Daily Archive

This is all repost folks.  The article from alter.net is long, but clearly written and provides a great deal of context as to what OWS is and what it needs to do to continue its success.   Do you want to actually understand some of what OWS? is about?  Make the time and read this article.  Take it away Dr.Chomsky.

|

It’s a little hard to give a Howard Zinn Memorial Lecture at an Occupy meeting. There are mixed feelings that go along with it. First of all, regret that Howard is not here to take part and invigorate it in his particular way, something that would have been the dream of his life, and secondly, excitement that the dream is actually being fulfilled. It’s a dream for which he laid a lot of the groundwork. It would have been the fulfillment of a dream for him to be here with you.

The Occupy movement really is an exciting development. In fact, it’s spectacular. It’s unprecedented; there’s never been anything like it that I can think of. If the bonds and associations that are being established at these remarkable events can be sustained through a long, hard period ahead — because victories don’t come quickly– this could turn out to be a very significant moment in American history.

The fact that the demonstrations are unprecedented is quite appropriate. It is an unprecedented era — not just this moment — but actually since the 1970s. The 1970s began a major turning point in American history. For centuries, since the country began, it had been a developing society with ups and downs. But the general progress was toward wealth and industrialization and development — even in dark and hope — there was a pretty constant expectation that it’s 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, the spirit was quite different. There was a sense that we’re going to get out of it, even among unemployed people. It’ll get better. There was a militant labor movement organizing, CIO was organizing. It was getting to the point of sit-down strikes, which are very frightening to the business world. You could see it in the business press at the time. A sit-down strike was just a step before taking over the factory and running it yourself. Also, the New Deal legislations were beginning to come under popular pressure. There was just a sense that somehow we’re going to get out of it.

It’s quite different now. Now there’s kind of a pervasive sense of hopeless, or, I think, despair. I think it’s quite new in American history and it has an objective basis. In the 1930s unemployed “working people” could anticipate realistically that the jobs are going to come back. If you’re a worker in manufacturing today — and the unemployment level in manufacturing today is approximately like the Depression — if current tendencies persist, then those jobs aren’t going to come back. The change took place in the ’70s. There are a lot of reasons for it. One of the underlying reasons, discussed mainly by economic historian Robert Bernard, who has done a lot of work on it, is a falling rate of profit. That, with other factors, led to major changes in the economy — a reversal of the 700 years of progress towards industrialization and development. We turned to a process of deindustrialization and de-development. Of course, manufacturing production continued, but overseas (it’s very profitable, but no good for the workforce). Along with that came a significant shift of the economy from productive enterprise, producing things people need, to financial manipulation. Financialization of the economy really took off at that time.

Before the ’70s, banks were banks. They did what banks are supposed to do in a capitalist economy: take unused funds, like, say, your bank account, and transfer them to some potentially useful purpose, like buying a home or sending your kid to college. There were no financial crises. It was a period of enormous growth; the largest period of growth in American history, or maybe in economic history. It was sustained growth in the ’50s and ’60s and it was egalitarian. So the lowest percentile did as well as the highest percentile. A lot of people moved into reasonable lifestyles — what’s called here “middle class” (working class is what it’s called in other countries).

It was real. The ’60s accelerated it. The activism of the ’60s, after a pretty dismal decade, really civilized the country in lots of ways that are permanent. They’re not changing. The ’70s came along and suddenly there’s sharp change to industrialization and the offshoring of production. The shifting to financial institutions, which grew enormously. Also in the ’50s and ’60s there was the development of what became several decades later the high-tech economy. Computers, Internet, the IT revolution was mostly developed in the ’50 and the ’60s, and substantially in the state sector. It took a couple of decades before it took off, but it was developed then.

The 1970s set off a kind of a vicious cycle that led to a concentration of wealth increasingly in the hands of the financial sector, which doesn’t benefit the economy. Concentration of wealth yields concentration of political power, which, in turn, arrives to legislation that increases and accelerates the cycle. The physical policies such as tax changes, rules of corporate governance, deregulation were essentially bipartisan. Alongside of this began a very sharp rise in the costs of elections, which drives the political parties even deeper than before into the pockets of the corporate sector.

A couple years later started a different process. The parties dissolved, essentially. It used to be if you were a person in Congress and hoped for a position of committee chair or a position of responsibility, you got it mainly through seniority and service. Within a couple of years, you started to have to put money into the party coffers in order to get ahead. That just drove the whole system even deeper into the pockets of the corporate sector and increasingly the financial sector–a tremendous concentration of wealth, mainly in the literally top 1/10th of 1 percent of the population.

Meanwhile, for the general population it began an open period of pretty much stagnation, or decline for the majority. People got by through pretty artificial means — like borrowing, so a lot of debt. Longer working hours for many. There was a period of stagnation and a higher concentration of wealth. The political system began to dissolve. There’s always been a gap between public policy and the public will, but it just grew kind of astronomically. You can see it right now, in fact.

Take a look at what’s happening right now. The big topic in Washington that everyone concentrates on is the deficit. For the public, correctly, the deficit is not much of an issue. The issue is joblessness, not a deficit. Now there’s a deficit commission but no joblessness commission. As far as the deficit is concerned, if you want to pay attention to it, the public has opinions. Take a look at the polls and the public overwhelmingly supports higher taxes on the wealthy, which have declined sharply during this stagnation period, this period of decline. The public wants higher taxes on the wealthy and to preserve the limited social benefits. The outcome of the deficit commission is probably going to be the opposite. Either they’ll reach an agreement, which will be the opposite of what the public wants, or else it will go into kind of an automatic procedure which is going to have those effects. Actually that’s something that’s going to happen very quickly. The deficit commission is going to come up with its decision in a couple of weeks. The Occupy movements could provide a mass base for trying to avert what amounts to a dagger in the heart of the country, and having negative effects.

Without going on with details, what’s being played out for the last 30 years is actually a kind of a nightmare that was anticipated by the classical economists. If you take an Adam Smith, and bother to read Wealth of Nations, you see that he considered the possibility that the merchants and manufacturers in England might decide to do their business abroad, invest abroad and import from abroad. He said they would profit but England would be harmed. He went on to say that the merchants and manufacturers would prefer to operate in their own country, what’s sometimes called a “home bias.” So, as if by an invisible hand, England would be saved the ravage of what’s called “neoliberal globalization.”

That’s a pretty hard passage to miss. In his classic Wealth of Nations, that’s the only occurrence of the phrase “invisible hand.” Maybe England would be saved from neoliberal globalization by an invisible hand. The other great classical economist David Ricardo recognized the same thing and hoped it wouldn’t happen. Kind of a sentimental hope. It didn’t happen for a long time, but it’s happening now. Over the last 30 years that’s exactly what’s underway. For the general population — the 99 percent in the imagery of the Occupy movement –it’s really harsh and it could get worse. This could be a period of irreversible decline. For the 1 percent, or furthermore 1/10th of 1 percent, it’s just fine. They’re at the top, richer and more powerful than ever in controlling the political system and disregarding the public, and if it can continue, then sure why not? This is just what Smith and Ricardo warned about.

Read the rest of this entry »