15 Noam Chomsky Quotes on Economics

Noam Chomsky quotes on economics

8. 'Tough love' is just the right phrase: love for the rich and privileged, tough for everyone else.

19. The Bush Administration do have moral values. Their moral values are very explicit: shine the boots of the rich and the powerful, kick everybody else in the face, and let your grandchildren pay for it. That simple principle predicts almost everything that's happening.

22. If there was anyone who actually fit the category of conservative, if there was such a category of people, they would have a very easy way to deal with the fact that 60% of the children under 2 [in Nicaragua] are suffering probable brain damage. Namely, by paying their debts. Simple conservative principle. But that's beyond unthinkable. Compassionate conservatives might want to go beyond that, if they existed. But they're much more interested in making political capital over the fact that a woman in a vegetative state shouldn't be allowed to die in dignity.

23. Personally I'm in favor of democracy, which means that the central institutions in the society have to be under popular control. Now, under capitalism we can't have democracy by definition. Capitalism is a system in which the central institutions of society are in principle under autocratic control. Thus, a corporation or an industry is, if we were to think of it in political terms, fascist; that is, it has tight control at the top and strict obedience has to be established at every level -- there's a little bargaining, a little give and take, but the line of authority is perfectly straightforward. Just as I'm opposed to political fascism, I'm opposed to economic fascism. I think that until major institutions of society are under the popular control of participants and communities, it's pointless to talk about democracy.

24. ...capitalism is basically a system where everything is for sale, and the more money you have, the more you can get. And, in particular, that's true of freedom. Freedom is one of the commodities that is for sale, and if you are affluent, you can have a lot of it. It shows up in all sorts of ways. It shows up if you get in trouble with the law, let's say, or in any aspect of life it shows up. And for that reason it makes a lot of sense, if you accept capitalist system, to try to accumulate property, not just because you want material welfare, but because that guarantees your freedom, it makes it possible for you to amass that commodity. [...] what you're going to find is that the defense of free institutions will largely be in the hands of those who benefit from them, namely the wealthy, and the powerful. They can purchase that commodity and, therefore, they want those institutions to exist, like free press, and all that.

26. Ricardo's 'science' was founded on the principle that capital is more or less immobile and labor highly mobile. We are enjoined today to worship the consequences of Ricardo's science, despite the fact that the assumptions on which they are based have been reversed: capital is highly mobile, and labor virtually immobile -- libertarian conservatives lead the way in rejecting Adam Smith's principle that 'free circulation of labor' is a cornerstone of free trade, in keeping with their contempt for markets (except for the weak).

30. Take the Kyoto Protocol. Destruction of the environment is not only rational; it's exactly what you're taught to do in college. If you take an economics or a political science course, you're taught that humans are supposed to be rational wealth accumulators, each acting as an individual to maximize his own wealth in the market. The market is regarded as democratic because everybody has a vote. Of course, some have more votes than others because your votes depend on the number of dollars you have, but everybody participates and therefore it's called democratic. Well, suppose that we believe what we are taught. It follows that if there are dollars to be made, you destroy the environment. The reason is elementary. The people who are going to be harmed by this are your grandchildren, and they don't have any votes in the market. Their interests are worth zero. Anybody that pays attention to their grandchildren's interests is being irrational, because what you're supposed to do is maximize your own interests, measured by wealth, right now. Nothing else matters. So destroying the environment and militarizing outer space are rational policies, but within a framework of institutional lunacy. If you accept the institutional lunacy, then the policies are rational.

32. ...there are no two points of view more antithetical than classical liberalism and capitalism -- and that's why when the University of Chicago publishes a bicentennial edition of Smith, they have to distort the text (which they did): because as a true classical liberal, Smith was strongly opposed to all of the idiocy they now sprout in his name.

33. During the early stages of the industrial revolution, as England was coming out of a feudal-type of society and into what's basically a state-capitalist system, the rising bourgeoisie there had a problem. In a traditional society like the feudal system, people had a certain place, and they had certain rights - in fact, they had what was called at the time a 'right to live.' I mean, under feudalism it may have been a lousy right, but nevertheless people were assumed to have some natural entitlement for survival. But with the rise of what we call capitalism, that right had to be destroyed: people had to have it knocked out of their heads that they had any automatic 'right to live' beyond what they could win for themselves on the labor market. And that was the main point of classical economics. Remember the context in which all of this was taking place: classical economics developed after a period in which a large part of the English population had been forcibly driven off the land they had been farming for centuries - that was by force, it wasn't a pretty picture. In fact, very likely one of the main reasons why England led the industrial revolution was just that they had been more violent in driving people off the land than in other places. For instance, in France a lot of people were able to remain on the land, and therefore they resisted industrialization more. But even after the rising bourgeoisie in England had driven millions of peasants off the land, there was a period when the population's 'right to live' still was preserved by what we would today call 'welfare.' There was a set of laws in England which gave people rights, called the 'Poor Laws' - which essentially kept you alive if you couldn't survive otherwise; they provided sort of a minimum level of subsistence, like subsidies on food and so on. And there was something called the 'Corn Laws', which gave landlords certain rights beyond those they could get on the market - they raised the price of corn, that sort of thing. And together, these laws were considered among the main impediments to the new rising British industrial class - so therefore they just had to go. Well, those people needed an ideology to support their effort to knock out of people's heads the idea that they had this basic right to live, and that's what classical economics was about - classical economics said: no one has any right to live, you only have a right to what you gain for yourself on the labor market. And the founders of classical economics in fact said they'd developed a 'scientific theory' of it, with - as they put it - 'the certainty of the principle of gravitation.' Alright, by the 1830s, political conditions in England had changed enough so that the rising bourgeoisie were able to kill the Poor Laws, and then later they managed to do away with the Corn Laws. And by around 1840 or 1845, they won the elections and took over the government. Then at that point, a very interesting thing happened. They gave up the theory, and Political Economy changed. It changed for a number of reasons. For one thing, these guys had won, so they didn't need it so much as an ideological weapon anymore. For another, they recognized that they themselves needed a powerful interventionist state to defend industry from the hardships of competition in the open market - as they always had in fact. And beyond that, eliminating people's 'right to live' was starting to have some negative side-effects. First of all, it was causing riots all over the place: for a long period, the British army was mostly preoccupied with putting down riots across England. Then something even worse happened - the population started to organize: you got the beginnings of an organized labor movement, and later the Chartist movement, and then a socialist movement developed. And at that point, the elites in England recognized that the game just had to be called off, or else they really would be in trouble - so by the time you get to the second half of the nineteenth century, things like John Stuart Mill's Principles of Political Economy, which gives kind of a social-democratic line, were becoming the reigning ideology. See, the 'science' happens to be a very flexible one: you can change it to do whatever you feel like, it's that kind of 'science.' So by the middle of the nineteenth century, the 'science' had changed, and now it turned out that laissez-faire was a bad thing after all - and what you got instead were the intellectual foundations for what's called the 'welfare state.' And in fact, for a century afterwards, 'laissez faire' was basically a dirty word - nobody talked about it anymore. And what the 'science' now said was that you had better give the population some way of surviving, or else they're going to challenge your right to rule. You can take away their right to live, but then they're going to take away your right to rule - and that's no good, so ways have to be found to accommodate them. Well, it wasn't until recent years that laissez-faire ideology was revived again - and again, it was a weapon of class warfare. As far as I can see, the principles of classical economics in effect are still taught: I don't think what's taught in the University of Chicago Economics Department today is all that different, what's called 'neo-liberalism'. And it doesn't have any more validity than it had in the early nineteenth century - in fact, it has even less. At least in the early nineteenth century, Ricardo's and Malthus' assumptions had some relation to reality. Today those assumptions have no relation to reality. Look: the basic assumption of the classical economists was that labor is highly mobile and capital is relatively immobile - that's required, that's crucial to proving all their nice theorems. That was the reason they could say, 'If you can't get enough to survive on the labor market, go someplace else' - because you could go someplace else: after the native populations of places like the United States and Australia and Tasmania were exterminated or driven away, then yeah, poor Europeans could go someplace else. So in the early nineteenth century, labor was indeed mobile. And back then, capital was indeed immobile - first because 'capital' primarily meant land, and you can't move land, and also because the extent that there was investment, it was very local: like, you didn't have communications systems that allowed for easy transfers of money all around the world, like we do today. So in the early nineteenth century, the assumption that labor is mobile and capital is immobile was more or less realistic - and on the basis of that assumption, you could try to prove things about comparative advantage and all this stuff you learn in school about Portugal and wine and so on. Incidentally, if you want to know how well those theorems actually work, just compare Portugal and England after a hundred years of trying them out - growing wine versus industrializing as possible modes of development. But let's put that aside... Well, by now the assumptions underpinning these theories are not only false - they're the opposite of the truth. By now labor is immobile, through immigration restrictions and so on, and capital is highly mobile, primarily because of technological changes. So none of the results work anymore. But you're still taught them, you're still taught the theories exactly as before - even though the reality today is the exact opposite of what we assumed in the early nineteenth century. I mean, if you look at some of the fancier economists, Paul Krugman and so on, they've got all kinds of little tricks here and there to make the results not quite so grotesquely ridiculous as they'd otherwise be. But fundamentally, it all just is pretty ridiculous. If capital is mobile and labor is immobile, there's no reason why mobile capital shouldn't seek absolute advantage and play one national workforce against another, go wherever the labor is cheapest and thereby drive everybody's standard of living down. In fact, that's exactly what we're doing in NAFTA and all these other international trade agreements which are being instituted right now. Nothing in these abstract economic models actually works in the real world. It doesn't matter how many footnotes they put in, or how many ways they tinker around the edges. The whole enterprise is totally rotten at the core: it has no relation to reality anymore - and furthermore, it never did.

34. In fact, just take a look at the history of 'trucking and bartering' itself; look at the history of modern capitalism, about which we know a lot. The first thing you'll notice is, peasants had to be driven by force and violence into a wage-labor system they did not want; then major efforts were undertaken - conscious efforts - to create wants. In fact, if you look back, there's a whole interesting literature of conscious discussion of the need to manifacture wants in the general population. It's happened over the whole long stretch of capitalism of course, but one place where you can see it very nicely encapsulated is around the time when slavery was terminated. It's very dramatic too at cases like these. For example, in 1831 there was a big slave revolt in Jamaica - which was one of the things that led the British to decide to give up slavery in their colonies: after some slave revolts, they basically said, 'It's not paying anymore.' So within a couple of years the British wanted to move from a slave economy to a so-called 'free' economy, but they still wanted the basic structure to remain exactly the same - and if you take a look back at the parliamentary debates in England at the time, they were talking very consciously about all this. They were saying: look, we've got to keep it the way it is, the masters have to become the owners, the slave have to become the happy workers - somehow we've got to work it all out. Well, there was a little problem in Jamaica: since there was a lot of open land there, when the British let the slaves go free they just wanted to move out onto the land and be perfectly happy, they didn't want to work for the British sugar plantations anymore. So what everyone was asking in Parliament in London was, 'How can we force them to keep working for us, even when they're no longer enslaved into it?' Alright, two things were decided upon: first, they would use state force to close off the open land and prevent people from going and surviving on their own. And secondly, they realized that since all these workers didn't really want a lot of things - they just wanted to satisfy their basic needs, which they could easily do in that tropical climate - the British capitalists would have to start creating a whole set of wants for them, and make them start desiring things they didn't then desire, so then the only way they'd be able to satisfy their new material desires would be by working for wages in the British sugar plantations. There was very conscious discussion of the need to create wants - and in fact, extensive efforts were then undertaken to do exactly what they do on T.V. today: to create wants, to make you want the latest pair of sneakers you don't really need, so then people will be driven into a wage-labor society. And that pattern has been repeated over and over again through the whole entire history of capitalism. In fact, what the whole history of capitalism shows is that people have had to be driven into situations which are then claimed to be their nature. But if the history of capitalism shows anything, it shows it's not their nature, that they've had to be forced into it, and that that effort has had to be maintained right until this day.

46. On September 1st of last year, the Soviet Union shot down Korean KAL 007, killing 269 people, and the immediate response here was that this proves that the Russians are the most barbaric people since Attila the Hun or something, and therefore we have to step up the attack against Nicaragua, set in MX missiles, put Pershings in West Germany, and increase the military system. In fact, the immediate main reaction here was great euphoria on Wall Street, where commentators pointed out that defense stocks have never looked better, you know, the big rise in defense stocks. All of this was because of this barbarous act, which is the worst thing that ever happened in human history. The story was given unbelievable coverage. Not only the story, but the American government interpretation of it, which is roughly what I've just said, was given the kind of coverage that I doubt has ever been given to any story in history... Just to give you an indication, the New York Times publishes an index volume, very densely printed thing, you practically need a magnifying glass to read it, big pages... For the month of September alone, the index volume is 7 pages, just on this... And it's all from the standpoint of the government, namely, here're these unbelievable monsters, for no reason other than sadistic love of massacre, killed 269 innocent people. Well, the government story gradually eroded and collapsed, and now basically nothing's left of it, except some funny questions. Like, what was that Korean airliner actually doing over the most sensitive area of Russian airspace? And why didn't the American reconnaissance jets nearby, RC-135 or... Why didn't they signal to the plane, as they certainly had the ability to do, to get out of the region? And what was it doing there in the first place, how come it was on a great circle route? It's very hard to imagine by a navigational error. There're all kinds of questions like that, and those questions have essentially collapsed the government case, as was sort of quietly admitted in the small print after the political capital has been made. But there're some other things, which are never discussed, which I think are even more important. So let me mention a couple. Right in the middle of all of this furor about the Korean airliner, on November 11th in fact, there was a 100 word item in the New York Times, devoted to the interesting fact that UNITA, which is a group that we call 'freedom fighters', supported by us and South Africa, in Angola, they took credit for shooting down a civilian Angolan jet, killing 126 people. Now, there was no RC-135 in the area, confusing the issue, maybe jamming radar. It was just pure, plain, premeditated murder. Got 100 words in the New York Times. February 9th this year, UNITA took credit for downing another civilian jet. That one wasn't even mentioned, you gotta read the foreign press to find that one out. Now, under the very confused circumstances of KAL 007, if that was the worst atrocity in human history, well, what about the freedom fighters that we support along with South Africa? Who did something much worse, they just purposely shot down a civilian jet. I mean, granted, the only people killed were black or something, but putting that aside, why is it any different? In fact, it's a lot worse. And in fact, since we're the ones who support them, we're the worst barbarians in history, way worse than the Russians. So let's go back a little further, those who have a little bit of memory could remember some other cases. For example, in October 1976, a Cubana airliner was blown up, with 76 people killed, including the Olympic gold medal winning fencing team of Cuba, and the bomb was placed on the plane by the CIA. It was placed by a CIA agent, he's known, he continued to be a CIA agent, continued to carry out other atrocities... Or let's go back a little further. In February 1973, Israel shot down a civilian jet over the Sinai, killing 110 people. The plane was lost in a sand storm. It was about 2 minutes flight time away from Cairo. No confusion, no ambiguity. The orders came from the highest center of the high command. Now this was sort of noticed, there were a couple of references to this in the middle of the KAL 007 business. Predictably, a series of lies were produced, in the New York Times and elsewhere, saying that the situation was totally different because Israel has taken responsibility and paid compensation. If you look back, you find that Israel did not take responsibility, and refused to pay compensation. They agreed to something else, what's called ex gratia compensation, meaning just sort of pure humanitarian aid, which is easy enough because we paid for it. But they refused to pay compensation, because that would imply responsibility, and they refused any responsibility. In fact, what they did is exactly what the Russians did: they put a couple of pilots on television, and they told how what they did was exactly right and just, and they tried to blame the French pilot, he didn't know how to fly... Couple of days after that, Golda Meir came to Washington. She was asked no embarrassing questions about this; the press didn't bother. And she returned home with new military aircrafts. That's the way we responded in that case. There was also editorial comment. The New York Times, which was outraged beyond anything about the Russians, it also had something to say in this case. It had an editorial saying that 'No useful purpose is served by acrimonious debate over assignment of blame'. That was the phrase in this situation of tension... Well, if you look back a little further, you can find other things too. For example, in 1955 an Air-India plane was blown up, with many people killed. In fact, including the people killed was the whole Chinese delegation to the Bandung Conference, the neutralist conference that was held in Indonesia. Turned out the bomb was planted by a CIA agent, who later defected and told the story... The purpose of the operation was to kill Zhou Enlai, who was supposed to be on the plane but by accident had gotten off. So they killed the rest of the delegation, plus everybody else, but not him... And if you bother, you'll find other cases too. All of this is ignored. The one case which was even mentioned, the Israeli one, was falsified... While we have this huge hysteria whipped up about the worst monsters in history... And the press went along with this, virtually 100%. The LA Times is the only newspaper in the US that I know of, that published an honest account of the Israeli case, by Robert Scheer. He published a straight factual account, which gave essentially what I've just said. The other cases were never mentioned -- maybe there's something that I've missed -- but the rest of the press didn't mention any of this stuff. Now, here is an example of the way a really well-disciplined propaganda system works. Total obedience, total subservience to state propaganda. When the state says, 'Whip up hysteria against the evil empire', everybody starts yelling, jumping up and down, and screaming about the evil empire... [Q: how do you pull that off?] That's a very interesting question. See, if it happened in, say, Nazi Germany or the Soviet Union, we know how they pulled it off. Namely, an order came from the Ministry of Truth, and everybody had to obey it. Now that didn't happen here. Here it happened in the way American propaganda always works: by servility and cowardice and class interest. In other words, we have a relatively centralized media, and there are great advantages to subordinating yourself to external power, which in fact represents your interests anyhow. The mass media are basically big corporations, and they share the interests of other major corporations, which means the interests represented by the state. So it's not too surprising that they'd tend to support state power; what is interesting is the uniformity, the virtual lack of deviance. The fact that in a country as complex as this, one article should appear, referring to one of these incidents, and the others I suppose were barely reported at all. This is something that you find over and over again when looking at the American propaganda system. So for example, take the invasion of South Vietnam. How did we succeed, for 22 years, in preventing essentially 100% of scholarship from referring to a historical event that occurred. Namely, the American invasion of South Vietnam. There is no such event. Take a look in the encyclopedias, the history books, the specialized monographs, and you'll see that there's no such event as the invasion of South Vietnam in 1962, or aggression against South Vietnam - it's just not there... We have a very intricate system, and it does it with consummate skill, and with great success. So on major issues, you just get no deviation at all.

110. To gain control over this resource, and have probably military bases there, is a tremendous achievement for world control. You read counter-arguments to this, and they're worth looking at. So it's argued that it can't be true, because the costs of reconstruction are gonna be greater than the profits that will be made. Well, maybe that's true, maybe it isn't, but it's totally irrelevant. And the reason is because the costs of reconstruction are gonna be paid by the taxpayer, by you, and the profits are gonna go right into the pockets of the energy corporations. So yeah, it doesn't matter how they balance out, it's just another taxpayer subsidy to the rich.

111. Somebody's paying the corporations that destroyed Iraq and the corporations that are rebuilding it. They're getting paid by the American taxpayer in both cases. So we pay them to destroy the country, and then we pay them to rebuild it.

186. There's one white powder which is by far the most lethal known, it's called sugar. If you look at the history of imperialism, a lot of it has to do with that. A lot of the imperial conquest, say in the Caribbean, set up a kind of a network... The Caribbean back in the 18th century was a soft drug producer: sugar, rum, tobacco, chocolate. And in order to do it, they had to enslave Africans, and it was done largely to pacify working people in England who were being driven into awful circumstances by the early industrial revolution. That's why so many wars took place around the Caribbean.

193. Rio de Janeiro, incidentally, is not the poor part of the country, that sort of the rich part of the country. It's not the northeast, where 35 million people or so, nobody knows what happens to them, or cares. But Rio de Janeiro, that's where people are looking, the rich parts. And this journal is a science journal, kinda like Science in the United States. It was studying malnutrition. And here's the figures it had for Rio de Janeiro: infants from 0 to 5 months, severe malnutrition, meaning medically severe, 67%; 5 months to a year, 41%; a year to 5 years, 11%. Now the reason of course for the decline, from 67 to 41 to 11, is that they will die. So that's what happens under the conditions of the economic miracle, like in Guatemala. Now, it's a little wrong to say that the people die. The fact is, they don't die. We kill them, that's what happens. We kill them by carrying out policies, supporting the regimes of the kind that I've described. And by intervening with force and violence to suppress and destroy any attempt, however minimal, even on a speck like Grenada, we've got to stop any attempt to bring some change into this. That's the history of our hemisphere.