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[liberationtech] Noam Chomsky: Is the World Too Big to Fail?

Moritz Bartl moritz at
Thu Apr 21 16:19:41 PDT 2011

Is the World Too Big to Fail?
The contours of global order.
— By Noam Chomsky (April 21 2011)

The democracy uprising in the Arab world has been a spectacular display
of courage, dedication, and commitment by popular forces—coinciding,
fortuitously, with a remarkable uprising of tens of thousands in support
of working people and democracy in Madison, Wisconsin, and other US
cities. If the trajectories of revolt in Cairo and Madison intersected,
however, they were headed in opposite directions: in Cairo toward
gaining elementary rights denied by the dictatorship, in Madison towards
defending rights that had been won in long and hard struggles and are
now under severe attack.

Each is a microcosm of tendencies in global society, following varied
courses. There are sure to be far-reaching consequences of what is
taking place both in the decaying industrial heartland of the richest
and most powerful country in human history, and in what President Dwight
Eisenhower called "the most strategically important area in the
world"—"a stupendous source of strategic power" and "probably the
richest economic prize in the world in the field of foreign investment,"
in the words of the State Department in the 1940s, a prize that the US
intended to keep for itself and its allies in the unfolding New World
Order of that day.

Despite all the changes since, there is every reason to suppose that
today's policy-makers basically adhere to the judgment of President
Franklin Delano Roosevelt's influential advisor A.A. Berle that control
of the incomparable energy reserves of the Middle East would yield
"substantial control of the world." And correspondingly, that loss of
control would threaten the project of global dominance that was clearly
articulated during World War II, and that has been sustained in the face
of major changes in world order since that day.

>From the outset of the war in 1939, Washington anticipated that it would
end with the US in a position of overwhelming power. High-level State
Department officials and foreign policy specialists met through the
wartime years to lay out plans for the postwar world. They delineated a
"Grand Area" that the US was to dominate, including the Western
hemisphere, the Far East, and the former British empire, with its Middle
East energy resources. As Russia began to grind down Nazi armies after
Stalingrad, Grand Area goals extended to as much of Eurasia as possible,
at least its economic core in Western Europe. Within the Grand Area, the
US would maintain "unquestioned power," with "military and economic
supremacy," while ensuring the "limitation of any exercise of
sovereignty" by states that might interfere with its global designs. The
careful wartime plans were soon implemented.

It was always recognized that Europe might choose to follow an
independent course. NATO was partially intended to counter this threat.
As soon as the official pretext for NATO dissolved in 1989, NATO was
expanded to the East in violation of verbal pledges to Soviet leader
Mikhail Gorbachev. It has since become a US-run intervention force, with
far-ranging scope, spelled out by NATO Secretary-General Jaap de Hoop
Scheffer, who informed a NATO conference that "NATO troops have to guard
pipelines that transport oil and gas that is directed for the West," and
more generally to protect sea routes used by tankers and other "crucial
infrastructure" of the energy system.

Grand Area doctrines clearly license military intervention at will. That
conclusion was articulated clearly by the Clinton administration, which
declared that the US has the right to use military force to ensure
"uninhibited access to key markets, energy supplies, and strategic
resources," and must maintain huge military forces "forward deployed" in
Europe and Asia "in order to shape people's opinions about us" and "to
shape events that will affect our livelihood and our security."

The same principles governed the invasion of Iraq. As the US failure to
impose its will in Iraq was becoming unmistakable, the actual goals of
the invasion could no longer be concealed behind pretty rhetoric. In
November 2007, the White House issued a Declaration of Principles
demanding that US forces must remain indefinitely in Iraq and committing
Iraq to privilege American investors. Two months later, President Bush
informed Congress that he would reject legislation that might limit the
permanent stationing of US Armed Forces in Iraq or "United States
control of the oil resources of Iraq"—demands that the US had to abandon
shortly after in the face of Iraqi resistance.

In Tunisia and Egypt, the recent popular uprisings have won impressive
victories, but as the Carnegie Endowment reported, while names have
changed, the regimes remain: "A change in ruling elites and system of
governance is still a distant goal." The report discusses internal
barriers to democracy, but ignores the external ones, which as always
are significant.

The US and its Western allies are sure to do whatever they can to
prevent authentic democracy in the Arab world. To understand why, it is
only necessary to look at the studies of Arab opinion conducted by US
polling agencies. Though barely reported, they are certainly known to
planners. They reveal that by overwhelming majorities, Arabs regard the
US and Israel as the major threats they face: the US is so regarded by
90% of Egyptians, in the region generally by over 75%. Some Arabs regard
Iran as a threat: 10%. Opposition to US policy is so strong that a
majority believes that security would be improved if Iran had nuclear
weapons—in Egypt, 80%. Other figures are similar. If public opinion were
to influence policy, the US not only would not control the region, but
would be expelled from it, along with its allies, undermining
fundamental principles of global dominance.

The Invisible Hand of Power

Support for democracy is the province of ideologists and propagandists.
In the real world, elite dislike of democracy is the norm. The evidence
is overwhelming that democracy is supported insofar as it contributes to
social and economic objectives, a conclusion reluctantly conceded by the
more serious scholarship.

Elite contempt for democracy was revealed dramatically in the reaction
to the WikiLeaks exposures. Those that received most attention, with
euphoric commentary, were cables reporting that Arabs support the US
stand on Iran. The reference was to the ruling dictators. The attitudes
of the public were unmentioned. The guiding principle was articulated
clearly by Carnegie Endowment Middle East specialist Marwan Muasher,
formerly a high official of the Jordanian government: "There is nothing
wrong, everything is under control." In short, if the dictators support
us, what else could matter?

The Muasher doctrine is rational and venerable. To mention just one case
that is highly relevant today, in internal discussion in 1958, president
Eisenhower expressed concern about "the campaign of hatred" against us
in the Arab world, not by governments, but by the people. The National
Security Council (NSC) explained that there is a perception in the Arab
world that the US supports dictatorships and blocks democracy and
development so as to ensure control over the resources of the region.
Furthermore, the perception is basically accurate, the NSC concluded,
and that is what we should be doing, relying on the Muasher doctrine.
Pentagon studies conducted after 9/11 confirmed that the same holds today.

It is normal for the victors to consign history to the trash can, and
for victims to take it seriously. Perhaps a few brief observations on
this important matter may be useful. Today is not the first occasion
when Egypt and the US are facing similar problems, and moving in
opposite directions. That was also true in the early nineteenth century.

Economic historians have argued that Egypt was well-placed to undertake
rapid economic development at the same time that the US was. Both had
rich agriculture, including cotton, the fuel of the early industrial
revolution—though unlike Egypt, the US had to develop cotton production
and a work force by conquest, extermination, and slavery, with
consequences that are evident right now in the reservations for the
survivors and the prisons that have rapidly expanded since the Reagan
years to house the superfluous population left by deindustrialization.

One fundamental difference was that the US had gained independence and
was therefore free to ignore the prescriptions of economic theory,
delivered at the time by Adam Smith in terms rather like those preached
to developing societies today. Smith urged the liberated colonies to
produce primary products for export and to import superior British
manufactures, and certainly not to attempt to monopolize crucial goods,
particularly cotton. Any other path, Smith warned, "would retard instead
of accelerating the further increase in the value of their annual
produce, and would obstruct instead of promoting the progress of their
country towards real wealth and greatness."

Having gained their independence, the colonies were free to ignore his
advice and to follow England's course of independent state-guided
development, with high tariffs to protect industry from British exports,
first textiles, later steel and others, and to adopt numerous other
devices to accelerate industrial development. The independent Republic
also sought to gain a monopoly of cotton so as to "place all other
nations at our feet," particularly the British enemy, as the Jacksonian
presidents announced when conquering Texas and half of Mexico.

For Egypt, a comparable course was barred by British power. Lord
Palmerston declared that "no ideas of fairness [toward Egypt] ought to
stand in the way of such great and paramount interests" of Britain as
preserving its economic and political hegemony, expressing his "hate"
for the "ignorant barbarian" Muhammed Ali who dared to seek an
independent course, and deploying Britain's fleet and financial power to
terminate Egypt's quest for independence and economic development.

After World War II, when the US displaced Britain as global hegemon,
Washington adopted the same stand, making it clear that the US would
provide no aid to Egypt unless it adhered to the standard rules for the
weak—which the US continued to violate, imposing high tariffs to bar
Egyptian cotton and causing a debilitating dollar shortage. The usual
interpretation of market principles.

It is small wonder that the "campaign of hatred" against the US that
concerned Eisenhower was based on the recognition that the US supports
dictators and blocks democracy and development, as do its allies.

In Adam Smith's defense, it should be added that he recognized what
would happen if Britain followed the rules of sound economics, now
called "neoliberalism." He warned that if British manufacturers,
merchants, and investors turned abroad, they might profit but England
would suffer. But he felt that they would be guided by a home bias, so
as if by an invisible hand England would be spared the ravages of
economic rationality.

The passage is hard to miss. It is the one occurrence of the famous
phrase "invisible hand" in The Wealth of Nations. The other leading
founder of classical economics, David Ricardo, drew similar conclusions,
hoping that home bias would lead men of property to "be satisfied with
the low rate of profits in their own country, rather than seek a more
advantageous employment for their wealth in foreign nations," feelings
that, he added, "I should be sorry to see weakened." Their predictions
aside, the instincts of the classical economists were sound.

The Iranian and Chinese "Threats"

The democracy uprising in the Arab world is sometimes compared to
Eastern Europe in 1989, but on dubious grounds. In 1989, the democracy
uprising was tolerated by the Russians, and supported by western power
in accord with standard doctrine: it plainly conformed to economic and
strategic objectives, and was therefore a noble achievement, greatly
honored, unlike the struggles at the same time "to defend the people's
fundamental human rights" in Central America, in the words of the
assassinated Archbishop of El Salvador, one of the hundreds of thousands
of victims of the military forces armed and trained by Washington. There
was no Gorbachev in the West throughout these horrendous years, and
there is none today. And Western power remains hostile to democracy in
the Arab world for good reasons.

Grand Area doctrines continue to apply to contemporary crises and
confrontations. In Western policy-making circles and political
commentary the Iranian threat is considered to pose the greatest danger
to world order and hence must be the primary focus of US foreign policy,
with Europe trailing along politely.

What exactly is the Iranian threat? An authoritative answer is provided
by the Pentagon and US intelligence. Reporting on global security last
year, they make it clear that the threat is not military. Iran's
military spending is "relatively low compared to the rest of the
region," they conclude. Its military doctrine is strictly "defensive,
designed to slow an invasion and force a diplomatic solution to
hostilities." Iran has only "a limited capability to project force
beyond its borders." With regard to the nuclear option, "Iran's nuclear
program and its willingness to keep open the possibility of developing
nuclear weapons is a central part of its deterrent strategy." All quotes.

The brutal clerical regime is doubtless a threat to its own people,
though it hardly outranks US allies in that regard. But the threat lies
elsewhere, and is ominous indeed. One element is Iran's potential
deterrent capacity, an illegitimate exercise of sovereignty that might
interfere with US freedom of action in the region. It is glaringly
obvious why Iran would seek a deterrent capacity; a look at the military
bases and nuclear forces in the region suffices to explain.

Seven years ago, Israeli military historian Martin van Creveld wrote
that "The world has witnessed how the United States attacked Iraq for,
as it turned out, no reason at all. Had the Iranians not tried to build
nuclear weapons, they would be crazy," particularly when they are under
constant threat of attack in violation of the UN Charter. Whether they
are doing so remains an open question, but perhaps so.

But Iran's threat goes beyond deterrence. It is also seeking to expand
its influence in neighboring countries, the Pentagon and US intelligence
emphasize, and in this way to "destabilize" the region (in the technical
terms of foreign policy discourse). The US invasion and military
occupation of Iran's neighbors is "stabilization." Iran's efforts to
extend its influence to them are "destabilization," hence plainly

Such usage is routine. Thus the prominent foreign policy analyst James
Chace was properly using the term "stability" in its technical sense
when he explained that in order to achieve "stability" in Chile it was
necessary to "destabilize" the country (by overthrowing the elected
government of Salvador Allende and installing the dictatorship of
General Augusto Pinochet). Other concerns about Iran are equally
interesting to explore, but perhaps this is enough to reveal the guiding
principles and their status in imperial culture. As Franklin Delano
Roosevelt's planners emphasized at the dawn of the contemporary world
system, the US cannot tolerate "any exercise of sovereignty" that
interferes with its global designs.

The US and Europe are united in punishing Iran for its threat to
stability, but it is useful to recall how isolated they are. The
nonaligned countries have vigorously supported Iran's right to enrich
uranium. In the region, Arab public opinion even strongly favors Iranian
nuclear weapons. The major regional power, Turkey, voted against the
latest US-initiated sanctions motion in the Security Council, along with
Brazil, the most admired country of the South. Their disobedience led to
sharp censure, not for the first time: Turkey had been bitterly
condemned in 2003 when the government followed the will of 95% of the
population and refused to participate in the invasion of Iraq, thus
demonstrating its weak grasp of democracy, western-style.

After its Security Council misdeed last year, Turkey was warned by
Obama's top diplomat on European affairs, Philip Gordon, that it must
"demonstrate its commitment to partnership with the West." A scholar
with the Council on Foreign Relations asked, "How do we keep the Turks
in their lane?"—following orders like good democrats. Brazil's Lula was
admonished in a New York Times headline that his effort with Turkey to
provide a solution to the uranium enrichment issue outside of the
framework of US power was a "Spot on Brazilian Leader's Legacy." In
brief, do what we say, or else.

An interesting sidelight, effectively suppressed, is that the
Iran-Turkey-Brazil deal was approved in advance by Obama, presumably on
the assumption that it would fail, providing an ideological weapon
against Iran. When it succeeded, the approval turned to censure, and
Washington rammed through a Security Council resolution so weak that
China readily signed—and is now chastised for living up to the letter of
the resolution but not Washington's unilateral directives—in the current
issue of Foreign Affairs, for example.

While the US can tolerate Turkish disobedience, though with dismay,
China is harder to ignore. The press warns that "China's investors and
traders are now filling a vacuum in Iran as businesses from many other
nations, especially in Europe, pull out," and in particular, is
expanding its dominant role in Iran's energy industries. Washington is
reacting with a touch of desperation. The State Department warned China
that if it wants to be accepted in the international community—a
technical term referring to the US and whoever happens to agree with
it—then it must not "skirt and evade international responsibilities,
[which] are clear": namely, follow US orders. China is unlikely to be

There is also much concern about the growing Chinese military threat. A
recent Pentagon study warned that China's military budget is approaching
"one-fifth of what the Pentagon spent to operate and carry out the wars
in Iraq and Afghanistan," a fraction of the US military budget, of
course. China's expansion of military forces might "deny the ability of
American warships to operate in international waters off its coast," the
New York Times added.

Off the coast of China, that is; it has yet to be proposed that the US
should eliminate military forces that deny the Caribbean to Chinese
warships. China's lack of understanding of rules of international
civility is illustrated further by its objections to plans for the
advanced nuclear-powered aircraft carrier George Washington to join
naval exercises a few miles off China's coast, with alleged capacity to
strike Beijing.

In contrast, the West understands that such US operations are all
undertaken to defend stability and its own security. The liberal New
Republic expresses its concern that "China sent ten warships through
international waters just off the Japanese island of Okinawa." That is
indeed a provocation—unlike the fact, unmentioned, that Washington has
converted the island into a major military base in defiance of vehement
protests by the people of Okinawa. That is not a provocation, on the
standard principle that we own the world.

Deep-seated imperial doctrine aside, there is good reason for China's
neighbors to be concerned about its growing military and commercial
power. And though Arab opinion supports an Iranian nuclear weapons
program, we certainly should not do so. The foreign policy literature is
full of proposals as to how to counter the threat. One obvious way is
rarely discussed: work to establish a nuclear-weapons-free zone (NWFZ)
in the region. The issue arose (again) at the Non-Proliferation Treaty
(NPT) conference at United Nations headquarters last May. Egypt, as
chair of the 118 nations of the Non-Aligned Movement, called for
negotiations on a Middle East NWFZ, as had been agreed by the West,
including the US, at the 1995 review conference on the NPT.

International support is so overwhelming that Obama formally agreed. It
is a fine idea, Washington informed the conference, but not now.
Furthermore, the US made clear that Israel must be exempted: no proposal
can call for Israel's nuclear program to be placed under the auspices of
the International Atomic Energy Agency or for the release of information
about "Israeli nuclear facilities and activities." So much for this
method of dealing with the Iranian nuclear threat.

Privatizing the Planet

While Grand Area doctrine still prevails, the capacity to implement it
has declined. The peak of US power was after World War II, when it had
literally half the world's wealth. But that naturally declined, as other
industrial economies recovered from the devastation of the war and
decolonization took its agonizing course. By the early 1970s, the US
share of global wealth had declined to about 25%, and the industrial
world had become tripolar: North America, Europe, and East Asia (then

There was also a sharp change in the US economy in the 1970s, towards
financialization and export of production. A variety of factors
converged to create a vicious cycle of radical concentration of wealth,
primarily in the top fraction of 1% of the population—mostly CEOs,
hedge-fund managers, and the like. That leads to the concentration of
political power, hence state policies to increase economic
concentration: fiscal policies, rules of corporate governance,
deregulation, and much more. Meanwhile the costs of electoral campaigns
skyrocketed, driving the parties into the pockets of concentrated
capital, increasingly financial: the Republicans reflexively, the
Democrats—by now what used to be moderate Republicans—not far behind.

Elections have become a charade, run by the public relations industry.
After his 2008 victory, Obama won an award from the industry for the
best marketing campaign of the year. Executives were euphoric. In the
business press they explained that they had been marketing candidates
like other commodities since Ronald Reagan, but 2008 was their greatest
achievement and would change the style in corporate boardrooms. The 2012
election is expected to cost $2 billion, mostly in corporate funding.
Small wonder that Obama is selecting business leaders for top positions.
The public is angry and frustrated, but as long as the Muasher principle
prevails, that doesn't matter.

While wealth and power have narrowly concentrated, for most of the
population real incomes have stagnated and people have been getting by
with increased work hours, debt, and asset inflation, regularly
destroyed by the financial crises that began as the regulatory apparatus
was dismantled starting in the 1980s.

None of this is problematic for the very wealthy, who benefit from a
government insurance policy called "too big to fail." The banks and
investment firms can make risky transactions, with rich rewards, and
when the system inevitably crashes, they can run to the nanny state for
a taxpayer bailout, clutching their copies of Friedrich Hayek and Milton

That has been the regular process since the Reagan years, each crisis
more extreme than the last—for the public population, that is. Right
now, real unemployment is at Depression levels for much of the
population, while Goldman Sachs, one of the main architects of the
current crisis, is richer than ever. It has just quietly announced $17.5
billion in compensation for last year, with CEO Lloyd Blankfein
receiving a $12.6 million bonus while his base salary more than triples.

It wouldn't do to focus attention on such facts as these. Accordingly,
propaganda must seek to blame others, in the past few months, public
sector workers, their fat salaries, exorbitant pensions, and so on: all
fantasy, on the model of Reaganite imagery of black mothers being driven
in their limousines to pick up welfare checks—and other models that need
not be mentioned. We all must tighten our belts; almost all, that is.

Teachers are a particularly good target, as part of the deliberate
effort to destroy the public education system from kindergarten through
the universities by privatization—again, good for the wealthy, but a
disaster for the population, as well as the long-term health of the
economy, but that is one of the externalities that is put to the side
insofar as market principles prevail.

Another fine target, always, is immigrants. That has been true
throughout US history, even more so at times of economic crisis,
exacerbated now by a sense that our country is being taken away from us:
the white population will soon become a minority. One can understand the
anger of aggrieved individuals, but the cruelty of the policy is shocking.

Who are the immigrants targeted? In Eastern Massachusetts, where I live,
many are Mayans fleeing genocide in the Guatemalan highlands carried out
by Reagan's favorite killers. Others are Mexican victims of Clinton's
NAFTA, one of those rare government agreements that managed to harm
working people in all three of the participating countries. As NAFTA was
rammed through Congress over popular objection in 1994, Clinton also
initiated the militarization of the US-Mexican border, previously fairly
open. It was understood that Mexican campesinos cannot compete with
highly subsidized US agribusiness, and that Mexican businesses would not
survive competition with US multinationals, which must be granted
"national treatment" under the mislabeled free trade agreements, a
privilege granted only to corporate persons, not those of flesh and
blood. Not surprisingly, these measures led to a flood of desperate
refugees, and to rising anti-immigrant hysteria by the victims of
state-corporate policies at home.

Much the same appears to be happening in Europe, where racism is
probably more rampant than in the US. One can only watch with wonder as
Italy complains about the flow of refugees from Libya, the scene of the
first post-World War I genocide, in the now-liberated East, at the hands
of Italy's Fascist government. Or when France, still today the main
protector of the brutal dictatorships in its former colonies, manages to
overlook its hideous atrocities in Africa, while French President
Nicolas Sarkozy warns grimly of the "flood of immigrants" and Marine Le
Pen objects that he is doing nothing to prevent it. I need not mention
Belgium, which may win the prize for what Adam Smith called "the savage
injustice of the Europeans."

The rise of neo-fascist parties in much of Europe would be a frightening
phenomenon even if we were not to recall what happened on the continent
in the recent past. Just imagine the reaction if Jews were being
expelled from France to misery and oppression, and then witness the
non-reaction when that is happening to Roma, also victims of the
Holocaust and Europe's most brutalized population.

In Hungary, the neo-fascist party Jobbik gained 17% of the vote in
national elections, perhaps unsurprising when three-quarters of the
population feels that they are worse off than under Communist rule. We
might be relieved that in Austria the ultra-right Jörg Haider won only
10% of the vote in 2008—were it not for the fact that the new Freedom
Party, outflanking him from the far right, won more than 17%. It is
chilling to recall that, in 1928, the Nazis won less than 3% of the vote
in Germany.

In England the British National Party and the English Defence League, on
the ultra-racist right, are major forces. (What is happening in Holland
you know all too well.) In Germany, Thilo Sarrazin's lament that
immigrants are destroying the country was a runaway best-seller, while
Chancellor Angela Merkel, though condemning the book, declared that
multiculturalism had "utterly failed": the Turks imported to do the
dirty work in Germany are failing to become blond and blue-eyed, true

Those with a sense of irony may recall that Benjamin Franklin, one of
the leading figures of the Enlightenment, warned that the newly
liberated colonies should be wary of allowing Germans to immigrate,
because they were too swarthy; Swedes as well. Into the twentieth
century, ludicrous myths of Anglo-Saxon purity were common in the US,
including among presidents and other leading figures. Racism in the
literary culture has been a rank obscenity; far worse in practice,
needless to say. It is much easier to eradicate polio than this
horrifying plague, which regularly becomes more virulent in times of
economic distress.

I do not want to end without mentioning another externality that is
dismissed in market systems: the fate of the species. Systemic risk in
the financial system can be remedied by the taxpayer, but no one will
come to the rescue if the environment is destroyed. That it must be
destroyed is close to an institutional imperative. Business leaders who
are conducting propaganda campaigns to convince the population that
anthropogenic global warming is a liberal hoax understand full well how
grave is the threat, but they must maximize short-term profit and market
share. If they don't, someone else will.

This vicious cycle could well turn out to be lethal. To see how grave
the danger is, simply have a look at the new Congress in the US,
propelled into power by business funding and propaganda. Almost all are
climate deniers. They have already begun to cut funding for measures
that might mitigate environmental catastrophe. Worse, some are true
believers; for example, the new head of a subcommittee on the
environment who explained that global warming cannot be a problem
because God promised Noah that there will not be another flood.

If such things were happening in some small and remote country, we might
laugh. Not when they are happening in the richest and most powerful
country in the world. And before we laugh, we might also bear in mind
that the current economic crisis is traceable in no small measure to the
fanatic faith in such dogmas as the efficient market hypothesis, and in
general to what Nobel laureate Joseph Stiglitz, 15 years ago, called the
"religion" that markets know best—which prevented the central bank and
the economics profession from taking notice of an $8 trillion housing
bubble that had no basis at all in economic fundamentals, and that
devastated the economy when it burst.

All of this, and much more, can proceed as long as the Muashar doctrine
prevails. As long as the general population is passive, apathetic,
diverted to consumerism or hatred of the vulnerable, then the powerful
can do as they please, and those who survive will be left to contemplate
the outcome.

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