Noam Chomsky: The varieties of neo-liberal doctrine

Noam Chomsky

The doctrine of the free market exists in two varieties. The first is the official doctrine imposed on defenseless. The second is what we might call "really existing free market doctrine": market orders are good for you but not for me, except for temporary benefits.

It is "really existing doctrine" dominated, from the XVII century, when Britain became the most developed country in Europe, with a high level of taxation and the effective leadership, organize fiscal and military activities of the state, which has become "the largest and the only player in the economy" and its global expansion, in the words of British historian John Brewer.

Britain ultimately still appealed to the liberal "internationalism" in 1846, after 150 years of protectionism and state control of violence have put it far ahead of any competitor. But turn to the market was made with significant reservations. 40% of the British textiles continued to flow into the colonized India, and the same for the British exports as a whole. British Steel did not allow the U.S. market is very high tariffs, which allowed the United States to develop its own steel industry. But India and other colonies were still available, and remained so when British Steel expelled from the international markets through price policy. India is in this respect, it is instructive case. At the end of the XVIII century it produced as much steel as the whole of Europe, and British engineers in 1820 studied the more advanced techniques of Indian steel mills, trying to overcome the "technology gap". When did the railroad boom, Bombay was producing locomotives at a competitive level. But really existed doctrine of the free market has destroyed these sectors of Indian industry, just as before it destroyed the textile industry, shipbuilding and other types of industries that were considered then advanced. But the United States and Japan have avoided European control and managed to borrow a British model of government intervention in the market.

When the Japanese competition became too difficult to manage, England simply postponed the game: The British Empire is actually closed to the Japanese export part of the background of the Second World War. At the same time, Indian manufakturschiki asked for protection, but from England, not from Japan. If you really existing market doctrine such luck they passed. Abandoning their limited options laissez-faire in the 30-ies of XX century, the British government turned to more direct intervention in its own economy. For several years, the machine-tool production has increased five-fold, along with the boom in the chemical, steel, aviation and many other industries, an economic analyst Will Hutton calls it "the unsung new wave" of the Industrial Revolution. Industry, which is controlled by the state, allowed Britain to beat Germany in the war, and even to reduce the gap with the United States, which then underwent drama own economic expansion, when corporate managers got their hands on state-controlled economy of war.

A century after England turned to a form of liberal "internationalism", the same path followed by the United States. Over the century and a half period of protectionism and violence in the United States have become rich and powerful nations of the world and, just as before England, began to notice the dignity of a "level playing field" where they could expect to defeat any competitor. But as well as England, the United States enjoyed many reservations.

One was that, as a first England Washington applied his force to suppress the self-development of other countries. In Latin America, Egypt, South Asia and all over the development was to be a "catch-up" and not "competitive." Occurred as a large-scale government intervention in trade. For example, Marshall Aid was linked to the purchase of U.S. agricultural products, which was one of the reasons that the U.S. share of world grain trade has increased from less than 10% before the war to more than 50% by 1950, while the export of grain from Argentina fell by two-thirds. U.S. aid "Bread for the World" was also used to subsidize U.S. agribusiness and supply of American grain, of a kind policy played the role of a means of combating the independent development of other countries. The actual destruction of such means of grain production in Colombia has become a factor in the growth of its drug industry, and further neoliberal policies has accelerated this growth in the entire region of the Andes. While the textile industry in Kenya has failed in 1994, when the Clinton administration imposed a quota, barred the path of development, passed every industrial country, "African reformers" were warned that they should move forward, improving the environment for business and "seal the reform free market "for such a policy in trade and investment that will meet the requirements of foreign investors.

And these are just some of the disparate illustrations.

However, the most significant deviations from the doctrine of the free market are different. One of the fundamental postulates of the theory of free trade says that government subsidies are not allowed. But after World War II, American business leaders had expected that without state intervention the economy rush right back to depression. They also insisted that the highly industry, especially aviation, but a more general conclusion was, "can not satisfactorily exist in a competitive, unsubsidized economy based only on free enterprise," and that "the government is the only possible savior of her." I quote from the major business publications, which also acknowledged that the Pentagon's system the best way to shift the cost on society. They understood that social spending could play the same catalytic role, but it is not a direct subsidy to the corporate sector, because it is associated with democratization and is redistributive. Military spending is not peculiar to any one of these "gaps".

Products defense industry is also easy to sell. President Truman's secretary for the Air Force put it simply, we should not use the word "subsidy", he said, we should use the word "security." He was convinced that the military budget is capable of as he puts it, "to meet the needs of the aviation industry." One consequence of this was that civil aircraft are now leading the subject of U.S. exports, and production-based aircraft giant industry of travel and tourism is a major source of profits.

So, Clinton found it quite appropriate to select the "Boeing" as "a model for companies across America," when at the Asia-Pacific summit in 1993, he preached to thunderous applause own "a new vision of the future that is associated with the free market." An excellent example of a real-world markets, the production of civil aircraft is now in the hands of predominantly two firms' BoingMakdonald "and" Airbus ", each of which obya Zana their existence and success of large-scale government support. The same pattern prevails in computers and electronics in general, in automation, biotechnology, communications media, and in fact almost every fast-growing sector of the economy.

Reagan administration was not required to explain the doctrine of "really existing free market capitalism." Its employees were masters of their craft: extolling the delights of the market to the poor, they proudly boasted to the business world that Reagan "has given more subsidies of U.S. industry than any of his predecessors in more than half a century," too modest assertion, because they have surpassed all predecessors combined, when "the leadership of a major shift towards protectionism after the 30-ies of XX century", commented the Reagan decade review in the magazine "the Foreign Affairs". Without this and other extreme measures of state intervention in the market it is doubtful that the steel, automotive, machine-tool, or semiconductor industry coped with the Japanese competition or have been able to lead in new technologies with important consequences for the overall economy. This experience illustrates once again that the "conventional wisdom is full of holes," as they say in another article in "the Foreign Affairs", dedicated to the Reagan era. But conventional wisdom keeps its ideological weapon for the suppression of the defenseless.

Both the United States and Japan has just announced new major programs of investment in advanced technologies transferred in the aircraft and semiconductor industries to support the private industrial sector by state subsidies.

To illustrate what "really existing free market theory" with the other evidence, we note that in an extensive study of transnational corporations (TNCs) Ruijgrok Winfried and Rob van Tulder found that "in fact, all the major companies of the world experienced a major determining effect of by government policies and trade barriers related to their strategy and competitiveness, "and" at least twenty companies in the list of the 100 most successful companies in the magazine "Fortune" in 1993 did not have survived as independent companies, if they were not rescued their governments, "or socialization of losses, or simply turning over control to the state, when they are in trouble. One of them is a leading employer in the deeply conservative district Gingrich, the company "Lockheed", was rescued from the collapse of the large government guarantees loans. The same study also highlights that government intervention, which "has been the rule rather than the exception over the past two centuries … has played a key role in the development and spread of many new products in products and production processes, especially in the aerospace and electronics industries, modern agriculture, material technology, energy and transport technologies ", as well as generally in the telecommunications and information technologies tion (the most impressive recent examples of the Internet and World Wide Web), and in the old days in the textile and steel industries, and of course, energy. Government policy "was and remains the overwhelming force in shaping the policies and the competitiveness of the largest companies in the world." Other technical studies confirm these findings.

All this is to say much more, but one conclusion is quite clear: the doctrine sanctioned cleverly invented and used for power and profit. Today's "experiments" followed a familiar pattern when take the form of "socialism for the rich" in the system of global corporate mercantilism, in which "trade" is a significant number of transactions carried out within the same firms under the central leadership, when these firms are a giant organization related to its competitors strategic alliances when they tyrannical internal structure, planned in such a way as to hinder the democratic decision-making and prevent the owners from market discipline. It is assumed that this doctrine should be taught the inexorable poor and defenseless.

So, we can ask how the "global" economy really is and to what extent it may be popular democratic control. If we take as our starting point trade, financial flows, etc., at the present time, the economy is more global than at the beginning of the twentieth century. Furthermore, TNCs rely heavily on government subsidies and domestic markets, and their international transactions, including trade deals under the other, it is mainly within Europe, Japan and the United States, where policies are effective and there is no fear of the military coup and the like. It can be a lot of new and significant, but not very much you can believe in that process of "out of control", even if we stick to existing mechanisms.

Maybe the fact that we have to adhere to them, is a law of nature? No, if we seriously examine the doctrine of classical liberalism. For example, it is well known that Adam Smith praised the division of labor. However, it remains virtually unknown to the fact that he denounced his brutal consequences that turn workers into objects "is so stupid and ignorant as it is possible for a human being", and is "in any decent and civilized society should be prevented" by government action to overcoming the destructive power of the "invisible hand." Also not too much touted Smith's opinion that the government "regulation in favor of the workers are always fair and equitable," but "when it is in favor of the hosts," it is not like that. Or take his call for income equality that forms the core of his argument in favor of the free market.

Other leading members of the classical liberal tradition goes much further. Wilhelm von Humboldt decried wage labor as such: he wrote that if a worker works under external control, "we may admire what he does, but despise what he is." "Craft is improving, deteriorating craftsman," said Alexis de Tocqueville. Also, a great figure of the liberal pantheon, Tocqueville agreed with Smith and Jefferson is that income inequality is an important feature of a free and just society. One hundred and sixty years ago, he warned of the dangers of "permanent inequality of conditions" and the end of democracy that will come if the "aristocracy manufakturschikov, growing before our eyes" in the United States, "one of the worst that ever existed in the world" break out beyond its intended scope, which it subsequently did, going over the brink of the worst nightmares of Tocqueville.

I barely touch the intricate and entertaining issues that, in my opinion, suggests that the basic principles of classical liberalism find their natural modern expression is not in the neo-liberal "religion", and independent action of the working people and the ideas and practices freedom-loving socialists, what to pay attention to such major thinkers of the XX century, as Bertrand Russell and John Dewey.

We must prudently assess the doctrine prevailing in the intellectual scene and treated with vigilant attention to the arguments, facts and lessons of the past and contemporary history. It makes no sense to ask what the "right" country-specific, as if these countries are common to all the citizens of the interests and values. Besides what may be right for the people of the United States, which has incomparable advantages, it can be wrong for others with a much narrower range of choices. At the same time, however, we can sensibly assume that what is right for the people of the world, but at a very unlikely coincidence can match the plans' principal architects. " And now there is no more reason than they've ever been before, let these "principal architects" to arrange a future in their own interest.

An excerpt from the book Profit on humans

Like this post? Please share to your friends: