Saturday, June 28, 2014

Chomsky. Transcript. Who owns the world. Resistance and way forward. UMassAmherst. 27 Sep 2012.

When I was thinking about these remarks, I had twotopics in mind, couldn't decide between them, actually prettyobvious ones. Onetopic is, what are themostimportant issues that we face? Thesecondtopic is, what issues are not being treated seriously or at all in the quadrennial frenzy now underway called an election? But I realised that there's no problem; it's not a hard choice: they're thesametopic. And there are reasons for it, which are verysignificant in themselves. I'd like to return to that in a moment. But first a few words on the background, beginning with the announced title, Who Owns the World? Actually, a good answer to this was given years ago byAdamSmith, someone we're supposed to worship but not read. Sound of laughter. [] A little subversive when you read him sometimes. [Supposed to be ironic.] He was referring to themostpowerful country in the world in his day and, of course, the country that interested him, namely, England. And he pointed out that inEngland the principal architects of policy are those who own the country: the merchants and manufacturers in his day. And he said they make sure to design policy so that their own interests are most peculiarly attended to. Their interests are served by policy, however grievous the impact on others, including the people ofEngland. But he was an oldfashioned conservative withMoralprinciples, so he added the victims ofEngland, the victims of the, what he called the “savage Injustice of the europeans,” particularly inIndia. Well, he had no illusions about the owners, so to quote him again, “All for ourselves and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind.” It was true then, it's true now. Britain kept its position as the dominant worldpower well into the20thcentury despite steady decline. By the end ofWorldWarTwo, dominance had shifteddecisively into the hands of the upstart across the sea, theUnitedStates, by far themost-powerful and -wealthy society in worldHistory. Britain could only aspire to be its juniorpartner as theBritishForeignOffice ruefullyrecognised. At that point, 1945, theUnitedStates had literally half the world's wealth, incredible security, controlled theentireWesternHemisphere, both oceans, the opposite sides of both oceans. There's nothing, there hasn't ever been anything like that inHistory. And planners understood it. Roosevelt'splanners were meeting right through theSecondWorldWar, designing the postwarworld. They were quite sophisticated about it, and their plans were prettymuch implemented. They wanted to make sure that theUnitedStates would control what they called a “grand area,” which would include, routinely, theentirewesternHemisphere, theentireFarEast, theformerBritishEmpire, which theUS would be taking over, and as much ofEurasia as possible, crucially, its commercial and industrial centers in westernEurope. And within this region, they said, theUnitedStates should hold “unquestioned power with military and economic supremacy, while ensuring the limitation of any exercise of sovereignty byStates that might interfere with these global designs.” And those were prettyrealistic plans at the time, given the enormous disparity of power. TheUS had been by far therichestcountry in the world evenbefore theSecondWorldWar, although it wasn't, was not yet the major global actor. During theSecondWorldWar, theUnitedStates gainedenormously. Industrialproduction almostquadrupled, got us out ofDepression. Meanwhile, industrial rivals were devastated or seriouslyweakened. So that was an unbelievable system of power. Actually, the policies that were outlined then still hold. You can read them inGovernmentpronouncements. But the capacity to implement them has significantly declined. Actually there's a major theme now inForeignPolicydiscussion, you know, journals and so on. The theme is called “American decline.” So, for example, in the most prestigious establishment internationalrelationsjournal, ForeignAffairs, a couple of months ago, there was an issue which had on the front cover in big bold letters, “Is America Over Questionmark”. That's announcing the theme of the issue. And there is a standard corollary to this: power is shifting [westward], to-China and -India, the rising worldpowers, which are going to be the hegemonicStates of the future. Actually, I think the decline, the decline is quite real, but some serious qualifications are in order. First of all, the corollary is highlyunlikely, at least in the foreseeable future. China and India are verypoor countries. Just take a look at, say, the humandevelopment index of theUnitedNations: they're way down there. China is around90th. I think India is around120th or so, last time I looked. And they have tremendous internal problems: demographic problems, extreme poverty, hopeless inequality, ecological problems. China is a great manufacturing center, but it's actually mostly an assemblyplant. So it assembles parts and components, highTechnology that comes from the surrounding industrial, moreadvanced industrial centers: Japan, Taiwan, southKorea, Singapore, theUnitedStates, Europe, and it basicallyassembles them. So, if, say, you buy one of these eye-things. Sound of laughter. You know, an iPad from China, that's called an export fromChina, but the parts and components and Technology come from outside. And the value added inChina is minuscule. It's been calculated. They'll move up theTechnologyladder, but it's a hard climb, India evenharder. Well, I think one should be skeptical about the corollary. But there's another qualification that's moreserious. The decline is real, but it's notnew. It's been going on since1945. In fact, it happenedveryquickly. In the late1940s, there's an event that's known here as theLossOfChina. China became independent. That's a loss of a huge piece of the grand area ofAsia. And it became a major issue in americanDomesticPolicy. Who's responsible for theLossOfChina? A lot of recriminations, and so on. Actually, the phrase is kind of interesting. Like, I can't lose your computer, right? Because I don't own it. I can lose my computer [only]. Well, the phrase, theLossOfChina, kind of presupposes a deeplyheld principle of kind of american eliteconsciousness, We own the world, and if some piece of it becomes independent, we've lost it. And that's a terrible loss, we've got to do something about it. It's neverquestioned, which is interesting in itself. Well, right about thesametime, around1950, concerns developed about the loss of southeastAsia. That's what led theUnitedStates into theIndochinaWars, theworstatrocities of the postwarperiod. Partly lost, partly not. A verysignificant event in modernHistory was in1965, when Indonesia, which was the main concern, that's the country of southeastAsia with most of the wealth and resources, there was a coup inIndonesia, Suhartocoup. It led to an extraordinary massacre, what theNewYorkTimes called a “staggering mass slaughter.” It killed hundreds of thousands of people, mostly landless peasants, destroyed the only mass politicalparty, and opened the country up to western exploitation. Euphoria in theWest was so enormous that it couldn't be contained. So, in theNewYorkTimes, describing the “staggering mass slaughter,” it called it a “gleam of light in Asia.” It was a column written byJamesReston, the leading liberal thinker in theTimes. And thesame elsewhere: Europe, Australia. It was a fantastic event. Years later, McGeorgeBundy, who was thenationalsecurityadviser for Kennedy and Johnson, in retrospect, he pointed out that it probably would have been a good idea to end theVietnamWar at that point, to pull out. Contrary to a lot of illusions, theVietnamWar was fought primarily to ensure that an independentVietnam would not developsuccessfully and become a model for other countries in the region. It would not, to borrow HenryKissinger's terminology speaking aboutChile, we have to prevent what they called the, what he called the virus of independent development from spreading contagion elsewhere. That's a critical part of americanForeignPolicy since theSecondWorldWar. Britain, France, others to a lesser degree. And by1965, that was over. Vietnam was, southVietnam was virtuallydestroyed. Word spread to the rest ofIndochina it wasn't going to be a model for anyone, and the contagion was contained. There were, theSuhartoregime made sure that Indonesia wouldn't be infected. And prettysoon, theUS hadDictatorships in every country of the region: Marcos on the Philippines, a dictatorship inThailand, Chun in south[Korea], Park in southKorea. It was no problem about the infection. So that would have been a good time to end theVietnamWar, he felt. Well, that's southeastAsia. But the decline continues. In the last tenyears, there's been a veryimportant event: the loss of southAmerica. For thefirsttime in fivehundredsyears, the south. Since the conquistadors, the southamerican countries have begun to move towards independence and a degree of integration. The typical structure of one of the southamerican countries was a tiny, veryrich, westernised elite, oftenwhite or mostlywhite, and a huge mass of horrible poverty, countries separated from one another, oriented to, each oriented towards its, you know, either Europe or morerecently theUnitedStates. Lasttenyears, that's been overcome, significantly. Beginning to integrate, the prerequisite for independence, even beginning to face some of their horrendous internal problems. That's the loss of southAmerica. Onesign is that theUnitedStates has been driven out of every single military base in southAmerica. We're trying to restore a few, but right now there are none. Well, moving on to just lastyear, theArabSpring is another such threat. It threatens to take that big region out of the grand area. That's a lot moresignificant than southeastAsia or southAmerica. You go back to the 1940s, theStateDepartment recognised that the energyresources of theMiddleEast are what they called “one of thegreatest material prizes in worldHistory,” a spectacular source of strategic power. If we can controlMiddleEastenergy, we can control the world. Take a look at theUSBritishcoup inIran in1953. Veryimportant event. Its shadows cast over the world until today. Now that was, it was a pretense that it was a part of theColdWar. It had nothing to do with theColdWar. What it had to do with was the usual fear: independentNationalism. And it wasn't even concerned with access-to-oil or profits. It was concerned with control, control of the oilresources ofIran and, in fact, of the region. And that's a theme that runs right through policydecisions. It's notdiscussed much, but it's veryimportant to have control, exactly as StateDepartment pointed out, advisers pointed out in the[19]40s. If you can control the oil, you can control most of the world. And that goes on. So far, the threat of theArabSpring has been pretty well contained. In the oilDictatorships, which are themostimportant ones for theWest, every effort to join theArabSpring has just been crushed by force. SaudiArabia was so extreme that when there was an effort to go out into the streets, the securitypresence was so enormous that people were even afraid to go out. There's a little discussion of what goes on inBahrain, where it's been crushed, but easternSaudiArabia was much worse. The emirates totallycontrol. So that's okay. We managed to ensure that the threat ofDemocracy would be smashed in themostimportant places. Egypt is an interesting case. It's an important country, not an oilproducer. It is a small one. But inEgypt, theUnitedStates followed a standard operating procedure. If any of you are going into the diplomatic service, you might as well learn it. There's a standard procedure when one of your favouriteDictators gets into trouble. First, you support him as long as possible. But if it becomes reallyimpossible, say theArmy turns against him, then you send him out to pasture and get the intellectualclass to issue ringing declarations about your love ofDemocracy, and then try to restore the old system as much as possible. There's case after case of that: Somoza inNicaragua, Duvalier inHaiti, Marcos in thePhilippines, Chun in southKorea, Mobutu in theCongo, over and over. I mean, it takes [requires] genius not to see it. Sound of laughter. And it's exactly what was done inEgypt and what France tried to do, not quite with as much success, inTunisia. Well, the future is uncertain, but the threat ofDemocracy so far is contained. And it's a real threat. I'll return to that. It's also to, important to recognise that the decline over thepastfiftyyears is, to a significant extent, selfinflicted, particularly since the[19]70s. I'll go back to that, too. But first let me say a couple of things about the issues that are most important today and that are being ignored or not dealtseriously, dealt with seriously in the electoral campaigns, for good reasons. So let me start with themostimportant issues. Now there are two of these. They're of overwhelming significance, because the fate of the species depends on them. One is environmentaldisaster, and the other is nuclearwar. I'm not going to take much time reviewing the threats of environmental disaster. Actually, they're on the frontpages almostdaily. So, for example, lastweek theNewYorkTimes had a frontpagestory with the headline, “Ending Its Summer Melt, Arctic Sea Ice Sets a New Low That Leads to Warnings.” The melting this summer was far faster than was predicted by the sophisticated computer models and themostrecent UnitedNationsreport. It's now predicted that the summer ice might be gone by 2020. It was assumed before that it may be 2050. They quoted scientists who said this is “a prime example of the builtinConservatism of [our] climateforecasts. As dire [the warnings are] about the longterm consequences of heattrappingemissions ... many of [us] fear [that] they may still be underestimating the speed and severity of the impending changes.” Actually, there's a climatechangestudyprogram atMIT, where I am. They've been warning about this for years, and repeatedly have been proven right. TheTimes report discusses, briefly, the severe attack, the severe impact of all of this on the globalclimate, and it adds, “But Governments have not responded to the change with any greater urgency about limiting greenhouseemissions. To the contrary, their main response has been to plan for exploitation of newlyaccessible minerals in theArctic, including drilling for moreoil.” That is, to accelerate the catastrophe. Sound of cheer. It's quite interesting. It demonstrates an extraordinary willingness to sacrifice the lives of our children and grandchildren for shortterm gain, or perhaps an equallyremarkable willingness to shut our eyes so as not to see impending peril. These things you sometimesfind with young infants: something looks dangerous, close my eyes and won't look at it. Well, there is another possibility. I mean, maybe humans are somehow trying to fulfill a prediction of great american biologist who diedrecently, ErnstMayr. He argued years ago that intelligence seems to be a lethal mutation. Sound of laughter. He, and he had some prettygood evidence. There's a notion of biological success, which is how many of you are there around. You know, that's biological success. And he pointed out that if you look at the tens of billions of species in human, in worldHistory, the ones that are very successful are the ones that mutate very quickly, like bacteria, or the ones that have a fixed ecological niche, like beetles. They seem to make out fine. But as you move up the scale of what we call intelligence, success declinessteadily. When you get up to mammals, it's verylow. There are very few of them around. I mean, there's a lot of cows, it's only because we domesticate them. When you get to humans, it's the same. 'Til very recently, muchtoorecent a time to show up in any evolutionary accounting, humans were veryscattered. There were plenty of other hominids, but they disappeared, probablybecause humans exterminated them, but nobody knows for sure. Anyhow, maybe we're trying to show that humans just fit into the general pattern. We can exterminate ourselves, too, the rest of the world with us, and we're hell bent on it right now. Well, let's turn to the elections. Both politicalparties demand that we make the problem worse. In2008, both partyplatforms devoted some space to how theGovernment should address climatechange. Today, the. In the Republican platform, the issue has essentiallydisappeared. But the platform does demand that Congress take quick action to prevent theEnvironmentalProtectionAgency from regulating greenhousegases. So let's make sure to make it worse. And it also demands that we open theAlaska'sArcticRefuge to drilling, I'm quoting now, “in order to take advantage of all of our american godgiven resources.” You can't disobey god, after all. Sound of laughter. On environmental policy, the program says, “We must restore scientific integrity to our public research institutions and remove political incentives from publiclyfunded research.” All that's a code word for climateScience: stop funding climateScience. Romney himself says there's no scientific consensus, so we should support more-debate and -investigation within the scientific community, but no action, except to act to make the problems worse. Well, what about the democrats? They concede that there's a problem and advocate that we should work toward an agreement to set emissionslimits in unison with other emerging powers. But that's it. No action. And, in fact, as Obama has emphasised, we have to work hard to gain what he calls onehundredyears of energyindependence by exploiting domestic or canadian resources by fracking or other elaborateTechnologies. Doesn't ask what the world would look like in onehundredyears. So, there are differences. The differences are basically about how enthusiastically the lemmings should march towards the cliff. Sound of laughter. Let's turn to thesecond major issue: nuclearwar. That's also on the frontpages daily, but in a way, that would seem outlandish to some independent observer viewing what's going on onEarth, and in fact does seem outlandish to a considerable majority of the countries of the world. Now, the current threat, not for thefirsttime, is in theMiddleEast, focusing onIran. The general picture in theWest is veryclear: it's far toodangerous to allowIran to reach what's called “nuclearcapability.” That is, the capability enjoyed by many powers, dozens of them, to produce nuclearweapons if they decide to do so. As to whether they've decided, USintelligence says it doesn't know. TheInternationalAtomicEnergyAgency just produced its mostrecent report a couple weeks ago, and it concludes, I'll quote it, “it cannot demonstrate the absence of undeclared nuclear-material and -activities in Iran.” Now, that is, it can't demonstrate something which cannot, a condition that can't be satisfied. There's no way to demonstrate the absence of the work, that's convenient, therefore Iran must be denied the right to enrich uranium, that's guaranteed to every power that signed theNonProliferationTreaty. Well, that's the picture in theWest. That's not the picture in the rest of the world. As you know, I'm sure, there was just a meeting of theNonAlignedMovement, that's large majority of the countries in the world and representing most of the world's population, a meeting inTehran. And once again, not for thefirsttime, they issued a ringing declaration of support forIran'sright to enrich uranium, right that every country has that signed theNonProliferationTreaty. Prettymuch thesame is true in the arab world. It's interesting. I'll return to that in a moment. There is a basic reason for the concern. It was expressedsuccinctly byGeneralLeeButler. He's the former head of theUSStrategicCommand, which controls nuclearweapons and nuclearstrategy. He wrote that “It is dangerous in the extreme that in the cauldron of animosities that we call theMiddleEast, onenation should arm itself with nuclearweapons, which may inspire other nations to do so.” GeneralButler, however, was not referring toIran; he was referring toIsrael, the country that ranks highest in european polls as the most dangerous country in the world, right above Iran, and not incidentally, in the arab world, where the public regard theUnitedStates as the second mostdangerous country right afterIsrael. In the arab world, Iran, though disliked, ranks far lower as a threat. Among the populations, that is, not theDictatorships. With regard to iranian nuclearweapons, nobody wants them to have them, but in many polls, majorities, sometimes considerable majorities, have said that the region would be moresecure if Iran had nuclearweapons, to balance those of their major threats. Now, there's a lot of commentary in the westernMedia, in journals, about arab attitudes towardsIran. And what you read, commonly, is that the arabs want decisive action againstIran, which is true of theDictators. It's not true of the populations. But who cares about the populations, what are calleddisparagingly, the arab street? We don't care about them. Now that's a reflection of the extremelydeep contempt forDemocracy among westernelites, I mean, so deep that it can't be perceived. You know, it's just kind of like reflexive. The study of popular attitudes in the arab world, and there is very extensive study by western polling agencies, it revealsveryquickly why theUS and its allies are so concerned about the threat ofDemocracy and are doing what they can to prevent it. Just take. They certainly don't want attitudes like those I just indicated to become policy, while of course issuing rousing statements about our passionate dedication toDemocracy. Those are relayed-obediently by reporters and commentators. Well, unlike Iran, Israel refuses to allow inspections at all, refuses to join theNonProliferationTreaty, has hundreds of nuclearweapons, has advanced deliverysystems. Also, it has a long record of violence and repression. It has annexed and settled conquered territories illegally, in violation ofSecurityCouncilorders, and many acts of aggression; fivetimes against Lebanon alone, no credible pretext. In theNewYorkTimes yesterday, you can read that theGolanHeights are disputed territory, theSyrianGolanHeights. There is aUNSecurityCouncilResolution, 497, which is unanimous, declaring Israel's annexation of theGolanHeights illegal and demanding that it be rescinded. And in fact, it's disputed only inIsrael and in theNewYorkTimes, which in fact is reflecting actualUSpolicy, not formalUSpolicy. Iran has a record of aggression. too. In the last several hundredyears, it has invaded and conquered a couple of arab islands. Now that was under theShah, USimposedDictator withUSsupport. That's actually theonlycase in several hundredyears. Meanwhile, the severe threats of attack continue, you've just been hearing them at theUN, from theUnitedStates, but particularly Israel. There is a reaction to this at thehighestlevel in theUnitedStates. LeonPanetta, SecretaryOfDefense, he said that we don't want to attackIran, we hope that Israel won't attackIran, but Israel is a sovereign country, and they have to make their own decisions about what they'll do. You might ask what the reaction would be if you reverse the cast of characters. And those of you who have antiquarian interests might remember that there's a document called theUnitedNationsCharter, the foundation of modernInternationalLaw, which bars the threat or use of force in international affairs. Now, there are two rogueStates, UnitedStates and Israel, for whom, which regard theCharter and InternationalLaw as just a boring irrelevance, so, do what they like, and that's accepted. Well, these are not just words; there is an ongoing war, includes Terrorism, assassination of nuclearscientists, includes economicwar. US-threats, not international ones, US-threats have cutIran out of the international financialsystem. Western military analysts identify what they call “weapons of finance” as acts of war that justify violent response. When they're directed against us, that is. Cutting Iran out of globalfinancialmarkets is different. TheUnitedStates is openly carrying out extensive cyberwar againstIran. That's praised. ThePentagon regards cyberwar as an equivalent to an armed attack, which justifies military response, but that's of course when it's directed against us. The leading liberal figure in theStateDepartment, HaroldKoh, he's the top StateDepartment legal adviser, he says that cyberwar is an act of war if it results in significant destruction, like the attacks against iranian nuclearfacilities. And such acts, he says, justify force in selfdefense. But, of course, he means only attacks against theUnitedStates or its clients. Well, Israel's lethal armory, which is enormous, includes advanced submarines, recentlyprovided byGermany. These are capable of carrying Israel's nucleartipped missiles, and these are sure to be deployed in thePersianGulf or nearby if Israel proceeds with its plans to bombIran or, more likely, I suspect, to try to set up conditions in which theUnitedStates will do so. And theUnitedStates, of course, has a vast array of nuclearweapons all over the world, but surrounding the region, from theMediterranean to theIndianOcean, including enough firepower in thePersianGulf to destroy most of the world. Another story that's in the news right now is the israeli bombing of the iraqi reactor inOsirak, which is suggested as a model for israeli bombing ofIran. It's rarelymentioned, however, that the bombing of theOsirakreactor didn't end SaddamHussein's nuclearweaponsprogram. It initiated it. There was no program before. And theOsirakreactor was notcapable of producing uranium for nuclearweapons. But, of course, after the bombings, Saddam immediatelyturned to developing a nuclearweaponsprogram. And if Iran is bombed, it's almostcertain to proceed just as SaddamHussein did after theOsirakbombing. In a few weeks, we'll be commemorating the 50th anniversary of “themostdangerous moment in humanHistory.” Now, those are the words of historian, Kennedyadviser, ArthurSchlesinger. He was referring, of course, to theOctober1962MissileCrisis, “themostdangerous moment in humanHistory.” Others agree. Now, at that time, Kennedy raised the nuclearalert to the secondhighestlevel, just short of launching weapons. He authorizedNATOaircraft, with Turkish or other pilots, to take off, fly toMoscow and drop bombs, setting off a likely nuclearconflagration. At the peak of the missilecrisis, Kennedy estimated the probability of nuclearwar at perhaps 50percent. It's a war that would destroy theNorthernHemisphere, PresidentEisenhower had warned. And facing that risk, Kennedy refused to agree publicly to an offer byKruschev to end the crisis by simultaneous withdrawal of Russian missiles fromCuba and USmissiles fromTurkey. These were obsolete missiles. They were already being replaced by invulnerable Polarissubmarines. But it was felt necessary to firmly establish the principle that Russia has no right to have any offensive weapons anywhere beyond the borders of theUSSR, even to defend an ally againstUSattack. That's now recognised to be the prime reason for deploying missiles there, and actually a plausible one. Meanwhile, theUnitedStates must retain the right to have them all over the world, targeting-Russia or -China or -(any other enemy). In fact, in1962, the United. We just recentlylearned, theUnitedStates had just secretlydeployed nuclear missiles toOkinawa aimed atChina. That was a moment of elevated regional tensions. All of that is veryconsistent with grand area conceptions, the ones I mentioned that were developed byRoosevelt'splanners. Well, fortunately, in 1962, Kruschev backed down. But the world can't be assured of such sanity forever. And particularly threatening, in my view, is that intellectual opinion, and even scholarship, hailKennedy'sbehaviour as his finest hour. My own view is it's one of theworstmoments inHistory. Inability to face the truth about ourselves is all too common a feature of the intellectual culture, also personal life, has ominous implications. Well, tenyearslater, in1973, during theIsraelArabWar, HenryKissinger called a highlevel nuclearalert. The purpose was to warn the russians to keep hands off while he was, so we've recentlylearned, he was secretlyinformingIsrael that they were authorised to violate the ceasefire that had been imposedjointly by theUS and Russia. When Reagan came into office a couple of years later, theUnitedStates launched operations probing russian defenses, flying in toRussia to probe defenses, and simulating air and naval attacks, meanwhile placingPershingmissiles inGermany that had a fiveminuteflighttime to russian targets. They were providing what the CIA called a “supersudden firststrike capability”. The russians, not surprisingly, were deeplyconcerned. Actually, that led to a major warscare in1983. There have been hundreds of cases when humanintervention aborted a firststrikelaunch just minutes before launch. Now, that's after automated systems gave false alarms. We don't have russian records, but there's no doubt that their systems are far moreaccidentprone. Actually, it's a near miracle that nuclearwar has been avoided so far. Meanwhile, India and Pakistan have come close to nuclearwar several times, and the crises that led to that, especially Kashmir, remain. Both India and Pakistan have refused to sign theNonProliferationTreaty, along withIsrael, and both of them have receivedUSsupport for development of their nuclearweaponsprograms, actually, until today, in the case ofIndia, which is now aUSally. War threats in theMiddleEast, which could becomeReality verysoon, once again escalate the dangers. Well, fortunately, there's a way out of this, a simple way. There's a way to mitigate, maybe end, whatever threat Iran is alleged to pose. Verysimple, Move towards establishing a nuclearweaponsfreezone in theMiddleEast. Now, the opportunity is coming again this december. There's an international conference scheduled to deal with this proposal. It has overwhelming international support, including, incidentally, a majority of the population inIsrael. That's fortunately. Unfortunately, it's blocked by theUnitedStates and Israel. A couple of days ago, Israel announced that it's not going to participate, and it won't consider the matter until there's a general regional peace. Obama takes thesamestand. He alsoinsists that any agreement must excludeIsrael and even must exclude calls for other nations, meaning theUS, to provide information about israeli nuclearactivities. TheUnitedStates and Israel can delay regional peace indefinitely. They've been doing that for thirtyfiveyears onIsraelPalestine, virtual international isolation. It's a long, important story that I don't have time to go into here. So, therefore, there's no hope for an easy way to end what theWest regards as themostsevere current crisis. No way unless there's largescale public pressure. But there can't be largescale public pressure unless people at least know about it. And theMedia have done a stellar job in averting that danger: nothing reported about the conference or about any of the background, no discussion, apart from specialistarmscontroljournals where you can read about it. So, that blocks the easy way to end theworst existing crisis, unless people somehow find a way to break through this. Well, turning to the election, there’s an unanimity in ignoring all of this, not a word. Theonlyissue discussed is, Should theUnitedStates agree withIsrael’sposition? Israel’sposition is that theUS should establish a redline. A redline should be iranian capability to produce nuclearweapons, the capability vast number of countries have. So if they reach capability, we should bomb them. That’s Israel’sposition. It’s also the position oftheUSSenate. A couple of days ago, Senate declared that ninety-to-one, theoneexception was RandPaul, ninety-to-one, theUnitedStates must acceptIsrael’sposition, establish a redline at capability, contrary to theWhiteHouse. Well, that’s themostimportant international issue. There’s also quite crucial domestic issues. Themostserious is there are roughlytwentythreemillionspeople unemployed, underemployed, or just given up. That’s a real catastrophe for the people themselves. Their lives are destroyed, their families are destroyed, and for theEconomy huge resources notused. That does enter the election. The republicans have an answer to this. We should enrich the rich. You don’t use the word rich anymore. There’s an euphemism. They’re called the jobcreators. Sound of laughter. They don’t create any jobs, but that’s the way you refer to the rich. Sometimes they’re called the makers, not the takers. So who are the takers? Well, that’s easy. The big bank are, for example, enormous takers. They get thirtybillionsUSD a year from just theGovernmentinsurancepolicy alone, toobigtofailpolicy. Some estimate it about sixtybillionsUSD. Superrich are incredible takers. You just take a look at the taxbreaks. Taxbreaks amount to more than sevenpercent ofGDP, GrossDomesticProduct. That’s twofifth as large as the entire federalGovernment. The taxbreaks are overwhelminglyregressive, favouring the rich. And how do they achieve that nice outcome? “By lobbying-heavily and -systematically, contributing to politicalcampaigns.” I’m quoting that radical rag, ForeignAffairs. There are many other regressive devices, PattonLaws designed to radicallyincrease the price of drugs, and others. Researchandevelopmentprocurement, old techniques for enriching the private sector. Particularlysignificant since the1970s, big change in the way theEconomy works then. Particularlysignificant since then are financialinstitutions. There is a role for banks in aState-capitalistEconomy. So for example, what a bank is supposed to do is, take your deposit, and decide to lend it somebody who wants to do something with it, like you know, buy a car, send the kids to college, start a business, buy a house, whatever it might be. That’s the function of banks. And it was prettywell filled during the great growthperiod, sometimescalled the golden age, [19]50s and [19]60s, enormous growthperiod prettyegalitarian. At that time, theNewDeallegislation still prevailed, including a fair amount of regulation, so there were no financial crisis. Since the1970s, that’s all changed. There’s been a huge explosion of financialinstitutions, mostlydedicated to financial manipulations. Take a look at the businesspage of theNewYorkTimes today. There’s a big debate about whether they should be some regulation on superfast automated trading, you know, when you cut the trade by microsecond or something, maybe beat somebody else out, which is causing all kinds of problems. And Europe, Australia and Canada are trying to clam down on it, theUnitedStates is hanging back, but there’s plenty of this. By2007, financialinstitutions literallyreached fortypercent of corporateprofits. What’s the impact of this on theEconomy? Actually, before the recent crash, there was verylittle study of it. The reason is there was a kind of religious doctrine. Doctrines is, Markets know best, so it had to be beneficial. So you’re a welltrained economist, you just don’t look at it. After the crash, there was a kind of a change of mood somewhat. So prominent international economist wrote, I’m quoting, “An emerging consensus is developing among the economists on the need for macrocredential supervision of financialmarkets. There’s a growing recognition that our financialsystem is running a doom’sdaycycle. Whenever it fails, we rely on black’smoney and fiscalpolicy to bail it out. This response teaches the financialsector a lesson, Take large gambles to get paidhandsomely, and don’t worry about the costs. They’ll be paid by the taxpayers through bailsouts and lost jobs. And the financialsystem is thus resurrected to gamble again and to fail again.” I’m quotingBarryEichengreen and SamuelJohnson, an economist among you all know that they are among themostrespected financial and international economists. The system is a “doomloop” in words of the official of theBankOfEngland, who is responsible for the financial stability. After the crisis, a number of veryprominent economists did start to write about it. There’s an issue of the journal ofAcademyOfArtsAndScience that had articles byBenjaminFriedman atHarvard, RobertSolo-w atMIT, aNobellaureat, they both pointed out that there haven’t been much in the way of study of impact of financialinstitutions. They didn’t say why, but the reason is theReligion. And they said, if you look at it, they said, When you look at it carefully, it looks like they impose a significant costs onEconomy. Themostrespected commentator in the englishspeaking world, MartinWolf oftheFinancialTimes, he went wellbeyond that. He said, “Outofcontrol financialsector is eating out modernEconomy from the inside, just as the larva of the spiderwasps eats out the host which it has been laid. Banks as presentlyconstituted and  managed cannot be trusted to perform any publiclyimportant function. Today’sbanks represent the incarnation of profitsseeking behaviour, taken to its logical limits in which theonlyquestion asked by the senior staff is, What can they get away with?” That’s not a spokesperson for theOccupyMovement. It’s themostrespected financial correspondent in theenglishspeaking world, quite conservative MartinWolf. Actually, there’s a study by two leading economists, one of  them nobel laureats, Paul** and George**, who found that themostlucrative strategy for executives at big bank would be to loot them to pay themselves, knowing fullwell that theGovernment, meaning the taxpayer, moved in to save them from bankruptcy. That was twentyyearsago. It’s a lot worse today. There are some limited steps to try to deal with this, but they are being beaten back byArmies of lobbyists. Well, that’s the takers. What about the makers, the workingpeople? They’re under constant attack. Fiscalpolicies and tradepolicis are designed to undermine manufacturing to set workers in competition with each other around the world, with the poorest to drive down the wages. Meanwhile, to protect the professionals, they are given all kinds of protections. They’re not supposed to compete. Unions are under terrific attack. It’s been going on since the1940s, but in the last generation, it’s been veryharsh. Employers have been basicallytold they can violate theLaws at will, and of course, they’re following it. That was Reagan. Clinton which led to tripled firing of organisers illegally. Clinton added his own method, it was calledNAFTA. NAFTA gave opportunities for employers to threaten to move plants toMexico in order to break strikes. That’s illegal, of course, but when you have a criminalState, it’s fine to act illegal. [Accurate.] That under NAFTAstudy, that led to verysharp increase in breaking strikes illegally. By now, they practically don’t exist. Private sector unionisation is down to sevenpercent. Public workers have so far defended themselves, but they’re under terrific attack. I have no time to go into it, but I should mention that Obama takes part in it. All of this has been accelerated under strong rightwing backlash that took place, backlash against the[19]60s, took place in early[19]70s. Major change in the nature oftheEconomy towards financialisation leading to what I described and offshoring. That led veryquickly to concentration of wealth, concentration of wealth leads to concentration of politicalpower almostreflexively, that leads to legislation to enhance to process, the vicious cycle. Fiscalpolicy, deregulation, rules of corporate governance, quite a lot, so the vicious cycle goes on, and it leads to what theOccupy’sslogan, which has now become prevalent, onepercent-ninetyninepercentdistinction. Actually, onepercent is wrong. It’s morelike pointonepercent-versus-therest. If you look at incomedistributions, highlyconcentrated in the fraction of onepercent. CEOs, hedgefundmanagers, and so on. For the majority, it’s stagnation and decline. Meanwhile, cost of elections have skyrocketed. SupremeCourt just has given its help a couple of times. There are studies of outcome by some verygood politicalscientists. Themostrecent one, a good book byMartinGilens concludes that seventypercent of the public are “powerless to shapeGovernmentpolicy,” his phrase. Meanwhile, the rich get what they want, and theMechanisms are by no means obscure. This has changed the politicalparties. The republicans some time ago abandoned any pretense of being a normal parliamentary party, they’re just dedicated lockstep, with the kind of cathechism everyone has to repeat, towards the service to the superrich and corporatesector. You can’t get votes that way. So they’ve been compelled to mobilise the sectors of the population that have alwaysbeen there and are substantial, but were neverpoliticallymobilised before. TheUnitedStates is, as you know, unusuallyreligious [and] fundamentalist country, off the international spectrum. I mean, almost half of the population thinks the world was created a couple of thousand years ago, with all the fossils and everything else. Sound of laughter. About a third of the population believes that every word in theBible is literallytrue. Twothirds expect theSecondComing, half of them in their lifetime, and on and on. I don’t think there’s anything like this close to it anywhere in the world. That goes far back. Actually, goes to the colonists, but it’s alwaysbeen there. It’s neverreallybeen mobilised as a politicalforce. Now, it is, and for good reasons. You’ve got to get voters somehow. There is also a nativist tradition. People are afraid that they’re coming after us. It’s amazing to watch. So RandPaul, who is a young libertarian hero in theSenate. Right now, he’s organising a campaign to try to get people to block theSmallArmsTreaty at theUnitedNations. It’s an important treaty. Small arms are massacring people all over the world. Almosteightypercent of them come from theUnitedStates. He has a rationale. He says that theArmsControlTreaty is a plot by theUnitedNations and the socialist radicals [like]-Obama and -Clinton to try to take away our arms. So when theUN comes to attack us, we won’t be able to defend ourselves. Sound of laughter. You can’t find this anywhere in the world, you know. Nothing remotelylike it. But these sectors are there, they’ve been around, it’s an old tradition. They’re now being mobilised, because there’s no other way to get votes. And that’s why you get what you’ve just seen in republican primaries. I mean, near lunacy. People in the rest of the world are looking at this, and can’t believe what’s happening to the country. Well, what’s happening is quite understandable. When one of the politicalparties abandons any pretense of being a parliamentary party, just serves the superrich, lockstep-uniformity. There’s no other way for them to survive. They’ve got to mobilise these sectors to get votes. That’s what’s happening. It’s commonlysaid that moderate republicans have disappeared, which is notquite true. They’re now centrist democrats. And DemocraticParty has veered to the right as well, seeking thesamecorporatedollars, not quite as fast. There’s a recent study byEconomicPolicyInstitute, that’s major source of reliable information and analysis of theEconomy. The recent study is calledFailureByDesign. It reviews the data simple. It’s worth reading. It’s a verysimple presentation of a lot of data. It reviews the data on the impact of the socalled neoliberal policies in the past generation, which includes astonishing concentration of wealth, while wages and incomes have stagnated or declined, workinghours have increased far beyondEurope. The weak benefitsystem has eroded. This, incidentally, in the therichest and themostpowerful in theHistory with extraordinary advantages. The authors of the study point out that the failure that they refer to is classbased. So the designers, they’ve achieved spectacular success. And they alsostress that it is designed, that is, there have been alternative policies, they’re alwayspossible, they stillare, but it will take the kind of activism that brought about theNewDeal, progressive steps in the[19]60s, back in the muchearlier days, in order to do something about this. Progress doesn’t come as the gift from above. PostgoldenageEconomy, the one reviewed by this pamphlet, it’s actuallyenacting a nightmare that was envisaged by the classical economists, AdamSmith and DavidRicardo. Both of them recognised, they’re talking aboutEngland, of course, they recognised that if british merchants and manufacturers invested abroad and relied on imports, they would profit, but England would suffer. Both of them hoped that these consequences would be averted by what’s called in the literature homebias, that is, the preference to do business in the homecountry, and see the homecountry grow and develope. “Therefore, as if by invisible hand, England would be saved from the ravages of the globalmarkets.” Actually, that’s theoneoccurence of the famous phrase, InvisibleHand, inSmith’sclassic, TheWealthOfTheNations. It’s prettyhard to miss. It’s theonlyoccurrence. And it’s basically an argument against neoliberal globalisation. DavidRicardo, successor, hoped that, thanks to homebias, I’m quoting him now, “most men of property would be satisfied with the low rate of profits in their own country, rather than seek a moreadvantageous employment for their wealth in foreign nations, feelings that I would be sorry to see weakened.” Samepoint essentially. Actually, that one was brought to light, I didn’t know it before, an important book on globalisation that was produced here byPoliticalEconomyResearchInstitute. In the past thirtyyears, (AdamSmith’s masters of mankind) have abandoned sentimental concerns for the welfare of their own society, concentrating instead on shortterm gain, huge bonuses, the country be damned, as long as the powerful nannySate remains intact to serve their interests. The developing picture is veryaptlydescribed in a brochure for investors that was produced byCitiGroup, a huge investment bank, and so on, once again feeding into publicprofits. That’s been doing that regularly for thirtyyears in a cycle of risky loans, huge profits, crash, bailout by the public. Banksanalysts, in a brochure for investors, they describe the world that’s dividing into twoblocks. One of which which they call plutonomy, then there’s the rest, the vast majority. Now sometimes, they’re called the global precariat, those who are living a precarious existence whether or not they’re luckyenough to get employment. In theUnitedStates, they’re subject to growing workerinsecurity. That, if you didn’t know, is the basis for the healthyEconomy. FederalReservechair, AlanGreenspan, explained that toCongress while he was lauding his performance in economic management. Actually, that’s the real shift in globalsociety. Not to-China and -India, but to global plutonomy. And CitiGroupanalysts understand it. They advised investors to focus on the veryrich, where all the action is. They have something called the plutonomystockbasket, which is the investment on things that the rich want. And they point out that it’s far outperform old index of developed markets since1985. That’s when theReaganThatcher economic programs of enriching the veryrich and punishing the rest were taking off.  And by shredding the remnants of politicalDemocracy, the master alsolay the basis for carrying the lethal process forward, and will continue to do so as long as their victims are willing to suffer in silence, which is always a choice, never a necessity. Thanks.

No comments:

Post a Comment