Thursday, September 10, 2009

Chomsky Crisis Boston Review

Chomsky: What America's 'Crisis' Means to the Rest of the World

By Noam Chomsky, Boston Review. Posted September 10, 2009.

The way we perceive "crises" here in the U.S. is a
profound symbol of how we don't understand them
internationally.

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

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

One way to enter this morass is offered by the June 11
issue of the New York Review of Books. The front-cover
headline reads "How to Deal With the Crisis"; the
issue features a symposium of specialists on how to do
so. It is very much worth reading, but with attention
to the definite article. For the West the phrase "the
crisis" has a clear enough meaning: the financial
crisis that hit the rich countries with great impact,
and is therefore of supreme importance. But even for
the rich and privileged that is by no means the only
crisis, nor even the most severe. And others see the
world quite differently. For example, in the October
26, 2008 edition of the Bangladeshi newspaper The New
Nation, we read: It.s very telling that trillions have
already been spent to patch up leading world financial
institutions, while out of the comparatively small sum
of $12.3 billion pledged in Rome earlier this year, to
offset the food crisis, only $1 billion has been
delivered. The hope that at least extreme poverty can
be eradicated by the end of 2015, as stipulated in the
UN.s Millennium Development Goals, seems as
unrealistic as ever, not due to lack of resources but
a lack of true concern for the world.s poor.

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

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

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

As the fate of Bangladesh illustrates, the terrible
food crisis is not just a result of "lack of true
concern" in the centers of wealth and power. In large
part it results from very definite concerns of global
managers: for their own welfare. It is always well to
keep in mind Adam Smith.s astute observation about
policy formation in England. He recognized that the
"principal architects" of policy -- in his day the
"merchants and manufacturers" -- made sure that their
own interests had "been most peculiarly attended to"
however "grievous" the effect on others, including the
people of England and, far more so, those who were
subjected to "the savage injustice of the Europeans,"
particularly in conquered India, Smith.s own prime
concern in the domains of European conquest. Smith was
referring specifically to the mercantilist system, but
his observation generalizes, and as such, stands as
one of the few solid and enduring principles of both
international relations and domestic affairs. It
should not, however, be over-generalized. There are
interesting cases where state interests, including
long-term strategic and economic interests, overwhelm
the parochial concerns of the concentrations of
economic power that largely shape state policy. Iran
and Cuba are instructive cases, but I will have to put
these topics aside here.

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

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

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

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

One way to enter this morass is offered by the June 11
issue of the New York Review of Books. The front-cover
headline reads "How to Deal With the Crisis"; the
issue features a symposium of specialists on how to do
so. It is very much worth reading, but with attention
to the definite article. For the West the phrase "the
crisis" has a clear enough meaning: the financial
crisis that hit the rich countries with great impact,
and is therefore of supreme importance. But even for
the rich and privileged that is by no means the only
crisis, nor even the most severe. And others see the
world quite differently. For example, in the October
26, 2008 edition of the Bangladeshi newspaper The New
Nation, we read: It.s very telling that trillions have
already been spent to patch up leading world financial
institutions, while out of the comparatively small sum
of $12.3 billion pledged in Rome earlier this year, to
offset the food crisis, only $1 billion has been
delivered. The hope that at least extreme poverty can
be eradicated by the end of 2015, as stipulated in the
UN.s Millennium Development Goals, seems as
unrealistic as ever, not due to lack of resources but
a lack of true concern for the world.s poor.

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

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

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

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

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

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

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

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

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

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

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

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

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

The American system of mass production that astonished
the world in the nineteenth century was largely
created in military arsenals. Solving the major
nineteenth-century management problem -- railroads --
was beyond the capacity of private capital, so the
challenge was handed over to the army. A century ago
the toughest problems of electrical and mechanical
engineering involved placing a huge gun on a moving
platform to hit a moving target -- naval gunnery. The
leaders were Germany and England, and the outcomes
quickly spilled over into the civilian economy.

Some economic historians compare that episode to
state-run space programs today. Reagan.s "Star Wars"
was sold to industry as a traditional gift from
government, and was understood that way elsewhere too:
that is why Europe and Japan wanted to buy in. There
was a dramatic increase in the state role after World
War II, particularly in the United States, where a
good part of the advanced economy developed in this
framework.

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

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

Reacting immediately to the Wall.s fall, the Bush
senior administration issued a new National Security
Strategy and budget proposal to set the course after
the collapse of Kennedy.s "monolithic and ruthless
conspiracy" to conquer the world and Reagan.s "evil
empire" -- a collapse that took with it the whole
framework of domestic population control. Washington.s
response was straightforward: everything will stay
much the same, but with new pretexts. We still need a
huge military system, but for a new reason: the
"technological sophistication" of Third World powers.

We have to maintain the "defense industrial base," a
euphemism for state-supported high-tech industry. We
must also maintain intervention forces directed at the
Middle East.s energy-rich regions, where the threats
to our interests that required military intervention
"could not be laid at the Kremlin.s door," contrary to
decades of pretense. The charade had sometimes been
acknowledged, as when Robert Komer -- the architect of
President Carter.s Rapid Deployment Force (later
Central Command), aimed primarily at the Middle East
-- testified before Congress in 1980 that the Force.s
most likely use was not resisting Soviet attack, but
dealing with indigenous and regional unrest, in
particular the "radical nationalism" that has always
been a primary concern throughout the world.

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

The fate of NATO exposes the same concerns, and it is
highly pertinent today. Prior to Gorbachev NATO.s
announced purpose was to deter a Russian invasion of
Europe. The legitimacy of that agenda was debatable
right from the end of World War II. In May 1945
Churchill ordered war plans to be drawn up for
Operation Unthinkable, aimed at "the elimination of
Russia." The plans -- declassified ten years ago --
are discussed extensively in the major scholarly study
of British intelligence records, Richard Aldrich.s The
Hidden Hand. According to Aldrich, they called for a
surprise attack by hundreds of thousands of British
and American troops, joined by one hundred thousand
rearmed German soldiers, while the RAF would attack
Soviet cities from bases in Northern Europe. Nuclear
weapons were soon added to the mix.

The official stand also was not easy to take too
seriously a decade later, when Khrushchev took over in
Russia, and soon proposed a sharp mutual reduction in
offensive weaponry. He understood very well that the
much weaker Soviet economy could not sustain an arms
race and still develop. When the United States
dismissed the offer, he carried out the reduction
unilaterally. Kennedy reacted with a substantial
increase in military spending, which the Soviet
military tried to match after the Cuban missile crisis
dramatically revealed its relative weakness. The
Soviet economy tanked, as Khrushchev had anticipated.
That was a crucial factor in the later Soviet
collapse.

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

As soon as Clinton came into office, he began the
expansion of NATO to the east. The process accelerated
with Bush junior.s aggressive militarism. These moves
posed a serious security threat to Russia, which
naturally reacted by developing more advanced
offensive military capacities. Obama.s National
Security Advisor, James Jones, has a still-more
expansive vision: he calls for extending NATO further
east and south, becoming in effect a U.S.-run global
intervention force, as it is today in Afghanistan --
"Afpak" as the region is now called -- where Obama is
sharply escalating Bush.s war, which had already
intensified in 2004.

NATO Secretary-General Jaap de Hoop Scheffer informed
a NATO meeting that "NATO troops have to guard
pipelines that transport oil and gas that is directed
for the West," and more generally have to protect sea
routes used by tankers and other "crucial
infrastructure" of the energy system. These plans open
a new phase of Western imperial domination -- more
politely called "bringing stability" and "peace."

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

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

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

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

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

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

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

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


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

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

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

The chair of the prominent law firm Sullivan &
Cromwell offered the equally apt prediction that "Wall
Street, after getting billions of taxpayer dollars,
will emerge from the financial crisis looking much the
same as before markets collapsed." The reasons were
pointed out, by, among others, Simon Johnson, former
chief economist of the IMF: "Throughout the crisis,
the government has taken extreme care not to upset the
interests of the financial institutions, or to
question the basic outlines of the system that got us
here," and the elite business interests [that] played
a central role in creating the crisis, making
ever-larger gambles, with the implicit backing of the
government, until the inevitable collapse . . . are
now using their influence to prevent precisely the
sorts of reforms that are needed, and fast, to pull
the economy out of its nosedive.

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

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

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

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

The picture might be much more grim than even the
Stern report predicts. A group of MIT scientists have
just released the results of what they describe as the
most comprehensive modeling yet carried out on the
likelihood of how much hotter the Earth.s climate will
get in this century, [showing] that without rapid and
massive action, the problem will be about twice as
severe as previously estimated six years ago -- and
could be even worse than that. Worse because the model
does not fully incorporate other positive feedbacks
that can occur, for example, if increased temperatures
caused a large-scale melting of permafrost in arctic
regions and subsequent release of large quantities of
methane.

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

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

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

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

The consequences are right before our eyes in ways
that are sometimes surreal. In May The Wall Street
Journal reported: U.S. transportation chief [Ray
LaHood] is in Spain meeting with high-speed rail
suppliers. . . . Europe.s engineering and rail
companies are lining up for some potentially lucrative
U.S. contracts for high-speed rail projects. At stake
is $13 billion in stimulus funds that the Obama
administration is allocating to upgrade existing rail
lines and build new ones that could one day rival
Europe.s fastest. . . . [LaHood is also] expected to
visit Spanish construction, civil engineering and
train-building companies.

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

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

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

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

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

Whether Obama purposely chose a corporation that led
the way to undermine labor rights I don.t know. More
likely, he and his handlers were unaware of the facts.

But at the time of Caterpillar.s innovation in labor
relations, Obama was a civil rights lawyer in Chicago.
He certainly read the Chicago Tribune, which published
a careful study of these events. The Tribune reported
that the union was "stunned" to find that unemployed
workers crossed the picket line with no remorse, while
Caterpillar workers found little "moral support" in
their community, one of the many where the union had
"lifted the standard of living." Wiping out those
memories is another victory for the highly
class-conscious American business sector in its
relentless campaign to destroy workers. rights and
democracy.

The union leadership had refused to understand. It was
only in 1978 that UAW President Doug Fraser recognized
what was happening and criticized the "leaders of the
business community" for having "chosen to wage a
one-sided class war in this country -- a war against
working people, the unemployed, the poor, the
minorities, the very young and the very old, and even
many in the middle class of our society," and for
having "broken and discarded the fragile, unwritten
compact previously existing during a period of growth
and progress." Placing one.s faith in a compact with
owners and managers is suicidal. The UAW is
discovering that again today, as the state-corporate
leadership proceeds to eliminate the hard-fought gains
of working people while dismantling the productive
core of the American economy.

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

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

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

WEBLINK:www.alternet.org/workplace/142471/chomsky:_what_america's_'crisis'_means_to_the_rest_of_the_world/?page=entire

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