US behaves nothing like a democracyby Noam Chomsky
RESULTS such as these, which are pretty consistent, illustrate demoralisation of the public of a kind that’s unusual, although there are examples — the late Weimar Republic comes to mind. The tasks of ensuring that the rabble keep to their function as bewildered spectators, takes many forms. The simplest form is simply to restrict entry into the political system. Iran just had an election, as you know. And it was rightly criticised on the grounds that even to participate, you had to be vetted by the guardian council of clerics. In the United States, you don’t have to be vetted by clerics, but rather you have to be vetted by concentrations of private capital. Unless you pass their filter, you don’t enter the political system — with very rare exceptions.
There are many mechanisms, too familiar to review, but that’s not safe enough either. There are major institutions that are specifically dedicated to undermining authentic democracy. One of them is called the public relations industry. A huge industry, it was, in fact, developed on the principle that it’s necessary to regiment the minds of men, much as an army regiments its soldiers — I was actually quoting from one of its leading figures before.
The role of the PR industry in elections is explicitly to undermine the school-child version of democracy. What you learn in school is that democracies are based on informed voters making rational decisions. All you have to do is take a look at an electoral campaign run by the PR industry and see that the purpose is to create uninformed voters who will make irrational decisions. For the PR industry that’s a very easy transition from their primary function. Their primary function is commercial advertising. Commercial advertising is designed to undermine markets. If you took an economics course you learned that markets are based on informed consumers making rational choices. If you turn on the TV set, you see that ads are designed to create irrational, uninformed consumers making irrational choices. The whole purpose is to undermine markets in the technical sense.
They’re well aware of it, incidentally. So for example, after Obama’s election in 2008, a couple of months later the advertising industry had its annual conference. Every year they award a prize for the best marketing campaign of the year. That year they awarded it to Obama. He beat out Apple computer, did an even better job of deluding the public — or his PR agents did. If you want to hear some of it, turn on the television today and listen to the soaring rhetoric at the G-8 Summit in Belfast. It’s standard.
There was interesting commentary on this in the business press, primarily The London Financial Times, which had a long article, interviewing executives about what they thought about the election. And they were quite euphoric about this. They said this gives them a new model for how to delude the public. The Obama model could replace the Reagan model, which worked pretty well for a while.
Turning to the economy, the core of the economy today is financial institutions. They’ve vastly expanded since the 1970s, along with a parallel development — accelerated shift of production abroad. There have also been critical changes in the character of financial institutions.
If you go back to the 1960s, banks were banks. If you had some money, you put it in the bank to lend it to somebody to buy a house or start a business, or whatever. Now that’s a very marginal aspect of financial institutions today. They’re mostly devoted to intricate, exotic manipulations with markets. And they’re huge. In the United States, financial institutions, big banks mostly, had 40 per cent of corporate profit in 2007. That was on the eve of the financial crisis, for which they were largely responsible. After the crisis, a number of professional economists — Nobel laureate Robert Solow, Harvard’s Benjamin Friedman — wrote articles in which they pointed out that economists haven’t done much study of the impact of the financial institutions on the economy. Which is kind of remarkable, considering its scale. But after the crisis they took a look and they both concluded that probably the impact of the financial institutions on the economy is negative. Actually there are some who are much more outspoken than that. The most respected financial correspondent in the English-speaking world is Martin Wolf of the Financial Times. He writes that the ‘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.’ By ‘the market economy’ he means the productive economy.
There’s a recent issue of the main business weekly, Bloomberg Business Week, which reported a study of the IMF that found that the largest banks make no profit. What they earn, according to the IMF analysis, traces to the government insurance policy, the so-called too-big-to-fail policy. There is a widely publicised bailout, but that’s the least of it. There’s a whole series of other devices by which the government insurance policy aids the big banks: cheap credit and many other things. And, according to the IMF at least, that’s the totality of their profit. The editors of the journal say this is crucial to understanding why the big banks present such a threat to the global economy — and to the people of the country, of course.
After the crash, there was the first serious attention by professional economists to what’s called systemic risk. They knew it existed but it wasn’t much a topic of investigation. ‘Systemic risk’ means the risk that if a transaction fails, the whole system may collapse. That’s what’s called an externality in economic theory. It’s a footnote. And it’s one of the fundamental flaws of market systems, a well-known, inherent flaw, is externalities. Every transaction has impacts on others which just aren’t taken into account in a market transaction. Systemic risk is a big one. And there are much more serious illustrations than that. I’ll come back to it.
What about the productive economy under RECD? Here there’s a mantra too. The mantra is based on entrepreneurial initiative and consumer choice in a free market. There are agreements established called free-trade agreements, which are based on the mantra. That’s all mythology.
The reality is that there is massive state intervention in the productive economy and the free-trade agreements are anything but free-trade agreements. That should be obvious. Just to take one example: The information technology revolution, which is driving the economy, that was based on decades of work in effectively the state sector — hard, costly, creative work substantially in the state sector, no consumer choice at all, there was entrepreneurial initiative but it was largely limited to getting government grants or bailouts or procurement. Except by some economists, that’s underestimated but a very significant factor in corporate profit. If you can’t sell something, hand it over the government. They’ll buy it.
After a long period — decades in fact — of hard, creative work, the primary research and development, the results are handed over to private enterprise for commercialisation and profit. That’s Steve Jobs and Bill Gates and so on. It’s not quite that simple, of course. But that’s a core part of the picture. The system goes way back to the origins of industrial economies, but it’s dramatically true since WWII that this ought to be the core of the study of the productive economy.
Another central aspect of RECD is concentration of capital. In just the past 20 years in the United States, the share of profits of the two hundred largest enterprises has very sharply risen, probably the impact of the Internet, it seems. These tendencies towards oligopoly also undermine the mantra, of course. Interesting topics but I won’t pursue them any further.
Instead, I’d like to turn to another question. What are the prospects for the future under RECD? There’s an answer. They’re pretty grim. It’s no secret that there are a number of dark shadows that hover over every topic that we discuss and there are two that are particularly ominous, so I’ll keep to those, though there are others. One is environmental catastrophe. The other is nuclear war. Both of which, of course, threaten the prospects for decent survival and not in the remote future.
I won’t say very much about the first, environmental catastrophe. That should be obvious. Certainly the scale of the danger should be obvious to anyone with eyes open, anyone who is literate, particularly those who read scientific journals. Every issue of a technical journal virtually has more dire warnings than the last one.
There are various reactions to this around the world. There are some who seek to act decisively to prevent possible catastrophe. At the other extreme, major efforts are underway to accelerate the danger. Leading the effort to intensify the likely disaster is the richest and most powerful country in world history, with incomparable advantages and the most prominent example of RECD — the one that others are striving towards.
Leading the efforts to preserve conditions in which our immediate descendants might have a decent life, are the so-called ‘primitive’ societies: First Nations in Canada, Aboriginal societies in Australia, tribal societies and others like them. The countries that have large and influential indigenous populations are well in the lead in the effort to ‘defend the Earth’. That’s their phrase. The countries that have driven indigenous populations to extinction or extreme marginalisation are racing forward enthusiastically towards destruction. This is one of the major features of contemporary history. One of those things that ought to be on front pages. So take Ecuador, which has a large indigenous population. It’s seeking aid from the rich countries to allow it to keep its substantial hydrocarbon reserves underground, which is where they ought to be. Now, meanwhile, the US and Canada are enthusiastically seeking to burn every drop of fossil fuel, including the most dangerous kind — Canadian tar sands — and to do so as quickly and fully as possible — without a side glance on what the world might look like after this extravagant commitment to self-destruction. Actually, every issue of the daily papers suffices to illustrate this lunacy. And lunacy is the right word for it. It’s exactly the opposite of what rationality would demand, unless it’s the skewed rationality of RECD.
Well, there have been massive corporate campaigns to implant and safeguard the lunacy. But despite them, there’s still a real problem in American society. The public is still too committed to scientific rationality. One of the many divergences between policy and opinion is that the American public is close to the global norm in concern about the environment and calling for actions to prevent the catastrophe and that’s a pretty high level. Meanwhile, bipartisan policy is dedicated to ‘bringing it on’, in a phrase that George W Bush made famous in the case of Iraq. Fortunately, the corporate sector is riding to the rescue to deal with this problem. There is a corporate funded organisation — the American Legislative Exchange Council. It designs legislation for states. No need to comment on what kind of legislation. They’ve got a lot of clout and money behind them. So the programs tend to get instituted. Right now they’re instituting a new program to try to overcome the excessive rationality of the public. It’s a programme of instruction for K-12 (kindergarten to 12th grade in schools). Its publicity says that the idea is to improve critical faculties — I’d certainly be in favour of that — by balanced teaching. ‘Balanced teaching’ means that if a sixth grade class learned something about what’s happening to the climate, they have to be presented with material on climate change denial so that they have balanced teaching and can develop their critical faculties. Maybe that’ll help overcome the failure of massive corporate propaganda campaigns to make the population ignorant and irrational enough to safeguard short-term profit for the rich. It’s pointedly the goal and several states have already accepted it.
Well, it’s worth remembering, without pursuing it that these are deep-seated institutional properties of RECD. They’re not easy to uproot. All of this is apart from the institutional necessity to maximize short-term profit while ignoring an externality that’s vastly more serious even than systemic risk. For systemic risk, the market failure — the culprits — can run to the powerful nanny state that they foster with cap in hand and they’ll be bailed out, as we’ve just observed again and will in the future. In the case of destruction of the environment, the conditions for decent existence, there’s no guardian angel around – nobody to run to with cap in hand. For that reason alone, the prospects for decent survival under RECD are quite dim.
Let’s turn to the other shadow: nuclear war. It’s a threat that’s been with us for 70 years. It still is. In some ways it’s growing. One of the reasons for it is that under RECD, the rights and needs of the general population are a minor matter. That extends to security. There is another prevailing mantra, particularly in the academic professions, claiming that governments seek to protect national security. Anyone who has studied international relations theory has heard that. That’s mostly mythology. The governments seek to extend power and domination and to benefit their primary domestic constituencies — in the US, primarily the corporate sector. The consequence is that security does not have a high priority. We see that all the time. Right now in fact. Take say Obama’s operation to murder Osama Bin Laden, prime suspect for the 9/11 attack. Obama made an important speech on national security last May 23rd. It was widely covered. There was one crucial paragraph in the speech that was ignored in the coverage. Obama hailed the operation, took pride in it — an operation which incidentally is another step at dismantling the foundations of Anglo-American law, back to the Magna Carta, namely the presumption of innocence. But that’s by now so familiar, it’s not even necessary to talk about it. But there’s more to it. Obama did hail the operation but he added to it that it ‘cannot be the norm’. The reason is that ‘the risks were immense’. The Navy SEALs who carried out the murder might have been embroiled in an extended fire-fight, but even though by luck that didn’t happen, ‘the cost to our relationship with Pakistan – and the backlash of the Pakistani public over the encroachment on their territory’, the aggression in other words, ‘was so severe that we’re just now beginning to rebuild this important partnership.’
Slightly abridged from a transcript of a recent speech delivered in Bonn, Germany, at DW Global Media Forum posted in salon.com, August 17.
Noam Chomsky is Institute Professor (retired) at MIT.
comments powered by Disqus
THE beginning of many drugs is usually laced with explanations trying to blunt the negative consequences, which are, of course, not detected until a certain time has elapsed. Therefore, when Phensidyl, or ‘dail’ as it is known in Bangladesh, first became... Full story