2014 "Noam Chomsky": Why you can not have a Capitalist Democracy!

I'm not I started by saying that one of the relations between capitalism and democracy is contradiction you can't have capitalist democracy and the people who really sort of believe in markets or at least pretend to understand that so if you read Milton fredman and other Apostles of so-called libertarianism they don't call for democracy they call for what they call Freedom which is a very in a very restrictive concept of Freedom it's not the freedom of a a working person to control their work their lives and so on it's their freedom to submit themselves to control

by a higher authority that's called Freedom uh but not democracy they don't like democracy and they're right capitalism and democracy really are inconsistent uh actually what's called libertarianism in the United States is about as extremely extreme an example of anti- libertarianism that you can imagine they're in favor of private tyranny the worst kind of tyranny tyranny by unaccountable private concentrations of wealth when they say well we don't want government interference in the market they mean that they mean maybe they don't understand it but if you think it through it's pretty obvious the kind of interference

in the market they want to block is the kind that would permit unconstrained tyranny on the part of totally unaccountable private tyrannies which is what corporations are it's worth bearing in mind how radically opposed this is to Classical liberalism they like to invoke say Adam Smith but if you read Adam Smith he said the opposite he he's famous for not you know the claim is that he was opposed to regulation government regulation interference in markets it's not true he was in favor of Regulation as he put it when it benefits The Working Man he was

against interference when it benefited the Masters that's traditional Classical liberalism this what's called libertarian in the United States which likes to invoke the the history that they've concocted is uh radically opposed to basic class libertarian principles and uh it's kind of astonishing to me that a lot of young people say college students are attracted by this kind of thing I mean you can't after all read the classical texts and so take say Adam Smith I mean Adam Smith at the time he's the icon you know of libert he's uh he was considered to be a

dangerous radical at the time because he was pretty anti- capitalist this pre sort of pre- capitalist era but he was opposed to it he condemned what he called the the vile maxim of the Masters of mankind all for ourselves and nothing for anyone else that's an Abomination uh that take the phrase invisible hand everybody learned that in high school or college Adam Smith actually did use the term rarely but take a look at how he used it in Wealth of Nations his major work it's used once if you look at the context it's an argument

again against what is now called neoliberal globalization and what he argued is this he was concerned with England of course he said suppose in England that the merchants and manufacturers invested abroad and imported from abroad he said well that would be profitable for them would be harmful to the people of England however they will have enough of a commitment to their own country to England what's called a home bias in the literature they'll have enough of a home bias so that as if by an invisible hand they'll keep to the less profitable actions and in

England will be saved from the ravages of what we call neoliberal globalization that's the one use of the term in Wealth of Nations in his other major work moral sentiments terms also used once and the context is this remember England's basically an agricultural country then he says suppose some landlord accumulates an enormous amount of land and everybody else has to work for him he says well that won't turn out too badly and the reason is that the landlord will be motivated by his natural sympathy for other people so he will make sure that the necessities

of life and the goods available will be distributed equitably to the to his the people on his lands and it'll end up with an equal relatively equal and just distribution of wealth as if by an invisible hand and that's his other use of the term just compare that with what you're taught in school or what you read in the newspapers and it goes across the board like everybody probably has read uh the first paragraphs of Wealth of Nations which talks about how wonderful it is that the butcher pursues his interests and the baker pursues his

interests we're all happy so we should be in favor of division of labor everybody's read that how many people have read a couple of hundred pages into Wealth of Nations where he has a bitter attack on division of labor for interesting reasons and reasons that were standard in the enlightenment environment in which he lived very different from ours uh he says if you if he pursued division of labor people will be directed to actions in which they'll just repeat the same mechanical operations over and over they'll be deskilled okay that's the goal of management for

100 years deskill the workforce he says that's what'll happen if you pursue division of labor he goes on to say this will turn people into creatures as stupid and ignorant as a human being can possibly be and therefore in any civilized society the government will have to intervene to prevent any development like this that's Adam Smith's view of division of labor The Next Step here's a research project take the standard edition scholarly edition of Wealth of Nations uh produced by the University of Chicago press naturally on the bicentennial with a scholarly apparatus you know footnotes

and everything else and take a look at the index this a scholarly index look up division of labor this this part of the book is not referenced you can't find it unless you decide to read 700 Pages then you can find it but that's his concept of division of labor and it continues like this I mean I'm not extoling a lot of things that are you can harshly criticize like his advice to the colonies but nevertheless it's a very different picture from what's called libertarianism or capitalism today uh capitalist democracy would self-destruct capitalism would self-destruct

and that's why it hasn't been instituted uh the Masters understand that they cannot survive a capitalist economy l a fair economy you take a look at the history it's pretty interesting uh so the United States when it was it was independent so it could reject the rules of sound economics and developed there were other countries that were poised for industrial revolution and were given the same advice like Egypt and India in fact India already was the commercial industrial center of the world more so than England Egypt was poised for an industrial revolution and it's not

impossible that it might have developed it was a rich agrarian society it had cotton produced cotton as I say that's the main product like oil today and it didn't need slaves it had peasant uh it had a developmental government aimed at uh Industrial Development could have taken off just as India could have taken off but they were not free to reject sound economics because they were ruled by British Force so they were forced to accept sound economics and Egypt became Egypt and the United States became the United States India went through a Century of De

development till it finally got independent that's what happens when you apply leair principles in fact that's essentially how the third world and the first world divided you take a look at the countries that developed they're the countries who violated the principles England the United States Germany France the Lo Netherlands one country of the South one country developed Japan the one country that wasn't colonized and was able to pursue the same course that the rich countries developed uh I mentioned that in in mid 19th century 1846 Britain was so far ahead of the rest of the

world in Industrial Development that they did decide that leair would be possible so they moved to what's called a free trade uh era it didn't first of all they imposed sharp constraints on it they cut off the EMP India India was not allowed to others could not invest in India their main possession and India was not allowed to develop uh there were other restrictions but pretty soon uh British capitalists called the game off uh because they couldn't compete by the 1920s they couldn't compete with Japanese production so they literally closed off the Empire to Japanese

exports that's part of the background for the Pacific War 19 in the 1940s the United States did the same with its smaller Empire Philippines the Dutch did the same with Indonesia all the Imperial systems decided no more free trade we can't compete so they closed off the Empire meaning Japan had no markets no resources and they went to war uh that's a large part of the background the United States in 1945 did uh uh move towards Le fair in fact there was an important conference the United States was basically running the world at that point

you know for obvious reasons uh there was a hemispheric conference called by Washington February 1945 in Mexico where the Western Hemisphere was compelled to adopt an economic Charter for the Americas which which banned any interference with Market principles the goal was you read the state department reports to oppose the New Nationalism in Latin America which is based on the idea that the resource that the people of a country should benefit from the country's resources that's evil can't allow that it's Western and US investors who have to benefit from their resources so that was the economic

Charter the americaas imposed on the countes the hemisphere with one exception here the United States did not follow those policies quite the contrary as I mentioned there was a massive development of a state e paced economy with an industrial policy uh the kind that created the modern Hightech economy you can see it right across the river take take a look at MIT right one of the main centers of this if you looked at MIT in the 1950s when I got there it was surrounded by uh electronics based high-tech firms like Ron and itch you know

huge uh it firms uh you take a look at MIT today take a look at the buildings it's nardis fizer and so on the reason is completely obvious during the 50s and 60s The Cutting Edge of the economy was Electronics based so the the way to get the public to pay for it was to scream Russians and to get them to pay higher taxes for the Pentagon and then the Pentagon would fund uh the research and development like my own salary for example I shouldn't complain too much and uh the uh uh and of course

private So-Cal Private Industry was around there like vultures to pick up the uh the products and the research and just Market it well since 70s The Cutting Edge of the economy has been moving towards being biology based so funding Government funding has shifted Pentagon funding is declining funding from the NIH and other so-called health related government institutions is increasing and the private corporations understand that so now nardis you know gen genetic engineering firms and so on are hanging around trying to pick up the research that you're paying for so that they can Market it and

make profits it's just transparent it's in front of our eyes and it takes a very effective uh educ ational system to prevent people from seeing it it's virtually transparent that's the way really existing capitalist democracy Works let's say a final word about democracy then I'm afraid I have to leave uh there's a major attack on Democracy all the way through but by now it's reached the point which is pretty remarkable you take a look at main one of the main topics in mainstream political science you know I'm not talking about radicals mainstream political science is

comparing public attitudes with public policy it's a fairly straightforward see hard work but straightforward effort we have the public policy so you can see it there's extensive polling quite reliable generally consistent it's results it gives you a good sense of what public attitudes are and the results of this are published in the major books and articles give you references if you like the results are very straightforward about 70% of the population the lowest 70% on the income scale are literally disenfranchised their opinions have no effect on policy their elected representatives don't pay any attention to

them uh that's one of the reasons why many of them don't bother voting they're not going to pay attention to them anyway may not read the technical literature but you understand it in other ways uh as you move up the income scale you begin to get a little more uh a little more influence on policy when you get to the top and contrary to the Occupy Movement it's not 1% it's more like one tenth of 1% when you get to the top where the massive concentration of wealth is they basically set policy that's it's not

democracy that's plutocracy and that's what we have accepted the good thing about it is it's changeable it's not controlled by force we are very free in that respect thanks to victories over the centuries that it's not possible now for a corporation to do what Andrew Carnegie the great pacifist did in 1890 uh that gives a lot of options and you have to make use of them afraid I got to [Applause] leave thank [Applause] you thank you