Can civilisation survive really existing capitalism? | Noam Chomsky

so it had to Maria's account that when I got here with when Karen I got here without passports it actually was very nice gesture on the part of the Irish government to arrange it because they knew that I was coming here and as a guest of Amnesty International to speak at a campaign they were conducting condemning the government for its participation and the globalized terror campaign Shannon Airport but they went ahead anyway well you've seen the title I guess it's a question can civilization survive really existing capitalism in referring to really existing capitalism I have in mind what really exists and is called capitalism though whether that's what it should be called as another question and the United States is the most important example for obvious reasons the term itself capitalism is vague enough so that it can cover a great many possibilities in fact that's a straight by the fact that it's is used to describe the United States US economic system which deviates quite crucially from market capitalism free-market capitalism as indeed did Britain before it and in fact every other developed society the only societies that could authentically be called capitalism are the ones that had free markets rammed down their throat by imperial powers they're what we now call the third world not least for that reason it's a worth bearing in mind how the scale of the departures of really existing capitalism from the official doctrine free-market capitalism so keep the United States to mention just a few examples in the past 20 years the share of profits of the largest 200 corporations in the United States has risen very sharply partly as a result of the internet which was supposed to have the opposite effect but it's having the effect of intensifying the oligopolistic character of the core US economy so the law n° in another sector the largest banks with trillions of dollars of assets have repeatedly merged to become still larger by now the six largest ones largely responsible for the current global financial crisis they've increased their assets from 18% of gross domestic product 20 years ago to 63% today oligopoly of course undermines markets it leads to automatically to collusion to prevent price wars which the competitors don't want and to turn to mostly meaningless product differentiation to try to get people to buy their goods instead of someone else's identical ones that's done through massive advertising advertising itself it was a huge industry maybe marketing maybe 1/6 of gross domestic product its advertising is explicitly devoted to undermining markets taken an economics course you know that markets are supposed to be based on informed consumers making rational choice which is not exactly what you see if you turn on the television said creativity and innovation have also substantially been in the public sector not much appreciated so turn to Alan Greenspan back in the days when he was still revered as a saint Alan that was before the crash that was caused in no small part by adherence to the fundamentalist market doctrines that he preached back then in his glory days he gave a speech to editors in which he extolled the wonders of our free market system with system free enterprise with based on entrepreneurial initiative and consumer choice but he made a mistake he actually listed examples every example he listed was a textbook case of the crucial role of the state sector all the way through there was actually one exception which was an instructive one in itself namely transistors transistors were developed at a private laboratory Bell Telephone laboratories and the lab was a great lab for a long time that's when AT&T had a government insured monopoly over telephone service so could therefore impose millat monopoly pricing had great resources it could use them to establish a terrific lab as soon as the company was broken up the lab had to be dismantled it's still there but it's now devoted to the short term applications for for the industry furthermore the transistor development though it did take place in the lab was based extensively on wartime technology Second World War technology which of course all in the state sector and there was no market for high-end transistors they were much too expensive so therefore the government had bought a hundred percent of them the procurement incidentally is a major form of government subsidy to the industry actually there's a kind of an analogue here in the way the core sectors of the Irish economy have developed the construction services vary substantially through government for kind of procurement paying them paying them off to do things for which there's no demand Saint Allan's speech incidentally was at the same time when he was testifying to Congress and soberly explaining the wonders of the great economy that he was directing to great acclaim at the time which he attributed to what he called growing worker insecurity now that is intimidating workers so they won't make any irrational efforts to try to keep wages up to inflation let alone up the productivity which they ought to be kept up - that's an obvious contribution to the health of the economy under really existing capitalism computers and the Internet in fact the whole the basic components of the IT revolution they were in the state sector for substantially four decades before they were handed over to private companies for marketing and profit that includes the creative and innovative research development subsidies procurement and other devices again very little role for consumer choice and entrepreneurial initiative at least in the difficult and risky period except for the initiative and getting government subsidy for what you're doing and the same is true of much of the high-tech economy and it traces far far back actually back to the early days of English industrialization in one domain the financial sector the state intervention is notorious and it's expanded enormous Lee of course in the past generation in the United States it's hard to remember but back in the 50s and 60s during the big growth period and banks were banks put your money in them they lent money to some presumably useful purposes that was it no interstate banks no financial crises that changed in the past generation and now they their firms devoted to complex and risky transactions and they have grown enormously by the time in the u.s. at the time of the crash 2007 they had risen to 40 percent of corporate profits now the way they can get away with this is because they rely very heavily on a government insurance policy tacit insurance policy informally it's called too big to fail that provides the biggest banks with great advantages and the scale has been roughly estimated by economists maybe 40 billion dollars a year or so however there's a recent study by the IMF that indicates that that may be a considerable underestimate I'll quote the business press reporting the study says perhaps the largest US by aren't really profitable at all and the billions of dollars they allegedly earn for their shareholders were almost entirely a gift from the US taxpayers in a variety of ways including bailout but many other things like cheap credit and so on that's more evidence to support a judgment by the most respected financial correspondent in the english-speaking world Martin wolf of the London Financial Times he describes what he says is that an out-of-control financial sector is eating out the modern market economy from inside just as the larvae of a spider wasp eats out the host in which it's been laid with an observation with a certain grim resonance right here and it is thanks to the lavish contributions of the taxpayer unwittingly to maintaining this destructive system the term capitalism is also used for many other systems it's sometimes used for systems that have no capitalists at all like the great Mondragon conglomerate in the Basque Country or the worker on the enterprises that are springing up in the decaying Rust Belt of the United States some might even use the term capitalism to include some version of the industrial democracy that was advocated among others by John Dewey America's leading social philosopher in the last century he called for a workers for workers to be wood in his words masters of their own industrial fate and for all institutions to be under public control including the means of production exchange publicity transportation and communication short of this Dewey concluded politics will remain the shadow cast by big business over Society his major work as some of you know was on democracy and that was his conception of democracy and he was condemning the truncated version of democracy that really existed by now it's been left in tatters much worse than when he described by now control of the government I'm getting talking about the United States but not very different elsewhere control of government is very narrowly concentrated at the peak of the income scale the large majority down below are effectively disenfranchised that's been John pretty well by just mainstream political science one of the major topics is investigating the very rich poll data so you know what people think and of course you can take a look at policies you can compare them and the recent racial research right in the mainstream estimates that the lower 70 percent on the income wealth scale have essentially no influence on policy so they are effectively disenfranchised influence increases slowly as you move up the rest of the scale and you get to the very top they get what they want there's always been a lot of truth to that but it's increased enormously during the past 30 odd years of the neoliberal period really an assault on the population very harmful just about everywhere it's been applied you've suffered from it here the current political economic system is actually a form of plutocracy it's very misleading to call it democracy diverges radically from democracy if by democracy we mean political Arrangements in which what the public thinks has some influence on policy there have been serious debates and academic debates over the years about whether a capitalism is in principle consistent with democracy but if we talk about really existing capitalism the questions answered certainly not a really existing capitalist democracy for short or ECD you can pronounce it rekt if you like they are radically incompatible that's easily demonstrated for reasons to which I'll return it seems to me unlikely that civilization can survive that really existing capitalism and the sharply attenuated a democracy that goes along with it and an important question is whether actual actual democracy functioning democracy that might make a difference well it's hard to speculate about non existent systems but there's some reason to believe that it would so let's just keep to the most critical immediate problem that civilization faces there's plenty of them but this is the primary one environmental catastrophe policies and public attitudes differ quite sharply in the United States that's commonly the case under wrecked but strikingly in this case actually there's a an issue of the last recent last issue of the Journal of the American Academy of Arts and Sciences which goes into this so read some quotes the researchers found that a hundred and nine countries have enacted some form of policy regarding renewable power at 118 countries have set targets for renewable energy in contrast to this hundred plus the United States has not adopted any consistent and stable set of policies at the national level to force the foster the use of renewable energy now that's it's not public opinion that's driving policy off the national spectrum quite the contrary the public is much closer to the global norm than policy is and much more supportive of actions to confront the likely environmental disaster that we're facing maybe not too far off could be lives of our grandchildren here's what the researchers found the same issue huge majorities of the public have favored steps by the federal government to reduce the amount of greenhouse gas emissions generated when utilities produce electricity in 2006 eighty six percent of respondents favored requiring utilities or at least encouraging them with tax breaks to reduce the amount of greenhouse gases they emit also in that year eighty seven percent favored tax breaks for utilities that produce more electricity from water the wind or sunlight and these majorities have been maintained up to the most recent studies very sharply different from policies and I just quoted well the fact that the public is influenced by science is deeply troubling to those who dominate the economy and largely control state policy as very interesting current illustration of that there's an organization called the Alec the American Legislative Exchange Council it's a corporate funded organization that rights legislation that they try to induce states to adopt they have a new program it's called an environmental literacy Improvement Act so the the the act is intended for schools k12 you know kindergarten to 12th grade and the the act Manit meant I'm quoting it now the Act mandates balanced teaching of climate science through these years balanced teaching is a code phrase that means teaching climate change denial in order to balance a mainstream climate science it's analogous to what's called the balanced teaching that's advocated by creationists to enable the teaching of creation science in the schools and in fact legislation based on this act has already been introduced by the number of states aLEC has play a clout because of the enormous corporate funding behind it of course all this is dressed up in rhetoric about the wonders of critical thinking about a fine idea but you can think of better choices than an issue that threatens decent survival and by accident happens to contribute to corporate profits the alec legislation is based on a proposal or project of the Heartland Institute that's a corporate funded Institute that's dedicated openly to rejection of the scientific consensus on climate change the Institute project calls is called calls for a global warming curriculum for k-12 classrooms it aims to teach that there is a major controversy over whether or not humans are changing the weather and in fact there is a controversy it's regularly reported in the media on one side you have the overwhelming majority of scientists all the world's major national academies of science all the professional science journals the integral or interview and intergovernmental panel on climate change that's one side they all agree that global changes global warming's taking place this substantial human component that the situation is serious and perhaps dire and that very soon maybe within decades the world might reach a tipping point where there's nothing to do about it the process will begin to escalate sharply and will be irreversible with very severe economic and social social effects it's pretty rare to find a consensus of that nature on a complex scientific issue there is another side consist of skeptics including a few serious respected scientists who caution correctly that much remains unknown which means it might not be as bad as anticipated or it might be worse only the first part is reported and then omitted from the contrived debate altogether is a much larger group of skeptics so highly regarded climate scientists happens to include the climate change group in my own university MIT and they regard the regular reports of the IPCC as much too conservative and they've been repeatedly proven correct unfortunately but they're not part of the public debate although they're very prominent in the scientific literature well the Heartland Institute and Alec are just one part of a huge campaign by corporate lobbies to sow doubts about the near unanimous consensus of scientists that human activities are having a major impact on global warming with possibly ominous implications and there's nothing hidden about the campaign it's quite public it's been openly announced that includes of course the major lobbies of the fossil fuel industry it includes the American Chamber of Commerce which is the major business lobby and others the the the efforts of Alec and famous Koch brothers you've probably read about however a fraction of what's underway is a great deal more which is concealed in complex ways every once in a while something leaks out there was a story in the London Guardian recently buses and Goldenberg she finds that conservative billionaires used a secretive funding route to channel nearly 120 million dollars it's last year to more than a hundred groups casting doubt about the science behind climate change helping de Ville build a vast network of think tanks and activist groups working to a single purpose to redefine climate change from neutral scientific fact to a highly polarizing wedge issue for hardcore conservatives and the propaganda campaign has apparently had some effect on public opinion in the United States which is a little more skeptical than the global norm not much but the effect is not significant enough to satisfy the Masters and that's why you have sectors of the corporate world that are launching their attack on the educational system - in an effort to counter the dangerous tendency of the public to pay attention to the overwhelming conclusions of scientific research a couple of months ago there was a meeting of the Republican National Committee if read about one governor Governor Bobby Jindal of Louisiana warned the Republican leadership his words we must stop being the stupid part we must stop insulting the intelligence of voters but Alec and its corporate sponsors disagree they want to go much farther turning it into this stupid nation and they're doing it for quite principled reasons these are rooted in these central institutions of recht one of the dark money organizations that's funding climate change denial is a group called donors trust it's also a major contributor to efforts to deny voting rights to poor blacks in the United States poor generally there's a good reason for that it's perfectly sensible now they tend to be Democrats if you look at their attitudes they even tend to be Social Democrats welfare state measures and things like that they might even go so far as to pay attention to science unlike those who are trained properly in critical thinking by balanced teaching and these these efforts direct attention to another aspect of rrect which is quite important that roughly half the population the United States doesn't vote and if you look at the non voters it's skewed towards the lower end of the income scale a heavily in fact and overwhelmingly they identify themselves as Democrats and their attitudes tend towards a social democratic there has been no serious inquiry into why they don't vote that's probably one reason is the main barriers that are placed in their way these are modern versions of the old poll tax and other devices that were designed to keep the rabble in their place but it's likely that one reason is that without studying the professional literature there's know that their opinions don't matter even if expressed in the ballot box so why take the trouble well turning to the most serious threat to decent survival of the major science journals regularly give a sense of how surreal is this corporate campaign to produce a stupid nation so take science the major scientific weekly in the United States a couple of months ago it had three items side by side news items one of them reported that 2012 was the hottest year on record in the United States that continues a long trend the second reported a new study by the u.s. global climate change research program which provided additional evidence for that rapid climate change is the result of human activities they also discussed likely more severe impacts and a third news item reported the appointments to chair the committee's on science policy that were chosen by the US House of Representatives the House of Representatives is overwhelmingly Republican the the votes for house are overwhelmingly Democratic last election was striking that's another consequence of the shredding of the political system well there are three chairs all three of them deny that humans contribute to climate change a to deny that it's even taking place the same issue of the journal has a technical article with new evidence that the irreversible tipping point may be much closer than anticipated I was followed a couple of weeks later by another report in science that underscores the need to ensure that Americans become the stupid nation this report provides evidence that even slightly warmer temperatures less than anticipated could start melting permafrost which in turn could it's well known could release the trigger the release of huge amounts of very dangerous greenhouse gases worse than carbon dioxide which are trapped in ice so it's best to keep two balanced education at least if you can face the grandchildren whose lives are destroying well within rekt it's extremely important as an institutional necessity that the u.s. become the stupid nation not misled by science and rationality in the interests of short-term gains of the Masters of the economy and the political system that's not easy to change because it's built into the institutional structures of the society actually these same people who are making these decisions in their individual lives may be contributing to environmental groups they can read the science journals as well as anyone else but in their institutional function they're bound by the structure of those institutions which again makes it very hard to change and explains why policies like this are necessary and the drive for stupidity goes well beyond climate change so federal funding for the fundamental R&D research and development has been dropping sharply as a share of GDP as compared with other countries the editor of science leading science journal in the u.s. he describes the government is deranged sacrificing tremendous future benefits on the altar of short-term profit and the delusions and they are delusions about debt which are driven mainly by the financial institutions as much as in Europe where in fact is it you more severe than in the United States these commitments are deeply rooted in the fundamentalist doctrines that are preached within recked although observed in a highly selective manner if you look closely we're given a couple of examples because it's also necessary to preserve a very powerful state to serve the interests of wealth and power that's what economist Dean Baker calls a conservative nanny state well it goes beyond this the market fundamentalism has a number of built-in and in fact quite well known the latias effects so one which is not discussed enough is that market fundamentalism while it pretends to expand choices in fact sharply restricts them so for example if I have to get the home home from work I can have a choice in the market as to whether to buy a Toyota or Chevy let's say but I can't choose between buying a car and having a public transportation system that's not a choice that's open in principle in a market system its requires collective decision-making and that's not an option it's in effect is it under wrecked with the tattering of democracy its diminishing option you can see the consequences so for example you can take a high-speed train from Beijing to Kazakhstan and it'll probably soon go all the way to Turkey but you can't take a high-speed train in the most heavily traveled corridor in the world the Northeast Corridor in the United States from Boston to Washington fact that trains there are barely faster than they were 60 years ago when my wife and I first took him and that's a natural aspect of a wrecked really existing capitalism with a tattered democratic system there are also what are called the market inefficiencies in the professional literature one of them series one is perfectly well known gets a very economics text is the failure to take into account the effect on others in a market transaction so-called externalities these externalities can be quite substantial that's even true simple transactions among individuals when you move on to major institutions they become huge in fact the current financial crisis is an illustration the it's partially traceable substantially traceable to the ignoring of what's called systemic risk that is the risk that if some and you know some risky transaction has taken place maybe the whole system will collapse the that's not a new discovery incidentally fifteen years ago the height of the euphoria about efficient markets there were two prominent economists one English one American John Eatwell and Lance Taylor they were an important book global finance at risk in which they spelled out the consequences of these market inefficiencies and dire consequences we're now living with another one we worse to come and they suggested means to deal with them which of course were disregarded there's a well another major international economist David Felix has been warning about this for many years ever since the liberalization liberalization of capital in the 70s he's been warning that the increasing frequency of financial crises during the period of financial liberalisation could terminate in an uncontrollable one I had good arguments for it fact there was plenty of evidence that was beginning to happen but these voices were unheard during the corporate-sponsored deregulatory rage with incidentally the intellectual backing of theses about efficient markets and rational behavior that had no empirical basis but were proclaimed with great confidence within the economics profession between every two market collapses the minutes of the Federal Reserve the US central bank which are released after five years it's quite an open society the US you can learn a lot about what's going on they've just released the two 2007 transcripts and they make interesting reading 2007 the whole system was crashing but here's a group of very distinguished economists and major banking system professionals they couldn't see that the huge housing bubble which is based on no economic fundamentals by then it reached eight trillion dollars of meaningless paper money that it was happening is nothing in the transcripts to recognize what's happening before their eyes and is a good reason there's a religion the religion is market fundamentalism it preaches that the markets are efficient and investors are rational so what's happening can't be happening so therefore we march ahead into the next disaster well after the predicted disaster occurred there were a few people predicted it leading economists again right in the mainstream reported what they called an emerging consensus on the need for macro prudential macro Prudential supervision of financial markets that is paying attention to the general stability of the financial system and not only its individual parts the two prominent international economists stated that there's a growing recognition that our financial system is running a doomsday cycle whenever it fails we rely on lacks money and fiscal policies to bail it out this response teaches a lesson to the financial sector take large Gamble's get paid handsomely and don't worry about the costs because they'll be paid by taxpayers and the financial system is thus resurrected they say to gamble again and to fail again worse each time the official of the Bank of England who's responsible for financial stability after the later crisis described it as a Doom loop well there is legislation being considered in the United States the so called the dodd-frank bill supposed to put band-aids on the sores and go very deep but it's as always being whittled down by armies of corporate lobbyists who are not countered there are no lobbyists for the public interest under wrecked just for the for the banks and it's very unlikely that much will come of the legislation after they're done with it so we'll march on to the next and probably in worst crisis it's been a regular occurrence over the past 30 years ever since Reagan in the United States and none before no crises before the because the New Deal regulations were in place and there were capital controls on international financial flows up until 1970 incidentally under IMF rules which still exists it's now forgotten but they are in fact being instituted again most recently in Cyprus to try to overcome the latest European catastrophe under the suicidal policies of austerity during stagnation which fail miserably every time they're applied although failure is a misleading word because they work quite well for the designers of the policy they just fail for people general people and that's Vivek infect not just an interesting booklet that just came out in the United States published by the economics Policy Institute it's the major source of regular economic data of the state of economy and working people the poly half was called failure by design they review the policies of the past 30 odd years the neoliberal period and they review the I won't give the data they review what's familiar from what's happened to the public over this period the enormous tremendous concentration of wealth way at the top top tenth of one percent stagnation or decline for large majority a deterioration of relatively weak benefit systems and so on and the pamphlets called failure by design but they point out the design because there always were alternative policies they well-known ones but they point out as a class-based failure for the designers it's in a fantastic success you know they're richer than imaginable and doing better all the time they've done this disaster they come out better corporate profits for example are at record highs in the United States corporations have so much money they don't want to do with it they don't invest it because there's no demand but it's they use it for financial speculation which and the banks are bigger and richer than before the crisis that they caused so its failure by design and class based failure and pretty much the same is true of Europe just being careful when people talk about these is failed or as I just did suicidal policies well there's a far more serious example of the danger of ignoring externalities the ones that are dismissed to a footnote under fundamentalist market fundamentalist doctrine and that's the environmental catastrophe here the externality that's ignored it the fate of the species and in this case there is no one to run to cap in hand to be asked to be bailed out tax payer can't help on this one well these consequences have very deep roots in wreck than its guiding doctrines which also dictate that the Masters will make major efforts to escalate the threats even though they're quite aware of them again institutional fact that's one reason and not the only one why it seems quite unlikely that civilization will survive rekt without serious blows well there's if there are historians in the future there may not be but if there are they're going to see they look back on this period they're going to see a very strange phenomenon developing under our eyes with eyes open the world is marching towards serious disaster no secret eyes --as facts are there read it right in front of you under of course efforts to counter it they vary and they vary in an interesting way the most far-reaching efforts to counter the crisis are found in pre-industrial societies what are called primitive societies anyway they don't have the benefit of education indigenous societies tribal societies First Nations and so on and the most strenuous efforts to escalate the threats are in the most advanced most educated richest and most powerful societies so take the Western Hemisphere Ecuador which has a large indigenous population and is an oil producer is undertaking efforts under the pressure of the indigenous population to get support from Europe which they surely won't get to leave the oil in the ground where it ought to be and turn to other forms of growth and development that's the poor uneducated indigenous societies Bolivia which has an even bigger indigenous populations way in the lead internationally and doing something about this then you go to the other extreme up north United States and Canada they're racing madly to try to get the crisis to be as rapid and as Extreme as possible that's what's called the you read the enthusiastic you know euphoric reports about a century of energy independence they which are all over the newspapers including the financial newspapers and both political parties agree it's really a great thing we're going to have a hundred years of energy independence by trying to get every drop of fossil fuels out of the ground including things like Canadian tar sands which are extremely damaging to the environment that the local and in fact global environment but we got to do that and the energy independence is almost totally meaningless so we have to make sure that crisis is as quick and bad as possible all of these euphoric discussions don't don't mention the raise the question what's the word we're going to look like in a hundred years not somebody else's business within wrecked you don't ask that question well that's the scene that a future historian will see if there is one to look back and it'll be a very striking one and it's up to us actually to decide if that scenario is going to happen it's very imminent Thanks you

Channel: UCD - University College Dublin

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Keywords: Noam Chomsky, UCD, University College Dublin, UCD Philosophy Society, Inaugural Lecture, UCD - University College Dublin, myucd, Foreign Policy (Field Of Study), United States Of America (Country), United States History

Id: _uuYjUxf6Uk

Length: 47min 17sec (2837 seconds)

Published: Wed Apr 03 2013