Noam Chomsky spoke at the University of Oregon earlier this week. An estimated 2000 people turned up to hear him. Chomsky admitted he had left his notes in his hotel room, so he would have to wing it. The title of his talk was “Global Hegemony: Its Facts and Images”. Chomsky began by quoting Adam Smith’s “Vile Maxim of the Masters of Mankind”: “All for us, nothing for everyone else.” Chomsky believes that this is increasingly how the ruling class thinks. From this he proceeded to talk about how economic power increasingly determines political power. He quoted Thomas Ferguson to the effect that elections are when investors gather to control the state. Obama’s victory in the presidential election was due to support from financial institutions. The result of this financial control of the government is that the country is at its highest level of inequality ever. The richest one tenth of one percent of the population have become spectacularly wealthy.
Chomsky argued that the Bretton Woods agreement resulted in a period of unparalleled economic growth in the years following World War II. However, Bretton Woods was abandoned during the 1970’s, one result of which was a sharp growth in the size of financial institutions. This has resulted in the weakening of banking regulation in the U.S. Chomsky argued that the concentration of wealth leads to a concentration of political power. Bush’s tax cuts, for example, were designed so that half of them went to the richest one percent of the population. He pointed out that during the last months of 2010, Obama imposed a pay freeze on federal employees, which amounts to a tax increase for them. He renewed the Bush tax cuts, and he reduced funding for Social Security, which, Chomsky believes will eventually lead to its privatization. He pointed out that the Savings and Loan scandal of the 1980’s resulted in criminal prosecutions. There have been no prosecutions of the criminal behavior that caused the financial meltdown of 2008. Bankers now have no incentive to obey the law, because they know they will not be punished.
Smith’s “Masters of Mankind” want the government to focus on cutting the deficit, not on stimulating the economy. Public education is being dismantled. Why this attack on Social Security and on education? They’re based on the principle that one should care about other people. This violates the Vile Maxim. Half the deficits are from military spending, but the rich don’t want this cut.
To some extent, this is built into our political system. James Madison, one of the founding fathers, said that power must be in the hands of the wealthy, because they are the most “responsible” members of society. Madison, according to Chomsky, was “pre-capitalist”. He imagined the wealthy to be benevolent aristocrats. He failed to foresee the rise of corporations that no longer care about the welfare of the country.
The market is based on the theory that consumers make rational choices. Business undermines this through advertising, which gets people to make irrational choices. They undermine democracy the same way.
The problem of capitalism has become an existential one, because corporations regard the survival of the species as an externality, meaning that is of no concern to them because it has nothing to do with them making a profit.
The Spanish Prisoner 
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