[OccupyCU] Plutonomy and the Precariat / Noam Chomsky | May 8, 2012

[ya'aQov]

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http://www.thenation.com/article/167763/plutonomy-and-precariat
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*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 percent 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 percent and even less—the .1
percent—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 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.”*

*Plutonomy refers to the rich, those who buy luxury goods and so on, and
that’s where the action is. They claimed that their plutonomy index was way
outperforming the stock market. As for the rest, we set them adrift. We
don’t really care about them. We don’t really need them. They have to be
around to provide a powerful state, which will protect us and bail us out
when we get into trouble, but other than that they essentially have no
function. These days they’re sometimes called the “precariat”—people who
live a precarious existence at the periphery of society. Only it’s not the
periphery anymore. It’s becoming a very substantial part of society in the
United States and indeed elsewhere. And this is considered a good thing.*

*So, for example, Fed Chairman Alan Greenspan, at the time when he was
still “Saint Alan”—hailed by the economics profession as one of the
greatest economists of all time (this was before the crash for which he was
substantially responsible)—was testifying to Congress in the Clinton years,
and he explained the wonders of the great economy that he was supervising.
He said a lot of its success was based substantially on what he called
“growing worker insecurity.” If working people are insecure, if they’re
part of the precariat, living precarious existences, they’re not going to
make demands, they’re not going to try to get better wages, they won’t get
improved benefits. We can kick ’em out, if we don’t need ’em. And that’s
what’s called a “healthy” economy, technically speaking. And he was highly
praised for this, greatly admired.*

*So the world is now indeed splitting into a plutonomy and a precariat—in
the imagery of the Occupy movement, the 1 percent and the 99 percent. Not
literal numbers, but the right picture. Now, the plutonomy is where the
action is and it could continue like this.*

*If it does, the historic reversal that began in the 1970s could become
irreversible. That’s where we’re heading. And the Occupy movement is the
first real, major, popular reaction that could avert this. But it’s going
to be necessary to face the fact that it’s a long, hard struggle. You don’t
win victories tomorrow. You have to form the structures that will be
sustained, that will go on through hard times and can win major victories.
And there are a lot of things that can be done.*

*Toward Worker Takeover*

*I mentioned before that, in the 1930s, one of the most effective actions
was the sit-down strike. And the reason is simple: that’s just a step
before the takeover of an industry.*

*Through the 1970s, as the decline was setting in, there were some
important events that took place. In 1977, US Steel decided to close one of
its major facilities in Youngstown, Ohio. Instead of just walking away, the
workforce and the community decided to get together and buy it from the
company, hand it over to the work force, and turn it into a worker-run,
worker-managed facility. They didn’t win. But with enough popular support,
they could have won. It’s a topic that Gar Alperovitz and Staughton Lynd,
the lawyer for the workers and community, have discussed in detail.*

*It was a partial victory because, even though they lost, it set off other
efforts. And now, throughout Ohio, and in other places, there’s a
scattering of hundreds, maybe thousands, of sometimes not-so-small
worker/community-owned industries that could become worker-managed. And
that’s the basis for a real revolution. That’s how it takes place.*

*In one of the suburbs of Boston, about a year ago, something similar
happened. A multinational decided to close down a profitable, functioning
facility carrying out some high-tech manufacturing. Evidently, it just
wasn’t profitable enough for them. The workforce and the union offered to
buy it, take it over, and run it themselves. The multinational decided to
close it down instead, probably for reasons of class-consciousness. I don’t
think they want things like this to happen. If there had been enough
popular support, if there had been something like the Occupy movement that
could have gotten involved, they might have succeeded.*

*And there are other things going on like that. In fact, some of them are
major. Not long ago, President Barack Obama took over the auto industry,
which was basically owned by the public. And there were a number of things
that could have been done. One was what was done: reconstitute it so that
it could be handed back to the ownership, or very similar ownership, and
continue on its traditional path.*

*The other possibility was to hand it over to the workforce—which owned it
anyway—turn it into a worker-owned, worker-managed major industrial system
that’s a big part of the economy and have it produce things that people
need. And there’s a lot that we need.*

*We all know or should know that the United States is extremely backward
globally in high-speed transportation, and it’s very serious. It not only
affects people’s lives, but the economy. In that regard, here’s a personal
story. I happened to be giving talks in France a couple of months ago and
had to take a train from Avignon in southern France to Charles De Gaulle
Airport in Paris, the same distance as from Washington, DC, to Boston. It
took two hours. I don’t know if you’ve ever taken the train from Washington
to Boston, but it’s operating at about the same speed it was sixty years
ago when my wife and I first took it. It’s a scandal.*

*It could be done here as it’s been done in Europe. They had the capacity
to do it, the skilled work force. It would have taken a little popular
support, but it could have made a major change in the economy.*

*Just to make it more surreal, while this option was being avoided, the
Obama administration was sending its transportation secretary to Spain to
get contracts for developing high-speed rail for the United States, which
could have been done right in the rust belt, which is being closed down.
There are no economic reasons why this can’t happen. These are class
reasons and reflect the lack of popular political mobilization. Things like
this continue.*

*Climate Change and Nuclear Weapons*

*I’ve kept to domestic issues, but there are two dangerous developments in
the international arena, which are a kind of shadow that hangs over
everything we’ve discussed. There are, for the first time in human history,
real threats to the decent survival of the species.*

*One has been hanging around since 1945. It’s kind of a miracle that we’ve
escaped it. That’s the threat of nuclear war and nuclear weapons. Though it
isn’t being much discussed, that threat is, in fact, being escalated by the
policies of this administration and its allies. And something has to be
done about that or we’re in real trouble.*

*The other, of course, is environmental catastrophe. Practically every
country in the world is taking at least halting steps towards trying to do
something about it. The United States is also taking steps, mainly to
accelerate the threat. It is the only major country that is not only not
doing something constructive to protect the environment, it’s not even
climbing on the train. In some ways, it’s pulling it backwards.*

*And this is connected to a huge propaganda system, proudly and openly
declared by the business world, to try to convince people that climate
change is just a liberal hoax. “Why pay attention to these scientists?”*

*We’re really regressing back to the dark ages. It’s not a joke. And if
that’s happening in the most powerful, richest country in history, then
this catastrophe isn’t going to be averted—and in a generation or two,
everything else we’re talking about won’t matter. Something has to be done
about it very soon in a dedicated, sustained way.*

*It’s not going to be easy to proceed. There are going to be barriers,
difficulties, hardships, failures. It’s inevitable. But unless the spirit
of the last year, here and elsewhere in the country and around the globe,
continues to grow and becomes a major force in the social and political
world, the chances for a decent future are not very high.*
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