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

[C. G. Estabrook]

The full pamphlet from which this a selection will be available at the  
AWARE table at the Farmers' Market this weekend. --CGE


On May 11, 2012, at 3:55 PM, ya'aQov wrote:

> http://www.thenation.com/article/167763/plutonomy-and-precariat
>
>
>
> 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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