% FROM THE NOAM CHOMSKY ARCHIVE
% http://www.contrib.andrew.cmu.edu:/usr/tp0x/chomsky.html
% ftp://ftp.cs.cmu.edu/user/cap/chomsky/
% Filename: articles/chomsky.z.mandate-for-change
% Title: ``Mandate for Change,'' or Business as Usual
% Author: Noam Chomsky
% Appeared-in: Z Magazine, February 1993
% Source: ftp.uu.net:/government/umich-poli/Essays/Chomsky/mandate.for.change
% Keywords: Clinton, election, economy, NAFTA
% Synopsis: Compares Bush and Clinton's economic policies
% See-also: articles/chomsky.z.clinton.vision, articles/chomsky.z.clinton.vision.update, articles/chomsky.nation.nafta
``MANDATE FOR CHANGE,'' OR BUSINESS AS USUAL
Noam Chomsky
Z Magazine, February 1993
As the victors were recovering from the celebration of their
electoral triumph in November, the front-page headlines read:
``The Economy: Aides plan a scaled-back early agenda.'' ``A
group of aides to President-elect Bill Clinton is preparing an
economic plan for the Democrat's early days in office that would
postpone action on some of his more sweeping proposals in favor
of a moderate increase in infrastructure spending, preliminary
steps to control rising health care costs and a series of
business tax breaks that rated little mention during the
campaign,'' pol itical correspondent Peter Gosselin reported. In
the following days, Clinton's advisers, including those on the
progressive fringe, reiterated the message, which had been
understood all along by corporate-financial sectors; the
steadiness of the markets and strength of the dollar were among
the many indications of the general satisfaction with Clinton's
imminent victory in the business world, which was soon to be
reassured further by his top appointments and indication of
priorities.
The magic word in Clinton's campaign had been ``Change,'' a
reorientation of policy toward the needs of the great majority of
the population who had suffered from Reagan-Bush ``trickle down''
economics---in practice, an upward flood---and had swept Clinton
into office on the promise of an end to the party for the rich.
But it would be unfair to speak unkindly of the newly-elected
President for clarifying at once that the fine words of the
campaign were not intended seriously, that the ``Mandate for
Change'' proclaimed by a Clinton think tank meant ``Business as
Usual,'' as it did when Eisenhower's PR team coined the phrase.
``Campaign pledges (are] made to be broken,'' Harvard political
scientist and media specialist Marty Linsky explained when
President Bush called for ``revenue enhancement'' after winning
the 1988 election with a pledge not to raise taxes. To accuse
Bush of violating his campaign pledge was a ``political cheap
shot.'' When he led the public in his ``read my lips---no new
taxes'' chant, Bush had merely been expressing his ``world
view,'' making ``a statement of his hopes.'' The same precepts
hold for his successor.
Only the most naive, who do not comprehend the democratic system,
could think that their political representatives mean what they
say. Sophisticates understand that ``elections and governing are
different ball games, played with different objectives and
rules.'' ``The purpose of elections is to win,'' Linsky
elaborated, expressing the contempt for democracy that is
standard fare among educated elites; and ``the purpose of
governing is to do the best for the country''---where ``the
country'' is to be understood as ``those who matter,'' though
honesty on that score as well would be too much to expect.
This course of instruction is helpful. The lessons have broad
application. Take the concept ``jobs.'' It is beyond doubt that
more and better jobs `are desperately needed. ``Job destruction
[is] worse than we thought,'' economists Lawrence Mishel and
Jared Bemstein report, with ``more than 17 million workers,
representing 13.2 percent of the labor force, . . . unemployed or
underemployed in July [ 1992],'' a rise of 8 million during the
Bush years. Furthermore, some three-fourths of the rise in
unemployment is permanent loss of jobs. Meanwhile the stagnation
of real wages changed to sharp decline from the mid-1980s,
extending even to college-educated, while ``of the gain in income
per head, 70 percent accrued to the top I percent of income
earners, while the bottom lost absolutely,'' MIT economist
Rudiger Dombusch observes, so that ``For most Americans, it is no
longer true that the young generation can count on being
economically ahead of its parents '' a significant turning point
in the history of industrial society.
One can therefore appreciate the passionate concern expressed by
political figures, corporate leaders, and their press agents over
the need to create jobs for suffering Americans. Heartening
indeed, until we recall our lessons. Looking a bit more closely,
we find that the word ``jobs'' has taken on an entirely new
meaning: ``profits.'' Thus when George Bush takes off to Japan
with a bevy of auto executives in tow, he waves the banner
``jobs, jobs, jobs,'' meaning profits, profits, profits,'' as a
look at his social and economic policies demonstrates without
equivocation. The press and air waves resound with promises to
increase `jobs,'' put forth by those who do what is in their
power to send them to high-repression, low-wage regions, and to
destroy what remains of meaningful work and workers' rights, all
in the interest of some unmentionable seven-letter word. All
becomes clear once we join the sophisticates who understand that
`'the purpose of rhetoric is to delude,'' while ``the purpose of
governing is to do the best for `the country';'in the technical
sense of that term.
That ``the country'' in whose interests policy is designed is to
be understood in class terms is, of course, no recent insight.
Those who have been properly instructed in the famous ``canon''
will surely have ``learned'' that Adam Smith denounced the
mercantilist and colonial systems as harmful and absurd, while
preaching the virtues of free trade. As explained in the
introduction to the Chicago bicentennial edition of Wealth of
Nations by noted Chicago economist George Sligler, ``Americans
will' find [Smith's] views on the American colonies especially
instructive. He believed that there was, indeed,
exploitation---but of the English by the colonists,'' contrary to
what the uninitiated might think. But few are likely to have
discovered what Smith actually wrote. Mercantilism and
colonialism may have harmed the general population of England,
Smith concluded, but were of great benefit to the ``merchants and
manufacturers'' who ``have been by far the principal architects''
of policy; their interests have ``been most peculiarly attended
to'' by the system, though not the interests of consumers and
working people. (As for the English colonists in America, the
harsh regulations imposed upon them by imperial England were ``a
manifest violation of the most sacred rights of mankind,'' Smith
wrote, though nothing like the ``savage injustice'' of the
treatment of the lesser breeds).
In brief, mercantilism and empire were among the many devices
that regularly shape social and economic policy into a welfare
project for the rich and powerful---definitely not the right
lesson for impressionable young minds. In this and many other
ways, the contents of Smith's classic have been crucially
modified as they enter contemporary ideology in the hands of his
latter-day disciples, to form part of the ``free market''
theology preached by a variety of cynics.
Smith's class analysis of policy-formation retains its relevance,
and Linsky's lessons add a useful supplement. If ``change'' once
again translates into new methods of enhancing existing power and
privilege, we need only recognize that that is what is best for
``the country,'' properly construed. Returning to the ``sweeping
proposals'' that were instantly recognized to be ``unnecessary''
and ``inappropriate,'' we may recall that the public was not
merely indicating a preference for curtailing ``rising health
care costs'' and for unspecified ``infrastructure spending.''
Over two-thirds of the public have regularly called for the kind
of national health insurance that exists in one or another form
in all other industrial societies, in place of the highly
bureaucratized ``private enterprise'' U.S. system, with its harsh
rationing of health care by price and huge administrative
expenses and other inefficiencies (the British National Health
Service devoted 4 percent of total health-care expenditure to
administrative costs in the late 1980s as compared with 21
percent in the U.S., the distinguished British conservative Ian
Gilmour points out; the comparison with Canada is similar). And
an overwhelming majority (83 percent in the latest Harris poll)
protested that ``the rich are getting richer and the poor are
getting poorer,'' that ``the economic system is inherently
unfair,'' as the president of the polling organization summarized
popular feelings. Small wonder that Reagan's popularity is barely
above Nixon's, far below other living ex-Presidents, and that he
is particularly disliked by working people and ``Reagan
Democrats.''
But on a wide array of matters such as these, Clinton cannot be
criticized, even unfairly, for quick abandonment of ``campaign
pledges'' that are ``made to be broken,'' since the pledges were
never made. Both political factions, along with their sponsors
and the ideological managers, understand that the childish
confusions of the rabble need not be considered by the ``men of
virtue'' who have assumed the responsibility of governing since
the origins of the Republic, always seeking what is best for
``the country.''
Popular confusions extend quite far. Through the 1980s,
considerable majorities favored a nuclear freeze, social spending
over military spending, more government regulation to protect
worker health and safety, higher taxes if necessary for such
purposes, and so on. The errors of the rabble are also prevalent
among the other beneficiaries of the Reagan-Thatcher revolution.
The British Social Attitudes survey for 1992 finds that
``respondents came out in favour of public spending by bigger
margins than ever,'' the London Guardian reports, with 65 percent
favoring higher taxes and more spending.
Perhaps they are reacting to Thatcher's achievements in creating
the worst crisis for manufacturing industry in the 19th-20th
century, destroying almost one-third of the manufacturing plant
within a few years by blind pursuit of Friedmanite and
laissez-faire doctrines that were falsified and failed at every
turn, yielding a ``miserable performance'' for the economy
through 1990, lowering growth rate, rapidly increasing poverty
while playing ``Good Samaritan only to the better off' and giving
London almost the appearance of ``a third-world
capital''---despite the huge shot-in-the-arm provided by North
Sea oil and the sharp decline in prices of Third World exports
(Ian Gilmour, in his incisive review of a decade of ``Dancing
with Dogma''). The result was to send Britain to ``Europe's
poorhouse,'' the Financial Times observes in October 1992,
``technically poor enough to apply for extra European Community
cash'' along with Spain, Ireland, Portugal, and Greece. Much the
same happened in Australia, where a Labor government tried the
same ``cruel experiment'' with the same consequences, a ``dismal
tale of economic failure,'' conservative Robert Manne points out
in the business press, reviewing the well-documented
``disaster.''
The destructive impact of neoliberal dogma on Third World
societies has been extensively discussed.Less familiar is the
fact that the three English-speaking societies, which danced with
the same dogmas (though only to a limited extent, being powerful
enough to violate the rules) suffered accordingly, a fact that
should ``have, at the very least, planted the seeds of doubt,''
Manne comments, with reference to Australia. In all three
societies the doubts were allayed by what MIT economist Paul
Krugman describes as a ``combination of mendacity and sheer
incompetence,'' referring specifically to attempts to suppress
the truth ``by the Wall Street Journal, the U.S. Treasury
Department, and a number of supposed economic experts,'' a record
that demonstrates ``the extent of the moral and intellectual
decline of American conservatism,'' a record matched in England
and Australia.
As in the United States, the rabble in Britain have dangerous
thoughts about the private economy. Asked how profits should be
distributed, 42 percent chose investment, 39 percent workforce
benefits, 14 percent consumer benefits (lower prices), and 3
percent share-holders/managers benefits. Asked how profits would
be distributed, 28 percent predicted investment, 8 percent
workforce benefits, 4 percent consumer benefits, and 54 percent
shareholders/managers benefits. The conviction that the economic
system is ``inherently unfair'' is widely shared, but well beyond
the reach of the political system in societies that have
succeeded in reducing the general public to a spectator role, as
leading democratic theorists have long urged.
Problems of Gonvernance
While the two factions of the business party agree over a broad
range, they differ in popular constituency and sometimes in
tactical preferences. These are only tendencies, reflecting
shifting alliances, but they are real and sometimes have policy
consequences. The popular base of the Democrats lends more
towards working people, the poor, women, minorities---the rabble
generally. The Republicans, who have been more open and
forthright in presenting themselves as the party of owners and
managers, have sought to create a popular base through appeal to
jingoism, fear, religious fanaticism, and the like. That provides
substantial outreach. Religious fundamentalists alone are a huge
popular grouping in the United States, which resembles
pre-industrial societies in that regard. This is a culture in
which three-fourths of the population believe in religious
miracles, half believe in the devil, 83 percent believe that the
Bible is the ``actual'' or the inspired word of God, 39 percent
believe in the Biblical prediction of Armageddon and ``accept it
with a certain fatalism,'' a mere 9 percent accept Darwinian
evolution while 44 percent believe that ``God created man pretty
much in his present form at one time within the last 10,000
years,'' and so on. The ``God and Country rally'' that opened the
national Republican convention is one remarkable illustration,
which aroused no little amazement in conservative circles in
Europe.
Needless to say, neither political faction offers its popular
constituency any real influence over matters of importance to
``the country,'' but their concerns can be addressed at the
margins. The dramatic assault on civil liberties during the
Reagan years is a case in point. With a different popular base,
Clinton will doubtless mitigate these policies, a matter of no
small significance for personal life, though with only marginal
impact on the primary task: to ensure the proper functioning of
the welfare state for the rich.
Here objective problems arise that cannot be ignored, and there
are differing perspectives within the business community (hence
the political system) as to how they should be addressed. One
major concern is ``industrial policy;'that is, the state role in
sustaining private enterprise; the role of the state in securing
``jobs,'' to resort to Politically Correct Newspeak. This was
perhaps the major real issue in the 1992 election.
It is hardly a secret that every successful industrial society,
from England to the East Asian NICs, achieved that condition and
maintains it by radically violating market principles. These
principles do serve useful functions: they can be selectively
invoked to restrict social spending, to undercut competitors, and
to open Third World societies to more efficient exploitation
(including now much of Eastern Europe). Within the ideological
system, therefore, neoliberal doctrine is highly praised. But
business has always insisted that a powerful state intervene to
regulate disorderly markets, organize a public subsidy for
advanced industry, suppress labor and independent forces at home
and abroad, and in other ways protect the interests of those who
control investment and finance, and thus set the general
conditions within which the ``architects of policy'' meet their
responsibilities. Any illusions that capitalism might be a
viable system vanished---apart from the secular
theologians---with the Great Depression and the successful
recovery from it under the wartime command economy, administered
by corporate executives who learned their lessons well.
Like all advanced societies, the U.S. has relied on state
intervention in the economy from its origins, though for
ideological reasons, the fact is commonly denied. During the
post-World War II period, such ``industrial policy'' was masked
by the Pentagon system, including the Department of Energy (which
produces nuclear weapons) and NASA, converted by the Kennedy
administration to a significant component of the state-directed
public subsidy to advanced industry.
By the late 1940s, it was taken for granted in
government-corporate circles that the state would have to
intervene massively to maintain the private economy. In 1948,
with postwar pent-up consumer demand exhausted and the economy
sinking back into recession, Truman's ``cold-war spending'' was
regarded by the business press as a ``magic formula for almost
endless good times'' (Steel), a way to ``maintain a generally
upward tone'' (Business Week). The Magazine of Wall Street saw
military spending as a way to ``inject new strength into the
entire economy,'' and a few years later, found it ``obvious that
foreign economies as well as our own are now mainly dependent on
the scope of continued arms spending in this country,'' referring
to the international military Keynesianism that finally succeeded
in reconstructing state capitalist industrial societies abroad
and laying the basis for the huge expansion of Transnational
Corporations (TNCs), at that time mainly U.S.-based.
The Pentagon system was considered ideal for these purposes. It
imposes on the public a large burden of the costs (research and
development, R&D) and provides a guaranteed market for excess
production, a useful cushion for management decisions.
Furthermore, this form of industrial policy does not have the
undesirable side-effects of social spending directed to human
needs. Apart from unwelcome redistributive effects, the latter
policies tend to inte4ere with managerial prerogatives; useful
production may undercut private gain, while state-subsidized
waste production (arms, Man-on-the-Moon extravaganzas, etc.) is a
gift to the owner and manager, who will, furthermore, be granted
control of any marketable spin-offs. Furthermore, social spending
may well arouse public interest and participation, thus enhancing
the threat of democracy; the public cares about hospitals, roads,
neighborhoods, and so on, but has no opinion about the choice of
missiles and high-tech fighter planes. The defects of social
spending do not taint the military Keynesian altemative, which
had the added advantage that it was well-adapted to the needs of
advanced industry: computers and electronics generally, aviation,
and a wide range of related technologies and enterprises.
The Pentagon system of course served other purposes. As global
enforcer, the U.S. needs intervention forces and an intimidating
posture to facilitate their use. But its economic role has always
been central, a fact well-known to military planners. Army Plans
Chief General James Gavin, in charge of Army R&D under
Eisenhower, noted that ``What appears to be intense interservice
rivalry in most cases . . . is fundamentally industrial
rivalry.'' It was also recognized from the outset that these
goals require ``sacrifice and discipline'' on the part of the
general public (NSC 68). It was therefore necessary, Dean Acheson
urged ``to bludgeon the mass mind'' of Congress and recalcitrant
officials with the Communist threat in a manner ``clearer than
truth,'' and to ``scare hell out of the American people,'' as
Senator Vandenberg interpretedthe message. To carry out these
tasks has been a prime responsibility of intellectuals throughout
these years.
Public acquiescence was largely secured by fear. By the 1980s,
however, the cry that ``the Russians are coming'' was losing its
efficacy. The problem of the vanishing pretext was a troublesome
one throughout the decade, heightened by the erosion of public
tolerance in the face of growing economic problems. Major
propaganda efforts were undertaken to conjure up new demons:
international terrorism, Qaddafi and crazed Arabs generally,
Sandinistas marching on Texas, Hispanic narcotraffickers, etc.
The absurdity of the pretexts did not prevent them from having a
certain effect though with only temporary success, a problemthat
must be faced.
Aiding the Pentagon
In passing, we may note that the current PR campaign in Somalia
has similar motives, a fact that is scarcely even disguised. The
First Landing was carefully staged for TV. Pentagon briefings
directed journalists to where they were wanted, even advising
them when and where ``to set up their cameras'' (New York Times).
Pentagon officials encouraged ``extensive media coverage in a bid
to cast the US mission in the most positive light,'' the
Washington Post reported, noting ``the invasion's
made-for-Hollywood quality,'' which aroused considerable ridicule
in Europe, and occasionally here. These officials were ``eager to
advertise both to Somalia and the rest of the world the
precedent-setting humanitarian mission,'' the Post reported,
omitting the quotes around the last two words that authentic
journalism would require.
The operation will be ``a good experience for other countries and
for us to see what effect American generosity has on these types
of disaster,'' the overseas relief chief of USAID Andrew Natsios,
stated: ``millions of lives will be saved Americans should feel
very good about themselves''---and about the Pentagon budget that
allows such miracles of generosity. Officials ``didn't hide the
fact that they wanted to make it as easy as possible for the news
media to cover an event that portrays them in a good light,''
Peter Grier reported in the Christian Science Monitor. ``With the
military budget crumbling, a little favorable publicity can only
help.'' For the Marine Corps, the operation is a ``showcase . . .
at a time when Congress is under intense pressure to produce
post-Cold War defense savings,'' the Post commented, and the
whole affair is nothing less than ``a public relations bonanza at
just the right time.'' JCS chair Colin Powell added that the
effort is a ``paid political advertisement'' on behalf of plans
for an intervention force, The military ``convoys were more a
symbolic show for the world's television cameras than any serious
effort to get a steady stream of food moving '' New York Times
correspondent Jane Perlez reported two weeks after the landing,
under the heading ``Somalia, We Are Here! (Now What Do We Do?).''
The intervention ``seemed to be largely devoid of ulterior
political motives,'' Perlez added, a phrase that is obligatory
even in reports that bring out clearly the overriding ``political
motives'' and the great efforts to achieve the desired effect.
These efforts were so obvious that only the most disciplined were
able to suppress entirely what they knew and to marvel that the
intervention ``was justified _solely_ on moral grounds'' and thus
put ``the question of idealism in foreign policy rather purely''
(New Republic editors, their emphasis).
The pretensions could hardly be taken seriously. If Washington
had any humanitarian concerns for the people of Somalia, it had
ample opportunity to act upon them from 1978 through 1990, when
it was the major supporter of Siad Barre, the Saddam Hussein
clone who was then destroying Somali society, killing 50--60,000
according the African Watch and setting the stage for the horrors
that followed-facts regularly finessed in current media coverage.
There is no evidence of a sudden religious conversion since.
Furthermore, there are numerous ``humanitarian missions'' that
could readily be undertaken if generosity were even a marginal
element in policy-making. To take a case close to home, it is
agreed on all sides that a few phone calls to the ruling
Generals---not 30,000 troops---would probably suffice to call off
the savage terror in Haiti and allow the return of the
democratically-elected President Jean-Bertrand Aristide, highly
popular in Haiti if not in Washington; this minimal intervention
would also save any number of infants from starvation and
disease. Examples abound. That aside, no one who even pretends to
be serious will lend credence to a ``humanitarian act'' carefully
staged for the world's TV cameras---particularly, when it is
undertaken by a great power with a horrifying record of abuse of
human rights, and a particular penchant for imposing starvation
and disease on civilian societies by economic warfare (Vietnam,
Cuba, Chile, Nicaragua, Iraq, . . .).
States are not moral agents. ``Generosity'' and ``humanitarian
missions'' are tools of the trade of the commissar class in every
society. Perhaps some historical examples can be found of
``humanitarian intervention,'' but transparently, this is not one
of them.
As is fully recognized, the troops were sent well after the civil
society had begun to recover and the crisis was clearly receding.
``One thing is certain,'' Jane Perlez emphasizes: ``the worst of
the Somali famine of 1992 is past.'' ``The Worst Was Over'' (a
sub-heading reads) well before the U.S. forces arrived in
December. By early November, aid agencies in the distribution
center in Baidoa, where the crisis was unusually severe, reported
that about 80 percent of aid was reaching the most needy, and by
the end of the month, the ICRC and other experienced agencies
were reporting still higher figures. Recovery from Siad Barre's
atrocities in the North had been substantial well before, and
even in the region of greatest suffering in the South there was
visible progress, thanks in part to the efforts of the
highly-regarded UN mediator Muhammad Sahnoun, who was removed
after his public criticism of the incompetence of the UN
operations. Serious reservations about the character of the U.S.
intervention were expressed by development and relief agencies
and the few people really knowledgeable about Somalia and the
problems of famine, among them Rakiya Omaar, the Somali head of
Africa Watch who was dismissed when she publicly opposed the
intervention, and her co-worker Alex de Waal, one of the leading
specialists on African famines and East Africa, who resigned in
protest. The American Friends Service Committee, which has
carried out development programs and relief work in Somalia for
over ten years and is implementing emergency programs today,
concluded ``on the basis of this direct experience and our
knowledge of the country and its people'' that the massive
military intervention is a '' grave mistake'' that ``may be
counterproductive in the long if not the short run,''
interrupting and disrupting the processes of reconstruct tion
that ``have been undertaken among traditional leaders facilitated
by Ambassador Mohammed Sahnoun of the United Nations and others,
to try to build peace from below.'' Apparently reflecting
similar perceptions, the International Red Cross (ICRC), which
played by far the greatest part in responding to the terrible
famine that peaked in summer 1992, refused to accept U.S.
military escorts for fear that this would disrupt arrangements
that hail been developing within Somali civil society. The
British government pressured Oxfam and Save the Children, both
dependent on government support, to call off their criticismsof
the intervention.
Many expressed particular concern over US. dealings with the
leading ``warlords,'' fearing that this may provide greater le
legitimacy and power to the most dangerous and destructive
elements in the society. They seem to agree. Both General
Mohammed Farrar Aideed the most powerful of these killers, and
his ally Col. Omar Jess, who massacred over 100 civilian leaders
in Kismayu in preparation for the arrival of the marines, ``want
to deal solely with the U.S.,'' Julian Onne comments in the
Financial Times, reporting on a protest by 500 demonstrators
loyal to Aideed that disrupted the visit of UN Secretary General
Boutros Ghali to Mogadishu, which Aideed controls.
There is good reason to believe that a more modulated approach in
cooperation with Somali civil society could have been effective
in enhancing the recovery already underway, along lines that have
been presented by Omaar de Waal, and other close observers. The
military operation that was so ``eagerly advertised'' may prove
beneficial or harmful to Somalis in the long run, but that is
incidental; they are basically props for photo opportunities.
In the UK, as here, it is commonly felt necessary to include
ritual phrases about the ``humanitarian mission'' in analyses of
actual motives. Economic correspondent Michael Prowse of the
Financial Times describes the Somali intervention in these terms:
``in the absence of the communist threat, the most reliable way
to sustain public support for large military expenditures may be
to base foreign policy on values the public holds dear. In
today's changed world [the Soviet threat having vanished], Mr.
Clinton is thus being a realist, as much as an idealist, in
pledging to make the promotion of democracy and human rights the
guiding principles for overseas interventions''---PR devices that
he did not invent, of course. Having exposed the propaganda,
Prowse goes on to laud ``The heartwarming presence of U.S. troops
in Somalia,'' where, ``For the first time in recent U.S. history
(perhaps ever), a sizable military intervention overseas was
justified on purely moral grounds.'' A high tolerance for
self-contradiction is a virtual necessity for intellectual
respectability, given the need to invest the actual workings
ofpower with suitable majesty.
The day after the intervention, in an article on the U.S.
economy not mentioning Somalia, Prowse cited U.S. economists in
corporate and financial institutions who attribute the
sluggishness of recovery from the recession to the decline in
military spending, which eliminates a traditional device for
stimulating the economy. In brief, the stakes in ``sustaining
public support for large military expenditures'' are high.
According to the official version of the timing presented most
fully by Don Oberdorder of the Washington Post on the basis of
official leaks, the decision to intervene was taken on November
21 on the grounds that ``the need is crying'' and ``only the
United States can do something.'' That story lacks any
credibility; ``the need was crying'' months earlier, and was
declining by late November thanks to the efforts of others.
It is possible that the intervention had been planned for the
post-election period. In early November, a marine colonel in
civilian clothes was seen by reporters in Baidoa, apparently
scouting out the area where a major base would be established; at
the time, U.S. military personnel were restricted to the cargo
planes delivering supplies. A ``humanitarian intervention'' just
before election day would have seemed too cynical a ploy,
undermining the PR function. An earlier intervention would have
faced two problems. The first is that the situation had not yet
begun to settle. The operation would have been far more risky,
and it was not so obvious then that the appearance of success
could be quickly achieved; similar considerations rule out
``humanitarian intervention'' in Bosnia, even more strongly.
Second, it is widely felt that things might go sour after the
initial PR bonanza, and the Administration surely did not want to
face such problems under the glare of election klieglights. The
post-election timing is preferable. Order was being restored so
the appearance of success is more likely. Bush's term can end in
a blaze of glory. If the ``purely idealistic'' effort turns into
the usual disaster, on the model of Grenada, Panama, and so on,
attention will have waned or someone else will have to pick up
the pieces and suffer the political consequences.
As in earlier efforts to sustain the Pentagon system, the Somali
intervention may serve other purposes. The U.S. supported Siad
Barre through his worst atrocities because of its interest in
Somali bases for the intervention forces aimed at the Middle East
and for possible operations in Africa; such considerations might
remain of some importance (not much, I suspect, alternatives
being readily available). Furthermore, in large parts of Africa
and the Middle East the rise of Islamic fundamentalism (which may
well be accelerated by the intervention) is a matter of growing
concern, for traditional reasons: like secular nationalist
tendencies, liberation theology, labor and peasant organizing,
democratic socialist political initiatives, some military
regimes, and other potentially independent forces, Islamic
fundamentalism falls under the rubric of ``ultranationalism,'' a
term that covers any threat of deviation from the subordinate
role assigned to the service areas, whatever its political
coloration. Nevertheless, it seems likely that at the current
moment, the prevailing factor is the domestic one, the crisis of
state industrial policy, as the more serious commentary and
reporting often indicates obliquely.
Industrial Policy for the 1990s
The decline of the traditional form of industrial strategy is a
serious matter. To convince the taxpayer to subsidize advanced
industry by the methods designed in the early postwar years is
becoming increasingly difficult. It is not surprising, then, that
we now hear open discussion of the need for ``industrial
policy''---that is, new forms, no longer masked by the Pentagon
system.
The old methods were running into difficulties for reasons beyond
the loss of the standard pretext and the erosion of tolerance on
the part of people suffering the effects of Reaganite
spend-and-borrow abandon. The Pentagon system of industrial
subsidy and planning has obvious inefficiencies. These were
tolerable in the days of overwhelming U.S. economic dominance,
less so as U.S.-based corporations face serious competitors who
can design and produce directly for the commercial market, not
awaiting possible spin-offs from high tech weapons or space
shots. Furthermore, the cutting edge of industrial development is
shifting to biology-based technology. That is one reason why the
West, with the U.S. in the lead, is insisting that GATT
agreements and NAFTA (North American Free Trade Agreement)
provide enhanced protection for patents (``intellectual
property''), thus locking the Third World into dependency on
high-priced products of Western agribusiness, biotechnology, the
pharmaceutical industry, and so on. It is important to ensure
that TNCs control seeds, plant varieties, drugs, and the means of
life generally; by comparison, electronics deals with frills.
Public subsidy and state protection for biology-based industries
can not easily be hidden behind a Pentagon cover. For such
reasons alone, new forms of state intervention are required (see
Year 501 , South End Press).
In the 1992 electoral campaign, the Democrats showed more
awareness of these issues, gaining support from sectors of the
corporate world that recognized them to be more attuned to real
world problems than Reaganite ideologues. Not that Reaganites
were reluctant to use state power to protect the wealthy from
market forces. The primary mechanisms were the usual military
Keynesian ones. To mention one striking case, a 1985 OECD study
found that the Pentagon and Japan's state planning ministry MITI
were distributing R&D funds much the same way, making similar
guesses about new technologies. A major Pentagon funnel was SDI
(``Star Wars''), which was openly advertised as a state subsidy
to the ``private sector,'' and lauded by the business press for
that reason. The Reagan-Bush decade ended in fall 1992 with a
well-publicized improvement in the economy, attributed in the
business press to a sharp rise in military spending much of it
for computer purchases. While almost all industrial societies
became more protectionist in past years, at great cost to the
Third World, the Reaganites led the pack, introducing more import
restrictions than all postwar administrations combined. British
MP Phillip Oppenheim, ridiculing Anglo-American posturing about
``liberal market capitalism,'' notes that ``A World Bank survey
of non-tariff barriers showed that they covered 9 per cent of all
goods in Japan---compared with 34 per cent in the U.S.---figures
reinforced by David Henderson of the OECD, who stated that during
the 1980s the U.S. had the worst record for devising new
non-tariff barriers'' (basically, ways to strong-arm
competitors). He adds that OECD figures show U.S. state funding
for non-military R&D to be about one-third of all civil research
spending, as compared to 2 percent state funding in Japan. The
Thatcher record is similar.
The Reaganites also conducted the biggest nationalization in U.S.
history (the Continental Illinois Bank bailout) and enabled the
steel industry to reconstruct by effectively barring imports and
undermining unions to reduce labor costs. They are leaving
Washington with heavy new restrictions on European Community
steel exports that the EC claims violate intemational trade
rules; Washington's justification is alleged EC dumping, but the
EC responds that total EC steel exports had fallen below the
``voluntary quota'' (the Reaganite non-tariff barrier). The
Reagan administration sharply increased export-promotion by means
of Export-Import bank credits in apparent ``violation of the
GATT,'' Eximbank chair John Macomber concedes. They conducted
``what was effectively an `industrial policy' '' (contrary to
official rhetoric) that rebuilt the U.S. computer chip industry
by such means as an agreement ``essentially forced on Japan'' to
increase purchases of U.S. chips and by establishment of the
government-industry consortium Sematech to improve manufacturing
technology, the Washington Post reported, quoting Charles White,
vice president for strategic planning at Motorola, the
second-biggest U.S. chip maker, who said: ``You can't
underestimate the government's role.''
Despite such achievements, the Reagan-Bush faction remains
hampered by ideological extremism, unable to face current
problems of industrial strategy as directly as their political
opponents, some elements of the corporate-financial world assume.
Clintonite thinking on this issue is reflected in the choice of
Berkeley Professor Laura Tyson as Chairperson of the Council of
Economic Advisors. Tyson was a founder and codirector of the
Berkeley Roundtable on the International Economy, a
corporate-funded trade and technology research institute that
advocates unconcealed state industrial policy. She has
``longstanding relationships with Silicon Valley companies that
stand to benefit from the policies she advocates,'' Times
business correspondent Sylvia Nasar notes. In support of these
policies, Roundtable co-director Michael Borrus cites a 1988
Department of Commerce study showing that ``five of the top six
fastest growing U.S. industries from 1972 to 1988 were sponsored
or sustained, directly or indirectly, by federal investment,''
the only exception being lithographic services. ``The winners''
in earlier years, he writes, ``computers, biotechnology, jet
engines, and airframes were each the by-product of public
spending for national defense and public health.'' The record
goes back to the earliest days; ``defense'' and ``public health''
are the familiar Newspeak disguises, perhaps a shade less
deceptive than ``free market neoliberalism.''
Such familiar lessons of economic history can no longer be
concealed, as the Pentagon system and the Cold War ideology have
eroded. The interventionist measures of the Reaganites reflect
these needs, as does the increasingly open discussion of
``industrial policy.'' A recent study of the National Academy of
Sciences and Engineering proposed a $5 billion quasi-governmental
company ``to channel federal money into private applied
research''; that is, publicly-funded research that will yield
private profit. Another report, entitled The Government Role in
Civilian Technology: Building a New Alliance, calls for new
efforts to extend ``the close and longstanding''
government-industry relationship that has ``helped to establish
the commercial biotechnology industry.'' It recommends a
government-funded ``Civilian Technology Corporation'' to assist
U.S. industry to commercialize technology by encouraging
``cooperative R&D ventures in pre-commercial areas'';
``pre-commercial,'' to ensure that profit is restricted to
private wealth and power. The ventures will be ``cooperative,''
with the public paying the costs up to the point of product
development. At that point costs change to gains, and the public
hands the enterprise over to private industry, the traditional
pattern.
``America cannot continue to rely on trickle-down technology from
the military,'' Clinton stated in a document issued by his
campaign headquarters in September 1992 (``Technology: The Engine
of Economic Growth''). The old game is ending. In the ``new era''
planned by the Clinton administration, Times science writer
William Broad reports, ``the Government's focus on making
armaments will shift to fostering a host of new civilian
technologies and industries''--- just as in the ``old era,'' but
then behind the Pentagon mask. ``President Clinton proposes to
redirect $76 billion or so in annual Federal research spending so
it spurs industrial innovation'' in emerging
technologies---which, in unmentionable fact, were largely funded
through the Pentagon system (and the National Institute of
Health) in the ``old era.'' A minimum of $30 billion is to be
taken from the Pentagon's research budget as a ``peace dividend''
over four years for these purposes, Broad writes, noting that:
``Significantly, the initiative would spend the same amount of
money as Star Wars, $30 billion, in half the time. ''
Also significantly, Clinton's advisers knew all along that Star
Wars was ``only tangentially related to national defense '' that
its prime function was to serve as ``a path to competitiveness in
advanced technologies,'' as publicly explained in Congressional
Hearings (Clinton's close associate Robert Reich, now Secretary
of Labor, writing in 1985 in the New York Times under the heading
``High Tech, a Subsidiary of Pentagon Inc.''). As noted earlier,
the function of Star Wars as part of the system of public
subsidy, private profit, was made clear to the business world
from the start, though largely concealed from the general public
by the doctrinal managers.
The Wall Street Journal reports a study by Battelle Memorial
Institute showing that research spending will remain sluggish
because of ``a slowdown in weapons development.'' ``Government
spending over the past five years has swung toward space and
energy programs, and away from weapons development '' the
principal author of the report said. That is government spending
(the public subsidy) shifted from one component of the Pentagon
system to the others.
``We're now going to develop an economic strategy much in the way
we developed a national security strategy to fight the cold war,
'' Kent Hughes, president of Clinton s Council on
Competitiveness, proclaimed. It is necessary only to bring out
the striking continuities as old policies are adapted to new
contingencies, and to reinterpret the ``cold war'' as what it
was. A related matter is the traditional business demand that
the public via government, pay the costs of the infrastructure
required for private power and profit, everything from roads to
education. By now, even such enthusiasts for Reagan's party for
the rich as the Wall Street Journal are concerned by the
consequences of the policies they advocated, such as the
deterioration of the state college systems that supplied the
needs of the corporate sector. ``Public higher education---one
the few areas where America still ranks supreme---is being
pounded by state spending cuts, '' the Journal worriedly reports,
echoing the concerns of businesses that ``rely heavily on a
steady stream of graduates'' for skilled personnel and on applied
research that they can exploit. This is one of the long-predicted
consequences of the cutback of federal services for all but the
wealthy and powerful, which devastated states and local
communities. Class war is not easy to fine tune.
That Clinton will be able to address these problems is not at all
clear. Frivolous Reaganite policies left the country deeply in
debt at all levels, from the federal government to households.
Interest on the federal debt has skyrocketed, now reaching the
scale of the days when the costs of the World War had to be
faced. Had the borrowing been used for productive investment or
R&D, it could have been justified. But it was not. Rather, it
was largely frittered away in luxury consumption, financial
manipulations and swindles, and other Yuppie fun-and-games-much
as in Thatcherite England, the other ``revolution'' much admired
by the privileged. A National Science Foundation study at the
peak of the mania estimated that R&D expenditures declined by 5
percent for companies involved in mergers and acquisitions
compared to a 5 percent rise for others. Meanwhile real wages
declined, hunger and deep poverty rose rapidly, the jail
population zoomed, and the society began to take on a distinct
Third World aspect. Given the debt, even the kinds of ``moderate
increase in infrastructure spending'' and other devices that
Clinton advisers are willing to contemplate, reflecting business
concerns, may not be feasible.
Who Decides? For Whom?
The standard rhetorical cloak for the new ``economic strategy''
is that its goal is to provide jobs. That is not false, as long
as we recall the meaning of the term ``jobs'' in Politically
Correct Newspeak. Whether the strategy will provide jobs, and for
whom, is debatable. What is not debatable is that the driving
concern remains the unmentionable seven-letter word, and that the
public is to be excluded, completely, from any participation in
formulating this ``economic strategy. '' The latter principle
follows from the guiding doctrine of elite democratic theory: the
public are to be spectators, not participants in managing public
affairs, which are none of their business. The urgency of
preserving this principle is highlighted by the curious
confusions that the public manifests, reviewed earlier.
The guiding doctrines, of course, have far more general
application. To mention one interesting case, in Poland ``Public
resistance to privatization, especially among workers, has been
evident since early in the post-Communist period,'' the director
of Russian and East European studies at George Washington
University, Sharon Wolchik, observes: ``A 1990 survey, for
example, found that only 13 percent of workers, but 37 percent of
directors, favored private ownership of their enterprise,'' with
over one-third of both workers and directors favoring state and
employee ownership. But the attitudes of the population are
inconsequential in the ``new democracies''---one reason, perhaps,
why ``the Communist era is looking better and better'' to Poles,
as another academic specialist observes (JaneLeftwich Curry).
Whether in Somalia, or Poland, or any other choice that one may
make, the concerns of the general population are as incidental to
the architects of policy as in the days of Adam Smith's England.
And crucially, the rabble must be kept from interfering with the
plans that will determine their fate.
While state managers may attempt to adapt the traditional devices
of public subsidy and protection to new contingencies, they will
surely continue to support the main lines of policy: extending
the globalizalion of the economy and establishing more firmly the
decision-making apparatus that is taking shape to serve the
interests of the supranational industrial and financial
institutions. These are important features of the current era,
discussed in earlier articles here (see my Z articles in May,
July/August, November, and Edward Herman's ``Doublespeak,''
November 1992).
Nixon's dismantling of the intemational economic system was one
of several factors leading to a huge increase in unregulated
capital, beyond the power of governments to control. The rich
societies are no longer immune, as European central banks learned
a few months ago. Even the United States, still the world's
largest economy and most powerful state, is facing these
problems. The U.S. can freely disregard lMF ``advice '' as the
Bush administration showed in October when the IMF prescribed
deficit-cutting measures including new taxes, and ``fundamental''
health care reforms---the kind of ``advice'' on structural
adjustment that amounts to orders for the Third World, however
harmful the consequences, Doug Henwood notes, reporting the U.S.
rejection. But it is not beyond the reach of international bond
investors, who ``may now hold unprecedented power---perhaps even
a veto-over U.S. economic policy,'' the Wall Street Journal
reported immediately after the election. This consequence of the
huge Reagan-Bush deficit will serve as brake on any odd ideas
that Clinton advisers might have about spending, the Journal
noted reassuringly; spending of the wrong kind, that is, not
directed to the needs of ``the country,'' in the technical sense.
Related developments of the past several decades have accelerated
the globalization of the economy, along with its immediate
corollary: a growing superfluous population at home as production
shifts to high repression, low wage areas (and, at the same time,
productivity gains reduce the need for industrial workers). The
superfluous people are becoming less significant as a market as
well. Increasingly, production can be shifted to poor and
oppressed populations and directed to the relatively wealthy, a
small sector in the traditional Third World, a far larger one in
the advanced industrial societies. The model pioneered by Henry
Ford---wages high enough for domestic workers to provide a
market---may decline along with the national economies on which
it was based. Rhetoric aside, these are not likely to be serious
concerns of the ``principal architects'' of policy, any more than
they have been in the past.
The reversion of much of East Europe to its traditional Third
World status offers new weapons against U.S. workers (and Western
workers generally). As widely reported, GM plans to close two
dozen plants in the U.S. and Canada. Meanwhile it bas opened a
$690 million assembly plant in East Germany with great
expectations, heightened by the fact that, thanks to 43 percent
unofficial unemployment, workers are willing to ``work longer
hours than their pampered colleagues in western Germany'' at 40
percent of the wage and with few benefits, the Financial Times
cheerily explains. Capital can readily move; people cannot, or
are not permitted to by those who applaud Adam Smith's doctrines
when it suits their needs. Jobs may disappear in the West;
``jobs'' in the technical sense will do just fine.
The U.S. (like other states) will continue to defend U.S.-based
corporate and financial interests while seeking to maintain a
global environment in which they can flourish. That requires, in
particular, that the Third World be kept in its service role.
Meanwhile at home, state power will continue to be employed to
dissolve popular structures (unions, etc.) that might serve the
needs of the general public and enable them to interfere
illegitimately in the management of public affairs It will also
be necessary to find ways to control the growing ``Third World at
home,'' no small problem. The Clinton Mandate for Change promises
no change in these respects.
Much of world trade (close to half, by some estimates) consists
of intrafirm transfers---centrally managed trade, internal to
particular TNCs and guided by a highly ``visible hand,'' to
borrow the phrase of business historian Alfred Chandler. In an
important critical analysis of the GATT World Bank economists
Herman Daly and Robert Goodland point out that in prevailing
economic theory, ``firms are islands of central planning in a sea
of market relationships. '' ``As the islands get bigger'' they
add, ``there is really no reason to claim victory for the market
principle''---particularly as the islands approach the scale of
the sea, which departs radically from free market principles, and
always has, because the powerful will not submit to these
destructive rules.
As in the past, political institutions are taking shape to
reflect the realities of private economic power: the IMF and
World Bank, G-7, NAFTA, and other elements of the ``de facto
world government'' described by the intemational financial press
as the executive for the ``new imperial age. '' These processes
allow major decisions to be insulated from parliamentary
institutions, which may be infected by public influence This
important development carries forward the long-term project of
safeguarding wealth and privilege from public interference and
overcoming the threat that democratic forms might have actual
substance. Increasingly, the general public are not even aware of
major decisions that will determine their fate, hence are in no
position to influence them. A good part of the popular concern in
Europe over instituting EC structures has to do with ``the
democratic deficit, `` `the fact that policies escape
parliamentary control at the national level and do not come under
equivalent control at the Community level'' (John Lambert). The
same problems are arising here, though they are less discussed in
our more depoliticized society.
Neither at home nor abroad does the real world bear much
resemblance to the dreamy fantasies now fashionable among
intellectuals about History converging to an ideal of liberal
democracy that is the ultimate realization of Freedom. Consider
N NAFTA. One may debate the consequences, but no one doubts that
they will be large in scale. The NAFTA is an executive agreement
reached on August 12, 1992, just in time to become a major issue
in the electoral campaign. It was mentioned but barely. The Trade
Act of 1974 established a Labor Advisory Committee (IAC), based
in the unions, which is required by law to provide advice and
information to the executive branch before any trade agreement is
reached. The LAC was advised that its report was due on September
9, J992. A complete draft of the text of this elaborate treaty
was made available one day before, on September 8, making it
impossible for the LAC to formally meet, as directed by law. One
could hardly con conjure up a more striking example of utter
contempt for democracy. Furthermore, the LAC notes, ``the
administration refused to permit any outside advice on the
development of this document and refused to make a draft
available for comment.''
The situation in Canada was similar. The British Columbia
Teachers Federation wrote a sharply critical report on the treaty
draft noting the ``impossible limitations on the operation of
this committee, ``with absurd time constraints and exclusion of
entire provinces from any review of the lengthy and complex
executive agreement.
Despite the contemptuous dismissal of both the law and the
public, LAC did provide a review of NRA, concluding that while
the treaty would be a bonanza to investors (as all agree), it
would severely harm American workers (about 70 percent of them,
even by the analysis of the advocates). It will also very likely
harm Mexican workers as well, the LAC report notes, as do other
studies. One predicted consequence of the agreement is a rapid
increase in rural migration to urban areas as Mexican com
producers are wiped out by U.S. agribusiness exports, depressing
still further wages that have fallen some 60 percent during the
past decade and are likely to remain low, thanks to the harsh
repression of labor that is a crucial part of the highly-touted
Mexican ``economic miracle.'' Property rights are well
protected by the agreement, LAC and other analysts note, while
workers' rights are ignored.
The treaty is also likely to have harmful environmental
consequences; production can shift to regions where enforcement
of laws is lax or non-existent, and regulations imposed by
parliamentary bodies can be overridden as ``unfair restraint of
trade,'' processes already underway in the Framework of the
U.S.-Canada ``Free trade'' agreement. In general, the LAC report
concludes, ``U.S. corporations, and the owners and managers of
these corporations, stand to reap enormous profits. The United
States as a whole, however, stands to lose an enormous amount.''
The country will suffer, ``the country''--in the Newspeak
sense---will, again, do just fine.
On a wide range of issues, the LAC report observes, NAFTA ``will
have the effect of prohibiting democratically elected bodies at
[federal, state, and local levels of government from enacting
measures deemed inconsistent with the provisions of the
agreement,'' including measures on the environment, workers'
rights, health and safety, etc. The LAC report calls for the
treaty to be renegotiated, offering a series of constructive
proposals.
Neither the contents of this important critical analysis, nor the
scorn for law and democracy shown by the Bush administration,
were reported. These matters are of no interest to the
ideological institutions, or more accurately, are of negative
interest---suppression is necessary, in the interests of ``the
country. '' Citizens know next to nothing; indeed, subversion of
democracy has reached such remarkable heights that they do not
even know that they know nothing. Congress abdicated
responsibility. The Clinton camp had little to say. In such ways,
we can approach the long-sought ideal: formal democratic
procedures that are utterly devoid of meaning, as citizens not
only do not intrude into the public arena,, but have scarcely an
idea of the policies that will shape their lives.
It is a striking fact that although these critical issues have
been kept almost entirely out of the public domain, 60 percent of
the public do have an opinion about NRA, opposing it by nearly
2-to-1 in October 1992. As usual, that was irrelevant to the
presidential campaign, then in its final weeks. It was enough,
however, to frighten the Wall Street Journ9L, which ran a fevered
front-page story warning of the ``diverse coalition of
grass-roots foes'' that is ``fighting `Nafta','' including the
labor movement, populist farm groups, and environmental and
religious organizations. These dangerous elements ``hit pay
dirt,'' the Journal reports ominously, receiving g funds (a
magnificent $50,000) from a branch of the Unitarian Church.
The corporate world is, naturally, shaking in its boots at the
thought that its monopoly might be challenged. The lesson for the
rest of us is obvious.
More generally, people have little specific knowledge of what is
happening `around them. An academic study that appeared right
before the presidential election reports that less than 30
percent of the population was aware of the positions of the
candidates on major issues, though 86 percent knew the name of
George Bush's dog. The general thrust of propaganda gets through,
however. When asked to identify the largest element of the
federal budget, less than 1/4 give the correct answer. military
spending. Almost half select foreign aid, which barely exists;
the second choice is welfare, chosen by 1/3 of the population,
who also far overestimate the proportion that goes to blacks and
to child support. And though the question was not asked,
virtually none are likely to be aware that ``defense spending''
is in large measure welfare for the rich. Another result of the
study is that more educated sectors are more ignorant---not
surprising, since they are the main targets of indoctrination.
Bush supporters, who are the best educated scored lowest overall.
The study also shows that Republican propaganda (however
fraudulent) passed through the media with greater effect than the
Democrats counterpart, an inconvenience for the charges of
``liberal bias'' that are particularly relished by the liberal
media, which---as usual---greatly appreciate such condemnation as
a tribute to their fiery independence of power.
With regard to all of these issues, two distinct questions arise.
What will be the likely consequences of the policies under
consideration? Who decides? The answer to the second question is
clear: the ``principal architects'' of policy are the traditional
ones. The public has essentially no role, and with the recent
advances in destruction of democracy, no knowledge.
As noted, the first question can be debated. Perhaps, as the
scant media coverage generally takes for granted reflexively, the
NAFTA will benefit all; the Clinton and the Reagan-Bush factions
are earnestly seeking to improve the lives and prospects of the
general public, differing only on how to achieve this result; all
are committed to free trade, which is obviously the greater good;
etc. Maybe there really is a tooth fairy. Perhaps. No matter what
one believes, it cannot be doubted that the policy questions
require careful scrutiny and analysis. And that they will not
receive, certainly not on the part of those whose lives and fate
are at stake, unless they organize to do something about it.