("Quid coniuratio est?")
NOAM CHOMSKY -- 10/17/94
My transcript of part of a talk given by Noam Chomsky at UICC (University of Illinois at Chicago Circle) on October 17, 1994. Special thanks to Paul Mueth for travelling to Chicago, taping the talk, then broadcasting it on local radio station WEFT 90.1 FM on Sunday, October 23, 1994.
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Well these developments are often attributed to, you know, kind of "inexorable forces", forces which work like the principle of gravitation, as David Ricardo put it back at an earlier stage of economic, of ideological warfare. And the two that are usually mentioned are international trade and automation. There's no time to talk about that, but that's fraud. I mean, the efficiencies of international trade and the efficiencies of automation don't have much to do with the market. They have to do with State power. Trade becomes efficient because of the role of State power in making it efficient -- for example, the role of the Pentagon in keeping down oil prices, say, and numerous other forms of subsidy. Take that away, and you carry out reasonable measures and the efficiency of trade goes quickly out the window. As for automation, that is true that it's driving people out of work now. As you say, it's replacing workers. But the reason is, it was so inefficient that it had to be developed through the State sector of the economy, the military sector, for several decades before it could finally be handed over to private power as a technique of getting rid of people. And the kind of automation that was developed was not inherent in the technology. It was, you could, you know, have automation which increases the power of machinists, let's say. This was designed to de-skill people and to increase the power of managers. Nothing about economics that says it's gotta work like that. Those are questions of power. It was done directly through the State's system, as is every form of economic development, at least in the history of any developed country in the world, including us. (And there's actually a good book on that, published by one of the sponsors of this talk, Charles Kerr, so I won't go on with it. Dave Noble's book, Production Without People. He's done some of the best work on this.)
In any event, without proceeding, neither trade nor automation, the two major factors, work by market forces. They work by... They're big social engineering projects, with powerful State/Corporate planning behind them. As is virtually everything else. And, in fact, this invocation of market forces as if they were forces of nature is absolutey nonsense. This goes way back to the origins of the Industrial Revolution. There isn't a case on record, including England and the United States and every other place you like, where development has taken place along the lines that even remotely resemble anything that's, you know, described in economic theory. And that's imposed on the weak: the poor at home and the third world, simply by power. Big story, and no time to go on with it.
Just going back to the general picture, the, say, 30 percent unemployment and the human rights catastrophe that that's part of: what that means is, pretty simply, that the whole economic system is an absolute catastrophe! There's huge numbers of people who want to work, are willing to work [and] in fact want to work. There's plenty of work for them to be doing, to be done. Just look around you, you can see lots and lots of things that could be done which would be to their benefit and everybody else's benefit. But the economic system is such a total catastrophe that it can't bring together idle hands and needed work. So therefore the work isn't done and the people remain idle.
O.K. Now that's what's called an economic catastrophe: total, huge, economic failure on a cosmic scale. That's not the way it's described. It's described as a grand success. And there's a reason for that. Because there's a sector of the population for whom it is a grand success. So, for example, if you read, say, Fortune magazine, and you look at the "Fortune 500" issue -- for the Fortune 500 it's a grand success! Their last review talks about their dazzling profits -- even though sales are stagnating. So for them it's a grand success. And, in fact, in general, profits are shooting up while the wages are going down and people are starving and poverty is increasing and malnutrition's increasing. And, in fact, world society's becoming polarized. You know, it's happening across countries; it's happening more radically within countries (our own leading the way, among the rich societies).
So there's a sector for whom it's a grand success. It's like "economic miracles" generally. And that sector happens to include the people who write the articles and give the speeches and, you know, talk about how wonderful we are and so on. So this colossal failure is described as a "grand success".
Well there are a number of major tendencies in the last 20 years or so that are driving all of this. And they are not laws of nature. They are matters of specific social policy -- I'll just mention two.
One is a tremendous change in the nature of international capital. There has been a huge explosion, huge explosion, in the amount of unregulated financial capital, capital in the world. And its composition is, its last World Bank estimate, estimated at around $14 trillion. Of which about a trillion dollars moves every day, thanks to telecommunications and so on. That completely dwarfs the holdings of even rich countries, let alone poor countries. Furthermore, the composition of that capital has changed radically. In 1970 -- this all began when Richard Nixon dismantled the Bretton-Wood system. Remember, we are the big Mafia don, so we set the rules. And the U.S. decided it didn't want the Bretton-Wood system anymore, so it was... threw it down the drain. And that was a system which there had been kind of regulated capital and quite successful economic growth. But the U.S. didn't like it for various reasons, so it was tossed in the wastebasket. And we have this new period of unregulated financial capital -- first of all, a huge explosion of it.
And secondly, a radical change in its composition. So back in 1970, before the demolition of the Bretton-Wood system, about 90 percent of the capital in international transactions was for investment and commerce. You know, something more or less productive, if you count Cadillacs productive. At least something that was making something, or trading something. And 10 percent was speculation. Well by 1990 those figures had reversed: it was 90 percent speculation and 10 percent commerce and investment. And last year (according to an undocumented Committee on Trade and Development report that just came out), it was down to *5* percent, for anything remotely productive, 95 percent pure speculation. That's a very radical change.
And it has its effects. There was a study done by a group led by Paul Volcker, the [former] head of the federal reserve, which estimated that about half of the -- there's been a decline in growth rate ever since then, not surprisingly. And he attributed about half of it just to fluctuations in financial markets, and so on.
But anyway, this change is enormous. And speculative capital has a, you know, has a goal. They want to keep currencies stable. Like you wanna, that's the main purpose of, say, bond holders. They are gonna invest their money where it stays, where there's no inflation. So there's huge pressure against stimulative activities. Any government that tries to stimulate its economy, to bring about growth or employment, they're gonna get smashed. Because there's gonna be huge capital flight which'll wipe 'em out.
Well for the third world, or even European countries, that's hopeless. Even a rich country like the U.S. can't, can't withstand it. That's why whenever you see these front page headlines, you know, "Fear of Growth", you know, there's concern that the country might be, the economy might be growing a little. Maybe people are getting jobs. And that's dangerous, so you gotta shoot up the interest rates [and] make sure that doesn't happen. 'Cause that would be a catastrophe. And it would be! With totalitarian institutions running the world, and holding on to its capital, and forcing people to do what they want no matter what their decisions may be. That's one tendency.
The other, parallel tendency is just the internationalization of production. Which makes capital very mobile; labor is immobile. That means that one work force, national work force, can be played off against another in a kind of whipsaw activity. You don't even have to shift jobs. Just the threat of possible job shift is enough to destroy wages, benefits. I mean economists tell you all kinds of things about "jobs aren't shifting" -- maybe true, maybe false, but it's totally irrelevant anyway. Because it's enough to be able to threaten to shift jobs to drive down benefits and wages and so on. And that's what's happening all around the world. That's what the so-called "trade agreements" are largely about.
The effect of all of this is, for one thing, to lead to obvious polarization, very sharp polarization into wealthy sectors (mostly around financial centers and so on) and an increasingly impoverished general public. A sort of a third world model, you know, with a lot of "superfluous" people, people that don't contribute to profit making and therefore have no human rights and so on.
It also is a major attack on democracy. Because it takes power away from parliamentary institutions -- whatever power they may have had is declining. "Policy can be insulated from politics," as The Economist put it. Or take some World Bank lingo: it's possible to have what's called "technocratic insulation". That's a "good" thing. It means that technocrats, the guys that work for the rich, are insulated from popular pressure. So the Parliaments can play their games, and people can vote and do all the stuff they like, but meanwhile, policy will go on in its own way. Because the totalitarian structures that run the world will do what they feel like. And they have enough power so that they can do it anyway.
These totalitarian structures are, basically, the corporate system and the de-facto, quasi-governmental institutions they set up around them. And the term "totalitarian" is quite accurate. There is no human institution that approaches totalitarianism as closely as a business corporation. I mean, power is completely top-down. You can be inside it somewhere and you take orders from above and hand 'em down. Ultimately, it's in the hands of owners and investors.
If you're outside the system, you can try to rent yourself to it (called "getting a job"), or you can buy the junk it produces. And that's it. There is some degree of legislation, but mostly it's in the wastebasket. And as they get stronger and stronger, these totalitarian institutions -- which are concentrating and gaining enormous control over the world economy -- are, indeed, insulated. And like other concentrations of power in the past, they're spawning governments. National states in Europe, say, grew up pretty much around national economies. [Unclear], it's getting its own governing institutions -- what [the] business press and the world calls a de-facto world government, which includes the IMF [International Monetary Fund] and the World Bank and the World Trade Organization.
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Unfortunately, the hour allotted for the broadcast runs out at this point, so Professor Chomsky is cut off. Nonetheless, my thanks again to WEFT and Mr. Mueth for an excellent broadcast.
I encourage distribution of "Conspiracy Nation."
"Justice" = "Just us" = "History is written by the assassins."