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Sharp Read | The yoke of neoliberalism revisited
A new book co-authored by Noam Chomsky updates his critique of capitalism with insightful comment on what has allowed the tyranny of the common sense consensus to flourish for so long.
Noam Chomsky has been at the forefront of a radical critique of the United States’ imperialism, militarism and neoliberal global domination for more than five decades. From campaigning against the Vietnam War and exposing the destabilisation of the Middle East to interventions in Latin America and the endless War on Terror, Chomsky’s has been one of the clearest and most steadfast voices of the American Left demonstrating how these US actions have been driven primarily by the interests of the capitalist economy seeking both new markets and global domination.
There is something quite invigorating then in finding a new book by him – at age 92 – and Marv Waterstone, his colleague at the University of Arizona. Titled Consequences of Capitalism: Manufacturing Discontent and Resistance (Hamish Hamilton, 2021), it brings Chomsky’s critique of capitalism up to date and includes the climate emergency, Donald Trump’s reign and the impact of Covid-19 on an already divided and inequitable world. Although the book discusses capitalism as a global phenomenon, it focuses predominantly on the US, the uncontested champion of global capitalism.
The book presents a series of 14 lectures by the two authors (seven each), delivered in January and February 2019. They set out to show how the dominant crises of the modern era – America’s seemingly insatiable appetite for war, the climate crisis, the malignant power of finance capital and growing inequality – are all derived from capitalism’s endless need for growth and profit, no matter the cost.
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Although the formal structure focuses primarily on one of these issues per chapter, each issue surfaces in every chapter. This is not surprising, as the whole point of the book is that they are different manifestations of the logic of capitalism. A brief “coda” places the Covid crisis in this context. However, written very early in the pandemic, it is not able to reflect on inequalities in vaccine access and the profiteering of the pharmaceutical industry, which would certainly match their general narrative very well.
The authors’ purpose is not just to expose the awful state of the global political economy, but to lay a theoretical basis for fundamental change. They start with the question: how is it that a system that has been so destructive, leaving large sections of the population of the richest country in world history struggling to survive, and all but the very richest worse off than they were 40 years ago, continues to exist with the consent of the majority of citizens even while the country is in a state of almost permanent war, with 100 000 soldiers killed in action since World War II?
With specific reference to the climate disaster, they ask how it can be that it is “easier to see the end of the world, than it is to see the end of capitalism”.
The first two chapters seek to understand this conundrum, and the final two point us to how we might begin to organise for change. I will address these two sections after dealing with the historical substance and analysis that form the core of the central chapters.
A gruelling journey
There is an interesting division of labour in the lectures. Waterstone, a self-described Marxist geographer, tends to deal with each topic at a more theoretical level, setting the conceptual scene and marshalling the sweep of history in a way that grounds the ideas he wishes the reader to absorb. This includes a bold and concise summary of the key elements of Karl Marx’s Capital Volume 1. Chomsky, ever both an intellectual and activist, gives us the gory details, in a narrative that is both informative and infused with an anger bubbling below the surface and showing itself briefly in understated, sarcastic asides. One of the 20th century’s great scholars of linguistics and how we make meaning is also a master of language.
The lectures themselves are a gruelling journey through the damage wreaked globally by economic expansionism and military power over several hundred years. Slavery, colonial conquest, genocide in North and South America and the recreation of unpaid labour in the US through criminalising, jailing and then deploying the African-American population as chain gangs are morbid enough. Since the beginning of the 20th century, this brutal history is followed by successive waves of violent union busting, the campaign of legal terror against “communists” by Senator Joe McCarthy and his many allies, and the fostering of and active support for coups and brutal dictatorships around the world when American economic interests are threatened.
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We are also reminded that since World War II the US has been permanently at war: first in Korea and Vietnam to prevent the “dominos falling” in South East Asia, followed by regular military interventions elsewhere. Interestingly, Chomsky argues that despite the apparent defeat in Vietnam, the US secured its greater goal of stopping the spread of economic democracies elsewhere in South East Asia. In recent decades, the country has waged an endless War on Terror, notably conducted in countries from which no aggression against the US was visible at the time. Indeed, it has been rather against regimes that the US supported in previous wars: Iraq against Iran and the mujahideen, who became the Taliban, against the Soviet occupation of Afghanistan.
While the costs of these wars, in dollars and lives, are astronomical, it is also true that there is an enormous arms industry, supplying both the US Armed Forces and its allies (or is that proxies?) in Saudi Arabia, Israel and across the globe, for whom war is a highly profitable business. US companies sold weapons worth about $240 billion in 2017 – a good reason to sustain the impression that the country has endless enemies who must be defeated.
War on the environment
The chapter on militarism is followed by an exploration of capitalism’s war on the environment. There are, of course, other more complete expositions. However, the authors issue a timely reminder that the climate emergency is also inextricably linked to other aspects of environmental disaster that have their own destructive effects. These effects include the world being buried in plastic and the loss of biodiversity, including food varieties as a consequence of industrial farming, monoculture and excess pesticides and herbicides. They remind us that land seizures for these purposes in developing countries drive people off the land and into cities, destroying the commons and increasing food shortages and urban poverty.
The authors point out that this destruction is not incidental to capitalism but fundamental to its nature. Growth is the mantra of all economic policymakers. Without growth, the economy is in a recession or, worse still, a depression. But this endless growth has to take place in a world with limited physical resources, which are being depleted and not replaced. That this has to end in disaster seems so obvious it should not have to be stated. Yet, as Chomsky notes, the reality is a “virtually reflexive decision to race towards destruction with eyes wide open if it yields short-term gain. Right now, profits are spectacular and CEO salaries have skyrocketed to the stratosphere … why care if I (don’t) leave my grandchildren a world in which they have some chance for decent survival?”
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Waterson argues that capitalism’s cavalier approach to the environment is inevitable. Given the focus on profits in a competitive economy, companies will always find ways to reduce costs. One important way is by not paying the cost of the environmental damage they do – “dump it anywhere but in the accounts”, as a friend of mine once put it several decades ago. Thus, environmental damage is an “externality” to be ignored or fixed at the cost of taxpayers. No wonder executives and shareholders think capitalism is the best system.
The period from the Depression of the 1930s to the 1970s saw some “welfare state”-type developments in American society in the interests of social cohesion – “saving capitalism from the capitalists”, as Chomsky puts it. Medicare, Medicaid, unemployment insurance and social security date from this time. From the 1940s, the top marginal tax rate hovered above 80% for three decades. Keynesian management of the economy was in vogue and the improving standard of living of ordinary Americans reflected the benefits.
The gospel according to neoliberalism
The neoliberal revolution was seeded by Milton Friedman, Friedrich Hayek and others in the Mont Pelerin Society as early as 1947. They plotted and conspired to spread the neoliberal gospel until a crisis arose that would allow them to seize the moment. The crisis was rising oil prices and falling profits in the 1970s. By the end of the next decade, Ronald Reagan and Margaret Thatcher had turned neoliberalism from a fringe idea into the new world order.
Top marginal tax rates were reduced to 28% and an assault was launched on anything that constrained the freedom of capital: from regulation, unions and government involvement in the economy to any constraints on the free movement of finance, and where it could make the most profits with the least restrictions. Public goods were privatised, and the whole approach imposed on the global economy through the International Monetary Fund and the World Bank, where possible, and through the destabilisation of socialist governments and the establishment of dictatorships when necessary, as in Chile, Argentina and Nicaragua.
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The authors make the interesting point that US in