Monday, December 31, 2012

Crisis and Hope: Theirs and Ours

Noam Chomsky has written and lectured widely on linguistics, philosophy, intellectual history, contemporary issues, international affairs and U.S. foreign policy. His works include: Aspects of the Theory of Syntax; Cartesian Linguistics; Sound Pattern of English (with Morris Halle); Language and Mind; American Power and the New Mandarins; At War with Asia; For Reasons of State; Peace in the Middle East?; Reflections on Language; The Political Economy of Human Rights, Vol. I and II (with E.S. Herman); Rules and Representations; Lectures on Government and Binding; Towards a New Cold War; Radical Priorities; Fateful Triangle; Knowledge of Language; Turning the Tide; Pirates and Emperors; On Power and Ideology; Language and Problems of Knowledge; The Culture of Terrorism; Manufacturing Consent (with E.S. Herman); Necessary Illusions; Deterring Democracy; Year 501; Rethinking Camelot: JFK, the Vietnam War and US Political Culture; Letters from Lexington; World Orders, Old and New; The Minimalist Program; Powers and Prospects; The Common Good; Profit Over People; The New Military Humanism; New Horizons in the Study of Language and Mind; Rogue States; A New Generation Draws the Line; 9-11; and Understanding Power. His most recent book is called "Gaza in Crisis: Reflections on Israel's War Against the Palestinians",  published in November of 2010.


NOAM CHOMSKY, LINGUIST AND U.S. GOVERNMENT CRITIC: To clarify the title a little, I'll adopt the imagery of the Occupy movements, the imagery that's become familiar, current, in the last few months: them is the 1 percent and us is the 99 percent. Of course, this is only imagery. It's not to be taken literally. The leading factor in the astonishing inequality to which he Occupy movement has finally drawn attention actually lies in a fraction of 1 percent of the population, maybe 0.1 percent. It's mostly hedge fund managers, CEOs of financial corporations, and the like.

This is a product of radical changes in the economy since the 1970s. It initiated a process in which an out-of-control financial sector is eating out the modern market economy from the inside, just as the larva of the spider wasp eats out the host in which it has been laid. Actually, those words are not mine—I couldn't get away with it. I'm quoting Martin Wolf of The Financial Times, probably the most respected economic correspondent in the world—and, suitably, conservative.

A related and parallel process has been the deindustrialization of America. That's a sharp reversal of centuries of history. It's been a bonanza for the 1 percent and pretty much of a disaster for the rest. The process is called "failure by design" by the Economic Policy Institute. They're the major monitors of the state of working America. And not, of course, a failure for the designers—as they make clear, the designers have been making out like bandits. Rather, a failure for the rest, including future generations, on whom a huge burden is being imposed, one that may be impossible to meet. And again, by design. It's not a law of nature, law of economics, anything else. Planned process.

The Occupy imagery, it refers to aspirations and commitments. So take, for example, Martin Luther King. His anniversary was commemorated, celebrated a couple of weeks ago. King was a leading figure of the 1 percent. That's independent of whatever his personal assets might have been when he was assassinated. And we should recall that he was assassinated while he was supporting a strike of public sector workers, a group that's now targeted for destruction in the current phase of the class war, the vicious class war that's intensified in the last 30 years or so.

He was hoping, at the time, to carry his dream forward by leading a march of the poor to Washington. The march actually took place, starting from the motel where he was assassinated in Memphis, passing through regions where the civil rights struggle had been waged, and finally reaching Washington, where the marchers were dismissed with scorn by Congress and driven out of the city by the police, who for good measure were ordered to destroy their encampment in Resurrection City in the middle of the night. It's revealing, the contempt of Northern liberalism for King, once he went beyond condemning racist Alabama sheriffs to confronting more fundamental problems of American society in the North as well, the terrible plight of the poor and aggression abroad—at the time, that was the atrocious U.S. war Indochina.

Martin Luther King's actual dream—and not the one we hear orations about on Martin Luther King Day—the actual one was left in tatters, an unfulfilled legacy, matters worth contemplating as King is solemnly commemorated.

One vivid illustration of the difference between the crises of the 1 percent and the 99 percent is the fate of the congressional legislation that was passed to deal with the catastrophic financial crisis that was created by the 1 percent and their associates in the political and professional worlds. The government reaction was reviewed by the special inspector general of the Bush-Obama bailout programs, Neil Barofsky. He pointed out that the legislation that authorized the bailout was two-sided. It was the financial institutions that were responsible for the collapse. They were to be saved by the taxpayer. And the victims of their misdeeds were to be very partially compensated by measures to give some protection to home values and to secure homeownership. Well, only one part of the bargain was kept, and it didn't take a genius to predict which part. The financial institutions were rewarded lavishly for causing the crisis. The TARP bailouts were the least of it.

Meanwhile, the rest of the program floundered. To quote Barofsky, foreclosures continued to mount, with 8 million to 13 million filings forecast over the program's lifetime, while the biggest banks are 20 percent larger than they were before the crisis and control a larger part of our economy than ever. Furthermore, he went on, they reasonably assume that the government will rescue them again if necessary. Indeed, the credit rating agencies incorporate future government bailouts into their assessments of the largest banks, exaggerating market distortions that provide them with an unfair advantage over smaller institutions, which continue to struggle—and, of course, over the 99 percent. In short, he concludes, Obama's programs were a giveaway to Wall Street executives and a blow in the solar plexus to their defenseless victims, and very likely a stepping stone towards the next and probably worst financial crisis, as business lobbying chips away systematically at the Dodd-Frank regulation bill.

Well, these crises have been a regular occurrence since the Reagan years, though there weren't any before. Before that, the New Deal regulatory apparatus remained in place. That was also the greatest growth period in American economic history, often called Golden Age by economists. It was also a period of egalitarian growth. The lowest fifth of the population did about as well as the top fifth. It was also the period in which the modern high-tech economy was founded, very largely in the dynamic state sector of the economy, and not something you read about when you see the encomiums to Steve Jobs and Bill Gates and the others who made use of the contribution of the public to commercialize the work that had been done.

Well, at that time, the banks were banks. They did pretty much what a bank is supposed to do in a state capitalist society. They took unused capital, like, say, your bank accounts, and they transferred them to what was supposed to be some constructive use, like somebody wants to buy a home, or send their kids to college, or start a business, or whatever it may be. That was the golden age.

When deregulation began and the postwar system, so-called Bretton Woods system, was dismantled—that was a system of regulated capital and regulated currencies. When that was dismantled in the 1970s, it led to an extraordinary increase in global capital flow. Banks weren't banks anymore. They became financial casinos, increasingly opaque instruments, all kinds of incentives to underestimate risk, because, as Barovsky pointed out, the nanny state is counted on to step in when things go sour. Credit rating agencies, as he wrote, already take that for granted.

Well, it wasn't very hard to predict what was going to happen. There were a few international economists who actually did, very few. One of them was David Felix. He repeatedly warned—I'm quoting him—that the increasing frequency of financial crises during the period of financial liberalization could terminate in an uncontrollable one, a return to the Great Depression or quite close to that. He was joined by a few others, among them John Eatwell and Lance Taylor, well-known British and American economists. They published in the '90s an important book called Global Finance at Risk. They discussed the institutional roots of the underestimation of risk and they proposed means to deal with it.

At root, the problems result from very well known inefficiencies of markets, inherent inefficiencies of markets, which you learn about in your first semester of economics. One of these is that transactions in a market system don't take into account the effects on others who are not parties to the transaction. So, for example, if you sell me a car and we're paying attention, we'll work it out so that we both make out pretty well, alright. But we simply don't take into account the effect of that purchase on somebody else, that guy over there. And the effects can be—the effects are real. There's more pollution, there's more traffic congestion, there are more accidents. And when you multiply these over the population, they become substantial. In fact, these externalities, as they're called—you don't pay attention to them, they're a footnote—they can be huge.

That's particularly true in the case of financial institutions. So their vocation is to take risks. And if they're well managed, they are supposed to ensure that the potential losses to themselves will be covered—that is, to themselves. Under capitalist rules, market rules, it's not their business to consider the risk to others. That's even apart from the nanny state rushing in when things get in trouble, which of course expands the underestimation of risks.

But even apart from that, just inherent in a market system is that risk is underpriced, because what's called systemic risk, that is, the rest of the system at large, is not priced into decisions. So if Goldman Sachs makes a risky transaction, investment of some kind, or loan or whatever, it presumably, if well managed, covers the risk to itself, even putting aside the fact that the nanny state is there to help it out when things go wrong. But it doesn't take into account the risk that if its, say, loan goes bad, the whole system will collapse, which is pretty close to what happened. It insured itself with AIG. AIG tanked. If the government hadn't bailed out AIG, the biggest insurance company, Goldman Sachs would be bankrupt and other consequences like it would've happened, as would happen in a capitalist society without the nanny state. But the risk is always there and exaggerated, underestimated, just by virtue of the nature of markets. Well, that naturally leads to repeated crises. But all such annoying thoughts were put to the side during the period of what's called neoliberal globalization. That kind of settled into dogma from the Reagan-Thatcher years.

Also dismissed were occasional warnings to beware of what Nobel laureate Joseph Stiglitz 15 years ago called the religion that markets know best. They don't. There are inherent risks that are just part of them. They can be very severe, and often are. That's the least of it. But to devout believers who came to dominate the profession, such heresies as regulating financial markets must be dismissed, in fact, dismissed with ridicule. In fact, they consistently were.

The extremism of the religion was revealed quite graphically just a couple days ago. The Fed, the Federal Reserve, regularly releases transcripts after five years, and it released transcripts of internal discussions in 2006. Those are very interesting reading. That was just when the housing bubble was reaching its incredible peak—unnoticed because markets know best. So the fact that in the last few years housing prices had been shooting way out of sight, breaking a trendline of a century without any basis in any economic fundamentals, that had to be right because markets know best. That's what the religion dictates.

Economist Dean Baker, who's one of the very few who foresaw the catastrophe—he could do the arithmetic, which is apparently a rare talent—he comments that there is no one in the eight Fed meetings reported who suggests that the economy faces any serious turbulence ahead. There is not even discussion that a mild recession could be in sight. There was a concern in the meetings. The concern was inflation, of which there wasn't even a remote sign. But that's what worries financial institutions.

Shortly after the Fed meetings, the huge bubble burst, destroyed trillions of dollars of paper wealth, on which much of the public relied, having been deluded into believing that it was safe. For the more deprived parts of the population, like African-Americans, it virtually eliminated net worth. It's astonishing when you look at the figures.

Well, during these—if you read the transcripts, the president of the New York Fed, the one who's primarily in charge of monitoring Wall Street, he captured the general mood among the elite of the profession, economics profession, when he hailed Fed Chairman Alan Greenspan, who at this time was revered as Saint Alan, on the eve of the worst crash since the Great Depression, Timothy Geithner (that's who it is), who went on to become—was appointed Obama's chief economic manager, he told Greenspan, I'd like the record to show that I think you're pretty terrific. And thinking in terms of probabilities, I think the risk that we decide in the future that you're even better than we think is higher than the alternative. So you're up in the pantheon.

Greenspan himself had not only boasted over the achievements of what economists called the Great Moderation over which he was presiding, but he even explained how the magical tricks were performed. He was quite frank about it. During the Clinton years, he informed Congress that one of the ways in which he was achieving these fabulous results was to instill growing worker insecurity. And that's a good thing, he says, because it reduces efforts by working people to try to gain compensation and benefits to mitigate the harsh effects of the Great Moderation. And that's obviously healthy for the economy. The religion decrees that those gains should go to the 1 percent—of course, for the benefit of all by some kind of miracle that never takes place.

After the great crash, 2007, such fundamental market efficiencies—which, as I say, you're taught about in the first term of economics—they finally did reach the attention of leading economists. One of the leading financial economists wrote that there is growing recognition that our financial system is running a doomsday cycle. Whenever it fails, we rely on lax money and fiscal policies to bail it out. The response teaches the financial sector to take large gambles to get paid handsomely. And don't worry about the costs; they will be paid by taxpayers through bailouts and lost jobs. And the financial system is resurrected to gamble again.

Notice that that's recognizing a kind of a superficial cause of the problem. The deeper cause inherent in market inefficiencies—in this case, at least—went unmentioned, though others mentioned it. So the system is a doom loop was the words of the official of the Bank of England who's responsible for financial stability. And, in fact, so it remains, getting worse.

Well, as I mentioned, the failure by design traces back to the 1970s when there was a substantial redirection of the U.S. economy towards financialization and offshoring of production, deindustrialization. Both of these were upheld in part by the falling rate of profit in domestic manufacturing, but also by diversification of the global economy. By 1970 the global economy was becoming what's called tripolar.

You have to recall that after the Second World War, the peak of U.S. power, the U.S. was the one economic center, had half the world's wealth. The other industrial countries had been severely harmed or devastated by the war. The U.S. gained enormously from the war. Industrial production practically quadrupled. And that was the peak of power.

The famous American decline that's talked about these days, actually it started right away, declined very quickly. The decline is kind of interesting if you think about it. The first step in American decline has a name. It's called the loss of China. It happened in 1949. And then there's huge debate over who's responsible for the loss of China, a major issue in American domestic policy since that time. It's interesting that the phrase itself is never questioned. You can only lose something that you own. And it's just taken for granted. Of course we own the world. How can anyone question that? So if some part of the world moves towards independence, we've lost it. And then the problem is, you know, who's responsible for the loss? In fact, part of the postwar planning, very explicit, was that the U.S. should control the entire Far East, as well as most of the rest.

So that's the beginning of American decline. It keeps going. I won't run through it. But by 1970, it had reached the point that, instead of controlling half the world's wealth, it had declined to 25 percent, which is still colossal, but not 50 percent. And the United States by then was—it's about what it is now, incidentally. The United States was one of three major economic centers. There was a major center in North America, U.S.-based North America; another one in German-based Europe, roughly comparable; and a third in East Asia, which was already becoming the most dynamic industrial system in the world. Then it was Japan-based. As soon as—that was to be joined by the industrial powerhouses in Japan's former colonies, Taiwan and South Korea, soon later joined by China, which is becoming its assembly plant.

That's actually an important fact to bear in mind when you hear about China's rapid growth, which is indeed spectacular. But the growth is largely as an assembly plant for the industrial countries on its periphery and for multinational corporations, say, like Apple, where they make your iPod, and Foxconn. That's where the high technology comes from, the parts and components, the fancy software, and so on. China itself mostly assembles them.

That means, incidentally, that the trade deficit with China that you hear about all the time is severely miscalculated, which has been pointed out. In fact, if you calculate the trade deficit by what's called value-added, how much value is actually added at each step of the manufacturing process, then the trade deficit with China reduces by about 25 percent, and it goes up by the same figure, approximately, with the peripheral industrial countries. And, of course, U.S. manufacturers gain from it as well, not the population.

There's a recent study by the Sloan foundation that goes into this and gives some illustrations. One illustration is an iPod. They say if there's an iPod assembled and exported from China, it costs, they estimated, $150 to produce, and China adds $4 dollars to that. The rest is coming from the outside.

Well, under these conditions, namely, you know, decline in the rate of profit of manufacturing, diversification of the economy, opportunities for production abroad, and so on, under those conditions, financial manipulations and overseas operations became much more profitable for the designers of the economy, who designed a failure, as the EPI points out. What that did is it set off a vicious cycle of greater concentration of wealth, increasingly in the financial sector, which just exploded. That concentration of wealth leads almost automatically to concentration of political power. That in turn leads to legislation, which carries the cycle forward. So things like fiscal measures, you know, changing tax burdens and so on, deregulation, rules of corporate governance that give more power to the chief executive, and a lot more.

Meanwhile, what remained of functioning democracy, rapidly declining, was shredded further as the cost of elections skyrocketed. That drives the political parties deeper—even deeper than before—they were always there, but even deeper than before into corporate pockets. That's where the money is. The Republicans did it so enthusiastically that they scarcely even resemble a traditional political party anymore, which is part of the reason for the near lunacy of the Republican debates. We can talk about that.

If you abandon any pretense of being a political party, you have to mobilize voters somehow, and you can't do it on the basis of your policies. You know, you can't go to the voting publics and say, hey, our only policy is to enrich the superrich and impoverish you. So you have to organize other constituencies. They're groups that are always there, you know, but they weren't really mobilized as a political force in earlier years.

That includes religious—I could use the word extremist, meaning by world standards, but they're not extremist by U.S. standards. The country's kind of off the spectrum in religious extremism and has been for a long time—in fact, since the colonists. But they weren't organized as a political force very much. And now they are. That's a big voting constituency. Nativists who are consumed with hate and fear, they're always there, but now they're organized. Small businessmen who feel that the world's turning against them, they don't like the big corporations, they don't like the government, they don't like anybody, they can be organized, and other sectors like that.

I kind of hate to say it, but those of you who know something about modern history will recognize that this is somewhat similar to the constituencies that big industrialists mobilized in Germany in the late Weimar Republic, which was the Nazi Party. And they thought they could control them, but it turned out they couldn't. But—a lot of dissimilarities, but some unpleasant similarities, too.

Anyhow, when you mobilize those constituencies and that's who you have to talk to, then the debates and—the so-called debates, you know, the catechism and so on, is going to be like what you see on television. It's kind of amazing the world. There's nothing like it in any parliamentary system. But it's almost inevitable once a political party abandons any pretense of being a political party and just is completely in service to a tiny sector, a fraction of the 1 percent.

Well, that's the vicious cycle. The Democrats who—actually, the Democrats today are what used to be called moderate Republicans. Moderate Republicans, it's sometimes said that they're gone. They're not gone. They're centrist Democrats, or even center-left Democrats. They're not far behind, although that's part of the vicious cycle.

Well, actually, a lot of what's going on is in accord with a maxim of Adam Smith's that should actually be known better. Back in Wealth of Nations (1776), he wrote that—of course, he was interested in England. He wrote that in England the principal architects of government policy are the people who own the economy—in his day, the merchants and manufacturers of England. They set policy and they design it so as to ensure that their own interests are very well attended to, however grievous the effect on others, including the people of England, but in particular those overseas, like those in India who were suffering what he called the savage injustice of Europeans, the British in that case, as he knew.

Well, that's a pretty good principle of politics. It held well in 1770s. It's slightly different today. It's not merchants and manufacturers; it's financial institutions and multinational corporations. But the general maxim holds pretty well. You can make it more complex and sophisticated, but as a kind of a simple first approximation, it's not bad, and very dramatic today.

Well, it's also worth remembering that the founders of classical economics—that's Adam Smith and David Ricardo—they could predict what's been happening today, and in fact they did. They warned about what they recognized would be a nightmare of what's now called neoliberal globalization, what the 99 percent have been enduring here, and much harsher, and long familiar in poorer countries.

So, for example, Adam Smith discussed what would happen if in England the merchants and manufacturers decided to basically abandon England to invest abroad and import from abroad. He pointed out that they might do very well under those circumstances but it would be very harsh for England. However, he argued that this is not going to happen, because of a phenomenon that's sometimes called home bias—the merchants and manufacturers would prefer to do business at home, to invest at home and get their commodity products from home. And he said, because of this, as if by an invisible hand, England will be saved from the ravages of what we call neoliberal globalization. That phrase, "invisible hand", is a pretty hard one to miss. It's the only occurrence, the one occurrence of the phrase in his classic Wealth of Nations. So if you look it up in the index, that's the passage it'll take you to. It's basically a critique of neoliberal globalization and a description of what's happening now.

He was not alone. The next great political economist, David Ricardo, classical economist, he recognized the same thing. He recognized that his famous law of comparative advantage would collapse if, you know, his England-Portugal model, if the British investors and merchants did everything in Portugal, they'd do fine, but England would collapse. And he said it wouldn't happen. He hoped it wouldn't happen. He was a little more sentimental about it than Adam Smith. He hoped it wouldn't happen. He hoped that because of home bias—I'll quote him—most men of property would be satisfied with a low rate of profits in their own country rather than seek a more advantageous employment for their wealth in foreign nations, feelings that I should be sorry to see weakened, he said.

Well, that's what happened, dramatically, in the past generation. That leads to the process of eating out the market economy like the larva of a wasp, to quote Martin Wolf again, and destruction of the manufacturing base of the economy at home, with all that that entails, and it's quite serious. Well, the 1 percent can survive on finance and profits from production, survive very well, at least temporarily. Production under absolutely hideous conditions at monstrosities like Foxconn, Taiwanese-owned corporation where they produce your iPods and other Apple products and others. But the 99 percent can't survive on this. And there are other effects, longer-term effects. One of them is loss of the technological edge. That's another debt we're imposing on future generations. There's a—to take one rather striking illustration, there is a rapidly growing market for solar panels, growing very fast. It's now been largely taken over by China.

The U.S. secretary of energy, physicist Steven Chu, he warned recently to Congress that the United States is falling behind in advanced manufacturing, and he took as exhibit A solar panel manufacturing. He toured one of the main Chinese factories, and he reported—it's a high-tech automated factory—it's not succeeding because of cheap labor. Rather, because of sensible planning, the government creating opportunities for infrastructure for suppliers, and so on, a kind of a synergy's developed; also for Apple products, as was discussed recently in The New York Times.

So he said it started, the factory started with very low-tech manufacturing. But there is a general phenomenon which is well known to industrial engineers: manufacturing capacity provides the basis and stimulus for design innovation and rising to higher levels of sophistication in production design and invention. A lot of it comes from the factory floor, just trying things out, seeing what works, getting new ideas, and so on. And in fact it's gotten to the point, Chu points out, where the Chinese have now developed a type of solar cell with world record efficiencies. So China's forging ahead in this essential market, and it might in others too, as the 99 percent here languish—again, by design.

Now, I mentioned that China to this day is still primarily an assembly plant, but it's going to move up the technology ladder in ways like this, and we're helping out—and helping others out—to gain a technological edge, which we'll lose. Industrial countries, too. Germany's doing quite well, for example.

Well, a good illustration of the design is President Obama's economic team. When he came into office, it was in the midst of this terrible collapse. So the first thing he had to do was appoint an economic team. And it was very interesting to see how he appointed. He avoided everyone who had criticized the decisions and the procedures that were leading to the crisis—included Nobel laureates. They were out, period. The ones who came in were the ones who designed the crisis—Robert Rubin's boys, basically. And that was noticed. The business press noticed it. So Bloomberg news, one of the main business journals, they actually did a review of Obama's economic team one by one, talked about their records, and their conclusion was that most of these guys shouldn't be on an economic team; they should be getting subpoenas. Well, that's correct.

There was in fact one exception, representing the liberal left, called for some kind of regulation. That was Paul Volcker. Just to place him in the spectrum, he was Reagan's Treasury secretary. But by, you know, the last couple of years, that puts him somewhere on the left.

He—anyway, he didn't last very long. He was thrown out. He was replaced. Obama replaced him by Jeffrey Immelt. He's the CEO of General Electric. That's the nation's largest corporation. And the business world was quite pleased. They were glad to get rid of Volcker, radical leftist, and they trusted Immelt. So London Financial Times pointed out that Mr. Immelt's appointment was applauded by the U.S. Chamber of Commerce, the main big business lobby, which has been among the president's harsher critics, and funded—notice, funded many Republicans who ran against Democrats in November's elections. This was right after the 2010 election. So the last barrier to unimpeded business rule is out of the way. We can all be happy in the 1 percent.

Well, you take a look at GE—. This appointment, incidentally, was heralded as to create jobs. Okay, that's Jeffrey Immelt's mission. More than half of GE's workforce is abroad. More than half of its revenues come from overseas operations; also very substantially from—not from production, but from financial

manipulations. It is now doing some hiring, but at much lower salaries. The workforce has been so beaten down by class war, by unemployment, designed unemployment, that they don't object; they're glad to have any work at all. This practice that GE is now illustrating of two-tier contracts—you know, old contracts for the unionized workforce that you can't get rid of yet but are trying to get rid of them, but much lower pay and much worse benefits for all new workers—that two-tiered contract system, it goes back to the Reagan years. It's a core part of the bitter and very self-conscious class war of the past generation.

Well, the Immelt appointment, as I said, was proclaimed by the White House to be for job growth, but it had very little to do with that. More accurately, it's what's called follow the money. More than a century ago, the great political financier Mark Hanna said that three things are important in politics: money, money, and I've forgotten the third one. That's far more true today than it was a century ago, especially after the changes of—radical changes of the past 30 years.

Well, the consequent and perfectly predictable decline of—and, in fact, intended decline of democracy is evident every day on the front pages. So right now, for example, in Washington, the great issue of the day is the deficit. For the general public, the great issue of the day is jobs. And on strictly economic grounds, the public is right. There are very few serious economists who question this.

So—in fact, the reasons are explained in the most prestigious places, including the business press. I'll quote again Martin Wolf, the London Financial Times correspondent, who's maybe the most respected economic correspondent in the world. He writes that the U.S. fiscal position is not an urgent issue. The U.S. is now able to borrow on easy terms. The astonishing feature of the federal fiscal position is that revenues are forecast to be a mere 14.4 percent of gross domestic product in 2011, far below their postwar average of close to 8 percent. Individual income tax is forecast to be barely 6 percent of GDP in 2011. This non-American cannot understand what the fuss is about. In 1988, at the end of Ronald Reagan's term, receipts were three times that high, over 18 percent of GDP. Tax revenue has to rise substantially if the deficit is to close. And, of course, that means rise substantially on the sectors of the population where it's been sharply reduced—the rich, especially the super rich in the corporate sector.

Well, it is astonishing, but it's not hard to understand. It's the demand of the financial institutions and the super rich, and in a rapidly declining democracy, that's what counts. Those are the voices that are heard. And as an instrument of class war, the policies that the public strongly opposes make perfectly good sense.

Actually, much the same is true these days in continental Europe. Their two leading economists, financial press, even the International Monetary Fund, point out that the policies of the European Central Bank, which are much more reactionary than the Fed, their policies imposing austerity during recession are almost certain to undermine growth, and even to undermine debt repayment, which is exactly what's been happening. The IMF, International Monetary Fund, recently did a survey of several hundred cases of applying austerity during recession, and they showed that uniformly it undermines growth, and even undermines debt repayment, which is not too surprising. What's needed is economic stimulus, and Europe has plenty of resources for that.

So on economic grounds it doesn't make any sense. But on grounds of class warfare, it's kind of sensible. It's a way to undermine hated social programs, to weaken labor, and to entrench corporate control even more than before. So the programs that the public strenuously opposes are quite rational. It's more failure by design.

Well, even if you keep to the secondary issue of the deficit, the radical decline of democracy I'm speaking of here stares us in the face. So the public has views on how to deal with the deficit—large majorities. Raise taxes on the rich, even if not anywhere near the level of the great growth periods, but raise them. And safeguard the benefit systems—Medicare, Social Security. Actually, even Tea Party adherents insist on that. The financial institutions demand the opposite, so, therefore, it's the opposite that's on the agenda.

For Republicans, it's part of the catechism that you have to solemnly intone lockstep, rather in the style of the old Communist Party: you've just got to repeat it. And the Democrats, again, are not all that far behind, though a couple of steps behind.

Well, there is something that's undiscussable that is a very obvious, well-known way to eliminate the deficit totally, and in fact to create a surplus, and that is to reform the scandalous health-care system. And not by some utopian means. Just to make it like other industrial countries. You know, that's kind of not outer space.

So the U.S. health system, which is unique in a number of ways, one is that it's privatized and unregulated, hence extremely inefficient—layer after layer of bureaucracy, tons of administrative costs, profit-making, advertising, all sorts of things which take funds away from treatment of people, and of course all kind of measures. After all, these are profit-making institutions. They're there to make profit, not to cure people, so they try to do it. And they tried to do it by all sorts of ways to defer or prevent treatment if they can get away with it. That's kind of automatic. And it's about twice the per capita costs, even more, of comparable countries. That does not translate into health benefits. In fact, the U.S. comes out sort of at the low end of industrial societies in health outcomes. But that's a huge cost. And, in fact, if we did institute a health care system like other countries, the deficit would be wiped out, and in fact there'd be a surplus. But that's not part of the debate over the deficit. It's not discussed in the media. The financial institutions don't want it. End of story.

There actually is a far more ominous component of the failure by design. Now, that's not just for the 99 percent, but for their children and their grandchildren, and those are the 1 percent too. And that's environmental catastrophe. There have been a number of major emissions reports in the last couple of weeks, one from the International Energy Association, which is a pretty conservative body. It was founded by Henry Kissinger. They came out with their regular report indicating that emissions, you know, greenhouse emissions, were far beyond what had been anticipated, and their chief economist warned that we may have about five years before the window closes, as he put it. We'll reach the point in global warning which is irreversible—assumed to be irreversible; from then on it just explodes. And these are what are called nonlinear processes, you know, can explode pretty fast. So we've got five years. The emissions are getting worse than ever.

Right before that, a couple of weeks before that, the U.S. energy monitors, Energy Department, produced its estimates, which—similar—said—it's for 2010, the last figures. It said it was the greatest rise ever, and it was worse than the worst-case scenario of the IPCC, you know, the international monitors, the scientists group that monitors emissions. They have a spectrum of more optimistic, less—more pessimistic estimates, and this was worse than the worst of them.

I should say that where I am at MIT, that didn't come as any surprise. There is a climate change study group at MIT, and they've been saying for years, and publishing the fact that their own models suggest that the IPCC consensuses, and even its worst case, is far too optimistic. Well, that's what the latest emissions report shows.

Congress reacted to this. They reacted by enacting [snip] the problem. And can't do that, so therefore we can't inquire into it. It's kind of similar to the National Rifle Association, which for decades has prevented any legislation which would lead to an inquiry—no action, just an inquiry into whether there's a relation between guns and homicides. I mean, it's clear what they're going to find out. But you can't inquire into it. It's too dangerous.

Well, meanwhile, Congress, the Republican Congress, is busy. It's dismantling environmental measures that are on the books, the ones introduced by Richard Nixon, who was in many ways the last liberal president. Eisenhower would look like some kind of flaming radical today. So it's all the more evidence about how both the doctrinal and policy spectrum has shifted to the right.

On climate, there are international polls taken by the Pew Foundation, and it turns out that across the world a large majority of the population is very much concerned about the environmental catastrophe. Even in the United States there's considerable concern, although the United States is much lower than other countries, much less concerned, less belief that it's real, which is why every Republican candidate can say and indeed must say it doesn't exist or it's not a problem and get away with it.

In the United States, this figure has been going down for the last couple of years, concern for climate, you know, the problems of climate. And it's certainly correlated with a massive corporate propaganda campaign, which was openly announced, and nothing secret about it. You could read in The New York Times that after the success of the insurance companies in beating back health reform and turning the Obama program into a kind of a gift to them—which indeed it was—after their success, the Chamber of Commerce, American Petroleum Institute, and others announced that they're going to use the same methods to try to undermine the concern over global warming. And it's been a big campaign. It's apparently had a substantial effect. And that's all a direct consequence of the shift of power towards unaccountable private tyrannies and the religion—and it is a religion—that there must be no public interference in their pursuit of short-term profit and power.

Well, it's easy and convenient to make fun of the Republican congressman who explained that there can't be any environmental problems, because God promised Noah that there would never be another flood. That's easy. We can laugh about it. It's less easy, less convenient, and far more significant to pay attention to the secular religious extremism that's all around us, right in our circles, our own enlightened circles, the kind that I mentioned. And this indeed goes well beyond what I've already mentioned, and it involves crises that are far graver than the failure by design in the rich countries, from which the 99 percent are suffering.

Among these many crises—and there are plenty of them—there's one that ought to be of prime concern for us, and that is just on moral grounds, the ones—the crises affecting the victims of our crimes. Well, these range too widely to talk about, but I'll just end by bringing up one quite striking case, which happens to teach us a good deal about ourselves if we choose to learn from it. As you know, anniversaries of important events are often commemorated, sometimes quite solemnly, like Pearl Harbor Day, but there are some that are forgotten, and they have lessons, too. So I'll mention one.

We are now reaching the 50th anniversary of the date when President John F. Kennedy launched a direct U.S. invasion of South Vietnam. Just 50 years ago he shifted U.S. policy from support of a brutal client regime that had killed tens of thousands of people and elicited resistance they couldn't subdue; he shifted policy from support for them to a direct U.S. attack that included bombing by U.S. aircraft, use of napalm, a program of chemical warfare, programs that ultimately drove millions of people, villagers, into urban slums or what amounted to concentration camps, in which the story was they would be protected from the indigenous guerrillas, who in fact the administration knew they were willingly supporting.

Well, I'll quote official sources from 50 years ago. President Kennedy authorized use of U.S. forces in a sharply increased effort to avoid a further deterioration of the situation in South Vietnam, including increased airlift to the government of Vietnam—that's the U.S. client regime, which until virtually the end declared itself to be the government of all of Vietnam—this increased airlift included helicopters, light aviation, transport aircraft, equipment, and U.S. personnel, for aerial reconnaissance, instruction in and execution of air-ground support, special intelligence, aircraft personnel, and chemical defoliants, to kill Vietcong food crops and defoliate selected border and jungle areas. Spraying equipment was installed on the H-34 helicopters and is ready to be used against food crops. This is 1961. Early '62, the defoliants included Agent Orange. That's laden with dioxin, which was known to be—by the manufacturers, at least, was known to be one of the most lethal carcinogens that's—anyone knows about, and it exacted a pretty terrifying toll on the invading armies, and of course far worse horrors for the civilian population. Still does. You find aborted hideously malformed fetuses in Saigon hospitals several generations down the line. And notice that all of this is attack on South Vietnam.

The short-term effects were reported by the most highly respected Indochina specialist, military historian Bernard Fall—who was no dove, incidentally, but he was one of the few who cared about the people of the tormented countries. So in early 1965 he estimated that about 66,000 had been killed between 1957 and 1961 under the U.S.-imposed terror state, and another 90,000 between 1961, when policy was shifted, and April 1965, during the early stages of the Kennedy-Johnson aggression, virtually all of them South Vietnamese, and mostly victims of the U.S. client regime, or as he put it, the crushing weight of American armor, napalm, jet bombers, and, finally, vomiting gases.

Well, the decisions of 50 years ago were largely kept from the American people, though pieces dribbled out, and so are the shocking consequences that persist. The first study of the continuing impact of chemical warfare on South Vietnamese—destruction of food crops and so on—the first study of that just appeared by Fred Wilcox a couple of months ago. I doubt very much it'll even be reviewed. Well, despite the silence, information did trickle through to give at least some sense of what was happening.

But efforts at justification were pretty slim because nobody really cared, hardly more than President Kennedy's impassioned address to the UN General Assembly, where he warned that we are opposed around the world by a monolithic and ruthless conspiracy that relies primarily on covert means for extending its sphere of influence. And if the conspiracy achieves its ends in Laos and Vietnam, the gates will be opened wide—conspiracies in the Kremlin. There weren't any Russians anywhere near sight, but they were the monolithic and ruthless conspiracy that was doing all these things.

About the same time, he warned that, as he put it, the complacent, the self-indulgent, the soft societies are about to be swept away with the debris of history, and only the strong can possibly survive. That was his lament after the failure of the invasion of Cuba, the Bay of Pigs invasion, warning that we've got to do something about it. Well, it's hardly necessary to spell out the actual basis for these grim pronouncements, since so few people are even paying attention to what was actually being done. And the invasion itself passed with hardly more than a yawn.

Well, that was 1961. Years later, by 1967, opposition to the crimes did reach a substantial scale, but by that time, hundreds of thousands of U.S. troops and tens of thousands of virtual mercenaries were rampaging through the country, heavily populated areas were subjected to saturation bombing, and by then the invasion had spread to the rest of Indochina. And the consequences had become so horrendous that Bernard Fall, again, forecast that Vietnam as a cultural and historic entity is threatened with extinction as the countryside literally dies under the blows of the largest military machine ever unleashed on an area of this size. And he was again referring to South Vietnam, which was always the main target up to that point.

The war went on for another eight horrendous years, and mainstream opinion was divided between those who describe the war as a noble cause that could have been won with more dedication, and at the opposite extreme, the critics, to whom it was a mistake that proved too costly, kind of like the German general staff after Stalingrad. That's the Liberals. By 1977, President Carter aroused almost no notice when he explained that we owe Vietnam no debt because the destruction was mutual. Practically no comment.

Well, still to come after Bernard Fall's grim warning was the bombing of the remote peasant society of Northern Laos, bombing with such intensity that the victims lived in caves for years to try to survive a bombing that had almost nothing to do with the Vietnam War, had mostly to do with the fact that there were a lot of bombers around with nothing much to do.

Shortly after that came the bombing of rural Cambodia at the incredible level of all Allied air operations in the entire Pacific theater during World War II, including two atom bombs. That's rural Cambodia. All of this was under Henry Kissinger's orders "anything that flies on anything that moves". Now, that's a call for genocide of a kind that's very hard to find in the archival record. It was kind of known but disregarded.

These were what are called "secret wars", in that—meaning reporting of what was available, even what was available, was very scanty. And the facts are still barely known to the general public, or even educated elites, people who can recite by heart every real or alleged crime of official enemies. These are all matters that merit reflection, not about, you know, the Republican base, but about ourselves and our communities, those we live in. And they also merit action.

And there is finally some action. The Occupy movements are the first large-scale popular response to the growing crisis of the past generation. Maybe they can go beyond what they've done. I hope so. They have achieved a great deal. And if they can overcome the inevitable repression already underway, and if they can find ways to expand into the general community and to deepen the insight that they're trying to provide, that could prove to be a development of historical significance. And whether that'll happen is essentially up to us to determine, just as it's up to us to determine whether, say, Martin Luther King's dream is to remain in tattered ruins or can in fact be realized. Thanks.


DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.


M.C.: So we got started a little late so that many of you could join us, and we're delighted to have you. We'll set up here. I believe we already have a couple of microphones set up. So we have some time for some dialog with Professor Chomsky. And we also have some handheld microphones up in the balcony. So if you could, please line up here. And I hope we can get some questions from some undergraduates as well tonight. That would be terrific. Okay. So the gentleman over on the side.

AUDIENCE: Dr. Chomsky, I absolutely love your work. I'm just wondering if you could comment and give some of your criticisms over the State of the Union speech the other night.

M.C.: A question about the State of the Union speech.


AUDIENCE: Yeah, if you had any criticisms.

CHOMSKY: Well, I don't know about you, but I never listen to State of the Union speeches. They're kind of predictable, which means they carry essentially no information, even in the technical sense of information. You can predict what they're going to say. It's mostly boilerplate. In this case it's a campaign speech for the next election. There were a couple of things in it which I read about later. I mean, there were a couple of things which are reasonable if they're carried through.

There are some things which are quite threatening. Just to pick one of those, Obama made it clear that they're going to go ahead with the XL pipeline. It's delayed. It'll go through, and the fracking operations. And these are kind of like a death sentence for the species. I mean, you can argue about the other things, but these are very serious.

The advanced technology that's been developed for getting gas, from the natural gas, other hydrocarbons, products from shale and tar sands, the predictions are—nobody knows if the predictions are right, but the predictions are that they will lead to—it's kind of hailed they'll lead to energy independence for the United States, maybe for a century. So the United States will be kind of the Saudi Arabia of the world. Of course, at the end of that century, there won't be any world to care about. But that's not part of the calculation.

I think it's kind of amazing to see these discussions. I mean, what the facts are you can debate. But take again The Financial Times. It's probably the most responsible and serious journal in the world, a very good journal. They had a full page devoted to a euphoric account of how fracking techniques and the pipeline could lead to a century of energy independence and global hegemony for the United States because of the vast resources that would be opened up, and some comment, a couple of sentences, on the local environmental effects, which are very severe. You know, it destroys water resources and all sorts of things. So a couple of words about that, but literally not one word relating it to the emissions reports that had just appeared at that time, the ones I mentioned.

And you just put these things together and you can see that the species is kind of like lemmings happily walking over the cliff. You know, it's pretty much what he said. It's going to lead to lemmings.

Other proposals, you know, it kind of varies. Some of them make some sense, some don't. There's not much detail, so you don't really know what they mean. And you don't know whether he's going to really pursue them.

So, for example, take, say, health care reform. I mean, Obama came into office with a mandate, a very strong mandate, also controlling both congressional bodies. And part of the mandate was for serious health reform. A majority of the population was in favor of some kind of national health care, you know, maybe extending Medicare to the whole population or what's called single-payer. It's Canadian style. And not 'cause Canada has the best health system in the world, but because this is a very insular country and people kind of know that Canada's there somewhere, and they don't know that Australia, say, has a much better health system. So people want a Canadian style health system, which would in fact sharply cut the deficit and so on. And that was the mandate.

He gave it away without a struggle. He—it was reduced to a public option, at least an option for this. Obama gave that away without trying. Even though he was supported by maybe close to two-thirds of the population, he quickly made a deal with the big pharmaceutical companies to continue legislation that I think is unique to the United States. In the United States, Congress is—the government is prevented by law, the executive is prevented by law from negotiating drug prices. So, of course, drug prices are, you know, two or three times as high as anywhere else.

Actually, there's one part of the medical system which is treated, is handled like every other industrial country. That's the Veterans Affairs program. There the government is allowed to negotiate drug prices, there's guaranteed health care, there's preventive care, you know, and the costs are a fraction of the general system, the public system, and the outcomes are quite good. And this, remember, is a vulnerable part of the population. These are people who are not kind of like a random section of the population. A lot of them have war injuries, traumas, and so on, so forth. Well, there they're allowed to do it, but for the rest of the population, not allowed to.

At that time, there was about 85 percent of the public was in favor of getting rid of that provision. And so it went, step by step. It actually ended up with, by about August—I guess it must've been August 2010, the insurance industry were euphoric about their victory. They said, it's great. We got a huge victory. The Obama system is going to give us a huge number of new people signing up, and we'll make a ton of money on it. Of course they turned against it, because nothing is ever good enough. I mean, unless you get everything, you don't have anything. So after having celebrated the victory, they finally turned against it and said, no, we want even more. You know. Well, of course. But that was an example of how he handled the mandate.

Same with other things. Like, take the bailout legislation that I mentioned. There were two parts to it in the legislation: save the banks who were responsible, pay them off for their crimes, and do something for the victims. Only half was done. It wasn't because of lack of public support. So we don't know. Even the kind of positive parts of it, it may not mean anything. In fact, whether they will mean anything depends on whether there's massive public pressure to force them to mean something. There's always pressure coming from concentrated capital. You know, the business classes are always fighting a very self-conscious class war—highly class-conscious business community. And if that's a one-sided class war, well, they win. And so it depends whether there's another side in the class war. But I think that's the fate of whatever's decent in the State of the Union speech.

AUDIENCE: Good evening. My name is David [də'ʃɑn]. I'm a former Marine veteran who survived the hideous war of atrocity against the Vietnamese peoples. After my return, I was trained as a community organizer by Saul Alinsky and was very active in Veterans Affairs, including being a core member of the group of volunteers that built the Vietnam Memorial in Washington, also known as the Wall. I invite everyone here to go there, and as you reflect during the spirit of Tet, healing and reconciliation, to try and imagine how vast a similar memorial would be in Vietnam and how much we owe the Vietnamese and the Indochinese.

My question. In the afterword to Failed States, you note the opportunities for education and organizing abound, and warn that failure to grasp them will have ominous repercussions for our country, our world, and future generations. I strongly believe that the media is mightier than war. And then I ask: how do we the people defend our Constitution, occupy the foreign-policy establishment and the national media, to ensure sustained democratic empowerment and access to unimpeachable ground intelligence to redress these foreign-policy grievances? Semper Fidelis.

CHOMSKY: Was that a question? I didn't understand. I don't really hear very well.

AUDIENCE: How do we occupy the foreign-policy establishment?

M.C.: Okay. How do we occupy the foreign-policy establishment?

CHOMSKY: The same way you bring about other changes. It's a very free country. By comparative standards, it remains a very free country. You get a lot of opportunities. They range from demonstrations to electoral politics to resistance to organizing, organizing public pressure. You know, that's the way you do it.

In fact, you don't have to go very far. The educational establishment, the intellectual establishment, is up to their neck in this. And we live right in the middle of it. Of course that can be influenced, you know, in classrooms and writing and organization and all sorts of things.

And, I mean, I hear the question often, and I don't really understand it. We can do almost anything we want. It's not like, say, Egypt, where you're going to get murdered by the security forces. Here there's some repression sometimes, but by international standards, by comparative standards, it's so slight that it hardly counts, certainly for privileged people—I mean, not for, say, Martin Luther King, not for the people of the wrong color or, you know, poor people and so on. Yeah, they can get it in the neck. But for people like us, the opportunities are just overwhelming. There's nothing to stop all kinds of action, from education and organizing to political action, to demonstrations, to—all kinds of resistance are possible, and a whole range of things, I mean, the kind of things that have succeeded in the past.

After all, we have a history of success in getting policy changes. The New Deal legislation, for example, that didn't come out of nowhere. That came out of very large-scale popular activism, which reached the point where the business world and the government agreed to allow progressive legislation to pass. The business world quickly tried to undermine it, but they had to accept it, because the next thing—. I mean, take, say, sit-down strikes. By the time sit-down strikes were taking place, the business world could easily see that the next step is just taking over the factory, running it, and kicking them out. Well, you don't want to allow that, so some legislation, important legislation passed. And under other massive popular organization and pressure, other things happened.

And it's happened again. I mean, in the 1960s, for example, the antiwar movement, which I mentioned, it got from essentially nowhere to a mass popular movement so strong that by 1968—if you read the Pentagon Papers, one of the most interesting sections is the final section. It ends in mid-1968. And the first few months of 1968, you take a look at that section, there the president wanted to send a couple of hundred thousand more troops to South Vietnam, and the military, the Joint Chiefs were opposed, because they said that they would need the troops for civil disorder control in the United States. The population was just going to get out of control—young people, women, minorities, others. They're just going to need the troops to control the population here. And they didn't send the troops. Well, you know, when the government gets that wary, you've had an effect. They did other horrible things. Could've been worse, but it was bad enough, like I mentioned. But it had to be kind of clandestine.

Actually, the same thing happened in the Iraq War. I mean, a common view is that the protests—the protests against the Iraq War were historically totally unique. I think it's the first war in history where there was massive protest before the war was officially launched. I can't think of a case where that ever happened. And it's claimed that there wasn't any effect, but I don't think that's true. It should have gone on. Unfortunately, it reduced, and that allowed more leeway for aggression.

But the Iraq War was nothing like the war against South Vietnam. I mean, the policies that Kennedy and Johnson routinely carried out without even thinking about it were never tried in Iraq. There was no chemical warfare, there was no saturation bombing by B-52s, there was no—what are called population control measures, where you drive the population into concentration camps. None of these measures were even tried. And I think the reason they weren't tried is part—a lot of reasons, but one of them was just the public—it was understood that the public was not going to tolerate them this time. So, okay, it had a kind of a retarding effect.

There are other kinds of popular organization that have had major effects. I mean, look, the country's a much more civilized place now than it was in the 1960s in many respects. I mean, take, say, women's rights. I mean, in the 1960s, women literally still were not allowed to serve on juries. I mean, they hadn't gotten the vote long before, but in the '60s they still—women could not—there were some states where they could, but in many states they couldn't serve on juries. And, I mean, you take a place, say, my own university in 1960, almost 100 percent white male. You know. Now it's kind of like this. And that's changed all over the country.

Well, that's a big change in the nature of the society and the culture. It didn't happen by magic. It wasn't a gift from above. It came from extensive organizing activities and corresponding actions which finally broke down a lot of barriers and freed things up. That's the way changes take place. It's not a big secret. There's no magic. And all those methods are still available.

AUDIENCE: Thank you.

M.C.: So let's see if we can go up to the balcony. Do we have a microphone with a questioner up there?

AUDIENCE: I was wondering if you'd read Gar Alperovitz's book America Beyond Capitalism, and if you have, what you thought of his ideas in the book.

M.C.: Could you repeat the title and author of the book, please? I didn't catch it either.

AUDIENCE: I was wondering if he'd read Gar Alperovitz's America Beyond Capitalism and what he thought of it.

M.C.: Okay. Gar Alperovitz's book America Beyond Capitalism.

CHOMSKY: Yeah. That's a very important book, and the work that he's doing that's described there is extremely important. I mean, that's one of the things that can be done. It's very feasible. The book reviews work that Alperovitz mainly has been involved in for some years in trying to develop worker-owned enterprises, mostly in Ohio.

It took off in Ohio for very interesting reasons. In I guess it was 1977, as part of this change in the socioeconomic policy that I was discussing, the U.S. Steel Corporation decided to close down its operations in Youngstown, Ohio. Youngstown is a steel town, and it was built by and around the steel industry. The working people, the community were, you know, extensively involved in steel production and everything that flows off of it. And a manufacturing plant spawns all sorts of other things. So it was a steel town.

U.S. Steel decided to sell it off, kill the town. Instead of just giving up, the workers in the community, what are called the stakeholders, offered to buy the plant and run it themselves. That could have been done; with enough public support, it could've happened. These were not public issues at the time. It did go to court. The union took the case to court to try to get the right to do it. They lost in the court, but they could have won, and it could have been carried forward.

Well, so it was a kind of defeat, but like a lot of defeats, it wasn't the end of the story. It was the basis for moving on to something else. And what it spawned was a lot of much smaller-scale efforts to establish worker-owned enterprises. A lot of it's called the Cleveland model. A lot of them are around Cleveland and other parts of Ohio, which are not huge enterprises, but there's a lot of them. Alperovitz in his book reviews all of this. You can look at it for details. And these are, notice, worker-owned. That's short of worker-managed. That would be another step towards liberation. But it's real, and it's a way of reacting to the kind of collapse of the productive system for the 99 percent by just taking it over.

Actually, if you could take a look at standard texts and business economics, you know, nothing radical, standard texts and business economics point out that there's no economic principle or any other principle that says that corporations should be controlled by shareholders. Shareholders, incidentally, doesn't mean somebody whose pension fund has two dollars of theirs in the—as a share. Shareholders are very narrowly concentrated. Shareholding's, like, top 1 percent of the population, most of it, and that means big banks, interlocking directorates, and so on. There's no economic principle that says they are the ones who should determine investment policy, like shipping production to Foxconn. There's no law of economics that says that that should happen. It could just as well be done by stakeholders, by the workforce and the community—perfectly consistent with anything that anyone claims about economic theory.

Well, you know, there's no reason for, say, the Occupy movement to be less imaginative and ambitious than standard business texts. So, yes, stakeholders could take over parts of the economy that are being dismantled, run them effectively, and direct them to different purposes. These are very feasible tasks.

So, for example, one of the things that Obama's praised for by the kind of left liberal economists, Paul Krugman and others, is for having essentially nationalized the auto industry and reconstructed it. That's pretty much what happened. Well, once the auto industry was nationalized, which is essentially what happened, there were alternatives. And one alternative was to reconstruct it and hand it back to, essentially, the original owners—not the same names, but same class, same banks, and so on. That's what was done.

Another possibility would have been to hand the auto industry over to the workforce and the communities, the stakeholders, and redirect it towards things that the country really needs, that we badly need, high speed rail, for example. It's a kind of a shameful situation when you compare the U.S. with other countries, even much poorer countries. And it would be a tremendous economic benefit and just a human benefit in all kinds of respects. It means I could have got here in two hours instead of wasting time at the airport, for example—literally two hours.

I happened to be in France a couple of months ago giving talks, and the last talk I gave was in Southern France. And I had to get from Avignon in southern France to the airport, de Gaulle airport. And, of course, there's a train that goes directly to the airport. And it took two hours. It's the same distance as Washington to Boston. Here it takes—I don't know what—eight hours or something. All of this is—these are human costs, they're economic costs, the things the country badly needs. The skilled workforce in the auto industry could easily be—it could be reconverted to producing things like this and other things that people need, and it could be done under the ownership and management of the workforce and the community. Well, that was an alternative.

But getting back to Gar Alperovitz, this is the kind of thing he's talking about. I don't remember if he talked about that particular case, but it's the kind of case that's coming up all the time. And these are very feasible things. They're not far out in Utopia. That could have a big effect on the society. And Alperovitz is one of the very few people who's really doing very good work on this. The book is certainly worth reading and thinking about what it describes, what options it suggests.

This comes up all the time, I should say, like at Boston. I live in Boston. About a year ago there's—in a suburb of Boston, Taunton, a manufacturing town, there was a reasonably successful high-technology, small manufacturing plant. It was producing equipment, high-tech equipment for aircraft. And they apparently were doing okay, but they weren't making enough profit for the managers and the multinational corporation who own them. So the corporation wanted to just dismantle it. The union, United Electrical Workers, wanted to buy the operation and just run it themselves. Well, the corporation wouldn't agree. I suspect that they wouldn't agree mostly on class grounds: it's kind of not a good idea to let people own and manage their own workplaces—you get the wrong idea. Anyhow, whatever the reason, it didn't work.

But if, say, the Occupy movement had been around and if it had been active and energetic enough and had reached out sufficiently, that's the kind of thing it could have participated in and supported, and maybe gotten it over the edge. Well, that'd be important in maintaining, say, manufacturing in Massachusetts. And that kind of thing goes on all the time. These are options that are all over the place.

M.C.: So—and Gar Alperovitz, by the way, who's also had a long, distinguished career, starting with his book Atomic Diplomacy about 50 years ago, is here at the university.

So our dilemma is that we could go on all night with Professor Chomsky, but we need to get back home safely, so let me take one more question, and we'll wrap it up. From this side.

AUDIENCE: Thank you.

AUDIENCE: Can you do the other side? 'Cause I've been waiting here to talk. Please?

AUDIENCE: Can we get a question from a woman?

M.C.: Fair enough. Thank you for your—.

CHOMSKY: It's kind of interesting that after all—.

M.C.: So if we can do both and get a question from the other side of upstairs from a woman, do we have anyone to fit the bill?

ASSISTANT: We have two women over here.

M.C.: Yes, we do.

AUDIENCE: So, hi. I'm Lindsay, and I am an adjunct professor, what's known as a Beltway adjunct. I teach eight classes a semester, and I have no health insurance and no retirement benefits. I'm a communications scholar, and I've studied your work for the last 15 years. And I want to know, beyond the critique—which was a marvelous critique, by the way, thank you—what are the discursive strategies that we can use to combat this kind of ideologically driven discourse that dominates the politics that we deal with in the classroom and beyond every day? I mean, I know I have friends, colleagues, and family members who are staunchly, you know, staunch supporters of Republican worldview, and it's hard to have dialogs, meaningful dialogs with them, because in late modernity, facts no longer matter, which is hard because there's some legitimacy in late modernity for challenging the notions of truth that historically grounded us in the Enlightenment. But what I'm wondering is, with that being the case, how do we begin to talk about truth in a meaningful way? What kind of linguistic strategies do we use to drive change? That's what I'm wondering.

CHOMSKY: I only heard about half of it.

M.C.: Okay. So—.

CHOMSKY: Sorry. I just don't hear very well.

M.C.: Short version: what discursive strategies can we use in a time when facts seem to have little foundation?

CHOMSKY: Yeah. Well, before answering, let me just make a comment expanding on the statement I made before about one of the great victories of the past generation, namely, establishing a much higher level of women's rights. It's a huge progress. But notice how far we are from having reached any proper point. Just about every talk I give, the same question comes up: how about allowing a question from a woman? Why does that question even arise? You know? Like, we don't ask the question, how about allowing a question from somebody with blonde hair, let's say. Why is the discrimination so deeply embedded, and in fact internalized, that you still have to raise the question? And it's uniform. I can't remember a talk where this didn't come up. So that's something to think about that's still a battle to be won internally and in the society.

As far as the discursive strategies are concerned, I don't think there are any answers other than the ones we all know, the ones that have succeeded—not a 100 percent, of course. Every success is limited. There are failures. But there are successes.

M.C.: Watch your hand.

CHOMSKY: Oh. Sorry. We've—. Yeah, one discursive strategy is to keep your hand away from the microphone.

But there are things we can all do. I mean, we're all—practically everybody here, I'm sure, is from a pretty privileged sector of the population. You have lots of opportunities. You can speak, you can write, you can organize, you can reach out to other people. If you keep doing it, it can have an impact.

Take, say, something like the women's movement. I mean, a lot of you are old enough to remember how that happened. I mean, it began with very small consciousness-raising groups, groups of women getting together and talking to each other and coming to comprehend—and a lot of it's internal—to comprehend that you don't have to accept oppression, that there is oppression, first of all. Like, if you'd asked my grandmother, is she oppressed, she wouldn't have known what you were talking about. Of course, she was hopelessly oppressed, but it just wasn't—that's life. You know, it's like asking, do you breathe? So just getting to understand that you don't have to accept oppression, you can be a free, independent person. And then came efforts to expand. And there was bitter resistance; you know, it wasn't easy by any means. And, in fact, there still is, and there's a backlash, and so on and so forth. But you just keep struggling for it.

The civil rights movement, it didn't get anywhere near Martin Luther King's dream, but it did have effects. Big change from, say, Alabama in 1960. You know, things are bad, but not like that. And it had the same way. It started with—you know, it goes back decades, of course, but it really took off when a couple of young black students sat in at a lunch counter 60 or 51 years years ago. And they were arrested, beaten, and so on. Pretty soon, SNCC formed, Student Nonviolent Coordinating Committee. The students got some support in Spelman College in Atlanta, where a lot of the SNCC activists came from. There were two faculty members who supported them, Howard Zinn and Staughton Lynd, both expelled. But they did get some support. And the Freedom Riders' Freedom Buses started. There was little participation from the North. It was very brutal. People were killed, beaten. You know, not fun. I mean, I remember demonstrations later—it was 1965—in the South, where there was just brutal police violence and repression. Federal marshals there kind of watching them, not doing anything. But they did—it did get some gains.

It hit a limit. It hit a limit as soon as it reached the North. It's kind of striking. Martin Luther King in 1966 expanded the movement to Chicago; then they were just dumped on miserably. It was an effort to mobilize the poor, mobilize people around slums. Moved on to the war in Vietnam. Huge antagonism. They ended up the way I described, just kind of written out of history by Northern liberals. But it did have success, and the successes are real, and we know how they were won.

Same with everything else. I mean, the Vietnam War protests did reach a substantial level, but remember what it was like for years. I mean, when I started giving talks about the Vietnam War in the early '60s, it was in somebody's living room or in a church with four people. You know. And in fact, if we tried to do it at the college, say, MIT, you'd have to bring together half a dozen topics and make one of them Vietnam in the hopes that somebody would show up. As late as October '65—that's after what Bernard Fall was describing, what I quoted—in Boston, which is a liberal city, you could not have a public demonstration against the war, literally. It would be violently broken up, often by students. It's a fact.

In March 1966, you know, at this time the hundreds of thousands of troops rampaging in South Vietnam, huge destruction, country virtually destroyed, in Boston (again, a liberal city), since we couldn't have public demonstrations 'cause they'd be broken up, we tried to have one in a church, a downtown church, [dʒə'rɔntən] Street Church. The church was attacked—you know, tomatoes, cans, defaced. Actually, I—there was a police contingent. I walked outside and stood next to the police captain and asked him, you know, can't you do something to stop the defacing of the church? And he said, no, he can't do anything. About a minute later, a tomato hit him in the face, and in about 30 seconds the place was cleared. But that was going on in March 1966. A year later they were big demonstrations.

And there were no special kind of tricky strategies, just what we all know how to do. If people don't want to think about facts, try to bring up the importance of understanding facts, which, after all, everyone knows. In fact, if you look at public attitudes, even Tea Party attitudes, they're kind of social democratic, literally. So, for example, among Tea Party advocates and, of course, the rest of the population, a considerable majority are in favor of more spending for health and more spending for education. They're against welfare, but more spending to help, say, women with dependent children.

That's the result of very effective propaganda. Ronald Reagan, one of his great successes was to demonize the concept of welfare. So welfare means, for Reagan, you know, Reaganite rhetoric, a rich black woman driving to a welfare office in a chauffeured Cadillac to take your hard-earned money and spend it on drugs or something. Well, nobody's in favor of that. But are you in favor of what welfare actually does? Yeah, that ought to supported.

And I just don't think it's true that people don't want to hear about facts. I mean, the same's true on health, on the deficit, on the things I mentioned—you know, not 100 percent, but there's a fairly—for example, about—I think it's two-thirds of the population thinks that corporations should be deprived of personal rights. That's a pretty significant move. That would undo a century of court decisions. It's not just Citizens United. It goes back a century. And that's against the will of about two-thirds of the population. Well, all these things offer plenty of opportunities for discussion, interchange, education, organizing, activism. The opportunities are all there. It's mostly the will to undertake them that's lacking. And it's not easy. I mean, there's costs associated with it, so—you know, undoubtedly even for privileged people; but, you know, not the costs that people like us can't bear, not that kind of cost.


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