Excerpt: "We’re really regressing back to the dark ages. It’s not a joke. And if that’s happening in the most powerful, richest country in history, then this catastrophe isn’t going to be averted -- and in a generation or two, everything else we’re talking about won’t matter. Something has to be done about it very soon in a dedicated, sustained way. It’s not going to be easy to proceed. There are going to be barriers, difficulties, hardships, failures. It’s inevitable. But unless the spirit of the last year, here and elsewhere in the country and around the globe, continues to grow and becomes a major force in the social and political world, the chances for a decent future are not very high."
In the following article, the section "Plutonomy and The Precariat" is especially revealing.
A Rebellious World or a
New Dark Age?
On the History of the
US Economy in Decline
By Noam Chomsky
By Noam Chomsky
May 08, 2012 "Information Clearing House"
-- The Occupy movement has been an extremely exciting development.
Unprecedented, in fact. There’s never been anything like it that I can think
of. If the bonds and associations it has established can be sustained through a
long, dark period ahead -- because victory won’t come quickly -- it could prove
a significant moment in American history.
The fact that the Occupy
movement is unprecedented is quite appropriate. After all, it’s an
unprecedented era and has been so since the 1970s, which marked a major turning
point in American history. For centuries, since the country began, it had been
a developing society, and not always in very pretty ways. That’s another story,
but the general progress was toward wealth, industrialization, development, and
hope. There was a pretty constant expectation that it was going to go on like
this. That was true even in very dark times.
I’m just old enough to
remember the Great Depression. After the first few years, by the mid-1930s --
although the situation was objectively much harsher than it is today --
nevertheless, the spirit was quite different. There was a sense that “we’re
gonna get out of it,” even among unemployed people, including a lot of my
relatives, a sense that “it will get better.”
There was militant labor
union organizing going on, especially from the CIO (Congress of Industrial
Organizations). It was getting to the point of sit-down strikes, which are
frightening to the business world -- you could see it in the business press at the
time -- because a sit-down strike is just a step before taking over the factory
and running it yourself. The idea of worker takeovers is something which is,
incidentally, very much on the agenda today, and we should keep it in mind.
Also New Deal legislation was beginning to come in as a result of popular
pressure. Despite the hard times, there was a sense that, somehow, “we’re gonna
get out of it.”
It’s quite different now. For
many people in the United States, there’s a pervasive sense of hopelessness,
sometimes despair. I think it’s quite new in American history. And it has an
objective basis.
On the Working Class
In the 1930s, unemployed
working people could anticipate that their jobs would come back. If you’re a
worker in manufacturing today -- the current level of unemployment there is
approximately like the Depression -- and current tendencies persist, those jobs
aren’t going to come back.
The change took place in the
1970s. There are a lot of reasons for it. One of the underlying factors, discussed
mainly by economic historian Robert Brenner, was the falling rate of profit in
manufacturing. There were other factors. It led to major changes in the economy
-- a reversal of several hundred years of progress towards industrialization
and development that turned into a process of de-industrialization and
de-development. Of course, manufacturing production continued overseas very
profitably, but it’s no good for the work force.
Along with that came a
significant shift of the economy from productive enterprise -- producing things
people need or could use -- to financial manipulation. The financialization of
the economy really took off at that time.
On Banks
Before the 1970s, banks were
banks. They did what banks were supposed to do in a state capitalist economy:
they took unused funds from your bank account, for example, and transferred
them to some potentially useful purpose like helping a family buy a home or
send a kid to college. That changed dramatically in the 1970s. Until then,
there had been no financial crises since the Great Depression. The 1950s and
1960s had been a period of enormous growth, the highest in American history,
maybe in economic history.
And it was egalitarian. The
lowest quintile did about as well as the highest quintile. Lots of people moved
into reasonable lifestyles -- what’s called the “middle class” here, the
“working class” in other countries -- but it was real. And the 1960s
accelerated it. The activism of those years, after a pretty dismal decade,
really civilized the country in lots of ways that are permanent.
When the 1970s came along,
there were sudden and sharp changes: de-industrialization, the off-shoring of
production, and the shift to financial institutions, which grew enormously. I
should say that, in the 1950s and 1960s, there was also the development of what
several decades later became the high-tech economy: computers, the Internet,
the IT Revolution developed substantially in the state sector.
The developments that took
place during the 1970s set off a vicious cycle. It led to the concentration of
wealth increasingly in the hands of the financial sector. This doesn’t benefit
the economy -- it probably harms it and society -- but it did lead to a
tremendous concentration of wealth.
On Politics and Money
Concentration of wealth
yields concentration of political power. And concentration of political power
gives rise to legislation that increases and accelerates the cycle. The
legislation, essentially bipartisan, drives new fiscal policies and tax changes,
as well as the rules of corporate governance and deregulation. Alongside this
began a sharp rise in the costs of elections, which drove the political parties
even deeper into the pockets of the corporate sector.
The parties dissolved in many
ways. It used to be that if a person in Congress hoped for a position such as a
committee chair, he or she got it mainly through seniority and service. Within
a couple of years, they started having to put money into the party coffers in
order to get ahead, a topic studied mainly by Tom Ferguson. That just drove the
whole system even deeper into the pockets of the corporate sector (increasingly
the financial sector).
This cycle resulted in a
tremendous concentration of wealth, mainly in the top tenth of one percent of
the population. Meanwhile, it opened a period of stagnation or even decline for
the majority of the population. People got by, but by artificial means such as
longer working hours, high rates of borrowing and debt, and reliance on asset
inflation like the recent housing bubble. Pretty soon those working hours were
much higher in the United States than in other industrial countries like Japan
and various places in Europe. So there was a period of stagnation and decline
for the majority alongside a period of sharp concentration of wealth. The
political system began to dissolve.
There has always been a gap
between public policy and public will, but it just grew astronomically. You can
see it right now, in fact. Take a look at the big topic in Washington that
everyone concentrates on: the deficit. For the public, correctly, the deficit
is not regarded as much of an issue. And it isn’t really much of an issue. The
issue is joblessness. There’s a deficit commission but no joblessness
commission. As far as the deficit is concerned, the public has opinions. Take a
look at the polls. The public overwhelmingly supports higher taxes on the
wealthy, which have declined sharply in this period of stagnation and decline,
and the preservation of limited social benefits.
The outcome of the deficit
commission is probably going to be the opposite. The Occupy movements could
provide a mass base for trying to avert what amounts to a dagger pointed at the
heart of the country.
Plutonomy and the
Precariat
For the general population,
the 99% in the imagery of the Occupy movement, it’s been pretty harsh -- and it
could get worse. This could be a period of irreversible decline. For the 1% and
even less -- the .1% -- it’s just fine. They are richer than ever, more
powerful than ever, controlling the political system, disregarding the public.
And if it can continue, as far as they’re concerned, sure, why not?
Take, for example, Citigroup.
For decades, Citigroup has been one of the most corrupt of the major investment
banking corporations, repeatedly bailed out by the taxpayer, starting in the
early Reagan years and now once again. I won’t run through the corruption, but
it’s pretty astonishing.
In 2005, Citigroup came out
with a brochure for investors called “Plutonomy: Buying Luxury, Explaining
Global Imbalances.” It urged investors to put money into a “plutonomy index.”
The brochure says, “The World is dividing into two blocs -- the Plutonomy and
the rest.”
Plutonomy refers to the rich,
those who buy luxury goods and so on, and that’s where the action is. They
claimed that their plutonomy index was way outperforming the stock market. As
for the rest, we set them adrift. We don’t really care about them. We don’t
really need them. They have to be around to provide a powerful state, which
will protect us and bail us out when we get into trouble, but other than that
they essentially have no function. These days they’re sometimes called the
“precariat” -- people who live a precarious existence at the periphery of
society. Only it’s not the periphery anymore. It’s becoming a very substantial
part of society in the United States and indeed elsewhere. And this is
considered a good thing.
So, for example, Fed Chairman
Alan Greenspan, at the time when he was still “Saint Alan” -- hailed by the
economics profession as one of the greatest economists of all time (this was
before the crash for which he was substantially responsible) -- was testifying
to Congress in the Clinton years, and he explained the wonders of the great
economy that he was supervising. He said a lot of its success was based
substantially on what he called “growing worker insecurity.” If working people
are insecure, if they’re part of the precariat, living precarious existences,
they’re not going to make demands, they’re not going to try to get better
wages, they won’t get improved benefits. We can kick ’em out, if we don’t need
’em. And that’s what’s called a “healthy” economy, technically speaking. And he
was highly praised for this, greatly admired.
So the world is now indeed
splitting into a plutonomy and a precariat -- in the imagery of the Occupy
movement, the 1% and the 99%. Not literal numbers, but the right picture. Now,
the plutonomy is where the action is and it could continue like this.
If it does, the historic
reversal that began in the 1970s could become irreversible. That’s where we’re
heading. And the Occupy movement is the first real, major, popular reaction
that could avert this. But it’s going to be necessary to face the fact that
it’s a long, hard struggle. You don’t win victories tomorrow. You have to form
the structures that will be sustained, that will go on through hard times and
can win major victories. And there are a lot of things that can be done.
Toward Worker Takeover
I mentioned before that, in
the 1930s, one of the most effective actions was the sit-down strike. And the
reason is simple: that’s just a step before the takeover of an industry.
Through the 1970s, as the
decline was setting in, there were some important events that took place. In
1977, U.S. Steel decided to close one of its major facilities in Youngstown,
Ohio. Instead of just walking away, the workforce and the community decided to
get together and buy it from the company, hand it over to the work force, and
turn it into a worker-run, worker-managed facility. They didn’t win. But with
enough popular support, they could have won. It’s a topic that Gar Alperovitz
and Staughton Lynd, the lawyer for the workers and community, have discussed in
detail.
It was a partial victory
because, even though they lost, it set off other efforts. And now, throughout
Ohio, and in other places, there’s a scattering of hundreds, maybe thousands,
of sometimes not-so-small worker/community-owned industries that could become
worker-managed. And that’s the basis for a real revolution. That’s how it takes
place.
In one of the suburbs of
Boston, about a year ago, something similar happened. A multinational decided
to close down a profitable, functioning facility carrying out some high-tech
manufacturing. Evidently, it just wasn’t profitable enough for them. The
workforce and the union offered to buy it, take it over, and run it themselves.
The multinational decided to close it down instead, probably for reasons of
class-consciousness. I don’t think they want things like this to happen. If
there had been enough popular support, if there had been something like the
Occupy movement that could have gotten involved, they might have succeeded.
And there are other things
going on like that. In fact, some of them are major. Not long ago, President
Barack Obama took over the auto industry, which was basically owned by the
public. And there were a number of things that could have been done. One was
what was done: reconstitute it so that it could be handed back to the
ownership, or very similar ownership, and continue on its traditional path.
The other possibility was to
hand it over to the workforce -- which owned it anyway -- turn it into a
worker-owned, worker-managed major industrial system that’s a big part of the
economy, and have it produce things that people need. And there’s a lot that we
need.
We all know or should know
that the United States is extremely backward globally in high-speed
transportation, and it’s very serious. It not only affects people’s lives, but
the economy. In that regard, here’s a personal story. I happened to be giving
talks in France a couple of months ago and had to take a train from Avignon in
southern France to Charles De Gaulle Airport in Paris, the same distance as
from Washington, DC, to Boston. It took two hours. I don’t know if you’ve ever
taken the train from Washington to Boston, but it’s operating at about the same
speed it was 60 years ago when my wife and I first took it. It’s a scandal.
It could be done here as it’s
been done in Europe. They had the capacity to do it, the skilled work force. It
would have taken a little popular support, but it could have made a major
change in the economy.
Just to make it more surreal,
while this option was being avoided, the Obama administration was sending its
transportation secretary to Spain to get contracts for developing high-speed
rail for the United States, which could have been done right in the rust belt,
which is being closed down. There are no economic reasons why this can’t
happen. These are class reasons, and reflect the lack of popular political
mobilization. Things like this continue.
Climate Change and
Nuclear Weapons
I’ve kept to domestic issues,
but there are two dangerous developments in the international arena, which are
a kind of shadow that hangs over everything we’ve discussed. There are, for the
first time in human history, real threats to the decent survival of the species.
One has been hanging around
since 1945. It’s kind of a miracle that we’ve escaped it. That’s the threat of
nuclear war and nuclear weapons. Though it isn’t being much discussed, that
threat is, in fact, being escalated by the policies of this administration and
its allies. And something has to be done about that or we’re in real trouble.
The other, of course, is
environmental catastrophe. Practically every country in the world is taking at
least halting steps towards trying to do something about it. The United States
is also taking steps, mainly to accelerate the threat. It is the only major
country that is not only not doing something constructive to protect the
environment, it’s not even climbing on the train. In some ways, it’s pulling it
backwards.
And this is connected to a
huge propaganda system, proudly and openly declared by the business world, to
try to convince people that climate change is just a liberal hoax. “Why pay
attention to these scientists?”
We’re really regressing back
to the dark ages. It’s not a joke. And if that’s happening in the most
powerful, richest country in history, then this catastrophe isn’t going to be
averted -- and in a generation or two, everything else we’re talking about
won’t matter. Something has to be done about it very soon in a dedicated,
sustained way.
It’s not going to be easy to
proceed. There are going to be barriers, difficulties, hardships, failures.
It’s inevitable. But unless the spirit of the last year, here and elsewhere in
the country and around the globe, continues to grow and becomes a major force
in the social and political world, the chances for a decent future are not very
high.
Noam Chomsky is Institute
Professor (retired) at MIT.
© 2012 Noam Chomsky
***
In the following video clip, Chomsky speaks knowledgeably and
admiringly of Liberation Theology: http://www.youtube.com/watch?v=SNDG7ErY-k4&feature=related
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