Page 1 of
2 DISPATCHES FROM
AMERICA Plutonomy and the
precariat By Noam Chomsky
The Occupy movement has been an extremely
exciting development. Unprecedented, in fact.
There's never been anything like it that I can
think of. If the bonds and associations it has
established can be sustained through a long, dark
period ahead - because victory won't come quickly
- it could prove a significant moment in American
history.
The fact that the Occupy movement
is unprecedented is quite appropriate. After all,
it's an unprecedented era and has been so since
the 1970s, which marked a major turning point in
American history. For centuries, since the country
began, it had been a developing society, and not
always in very pretty ways. That's another story,
but the general progress was toward wealth,
industrialization, development, and hope. There
was a pretty
constant expectation that it was
going to go on like this. That was true even in
very dark times.
I'm just old enough to
remember the Great Depression. After the first few
years, by the mid-1930s - although the situation
was objectively much harsher than it is today -
nevertheless, the spirit was quite different.
There was a sense that "we're gonna get out of
it," even among unemployed people, including a lot
of my relatives, a sense that "it will get
better".
There was militant labor union
organizing going on, especially from the CIO
(Congress of Industrial Organizations). It was
getting to the point of sit-down strikes, which
are frightening to the business world - you could
see it in the business press at the time - because
a sit-down strike is just a step before taking
over the factory and running it yourself. The idea
of worker takeovers is something which is,
incidentally, very much on the agenda today, and
we should keep it in mind. Also New Deal
legislation was beginning to come in as a result
of popular pressure. Despite the hard times, there
was a sense that, somehow, "we're gonna get out of
it".
It's quite different now. For many
people in the United States, there's a pervasive
sense of hopelessness, sometimes despair. I think
it's quite new in American history. And it has an
objective basis.
On the working
class In the 1930s, unemployed working people
could anticipate that their jobs would come back.
If you're a worker in manufacturing today - the
current level of unemployment there is
approximately like the Depression - and current
tendencies persist, those jobs aren't going to
come back.
The change took place in the
1970s. There are a lot of reasons for it. One of
the underlying factors, discussed mainly by
economic historian Robert Brenner, was the falling
rate of profit in manufacturing. There were other
factors. It led to major changes in the economy -
a reversal of several hundred years of progress
towards industrialization and development that
turned into a process of de-industrialization and
de-development. Of course, manufacturing
production continued overseas very profitably, but
it's no good for the work force.
Along
with that came a significant shift of the economy
from productive enterprise - producing things
people need or could use - to financial
manipulation. The financialization of the economy
really took off at that time.
On
banks Before the 1970s, banks were banks.
They did what banks were supposed to do in a state
capitalist economy: they took unused funds from
your bank account, for example, and transferred
them to some potentially useful purpose like
helping a family buy a home or send a kid to
college. That changed dramatically in the 1970s.
Until then, there had been no financial crises
since the Great Depression. The 1950s and 1960s
had been a period of enormous growth, the highest
in American history, maybe in economic history.
And it was egalitarian. The lowest
quintile did about as well as the highest
quintile. Lots of people moved into reasonable
lifestyles - what's called the "middle class"
here, the "working class" in other countries - but
it was real. And the 1960s accelerated it. The
activism of those years, after a pretty dismal
decade, really civilized the country in lots of
ways that are permanent.
When the 1970s
came along, there were sudden and sharp changes:
de-industrialization, the off-shoring of
production, and the shift to financial
institutions, which grew enormously. I should say
that, in the 1950s and 1960s, there was also the
development of what several decades later became
the high-tech economy: computers, the Internet,
the IT Revolution developed substantially in the
state sector.
The developments that took
place during the 1970s set off a vicious cycle. It
led to the concentration of wealth increasingly in
the hands of the financial sector. This doesn't
benefit the economy - it probably harms it and
society - but it did lead to a tremendous
concentration of wealth.
On politics
and money Concentration of wealth yields
concentration of political power. And
concentration of political power gives rise to
legislation that increases and accelerates the
cycle. The legislation, essentially bipartisan,
drives new fiscal policies and tax changes, as
well as the rules of corporate governance and
deregulation. Alongside this began a sharp rise in
the costs of elections, which drove the political
parties even deeper into the pockets of the
corporate sector.
The parties dissolved in
many ways. It used to be that if a person in
Congress hoped for a position such as a committee
chair, he or she got it mainly through seniority
and service. Within a couple of years, they
started having to put money into the party coffers
in order to get ahead, a topic studied mainly by
Tom Ferguson. That just drove the whole system
even deeper into the pockets of the corporate
sector (increasingly the financial sector).
This cycle resulted in a tremendous
concentration of wealth, mainly in the top tenth
of one percent of the population. Meanwhile, it
opened a period of stagnation or even decline for
the majority of the population. People got by, but
by artificial means such as longer working hours,
high rates of borrowing and debt, and reliance on
asset inflation like the recent housing bubble.
Pretty soon those working hours were much higher
in the United States than in other industrial
countries like Japan and various places in Europe.
So there was a period of stagnation and decline
for the majority alongside a period of sharp
concentration of wealth. The political system
began to dissolve.
There has always been a
gap between public policy and public will, but it
just grew astronomically. You can see it right
now, in fact. Take a look at the big topic in
Washington that everyone concentrates on: the
deficit. For the public, correctly, the deficit is
not regarded as much of an issue. And it isn't
really much of an issue. The issue is joblessness.
There's a deficit commission but no joblessness
commission. As far as the deficit is concerned,
the public has opinions. Take a look at the polls.
The public overwhelmingly supports higher taxes on
the wealthy, which have declined sharply in this
period of stagnation and decline, and the
preservation of limited social benefits.
The outcome of the deficit commission is
probably going to be the opposite. The Occupy
movements could provide a mass base for trying to
avert what amounts to a dagger pointed at the
heart of the country.
Plutonomy and the
precariat For the general population, the
99% in the imagery of the Occupy movement, it's
been pretty harsh - and it could get worse. This
could be a period of irreversible decline. For the
1% and even less - the .1% - it's just fine. They
are richer than ever, more powerful than ever,
controlling the political system, disregarding the
public. And if it can continue, as far as they're
concerned, sure, why not? Take, for
example, Citigroup. For decades, Citigroup has
been one of the most corrupt of the major
investment banking corporations, repeatedly bailed
out by the taxpayer, starting in the early Ronald
Reagan years and now once again. I won't run
through the corruption, but it's pretty
astonishing.
In 2005, Citigroup came out
with a brochure for investors called "Plutonomy:
Buying Luxury, Explaining Global Imbalances." It
urged investors to put money into a "plutonomy
index". The brochure says, "The World is dividing
into two blocs - the Plutonomy and the rest."
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
Central, Hong Kong Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
