Profit Over People: Neoliberalism and Global Order[1]
Chapter 1:
Neoliberalism and Global Order
Chomsky: “There was no need to explain the
doctrines of “really existing free market capitalism” to the Reagan
administration. They were masters of the art, extolling the glories of the
market to the poor while boasting proudly to the business world that Reagan had
“granted more import relief to US industry than any of his predecessors in more
than half a century” – which is far too modest; they surpassed all predecessors
combined, as they “presided over the greatest swing toward protectionism since
the 1930s,” Foreign Affairs commented in a review of the decade. Without these
and other extreme measures of market interference, it is doubtful that the
steel, automotive, machine tool, or semiconductor industries would have
survived Japanese competition, or been able to forge ahead in emerging
technologies, with broad effects through the economy.” (Varieties of Neoliberal
Doctrine)
Brian: I really must object to this
conceptual framework. There is no such thing as “really existing free market
capitalism”, different from the free market capitalism of economic theory. Free
market capitalism is an ideal type, defined as a societal arrangement where
coercion through physical violence, theft, fraud, or the threat thereof, is
entirely absent. The Reagan administration was an interventionist,
war-mongering, crony capitalist regime that claimed
to champion free market principles. By criticizing this regime, one is not
criticizing free market capitalism.
This tactic comes with particular ill grace from Chomsky, who
claims to be a ‘leftist libertarian’, an ‘anarcho-communist/syndicalist’. He
would probably vehemently object if I criticized his leftist views by saying
that “really existing leftism” consists of the brutal communist regimes which
Chomsky himself is critical of. He would probably point out that his version of
leftism is very different from the brutal state communist manifestations. I
would say the same myself in defense of the ideal concept of free market
capitalism.
As for Chomsky’s implicit praise of protectionist policies, I
have recently written a whole post dedicated to the protectionism issue, which
can be found here: http://thinkingabouthumansociety.blogspot.ca/2014/01/free-trade-versus-protectionism-six.html
Chomsky: “I am only barely touching on
intricate and fascinating issues, which suggest, I think, that leading
principles of classical liberalism receive their natural modern expression not
in the neoliberal “religion” but in the independent movements of working people
and the ideas and practices of the libertarian socialist movements” (Varieties
of Neoliberal Doctrine”
Brian: Another attempt to claim classical
liberalism for contemporary leftism, let’s see how this one fares… Chomsky
obviously realized that it would be too absurd to claim that classical
liberalism, which unambiguously opposed state intervention in most areas of
social life, was a precursor to leftist statism. So he calls it a precursor to
his own oxymoronic political views: libertarian socialism!
Now, how on earth can one be both a libertarian and a socialist?
Socialism, fundamentally, stands for public ownership of the means of
production, and secondarily, for egalitarianism as a distribution ideal.
Libertarianism, fundamentally, stands for private ownership of the means of
production, and secondarily, for market meritocracy (reward according to how
well one succeeds in serving the consumers) as a distribution ideal. I think
that these are useful definitions of the two ideologies that are both clear and
unambiguous, as any good definition should be.
If we accept these two definitions, then libertarian
socialism is impossible, by definition. Means of production cannot be mostly
privately owned and mostly publicly owned at the same time. One’s distribution
ideal cannot be market meritocracy if one is in favour of forced redistribution
of resources to affect more egalitarian outcomes.
The only way out for libertarian socialism is if we choose to
define libertarianism as anarchism. In an anarchist world, it would be
theoretically possible for a gang of socialists to take over a region by force.
They could then make all inhabitants hand over all their property to the gang,
property that would then (supposedly) be administered as ‘communal property’
for the whole society. It is difficult to see why this would be very different
from statist socialism though. Essentially, this was what Lenin and his gang of
Bolsheviks did in Russia, and the results can hardly be called ‘libertarian’ by
any reasonable definition of the term. For the inhabitants of a region who are
forced to live under a communist regime, it doesn’t particularly matter whether
that regime is called an ‘official State’ or whether it is called an
‘illegitimate bandit gang’, the results of their rule are similar.
It would also be possible, in an anarchist world, for
like-minded socialists to pool their property (recognized as privately owned by
them by non-socialists) together and to live in a communal fashion. But
actually, this is already possible; there is no need to wait for an anarchist
revolution to make this happen. It’s just that it’s not a very popular
lifestyle choice, except perhaps among members of the Hippy/New Age subculture
and among members of some insular religious communities.
Given all this, I think it is best to stick with the first
definition of libertarianism that I provided, as it contributes more to clarity
of thought than defining libertarianism as anarchism. Even if we were to define
libertarianism as anarchism though, communism imposed on an initially anarchist
region by force is certainly not something that any classical liberal thinker
would have looked favorably upon.
Chapter 2: Consent
without Consent: Regimenting the Public Mind
Chomsky: “The Madisonian principle, then, is
that government must guard the rights of persons generally, but must provide
special and additional guarantees for the rights of one class of persons,
property owners.”
Brian: This ‘one class of persons’ includes
every person who isn’t a corpse. No one can live without holding and consuming
material objects (property). Someone whose rights to private property were
completely and effectively disregarded would have his food and water snatched
from his hands before he could consume any of it. A couple of days of this and
that person would become a corpse. Having a right to ‘freedom of speech’, or the
‘right to vote’ in democratic elections, would be little consolation to this
doomed person.
Chomsky: “Dulles and Eisenhower expressed
their concern over the Communist “ability to get control of mass movements,” an
ability that “we have no capacity to duplicate”: “The poor people are the ones
they appeal to and they have always wanted to plunder the rich.” In other
words, we find it hard to induce people to accept our doctrine that the rich
should plunder the poor, a public relations problem that had not yet been
solved.”
Brian: What a grim world Chomsky
(mistakenly) believes that he lives in! Apparently, the only options are: 1.
The poor plunder the rich. 2. The rich plunder the poor. But, there is actually
a third option: everyone ceases and desists from trying to plunder anyone else.
Chomsky doesn’t recognize this option because, for some reason, he doesn’t
believe it is possible for people to get rich by giving others what they want.
The only way people can get rich is, in Chomsky world, through plunder of the
poor.
This leads to an interesting question: does Chomsky, a pretty
well-off man himself, believe that he acquired his wealth by plundering poor
people? Or does he think that he’s the exception to the rule? Either way, it
would be easier for Chomsky if he just recognized that wealth can indeed be
acquired by giving other people what they want, even though it is sometimes
acquired through overt or covert plunder.
Chapter 4: Market
Democracy in a Neoliberal Order
Chomsky: “Before the (freer trade) “reforms”
were instituted, local (Haitian) rice production supplied virtually all
domestic needs, with important linkages to the domestic economy. Thanks to
one-sided “liberalization,” it now provides only 50 percent, with the
predictable effects on the economy. Haiti must “reform,” eliminating tariffs in
accord with the stern principles of economic science – which, by some miracle
of logic, exempt US agribusiness; it continues to receive huge public
subsidies, increased by the Reagan administration to the point where they
provided 40 percent of growers’ gross incomes by 1987. The natural consequences
are understood: a 1995 USAID report observes that the “export-driven trade and
investment policy” that Washington mandates will “Relentlessly squeeze the
domestic rice farmer,” who will be forced to turn to the more rational pursuit
of agroexport for the benefit of US investors, in accord with the principles of
rational expectations theory.”
Brian: The historical interpretation contained
in this paragraph does not make sense. The US, by getting Haiti to knock down
its tariffs on agricultural imports, opens Haiti as a market to publicly-subsidized
US agricultural producers. Now, presumably these US producers were offering
their products at lower prices than the domestic Haitian producers were, hence
the take-over of 50 percent of Haiti’s agricultural product market share by the
US producers.
Now, according to Chomsky, these lower prices wouldn’t be
possible if US agricultural producers didn’t receive such heavy public
subsidies. This may well be true, or it may not, as an unhampered US
agricultural industry would probably be more productive than it is in its
current subsidized and restricted form. In either case though, the people who
should be (quite rightly) complaining about these subsidies are the US
taxpayers forced to pay for them, not the fortunate customers who are able to
buy at lower prices due to the subsidies.
Alas, in Chomsky world, cheap food for residents of poor countries
is not a blessing, but a curse. This calamity allegedly resulted in ruin for
many Haitian farmers, while forcing others to (horrors!) export their products.
In other words, we have a situation where all of the Haitian consumers have
access to cheaper food, and where many Haitian farmers can now pursue gains
more effectively by exporting their products to foreign markets where the
demand is higher. But how about the farmers that were squeezed out by US
competition? Well, these were probably the more inefficient farmers, whom the
Haitian food consumers only put up with because of the tariff barriers
restricting their freedom of choice in the matter.
What can these farmers do when they can no longer farm? Well,
if Haiti were a well-governed country rather than the political basket case
that it is, the farmers would sell their land to those who had more value-productive
uses for it, and then they would go do something else. Perhaps they would go
work in the city in an industry where their abilities were valued more highly
than they were in the agricultural industry.
The million dollar question is: why couldn’t they do this?
Some probably did in fact do this. However, I would imagine that many were
prevented from adjusting their affairs appropriately by political turmoil,
violence, and corruption, and by the over-reliance of Haiti in general on the
gratuitous aid dispensed by western Non-Governmental Organizations (NGOs). This
potent brew of economic misery, not the fact that freer trade with the US
resulted in cheaper food prices for Haitians, should be getting the blame for
Haiti’s woes.
Chapter 6: “The
Ultimate Weapon”
Chomsky: “The most effective way to restrict
democracy is to transfer decision making from the public arena to unaccountable
institutions: kings and princes, priestly castes, military juntas, party
dictatorships, or modern corporations. The decisions reached by the directors
of GE affect the general society substantially, but citizens play no role in
them, as a matter of principle.”
Brian: Let’s start by clarifying the
definition of democracy that Chomsky seems to be using. He seems to think that
the ‘democratic public’, presumably through elections or committees or
something similar, should have as much decision-making power as possible, in
every area of societal life. Thus, a totalitarian state, run based on strict
democratic procedures for ruler selection, would seem to be Chomsky’s
‘democratic’ ideal.
With this in mind, let us now move on to Chomsky’s lumping in
of “modern corporations” with various authoritarian political institutions. For
a libertarian such as myself, this procedure is entirely unjustifiable.
Authoritarian (and democratic) political institutions and actors fund and
facilitate their activities through physical violence or the threat thereof. On
the other hand, free market business corporations fund and facilitate their
activities through production, voluntary exchange, and voluntary contractual
arrangements. To me, the difference seems pretty obvious and stark.
Given Chomsky’s totalitarian definition of democracy though,
lumping together business corporations with authoritarian political
institutions actually makes some sense. If ‘the people’, in their collective,
‘democratic’ capacity, are entitled to control all affairs that go on in their
country, than any institution that isn’t run by ‘the people’ would be equally
guilty of an offense, whether that institution be a political organization, a business
organization, or a familial organization. A business corporation seeks to
direct production, to hire and fire, to pay dividends or not, to issue debt or
not, without waiting for the commands of ‘the people’? Then these
‘unaccountable corporate autocrats’ are guilty of an offense against ‘the
people’, who have a right to oversee and control everything. If one doesn’t
agree with Chomsky’s totalitarian democratic ideals though, business corporations
and autocratic political institutions are completely different things.
Finally, Chomsky’s totalitarian democratic ideals aside, it
is not true that “citizens play no role” in the decisions made by corporate
leaders. These citizens are in fact the most important people to business
organizations: they are the consumers, the customers who are ‘always right’.
They are the ones whose patronage enables corporations to pay the bills, to expand,
and to make profit. They are the ones whose displeasure and withdrawal of
patronage causes corporations to cease making profit, to contract, and to ultimately
be forced into bankruptcy. This ‘role’ as a customer is a far more powerful
position than a citizen’s ‘role’ as a democratic elector. The citizen-elector’s
‘role’: to choose, every few years, which incompetent band of distasteful individuals
will rule over him. Compared to the customer’s right to patronize or to not
patronize a business with his own money, this elector role is a pretty
powerless and un-influential position.
[1]
Noam Chomsky, Profit Over People:
Neoliberalism And Global Order, Epub edition (New York: Seven Stories Press, 1999).
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