Friday, March 21, 2008


Deterring Democracy Copyright © 1991, 1992 by Noam Chomsky. Published by South End Press.
Chapter 7: The Victors Segment 7/14
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David Felix concludes that Argentina's decline results from "political factors such as prolonged class warfare and a lack of national commitment on the part of Argentina's elite," which took advantage of the free-market policies of the murderous military dictatorship. These led to massive redistribution of income towards the wealthy and a sharp fall of per capita income, along with a huge increase in debt as a result of capital flight, tax evasion, and consumption by the rich beneficiaries of the system; Reaganomics, in essence.35

In oil-rich Venezuela, over 40% live in extreme poverty according to official figures, and the food situation is considered "hyper-critical," the Chamber of Food Industries reported in 1989. Malnutrition is so common that it is often not noted in medical histories, according to hospital officials, who warn that "the future is horrible." Prostitution has also increased, reaching the level of about 170,000 women or more according to the Ministry of Health. The Ministry also reports an innovation, beyond the classic prostitution of women of low income. Many "executive secretaries and housewives and college students accompany tourists and executives during a weekend, earning at times up to [about $150] per contact." Child prostitution is also increasing and is now "extremely widespread," along with child abuse.36

Brutal exploitation of women is a standard feature of the "economic miracles" in the realms of capitalist democracy. The huge flow of women from impoverished rural areas in Thailand to service the prostitution industry -- one of the success stories of the economic takeoff sparked by the Indochina wars -- is one of the many features of the Free World triumph that escape notice.37 The savage conditions of work for young women largely from the rural areas are notorious; young women, because few others are capable of enduring the conditions of labor, or survive to continue with it.

Chile under the Pinochet dictatorship is another famous success story. Antonio Garza Morales reports in Excelsior that "the social cost which has been paid by the Chilean people is the highest in Latin America," with the number of poor rising from 1 million after Allende to 7 million today, while the population remained stable at 12 million. Christian Democratic Party leader Senator Anselmo Sule, returned from exile, says that economic growth that benefits 10% of the population has been achieved (Pinochet's official institutions agree), but development has not. Unless the economic disaster for the majority is remedied, "we are finished," he adds. According to David Felix, "Chile, hit especially hard in the 1982-84 period, is now growing faster than during the preceding decade of the Chicago Boys," enthralled by the free market ideology that is, indeed, highly beneficial for some: the wealthy, crucially including foreign investors. Chile's recovery, Felix argues, can be traced to "a combination of severe wage repression by the Pinochet regime, an astutely managed bailout of the bankrupt private sector by the economic team that replaced the discredited Chicago Boys, and access to unusually generous lending by the international financial institutions," much impressed by the favorable climate for business operations.38

Environmental degradation is also a severe problem in Chile. The Chilean journal Apsi devoted a recent issue to the environmental crisis accelerated by the "radical neoliberalism" of the period following the U.S.-backed coup that overthrew the parliamentary democracy. Recent studies show that about half the country is becoming a desert, a problem that "seems much farther away than the daily poisoning of those who live in Santiago," the capital city, which competes with Sao Paolo (Brazil) and Mexico City for the pollution prize for the hemisphere (for the world, the journal alleges). "The liquid that emerges from the millions of faucets in the homes and alleys of Santiago have levels of copper, iron, magnesium and lead which exceed by many times the maximum tolerable norms." The lands that "supply the fruits and vegetables of the Metropolitan Region are irrigated with waters that exceed by 1000 times the maximum quantity of coliforms acceptable," which is why Santiago "has levels of hepatitis, typhoid, and parasites which are not seen in any other part of the continent" (one of every three children in the capital has parasites). Economists and environmentalists attribute the problem to the "development model," crucially, its "transnational style," "in which the most important decisions tend to be adopted outside the ambit of the countries themselves," consistent with the assigned "function" of the Third World: to serve the needs of the industrial West.39

The fashion is to attribute the problems of Eastern Europe to the "sick system" (quite accurately), while ignoring the catastrophes of capitalism or, on the rare occasions when some problem is noticed, attributing them to any cause other than the system that consistently brings them about. Latin American economists are generally ignored, but some of them have been useful for ideological warfare and therefore have attained respectability in the U.S. political culture. One example is Francisco Mayorga, a Yale Phd in economics and the leading economist of the U.S.-backed UNO coalition, who became one of the most respected commentators on Nicaragua because he could be quoted on the economic debacle caused by Sandinista mismanagement. He remained a favorite as he became the economic Czar after the UNO victory in the February 1990 election, though he disappeared when he was removed after the failure of his highly-touted recovery policies (which failed, in large part, because of U.S. foot-dragging, the UNO government being nowhere near harsh and brutal enough for Washington's tastes).

But Mayorga was never quoted on what he actually wrote about the Nicaraguan economy, which is not without interest. His 1986 Yale doctoral dissertation is a study of the consequences of the development model of the U.S.-backed Somoza regime, and of the likely consequences of alternative policy choices for the 1980s. He concludes that "by 1978 the economy was on the verge of collapse" because of the "exhaustion of the agroindustrial model" and the "monetarist paradigm" that the U.S. favored. This model had led to huge debt and insolvency, and "the drastic downturn of the terms of trade that was around the corner was clearly going to deal a crucial blow to the agroindustrial model developed in the previous three decades," leading "inexorably" to an "economic slump in the 1980s." The immense costs of the U.S.-backed Somoza repression of 1978-9 and the contra war made the "inexorable" even more destructive. Mayorga estimates capital flight from 1977 to 1979 at $.5 billion, and calculates the "direct economic burden" of war from 1978 to 1984 at more than $3.3 billion. That figure, he points out, is one and a half times the "record GDP level of the country in 1977," a year of "exceptional affluence" because of the destruction of the Brazilian coffee crop, hence regularly used by U.S. propagandists (including some who masquerade as scholars) as a base line to prove Sandinista failures. The course of the economy from 1980, Mayorga concludes, was the result of the collapse of the agroindustrial export model, the severe downturn in the terms of trade, and the unbearable burden of the 1978-9 war and then the contra war (his study ends before the U.S. embargo exacerbated the crisis further). Sandinista policies, he concludes, were ineffective in dealing with the "inexorable" collapse: they "had a favorable impact on output and a negative effect on rural wages and farming profits," favoring industrial profits and redistributing income "from the rural to the urban sector." Had there been "no war and no change in economic regime," his studies show, "the Nicaraguan economy would have entered a sharp slump."40

These conclusions being useless or worse, Mayorga's work on the Nicaraguan economy passes into the same oblivion as all other inquiries into the catastrophes of capitalism. The example is noteworthy because of Mayorga's prominence at the very same time, insofar as he could serve a propaganda function.

Go to the next segment.

35 Felix, op. cit.; Guido Di Tella and Rudiger Dornbusch, The Political Economy of Argentina, 1946-1983 (Pittsburgh, 1989), cited by A. Chomsky, op. cit.

36 Excelsior, March 7; AFP, Excelsior, Feb. 26, 1990 (LANU, May 1990).

37 See Pasuk Phongpaichit, From peasant girls to Bangkok masseuses, International Labor Office (ILO), Geneva, 1982.

38 Excelsior, Dec. 17, 1989; LANU, Feb. 1990; Felix, op. cit.

39 Apsi, Chile, July 1990 (LANU, Sept. 1990).

40 Mayorga, The Nicaraguan Economic Experience, 1950-1984: Development and exhaustion of an agroindustrial model, Yale University Phd thesis, 1986. See Barricada Internacional, April 29, 1990, for relevant discussion. KEYWORDS terrorist democracy elections cia mossad bnd nsa covert operation 911 mi6 inside job what really happened wtc pentagon joint chiefs of staff jcs centcom laser hologram usa mi5 undercover agent female sex exploitation perception deception power anarchy green social democratic participation japanese spy black-op false flag gladio terror.

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