Democracy vs. democracy: How Neoliberalization
Has Established the Basis for a Revolution
In an exposition that brings to mind images from George Orwell’s Animal Farm, Chomsky demonstrates how neoliberal technocrats claim to espouse democratic ideals while practicing the complete opposite of what they say they stand for. Perhaps one of the most scathing criticisms of the dominant world order, Profit over People attempts to bare the facts beneath the aggrandized ideas of neoliberal and free enterprise economics that Chomsky argues is responsible for the unprecedented amassing of wealth for few in one hand, and the worsening impoverishment of the majority in the other. While this situation has put the latter in a disadvantaged situation, Chomsky claims that this also makes the former vulnerable to rebellion and revolutions. His arguments are encapsulated in the following statement during the early part of the book:
There have been many experiments in economic development in the modern era, with regularities that are hard to ignore. One is that the designers tend to do quite well, though the subjects of the experiment often take a beating.
The new global (dis)order
Chomsky establishes the basis for this argument by tracing the historical background of the United States’ ascent to superpower status and the social and economic conditions that precluded it, noting that the U.S. and Japan who both evaded colonization by Europe were the first countries apart from Europe itself to rapidly industrialize. He contends, and here one senses undertones of Lenin’s theory of Uneven Development, that these economies were able to grow precisely by “radically violating approved free market doctrine” which the U.S. has been rabidly selling to poorer countries in the World Trade Organization.
That economic power, according to Marxist theory, begets political power, is reflected in the presentation of the U.S. neoliberal economy as being able to dictate almost all aspects of life in the world, including major policies and development focus. The U.S. being one of the wealthiest nations affords it the power to intervene in the economic, political, and cultural decision-making of other nations.
The utilization of structural theories is also evident in Chomsky’s explanation on how the United States emerged as a major superpower after the first world war and even consolidated its strength as the second world war ended: through the use of both interventionist and “gloved” strategies to further its interest in a classic carrot-and-stick approach. This meant establishing the United Nations and several rather multi-lateral and uni-lateral organizations such as the International Monetary Fund and the World Bank whose role was to ensure the interests of American business in poor but willing countries through structural adjustment programs in exchange for much needed aid.
While it dangles aid to friendly and cooperative countries, it threatens with war and coercive means those who do not conform to the needs of U.S. business interest, as demonstrated by what the author calls as “defensive action to protect ‘the welfare of the world capitalist system” in countries deemed too democratic for the unstiffled growth of business and profit for multi-nationals and transnational corporations. Chomsky wryly notes that the economic technocrats of the free enterprise likewise see no harm in using both covert and overt force in ensuring “stability” in countries where it has business interest, which the author says means “security for the upper classes and large foreign enterprises whose welfare must be preserved.”
The new global order is therefore one that is based on center-periphery connections with the United States as the center of power and poor, backward nations serving as its satellites—resembling Andre Gunder Frank’s Dependency theory in the 1950s—wherein the latter’s impoverishment is largely brought about by a ballooning trade deficit incurred from dependence on capital goods and technology imports from the former while its resources are exported to the center as raw materials. Eric Foner (2003) echoes the same sentiments when he remarked in an article in the New York Times titled Not all Freedom is Made in America that “the prevailing ideology of global free enterprise — one element of freedom identified as timeless and universal in the National Security Strategy — assumes that the economic life of all countries can and should be refashioned in the American image,” which is “the latest version of the nation’s self-definition as a model for the entire world.”
The question of democracy
However, the dominance of private, business interest in the government creates a disjunction between private and public interest and necessarily alienates the state from the people. In such a situation, the so-called ‘democratic’ state becomes a parody of itself since it subverts the very ideals from which was established. Chomsky notes that in the process of consolidating its power, it has become necessary for the state to suppress dissenting opinion either by brute force or by propagating a large propaganda machinery that kept its people ignorant about real issues by distorting facts at will. He observed that “the more “free and popular” a government, the more it becomes necessary to rely on control of opinion to ensure submission to the rulers.”
To enable the public to maintain positive perception of the state, they are intentionally kept away from participating and engaging in politics. This has been difficult, however, as discerning populations could easily tell the truth from the lies. Chomsky relates that:
One issue remained to be settled Who owns the country? The question was answered by the rise of private corporations and the structures devised to protect and support them, though it remains a difficult task to compel the public to keep to the spectator role.
It takes great effort, however, to rouse the greater majority in advanced countries from its stupor especially when the billion-dollar mass media industry works overtime to reinforce the states’ myth-creation. The growth of the consumerist culture also contribute to molding citizens into apathetic and heavily individualistic personalities who believe that their greatest role in political decision-making is merly in casting the vote. Herein lie the basic problem of democracy, notes Chomsky, since the state is used by those in power to gain more power for themselves, thereby rendering the political and supposedly democratic exercise of voting a farce—that is, having to choose between the lesser evil instead of exorcising it from public office:
The elected officials of the country, most of whom belong to the elite and therefore are custodians of the free-enterprise interests, can then claim to speak for the majority of the people by blessings of the solid backing of the vote. They also claim to represent the voice of the minority, to which Chomsky scoffs as the “minority of the opulent” and not of the poor or marginalized.
The biggest casualty therefore is democracy itself. Chomsky cites the Columbian experience to demonstrate how the United States government tolerates and even supports fascist regimes and state terrorism in order to curtail the growth of dissent that may lead to harmful business environments:
The champion human rights violator in the hemisphere is Colombia, also the leading recipient of U.S. military aid and training in recent years. The pretext is the “drug war,” but that is “a myth,” as regularly reported by major human rights groups, the church, and other who have investigated the shocking record of atrocities and the close links between the narcotraffickers, landowners, the military, and their paramilitary associates. State terror has devastated popular organizations and virtually destroyed the one independent political party by assassination of thousands of activists, including presidential candidates, mayors, and others. Nonetheless Colombia is hailed as a stable democracy, revealing again what is meant by “democracy.”
This is explained by Chomsky’s contention in Secrets, Lies, and Democracy, that “any form of concentrated power doesn’t want to be subjected to popular democratic control — or, for that matter, to market discipline” because they don’t want external constraints on their capacity to make decisions and act freely.”
The irony of “free market” enterprise
The economic and political trappings of the new social order, however, are betrayed by the fact that giant multinational and transnational businesses dominate almost all aspects of business, enabling them to influence and set the trends in pricing, marketing, and even the creation of demands. Lenin in Imperialism correctly predicted that capitalism will ultimately end up defeating the “free market” principle in its frenzy to amass profit.
Indeed this is most clearly seen in the collapse of the WTO rounds which primarily aims to strip the markets of poorer nations of its only remaining protection against unfair competition from cheap imported goods that are products of what Lenin called the ‘crisis of production’ in major capitalist economies. In an ironic twist, while these richer countries are bullish about trade liberalization and the dismantling of trade barriers or trade blockages on their products, their own policies are smacking of protectionism.
A case in point illustrated by Chomsky is the institution of ‘reforms’ in Haiti which systematically reversed its self-sustaining economy into one that depended on rice importation—a product which was locally grown—while at the same time gearing for the export of its products abroad. As a result, according to the author, the domestic rice farmer was “forced to turn to the more rational pursuit of agro-export for the benefit of U.S. investors, in accord with the principles of rational expectations theory.”
The same conditions have been observed in
The fallacy of social equality
It is therefore understandable that Chomsky is highly pessimistic about the positive effects of globalization which neo-liberals contend will enable the development of backward and cash-strapped economies. According to Rucht (2000), the biggest criticism of neo-liberalization or globalization is that “first, globalization, whether intended or not, widens the gap between the rich and the poor, destroys indigenous cultures, and increases the exploitation of human and natural resources. Second, globalization escapes the control of (national) political institutions and, by this, also incapacitates the people as the democratic sovereign.”
Indeed, adherence to neo-liberal policies has resulted in catastrophic levels of greenhouse gasses and unabated use of non-renewable resources. The drive for competition in the interest of profit necessitates the exploitation of both natural and human resources to the maximum while keeping costs, which include wages, depressed that creates increased social inequalities. Chomsky supports this argument with the Haiti case wherein “the most impoverished country in the hemisphere has been turned into a leading purchaser of U.S.-produced rice, enriching publicly subsidized U.S. enterprises.” He dismisses the counterargument by remarking that “those lucky enough to have received a good Western education can doubtless explain that the benefits will trickle down to Haitian peasants and slum dwellers-ultimately.”
Furthermore, it has also been observed by Reich (2000) that the recent phenomenon of the “integration of the world market” has also intensified greater labor exploitation and flexibilization, wherein high unemployment levels in Third World countries provide giant businesses with cheap solutions for outsourcing employment, affecting even the working class of industrialized nations. This observation is shared by Chomsky who
The Inevitable: Revulsion and Revolution
The failure of the neo-liberal economic theory to deliver on its promises of development and amelioration for the poor is therefore due to the fact that it was never meant to serve the interest of the poor in the first place. Chomsky demonstrates this by pointing out to the Mexican experience with the NAFTA which they ultimately saw as “a gift to the rich that will deepen the divide between narrowly concentrated wealth and mass misery, and destroy what remains of the indigenous society.”
The inevitable consequence of the continued impoverishment is the polarization of the elite and the marginalized. This is shown in the struggle of the Zapatistas for “for work, land, housing, food, health care, education, independence, freedom, democracy, justice, and peace” which was brought about by the “complete marginalization and poverty and the frustration of many years trying to improve the situation.” Faced with tremendous pressure for survival, there is no other choice left for the disenfranchised majority but to organize their ranks into a formidable force and voice of opposition.
Chomsky’s tone in the last part of the book is therefore a warning of impending social uprising borne out by the discontent and clamor for change of those who feel that they have been short-changed by the neo-liberalist agenda:
A similar chord was struck worldwide, including the rich industrial societies, where many people recognized the concerns of the Zapatistas to be not unlike their own, despite their very different circumstances.
Here he also presents an encouragement for the poor and marginalized to organize themselves and to contribute to the resurgence of worldwide activism which he thinks will weaken the efforts of the state to use brutal force against uprisings:
Support was further stimulated by imaginative Zapatista initiatives to reach out to wider sectors and to engage them in common or parallel efforts to take control of their lives and fate.
More than anything, therefore, Profit over People is not merely an economic analysis but a forecast of things to come as a result of years of exploitation and broken dreams, which is the sharpening of the distinction between the ruling and the aggrieved class which gives “a bare glimpse of “time bombs” waiting to explode, not only in Mexico.”