The Prosperous Few and the Restless Many.pdf

and the

Restless Many

Noam Chomsky

Interviewed by David Barsamian

The Prosperous Few

Table of contents

The Prosperous Few and the Restless Many ........................................................... 1

The new global economy ................................................................................................ 3

NAFTA and GATT -- who benefits?............................................................................ 12

Food and Third World "economic miracles" ................................................................ 15

Photo ops in Somalia .................................................................................................... 18

Slav vs. Slav.................................................................................................................. 22

The chosen country ....................................................................................................... 24

Gandhi, nonviolence and India ..................................................................................... 32

Divide and conquer ....................................................................................................... 35

The roots of racism ....................................................................................................... 38

The unmentionable five-letter word ............................................................................. 41

Human nature and self-image ....................................................................................... 45

It can't happen here -- can it? ........................................................................................ 48

Hume's paradox ............................................................................................................ 50

"Outside the pale of intellectual responsibility" ........................................................... 53

The new global economy

I was on Brattle Street [in Cambridge] just last night. There were panhandlers,

people asking for money, people sleeping in the doorways of buildings. This

morning, in the subway station at Harvard Square, there was more of the same.

The spectre of poverty and despair has become increasingly obvious to the middle

and upper class. You just can't avoid it as you could years ago, when it was limited

to a certain section of town. This has a lot to do with the pauperization (the internal

Third Worldization, I think you call it) of the United States.

There are several factors involved. About twenty years ago there was a big change in the

world order, partly symbolized by Richard Nixon's dismantling of the postwar economic

system. He recognized that US dominance of the global system had declined, and that in

the new "tripolar" world order (with Japan and German-based Europe playing a larger

role), the US could no longer serve -- in effect -- as the world's banker.

That led to a lot more pressure on corporate profits in the US and, consequently, to a big

attack on social welfare gains. The crumbs that were permitted to ordinary people had to

be taken away. Everything had to go to the rich.

There was also a tremendous expansion of unregulated capital in the world. In 1971,

Nixon dismantled the Bretton Woods system, thereby deregulating currencies. That, and

a number of other changes, tremendously expanded the amount of unregulated capital in

the world, and accelerated what's called the globalization (or the internationalization) of

the economy.

That's a fancy way of saying that you export jobs to high-repression, low-wage areas --

which undercuts the opportunities for productive labor at home. It's a way of increasing

corporate profits, of course. And it's much easier to do with a free flow of capital,

advances in telecommunications, etc.

There are two important consequences of globalization. First, it extends the Third World

model to industrial countries. In the Third World, there's a two-tiered society -- a sector

of extreme wealth and privilege, and a sector of huge misery and despair among useless,

superfluous people.

That division is deepened by the policies dictated by the West. It imposes a neoliberal

"free market" system that directs resources to the wealthy and to foreign investors, with

the idea that something will trickle down by magic, some time after the Messiah comes.

You can see this happening everywhere in the industrial world, but most strikingly in the

three English-speaking countries. In the 1980s, England under Thatcher, the United

States under the Reaganites and Australia under a Labor government adopted some of the

doctrines they preached for the Third World.

Of course, they would never really play this game completely. It would be too harmful to

the rich. But they flirted with it. And they suffered. That is, the general population

suffered.

Take, for example, South Central Los Angeles. It had factories once. They moved to

Eastern Europe, Mexico, Indonesia -- where you can get peasant women flocking off the

land. But the rich did fine, just like they do in the Third World.

The second consequence, which is also important, has to do with governing structures.

Throughout history, the structures of government have tended to coalesce around other

forms of power -- in modern times, primarily around economic power. So, when you

have national economies, you get national states. We now have an international economy

and we're moving towards an international state -- which means, finally, an international

executive.

To quote the business press, we're creating "a new imperial age" with a "de facto world

government." It has its own institutions -- like the International Monetary Fund (IMF)

and the World Bank, trading structures like NAFTA and GATT [the North American

Free Trade Agreement and the General Agreement on Tariffs and Trade, both discussed

in the next section], executive meetings like the G-7 [the seven richest industrial

countries -- the US, Canada, Japan, Germany, Britain, France and Italy -- who meet

regularly to discuss economic policy] and the European Community bureaucracy.

As you'd expect, this whole structure of decision making answers basically to the

transnational corporations, international banks, etc. It's also an effective blow against

democracy. All these structures raise decision making to the executive level, leaving

what's called a "democratic deficit" -- parliaments and populations with less influence.

Not only that, but the general population doesn't know what's happening, and it doesn't

even know that it doesn't know. One result is a kind of alienation from institutions.

People feel that nothing works for them.

Sure it doesn't. They don't even know what's going on at that remote and secret level of

decision making. That's a real success in the long-term task of depriving formal

democratic structures of any substance.

At Clinton's Little Rock economic conference and elsewhere, there was much talk of

economic recovery and restoring competitiveness. Political economist Gar

Alperovitz wrote in the New York Times that what's being proposed is "not likely to

make a dent in our deeper economic problems. We may simply be in for a long,

painful era of unresolved economic decay." Would you agree?

I haven't seen that piece yet, but the Financial Times [of London, the world's leading

business journal] has been talking with some pleasure of the fiscal conservatism shown

by Clinton and his advisors.

There are serious issues here. First of all, we have to be careful in the use of terms. When

someone says America is in for a long period of decline, we have to decide what we

mean by "America." If we mean the geographical area of the United States, I'm sure that's

right. The policies now being discussed will have only a cosmetic effect. There has been

decline and there will be further decline. The country is acquiring many of the

characteristics of a Third World society.

But if we're talking about US-based corporations, then it's probably not right. In fact, the

indications are to the contrary -- their share in manufacturing production, for example,

has been stable or is probably even increasing, while the share of the US itself has

declined. That's an automatic consequence of sending productive labor elsewhere.

General Motors, as the press constantly reports, is closing some 24 factories in North

America. But in the small print you read that it's opening new factories -- including, for

example, a $700 million high-tech factory in East Germany. That's an area of huge

unemployment where GM can pay 40% of the wages of Western Europe and none of the

benefits.

There was a nice story on the front page of the Financial Times, in which they described

what a great idea this was. As they put it, GM doesn't have to worry about the

"pampered" West European workers any longer -- they can just get highly exploited

workers now that East Germany is being pushed back to its traditional Third World

status. It's the same in Mexico, Thailand, etc.

The prescription for our economic problems is more of the same -- "leave it to the

market." There's such endless trumpeting of the free market that it assumes almost

a myth-like quality. "It'll correct the problems." Are there any alternatives?

We have to first separate ideology from practice, because to talk about a free market at

this point is something of a joke. Outside of ideologues, the academy and the press, no

one thinks that capitalism is a viable system, and nobody has thought that for sixty or

seventy years -- if ever.

Herman Daly and Robert Goodland, two World Bank economists, circulated an

interesting study recently. In it they point out that received economic theory -- the

standard theory on which decisions are supposed to be based -- pictures a free market sea

with tiny little islands of individual firms. These islands, of course, aren't internally free -

- they're centrally managed.

But that's okay, because these are just tiny little islands on the sea. We're supposed to

believe that these firms aren't much different than a mom-and-pop store down the street.

Daly and Goodland point out that by now the islands are approaching the scale of the sea.

A large percentage of cross-border transactions are within a single firm, hardly "trade" in

any meaningful sense. What you have is centrally managed transactions, with a very

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