Noam Chomsky on Crisis and Hope: Theirs and Ours

12 Jul 2009

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MIT professor, author and dissident intellectual Noam Chomsky, spoke at the Riverside Church in Harlem on June 12, 2009 at an event sponsored by the Brecht Forum. More than 2,000 people packed into the Church to hear his address, titled "Crisis and Hope: Theirs and Ours." In his talk, Chomsky discussed the global economic crisis, the environment, wars in Iraq, Afghanistan and Pakistan, resistance to American empire and much more.

Democracy Now recorded the event on camera and provide a transcript of his speech below. The video clip featured in this post is the first of six, which cover his entire talk. To find links to the clips covering the rest of Prof. Chomsky's speech, please scroll to the end of this post.

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AMY GOODMAN: Today, a Democracy Now! special with one of the most important dissident intellectuals of our time, Noam Chomsky.

Born December 7th, 1928, in Philadelphia, by the age of ten he was writing an extended essay against fascism and about the Spanish Civil War. At fourteen, he was in New York, getting his education, as he tells it, in the back of the 72nd Street subway station, where his uncle ran a newspaper stand. The front of the subway station, that’s where people ran in and out buying newspapers quickly. But at the back, a little less trafficked, that’s where people stopped and had political discussions about the news in the papers they did or didn’t buy. 

At sixteen, he was at the University of Pennsylvania, where he got his doctorate. He became a professor of linguistics at the Massachusetts Institute of Technology at the age of twenty-six. He remained there for more than half a century and continues to teach there today. 

While Professor Chomsky broke new ground as a world-renowned linguist, shattering all previous paradigms, he was also taking on the war in Vietnam. Throughout his life, he spoke out against US imperialism, from Vietnam to the Indonesian occupation of East Timor, from the death squads in Latin America to the Israeli occupation of Palestine, and now to the wars in Iraq and Afghanistan.

Noam Chomsky turned eighty years old this past December. He has written over a hundred books. But despite being called "the most important intellectual alive today" by the New York Times, he is rarely heard or quoted in the mainstream media. 

Today we spend the hour with Noam Chomsky. He spoke recently here in New York at an event sponsored by the Brecht Forum. More than 2,000 people packed into the Riverside Church in Harlem to hear his address. The title of his talk, "Crisis and Hope: Theirs and Ours." This is Noam Chomsky.

Crisis and Hope: Theirs and Ours

NOAM CHOMSKY: Well, let me say a couple of words about the title, which, as always, is shorthand. There's too much nuance and variety to make any sharp distinction between us and them. And, of course, neither I nor anyone else can presume to speak for us. But I’ll pretend it's possible.

There's also a problem about the word "crisis." Which one do we have in mind? There are numerous very severe crises. Many of them will be under discussion here in a couple of weeks at the United Nations in their conference on the world financial and economic crisis. And these crises are interwoven in very complex ways which make it - which preclude any sharp separation. But again, I’ll pretend otherwise for simplicity.

Well, one way to enter this morass was helpfully provided by a current issue of the New York Review, dated yesterday. The front cover headline reads, "How to Deal with the Crisis." It features a symposium of specialists. And it’s worth reading, but with attention to the definite article: "the" crisis. For the West, the phrase "the crisis" has a clear enough meaning. It's the financial crisis that hit the rich countries and therefore is of supreme importance.

But, in fact, even for the rich and privileged, that’s by no means the only crisis or even the most severe of those they face. And others see the world quite differently. For example, the newspaper New Nation in Bangladesh. There, we read, "It's very telling that trillions have already been spent to patch up leading world financial institutions, while out of the comparatively small sum of $12 billion pledged in Rome earlier this year, to offset the food crisis, only $1 billion has been delivered. The hope that at least extreme poverty can be eradicated by the end of 2015, as stipulated in the UN’s Millennium Development Goals, seems as unrealistic as ever, not due to lack of resources but to a lack of true concern for the world’s poor." That's - they're talking about approximately a billion people facing starvation, severe malnutrition, even 30 or 40 million of them in the richest country in the world. That's a real crisis, and it's getting much worse.

In this morning's Financial Times, British business press, it’s reported that the World Food Program just announced that they're cutting food aid and rations and also closing operations. The reason is that the donor countries have been cutting back in funding because of the fiscal crunch, and they’re slashing contributions. So, a very close connection between the horrendous food crisis and poverty crisis and the significant, but less significant, fiscal crisis. They're ending up closing down operations in Rwanda, in Uganda, Ethiopia, many others. They have to - 20 to 25 percent cut in budget, while food prices are rising, and the financial crisis, the general economic crisis, is bringing unemployment and cutting back remittances. That’s a major crisis.

We might, incidentally, remember that when the British landed in what's now Bangladesh, they were stunned by its wealth and splendor. And it didn’t take very long for it to be on its way to become the very symbol of misery, not by an act of God.

Well, the fate of Bangladesh should remind us that the terrible food crisis is not just a result of Western lack of concern. In large part, it results from very definite and clear concerns of the global managers, namely for their own welfare. It's always well to keep in mind a astute observation by Adam Smith about policy formation in England. He recognized that what he called the "principal architects" of policy—in his day, the merchants and manufacturers - make sure that their own interests are most peculiarly attended to, however grievous the impact on others, including the people of England, but far more so those who were subjected to what he called the “savage injustice of the Europeans,” and particularly in conquered India, his own prime concern. We can easily think of analogs today. His observation, in fact, is one of the few solid and enduring principles of international and domestic affairs well to keep in mind.

And the food crisis is a case in point. It erupted first and most dramatically in Haiti in early 2008. Like Bangladesh, Haiti is a symbol of utter misery. And like Bangladesh, when the European explorers arrived, they were stunned because it was so remarkably rich in resources. Later it became the source of much of France’s wealth. I'm not going to run through the sordid history. It’s worth knowing. But the current food crisis traces back directly to Woodrow Wilson’s invasion of Haiti, which was murderous and brutal and destructive. Among Wilson’s many crimes was to dissolve the Haitian parliament at gunpoint, because it refused to pass what was called progressive legislation, which would allow US businesses to take over Haitian lands. Wilson’s marines then ran a free election, in which the legislation was passed by 99.9 percent of the vote. That's of the five percent of the population permitted to vote. All of this comes down to us as what’s called Wilsonian idealism.

Later, USAID instituted programs in Haiti to turn it - under the slogan of turning Haiti into the Taiwan of the Caribbean by adhering to the sacred principle of comparative advantage. That is, they should import from the United States, while working people, mostly women, slaved under miserable conditions in US-owned assembly plants.

Haiti's first free election in 1990 threatened these economically rational programs. The poor majority made the mistake of entering the political arena and electing their own candidate, Jean-Bertrand Aristide, a populist priest. And Washington instantly adopted standard operating procedures: the moving at once to undermine the regime. A couple of months later came the military coup, instituting a horrible reign of terror, which was backed by Bush, Bush I, and even more so by Clinton. By 1994, Clinton decided that the population was sufficiently intimidated, and he sent US forces to restore the elected president—that’s now called a humanitarian intervention—but on very strict conditions, namely that the president had to accept a very harsh neoliberal regime, in particular, no protection for the economy.

Haitian rice farmers are quite efficient, but they can’t compete with US agribusiness that relies on a huge government subsidy, thanks to Ronald Reagan’s free market enthusiasms. Well, there's nothing at all surprising about what followed next. In 1995, USAID wrote a report pointing out, and I'm quoting it, that "the export-driven trade and investment policy" that Washington mandated will "relentlessly squeeze the domestic rice farmer." In fact, the neoliberal policies rammed down Haiti's throat destroyed, dismantled what was left of economic sovereignty, drove the country into chaos, and that was accelerated by Bush Number Two's banning of international aid, on totally cynical grounds.

In February 2004, the two traditional torturers of Haiti—France and the United States—combined to back a military coup and send President Aristide off to Africa. The US denies him permission to return to the entire region. Haiti had by then lost the capacity to feed itself, making it highly vulnerable to food price fluctuation. That was the immediate cause of the 2008 food crisis, which led to riots and enormous protest, but not getting food.

The story is familiar, in fact quite similar, in much of the world. So, going back to the Bangladesh newspaper, it's true enough that the food crisis results from Western lack of concern -a pittance by our standards would overcome its worst immediate effects—but more fundamentally, it results from the dedication to Adam Smith’s principles of business-run state policy. These are all matters that we too easily evade. They happen daily.

Along with the fact that bailing out banks is not uppermost in the minds of the billion people now facing starvation, not forgetting the tens of millions enduring hunger in the richest country in the world, well, also sidelined is an easy way to make a significant dent in the financial and the food crises. It’s suggested by the publication a couple days ago of the authoritative annual report on military spending by SIPRI, the Swedish peace research institute, the scale of military spending is phenomenal, regularly increasing, this last year as well. Now, the US is responsible for almost as much as the rest of the world combined, seven times as much as its nearest rival, China. No need to waste time commenting.

This distribution of concerns reflects another crisis here, kind of a cultural crisis, that is the tendency to focus on short-term parochial games. That's a core element of our socioeconomic institutions and the ideological support system on which they rest. One example, now prominent, is the array of perverse incentives that are devised for corporate managers to enrich themselves. And, for example, what’s called the "too big too fail" insurance policies that are provided by the unwitting public. And deeper ones. They're just inherent in market inefficiencies.

One such inefficiency, now recognized to be one of the roots of the financial crisis, is the under-pricing of systemic risk, a risk that affects the whole system. So, for example—and that’s general, like if you and I make a transaction, say, you sell me a car, we may make a good deal for ourselves, but we don’t price into that transaction the cost to others. And there’s a cost: pollution, congestion, raising the price of gas, all sorts of other things, killing people in Nigeria because we're getting the gas from them. That doesn’t count when we - we don’t count that in. That's an inherent market inefficiency, one of the reasons why markets can't work.

And when you turn to the financial institutions, it can get quite serious. So it means that if, say, Goldman Sachs, if they're managed properly, if they make a risky loan, they calculate the potential cost to themselves if the loan goes bad, but they simply don’t calculate the impact on the whole financial system. And we now see how severe that can be, not that it’s anything new.

In fact, this inherent deficiency of markets, this inefficiency of markets, was perfectly well known ten years ago, at the height of the euphoria about efficient markets. Two prominent economists, John Eatwell and Lance Taylor, they wrote an important book, in which - called Global Finance at Risk, in which they spelled out the consequences of these market inefficiencies, which we now see, and they outlined means to deal with them. These proposals were exactly contrary to the deregulatory rage that was then being carried forward by the Clinton administration, under the leadership of those who Obama has now called upon to put band-aids on the disaster that they helped create.

Well, in substantial measure, the food crisis plaguing much of the South and the financial crisis of the North have common roots, namely the shift towards neoliberalism since the 1970s. That brought to an end the postwar, post-Second World War, Bretton Woods system that was instituted by the United States and Britain right after World War II. It had two architects: John Maynard Keynes of Britain and Harry Dexter White in the United States. And they anticipated that its core principles, which included capital controls and regulated currencies - they anticipated that these principles would lead to relatively balanced economic growth and would also free governments to institute the social democratic programs, welfare state programs, that had enormous public support around the world.

And to a large extent, they were vindicated on both counts. In fact, many economists call the years that followed, until the 1970s, the "Golden Age of Capitalism." That Golden Age led not only to unprecedented and relatively egalitarian growth, but also the introduction of welfare state measures. Keynes and White were perfectly well aware that free capital movement and speculation inhibit these options. Professional economics literature points out what should be obvious, that the free flow of capital creates what is sometimes called a "virtual senate" of lenders and investors who carry out a moment-by-moment referendum on government policies, and if they find that they’re irrational, meaning they help people instead of profits, then they vote against them, by capital flight, by tax on the country, and so on. So the democratic governments have a dual constituency, their own population and the virtual senate, who typically prevail. And for the poor, that means regular disaster.

In fact, one of the differences - one of the reasons for the radical difference between Latin America and East Asia in the last half-century is that Latin America didn’t control capital flight. In fact, in general, the rich in Latin America don't have responsibilities. Capital flight approximated the crushing debt. In contrast, during South Korea's remarkable growth period, capital flight was not onl

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