwhelmingly to support the most extreme radical Islamists in opposition to secular nationalism for understandable reasons. They don’t like to have the Brotherhood particularly but that’s a different matter. Saudi Arabia and Salafis are way to their extreme side.

It’s possible Cockburn predicts that this may lead to a bloody civil war. Joel Beinin, a specialist on Egyptian labor, writes that the security forces, after the military takeover, quickly crashed “a militant strike at the Suez Steel Company, located in the Canal Zone city that, not coincidentally, was in the vanguard of the revolutionary forces that compelled Mubarak to step down.No matter how popular the army may be at the moment, workers now face an emboldened authoritarian state that is openly hostile to their rights and aspirations.”

I suspect he’s correct. As I said, there have been real gains maybe lasting ones but they are in danger and I think the danger is quite serious. Right now there are two major power centers. One is Islamists and the other is the military. And the latter is very much in the ascendant and with substantial left liberal support, as I said I think is a mistake.

Two weeks ago, a new initiative was launched. It’s called, it calls itself “Revolution Path Front.” The main state newspaper al-Ahram describes it as a “new, anti-Brotherhood, anti-military front launched to achieve revolution goals.”

It contains well-known political figures, activists, labor leaders and others. The spokesperson at the press conference where they announced themselves was Wael Gamal. He is a quite impressive young left economist, I met him a couple of months ago in Egypt. He said at the press conference that "It has been two-and-a-half years since the revolution began and Egyptians have not yet achieved their dream of building a new republic that will provide them with democracy, justice and equality," "Millions have taken to the streets twice; once in January 2011 to topple Mubarak's regime, which was based on corruption and oppression… and a second time in June 2013, forcing Mohamed Morsi to step down after losing legitimacy as a result of the Brotherhood's attempts to monopolize political life and rebuild an oppressive system."

According to Al-Ahram, the aim is “to work for the redistribution of wealth, achieve social justice, combat the formation of an oppressive regime, achieve equality between citizens, set the path for transitional justice and adopt foreign policies that guarantee national independence.” Now if it does, that also guarantees US opposition to it. Is this possible? I don’t know. I hope it is. I think it’s…it looks like the best hope right now to save Egypt from what might become one of the darkest periods of its history under military rule. Thank you.