Take from the Needy and Give to the Greedy 2 страница

Here there are illusions that have to be dismantled from beginning to end. Take, say, David Ricardo, who actually is much more the godfather of contemporary neoliberal economics than Adam Smith, who was a pre-capitalist. Take a look at his famous law of comparative advantage, which we’re supposed to worship. It sort of works on his assumptions, but his assumptions are that capital would be pretty much immobile, partly because capital was land and land can’t be moved, but partly for other reasons. He thought capital would be relatively immobile because capitalists are nice human beings and they care about the people around them, so they’re not going to move their capital across the world because that would harm the people in their community and their country and naturally they have a lot of concern for them. Again, that’s a pre-capitalist thought. Within capitalist ideology, that’s a monstrosity. You’re not supposed to care about anything except maximizing your own wealth. So Ricardo in the early nineteenth century was reflecting the residue of the pre-capitalist era, in part at least, although he’s an interesting mixture.

All of the humane Enlightenment aspects of this have been eliminated, and rightly, because the logic of the capitalist enterprise is, You should not have human feelings. You should just be trying to maximize your own wealth and power. On the one hand, the idea that capitalist entrepreneurs ever thought they should be subjected to market discipline is ridiculous. You use state power as much as you can. This is again something known to economic historians, but they don’t really look at it in a comprehensive way. So, for example, there are good studies showing very persuasively that, say, in the history of the U.S. that its economic growth was very closely correlated with its extremely high level of protectionism. Its biggest growth period in the late nineteenth century was a period in which tariffs here were five or ten times as high as in most of Europe, and that was great for the U.S.

economy. That’s very general for every developed society.

On the other hand, that very much understates the case, because there are other things you don’t look at if you’re an economist. It’s somebody else’s field. For example, one reason why the Industrial Revolution was able to be so successful in England and the U.S. was because of cheap cotton. What made cotton cheap? Extermination or elimination of the native population and bringing in slaves. That’s a rather serious government intervention in the market, more than a slight market distortion. But that doesn’t count. And the same economic historians will accept all sorts of myths about how developed countries used state intervention. They say that protectionism stopped in the U.S. after 1945, when the U.S. turned toward liberal internationalism. There was indeed pressure to lower tariffs. For one thing, it’s not quite true that protectionism stopped. The Reaganites virtually doubled one or another form of protection.

But even if we were to agree protectionism didn’t stop, it would be largely beside the point, because there was another form of state intervention in the economy, a massive form that developed at that point, but that’s not the topic of economists, namely, the whole Pentagon system, which has overwhelmingly been a way of funneling public resources to advanced sectors of industry, and in fact was largely designed for that purpose. That they talk about in some other department.

If you put all these things together, you find that the doctrines of the market are mainly weapons to beat people over the head with. We don’t use them ourselves. And when you actually look at the founders, they had all sorts of different ideas on the market. They were coming out of a truly conservative tradition, one that we don’t have, which was rooted in the Enlightenment and existing institutions and was concerned with things like sympathy and solidarity and benevolent care, a lot of it very

autocratic. That’s all dissolved under the impact of a sort of hypocritical capitalist ideology which means capitalism for you, but protection for me.

DBYou’ve made a bit of a name for yourself in the field of linguistics and language. It’s interesting, in the current political scene, how much the passive voice is used. There’s an article on income inequality in the New Yorker (October 16), for example, which is replete with this. Inequality happens. There’s no agency. There’s no active voice. People are getting poorer. No one is making them poor. It just happens.

Or “people were killed,” not “we’re killing them.” That’s absolutely standard. In fact, that’s the beautiful thing about the passive voice and other such devices. It makes it look as if things happen without an agent, and that’s very useful when the agent shouldn’t be identified because it’s too close to home. Virtually all discussions of aggression and terror take place in this framework. But you’re right, now the idea is, something strange is just happening to the economy, which is forcing inequality. Maybe automation or trade. Nobody really knows. We can’t do anything about it.

But these are social decisions. They’re very easy to trace. You know who’s making the decisions and why. Not exactly, but certainly to a very substantial extent we know why these things are happening. You can identify the factors in them. You can see that they are by no means inevitable. There are people who are saying very sensible things about automation and the end of work. And there’s a real problem. People aren’t going to get jobs because maybe someday robots will do their work. While I agree with that if you put extremely narrow bounds on the discussion, in a general sense it’s completely untrue. Take a walk

through Boston or any other city and see if you don’t see things around where there’s work to be done. Then take a look at those people over there who are idle and say, Wouldn’t they like to do the work? The answer is yes to both. There is tons of work to be done, and lots of people who would like to do the work. It’s just that the economic system is such a grotesque catastrophe that it can’t even put together idle hands and needed work, which would be satisfying to the people and which would be beneficial to all of us. That’s just the mark of a failed system. The most dramatic mark of it. Work is not something that you should try to escape from, or that ordinary human beings would want to escape from. It’s something you want to do because it’s fulfilling, it’s creative. There’s plenty of it around. It’s not being done because of the extreme inadequacies of the socioeconomic system.

DBIn a recent Covert Action Quarterly article you wrote that “The terms of political discourse have been virtually deprived of meaning.” We’ve talked about “conservative,” for example. How can it be recovered? Is it something desirable?

Oh, sure. Evacuation of content from the terms of discourse is a very useful device for dumbing people down. If it’s impossible to talk about anything, then you’ve got them under control. There are things that we ought to be able to talk about in ordinary, simple words. There’s nothing terribly profound here, as far as I know. If there is, nobody has discovered it. We ought to be able to talk about these things in simple, straightforward words and sentences without evasion and without going to some expert to try to make it look complicated for some other reason. I’m not recommending anti-intellectualism. There are things to learn, and they’re worth learning, but the topics we are now discussing are not quantum physics. Anybody who’s interested can find out about them

and understand them, as much as is necessary for rational behavior in structures where you can make important decisions for yourself. We ought to try to protect substantive discourse from the attacks on it from all sides. A lot of it is from the left, I should say. One aspect of this is to protect sensible discussion from anything that has the prefix “post-” in it.

DBIn that same article, you write about the “acceleration of the deliberate policy of driving the country toward a Third World model, with sectors of great privilege, growing numbers of people sinking into poverty or real misery, and a superfluous population confined in slums or expelled to the rapidly expanding prison system.” I think that’s a fair summary of the current situation, but aren’t the social policies that are producing those conditions a recipe for revolt and upheaval?

Sometimes they have been, sometimes they haven’t been. Slave societies can exist for a long time. It’s not that it hasn’t been tried before in industrial countries. Take, say, England right around the time of Ricardo, in the 1820s, when a system very much like the one they’re trying to impose now was indeed imposed for the first time in an industrial country. The rulers got their way. They won political power in the mid-1830s and pretty soon they instituted the program they wanted, which was not all that different (though in a different world, of course) from what is being preached today. There were problems. The British army was spending most of its time putting down riots. Pretty soon organizing began, the Chartist movement began, labor organizing began.

By the mid-nineteenth century, the classical economists who had been deriding the idea of helping people because to help people harms them, had changed their position. You read people like, say, Nassau Senior, one of the old hawks of political economy. He was shifting

towards saying, There’s something to all this stuff. Then you get to John Stuart Mill in 1848 or so. That’s the foundation of the modern welfare state. For a long time laissez-faire was a bad word. Why? Because, to put it in a simple formula, the rich and powerful and their intellectuals, the economists, were telling people, You don’t have a right to live. You have a right to what you gain in the marketplace, but you don’t have any other right to live, and any effort to help you is going to hurt you. Pretty soon these strange people got the idea, We might not have a right to live, by your lights, but you don’t have a right to rule. So we’re just going to take it over and kick you out. That’s a little too far. The science, as it was called and still is called, was a very pliable one. Ricardo had compared the science of economics to Newton’s laws, but it turned out it wasn’t quite like that. When it became not usable as an instrument of class war, it simply changed. All of a sudden it turned out, Sure, you have a right to live and we have to adjust to your demands, because otherwise we’re not going to have a right to rule.

Exactly what form that organizing will take now . . . it’s already taken some form. It happens to be taking very antisocial forms. But that is a reflection of social and cultural factors in the society. It doesn’t have to. As I mentioned before, you go to the opposite extreme in our hemisphere, to Haiti, where it took very constructive forms. So if it doesn’t take constructive forms here, that’s our fault. We have no one to blame but ourselves.

DBBut let’s say you’re a CEO of a major corporation. Isn’t it in your economic interest to keep enough change in my pocket so that I’ll buy your products?

That’s an interesting question, and nobody knows the answer to it. It was a question that had an answer in a national economy. So if you go

back to the 1920s, at the time of the big automobile manufacturing burst, that was the question that Henry Ford raised. He drew the conclusion that you just drew. He said, I’d better give these guys a decent wage or nobody’s going to buy my cars. So he raised workers’ salaries beyond what he was forced to by market pressures. And others went along. That was on the reasoning that you just outlined, and it made sort of sense in a national economy.

Does it make sense in an international economy? Does it make sense in an international economy where you can shift production to the poorest and most deprived and most depressed regions where you have security forces keeping people under control and you don’t have to worry about environmental conditions and you have plenty of women pouring off the farms to work under impossible conditions and get burnt to death in factory fires and die from overwork and somebody else replaces them and that production is then integrated through the global system so that value is added where you have skilled workers and maybe pay a little more but you don’t have many of them? Finally it’s sold to the rich people in all the societies. Even the poorest Third World country has a very rich elite. As you take this kind of structural Third World model and transfer it over to the rich countries—it’s a structural model, it’s not in absolute terms—they have a sector of consumers that’s not trivial. Even if there’s plenty of superfluous people and huge numbers in jail and a lot of people suffering or even starving. So the question is, Can that work? As a technical question, nobody really knows the answer. And it doesn’t make any difference anyway. We shouldn’t even be allowing ourselves to ask it. The point is that whether it could work or not, it’s a total monstrosity. Fascism works, too. In fact, it worked rather well from an economic point of view. It was quite successful. That doesn’t mean it’s not a monstrosity. So there is the technical question, Will it work? To that nobody knows the answer. But there’s also a human question of

whether we should even ask, and the answer to that is, Of course not. That’s not the CEO’s question, but it should be everybody else’s.

DBWhat about the issue of the debt as a tactic of imposing a kind of de facto structural adjustment in the U.S.?

There’s a lot to say about it. Basically, yes. What is being said about the debt is for the most part nonsense. The one thing that is correct, which is hidden there, is that it is a weapon for cutting back social spending. In fact, it very likely was created for that reason. Most of the debt is Reagan debt. If you look back, it’s clear at the time, and I think it’s becoming clearer and clearer, that their borrow-and-spend lunacy which did substantially increase the debt, like 80% as compared with that accumulated over a couple hundred years, was conceived of and is now being very efficiently used as a weapon to cut back those parts of government that help the general population, while incidentally increasing spending for those parts of the government that help the very rich, like the Pentagon system.

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November 3, 1995

DBTo pick up where we left off the other day, maybe we should make a distinction between what is called “the debt” and the deficit.

It’s just a technical difference. The deficit is a year-by-year accounting of the ratio between income and outgo in each year. The debt is what’s accumulated over time. So if the deficit stays high, the debt will continue to grow. If the deficit can be negative, then the debt

cuts down.

DBYou mentioned that a lot is left out in the discussion about the debt. Like what?

I should say it’s not left out by serious professional economists who write about it, like Robert Eisner, who has done some of the best work. But it’s left out of the public debate. One point is that the debt, though high (and it certainly grew substantially during the Reagan years), nevertheless is not high by either comparative or historical standards. So in the past it has often been higher, and in other countries it’s higher. “High” means relative to the total economy, GNP or GDP, whatever you decide to measure. Relative to that, it’s not high.

The second point is that a debt is just part of living. There isn’t a business around that isn’t in debt. You borrow for, say, capital investment. Every person is in debt, virtually, unless they hide their money under the mattress. Almost everyone who has a car or a home or is sending their kids to college or doing anything is in debt. There’s nothing wrong with that. If you weren’t, you wouldn’t have a home or a car or a television set. You wouldn’t be able to buy things on your MasterCard. Your kids wouldn’t go to college. Debt is just the way the system functions.

A third point is that the calculations for the federal government don’t make any sense because they don’t distinguish between that part of the debt that is for capital investment, and therefore contributes to economic growth and in fact further income for the government and everybody else, and that part of the debt which is just operating expenses. Every business makes that distinction. Most of the states make that distinction. Unless you make that distinction you’re just in a dream world.

So, to begin with, the whole thing is off the mark from the start. If you ask about debt, the question to ask is, What’s it for? Take a family. If you go to Las Vegas and spend all your money and end up in debt and then you use the debt for more going to Las Vegas, that’s a bad use of debt. If you use the same amount of borrowing for a house or a car or your children’s education or putting into a business or buying books, then it could be a fine debt, in fact very constructive. In fact, forgetting what it does for you as a person, keeping to the strictest, narrowest economic considerations, it can contribute to further income. That’s exactly why businesses go into debt and people go into debt. One of the reasons. For a business it’s about the only reason. For people there are lots of good reasons.

When you turn to the government, you have to ask the same question: What’s the borrowing for? If the point of the borrowing is to put a lot of money into the pockets of Newt Gingrich’s rich constituents, which is in fact what it’s for, it’s like going to Las Vegas and wasting your money. On the other hand, if the same debt is used to improve what’s called human capital, that means to help children be healthier, better educated, more skilled, and so on—you have to put everything in terms of the word “capital” to be serious, although it’s not serious. It’s called “human capital.” It’s part of our kind of insane ideology. So if it’s used for human capital, by any measure it’s a wise debt. For example, it will increase economic growth, because improving human capital is one of the standard ways—the World Bank will tell you this—for increasing economic growth. What is going to determine much of the quality of life a little bit down the road—say you’re worried about your children—is how the economy’s working. That will determine a large part of what their lives are going to be like. It’s not the only thing, again, but let’s keep to that. That will depend on things like whether there is an educated, healthy, skilled population capable of increasing productivity

and doing useful things, whether there’s a livable environment, so you’re not falling on the floor and dying because of pollution. Whether there’s infrastructure, like can you get to work without spending three hours in a traffic jam, are there schools, are there hospitals—all of that is what contributes to economic growth in the narrowest terms.

Incidentally, relative equality also contributes to economic growth. Not too much is understood about these problems. Take the World Bank. Go out to the limits. They recognize that one of the factors, probably the major factor, that led to East Asian growth is relative equality, high infrastructure spending, investment in education, all of these things. It’s kind of common sense, and it’s shown by history. So if public spending is used for those purposes, then it contributes to the welfare of future generations, and then the debt is very wise, in fact it’s contributing to growth.

This idea that we’re somehow putting a burden on future generations by the debt is another small fraud. The debt is mostly owned by Americans. The latest figures I’ve seen show about 80% owned by Americans, which means that paying the debt goes back into the pockets of American citizens. You could claim that it has a very negative redistributive effect. That’s probably true. I don’t know if anybody knows the numbers, but it stands to reason that the people who own Treasury securities are not cab drivers. So the debt is by and large like other forms of social policy, that is, a technique by which the poor pay off the rich. But that’s internal to the country. It’s not a matter of putting a burden on your children, except in the sense that the whole regressive system puts a burden on your children because they’re going to be doing all sorts of things to pay off the rich. The debt is another one. But the Gingrich line about how you’ve got to save future generations is not only ridiculous, but it’s the opposite of the truth. By cutting back the kinds of government spending they want cut back, they’re cutting back future

economic growth and making life worse for the next generation, for just the reasons I mentioned.

These are things which certainly have to be seriously taken into consideration when you talk about the debt and the annual deficit.

Another factor has to do with what the public thinks of all of this. Business is totally in favor of cutting it back. There’s overwhelming support for it, even those parts of business that will be harmed by it. That’s kind of interesting. Because apparently for them, the class interest is overwhelming the immediate profit interest. So the class interest of rolling back all the social programs and ensuring that the government works only for the rich and destroying the regulatory apparatus and improving the options for corporate crime, which is what changing the tort system and the regulatory system means, all of that is so overwhelmingly beneficial that they’re willing to face the costs, to some extent, of less government service for the rich.

I should say only to some extent. If you look at the National Association of Manufacturers, they’re calling for more government assistance for, say, export promotion, meaning put money in their pockets. Newt Gingrich is not calling for cutting down the Pentagon system, putting money in the pockets of his rich constituents and others like them. On the contrary. Gingrich and the Heritage Foundation want a much bigger nanny state for the rich. So it’s mixed. But they’re willing to do things even that might harm profit because of the overwhelming advantages of destroying a whole system which is preventing them from robbing everybody blind. So that’s something.

So the business community is for it. Read Business Week. It’s uniform. In the political system, the leadership of both parties (not the scattered dissidents) is virtually 100% for it. So when Clinton goes on the radio to criticize the Republican budget program, he says, Of course we must balance the budget and eliminate the debt. That’s not even in

question.

But there’s another segment of the country, namely, the population. There are polls. There was recently a poll asking what people thought the primary issue was in the country. 5% said the debt. 5% said homelessness. So the number of people who think it’s the prime issue is the same as the number of people who think it’s homelessness. That shows you how people rank it. When asked, Should we eliminate the debt, here the polls are very carefully crafted. There are two sets of questions, one for headline writers and NPR and a set of questions for people who want to know the answers. The questions for the headline writers are, Would you like to see the debt eliminated? Most people say, Yes. It’s like asking, Would you like your mortgage eliminated? That’s for the headlines: Americans Voted for Balanced Budget. Everybody Wants the Debt Eliminated. Americans Like the GOP Agenda, etc. Then comes the question that matters: Do you want the debt eliminated or the deficit

reduced at the cost of ____ . Then come a lot of “of’s”: cutback in

health care, environmental protection, education. Then it goes way down. Depending on how the question is framed, it goes down to roughly 25% thinking it should be done at all, let alone thinking it’s a high priority. It’s like asking the question, Do you want your mortgage eliminated at the cost of giving up your house? You get a different answer to the question of would you like your mortgage eliminated. So this is part of the scam done by the public relations industry for the benefit of the doctrinal institutions. If you look at the bottom of the column, where the headline says Americans Want Balanced Budget, you sometimes get some of this data. So in general, the public is taking kind of a realistic attitude. They don’t think it’s that important, it’s about at the level of homelessness, and they don’t want it to happen at the cost that it’s going to take.

Suppose you raised the serious question and said, Do you want the

debt reduced at the cost of the health and welfare and economic growth of the next generation? Because that’s what it means. I’m sure as soon as this is laid out you’ll get overwhelming opposition, especially if it’s understood exactly why this is the case.

On top of all of this, there is some historical experience. Here you have to be pretty cautious, because very little is understood about these matters, as the better economists will agree. It’s very speculative. But there’s some evidence. For example, there have been periods of attempts to balance the budget. I think there have been about half a dozen since the 1820s. I think every single one has led very quickly to a very serious recession or a deep depression. It’s not hard to see why. If you think it through, you can see why that should be.

On the other hand, there are also rather sophisticated studies of the effect of the deficit on things like consumption, investment, growth, and so on. It tends to have a sort of positive correlation. It tends to be the case that deficits contribute to growth, consumption levels, investment, production, trade, the usual measures. These are complicated measures, and you don’t want to say anything with much confidence. But it looks like that, and you can see why it would be the case.

If you did a really serious analysis, which would be extremely hard, you’d ask the same question as about a person borrowing. Do you borrow so you can gamble in Las Vegas or do you borrow for your children’s education? If you could ask that question, which is sophisticated, and ask, Insofar as debt was used for productive government investment, like infrastructure, health, the environment, and so on, what was its effect? vs. debt for building the F-22, I’m pretty sure you’d get a pretty sharp answer. But that’s a hard question to ask, and I don’t think anybody’s asked it.

In any event, if you want to rethink the question of debt, you have to start from the beginning and redo it from a totally different perspective.

Again, if we had anything remotely like a free press around, these would be the front-page stories, what they’d be telling people every day. You can’t claim that they don’t tell you. If you really read everything, you’ll find somebody saying this down on a back page or a piece of an op-ed. But what people are deluged with is a different story. Unless you carry out a research effort, it’s very hard to know anything about these topics. Interesting to me is that despite the deluge, people do not believe that the debt is an important issue. That’s pretty astonishing. I don’t know how long that can go on.

DBOne of the things you often do is challenge assumptions. So many things are just taken for granted, and that’s what the discourse is built upon. Like, We need to have a balanced budget. But citing a recent CBS News-New York Times poll, Americans, when asked whether they would want to sustain Medicare at current levels or balance the budget, by 3 to I said that they would rather have Medicare. This poll, incidentally, was described by the Speaker of the House as an example of “disinformation.”

And the Times, which ran the poll well, for once (that was a lead front-page story) didn’t mention that this has been a consistent figure all the way back. So you go back to last December. There were similar polls. Again it turns out, although the questions weren’t framed exactly the same way, that when people were asked, Do you want budget balancing at the cost of medical assistance, health care, again it was about 3 to 1 opposed. So these are fairly steady figures, and it’s interesting that they’re holding up despite the propaganda. When people are asked, Would you like to have higher taxes for more medical research, it’s about 75% in favor. I don’t remember the last numbers, but quite consistently over the years the polls have indicated that people

are in favor of higher taxes if they’re used for things like health or education. Even foreign aid, believe it or not, if it goes to the poor. And of course, overwhelmingly the population thinks that the government has a responsibility to help the poor here.

They are also opposed to welfare, and that’s a success of the propaganda system. But yes, these poll results were interesting and important, have been consistent and generalized to almost everything else. And it hasn’t gone totally unnoticed. For example, Brad Knickerbocker is a well-known Washington correspondent for the Christian Science Monitor. He’s dealing mostly with environmental and energy issues these days. He had a column in which he said, kind of quizzically, that it’s almost as if Congress is looking at the polls and deciding to do the opposite. He was talking about environment and energy issues, where again it’s extremely dramatic, but it generalizes across the board. I think it’s hard to find a time in American history when policy has been so radically opposed to public opinion on issue after issue. It’s even true on the things that are going up.