Power Lies in Private Control of the Economy

It is extremely difficult to look in the mirror, at ourselves and at our country, even more so for those of us who have served in the military.

But, if we do not start to understand the world, we will not survive. We need democracy to deal with this crisis. We need to understand how little democracy we have in the United States and how the “national interest” of corporations have ruthlessly destroyed any outbreak of democracy in client countries of the world.

Most of you likely strongly disagree and are furious. But nature is not affected by your feelings, only by the destructive actions of our economic/political/cultural system. The survival of our children is at stake. Now we need courage to examine ourselves and our impact on the world.

In the United States and other so-called “Western democracies” the real power lies with the people who control the economy, the people at the top of corporations and with accumulated wealth. Our free market, capitalist economy is not democratic but the people at the top of this economic hierarchy have the power and, except for minor issues that do not affect them, the governments serve their interests. With money they can deceive, manipulate and buy elections or buy the candidate after elected.

Note that in the 1896 election, presidential candidate William Jennings Bryan was the first major threat to wealthy capitalists, and for the first time in our history, they gave large campaign donations to his opponent, William McKinley, playing a decisive role in McKinley’s victory (read United States Empire Crossed the Oceans in 1898 and War Is A Racket, by Major General Smedley Butler, 1935).

With wealth they pay government or private covert agencies to entrap and extort people and countries to serve them. This is likely why Epstein is dead, because in court he might expose the high level people, like Clinton, Trump and Prince Andrew and Epstein’s ties to our intelligence services. He just committed suicide and the prison video just happens to be lost.

So direct democracy gives people more power than representative democracy, but neither give much unless the economy is also democratized.

A green new deal is necessary but insufficient because it will be manipulated for corporate profit and will have little impact on the climate emergency unless we gain democracy in both government and the economy.


Failed States : The Abuse of Power and the Assault on Democracy

2006 by Noam Chomsky

Preface

the prospects for decent survival. Among them are at least these three: nuclear war, environmental disaster, and the fact that the government of the world’s leading power is acting in ways that increase the likelihood of these catastrophes

The selection of issues that should rank high on the agenda of concern for human welfare and rights is, naturally, a subjective matter. But there are a few choices that seem unavoidable, because they bear so directly on the prospects for decent survival. Among them are at least these three: nuclear war, environmental disaster, and the fact that the government of the world’s leading power is acting in ways that increase the likelihood of these catastrophes. It is important to stress the government, because the population, not surprisingly, does not agree. That brings up a fourth issue that should deeply concern Americans, and the world: the sharp divide between public opinion and public policy, one of the reasons for the fear, which cannot casually be put aside, that “the American ‘system’ as a whole is in real trouble—that it is heading in a direction that spells the end of its historic values [of] equality, liberty, and meaningful democracy.”

One is their inability or unwillingness to protect their citizens from violence and perhaps even destruction. Another is their tendency to regard themselves as beyond the reach of domestic or international law, and hence free to carry out aggression and violence

The “system” is coming to have some of the features of failed states, to adopt a currently fashionable notion that is conventionally applied to states regarded as potential threats to our security (like Iraq) or as needing our intervention to rescue the population from severe internal threats (like Haiti). Though the concept is recognized to be “frustratingly imprecise,” some of the primary characteristics of failed states can be identified. One is their inability or unwillingness to protect their citizens from violence and perhaps even destruction. Another is their tendency to regard themselves as beyond the reach of domestic or international law, and hence free to carry out aggression and violence. And if they have democratic forms, they suffer from a serious “democratic deficit” that deprives their formal democratic institutions of real substance.

Among the hardest tasks that anyone can undertake, and one of the most important, is to look honestly in the mirror. If we allow ourselves to do so, we should have little difficulty in finding the characteristics of “failed states” right at home. That recognition of reality should be deeply troubling to those who care about their countries and future generations. “Countries,” plural, because of the enormous reach of US power, but also because the threats are not localized in space or time.


Understanding Power: The Indispensable Chomsky


2002 by Noam Chomsky, Peter Rounds Mitchell, and John Schoeffel

Teach-In: Over Coffee
Based primarily on discussions at Rowe, Massachusetts, April 15–16, 1989.

[page 84]

Democracy Under Capitalism

MAN: You mentioned that we’re going to need participatory social planning to save the environment. I’m wondering, doesn’t decentralization of power also somehow conflict with trying to save the environment—I mean, that can’t be done without some sort of central agreement, don’t you think?

Well, the interest of the general population is to preserve human life; the interest of corporations is to make profits—those are fundamentally different interests.

Well, first of all, agreements don’t require centralized authority, certain kinds of agreements do. One’s assumption, at least, is that decentralization of power will lead to decisions that reflect the interests of the entire population. The idea is that policies flowing from any kind of decision-making apparatus are going to tend to reflect the interests of the people involved in making the decisions—which certainly seems plausible. So if a decision is made by some centralized authority, it is going to represent the interests of the particular group which is in power. But if power is actually rooted in large parts of the population—if people can actually participate in social planning—then they will presumably do so in terms of their own interests, and you can expect the decisions to reflect those interests. Well, the interest of the general population is to preserve human life; the interest of corporations is to make profits—those are fundamentally different interests.

MAN: In an industrial society, though, one might argue that people need to have jobs.

the need to make sure your children survive, and soon and so forth. But those are all considerations that simply don’t arise for corporate executives, they just are not a part of the agenda. In fact, if the C.E.O. of General Electric started making decisions on that basis, he’d be thrown out of his job in three seconds

Sure, but having jobs doesn’t require destroying the environment which makes life possible. I mean, if you have participatory social planning, and people are trying to work things out in terms of their own interests, they are going to want to balance opportunities to work with quality of work, with type of energy available, with conditions of personal interaction, with the need to make sure your children survive, and soon and so forth. But those are all considerations that simply don’t arise for corporate executives, they just are not a part of the agenda. In fact, if the C.E.O. of General Electric started making decisions on that basis, he’d be thrown out of his job in three seconds, or maybe there’d be a corporate takeover or something—because those things are not a part of his job. His job is to raise profit and market share, not to make sure that the environment survives, or that his workers lead decent lives. And those goals are simply in conflict.

MAN: Give us an example of what exactly you mean by social planning.

Well, right now we have to make big decisions about how to produce energy, for one thing—because if we continue to produce energy by combustion, the human race isn’t going to survive very much longer.

Well, right now we have to make big decisions about how to produce energy, for one thing—because if we continue to produce energy by combustion, the human race isn’t going to survive very much longer.50 Alright, that decision requires social planning: it’s not something that you can just decide on yourself. Like, you can decide to put a solar-energy something-or-other on your own house, but that doesn’t really help. This is the kind of decision where it only works if it’s done on a mass scale.

MAN: I thought you might have been referring to population control.

The trouble is, that’s the way that capitalism works. The nature of the system is that it’s supposed to be driven by greed; no one’s supposed to be concerned for anybody else, nobody’s supposed to worry about the common good

Yeah, population control is another issue where it doesn’t matter if you do it, everybody has to do it. It’s like traffic: I mean, you can’t make driving a car survivable by driving well yourself; there has to be kind of a social contract involved, otherwise it won’t work. Like, if there was no social contract involved in driving—everybody was just driving like a lethal weapon, going as fast as they can and forgetting all the traffic lights and everything else—you couldn’t make that situation safe just by driving well yourself: it doesn’t make much difference if you set out to drive safely if everybody else is driving lethal-weapon, right? The trouble is, that’s the way that capitalism works. The nature of the system is that it’s supposed to be driven by greed; no one’s supposed to be concerned for anybody else, nobody’s supposed to worry about the common good—those are not things that are supposed to motivate you, that’s the principle of the system. The theory is that private vices lead to public benefits—that’s what they teach you in economics departments. It’s all total bullshit, of course, but that’s what they teach you. And as long as the system works that way, yeah, it’s going to self-destruct.

What’s more, capitalists have long understood this. So most government regulatory systems have in fact been strongly lobbied for by the industries themselves: industries want to be regulated, because they know that if they’re not, they’re going to destroy themselves in the unbridled competition.51

MAN: Then what kind of mechanism for social planning do you think would work? Obviously you’re not too sanguine about our current form of government.

Well, there’s nothing wrong with the form—I mean, there are some things wrong with the form—but what’s really wrong is that the substance is missing. Look, as long as you have private control over the economy, it doesn’t make any difference what forms you have, because they can’t do anything. You could have political parties where everybody gets together and participates, and you make the programs, make things as participatory as you like—and it would still have only the most marginal effect on policy. And the reason is, power lies elsewhere.

So suppose all of us here convinced everybody in the country to vote for us for President, we got 98 percent of the vote and both Houses of Congress, and then we started to institute very badly needed social reforms that most of the population wants. Simply ask yourself, what would happen? Well, if your imagination doesn’t tell you, take a look at real cases. There are places in the world that have a broader range of political parties than we do, like Latin American countries, for example, which in this respect are much more democratic than we are. Well, when popular reform candidates in Latin America get elected and begin to introduce reforms, two things typically happen. One is, there’s a military coup supported by the United States. But suppose that doesn’t happen. What you get is capital strike—investment capital flows out of the country, there’s a lowering of investment, and the economy grinds to a halt.

That’s the problem that Nicaragua has faced in the 1980s—and which it cannot overcome, in my view, it’s just a hopeless problem. See, the Sandinistas have tried to run a mixed economy: they’ve tried to carry out social programs to benefit the population, but they’ve also had to appeal to the business community to prevent capital flight from destroying the place. So most public funds, to the extent there are any, go as a bribe to the wealthy, to try to keep them investing in the country. The only problem is, the wealthy would prefer not to invest unless they have political power: they’d rather see the society destroyed. So the wealthy take the bribes, and they send them to Swiss banks and to Miami banks—because from their perspective, the Sandinista government just has the wrong priorities. I mean, these guys hate democracy just as much as Congress hates democracy: they want the political system to be in the hands of wealthy elites, and when it is again, then they’ll call it “democracy” and they’ll resume investing, and the economy will finally start to function again.

real power does not happen to lie in the political system, it lies in the private economy

Well, the same thing would happen here if we ever had a popular reform candidate who actually achieved some formal level of power: there would be disinvestment, capital strike, a grinding down of the economy. And the reason is quite simple. In our society, real power does not happen to lie in the political system, it lies in the private economy: that’s where the decisions are made about what’s produced, how much is produced, what’s consumed, where investment takes place, who has jobs, who controls the resources, and so on and so forth. And as long as that remains the case, changes inside the political system can make some difference—I don’t want to say it’s zero—but the differences are going to be very slight.

In fact, if you think through the logic of this, you’ll see that so long as power remains privately concentrated, everybody, everybody, has to be committed to one overriding goal: and that’s to make sure that the rich folk are happy—because unless they are, nobody else is going to get anything. So if you’re a homeless person sleeping in the streets of Manhattan, let’s say, your first concern must be that the guys in the mansions are happy—because if they’re happy, then they’ll invest, and the economy will work, and things will function, and then maybe something will trickle down to you somewhere along the line. But if they’re not happy, everything’s going to grind to a halt, and you’re not even going to get anything trickling down. So if you’re a homeless person in the streets, your first concern is the happiness of the wealthy guys in the mansions and the fancy restaurants. Basically that’s a metaphor for the whole society.

Like, suppose Massachusetts were to increase business taxes. Most of the population is in favor of it, but you can predict what would happen. Business would run a public relations campaign—which is true, in fact, it’s not lies—saying, “You raise taxes on business, you soak the rich, and you’ll find that capital is going to flow elsewhere, and you’re not going to have any jobs, you’re not going to have anything.” That’s not the way they’d put it exactly, but that’s what it would amount to: “Unless you make us happy you’re not going to have anything, because we own the place; you live here, but we own the place.” And in fact, that’s basically the message that is presented, not in those words of course, whenever a reform measure does come along somewhere—they have a big propaganda campaign saying, it’s going to hurt jobs, it’s going to hurt investment, there’s going to be a loss of business confidence, and so on. That’s just a complicated way of saying, unless you keep business happy, the population isn’t going to have anything.

MAN: What do you think about nationalization of industry as a means of allowing for this kind of large-scale social planning?

if nationalization of industry was based on actual popular control over industry—workers’ control over factories, community control, with the groups maybe federated together and so on—then that would be a different story. That would be a very different story, in fact. That would be extending the democratic system to economic power, and unless that happens, political power is always going to remain a very limited phenomenon.

Well, it would depend on how it’s done. If nationalization of industry puts production into the hands of a state bureaucracy or some sort of Leninist-style vanguard party, then you’d just have another system of exploitation, in my view. On the other hand, if nationalization of industry was based on actual popular control over industry—workers’ control over factories, community control, with the groups maybe federated together and so on—then that would be a different story. That would be a very different story, in fact. That would be extending the democratic system to economic power, and unless that happens, political power is always going to remain a very limited phenomenon.