Tag: Neoliberalism

Nobel Prize-Winning Economist Stiglitz Tells Us Why ‘Neoliberalism Is Dead’

Joseph Stiglitz, who won a Nobel Memorial Prize in economics in 2001 for his work on information asymmetry, has been one of neoliberalism’s biggest critics in recent years, and he says the “neoliberal euphoria” that has gripped the world since the 1980s is now gone.

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Source: Portsider

Author: Will Martin, Business Insider

Emphasis Mine

Speaking with Business Insider after the launch of his latest book, “The Euro: How A Common Currency Threatens the Future of Europe” — which argues that the fundamental flaws with the euro and the broader European economy are causing huge problems for the continent and risk leading to its downfall — Stiglitz argued that neoliberalism, the dominant school of economic thinking in the West for the past 30 years or so, is on its last legs.
Since the late 1980s and the so-called Washington Consensus, neoliberalism — essentially the idea that free trade, open markets, privatisation, deregulation, and reductions in government spending designed to increase the role of the private sector are the best ways to boost growth — has dominated the thinking of the world’s biggest economies and international organisations like the International Monetary Fund and the World Bank.
The policies of Ronald Reagan and Clinton in the US and Margaret Thatcher in the UK are often held up as the gold standard of neoliberalism at work, while in recent years in Britain George Osborne and David Cameron’s economic policies continued the neoliberal tradition.
Since the 2008 financial crisis, however, there has been a groundswell of opinion in both economic and political circles to suggest that the neoliberal consensus may not be the right way forward for the world. In the past few years, with growth low and inequality rampant, that groundswell has gained traction.
Stiglitz, who won a Nobel Memorial Prize in economics in 2001 for his work on information asymmetry, has been one of neoliberalism’s biggest critics in recent years, and he says the “neoliberal euphoria” that has gripped the world since the 1980s is now gone.
 
Asked by Business Insider whether he thought the economic consensus surrounding neoliberalism was coming to an end, Stiglitz argued: “I can talk about this from the point of view of academia or even in policy circles. In academia, I think it has pretty well become rejected.
“The young students are not interested in establishing that neoliberalism works — they’re trying to understand where markets fail and what to do about it, with an understanding that the failures are pervasive. That’s true of both micro and macroeconomics. I wouldn’t say it’s everywhere, but I’d say that it’s dominant.
“In policymaking circles I think it’s the same thing. Of course, there are people, say on the right in the United States who don’t recognise this. But even many of the people on the right would say markets don’t work very well, but their problem is governments are unable to correct it.”
Stiglitz went on to argue that one of the central tenets of the neoliberal ideology — the idea that markets function best when left alone and that an unregulated market is the best way to increase economic growth — has now been pretty much disproved.
“We’ve gone from a neoliberal euphoria that ‘markets work well almost all the time’ and all we need to do is keep governments on course, to ‘markets don’t work’ and the debate is now about how we get governments to function in ways that can alleviate this,” he said.
In other words, Stiglitz says: “Neoliberalism is dead in both developing and developed countries.”
Stiglitz is not alone in his belief that neoliberalism has its problems, though his argument that the consensus is “dead” is somewhat more forthright than those of many others. In a blog post in May, three economists from the IMF — long one of the greatest champions of the neoliberal consensus — questioned the efficacy of some aspects of it, particularly when it comes to the creation of inequality.
“The increase in inequality engendered by financial openness and austerity might itself undercut growth, the very thing that the neoliberal agenda is intent on boosting,” Jonathan Ostry, Prakash Loungani, and Davide Furceri argued. “There is now strong evidence that inequality can significantly lower both the level and the durability of growth.”
“There are a lot of people thinking the same thing at this point, that basically some aspects of the neoliberal agenda probably need a rethink,” Ostry told the Financial Times on the day the blog was published, adding: “The crisis said: ‘The way we’ve been thinking can’t be right.'”
The decline of neoliberalism
The decline of neoliberalism is also evident in the UK, where austerity has reigned since the accession of the Conservative Party to government in 2010. Prime Minister David Cameron and Chancellor of the Exchequer George Osborne presided over a period of record fiscal-deficit reduction created through a six-year programme of austerity.
But since Cameron resigned following the UK’s vote to leave the European Union, fiscal stimulus in the UK has started to gain traction once again as a viable means of stimulating growth. It is widely expected that Philip Hammond, the new chancellor under newly installed Prime Minister Theresa May, will announce some form of fiscal easing at the Autumn Statement — which will come at some point before the end of the year (last year’s was in late November). As Business Insider’s Oscar Williams-Grut argued in mid-July, “Britain’s age of austerity could be over.”
Across the Atlantic, both US presidential nominees, Hillary Clinton and Donald Trump, both favouring expanded government borrowing to fund infrastructure projects. As Randall W. Forsyth argued in Barron’s magazine last week:
“We are all Keynesians now, President Richard Nixon famously declared after his New Economic Plan was unveiled in 1971. The notion seems to be echoing now, with the two major parties’ presidential candidates calling for increased government spending, notably for infrastructure projects.”
Neoliberalism may not be completely dead, as Stiglitz argues, but it is certainly being challenged from many angles.

 

See: http://portside.org/2016-08-20/nobel-prize-winning-economist-stiglitz-tells-us-why-neoliberalism-dead

How We Must Face the Rise of the Radical Right

The rise of the authoritarian right in democratic societies is due to the capturing of politics by economic elites. This election will not be won or lost on TV—it will be won or lost in the kitchens and the break rooms and the front porches of America’s working people.

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Source: AlterNet

Author: Damon Silvers/Campaign for the American Future

Emphasis Mine

Throughout the developed world, extreme right wing politics have surfaced in ways not seen since the Second World War. In Europe, parties of the far right have levels of public support that would have been unthinkable even a decade ago. In the United States, Donald Trump is the “presumptive nominee” of one of our two major political parties. His platform tries to mix the traditional hatreds of the racist right with the economic anxieties of America’s beleaguered middle class.

A couple of days ago, Ross Douthat, a conservative columnist for the New York Times, said of Donald Trump, “his unfitness starts with basic issues of temperament. It encompasses the race-baiting, the conspiracy theorizing, the flirtations with violence, and the pathological lying that have been his campaign-trail stock in trade. But above all it is Trump’s authoritarianism that makes him unfit for the presidency.”

Why is this happening?

The roots of the rise of the authoritarian right in democratic societies are complex. But the key issue here in both Europe and America is the capture of politics, and in particular the politics of economic policy, by economic elites.

Unleashing a Monster

Starting around 1980 in the United States and the United Kingdom, and in the 1990s in the larger European Union, the idea that governments should not act to help people in economic pain, or to right imbalances in economic power, became gospel, not just among the right, but among parties that identified themselves as the center-left. The idea was that after the collapse of the Soviet Union, we were going to have a market-based Utopia, where the problems that had plagued market societies in the 20th century were no longer going to exist. So the institutions and politics that had come into being to address the injustices and instabilities of market societies could be dismantled without fear of what would happen next. This fantasy, fueled by the political contributions of the financial sector, went by many names—Neoliberalism, Third Way Politics, the Washington Consensus, and so forth.

But instead of ushering in a market-based era of growth and good feeling, neoliberalism brought back the economic pathologies of the pre-New Deal era—runaway inequality and financial boom and bust cycles on an epic scale. And politically, the neoliberal consensus opened the door to a monster that many had thought had been driven permanently into the outer darkness of democratic politics—the racist, authoritarian right.

In hindsight, this threat has been growing since the 1990s, along with wage stagnation, economic insecurity and economic inequality. But it really got momentum from the financial and economic crisis that began in 2008 and the combination of bank bailouts and austerity politics that followed it—leaving in their wake pervasive economic insecurity and the collapse of confidence in government.

Fundamentally, we should have learned from the 1930s that if the public is offered two choices—democracy and austerity, or authoritarianism and jobs—a lot of people will choose authoritarianism. We can condemn those who make that choice from the comfort of our own circumstances, but what we really should understand is that the first responsibility of anyone who seeks to lead a democracy should be to make sure that democratic governance provides economic justice and economic security—that the public is never forced to choose between having an open, democratic society and having economic dignity.

This is why labor movements are so important to stable democracies. In the workplace and in the political system, labor movements demand that democratic politics be wedded to economic justice. We guard the door behind which waits the imprisoned monster of the right-wing authoritarian response to the injustices of market societies.

What We Must Demand

So, how should the global labor movement respond to the rising strength of Donald Trump, or the French Front National, or UKIP, the United Kingdom Independence Party?

There is a temptation to look for common ground, to bite our tongues and join in the neoliberal consensus in the hopes of gaining powerful allies against right-wing authoritarianism from among the 1 percent.

But this approach will only feed the authoritarian right by proving the argument they make to working people that “the politicians don’t care about you.”

Rather, we must insist that the candidates and political parties we support back an ambitious program for broad-based economic growth driven by rising wages.

The labor movement must demand that politicians we support offer, in place of neoliberalism and austerity, a global New Deal—a plan to get us out of global economic stagnation driven by downward pressures on wages—and into a virtuous cycle of rising wages driving investment that drives productivity.

What are the elements of such a program? Public investment in physical capital and human capital—in infrastructure and education. Strengthened minimum wage and hours rules. Protecting workers’ right to organize and bargain throughout the global economy. And most of all, a commitment to full employment and economic security for all who work.

We must also insist the politicians we support stand clearly against the racism and sexism of the authoritarian right. There can be no triangulation, no compromise on this point. If we are going to guard the door, we must guard the door.

But at the same time, as trade unionists we have to engage in conversations with those among us who are thinking about supporting the authoritarian right out of frustration with a political system that seems to have no interest in their economic pain. And engage and engage. This is the program the AFL-CIO, our community affiliate Working America, and our affiliate unions are committed to. This election will not be won or lost on TV—it will be won or lost in the kitchens and the break rooms and the front porches of America’s working people.

The authoritarian right can be defeated and defeated soundly—but it will require combining ambitious public policies that offer a clear vision of a better life, together with a commitment to the one-on-one organizing that is how we built the labor movement in the first place.

What are the stakes? How serious is the threat to democracy, to open societies, posed by the Front National, or by Donald Trump? We’ll only know if one of them get real power. And that probably tells us all we need to know about what we need to do.

See:http://www.alternet.org/tea-party-and-right/we-must-face-rise-radical-right?akid=14267.123424.lmSQ_w&rd=1&src=newsletter1056631&t=10

The media’s big Bernie Sanders myth: Here’s how we build the coalition that shatters Clintonism, neoliberalism

Hillary-bots argue that Sanders only appeals to white Iowa & New Hampshire voters. Here’s how he proves that wrong

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Source:Salon.com

Author:Anis Shivani

Emphasis Mine

Bernie Sanders is showing swift-footedness in making all the moves necessary to not only establish but consolidate his new front-runner position in Iowa and New Hampshire. Some in the media may not yet have caught on to the way the momentum continues to shift, but eventually the reality will sink in.

There are three things Sanders needs to do—and has already started doing in a noticeable way—to move clearly and permanently ahead of Hillary Clinton at the national level: a) dramatic emphasis on minority outreach; b) expansion of his economic message to one of social harmony; and c) delegitimization of the negative populism pervasive in the Republican primary.

Already, Cornel West has given a rousing introduction to Sanders in South Carolina. Sanders has been trying to reach out to the Congressional Black Caucus, though not yet with much luck. They might as this message becomes clearer: Sanders is a much better deal for minorities of every stripe—from embattled African-Americans to Hispanics and Asians and others—because of what his policies of economic justice represent compared to the neoliberal repressiveness of Clinton and the establishment Democratic Party.

The Clintons talk a good game when it comes to African-Americans (Bill, after all, was supposed to be our first black president before the real first black president showed up) but the truth is that Clintonian neoliberalism really tightened the screws on African-Americans by legitimizing extreme income inequality as the normal course of things—smashing, in effect, the Democratic Party’s bargain with minorities since the New Deal.

The Clintons ended welfare as we knew it, for example, by delusionally hoping that technology-driven productivity would somehow make poverty cease to exist, or by expanding the surveillance, prosecution and incarceration capacities of the state, building on the war on drugs initiated by Ronald Reagan to impose a stark omnipotence much less forgiving of mistakes made by poor people. Rhetorically—and emptily—the Clintons may align themselves with African-Americans, and claim some sort of honorary status with that community, but their policies have been death—literal death on the streets—for African-Americans.

It is a myth created by the establishment media that Sanders’ appeal is limited to well-educated white coastal liberals, particularly males, and that he has a natural barrier to how far and deep his support can extend. The claim is that South Carolina—and then Nevada with its Hispanic population—will be the firewalls that will break Sanders’ momentum if he wins in mostly white Iowa and New Hampshire.

But the truth is that Sanders’ potential appeal to minorities is unlimited—unlike Clinton’s upper limits due to the nature of her past and present policies and her utter incapacity to enunciate anything real that resonates with people beyond recycled neoliberal micro-platitudes. Therefore, Sanders must go for broke in reaching out to African-Americans, Hispanics and Asians as their natural candidate, and in the process rewrite the whole script for how the Democratic Party courts voters. New, and unprecedented, promises must be made to shatter the silence around issues that neoliberal candidates have zero interest in highlighting.

Secondly, while it has so far been a necessary and indeed winning strategy for Sanders to emphasize a straightforward recital of agenda items—especially single-payer healthcare, free college tuition and a $15 minimum wage (outlined by Jonathan Tasini in “The Essential Bernie Sanders and his Vision for America“)—Sanders needs to open this up to a message of optimism that reaches well beyond the listing of economic policy items. Britain’s Jeremy Corbyn has already shown how to do this.

Of course, these need to continue being hammered into consciousness until they became accepted parts of liberal discourse again (as the necessary antidote to Reaganite social darwinism that we never got from the Democratic Party), but I’m sure that Sanders will also figure out a way to connect these policy prescriptions to a radically expansive vision of the good life, part of which must involve reimagining America as an honest and responsible citizen in the world community.

There’s a reason why Hillary Clinton—like Tony Blair in Britain—has always been utterly incapable of humor. It is not a character flaw, per se, as it wasn’t for Blair, but the fact that neoliberalism demands a pure administrative outlook, managing at the margins with faith in private enterprise as the only salvation, that simply does not allow any glimpse of humor—by which I really mean humanity—to peek through.

Young people everywhere are looking for this streak of humanity in an increasingly robotic, unforgiving, rules-based world. Perhaps Sanders, despite his age, or perhaps because of it, can tap into his bona fide countercultural heritage to establish new norms for millennial liberal discourse, making a rousing case for old-fashioned liberty based in economic justice.

This is the ideal Martin Luther King Jr. and other visionaries at the time were beginning to fashion when we got sidelined, for nearly half a century, by an entirely different vision—Nixonian and ruthless and divisive (Donald Trump is playing from the same script). Neoliberals, it should be noted, will continue to indulge in the false bromides of the culture wars when pressed to the wall; they remain immersed in this methodology of false attack and counterattack, rather than seeking the roots of liberty in economic fairness.

Finally, Trump has gifted almost the perfect platform for Sanders to work against: a dark populism rooted in xenophobia and protectionism, a Machiavellian worldview pitting true Americans versus the racially unacceptable other, setting the stage for Sanders’ authentic populism, rooted in participatory democracy, to make all the more sense. The contrast with Trump is one big reason why Sanders has had so much resonance.

Here, Sanders’ outreach, such as when he spoke at Liberty University and was introduced by Jerry Falwell Jr., is a longer-term investment, and it will be more difficult to gain traction with this voting constituency than with African-Americans and other minorities. But fascistic populism of the talk radio variety needs a strong counterweight, which neoliberalism for the past quarter-century, coinciding with the rise of the Clintons, has refused to provide.

See: http://www.salon.com/2015/09/20/the_medias_big_bernie_sanders_myth_heres_how_we_build_the_coalition_that_shatters_clintonism_neoliberalism/

Noam Chomsky on America’s Economic Suicide

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From: AlterNet

By: Laura Flanders and Noam Chomsky

“Noam Chomsky has not just been watching the Occupy movement. A veteran of the civil rights, anti-war, and anti-intervention movements of the 1960s through the 1980s, he’s given lectures at Occupy Boston and talked with occupiers across the US.  His new book, Occupy, published in the Occupied Media Pamphlet Series by Zuccotti Park Press brings together several of those lectures, a speech on “occupying foreign policy” and a brief tribute to his friend and co-agitator Howard Zinn.

From his speeches, and in this conversation, it’s clear that the emeritus MIT professor and author is as impressed by the spontaneous, cooperative communities some Occupy encampments created, as he is by the movement’s political impact.

We’re a nation whose leaders are pursuing policies that amount to economic “suicide” Chomsky says. But there are glimmers of possibility – in worker co-operatives, and other spaces where people get a taste of a different way of living.

We talked in his office, for Free Speech TV on April 24.

LF: Let’s start with the big picture. How do you describe the situation we’re in, historically?

NC: There is either a crisis or a return to the norm of stagnation. One view is the norm is stagnation and occasionally you get out of it. The other is that the norm is growth and occasionally you can get into stagnation. You can debate that but it’s a period of close to global stagnation. In the major state capitalists economies, Europe and the US, it’s low growth and stagnation and a very sharp income differentiation a shift — a striking shift — from production to financialization.

The US and Europe are committing suicide in different ways. In Europe it’s austerity in the midst of recession and that’s guaranteed to be a disaster. There’s some resistance to that now. In the US, it’s essentially off-shoring production and financialization and getting rid of superfluous population through incarceration. It’s a subtext of what happened in Cartagena [Colombia] last week with the conflict over the drug war. Latin America wants to decriminalize at least marijuana (maybe more or course;) the US wants to maintain it.  An interesting story.  There seems to me no easy way out of this….

LF: And politically…?

NC: Again there are differences. In Europe there’s an dangerous growth of ultra xenophobia which is pretty threatening to any one who remembers the history of Europe…  and an attack on the remnants of the welfare state. It’s hard to interpret the austerity-in-the-midst-of-recession policy as anything other than attack on the social contract. In fact, some leaders come right out and say it. Mario Draghi the president of the European Central Bank had an interview with the Wall St Journal in which he said the social contract’s dead; we finally got rid of it.

In the US, first of all, the electoral system has been almost totally shredded. For a long time it’s  been pretty much run by private concentrated spending but now it’s over the top. Elections increasingly over the years have been [public relations] extravaganzas. It was understood by the ad industry in 2008 — they gave Barack Obama their marketing award of the year.  This year it’s barely a pretense.

The Republican Party has pretty much abandoned any pretense of being a traditional political party. It’s in lockstep obedience to the very rich, the super rich and the corporate sector. They can’t get votes that way so they have to mobilize a different constituency. It’s always been there, but it’s rarely been mobilized politically. They call it the religious right, but basically it’s the extreme religious population. The US is off the spectrum in religious commitment. It’s been increasing since 1980 but now it’s a major part of the voting base of the Republican Party so that means committing to anti-abortion positions, opposing women’s rights…  The US is a country [in which] eighty percent of the population thinks the Bible was written by god. About half think every word is literally true. So it’s had to appeal to that – and to the nativist population, the people that are frightened, have always been… It’s a very frightened country and that’s increasing now with the recognition that the white population is going to be a minority pretty soon, “they’ve taken our country from us.” That’s the Republicans. There are no more moderate Republicans. They are now the centrist Democrats. Of course the Democrats are drifting to the Right right after them. The Democrats have pretty much given up on the white working class. That would require a commitment to economic issues and that’s not their concern.

LF: You describe Occupy as the first organized response to a thirty-year class war….

NC: It’s a class war, and a war on young people too… that’s why tuition is rising so rapidly. There’s no real economic reason for that. It’s a technique of control and indoctrination.  And this is really the first organized, significant reaction to it, which is important.

LF: Are comparisons to Arab Spring useful? 

NC: One point of similarity is they’re both responses to the toll taken by the neo lib programs. They have a different effect in a poor country like Egypt than a rich country like the US. But structurally somewhat similar. In Egypt the neoliberal programs have meant statistical growth, like right before the Arab Spring, Egypt was a kind of poster child for the World Bank and the IMF [International Monetary Fund:] the marvelous economic management and great reform. The only problem was for most of the population it was a kind of like a blow in the solar plexus: wages going down, benefits being eliminated, subsidized food gone and meanwhile, high concentration of wealth and a huge amount of corruption.

We have a structural analogue here – in fact the same is true in South America –  some of the most dramatic events of the last decade (and we saw it again in Cartagena a couple of weeks ago) Latin America is turning towards independence for the first time in five hundred years. That’s not small. And the Arab Spring was beginning to follow it. There’s a counterrevolution in the Middle East/North Africa (MENAC) countries beating it back, but there were advances. In South America [there were] substantial ones and that’s happening in the Arab Spring and it has a contagious effect – it stimulated the Occupy movement and there are interactions.

LF. In the media, there was a lot of confusion in the coverage of Occupy. Is there a contradiction between anarchism and organization? Can you clarify? 

NC: Anarchism means all sort of things to different people but the traditional anarchists’ movements assumed that there’d be a highly organized society, just one organized from below with direct participation and so on.  Actually, one piece of the media confusion has a basis because there really are two different strands in the occupy movement, both important, but different.

One is policy oriented: what policy goals [do we want.] Regulate the banks, get money out of elections; raise the minimum wage, environmental issues. They’re all very important and the Occupy movement made a difference. It shifted not only the discourse but to some extent, action on these issues.

The other part is just creating communities — something extremely important in a country like this, which is very atomized. People don’t talk to each other. You’re alone with your television set or internet. But you can’t have a functioning democracy without what sociologists call “secondary organizations,” places where people can get together, plan, talk and develop ideas. You don’t do it alone. The Occupy movement did create spontaneously communities that taught people something: you can be in a supportive community of mutual aid and cooperation and develop your own health system and library and have open space for democratic discussion and participation.  Communities like that are really important. And maybe that’s what’s causing the media confusion…because it’s both.

LF: Is that why the same media that routinely ignores violence against women, played up stories about alleged rape and violence at OWS camps? 

NC: That’s standard practice. Every popular movement that they want to denigrate they pick up on those kind of things. Either that, or weird dress or something like that.  I remember once in 1960s, there was a demonstration that went from Boston to Washington and tv showed some young woman with a funny hat and strange something or other.  There was an independent channel down in Washington – sure enough, showed the very same woman. That’s what they’re looking for. Let’s try to show that it’s silly and insignificant and violent if possible and you get a fringe of that everywhere.

To pay attention to the actual core of the movement  — that would be pretty hard. Can you concentrate for example on either the policy issues or the creation of functioning democratic communities of mutual support and say, well, that’s what’s lacking in our country that’s why we don’t have a functioning democracy – a community of real participation. That’s really important. And that always gets smashed.

Take say, Martin Luther King. Listen to the speeches on MLK Day – and it’s all “I have a dream.” But he had another dream and he presented that in his last talk in Memphis just before he was assassinated.  In which he said something about how he’s like Moses he can see the promised land but how we’re not going to get there. And the promised land was policies and developments which would deal with the poverty and repression, not racial, but the poor people’s movement. Right after that (the assassination) there was a march. [King] was going to lead it. Coretta Scott King led it. It started in Memphis went through the South to the different places where they’d fought the civil rights battle and ended up in Washington DC and they had a tent city, Resurrection Park and security forces were called in by the liberal congress. The most liberal congress in memory. They broke in in the middle of the night smashed up Resurrection Park and drove them out of the city. That’s the way you deal with popular movements that are threatening…

LF: Thinking of Memphis, where Dr. King was supporting striking sanitation workers, what are your thoughts on the future of the labor movement? 

The labor movement had been pretty much killed in the 1920s, almost destroyed. It revived in the 1930s and made a huge difference. By the late 1930s the business world was already trying to find ways to beat it back. They had to hold off during the war but right after, it began immediately. Taft Hartley was 1947, then you get a huge corporate propaganda campaign a large part if it directed at labor unions: why they’re bad and destroy harmony and amity in the US.  Over the years that’s had an effect. The Labor movement recognized what was going on far too late. Then it picked up under Reagan.

Reagan pretty much informed employers that they were not going to employ legal constraints on breaking up unions (they weren’t not strong but there were some) and firing of workers for organizing efforts I think tripled during the Reagan years.

Clinton came along; he had a different technique for breaking unions, it was called NAFTA [the North American Free Trade Agreement.] Under NAFTA there was again a sharp increase in illegal blocking of organizing efforts. You put up a sign – We’re going to transfer operations to Mexico…  It’s illegal but if you have a criminal state, it doesn’t make a difference.

The end result, is, private sector unionization is down to practically seven percent. Meanwhile the public sector unions have kind of sustained themselves [even] under attack, but in the last few years, there’s been a sharp [increase in the] attack on public sector unions, which Barack Obama has participated in, in fact. When you freeze salaries of federal workers, that’s equivalent to taxing public sector people…

LF: And attacks on collective bargaining? 

NC: Attacks on collective bargaining in Wisconsin [are part of] a whole range of attacks because that’s an attack on a part of the labor movement that was protected by the legal system as a residue of the New Deal and Great Society and so on.

LF: So do unions have a future? 

NC: Well, it’s not worse than the 1920s. There was a very lively active militant labor movement in the late part of the 19th century, right through the early part of 20th century. [It was] smashed up by Wilson and the red scares. By the 1920s right-wing visitors from England were coming and just appalled by the way workers were treated. It was pretty much gone. But by 1930s it was not only revived, it was the core element of bringing about the New Deal. The organization of the CIO and the sit-down strikes which were actually terrifying to management because it was one step before saying “O.K. Goodbye, we’re going to run the factory.” And that was a big factor in significant New Deal measures that were not trivial but made a big difference.

Then, after the war, starts the attack, but it’s a constant battle right though American history. It’s the history of this country and the history of every other country too, but the US happens to have an unusually violent labor history. Hundreds of workers getting killed here for organizing at a time that was just unheard of in Europe or Australia…

LF: What is the Number One target of power today in your view? Is it corporations, Congress, media, courts? 

NC: The Media are corporations so… It’s the concentrations of private power which have an enormous, not total control, but enormous influence over Congress and the White House and that’s increasing sharply with sharp concentration of  private power and escalating cost of elections and so on…

LF: As we speak, there are shareholder actions taking place in Detroit and San Francisco. Are those worthwhile, good targets? 

NC: They’re ok, but remember, stock ownership in the US is very highly concentrated. [Shareholder actions are] something, but it’s like the old Communist Party in the USSR, it would be nice to see more protest inside the Communist Party but it’s not democracy. It’s not going to happen. [Shareholder actions] are a good step, but they’re mostly symbolic. Why not stakeholder action? There’s no economic principal that says that management should be responsive to shareholders, in fact you can read in texts of business economics that they could just as well have a system in which the management is responsible to stakeholders.

LF: But you hear it all the time that under law, the CEO’s required to increase dividends to shareholders. 

NC: It’s kind of a secondary commitment of the CEO. The first commitment is raise your salary. One of the ways to raise your salary sometimes is to have short-term profits but there are many other ways. In the last thirty years there have been very substantial legal changes to corporate governance so by now CEOs pretty much pick the boards that give them salaries and bonuses. That’s one of the reasons why the CEO-to-payment [ratio] has so sharply escalated in this country in contrast to Europe. (They’re similar societies and it’s bad enough there, but here we’re in the stratosphere. ] There’s no particular reason for it. Stakeholders — meaning workers and community – the CEO could just as well be responsible to them. This presupposes there ought to be management but why does there have to be management?  Why not have the stakeholders run the industry?

LF: Worker co-ops are a growing movement. One question that I hear is  — will change come from changing ownership if you don’t change the profit paradigm?  

NC: It’s a little like asking if shareholder voting is a good idea, or the Buffet rule is a good idea. Yes, it’s a good step, a small step. Worker ownership within a state capitalist, semi-market system is better than private ownership but it has inherent problems. Markets have well-known inherent inefficiencies. They’re very destructive.  The obvious one, in a market system, in a really functioning one, whoever’s making the decisions doesn’t pay attention to what are called externalities,effects on others. I sell you a car, if our eyes are open we’ll make a good deal for ourselves but we’re not asking how it’s going to affect her [over there.] It will, there’ll be more congestion, gas prices will go up, there will be environmental effects and that multiplies over the whole population. Well, that’s very serious.

Take a look at the financial crisis. Ever since the New Deal regulation was essentially dismantled, there have been regular financial crises and one of the fundamental reasons, it’s understood, is that the CEO of Goldman Sachs or CitiGroup does not pay attention to what’s calledsystemic risk. Maybe you make a risky transaction and you cover your own potential losses, but you don’t take into account the fact that if it crashes it may crash the entire system.  Which is what a financial crash is.

The much more serious example of this is environmental impacts. In the case of financial institutions when they crash, the taxpayer comes to the rescue, but if you destroy the environment no one is going to come to the rescue…

LF: So it sounds as if you might support something like the Cleveland model where the ownership of the company is actually held by members of the community as well as the workers… 

NC: That’s a step forward but you also have to get beyond that to dismantle the system of production for profit rather than production for use. That means dismantling at least large parts of market systems. Take the most advanced case: Mondragon. It’s worker owned, it’s not worker managed, although the management does come from the workforce often, but it’s in a market system and they still exploit workers in South America, and they do things that are harmful to the society as a whole and they have no choice. If you’re in a system where you must make profit in order to survive. You are compelled to ignore negative externalities, effects on others.

Markets also have a very bad psychological effect. They drive people to a conception of themselves and society in which you’re only after your own good, not the good of others and that’s extremely harmful.

LF: Have you ever had a taste of a non market system — had a flash of optimism –– oh this is how we could live? 

NC: A functioning family for example, and there are bigger groups, cooperatives are a case in point. It certainly can be done. The biggest I know is Mondragon but there are many in between and a lot more could be done. Right here in Boston in one of the suburbs about two years ago, there was a small but profitable enterprise building high tech equipment.  The multi-national who owned the company didn’t want to keep it on the books so they decided to close it down. The workforce and the union, UE (United Electrical workers), offered to buy it, and the community was supportive. It could have worked if there had been popular support. If there had been an Occupy movement then, I think that could have been a great thing for them to concentrate on. If it had worked you would have had  another profitable, worker-owned and worker managed profitable enterprise. There‘s a fair amount of that already around the country. Gar Alperovitz has written about them, Seymour Melman has worked on them. Jonathan Feldman was working on these things.

There are real examples and I don’t see why they shouldn’t survive. Of course they’re going to be beaten back. The power system is not going to want them any more than they want popular democracy any more than the states of middle east and the west are going to tolerate the Arab spring… .They’re going to try to beat it back.

LF: They tried to beat back the sit-in strikes back in the 1930s. What we forget is entire communities turned out to support those strikes. In Flint, cordons of women stood between the strikers and the police. 

NC: Go back a century to Homestead, the worker run town, and they had to send in the National Guard to destroy them.

LF: Trayvon Martin. Can you talk for a few minutes about the role of racism and racial violence in what we’ve been talking about?  Some people think of fighting racism as separate from working on economic issues. 

NC: Well you know, there clearly is a serious race problem in the country. Just take a look at what’s happening to African American communities. For example wealth, wealth in African American communities is almost zero. The history is striking. You take a look at the history of African Americans in the US. There’s been about thirty years of relative freedom. There was a decade after the Civil War and before north/south compact essentially recriminalized black life. During the Second World War there was a need for free labor so there was a freeing up of the labor force. Blacks benefitted from it. It lasted for about twenty years, the big growth period in the ‘50s and ‘60s, so a black man could get a job in an auto plant and buy a house and send his kids to college and kind of enter into the world but by the 70s it was over.

With the radical shift in the economy, basically the workforce, which is partly white but also largely black, they basically became superfluous. Look what happened, we recriminalized black life. Incarceration rates since the 1908s have gone through the roof, overwhelmingly black males, women and Hispanics to some extent. Essentially re-doing what happened under Reconstruction. That’s the history of African Americans – so how can any one say there’s no problem. Sure, racism is serious, but it’s worse than that…

LF: Talk about media. We often discern bias in the telling of a particular story, but I want you to talk more broadly about the way our money media portray power, democracy, the role of the individual in society and the way that change happens. …

NC: Well they don’t want change to happen….They’re right in the center of the system of power and domination. First of all the media are corporations, parts of bigger corporations, they’re very closely linked to other systems of power both in personnel and interests and social background and everything else. Naturally they tend to be reactionary.

LF: But they sort of give us a clock. If change hasn’t happened in ten minutes, it’s not going to happen. 

NC: Well that’s a technique of indoctrination. That’s something I learned from my own experience. There was once an interview with Jeff Greenfield in which he was asked why I was never asked ontoNightline.  He gave a good answer. He said the main reason was that I lacked concision. I had never heard that word before. You have to have concision. You have to say something brief between two commercials.

What can you say that’s brief between two commercials? I can say Iran is a terrible state. I don’t need any evidence. I can say Ghaddaffi carries out terror.  Suppose I try to say the US carries out terror, in fact it’s one of the leading terrorist states in the world. You can’t say that between commercials. People rightly want to know what do you mean. They’ve never heard that before. Then you have to explain. You have to give background. That’s exactly what’s cut out. Concision is a technique of propaganda. It ensures you cannot do anything except repeat clichés, the standard doctrine, or sound like a lunatic.

LF: What about media’s conception of power? Who has it, who doesn’t have it and what’s our role if we’re not say, president or CEO. 

NC: Well, not just the media but pretty much true of academic world, the picture is we the leading democracy in the world, the beacon of freedom and rights and democracy. The fact that democratic participation here is extremely marginal, doesn’t enter [the media story.]  The media will condemn the elections in Iran, rightly, because the candidates have to be vetted by the clerics. But they won’t point out that in the United States [candidates] have to be vetted by high concentrations of private capital. You can’t run in an election unless you can collect millions of dollars.

One interesting case is right now. This happens to be the 50thanniversary of the US invasion of South Vietnam – the worst atrocity in the post war period. Killed millions of people, destroyed four countries, total horror story. Not a word. It didn’t happen because “we” did it. So it didn’t happen.

Take 9-11. That means something in the United States. The “world changed” after 9-11. Well, do a slight thought experiment. Suppose that on 9-11 the planes had bombed the White House… suppose they’d killed the president , established a military dictatorship, quickly killed thousands, tortured tens of thousands more, set up a major international  terror center that was carrying out assassinations , overthrowing governments all over the place, installing other dictatorships, and drove the country into one of the worst depressions in its history and had to call on the state to bail them out  Suppose that had happened? It did happen. On the first 9-11 in 1973.  Except we were responsible for it, so it didn’t happen. That’s Allende’s Chile. You can’t imagine the media talking about this.

And you can generalize it broadly. The same is pretty much true of scholarship – except for on the fringes – it’s certainly true of the mainstream of the academic world.  In some respects critique of the media is a bit misleading [because they’re not alone among institutions of influence] and of course, they closely interact.”

Former Air America Radio host, Laura Flanders is the host and founder of GRITtv with Laura Flanders, a daily talk show for people who want to do more than talk. She is the author of the New York Times bestseller BUSHWOMEN: Tales of a Cynical Species (Verso, 2004) and Blue GRIT: True Democrats Take Back Politics from the Politicians (Penguin Press, 2007). A regular contributor on MSNBC, Flanders has appeared on shows from Real Time with Bill Maher to The O’Reilly Factor. Flanders is the editor of At the Tea Party: The Wing Nuts, Whack Jobs and Whitey-whiteness of the New Republican Right… and Why we Should Take it Seriously (October 2010, OR books). For more information, go to LauraFlanders.com or GRITtv.org.

Emphasis Mine

see:http://www.alternet.org/story/155281/noam_chomsky_on_america%27s_economic_suicide?akid=8723.123424.sDTZId&rd=1&t=2