On Capitalism, Europe, and the World Bank-Noam Chomsky

[IChing]

On Capitalism, Europe, and the World Bank
Noam Chomsky interviewed by Dennis Ott
ZNet, April 2, 2007

Dennis Ott: In a recent interview you quoted Thorstein Veblen, who contrasted “substantial people” and “underlying population.”<1> At a shareholder’s meeting of Allianz AG, major shareholder Hans-Martin Buhlmannn expressed the view that there is only one limit to the increase of the dividend: “The inferiors must not be bled so much that they can no longer consume. They must survive as consumers.”<2> Is this the guiding principle of our economic system? And if so, is there any substance to the notion of a “social market economy”?

Noam Chomsky: Those are traditional questions in economics. It’s part of Marx’s reasoning about why there’s going to be a continuing crisis of capitalism: that owners are going to try to squeeze the work force as much as possible, but they can’t go too far, it’ll be nobody to purchase what they buy. And it’s been dealt with over and over again in one or another way during the history of capitalism; there’s an inherent problem.

So for example, Henry Ford famously tried to pay his workers a higher wage than the going wage, because partly on this reasoning – he was not a theoretical economist, but partly on the grounds that if he doesn’t pay his workers enough and other people won’t pay their workers enough, there’s going to be nobody around to buy his model-T Fords. Actually that issue came to court in the United States, around 1916 or so, and led to a fundamental principle of Anglo-American corporate law, which is part of the reason why the Anglo-American system is slightly different from the European social market system. There was a famous case called “Dodge v. Ford.” Some of the stockholders of the Ford motor company, the Dodge brothers, brought Henry Ford to court, claiming that by paying the workers a higher wage, and by making cars better than they had to be made, he was depriving them of their profits – because it’s true: dividends would be lower. They went to the courts, and they won.

The courts decided that the management of the corporation has the legal responsibility to maximize the yield of the profit to its stockholders, that’s its job. The corporations had already been granted the right of persons, and this basically says they have to be a certain type of pathological person, a person that does nothing except try to maximize his own gain – that’s the legal requirement on a corporation, and that’s a core principle of Anglo-American corporate law. So when, say, Milton Friedman points out that corporations just have to have one interest in life, maximizing profit and market share, he is legally correct, that is what the law says. The reason the Dodge brothers wanted it was because they wanted to start their own car company, and that ended up being Dodge, Chrysler, Daimler-Chrysler and so on. And that remains a core principle of corporate law.

>>>>snip

http://www.chomsky.info/interviews/20070402.htm

[Greyhound]

1. Thanks for this. So few realize just how perverse our system really is,

this kind of thing has been going on since before the ink was dry on The Constitution. This case, Dodge v. Ford, is an excellent example of why the sheeple must be kept in absolute ignorance.

My question is, if they were made aware of their status in this country, would they even object?

[Cleita]

2. I love Noam Chomsky and how he really gets to the core of

what is going on, explaining it so clearly as well. Thanks for posting this.

[Warren Stupidity]

3. A related issue is efficiency.

The neoliberals simply assert that something is better (typically some deregulation or privatization of some sector of the economy) because it is more efficient. No examination of the assumption that efficiency is by itself sufficient justification is ever allowed. At the limit the capitalist economy produces vast mountains of stuff in endless variety with zero human labor, maximum productivity, and consequently nobody to consume it as we are all laid off.

[Tyler Durden]

4. Profit is GOD, worship or die.

[pnorman]

5. Initially, I had found Chomsky's books too "dense" for my taste.

But after I had read the below, my appreciation of him greatly deepened. I felt it was worth the extra effort to read his books, or listen to his interviews. (Plenty available on the web).



QUESTION: You've written about the way that professional ideologists and the mandarins obfuscate reality. And you have spoken -- in some places you call it a "Cartesian common sense" -- of the commonsense capacities of people. Indeed, you place a significant emphasis on this common sense when you reveal the ideological aspects of arguments, especially in contemporary social science. What do you mean by common sense? What does it mean in a society like ours? For example, you've written that within a highly competitive, fragmented society, it's very difficult for people to become aware of what their interests are. If you are not able to participate in the political system in meaningful ways, if you are reduced to the role of a passive spectator, then what kind of knowledge do you have? How can common sense emerge in this context?

CHOMSKY: Well, let me give an example. When I'm driving, I sometimes turn on the radio and I find very often that what I'm listening to is a discussion of sports. These are telephone conversations. People call in and have long and intricate discussions, and it's plain that quite a high degree of thought and analysis is going into that. People know a tremendous amount. They know all sorts of complicated details and enter into far-reaching discussion about whether the coach made the right decision yesterday and so on. These are ordinary people, not professionals, who are applying their intelligence and analytic skills in these areas and accumulating quite a lot of knowledge and, for all I know, understanding. On the other hand, when I hear people talk about, say, international affairs or domestic problems, it's at a level of superficiality that's beyond belief.

In part, this reaction may be due to my own areas of interest, but I think it's quite accurate, basically. And I think that this concentration on such topics as sports makes a certain degree of sense. The way the system is set up, there is virtually nothing people can do anyway, without a degree of organization that's far beyond anything that exists now, to influence the real world. They might as well live in a fantasy world, and that's in fact what they do. I'm sure they are using their common sense and intellectual skills, but in an area which has no meaning and probably thrives because it has no meaning, as a displacement from the serious problems which one cannot influence and affect because the power happens to lie elsewhere.

Now it seems to me that the same intellectual skill and capacity for understanding and for accumulating evidence and gaining information and thinking through problems could be used -- would be used -- under different systems of governance which involve popular participation in important decision-making, in areas that really matter to human life.

There are questions that are hard. There are areas where you need specialized knowledge. I'm not suggesting a kind of anti-intellectualism. But the point is that many things can be understood quite well without a very far-reaching, specialized knowledge. And in fact even a specialized knowledge in these areas is not beyond the reach of people who happen to be interested.
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http://www.chomsky.info/books/reader02.htm

Political Compass Test:
Economic Left/Right: -7.50
Authoritarian/Libertarian: -4.92

pnorman

[pnorman]

6. The below is the key paragraph, and is probably all I should have excerpted:

CHOMSKY: Well, let me give an example. When I'm driving, I sometimes turn on the radio and I find very often that what I'm listening to is a discussion of sports. These are telephone conversations. People call in and have long and intricate discussions, and it's plain that quite a high degree of thought and analysis is going into that. People know a tremendous amount. They know all sorts of complicated details and enter into far-reaching discussion about whether the coach made the right decision yesterday and so on. These are ordinary people, not professionals, who are applying their intelligence and analytic skills in these areas and accumulating quite a lot of knowledge and, for all I know, understanding. On the other hand, when I hear people talk about, say, international affairs or domestic problems, it's at a level of superficiality that's beyond belief.

pnorman