Noam Chomsky on America's Economic Suicide
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LF: So do unions have a future?
NC: Well, it’s not worse than the 1920s. There was a very lively active militant labor movement in the late part of the 19 th century, right through the early part of 20 th century. [It was] smashed up by Wilson and the red scares. By the 1920s right-wing visitors from England were coming and just appalled by the way workers were treated. It was pretty much gone. But by 1930s it was not only revived, it was the core element of bringing about the New Deal. The organization of the CIO and the sit-down strikes which were actually terrifying to management because it was one step before saying “O.K. Goodbye, we’re going to run the factory.” And that was a big factor in significant New Deal measures that were not trivial but made a big difference.
Then, after the war, starts the attack, but it’s a constant battle right though American history. It’s the history of this country and the history of every other country too, but the US happens to have an unusually violent labor history. Hundreds of workers getting killed here for organizing at a time that was just unheard of in Europe or Australia…
LF: What is the Number One target of power today in your view? Is it corporations, Congress, media, courts?
NC: The Media are corporations so… It’s the concentrations of private power which have an enormous, not total control, but enormous influence over Congress and the White House and that’s increasing sharply with sharp concentration of private power and escalating cost of elections and so on…
LF: As we speak, there are shareholder actions taking place in Detroit and San Francisco. Are those worthwhile, good targets?
NC: They’re ok, but remember, stock ownership in the US is very highly concentrated. [Shareholder actions are] something, but it’s like the old Communist Party in the USSR, it would be nice to see more protest inside the Communist Party but it’s not democracy. It’s not going to happen. [Shareholder actions] are a good step, but they’re mostly symbolic. Why not stakeholder action? There’s no economic principal that says that management should be responsive to shareholders, in fact you can read in texts of business economics that they could just as well have a system in which the management is responsible to stakeholders.
LF: But you hear it all the time that under law, the CEO’s required to increase dividends to shareholders.
NC: It’s kind of a secondary commitment of the CEO. The first commitment is raise your salary. One of the ways to raise your salary sometimes is to have short-term profits but there are many other ways. In the last thirty years there have been very substantial legal changes to corporate governance so by now CEOs pretty much pick the boards that give them salaries and bonuses. That’s one of the reasons why the CEO-to-payment [ratio] has so sharply escalated in this country in contrast to Europe. (They’re similar societies and it’s bad enough there, but here we’re in the stratosphere. ] There’s no particular reason for it. Stakeholders — meaning workers and community – the CEO could just as well be responsible to them. This presupposes there ought to be management but why does there have to be management? Why not have the stakeholders run the industry?
LF: Worker co-ops are a growing movement. One question that I hear is — will change come from changing ownership if you don’t change the profit paradigm?
NC: It’s a little like asking if shareholder voting is a good idea, or the Buffet rule is a good idea. Yes, it’s a good step, a small step. Worker ownership within a state capitalist, semi-market system is better than private ownership but it has inherent problems. Markets have well-known inherent inefficiencies. They’re very destructive. The obvious one, in a market system, in a really functioning one, whoever’s making the decisions doesn’t pay attention to what are called externalities,effects on others. I sell you a car, if our eyes are open we’ll make a good deal for ourselves but we’re not asking how it’s going to affect her [over there.] It will, there’ll be more congestion, gas prices will go up, there will be environmental effects and that multiplies over the whole population. Well, that’s very serious.