‘The idea of imposing austerity under recession is a recipe for suicide. … The effect, and presumably the intention, is to dismantle the welfare state and the social contract.’
…The social movement of the day camps at public spaces and calls itself Occupy. You’ve called it the first major popular response to 30 years of class war in the United States. What do you think has Occupy achieved so far?It achieved a lot, in two aspects. It very significantly affected public sensibility and public discourse. The imagery of the one percent versus the 99 percent, that’s spread over right through the mainstream, that’s now standard discourse. And that’s not insignificant. It brings to public attention the massive inequality and the striking maldistribution of power. There are also specific policy proposals that make a lot of sense. Efforts to try to return the electoral system to something approximating the democratic process and not just being bought by major corporations and the super rich, proposals about a financial transaction tax, ending foreclosures of kicking people out of their homes, concern for the environment and so on.
And the second aspect?
The Occupy movement spontaneously created communities of mutual support, mutual aid. The common kitchen, the libraries. These are maybe even more important. The U.S. is a very atomized society. People feel helpless and alone. Your worth as a human being depends on the number of commodities you can amass, which is one of the reasons for the debt crisis, and it’s just driven into people’s heads from infancy through massive propaganda and public relations. So people don’t have much social interaction.
If you compare it to the Tea Party movement…
The Tea Party isn’t a movement. It’s massively funded by private capital. It’s a movement that demographically is not unlike what the Nazis succeeded in organizing. It’s petty bourgeois, almost entirely white, in the nativist tradition, with the fear that within a generation or two the white population will be a minority and those others are taking our country away from us.
The Tea Party succeeded in sending dozens of their supporters to the Senate and to the Congress. In this way they are effective.
As long as they can be the storm troopers for the corporate sector they will succeed. The Republicans mobilize them, like the religious right, they have to. The Republican Party, decades ago, stopped being a traditional parliamentary party. It’s in lockstep obedience to the very rich and the corporate sector. But they can’t get votes that way. So they’ve got to mobilize these sectors of the population, like the Tea Party and the religious right. But the Republican establishment is a little bit afraid of them. It was quite striking to watch the primaries. Romney was the candidate of the Republican establishment, but he wasn’t the popular candidate. So one candidate after another came up, Santorum, Gingrich, and they had to be shut down by massive funding, propaganda, negative advertising and so on. You could tell very easily that the establishment, the rich bankers and businessmen, were worried about it.
Because of their irrationality.
Yes, take a look at German history. In the early days of the Nazis, the business community, the industrialists, they supported them. They were the ones who did smash up the unions and who went after the left and so on. They thought they could control them. It turned out they couldn’t.
One of the main goals of the Occupy movement is fighting inequality in the United States, but also worldwide. What is your assessment of the U.S. and European answer to the financial and the so-called Euro-crisis?
The U.S. reaction has been somewhat better than the European reaction. The European reaction is a suicide, class-based suicide. It’s pretty hard to interpret the Troika policies, mostly German-backed, as something else than class warfare. In fact ECB president Mario Draghi pretty much said we are going to get rid of the social contract.
But he also said that the fiscal pact has to be backed by a growth pact.
Finally they are talking about what should have been done in the first place. There are plenty of resources in Europe to carry out stimulation of demand and so on. But the idea of imposing austerity under recession is a recipe for suicide. Even the IMF has come out with studies showing that that’s the case. The effect, and presumably the intention, is to dismantle the welfare state and the social contract.
Why do you think that this is the intention?
Just look at the people who are designing the policies. They never liked the welfare state, they never liked the power of labor. Europe was a relatively civilized place by comparative standards. But that helps the population, that doesn’t help the corporate sectors, the super rich and so on. So sure, if they can dismantle that, fine. It’s hard to think of any other rationale for the policy that’s been pursued.
The rationale that German Chancellor Angela Merkel puts forward is that we have a debt crisis, and in times of debt, you’ve got to cut spending.
In times of debt, what you do is get the economies to grow so that they can overcome the debts. If you impose austerity, it gets worse. It was obvious in the beginning and that’s exactly what happened.
Do you think countries like Greece should have defaulted?
Greece has some serious internal problems. They just didn’t collect tax, the rich were undisciplined, and there’s too much bureaucracy. But the debt is a dual responsibility. If you believed in capitalism the problem would be a problem of the lenders. I lend you money, I make some profit, you can’t pay, tough for me.
But there always has to be some enforcement or guarantee that the debts are paid back.
Not in capitalism. But in real life it’s your neighbor’s problem. They have to subject themselves to austerity. These are just systems for supporting the wealth and power. So should Greece have defaulted? Well, it should have had a way to extract itself from debts that weren’t incurred by the population. It’s true that they used the fake money, fake wealth to overconsume. But that’s pretty much the faults of the banks. They were smart enough to figure out that there is gong to be unpayable debt. But the question is: Could Greece restructure so that the debt would not be imposed on the population? There are countries that have done it, like Iceland or Argentina.
People in the richer European countries fear that increasing spending will lead to higher debts.
Not if the money is used the way it was used in East Asia. They used it for capital investment and industrial policy programs. So, Taiwan and South Korea, Japan earlier, they moved from quite poor peasant societies to richer and developed societies. In fact, the entire history of state capitalist development has been like that. That’s the way the United States developed. In the 1770s, the newly liberated colonies did get economic advice from respectable figures like Adam Smith. And what Smith advised the colonies to do is accept what are called the principles of sound economics; the ones that the IMF and the World Bank were instructing the poor countries to do today. So, concentrate on your comparative advantage, export primary products, import superior manufacturers from Britain, but don’t try to monopolize your commodities, cotton being the most significant ones like oil in the 18th century. Well, the colonies were free. So they did the exact opposite. They raised tariff barriers, developed industry, tried to monopolize cotton. That’s how the U.S. developed.
Would protectionism make sense in the industrialized countries today? Because if you walk around in a supermarket, you’ll see products that have been produced under conditions that the societies in the industrialized countries wouldn’t tolerate. The t-shirt from Bangladesh, the TV from China, the toy from Taiwan: all produced without interference from the welfare-state, labor unions or environmental protections. “There is nothing more neoliberal than the consumer,” Swiss writer Adolf Muschg once noted. But shouldn’t we protect the consumer?
There are two approaches. One approach is protectionism, but notice that in the case that I’ve mentioned the protectionism was against the richer societies. You are talking about something different; tariffs against poor countries. And there is another approach, namely the approach that the European Union in fact took. Help them raise their levels so they don’t undermine the living standards of northern workers.
But what if you can’t raise standards in China?
Sure you can. In fact, it’s being done. When there were massive protests against Foxconn [the corporation that produces electronic devices for Apple in China] this year, China reacted by making some changes, allowing some degree of independent unions that have been permitted to slightly reduce the onerous conditions that sort of forced workers into this slave labor. If we impose tariffs against exports from China we are imposing costs on western corporations. It’s basically an assembly plant for parts and components that come from the more advanced industrial countries and it’s periphery.
So why not tax them for exploiting workers and the environment in those countries?
Yes, make them pay to raise the standards. I mean corporate profits have gone through the roof. Now, there’s a study by economists from the University of Massachusetts-Amherst that unused corporate banking and corporation profits amount to about $1.5 trillion that’s just sitting there because they see no advantage for them to spend it. Well, there are all kind of ways to spent that, as the study points to specific measures which would virtually eliminate unemployment, lead to economic growth and so on.
Noam Chomsky, at 83, is still full of beans. In 2005, Chomsky was named the leading living public intellectual by the British Prospect magazine, and he has been called the “father of modern linguistics.” On his desk in his office at the Massachusetts Institute of Technology in Cambridge, Mass., freshly printed books on the subjects of globalization, politics and linguistics are piled up. He recently published Occupy, in which he describes the movement as the first major public response to 30 years of class warfare in the United States. In this interview, Chomsky talks about his understanding of the political system, Occupy, the Tea Party, the so-called Euro-crisis and President Obama’s first term.