Free markets, trapped people

October 25, 1998

The Sunday Star-Times (Auckland)
"Free markets, trapped people"
by Anthony Hubbard

A business corporation, says philosopher Noam Chomsky, is a tyranny. "That's always

been well understood," he says in his matter-of-fact way, as though he were stating the
obvious. Among human institutions, he continues, it's hard to find one whose internal
structure is more tyrannical. "Orders come from the top down. At the bottom you can sort
of rent yourself out to it if you're lucky. At middle level you take orders from above and
hand them on down below. You know what to call that in the political domain?" What
Chomsky calls it is fascism.

Professor Chomsky is not much given to professorial euphemisms or scholarly evasion.

The man routinely described as one of the West's leading intellectuals is subversively
blunt. As a thinker, he transformed the field of linguistics, changing our ideas about
human language and, in turn, about the nature of the mind. He is one of the major
philosophers of the modern age. "Chomsky is one of this century's most important
figures," says a recent biography by Robert Barsky, "and has been described as one who
will be for future generations what Galileo, Descartes, Newton, Mozart or Picasso have
been for ours." A survey of contemporary scholarly literature found him to be the most
cited living person.

But it is as a political writer and activist that he is probably best known. Chomsky mixes
left-wing radicalism, formidable scholarship and Jovian wrath. Few critics of American
foreign policy have been fiercer or more formidable than Chomsky. Few critics of the
news media have been more unsettling to liberal notions of the fourth estate. And few
political commentators have asked such fundamental questions about the era of
triumphalist capitalism: our age, that is, when the ruling idea is that of the free market.
This makes Chomsky's visit to New Zealand -- he is to present the NZ Peace
Foundation's Media Peace Awards -- topical indeed.

In a phone interview with the Sunday Star-Times from his home in Massachusetts, US,
Chomsky did not want to talk in detail about the New Zealand experiment, but did say
that it was "unusual". "New Zealand is one of the few countries -- Australia is another --
which more or less voluntarily adopted the kind of regime that has often been forced on
the Third World. It's one of the reasons why it is the Third World. The consequences have
turned out as they usually have in the past." That is, while a small minority has prospered,
most of the people have suffered.

It would be "a miracle", he says, if it had turned out any other way. The wealthy preach
the free market to the poor and require them to practise it; they rarely, however, practise it
themselves. American big business, for example, was always ready to call on government
help when it needed it. The big US steel producers were now trying to exclude Japanese
steel from the American market. A year ago, he says, the US "imposed very high,
prohibitive tariffs against Japanese supercomputers because they were simply
undercutting US manufacturers." The rich and powerful practised free market policies
when it suited their interests. The United States was happy with a free market in
telecommunications and information technology, and "is even trying to force it on the rest
of the world. But that's because US corporate power is way ahead of the game, and likely
to dominate."

This dominant position was itself largely due to government subsidies and government-
funded research and development. "The Internet is a perfectly good example -- it was
developed largely within the state system, in the Pentagon and later the National Science
Foundation, and only a few years ago handed over to private power. Now it's considered
a great driving force in the economy."

The free-market reforms were promoted as leading to greater efficiency: it was

"inefficient" to run the railways with far more workers than were needed. But
inefficiency, says Chomsky, "is an ideological concept. I mean, is it inefficient to employ
them (railways workers) and efficient to let them starve? These are highly ideological
measures of efficiency." Usually, he adds, they are crafted in such a way that they benefit
the powerful few. The decline in the US railroad, he says, was largely due to the massive
government highway programme of the 1950s, "probably the greatest state social
engineering project in history".

"It was the project that essentially suburbanised America. It shifted transport to the roads
and aircraft and away from public transportation. Well, who is that efficient for? I mean,
it's certainly been very efficient for the parts of the private sector that are behind it, the
automobile industry and the oil industry and the tyre industry and so on. It's hard to argue
that it's efficient for the public. In fact, it doesn't even lead to speed. It takes me longer to
get to work today -- which is 10 miles (16km) away -- than it did 40 years ago. If I could
take public transportation it would be much better, but it's prohibitively expensive and
difficult."

Chomsky cites South Korea as living contradiction of the idea that economic growth and
development can flourish only in the free market. "South Korea had an astonishing
growth period, in fact historically unprecedented: their economy grew about 10-fold in 30
years. They did it under a social and economic regime which was by no means pretty,
incidentally -- it was pretty ugly. But it did involve a fair amount of (state-led) co-
ordination and control, capital regulation and so on... They had their arms twisted in the
early 1990s to dismantle all that, in fact that was kind of the price of admission to the
OECD. It's now quite widely recognised across a wide spectrum, including the World
Bank, that that (dismantling) was a factor, perhaps the lead factor in their economic
decline and the crisis that they're now facing."

The Uruguay Round of the General Agreement on Tariffs and Trade (GATT) touted by
New Zealand and others as a major advance for free trade, was in fact partially
protectionist. The United States and Europe still maintained substantial agricultural
subsidies. These were lower than before and the change might benefit agricultural trading
countries such as New Zealand. "But the Uruguay Round... was a sort of mix of
protectionist and liberalising devices which, when you look at them, are largely designed
in the interests of the dominant sectors of international commerce."

The Western news media had given little coverage to the Multilateral Agreement on
Investment (MAI), a controversial plan to liberalise global investment. The reason,
Chomsky says, is "obvious". "The media are huge corporations which rely on other
businesses for funding -- advertisers. They're closely linked to state power but that's true
of the whole corporate sector, and they have their interests. One of their interests for
example is that the population not find out about the MAI, and that's a very
understandable interest."

Chomsky and his colleague Edward Herman have developed a "propaganda model" of
the news media. The fourth estate, far from being the champion of truth and the people's
bulwark against the state, in fact serves quite a different purpose. Its role is actually, as
Chomsky once put it, that of "protecting privilege from the threat of public understanding
and participation." The intelligentsia play a similar role. Armies of academics and state
and business ideological managers, are engaged in "manufacturing consent" -- persuading
the people to support an unjust status quo.

It is clear why Chomsky, Institute Professor of Linguistics at the Massachusetts Institute

of Technology, has for decades been been seriously off-side with the powers that be. The
roots of his dissent lie deep. Born in Philadelphia in 1928, he was part of a Jewish
working-class extended family whose politics ranged from "normal Roosevelt
Democrats" (his parents) to various varieties of the radical left. It was a powerfully
intellectual and deeply cultured family. His father William, who had fled his native
Russia to avoid being drafted into the Czar's army, was to become a prominent Hebrew
grammarian. His mother Elsie, also a Hebrew teacher, was a sought-after public speaker.
At 10, Chomsky wrote his first article, an editorial about the fall of Barcelona during the
Spanish Civil War. He was profoundly influenced by the Catalonian anarcho-syndicalist
movement, a popular revolution where the workers took control of businesses and ran
them as co-operatives. His vision is still broadly anarchist or "libertarian socialist": it
looks to a society run by free associations of workers. This is socialism from the ground
up, rather than traditional top-down state socialism, where control rests in a centralised
government run by an elite.

Chomsky's reputation is one of formidable seriousness: his political writings boil with
moral outrage. He is a daunting opponent and not much inclined to give quarter to his
critics. This has led to some fierce fallings-out. "He implies that people who disagree
with him are stupid and ignorant. He is a brilliant debater and an out-and-out bully," said
his MIT colleague Steven Pinker in a 1995 profile in the Boston Globe newspaper.
Nathan Glazer, a liberal social science professor from Harvard, complained to the Globe
about Chomsky's "tiresome" political approach: "It's an old Marxist style of analysis: a
polemic. Everything all hangs together. No matter what happens, it benefits the ruling
class."
But in a half-hour phone interview the fearsome philosopher is affable and
straightforward. Yes, he says, he was "very supportive" of New Zealand's anti-nuclear
stand: "Nuclear weapons may likely be the end of us. It's not a joke, and the failure of the
nuclear powers ... to take seriously the rhetoric and underlying intent of the Non-
proliferation Treaty is extremely dangerous." He is not so impressed by New Zealand's
persistent refusal to condemn Indonesia's 1975 invasion of East Timor and the slaughter
of a large portion of its population. Chomsky has campaigned about the issue for many
years. The Western-backed invasion, he says, shows up the hypocrisy of Western
posturing over human rights and its cloaking of aggression in the guise of defence against
communism. However, he could understand why on issues such as this "a small country
should shelter under the mantle of the big powers. I don't particularly admire it, but it's
understandable. I don't think it has to be that way."

You might think that these were unpromising times for an anarchist and champion of
workers' control. Business is triumphant; the unions have been clobbered; management
rules the West. Chomsky finds at least some signs of hope. Modern information
technology is used to coerce and control and strengthen the power of management. But it
could also be used as "the means for achieving a much more free and democratic society,
for example worker control . . . It could be used to bring real-time information to people
everywhere so they can participate in decisions."

There was also an expansion and spread of democratic ideas about human rights. "It's
agonisingly slow, but there's no reason why these tyrannies (the corporations) should be
excluded from them." He had been surprised by the enthusiastic response he had from
union audiences to his ideas about these issues. "That was inconceivable a few years ago
in the United States."

How does a champion of workers' control deal with the shareholders' argument that "We
own the business, we put our money into it, so we should decide who runs it"? "Kings
and princes said the same thing. I don't denigrate that statement but we should put it in
historical context. First of all, how did they get the money? And what about the people
who actually built the institution?"

In the short term, he says, the corporations have been "stunningly successful. Profit
growth in the 1990s (in the US) has been 'dazzling', 'stupendous' -- those are the words
they use. Meanwhile, wages have stagnated, they've barely reached the levels of 1989."
But business was also wondering whether its triumph over labour could lead to a
backlash. "They're worried about it. You could read about it in the business press for the
past few years, they're full of discussions: 'When's it going to blow up?'" Nobody knows,
says Chomsky, whether there will be a popular reaction -- and nobody knows what form
it will take. It might take a very ugly shape indeed. Look at the movement that sprang out
of economic woe in Europe some decades back. "The most civilised part of the world,"
he warns, "with the highest cultural standards 70 years ago was Germany. No more need
be said."