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Democracy and Power

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Noam Chomsky

1. World Orders, Old and New1

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  • 1 Lecture delivered at Jawaharlal Nehru University (New Delhi) on 13 January 1996.

1What I want to do today is to focus attention on the current scene, but also on its origins, which I think are important for understanding it. So, I want to talk about the world order that arose from the ashes of the Second World War, which is when the current system was established, pretty much in its present form. Perhaps it would be more accurate to say that the world order that was constructed from the ruins of that catastrophe was to an unusual extent (maybe to a unique extent) the product of quite careful and sophisticated planning on the part of business and political leaders, mostly American for obvious reasons. Their planning was quite realistic at that time, as well as being sophisticated and quite successful.

2From the turn of the century, the US had been the leading industrial power in the world. It also had enormous resources. During the Second World War, industrial production in the US more than tripled; meanwhile its major competitors were either severely weakened or virtually destroyed. The US had the world’s most powerful military force, and had a position of strength and security that probably had no historical parallel. It had firm control of the western hemisphere, it controlled both oceans and beyond the oceans.

3The US also largely took control of the Middle East. That was a matter of great significance and remains so to this day. The reason is that, as was understood at that time by the State Department and President Eisenhower, the region is “a stupendous source of strategic power, and one of the greatest material prizes in world history,” as well as “probably the richest economic prize in the world in the field of foreign investment.” And the US was going to take it over; nobody else was going to interfere there. So the US immediately displaced its traditional rulers. France was simply expelled. Britain, for its part, was assigned a certain role which gradually declined as a sort of natural consequence of changes in power relations. Britain became a “junior partner,” as the British Foreign Office recognized in an internal document, although illusions about a “special relationship” still persist. The term, not taken very seriously on one side of the Atlantic, was taken quite seriously on the other. On my side of the Atlantic, if you look at the secret documents, Britain is described by a senior advisor of the Kennedy administration as “our lieutenant, the fashionable word is ‘partner,’” so let’s just hear the fashionable word.

4The commitment to control the world’s energy resources was perfectly understandable. In fact, it reiterated a very traditional principle. One century earlier, in the 1840s, a leading policy concern of the US government was to try and gain control of the most important resources. In those days, that meant cotton. Texas was conquered (later about half of Mexico) in large part to gain a monopoly of cotton. And the point was, quite explicitly, to try to paralyze England, the superpower rival of the day (the “deterrent” force), and also to intimidate Europe. President Tyler explained that “by securing the virtual monopoly of the cotton plant,” the US had acquired “a greater influence over the affairs of the world than would be found in armies however strong, or navies however numerous.” “That monopoly, now secured, places all other nations at our feet,” he said after the conquest. The same monopoly power neutralized British opposition to the conquest of the northwest territories and established the US in its present form. The plans of the Jacksonian Democrats were pretty much the same as those that were attributed to Saddam Hussein in the 1990s, in the most fantastic products of the propaganda system, but in that case the plan was quite realistic, in fact implemented, and very much like Washington’s actual position on the primary resources of the twentieth century. Since the Second World War it has been able to implement that. So, there are very close parallels between the two episodes, and they follow the same policy concerns.

5As far as oil is concerned, the US of course had – and still has – substantial oil resources of its own, and in the Gulf of Mexico under US control. North America has been a major energy producer. Venezuela was the single leading oil exporter till the 1970s, when it was surpassed by Saudi Arabia, and in 1995, Venezuela was the leading oil exporter to the US. The Woodrow Wilson administration had expelled Britain from Venezuela around 1920. The reason was that Venezuela was so rich (it had plenty of other resources too), so, no nonsense there. Saudi Arabia later replaced it, again as a virtual US colony with no interference tolerated.

6Post-World War II control over the world’s energy resources had another effect. It gave the US what was called “veto power” over rivals, as pointed out by George Kennan, head of the State Department planning staff and one of the leading architects of the post-World War order. He was just echoing the Jacksonian Democrats of a century earlier, whose idea was that a monopoly of cotton would give the US veto power over its rivals, primarily the British enemy, bringing them to its feet. The basic policy guidelines with regard to energy are quite interesting. They were outlined in secret by the State Department in 1944. They said that US policy must insist on “preservation of the absolute position presently obtaining” in the western hemisphere, meaning we keep total control, and therefore, “vigilant protection of existing concessions in United States hands, coupled with insistence upon the Open Door principle of equal opportunity for United States companies in new areas.” Illusions aside, that’s about as clear an articulation of “really existing free market doctrine” as you can have: what we have, we keep and close doors to others, and what we do not yet have, we take under the principle of the Open Door – that’s the ideal market policy. In one or another form, and to various degrees, something approximating the ideal is a natural goal, domestically and everywhere else. One of the jobs of intellectuals is not to know that. So if you’re looking for a job in the future, make sure you forget what I just said.

7US planners were well aware of the extraordinary power in their hands – they naturally intended to use it to construct a world order which conformed to their conception of the national interest. The US, I’m now quoting, “assumed, out of self-interest, responsibility for the welfare of the world capitalist system,” as put recently by respected diplomatic historian Gerald Haines, who also happens to be the senior historian of the CIA. This is quite an accurate description. There are conflicting versions of what was intended by the planners, but the most plausible version in my view is the one that they themselves articulated. The US is a very open society, with very rich documentary records, so we can learn a lot about these matters. Take George Kennan again, who was very influential. One of the primary architects of the world order, he headed the State Department policy planning staff which developed very comprehensive plans for most of the world, assigning each part of the world what was called its “function” in the new system. They were adapting plans that had been worked out during the Second World War by top planners of the State Department and the Council of Foreign Relations, which represents the more internationally-oriented sectors of the business community. They had been meeting from 1939 to 1945 in the War-Peace Studies Program. Their plans and discussions are interesting, and were largely implemented in the years that followed. There has been very little academic study of their important work, but it’s there if you want to find out about it. The only serious study I know is by Lawrence Shoup and William Mintner. Kennan’s position is articulated in an important planning document of 1948, which was rather comprehensive. Kennan pointed out that the US had half of the world’s wealth, and that the real task is to “maintain this position of disparity” between the US and the rest of the world. He argued, therefore, that the US should put aside “unreal objectives such as human rights, the raising of the living standards, and democratization” – referring specifically to the Far East, but the point was general – and must “deal in straight power concepts” without being “hampered by idealistic slogans” and recognizing that we cannot “afford today the luxury of altruism and world-benefaction.” That’s another sort of thing that you immediately tend to forget, if you’re looking for a job in the academic profession or in the political world. Kennan was considered too soft-hearted and sentimental for this harsh world, and he was soon replaced by Paul Nitze, who was made of sterner stuff. But his guiding principles weren’t forgotten. Now, they’re not studied, but they are known inside, and for that matter, they certainly weren’t original at all.

8A very similar conception of world order was outlined at the same time by Winston Churchill in public. He explained, in 1945, that “the government of the world must be entrusted to satisfied nations, who wished nothing more for themselves than what they had... We were like rich men dwelling at peace within their habitations,” and since “our power placed us above the rest,” we must use that power to keep the “hungry nations” under control and prevent them from endangering our satisfied existence. That’s another principle of world order. Earlier in the century, at the peak of British power before World War I, Churchill had spelled out this realistic vision more fully to the British Cabinet. He said: “We are not a young people with an innocent record and a scanty inheritance. We have engrossed to ourselves... an altogether disproportionate share of the wealth and traffic of the world. We have got all we want in territory, and our claim to be left in the unmolested enjoyment of vast and splendid possessions, mainly acquired by violence, largely maintained by force, often seems less reasonable to others than to us.” So we must teach them regular lessons in reasonableness: he was calling for an increase in the military budget. Well, the British Foreign Office recognized this was not proper fare for ordinary citizens, so that was kept secret for eighty years. Churchill understood it too: he did publish a sanitized version of this statement, but with the offending phrases removed, and one may safely assume that they will continue to be hidden away along with the equally realistic prescriptions of Kennan, and many others. One of the nice things about living in a free society is that if you are a real fanatic, if you are willing to dedicate your entire life to it, you can find out what planners are really thinking. It takes some work, but the record is there.

9The more humane among the conquerors did not find the methods that were used all that reasonable. Adam Smith, for instance, bitterly condemned what he called “the savage injustice of the Europeans.” He saw quite clearly that they were brutally creating the First World-Third World divide that is now so dramatic and was very much less so at that time. Smith was particularly harsh in condemning the British atrocities in Bengal, which were hardly a secret. He wasn’t alone in that. Another person who chose to know was Richard Cobden, one of the rare advocates of free trade. While John Stuart Mill was explaining the need for England to conquer more of India for the benefit of the “barbarians” (and, incidentally, to gain near-monopoly control over opium so as to force its way into China and create the greatest narco-trafficking enterprise in world history), Cobden was denouncing Britain’s crimes in India, and expressed his hope that the “national conscience... will be roused ere it be too late from its lethargy, and put an end to the deeds of violence and injustice which have marked every step of our progress in India.” He hoped in vain. There has been no “timely atonement and reparation” for which he called, and contrary to his concerns, no “punishment due for imperial crimes.” Rather, they are mostly lauded in a more attractive version of history constructed for the “satisfied nations.”

10Returning to the post-World War II period, there is no time to discuss what happened from 1950 to 1990. Adopting the illusions of that period, it was natural to expect that with the Cold War over, the US would at last be free to tend to the problems of the world’s impoverished nations, their critical debt burdens, fragile political structures and related human rights violations, without the distortions of the East-West prism. Many prominent analysts and institutions anticipated that, for the first time in the history of imperial powers, the US would now at last be able to act with benevolence and altruism and in accord with its own true nature, which had been well-hidden for the preceding 200 years. The predictions were instantly falsified (quite standard incidentally), and the harsh policies that they deplored continued without any change, in fact even intensified as new opportunities arose.

11The campaign of terror and economic warfare against Cuba is a pretty dramatic example. For about thirty years, it had been justified as self-defense against this menacing outpost of Soviet power which was ready to conquer the US. Apart from the absurdity, it’s long been known that the formal decision to overthrow the government of Cuba was taken in March 1960, at a time when Castro was anti-communist, and there were no meaningful Soviet connections. With the Soviet deterrent removed in 1990, US policies became still harsher, and the ideological system didn’t skip a beat. You’ll have to look pretty hard to find anyone who would see the obvious, namely that the attack on Cuba became harsher with the Soviet deterrent gone – mimicking what had happened a hundred years earlier. When the British deterrent was removed, the US was finally able to conquer Cuba. It was a policy that had been proposed back in the 1820s, but the British were in the way. That was no longer true at the end of the nineteenth century, so the US intervened to prevent Cubans from liberating themselves from Spain, and then took Cuba over, granting it “independence,” but in effect as a virtual US colony and plantation. And now again, with the Russian deterrent gone the policies became harsher ‒ the opposite of the predictions – in accord with the way world order actually works.

12As for the problems of the world’s impoverished nations, Washington did turn its attention to them but not quite in the manner that had been predicted. Rather, it did so by slashing its aid program, which was already the most miserly in the developed world. The timing was elegant. Congress passed legislation slashing support for the poor on the day the UNICEF press conference released its 1995 report, which estimated that 13 million children die each year from easily treatable diseases and malnutrition that could be dealt with for pennies a day (that’s an increase of 2 million since their previous report). It’s a “silent genocide” (as the head of the World Health Organization called it), which can now be intensified, with the propaganda needs of the Cold War gone, under what’s now conventionally called “donor fatigue.” None of this is a problem for the doctrinal institutions. And so it continues, on and on.

13Nothing substantial changed after the Cold War, exactly as a serious person would have expected, except that things got harsher because there were new possibilities. In the real world, the perceived task of the US remained as it had been in 1945, when it “assumed, out of self-interest, responsibility for the welfare of the world capitalist system,” as Haines described, though there were now new contingencies that required different tactics. After the Cold War, as before, planners acted on the basis of rational thinking and also historical experience as they saw it. It’s important to remember one aspect of the historical experience which was so conventional among states and other power systems that it’s a virtual cliché, namely the doctrine that our preponderance of power is both our right and our need. It’s a right because of our nobility, which is unique in history, and it’s our need because we are surrounded by fiendish enemies who are bent on our destruction. That’s close to a universal principle of the educated classes, so of course it applied in this case. It happens to be deeply rooted in US history from the early cleansing of the continent to the present, and too familiar here and elsewhere to require elaboration. And of course, no US innovation.

14Another highly relevant aspect of the historical experience is perhaps less familiar than it should be. It bears on India and most of the world. I am referring to the fact that from its origins, the US has been “the mother country and bastion of modern protectionism.” I am quoting the eminent economic historian Paul Bairoch, who proceeds to document his more general conclusion 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, or, for that matter, that the powerful adhere to their principles except for temporary advantage.

15The fact that the so-called late developers have departed from market principles has been quite familiar to economic historians at least, certainly since the work of Alexander Gershenkron some years ago. The same is also true of early developers. The US had always been extreme, from its origins, in rejecting market discipline. That’s how it developed in the first place, beginning with textiles and then on to steel, energy, chemicals, computers and electronics, pharmaceuticals and biotechnology, agribusiness, in fact every sector of the functioning economy, and gained enormous wealth and power; instead of pursuing its comparative advantage in the export of furs, as the doctrines of economic rationality would have dictated ‒ doctrines that were taught to the rest of the world by force.

16The American developmental state broke no new ground at all. Britain had done exactly the same thing. They did turn to free trade in 1846, after 150 years of protectionism had given them such an enormous advantage that a “level playing field” seemed a pretty safe bet, and even then continuing to rely on the fact that forty percent of its exports could go to the Third World, which means mostly their colonial world. For British textiles, for instance, the biggest export market was India, not because India was unable to develop its own textile industry or shipbuilding or steel or other industries, but because imperial force simply barred the way. The same was true in Egypt and elsewhere. During the era of railway building (the latter part of the last century), the US steel industry boomed, relying in no small measure on the fact that tariffs were so prohibitive that higher-quality and cheaper British goods could be kept out. In addition to that, there were military contracts and other state subsidies. Not in India, however, even though Indian production of iron had matched that of western Europe a century earlier, and Indian steel-making for shipbuilding and military production was more advanced than Britain as late as the 1820s, when British engineers were studying Indian techniques to try to close the technological gap.

17One may note, in passing, that there are many contemporary analogues. The Reaganites, noted for their exalted free market rhetoric, were in fact the most protectionist administration in postwar US history, virtually doubling import restrictions, and also pouring public funds into high-tech industry, often under the traditional cover of “defense.” The goal was to “reindustrialize America,” which was falling behind Japan (and Germany) because American management had failed to understand their new efficient production techniques. To help overcome the gap, the Reaganites again turned to the military, as conventionally in the past, setting up a program of “Management Technology” in which the technological gap was studied and management was brought up to date at public expense, one of many such mechanisms.

18Returning to nineteenth-century India, Britain spent vast sums on railway projects in India, favoring those expenditures over irrigation and agricultural improvement, but with little linkage effect for the Indian economy. Railway engines were produced in Bombay at that time at reasonable cost, but they were imported from England instead, not by the choice of Indians. Later, British steel was completely priced out of the international market, but the imperial preference system kept the Indian market and others open, while what were called discriminating protection principles denied similar support to Indian industry. All that was on the altar of free trade, a conveniently flexible doctrine.

19It can hardly escape notice that outside of Europe the only countries that developed are those that escaped the rule of Europe. The first one was the US, later it was Japan and some of its own colonies – it’s not easy to find an exception. It’s true from the origins of Europe’s industrial revolution, when Daniel Defoe, expressing a common perception in 1728, warned that England faced an uphill struggle in attempting to compete with China and India, which have “the most extended Manufacture, and the greatest variety in the World; and their Manufactures push themselves upon the World, by the mere Stress of their Cheapness.” So naturally protection and violence were necessary to overcome those unfair advantages. The more advanced countries in Asia might also have had the highest real wages in the world, at the time, and the best conditions for working class organization, so the most detailed recent scholarship indicates, contrary to long-standing beliefs. “Britain itself would have been de-industrialized by the cheapness of Indian calicoes, if protectionist policies had not been adopted,” concludes the same work, a very interesting PhD dissertation at Harvard by Prasannan Parthasarathi. And that extends to other industries as well. England faced the same problems in China in the mid-nineteenth century, overcoming them by the vicious Opium Wars, right at about the time of England’s worst atrocities in India.

20Defiance of market principles has always been a significant factor in economic development. That includes the post-World War II period. For instance, Europe, Japan, and the newly industrializing countries on its periphery all received a crucial economic stimulus from US military adventures. US military Keynesianism probably had a larger effect in revitalizing European economies than the Marshall plan, some political economists argue. The postwar Japanese economy was stagnant until the Korean War gave it a big shot in the arm. The Vietnam War did the same for Japan and for South Korea as well. Today’s First and Third Worlds, as I said, were much more alike in the eighteenth century. One reason for the enormous difference between them today is that the rulers were in a position to avoid the market discipline that they rammed down the throat of their dependencies. Bairoch, in his own study, concludes that the compulsory economic liberalism forced on the colonies in the nineteenth century is a major element in explaining the delay in their industrialization. Sometimes, in fact, it was de-industrialization, as in the Indian case. That’s a story that continues into the present under various guises, often with the cooperation of elite elements in Third World countries; because however much their countries may suffer they themselves benefit. These approaches do lead to highly stratified societies, in which some sectors do very well. Bairoch and other economic historians have studied these matters extensively. Economists don’t pay much attention to it, but in economic history itself it’s pretty well known.

21Economic theory considerably understates the role of state intervention for the wealthy. One reason is that attention is focused on a very narrow category of market interference. If you look at the studies, you see only the study of protectionism, but that’s only one form of market interference and not necessarily the most important one. Just to mention one kind of obvious omission, the industrial revolution in Britain and the US was fuelled by cheap cotton. What made cotton cheap was the violent elimination of the indigenous population of the southeast US and bringing in slaves – neither of these actions exactly an attribute of market orthodoxy. But that’s not counted when one talks about market interferences. The crucial matter of control of energy, that I mentioned, is another example. And so the story continues to the present. It’s rather striking in Bairoch’s history, not just because he is a very distinguished economic historian, but because it’s a very good history. He limits himself to protectionist measures and concludes, therefore, that after the Second World War, the US at least moved towards liberal internationalism, after a long history of leading the way in violating these principles, including in its most rapid growth periods. And there is an element of truth in this picture. The truth is that leading sectors of the US economy, particularly the more capital-intensive sectors, high-tech industry and the financial sector, did come to favor the liberal international principles from around the middle of the century for much the same reasons that motivated their British predecessors a century earlier: it looked like they could win any competition, so let’s have free competition. But that picture is seriously misleading, because it’s far too narrowly focused. American business leaders had learned a very important lesson from the enormous success of the semi-command economy during World War II. The lesson was that state subsidy and coordination could preserve and expand the system of private profit. That lesson was taught to the right people – the corporate executives who flocked to Washington to run the war-time economy. They haven’t forgotten it since. By the late 1940s, the business world recognized quite frankly that high-tech industry could not survive in a free enterprise economy, and that the government had to be what was called “the savior.” For quite convincing reasons, having to do more with power than efficiency, military Keynesianism was much preferred to alternatives, one reason being that it was much easier to sell, as the first Secretary of the Air Force, Stuart Symington (a liberal Democrat), pointed out to Congress. He said the word to use is not “subsidy,” the word to use is “security,” and so it remains. You don’t tell people that they are paying their taxes to the rich. What you tell them is that you are in danger of being destroyed, so you have to put your money in the pockets of the rich – indirectly, by processes you don’t see and are not publicly discussed, though anyone involved in science, technology, and the business world knows them very well from first-hand experience.

22There is hardly a sector of the functioning economy that doesn’t rely very heavily on these measures. That’s one of the main reasons why the Pentagon budget today remains roughly at Cold War levels. In fact, it is increasing – not because any danger is increasing but because it’s needed. I should say that my friends in the disarmament movement, I think, have sometimes misled people by writing about how many schools we could build if we didn’t have so many jet planes, and so on. Sure, that’s true. The business world understood that perfectly well back in the 1940s and even wrote about it. But they want the jet planes and not the schools, because that’s the way you get public funding for metallurgy and avionics and the aeronautical industry, and so on and so forth. There are fluctuations to be sure, and the statist reactionaries of the Reagan years, as I mentioned, broke new records for protectionism and public subsidy. They also boasted about it quite frankly to the business audience. And while the free trade enthusiasts and fiscal conservatives were preaching economic liberalism to everyone else (including the general population at home), they doubled import restrictions, increased public subsidies to the rich and shifted wealth to them by fiscal and other policies, while also undermining the labor movement, and also quickly transformed the world’s leading creditor into its leading debtor, again for reasons having to do with power – not efficiency. If the Reaganites had permitted market forces to function in the 1980s, there would probably be no steel or automobile industries in the US today, nor machine tools or semiconductors or automation or robotics, or much else. The Reagan administration effectively closed the door to Japanese competition and poured in plenty of public funds under the usual guise of security. No such measures were needed to safeguard the leading civilian export industry, namely aircraft, or the huge and profitable tourism industry, which is aircraft-based. These are largely an offshoot of the Pentagon system, which is by far the most important component of the welfare state, I mean in terms of magnitude (now growing at the hands of still more fanatical fiscal conservatives).

23Well, if economics and economic history didn’t have such a narrow focus, these would be primary topics of investigation, and if you look at them it’s simply not true that the US turned to liberal internationalism after 1945. It did it in a highly selective manner, with plenty of state subsidy and support at home under the guise of defense. And given all this, it is entirely natural that, say, when Bill Clinton showed up at the Asia-Pacific economic conference in Seattle back in 1993, and described his grand vision of the free market future, he did it in the hangar of the Boeing corporation and selected Boeing as the model for this grand market of the future. This makes perfect sense, you could hardly find a finer prototype of the publicly-subsidized private-profit economy that’s called free enterprise. Boeing is a publicly created and publicly subsidized enterprise, and it is indeed the country’s leading civilian exporter, but that’s because what it exports (the planes you fly in, including the one I just came here on) are modifications of military design, with the electronics and the avionics and the metallurgy and much else paid for by the public, under the guise of security – in much earlier years. Equally important was Clinton’s prime illustration of the miracles of the market at the Jakarta session a year later, namely Exxon, another stellar example of entrepreneurial value which won a 35 billion dollar contract to develop natural gas fields in Indonesia. Incidentally, that was called “jobs for Americans,” and sure there were some US managers and some skilled workers and a few others. Exxon’s stocks shot up right after that, because of the great joy built up by the prospect of the new jobs for Americans. “Jobs” has become the technical term for “profits”: it’s considered improper to mention the word “profits” in public discourse, so you say “jobs” instead and the important people understand that it means profits.

24All these victories for free market capitalism elicited great awe and acclaim, as one would expect of a well-behaved society. Equally natural is the fact that Newt Gingrich, head of the conservative revolution who preaches what’s called “tough love” to the weak and the destitute, is also the country’s leading welfare enthusiast. He brings more federal subsidies to his wealthy constituents than any comparable district in the country. And that contradiction poses no problem, passes with, at most, occasional mention. The reason is that both political parties, as well as respectable opinion generally, are committed to the same doctrine, the same double-edged conception of the free market, namely market discipline is just right for the poor at home, the defenseless Third World and everybody else, but the wealthy have to be protected. That’s a principle of world order that goes back a couple of hundred years, and it’s not going to change.

25I should stress that there is nothing special about the US. In this respect, the reliance on state power is quite general. If you want an example of what’s misleadingly called capitalism, here is one from the London Financial Times, one of the world’s leading business newspapers. A couple of days ago, it had a review of a new study of the top 100 global corporations in the Fortune list. It found that, out of 100, all had benefited from industrial and trade policies of their national governments, and at least twenty would not have survived if they had not been saved outright by government intervention. That’s what is called “capitalism.” Meanwhile, everybody else has to endure market discipline, because real science tells us that.

26Now, this historical dedication to protectionism and state power, and these remarkable successes of military Keynesianism during World War II, provided a good part of the intellectual equipment of the architects of the new world order of 1945. That remains true of those who are reshaping the system today, both domestically and internationally, under some new conditions. Going back to the postwar era, the first task was to restore the industrial societies with their traditional order pretty much intact. That meant restoring Nazi and fascist collaborators in the business community, and marginalizing and dispersing the anti-fascist resistance. This was often done with considerable violence. In South Korea, about 100,000 people were killed before what’s called the Korean War; they were mostly the anti-fascist resistance forces. The American occupying army actually used Japanese police forces to help, as well as collaborators. The same is true in many other places.

27The second task, closely related to the first, was to assign to the various parts of the South what were called their “functions” in the service of these goals. The guidelines were pretty much the same as outlined by Kennan and Churchill, and they remained very stable. If you look at high-level planning documents, the primary threat to US interests is consistently depicted as what are called “radical” and “nationalist” regimes that are responsive to popular pressure for “immediate improvements in the low living standards of the masses” and development for domestic needs. That’s called “radical nationalism,” or sometimes “economic nationalism,” and these tendencies conflict with the demand for a “political and economic climate conducive to private investment” with adequate repatriation of profits and “protection of our raw materials” – “our” raw materials, which by accident happen to be somewhere else. Opposition to economic nationalism was kind of a reflex (when it came to other countries, of course, not at home, where we have an extreme form of economic nationalism). Britain agreed. So the British Foreign Office, in 1949, feared that the fall of China might lead to a type of economy in which there was no place for the foreign manufacturer, the foreign banker, the foreign trader – which is of course an unacceptable outcome.

28US planning principles were most clearly illustrated in Latin America, where there was no interference, and US planners could do what they wanted. So there the values and ideals and goals come out with considerable clarity. In February 1945, the US called a hemispheric conference, where it presented the “economic charter of the Americas.” Its basic principle was the elimination of economic nationalism “in all its forms.” That was a problem because, as the State Department recognized, all of Latin America was overcome at the time with what was called “the philosophy of the new nationalism,” which “embraces policies designed to bring about a broader distribution of wealth and to raise the standard of living of the masses.” Furthermore, “Latin Americans are convinced that the first beneficiaries of the development of a country’s resources should be the people of that country.” Accordingly, they had to be instructed in the principles of economic rationality, which dictate that the first beneficiaries of a country’s resources are the US investors. Latin America was supposed to provide resources, markets, investment opportunities, cheap labor and all that sort of thing, but it was not to undergo what Washington called “excessive industrial development.” Both the Truman and the Eisenhower administrations allowed only what was called “complementary development.” So for instance, Brazil would be permitted to produce steel, but only the kind that US industry was interested in (you know, cheap, labor-intensive steel). And as far as possible, the principle was extended to the whole world. It is the basis for aid programs and so on: only complementary development, not the kind of development that would interfere with US-based private power.

29Of course, Washington’s position prevailed at the hemispheric conference – a major reason why Latin America has the highest inequality in the world and has been a political and socio-economic disaster for the vast majority of the population. These consistent disasters are particularly instructive when we recall that this is an area with very rich resources and potential. The region faces no external threat – it’s had the benefit of close supervision by the worlds’ richest and most powerful country, which was establishing what are called “testing areas for scientific methods of development” and “showcases for democracy and capitalism.” It has had repeated “economic miracles,” including in the two major economies of the region. Brazil up to six years ago and Mexico until December 1994 were both heralded as success stories for American-style capitalism until the (standard) collapse of the economic miracle, at which point the same measures that were hailed as proof of the marvels of capitalism become proof of the statist deviation from market principles, if not Marxism. The miracles have indeed been miraculous at least for some, at least for US investors and for Latin American elites who live in tremendous luxury. Meanwhile, the general population has sunk deeper into misery and despair. In large measure, this is because of the ways in which Latin America was opened to international markets, and the internal policies that result in part from the historical rapacity of Latin American elites and in part from external pressures.

30If we compare Latin America with East Asia, there are a lot of differences, so I don’t want to be too glib about it, but some differences are striking. They developed more or less along the same lines till around 1980, when they split very sharply. Latin America entered into a huge fiscal crisis, a debt crisis, and so on. East Asia keeps developing. Why? Well, there are some striking differences. There’s an enormous capital flight from Latin America – it’s open to international markets, and the wealthy are quite free to export capital. If Latin Americans could control the wealthy they wouldn’t have a debt crisis. That’s not a problem in East Asia. There the state is powerful enough to control capital as well as labor, which it controls everywhere. In South Korea, you could theoretically get the death penalty for capital flight, and there wasn’t any capital flight. That’s not necessarily a feature of autocratic societies. Britain has instituted similar measures against capital flight several times, including after the Second World War (in accord with the Bretton Woods principles of the postwar economic order, and also the IMF rules, still technically in effect). But Latin America didn’t have that advantage. It’s open to international markets. Another factor is this tremendous inequality, much worse than East Asia, which means lots and lots of luxury imports – plenty of Mercedes-Benz are coming in, and those sorts of things. That means huge imports, and huge trade deficits, and so on. These two factors are a big part of the crisis out there – just a simple consequence of a particular form of openness to international markets.

31These very same scientific methods that brought those results in Latin America are now being applied in much of eastern Europe, with similar effects. There’s a lot of puzzlement in the West over the fact that most of the population of Russia and even the former empire appear to be looking back at the pre-reform period (as it is called) as a kind of a golden age. There’s a lot of talk about why that is – you know, perhaps the past looks better as it recedes into the background, they forget what it was, or something like that. I don’t think that’s what is happening. There isn’t much yearning to return to Stalin’s dungeon either. It’s not so much that they see something receding, as something approaching. What they see approaching is Brazil and Mexico. Awful as the Soviet system was, what the US and its European allies imposed on the Third World was an even worse monstrosity, and the restored eastern European Third World is coming to learn that lesson.

32Back to 1945, other parts of the world were also assigned their roles. Southeast Asia, according to the Kennan policy planning studies, was to fulfill its main function as a service area for the reconstruction of western industrial capitalism that now included Japan. Japan was to be granted its new order in East Asia, what Kennan called the “empire toward the south,” all now safely under US control. Independent nationalism had to be demolished for the usual reasons, as was done with usual brutality and power. Africa, the US didn’t much care about, it didn’t count much. It was, therefore, to be handed over to Europe to “exploit,” as Kennan put it, for the reconstruction of Europe. He also thought that exploiting Africa would give Europe a kind of psychological shot in the arm, which they needed, being sort of gloomy in those days. You could imagine a different relation between Europe and Africa, but that never occurred to anyone; all this has been public for many years, but there’s no comment about it. As for the Middle East, it was to be incorporated directly within the US system. The local management of the Middle East was to be assigned to the British in those days, with what in earlier days Britain and the US called “an Arab façade,” submissive family dictatorships that would ensure that the huge profits from oil flow primarily to the West (mainly the US and Britain), not to the people of the region. That’s their crucial job (they are permitted to live in super-luxury themselves, a common feature of dependencies under imperial rule as well). If they don’t carry out their jobs, they’re out of the window; if they do, they can be as brutal as they want. The US also has to keep its finger on the nozzle, for reasons I mentioned.

33As for South Asia, it was not a major area of US planning concern, so the documentary record indicates. There the primary concern was to prevent what Kennan called “infection” from a potentially communist Indonesia or China. In 1948, these processes were taken very seriously. So seriously that, in 1948, Kennan considered Indonesia to be the primary problem facing US policy in the world. It was a judgment reiterated by the Eisenhower government a decade later. Eisenhower identified three major crisis areas in the world. One was Indonesia, another was North Africa, and the third was the Middle East – all oil producers, all Islamic, though then secular. The fear about Indonesia was that advocates of independent development might win a political victory. That meant the one mass political party, namely the PKI (the Indonesian Communist Party). And Indonesia specialists these days consider this possibility not at all unrealistic. One of the leading specialists is the Australian scholar Harold Crouch, who wrote the standard book for the period. He writes that “the PKI had won widespread support not as a revolutionary party but as an organization defending the interests of the poor within the existing system,” developing a “mass base among the peasantry” through its “vigor in defending the interests of the... poor.” American internal documents for that period have been released recently (very selectively). They reveal great fear that the democratic processes, if allowed to function, would come out the wrong way, so they had to be stopped. First, they were stopped by a huge campaign of CIA subversion and support for civil rebellion in the outer Islands, in 1958. They were finally terminated by the huge slaughter in 1965 of hundreds of thousands, maybe a million people, mostly landless peasants. The one mass-based political party, the PKI, was finally destroyed, and an end was put to the danger of democracy in Indonesia. That slaughter elicited enormous euphoria in the West – you have to read it to believe it.

34Similar fears lie behind the US attack on South Vietnam, later all of Indochina, and the overthrow of parliamentary governments in Guatemala and Brazil and Chile and a lot more. None of these involved any meaningful security threat from Russia or China, though that was the reflexive pretext by the government and commentariat. Radical and nationalistic regimes are intolerable in themselves, even more so if they seem to be succeeding in terms that might be meaningful to other people facing similar problems. In that case, they become what Kissinger termed viruses that can infect others, or as Acheson put it, they become “rotten apples that might spoil the barrel.” For the public, they are “dominoes” that are going to topple by aggression and conquest. Internally the absurdity of this picture is often conceded, and the real threat is recognized. When Henry Kissinger moaned that the contagious example of Chile would infect not only Latin America but also southern Europe, he didn’t really anticipate that Allende’s hordes were going to descend on Rome, but rather that Chile’s example would send Italian voters the wrong message – namely that democratic social reform was a possible option. The same is true quite generally. When you detect a virus, you take action to destroy it, and potential victims have to be immunized: typically, by state repression and terror. That pattern repeats itself over and over again through the years. It continues without notable change after the Cold War – that’s a substantial core element of modern history.

35Take a look at the Cold War itself. What’s that? Well, to a large extent it falls into the very same pattern. The Bolshevik Revolution, in 1917, extricated the Soviet Union from the western-dominated periphery (remember that this was the original Third World, going back to the fifteenth century in pre-Columbian times), and it set off the inevitable reaction, beginning with instant military intervention. From the outset, those have been basic elements of the Cold War. The underlying logic was not fundamentally different from Guatemala or Grenada. Of course, the scale of the problem was enormously different. So Grenada you can take care of over the weekend. The Soviet Union is a different story. It took seventy years. Bolshevik Russia was what is called radical nationalist – communist in the technical sense – unwilling “to complement the industrial economies of the West,” in the semi-official phrase which I am quoting. In fact, it was no more communist or socialist than it was democratic, in the literal sense of these terms, and furthermore there were no conceivable military threats. The Bolshevik example did have undeniable appeal, not only in the Third World but even in the rich societies. That was a fact that very greatly concerned Woodrow Wilson and Lloyd George at that time, as we now know from released records, and it continued to be a concern right into the 1960s (that’s when the documentary record runs dry). At this point, Kennedy and Macmillan are discussing the danger that Russian success will be just too influential for others. In short, the Soviet Union was a gigantic rotten apple. It wasn’t Stalin’s monstrous crimes that bothered western leaders, any more than in the case of Mussolini or Hitler or others who got plenty of support till they stepped out of line (Saddam Hussein is a recent case). Truman liked and admired Stalin. So did Churchill. Right through the Yalta conference Churchill was defending Stalin in internal discussions at the British Cabinet. Truman felt that the United States would have no problem whatsoever with the bloodthirsty tyrant if the US were to get its way eighty-five percent of the time. Well, it couldn’t get that – so the virus had to be destroyed. The ultra-nationalist threat was greatly enhanced after Russia’s leading role in defeating Hitler left it in control of eastern Europe, separating these regions too from the domains of western control – again those are traditional Third World resource, market, and investment areas for western Europe. In this case, the rotten apple was so huge (and after the World War so militarily powerful too) and the virus was so dangerous that this particular facet of the North-South conflict took on a life of its own from the very outset. And in my view that’s the major character of the Cold War.

36Similar concerns drove US policies in South Asia. There is one comprehensive scholarly study of this, a very good one by Robert McMahon, running through recently released documents. His conclusion, that of a very conservative scholar, is that western policies are what brought the Cold War to Asia – destroying Nehru’s vision of a zone of peace. Pakistan was set up as a military base, in large part as a component of the regional enforcement system directed at the Middle East. McMahon does keep to the conventional doctrine that US policy was “driven not by pursuit of material gain or geopolitical advantage as the policies of so many expansionist powers of the past had been,” but rather by “largely illusory military strategic and psychological fears.” Curiously, the same foolish and unnecessary errors were made everywhere in the world, under the same illusory fears that go from the terrifying threat of Grenada or Nicaragua to panic about Ho Chi Minh setting off on a world conquest and so on. The real concern that McMahon’s work points to was that China might win the economic competition with India, thus discrediting the capitalist democratic path of development. In fact, what he calls Washington’s irrational sense of insecurity, when you look at it case by case, turns out to be the perfectly rational concern that unless the world is totally under control, the rotten apples may spread unwanted messages, and the interests of the real rulers may be damaged, if only slightly. It’s an interesting fact about the intellectual culture (in the United States and Britain and most of the world to my knowledge) that highly consistent actions that prove very successful for their designers are consistently criticized in retrospect as foolish and naive and based on illusory fears. Apparently, it’s more acceptable to attribute to the planners consistent irrationality, verging on literal insanity, than it is to recognize the truth of the principles enunciated by Churchill and Kennan and others, at least in internal documents where they are, in fact, particularly well-articulated.

37With the Cold War over, things continue pretty much as before. Eastern Europe is being driven back to its earlier status. Parts that belonged before to the industrial West, like the Czech Republic and western Poland, are pretty much returning to that status. Others are drifting back towards something resembling their Third World origins, as illustrated by economic and social indicators. Just to mention one, the number of extra deaths in Russia alone is estimated at over half a million a year by 1993; that’s rather successful killing as a result of the capitalist reforms that were instituted in 1989 (this is from a study by UNICEF, which supports the so-called reforms). This picture is very easily recognized by anyone familiar with Brazil and Mexico and so on, and will doubtless be lauded as another economic miracle, as indeed it will be to the people who count.

38A few months after the fall of the Berlin Wall, the White House submitted its annual request to the Congress for the military budget. The text had been the same for years – we need a huge military budget because of the Russians. One thing has changed – the reason. It was no longer the awesome Russian threat that required enormous expenditures for what was called the “defense industrial base” and the intervention forces aimed primarily at the Middle East. Rather, it was frankly conceded that in the Middle East the threats to US interests “could not be laid at the Kremlin’s door” (contrary to many lies now withdrawn, no longer being serviceable), and it turns out that the general threat that required the United States to spend as much on the military as the rest of the world combined was the “technological sophistication” of Third World powers. That’s what the threat is, which the US is incidentally trying to increase as much at it can by being the largest arms seller in the world, which of course means that we are facing potential threats for which we need more arms to protect ourselves, and so on. None of this elicits any ridicule. In fact, it didn’t even elicit news report or comment. So everything proceeds on course, which isn’t at all surprising when you think about the real character of the Cold War.

39If you want to determine the true nature of the Cold War, it’s a useful idea to ask a simple question. Take a look at the end and ask who’s cheering and who’s despairing. That tells you something about the real nature of the conflict. So let’s try it in this case. The Cold War is over – who’s cheering? Well, in the East there are some people cheering – the old Communist Party hierarchy. They are extremely happy; they’re now taking on the standard role of the highly privileged elite that cooperates with western power. They’re called the capitalists – rich beyond their wildest dreams – and they won the Cold War. So the communist party leadership, they’re the winners. Among the losers are the general population, sinking into typical Third World misery and dreaming vainly of the days before they rejoined the Third World. They were doubtless released from tyranny, and are grateful at least for that. So, that tells you who won and who lost in the East. Who won and who lost in the West? There are very large cheers from investors, who regained their privileged access to the economy of the former Soviet empire – markets, investment opportunities, cheap labor, the whole business. The international business press, incidentally, is very frank about this. Surveying the wreckage, the London Financial Times had a report headlined “Green Shoots in Communism’s Ruins,” meaning everything is pretty rotten but there are a couple of good things. Green shoots turn out to be new opportunities for western corporations, now that the capitalist reforms have caused “rising unemployment and pauperization of large sections of the industrial working class.” That means a submissive and disciplined labor force is available (also healthy and educated, so things have changed from the days when eastern Europe was a typical Third World service area for the West). They’re willing to work longer hours than what the Financial Times calls the “pampered” western workers, at much lower wages and with much fewer benefits, and that’s kept that way by the very tough anti-labor policies of these repressive neo-liberal states. General Motors, Benz and others now have a new weapon to use against the pampered workers at home, who will have to abandon their “luxurious lifestyles,” the business press tells us cheerily. Once again, that tells you who won and who lost the Cold War. In the West, the ones who lost are the pampered western workers who now have a new weapon against them – meaning most of the population. They lost the Cold War. Those who won the Cold War are the executives and investors of Benz, General Motors, and the rest. That tells you not only what it was about to a large extent, but also why everything else persists.

40I should add that as elsewhere western investors in eastern Europe understand the free market as they always did. So General Motors and Benz and the rest will invest there, but they’ll demand tax holidays, stiff tariffs to ensure market control and the usual amenities, leaving the new Third World countries with the debts, and the pollution, and the task of providing infrastructure, and all that stuff. Benz recently worked out a similar deal with the state of Alabama, southeast United States, which indeed does offer something like Third World conditions, structurally speaking.

41Well, there certainly have been important changes in world order – I’ll finish briefly with these. One of the biggest changes was deregulation of financial markets. Back in the early 1970s, that was a primary factor in the huge explosion of speculative financial transactions and manipulations (speculation against currencies, things like that), which now constitute about ninety-five percent of foreign exchange transactions. According to a recent UNCTAD (United Nations Conference on Trade and Development) report, it was ten percent of a far smaller total in 1970. That’s a very radical change, and those consequences were understood right off. In 1978, James Tobin, a Nobel Prize-winning economist, pointed out (in his presidential address to the American Economic Association) that these changes (then just beginning) were going to drive the world towards a low-wage, low-growth equilibrium and also high profits. A recent study, which was directed by Paul Volcker (head of the Federal Reserve), attributes about half of the slowdown of growth since the early 1970s to just this factor. When capital is not being used for investment and commerce, but is being used for speculation against currencies and so on, this drives down growth in several ways. For one, capital is withdrawn from productive uses. For another, it’s a weapon against stimulative policy. If any government, even in a country like the United States, tries to do something to stimulate the economy and increase growth, which threatens to bring with it inflation and so on, there’s the threat of huge capital flight, which is not trivial with a trillion dollars moving across financial markets on an average day. That’s a powerful weapon even against the US, certainly against any Third World country. And it’s a major factor in the attack against democracy, since national economic planning becomes much harder, even if populations can get some control over their own governments in some fashion.

42There have been other developments that contribute to these tendencies. The telecommunications revolution took place around the same time (that’s another offshoot of the state system), and of course it facilitated the globalization of industry and finance. It made it possible for corporate headquarters to be in New York, financial operations in some tax haven, and production wherever people can be beaten down most efficiently (say Indonesia, where wages are about half the level of China – it’s called an economic miracle too). Corporate executives have also learned that this new information technology allows much more effective command and control, BusinessWeek reports, failing to add that the same technology differently used could radically reduce superfluous layers of management and devolve decision-making to working people. If you look at the history of automation, which has been well studied, it was so inefficient that it was developed through the state system (the Air Force for instance); but after decades of development, it was handed over to industry for private profit. That’s standard. But the point here is that the way it was developed was not in the interests of economic efficiency, but in the interest of power: automation could have been used to put decision-making power into the hands of (let’s say) skilled machinists and eliminate management; or it could be used to intensify management control and to deskill machinists. The second way was adopted in the state system for reasons of power and class war and not economic efficiency. One of the nice things about the state system is that you can do that without anyone knowing about it (unless they happen to have read David Noble’s fine study of the topic). Also, you don’t have to worry about costs as the public is paying for it. And the same is true of the telecommunication systems that are allowing for more effective command and control.

43The end of the Cold War contributed to these tendencies, as I mentioned, by adding new weapons to the armory, and by reducing the slight space that was available for non-alignment and independence in the Third World. A new version of the world order is taking shape. It has effective power transferred, to an unprecedented extent, to private tyrannies that are internally immune to the threat of democracy and generally unaccountable. Along with democracy, markets also are under attack, even if we put aside the massive state intervention. Increasing economic concentration offers endless devices to evade and undermine market discipline. Just to mention one aspect: about forty percent of what’s called world trade is actually not trade at all in any meaningful sense – its intra-firm, like a single corporation shipping something somewhere else and then shipping it back, never entering anybody’s market. This is called “trade” because it has to cross international borders – that’s forty percent of world trade, and over fifty percent of trade for the US and Japan. These, of course, are estimates; investigating private tyrannies is no easy matter. Operations internal to corporations are carefully managed by a very visible hand and they offer all sorts of mechanisms to undermine market discipline, leading to what’s properly being called a system of “corporate mercantilism” in the international arena. That system is rife with the kinds of conspiracies of the “masters of mankind” which Adam Smith warned against, not to speak of the traditional reliance on state power and public subsidy, and it’s pretty well recognized. Today, BusinessWeek perceives what they call a mega-corporate state in which there will be a few global firms within particular economic sectors. The vast majority of the world’s population is supposed to be subjected to market discipline and be told how wonderful it is. They are not supposed to hear things like this – this is for the readers of the business press and people who care about running the world.

44Well, that partly skims the surface. It’s pretty easy to see why the masters now perceive a real hope of achieving the kind of end of history that they’ve often announced in the past (always wrongly so far). It is also easy to see the reasons for the mood of anxiety and hopelessness that prevails in every part of the world, including the industrial societies, although there are also many signs of resistance all over the place, and I think they offer plenty of hope. It’s certainly possible to reverse this course. Human institutions and human decisions made within them are not engraved in stone, and there are ways to change them. You have to penetrate the clouds of deceit and distortion; you have to learn the truth about the world, to organize, to act, to change. It’s never been easy, it’s never been impossible. There are new challenges now, as well as new possibilities of international solidarity that weren’t there before. There’s rarely been a time in history when the choice of whether to undertake these struggles carried such fateful human consequences.

Question and Answer Session

45Question: There is a wide gulf between the First World and the Third World, and the aim of the Bush team is to sustain and perpetuate US hegemony. What are the prospects for alliances among nationalities of the Third World to break this hegemony?

46Chomsky: Well, there are plenty of opportunities for solidarity within the South, but it’s important to recognize other things that are going on. One of the striking features of this world order is the extension to industrial societies of something like the Third World model. So the US is also being subjected to a kind of structural adjustment, and the same with England. More and more of these rich countries are taking on the look of Third World countries: highly stratified, with a superfluous population, the usual picture. And that creates both a need and a possibility for alliances that cross the traditional North-South divide – because a good part of the population of the North is becoming like the South, at a different absolute level but in structural terms. That is beginning to happen, and I think it’s offering promising avenues for international solidarity. So, for the first time ever, there has been cooperation, for example, between North American and Central American labor. The US unions have traditionally opposed the Central American labor unions (and even supported brutal attacks on them), but now they are supporting them and sometimes doing pretty effective work in solidarity with working people in Central America. Indeed, they have common interests, and that extends over the whole world. General Motors can move not only to Mexico but to Poland, and this means that the reaction to this form of tyranny also has to be international. It calls for popular internationals of a kind that hasn’t existed for a long time, and in fact never really existed. I think the prospects for that are unprecedented. The same kind of technology (like telecommunications and so on) that allows centralized control also facilitates the spread of information and common action among people who want to resist it. And after all, the powers we face are very fragile. Take, say, corporations. Corporations exist on the basis of an extremely thin reed. In the US, they are given charters, charters that can be revoked. And they can be eliminated by simple parliamentary decisions – parliamentary decisions that could be part of major changes in the whole structure of the world order. Nothing like this would be easy, but the main reason why it’s not easy is that people don’t understand the power they have in their hands. I think that’s the hard thing to overcome, and it is within reach. That can be changed, not only internally within the Third World, but also across North-South borders.

47Question: Why do you think that the world order is maintained only by physical powers, like military and economic power? What about spiritual powers (not necessarily religious)?

48Chomsky: I think it’s quite right, that these powers help to maintain world order. I agree with that very strongly. In fact, this point has been understood for a long time. It was explained rather nicely by one of my favorite figures, David Hume – a very conservative, very smart analyst, a contemporary of Adam Smith and a friend of his. He wrote down the principles of government. The first principle he introduced by talking about what he regarded as a paradox of government. The paradox, as he put it, is that “force is in the hands of the governed,” not the governors. He said that’s true of most societies, even the most authoritarian ones. From totalitarian societies to free societies, force is in the hands of the governed, and that’s the paradox – how come they don’t throw out their rulers, who are oppressing them? Well, the answer must be that power rests, in part, on the control of opinion. It is by opinion only that the population is controlled, he argued – that’s spiritual power. That means imposing a range of hopes, and aspirations, and assumptions, and goals, and so on that keep people from acting to overthrow the powers that are oppressing them. Because force is indeed in the hands of the governed, there is no doubt about that. So the US, which is in many ways the freest society in the world, is also the one where the most effort is put into controlling opinion. That costs about a trillion dollars a year in just plain marketing, which is not only a means of creating artificial wants, but also a big device of control. So is state propaganda. The business world has understood for a long time that the public mind is the major threat facing corporate power. The US has a huge public relations industry, which is designed to control thought and attitudes, and its leaders are very frank about it. They have to fight what they call “the everlasting battle for the minds of men,” indoctrinate people with the capitalist story and so on. Those are very strong techniques of control – trapping people in artificially-created needs, and also simply indoctrinating them. Huge efforts go into that, and those are spiritual powers. They shouldn’t be left out; they play a crucial role in the system of domination, and also in overcoming it.

49Question: Is there any possibility of struggle within the First World societies?

50Chomsky: Sure. In fact it’s critical, because of their power. And the population faces somewhat similar problems. Inside the US and England, inequality has been growing very sharply. Real wages in the US (median real wages) have been declining since 1980. From 1980 until the last figures that are available, about ninety-five percent of families have lost real incomes. That’s right through a period of considerable growth. Meanwhile, profits are shooting through the roof. Under those conditions, something like the structure of a Third World society is being created. Just as a small example, take the city where I live, Boston – a very wealthy city. It has a hospital that caters to the general population, Boston City Hospital, not for rich folks, but for everybody else. A couple of years ago they had to establish a clinic for malnutrition because for the first time they were getting cases of Third World-type malnutrition, mostly among children. They have to actually learn from Third World specialists how to deal with these things. They’ve been doing studies, and it turns out that there’s a relationship between cold spells and malnutrition: a couple of weeks after a cold spell (Boston is very cold in the winter), the number of kids suffering from malnutrition increases. There are articles in medical journals about this. The reason is obvious: parents have to make an agonizing choice – do we heat our homes or do we feed our children? And you can’t do both, because you’re being forced down to Third World standards.

51Well, under these conditions there are many prospects for struggle inside the First World societies, and I think this goes back to the question of spiritual powers. Many people are very upset and angry in the US, that’s why the people in power often lose elections. People don’t want the new guys, but they want to get rid of the guys in power. What emerges from this anger is a very complicated thing. In part it’s very irrational, there’s a proliferation of cults of every imaginable kind, religious fanaticism, paramilitary organizations, all kinds of social disorders. On the other hand, there are also signs of more constructive resistance, and which of those is going to win is a matter of what the earlier question called spiritual powers – what you come to understand and believe, what you are committed to and so on. Those are not predictable things; they are things to work on.

52Question: What is your view on the peace process in the Middle East?

53Chomsky: Actually, if I may say something unkind about India and other countries, this is not a bad example of spiritual powers. The term “peace process in the Middle East” is interesting in itself. In the US, the term “peace process” is used in a technical sense, to refer to whatever the US government has been doing. For instance, undermining peace, which it is often doing, is called “the peace process.” Now, it’s understandable that this terminology is used inside the US doctrinal system, but what is striking is that it’s used everywhere.

54Now take the Middle East, which is a fairly dramatic example. For twenty-five years, the US has been standing in the way of any peace process there. That began in 1971, when President Sadat of Egypt offered a full peace treaty to Israel in terms which were exactly the American official policy at the time. Israel didn’t accept it, and the US had to make a choice – either go along with its ally or accept Egypt’s offer and pursue its former policy. There was an internal debate over that – Henry Kissinger won, the US rejected Sadat’s offer and instituted a policy that he called “stalemate,” meaning no negotiations, no diplomacy, just violence. From that point till today, the US has stood virtually alone in the world in opposing every diplomatic initiative – that’s called the peace process. The US vetoed Security Council resolutions, voted alone (with Israel, sometimes Dominica or some other client state) every year in the UN General Assembly and so on. Okay, finally the US position won. There are two basic points here. One is that the US was opposed to the withdrawal condition of UN 242, the basic document Washington had initiated in 1967 but rejected in 1971 (in practice, not formally). Secondly, it was opposed to Palestinian national rights. Palestinians don’t have wealth or power; therefore they have no rights, that’s elementary statecraft. Again, the US stood virtually alone in the world in opposing this. That’s called the peace process – twenty-five years of activity to prevent any political settlement in the Middle East. And the US peace process finally won – the Oslo agreements simply ratify US rejectionism.

55If you take a look at Oslo II, the interim agreement that has just been enacted and is being hailed as a great success (even in the Indian press, I noticed), what it does is to break up the West Bank into four regions. One of them is Greater Jerusalem, which is granted to Israel. If you take a look at the maps published in (say) the New York Times or in Israel, they just include that as a part of Israel. That’s one zone. The second zone Israel just takes, period. That’s seventy percent of the West Bank, totally under Israeli control. A third zone is granted to Palestinian authorities. That’s two percent of the West Bank – mainly the municipal areas of various towns; Israel is delighted to give them up. The rest (the fourth zone) is called the region of autonomy. If you take a look at the map, it consists of about a hundred scattered regions inside the Israeli area of total control. In exchange for this magnanimous agreement, which is about as extreme as any proposal that has been made in the Israeli-US spectrum, the Palestinians have to accept the legality (present and future) of Israeli settlements and Israeli sovereign rights in state lands, absentee lands which could mean up to ninety percent of the autonomy territory. That’s the settlement.

56In fact, Israel is finally doing what is sensible. Instead of trying to run the Occupied Territories themselves, they want to run it the way the British ran India. The British didn’t run India with the British army. They ran it with the Indian army: most of the troops that were controlling India were Indian troops, usually taken from one territory to beat up people of another territory. And that’s the sensible mode of colonial control. In South Africa and Rhodesia, the same thing is true – the worst atrocities were carried out by the Black mercenaries. Central America is run the same way: the US army goes when needed, but mostly it is run by state security forces (basically terrorist forces, mercenaries like the British colonial army). And now Israel is finally doing the same thing – it’s the only sensible way to run colonies. So the Palestinian mercenaries will control the population for them. They are pretty frank about it. Prime Minister Rabin, right after signing Oslo I, explained to the Israeli Parliament why there wouldn’t be any security problems in Israel. Limited withdrawal was contemplated, he said, and when the Palestinian security forces come in and run the place there won’t be any problems with appeals to the high court, or protests by human rights organizations or other bleeding hearts. These problems are going to end, because the mercenaries will be in charge. Well, that’s standard imperial policy, certainly in India everybody ought to know it by heart. That’s what they are instituting in those tiny areas they’re going to withdraw from. Meanwhile, they keep the resources, most of the land, and so on.

57This is a tremendous victory for power, and also a spiritual victory (to use that word again) because the world, amazingly, has accepted it. I discovered in interviews around the world, in Brazil, and western Europe, and so on, that people have forgotten what they believed themselves five years ago – namely they were advocating rights of self-determination for the Palestinians. Those rights have been lost, destroyed in the treaty, and that’s called the peace process. That’s a tremendous doctrinal victory – not just a victory for the rule of force on the ground but a victory of cultural hegemony, which is pretty impressive and it tells you something.

58Question: Do you have any comments on the World Bank, the IMF and the World Trade Organization in the context of structural adjustment programs for the Third World?

59Chomsky: Let me add to that, if I may, that the structural adjustment programs are also for the First World – with a somewhat different character, but rather similar in conception. On the World Bank, the IMF, the WTO and others like it, let me quote my favorite journal again, the Financial Times of London. A couple of years ago, it pointed out, I think accurately, that a “de facto world government” is taking form in “a new imperial age.” That de facto world government is based on a few powerful states and an array of multinational corporations that rely on them and are closely linked to them and often to one another, and a set of transnational structures of governance including the IMF, the World Bank, the WTO, all operating pretty much without inspection – that’s part of their beauty. I mean, theoretically you can figure out what’s going on in the WTO, but for 99.9 percent of the population it’s a total secret. This de facto world government is coalescing around the system of economic power. That’s pretty much the way nation-states developed around national economies, and now it’s happening around the global economy. It’s a kind of quasigovernmental structure, immune from public accountability or even public awareness, serving the interests of global financial, industrial, service and other institutions. These global institutions are of course nationally rooted and rely heavily on state power – that they largely control – all that’s quite important. They even have to be regularly bailed out by the national states, meaning the domestic population; otherwise many of them would collapse. So they are nationally rooted but global in character, and they need some kind of organizing structure around them. That’s what this entire network is about, and why there are major attacks on democracy as well as markets.

60If you look at the Uruguay Round and other recent negotiations, you find a mixture of liberalization and protectionism, very carefully crafted to serve the needs of its primary constituents (mainly investors). The protectionist measures, as you know better than I do, are very much discussed in India, primarily because of the likely impact of the new intellectual property rights regime, a highly protectionist measure designed to destroy things like the Indian pharmaceutical industry, so that drug prices can shoot up, and so on and so forth. That’s the way these things are crafted and they make perfect sense for that reason – they are serving the interests of the people who are designing them. These institutions have no legitimacy, and they are all fundamentally weak. They could be broken down by concerted popular action, but again that involves understanding what is going on and being willing to dedicate oneself to change it.

61Question: What are your comments on so-called economic liberalization in India?

62Chomsky: I don’t feel competent to talk about the specific case of India. But we can see what happened in history and elsewhere. There are regular consequences of this so-called economic liberalization. For one thing, it’s not liberalization. It’s a mixture of liberalization and protection and subsidy, a kind of complicated transfer of resources and power. The effects are pretty marked. They often lead to reasonable macroeconomic statistics, so you get these economic miracles, but also to consistent decline in the social and economic health of a large majority of the population. And great success for a sector that’s connected with international capital, and so on and so forth. Those are very consistent effects through Latin America and Africa, and I presume the same applies here in India.

63Question: With the end of the Cold War and the coming into being of a multipolar world, the US’s self-proclaimed role is to continue to lead even through a decline in its economic competitiveness, which affects its ability to dictate global outcomes...

64Chomsky: I’m not sure what the question is, though the picture is certainly a common and understandable one. It’s partly true, but partly misleading. For instance, when you talk of US economic decline you have to be rather cautious. Whether this is happening is a matter of definition. It depends on what you mean by the United States. If you mean the geographical area, yes there is an economic decline, for example the US share in world manufacturing has declined, there is a big trade deficit, and so on. On the other hand, if by US you mean the goods and services produced by US-based capital, then you get totally different results. If you look at US-based manufacturing corporations, their share in global production has not declined; in fact, it has probably increased. If you recalculate the US trade balance, as the Commerce Department recently did, by looking at exports of US corporations from overseas branches and affiliates as US exports, the US has a positive trade balance, not a trade deficit. From the point of view of the rulers, that’s the way to do it. The Wall Street Journal has pointed that out. The people who are doing the bookkeeping for the transnationals do not care about the national border. They care about what their corporation is doing. If it’s exporting from Brazil, that’s as good as if it’s exporting from Nevada, and the same is true globally. So, if by US you mean the people who run the show in the US, the US economy is not declining, in fact it may well be expanding its power. Similarly, the multipolar system appears in a different light if you look at the linkages across the big blocs, say Japan and the US and Europe. They are very closely interlinked at the level of real power, in all sorts of complicated ways, and those are the things that matter for people who run the show. If you think that through, you get a different picture; it’s a complicated story, but I think that’s the way to look at it.

65Question: Countries tend to favor the status quo as long as they perceive themselves as beneficiaries of it. They want change when they are on the other side. Even Indian criticism of the present discriminatory arrangement of the Security Council might change if India were made a permanent member. So it’s basically a question of which side one is on.

66Chomsky: But I don’t think one should talk of things like India as relevant entities in these matters. Here I think we should at least recognize what was obvious to, say, Adam Smith about two hundred years ago – that nations aren’t entities. They are divided. As he put it, the “principal architects of policy” will make sure that their own interests are “most peculiarly attended to,” whatever the impact on others. He was talking about England, where the principal architects of policy were the merchants and manufacturers. His point was that policy is made by the merchants and manufacturers, and they’re making sure that they do fine, however grievous the impact on the people of England. That generalizes, and unless you accept those elementary truisms (ideas that later came to be called class analysis, but were trivialities two hundred years ago), you can’t even talk realistically about the world. So for most of the people of India, does it matter if India is a member of the Security Council? What difference will it make? If they have a seat in the Security Council, then they’ll do what the US tells them to do in the Security Council instead of somewhere else. To ninety percent of the people of India, it doesn’t make any difference. Many probably won’t even know about it. So, who cares? I mean, there are big problems in the UN, but they don’t have anything much to do with who has a seat in the Security Council.

67I really feel that people should think about the questions quite differently. The framework of the discussion is part of the technique of control of opinion, by which power remains stable. You should always ask yourselves, like you do in the sciences, whether the framework of discussion is acceptable. Most of the time, it’s completely wrong; it’s designed to confuse, and control, and marginalize. If you just think the problem through, it appears in a new light. So there are problems with the UN, but the question is not who are the permanent members in the Security Council. The obvious question to ask is why there should be any. Well, the system was designed to make sure that the superpowers at that time, and this primarily meant the US, would run the show completely. That’s part of what is wrong about the UN. But changing the names of the placards isn’t going to change that fact.

68Question: The leadership of the world has moved from the Netherlands to Britain to the US, and perhaps Japan next. One thing they share, one component of this global leadership since the industrial revolution, is the exploitation of nature through gross materialism (and thus development). How long can the earth survive that exploitation? Hasn’t the time come for the historical struggle for existence to give way to cooperation and coexistence?

69Chomsky: Well, I don’t really think that Japan is going to be the next big power center. We could discuss that. However, the general point certainly has something right about it, but that is only a concern for people, not for those who make decisions. If you are, say, running a business and you want to stay in this business, you can’t be paying attention to whether the civilization is going to survive twenty years from now. You have to be paying attention to what the profits are going to be tomorrow, and if you don’t pay attention to that, somebody else will eliminate you. That’s the nature of a partially competitive system. There is some degree of competition in the system, and to the extent that competition exists, it drives people towards making short-term decisions which are quite irrational, in human terms. So these problems are definitely real. Global warming, for example, is not a joke. It could flood large parts of India, it’s perfectly conceivable. Scientists don’t know, they can just guess, but it could be really bad. But those things cannot be the concern of elements within the system that are seeking to maximize short-term gains. Therefore, they have to be the concern of someone else, and that concern can be implemented only in so far as unaccountable power is dissolved. If it remains in force, these problems will not be dealt with. And they are not trivial problems. If they are not dealt with in the near future, we may be faced with irreversible disaster.

70Question: How do you explain the Sino-US collaboration in the 1960s and 1970s?

71Chomsky: This is not a big problem. After gaining independence in the 1940s, China was interested in collaboration with the West. And the West would have accepted it on the same terms as Truman would have accepted collaboration with Russia, meaning we get our way eighty-five percent of the time, with China opened up to western penetration, investment and access to cheap labor and resources and so on. Within the US, there was a conflict in the 1950s, an important conflict about how to deal with China. You know the issue was a kind of hawk-dove conflict. Both groups had the same goal – to reintegrate China into the western-dominated world system. But the question was – do you do it better with a soft touch or a hard line? So should we be very hostile to China, drive it into an alliance with the Russians and smash them all up, or should we entice China into our system by trade and commerce or some other means? There are some good academic studies on this. It was a big issue in the 1950s. But by the 1960s the softer line was beginning to prevail. And incidentally, just to show how little the political labels mean, remember it was implemented by the hawks, namely Nixon and Kissinger. They’re the ones who shifted policy towards incorporating China into the US system in the soft manner. And this happened to coincide well with things that were going on in China. So you get this collaboration. It was partly related to Great Power problems as well. The Sino-Soviet conflict was always real, real even back in the 1940s, and it had become quite severe by the early 1960s. So I don’t see much problem in explaining that.

72Question: How do you envisage the trajectory of “socialism” now? Once the rotten apple gets power, may it not become as imperialistic and interventionist as the US is argued to be?

73Chomsky: Well, first of all I think that putting the word “socialism” in quotes is quite appropriate. The Soviet Union claimed to be “socialist” and “democratic.” It was about as socialist as it was democratic. The West laughed properly at it being a “people’s democracy,” but it happily applauded the self-image of socialism because that’s a good way to defame socialism. But both terms were equally accurate. The first thing that Lenin and Trotsky did when they took power in 1917 was to dismantle every socialist institution that had begun to develop spontaneously in the pre-revolutionary period. So factory councils, Soviets, everything was demolished. It was done on quite principled grounds. They were orthodox Marxists of a particular type; from their point of view, it didn’t make sense for socialism to come to a pre-industrial society. The historical role of capitalism, according to this story, is to develop the industrial system in a cruel but efficient fashion. And then socialism comes along and makes it democratic and free and so on, so there’s no place for socialism in Russia, a backward peasant society for which they had mostly contempt. They were carrying out a holding action, waiting for the revolution to take place in Germany – the advanced capitalist country where it was supposed to come about. There was an uprising, but it was crushed. They were left with power. Lenin at once turned to state capitalist methods (the new economic program), believing that socialism was just not possible, and nothing changed.

74There was nothing socialist about the Soviet Union; in fact, it was one of the least socialist countries in the world, if socialism means what it always meant, namely at least workers’ control over production. I mean, that’s the beginning, and you had more of it in the West than you had in the Soviet Union, so there was no question of socialism. Naturally, it was a power system. It became imperialistic, like any other power system, so the prospects for socialism, I think, improved after the fall of the Soviet Union, just as they improved with the fall of fascism. A barrier to socialism had been removed, namely another system of autocracy and domination had been eliminated. Well, if you’re a socialist surely you should celebrate that. Part of the victory of western doctrine has been to reinforce the belief, the crazy belief, that the system was socialist – so that people who are committed to socialist values are left kind of confused and disturbed and upset by the collapse of the Soviet Union, though in fact, it was one of the barriers to the achievement of socialism.

75Question: In this US-invented new world order, how much place does the Huntingtonian thesis of a “clash of civilizations” occupy?

76Chomsky: Well, with the collapse of the Cold War, a technique of doctrinal control collapsed. Until that point, any rotten thing that you did to the general population or abroad could be explained as an “unfortunate deviation from our traditional benevolence because of the Cold War.” First of all, it’s not the US. Let’s go back to this notion of the “US-invented new world order.” Actually, the phrase “new world order” appears over and over again – it appeared in 1990, actually twice in 1990, and here’s another example of the influence of controlled opinion. In 1990, the term “new world order” was used for the first time in many years. It was used by the South Commission in their very important book, The Challenge of the South – that’s the Commission that represents (more or less) the former non-aligned countries (something that India ought to know about given its history). The South Commission came out with an important volume, in which it called for a new world order based on global justice, and equity, and so on. Well, that one went over like a lead balloon. I wrote about it, and looked hard for something else, but could find virtually nothing. Who cares about studies produced by an organization devoted to interests and concerns of the vast majority of the world’s population, but not its privileged and powerful sectors? A couple of months later, George Bush announced a “new world order,” which he defined (to his credit) very simply: he said that in the new world order “what we say goes.” That was while bombs were falling on Baghdad. So there are two versions of the new world order. It’s not a US notion – it became a US notion because the voice of most of the population of the world never made it through the doctrinal barriers. I don’t think the South Commission study, which was quite perceptive and interesting, was ever reviewed in the US. I don’t know whether it was reviewed in India. But that was the first call for a new world order.

77Okay, what about the Huntington thesis? First, the doctrinal system needs something new with the convenient Cold War pretexts gone. In fact, right through the 1980s, when it was pretty obvious that the Russians weren’t going to be around for too long, there was an increasingly desperate search for some alterative technique of controlling the population. So if you look through the 1980s, the threat was changing. It was international terrorism, or crazed Arabs, or Hispanic narco-traffickers, or one thing or another. Huntington is a big thinker, the Professor of “the Science of Government” at Harvard. He came along with Clash of Civilizations. It has a sort of nice ring to it, though it didn’t mean anything, though with some effort it could be created. There is no more of a clash of civilizations today than there ever was. He’s talking about an alleged conflict between the US (between the western civilization) and Islam, but if you look at the connections, they cross all over the place. One of the leading US allies is the most extreme Islamic fundamentalist state in the world, namely Saudi Arabia. As long as the rulers of Saudi Arabia understand what their duty is, namely to ensure that the profits from oil production go to the West, they can be whatever they like – Islamic fundamentalists or whatever they please. The most populous Islamic state is Indonesia, which has been a close friend and ally ever since Suharto came to power with a huge mass slaughter of mostly landless peasants, also destroying the mass-based political party that represented their interests, and turned the country into a “paradise for investors.” The Reaganites gathered the most extreme radical fundamentalists they could find anywhere in the world, brought them to Afghanistan, armed and trained them – not to defend Afghanistan, which could have been legitimate, but to harm the Russians. They left Afghanistan to their tender mercies, once the task was over. Meanwhile, the Reaganites supported Zia ul-Haq as he brought extreme Islamic fundamentalism to Pakistan. They even pretended they didn’t know he was building nuclear weapons.

78Let’s continue with the 1980s. Well, the great enemy of the US in Central America was the Catholic Church. Large segments of the Catholic Church in Latin America had undertaken what they called the “preferential option for the poor.” They were organizing peasants and helping them to set up base communities and peasant associations. That is impermissible: it might lead to democracy and desperately needed social reform in these horror chambers. Accordingly, it set off a massive campaign of state terrorism effectively based in Washington. The decade opened with the murder of an Archbishop by elements closely aligned with the US, and ended with the murder of six leading Jesuit intellectuals by an elite battalion armed and trained by the US. And in between, you had very much the same story. So, was that a clash of civilizations? The US versus Catholicism? No, it was the usual clash, in fact the old North-South clash. Here was a part of the service areas which was trying to seek an independent role – that’s not allowed. They can be Catholic, or Islamic, or secular democrats, whatever you want. It’s the independence and particularly the danger of successful development on an independent path – that’s just not acceptable. So I don’t see any reason to believe in any clash of civilizations. There is just the old clash that always has to be disguised. It has to be disguised, because however well you understand it internally, the general public isn’t supposed to understand it. In fact, Huntington himself has been very clear about that. He’s pointed out frankly and honestly that during the whole Cold War period, US military intervention abroad often had to be justified by pretending that there was a conflict with the Russians, to mask it from the general population. He said that – in approximately those words – and it’s accurate. And he understands that well enough to understand it in the case of the new clash of civilizations.

79Question: If power rules the roost and it’s too bad (the leading examples are the USA and the USSR), then are you welcoming Hitler? If not, what is your alternative?

80Chomsky: That’s an interesting array of alternatives. The question is which gangster should order us around? There is another alternative – no gangster orders us around. We’ll get rid of all of them, and try to move towards democracy. That’s the alternative that I would suggest. It’s a pretty obvious one – there is nothing profound about it. And it is within reach.

Notes de fin

1 Lecture delivered at Jawaharlal Nehru University (New Delhi) on 13 January 1996.

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