(Thanks to Janice)

This is long, and I've added to the originial editing by (as far as
possible) distinguishing between question and answer. (MP)

See Chomsky Archive at
http://www.worldmedia.com/archive/interviews/9811-wennerberg.html
=============================
Tor Wennerberg interviews -- Chomsky on morality, human nature and the
global economic crisis.

Nov. 1998

TOR WENNERBERG: One idea that I find extremely interesting and fascinating
is the notion that just as our language capabilities are genetically
determined, so is our capacity - as human beings - for moral judgement.
What do you see as the implications of the idea that our moral capacity is
innate?


NOAM CHOMSKY: Well, for one thing, I don't think it can really be much of
a question. (That's not to say we understand anything about it.) But, the
fact of the matter is that we're constantly making moral judgments in new
situations, and over a substantial range we do it in a convergent
fashion--we don't differ randomly and wildly from one another.
Furthermore, young children do it, very quickly, and they also converge.


Of course, there are cultural and social and historical effects, but even
for those to operate, they must be operating on something. If you look at
this range of phenomena, there are only two possibilities: one is, it's a
miracle, and the other is, it's rooted in our nature. It's rooted in our
nature in the same sense in which language is, or for that matter, having
arms and legs is. And it takes different forms depending on the
circumstances, just as arms and legs depend on nutrition, and language
depends on my not having heard Swedish when I was six months old and so
on. But basically, it must be something that flows out of our nature, or
otherwise we'd never use it in any systematic way, except just repeating
what happened before. So, it's got to be there.


What are the implications? One implication is, we ought to be interested
in finding out what it is. We'd learn something important about ourselves.
You can't hope at this stage that we're beginning to learn anything from
biology. Biology doesn't begin to reach that far. In principle it should,
but right now it deals with much tinier problems. It has a hard time
figuring out how bees function, let alone humans.


But I think we can learn things by history and experience. Take, say, the
debate over big issues like slavery or women's rights and so on. It wasn't
just people screaming at each other. There were arguments, in fact,
interesting arguments on both sides. The pro-slavery side had very
substantial arguments that are not easy to answer. But there was a kind of
common moral ground in which a good bit of the debate took place, and as
it resolved, which it essentially did, you see a consciousness emerging of
what really is right, which must mean it reflects our built-in conception
of what's right. And that's something that we learn more about over time,
we get more insight into what's coming out of our nature. The implications
are very substantial, to the extent that we can understand them. It's
better to have a conscious understanding of what's guiding you, to the
extent you can, than just to react intuitively, without understanding.
That's true whether you're a carpenter reacting to how to form wood
artifacts or a moral human being reacting to how to decide between
behaviors toward others.


One example that comes to mind is that even the most extreme neoliberals
never defend income inequality in itself - it's always supposed to benefit
the poor.


That's a kind of universal. Every proposal that's made is made because it
helps the poor people. Doesn't matter what it is. Actually, that's
something that's been noticed by mainstream economists, like Paul Krugman.
He has a review article in a professional journal, International Affairs,
in their 75th anniversary issue. They had reviews of various topics. He
reviewed economic development. He pointed out that people have always had
different ideas about economic development, and every time they're
completely certain that it's right, and they're completely certain it's
going to help everyone. But then it turns out, shortly afterwards, that it
was all built on sand, and they switch to some other idea, with equal
certainty that it's also going to help everyone, including the poor,
although it's recognized in retrospect that the earlier one was a bad
idea. He then adds that some people claim that bad ideas flourish because
they're beneficial to the people with power. Well, yes, that probably
happens--perhaps a hundred percent of the time.


But you're right, it's always rationalized as being for the poor. No
individual gets up and says, I'm going to take this because I want it.
He'd say, I'm going to take it because it really belongs to me and it
would be better for everyone if I had it. It's true of children fighting
over toys. And it's true of governments going to war. Nobody is ever
involved in an aggressive war; it's always a defensive war--on both sides.
Again, you have to present things in such a way that they will accord with
people's understanding of what's right or wrong. Sometimes reaching
ludicrous levels. Let's take, say, the Nazis and Jews. That was presented
to the population as a defensive action. The Germans were defending
themselves against the Jewish attack.


TW: If we just make the thought experiment that a whole generation of
children were given the opportunity to grow up in a truly loving and
respectful environment, through liberatory child-rearing, so that they
would be able to fully develop their moral capacity, would it then, do you
think, be impossible to uphold a social order based on vast inequality and
elite rule?


I wouldn't say it's impossible, but I would think it would generate very
considerable resistance. Actually, it always generates resistance. And it
would generate even more in that case. It's a striking fact, if you look
at the notion of equality, take our own history, from the Greeks to the
present, it's very striking that just about every leading figure has
regarded equality as an obvious desideratum.


Take the earliest serious work on politics, Aristotle's Politics. Well he
points out that he's not a great fan of democracy, it's the best of a
bunch of bad systems. But he said a democracy cannot function if there are
extremes of wealth. Everyone has to be roughly equal-- everyone has to be
middle class, he said. And in fact, he called for a super welfare state.
He said in any democratic society, public resources will have to be used
in ways that he outlines, like communal meals, to ensure that the poor are
relatively well off and that there are no big differences. Otherwise, it's
impossible to have a properly functioning democracy.


Or go on to, say, Adam Smith. His argument for markets was nuanced; it's
not as extreme as people claim. He argued that under conditions of perfect
liberty, markets will lead to perfect equality. That's basically the
argument for them. Maybe the first real break with this, apart from
pathological cases, is capitalist ideology. So after Ricardo, you start
getting the conception that it's better for the poor if I'm rich. As
capitalist ideology becomes dominant, this conception that you'll only
hurt the poor by helping them, takes over. And then comes the idea that
you have no intrinsic rights. The big intellectual revolution for
capitalism, I think, was the principle that you human beings, have no
rights other than what you can gain on the labor market. So Malthus and
Ricardo and others said that if you can't survive by what you can gain on
the marketplace, go somewhere else. And any effort to try to help you will
just harm you in the long run, because of market interference. This was a
real intellectual revolution reflecting the economic emergence of
capitalist relations of ownership and production. And people fought
against it. The British army was putting down riots in the 1820s and
1830s, because people simply would not accept the fact that they had no
right to live. And that goes way back to enclosure of the commons.


Look at what was called liberty in England, the first modern democratic
revolution, in the 17th and 18th century. Liberty meant liberty for
property, which meant taking away from people their traditional rights.
Like their rights to the commons. And this was no small thing. The rights
to the commons meant forests, and pasture lands, grazing lands, and so on.
That's what kept people alive, and it was considered communal property.
With proprietary rights established, with liberty given to the owners,
that land was taken away from everyone else. And thereafter you had formal
liberty, but popular deprivation, which proletarianized the British
working class. And, there was plenty of resistance to that. In fact, and
the resistance goes on today. I think this is a deep sentiment, and an
understandable one, and we all recognize, at some core of our being, that
there's something quite wrong with one person having superfluities and
another person starving. You find that all the way through the tradition,
in people's actions, in literature.


TW: And now, just looking at the latest Human Development Report, the
figures on the combined wealth of the 250-something richest individuals in
the world...


But you noticed that they criticized it. They don't say, isn't this
wonderful? They say it's something wrong. In fact everybody says there's
something wrong. The only arguments that support it are saying, really
everybody benefits because it trickles down. The arguments are ludicrous,
but it's interesting that they have to give the arguments. The arguments
for defensive war are often equally ludicrous. Take the latest U.S.
bombing in the Sudan: it wasn't an attack on a Sudanese factory, it was
self-defense. Everything has to be self-defense.


TW: If we consider the likelihood that we as humans have an instinct for
creativity and a moral instinct, what is it in the way our system of
education is functioning, that perverts or inhibits these instincts from
fully developing themselves?


A good educational system ought to nurture and encourage these aspects of
human life and allow them to flourish. But of course that has problems.
For one thing it means that you will encourage challenge of authority and
domination. It will encourage questioning of powerful institutions. The
fact of the matter is that honesty, integrity, creativity, all these
things we're supposed to value, all run up dramatically against the
hierarchic, authoritarian structure of the institutional framework in
which we live. And since that structure is what sets the basic framework
in which things happen, it becomes virtually contradictory to implement
the values that you talk about in church on Sunday morning. So you put the
values to the side, to the Sunday Service, and get on with existing the
rest of the time. So Sunday is when you say, yeah, love and kindness and
charity and equality and all that stuff are the soul of life. But the
other six days of the week you're working within institutions of authority
and domination and control and self-enrichment and so on and you must
comply or suffer even graver consequences for not complying.


And schools are like that. So the way schools actually function - of
course it's not 100 percent, because there is a contradiction, so all
sorts of aspects show themselves depending on the teacher and so on - but,
by and large, there's a very strong tendency which works its way out in
the long run and on average, for the schools to have a kind of filtering
effect. They filter out independence of thought, creativity, imagination,
and in their place foster obedience and subordination. I think everyone
knows this from their own history. Like, how did I get to a good college
myself? I was always very critical and dissident. But I got there by
shutting up! I went through high school, thinking it was all really stupid
and authoritarian and boring, but I was obedient, I was quiet, I wasn't a
behavior problem, I didn't tell the teacher what I thought he was teaching
was ludicrous when I thought it was. And I made it to a good college.


There are people who don't accept, who aren't obedient. They are weeded
out, they're driving taxi cabs, they're behavior problems. The long-term
effect of this is to reward and foster subordination; it begins in
kindergarten and goes all the way through your professional or other
career. If you challenge authority, you get in one or another kind of
trouble. Again, it's not 100 percent the case, and there are some areas of
life were it's dramatically not the case, but on average and
overwhelmingly in the outcomes, it holds.


Yes, certainly there are counterforces at work but unfortunately, the
major effect is disciplinary. This is a point that Orwell notes in works
of his that aren't read. Everyone has read Animal Farm, the satire about
the Soviet Union. Not many people have read the introduction to Animal
Farm, and one of the reasons they never read it is it wasn't published.
The introduction to Animal Farm was called "Literary Censorship in
England." It wasn't published, it was found in his papers years later.


The point of the intended introduction is that, well, the book is about
this totalitarian monster society, but I want to talk about England, a
free society, to talk about how opinions are suppressed here, because
they're suppressed with remarkable efficiency. He doesn't go into the
reasons in any great depth, actually he has two sentences about the
reasons. One of them is that the press is owned by wealthy men who have
every reason not to want certain thoughts to be expressed. And the other
reason is that as you go through a good education - Oxford, Cambridge,
that sort of thing--you have instilled into you, you sort of internalize
the fact that there are some things it just wouldn't do to say. In fact,
deeper: it wouldn't do to think. And you become aware that people who do
think those things - now, going beyond Orwell--people who do think those
things and do say them tend to elicit a negative reaction, either to be
weeded out of the system or to be marginalized or to be punished in some
fashion. And the long-term effect is that success is to some considerable
extent contingent on subordination to institutions of power, and that that
kind of socialization--knowing what it wouldn't do to say--is a good part
of our education.


TW: I just reread the chapter "Psychology and Ideology" in The Chomsky
Reader, your critique of Skinner. Behaviorism is much less influential
today, but I wonder-it is two or three decades ago that you wrote about
thi-but what do you think has happened in the time since with the theory
of human malleability in a broader sense?


Well, behaviorism was very popular among the managerial classes, for not
surprising reasons. For one thing, it gave them a moral right to control
and dominate people. If people have no nature, no intrinsic nature, then
there is no moral barrier to control or manipulation of them - in their
own interest, of course. Somehow "we," the controllers, are immune from
this human condition of infinite malleability, however. "We" have a nature
and "we" understand what's good, that's kind of like a hidden premise. But
for the rest of the slobs out there, they're just passive objects, and we
can control and manage and organize them using the latest behavioral
techniques, and they'll all be better off.


That's a strain of thought that runs right through the whole intellectual,
managerial culture, from priesthoods up to Leninist commissars and to
contemporary liberal theorists. And behaviorism gave the perfect
intellectual justification for it; it didn't matter that the intellectual
foundations were ridiculous. It served a function so it survived. And the
parts of the society that need that, they still believe it--in fact,
believe it more than ever.


So, instead of talking only about academics, we're sort of minor folk,
let's go to the big institutions, like, say, the public relations
industry. Now we've gone several orders of magnitude larger in power and
significance. They were based from the beginning on the same idea. The
idea that it is necessary to control the public mind. In fact, the modern
public relations industry was in many ways an outgrowth of the increase in
democracy--and consciously so. You read the manuals, they talk about it,
in the 1920s and so on. With the extension of the franchise, with the
bringing in of working people and others into the public arena, you can no
longer ensure that the wealthy and the capable and the enlightened, us
good folks, will run everything. So therefore it is necessary to use the
techniques of propaganda. And right after the First World War this was
very prominent because of the enormous success of Anglo-American
propaganda during the war, which had real success in affecting people's
views, extremely so, and they were aware of it.


So in England for example--documents have now come out--the British
Conservative party recognized that its traditional domination of English
politics was threatened seriously by the extension of the franchise. And
they therefore concluded that they must turn to the techniques of
propaganda, drawing on the war-time experience, when the British Ministry
of Information had set off, as they put it, to control the thought of the
world--particularly the thought of the United States, because that's what
they cared about, that the United States come in and save them from this
mess. The Conservative party organized itself around the theme of
propaganda to overcome the threat of democracy. Something comparable
happened here, but here it happened primarily in the rise of public
relations, which became a huge industry devoted to "controlling the public
mind." The "intelligent minority" must "regiment the public mind every bit
as much as an army regiments the bodies of its soldiers."


I'm quoting from a manual written, incidentally, by a good New Deal
liberal intellectual, for whom this was second nature--of course you have
to regiment the public mind. He had come out of Woodrow Wilson's wartime
propaganda ministry, the first state propaganda ministry in American
history, which was very successful. You have to remember, during the first
World War, the population here was pacifist, the tradition was: don't get
involved in the European bloody nonsense, it's not our business, we're the
New World. And somehow, Woodrow Wilson had to - he was elected in 1916 on
a slogan of "Peace Without Victory"--and he had to quickly turn the
country around to become raving jingoist fanatics, hating everything
German. And they did it. With remarkable success. So they were impressed
with their achievement. The British Conservative party was impressed, the
business world was extremely impressed (then came the huge growth of the
propaganda industry). Another person who was impressed, incidentally, was
Adolf Hitler. He writes in Mein Kampf that Germany lost the war because of
propaganda, and next time we're going to have it too.


The idea that you can control people was supported by that experience.
They didn't read Watson or Skinner. You can control people, and you must
control people - of course in their own interest, it's always in their own
interest. You can read it in the Encyclopedia of the Social Sciences, by
one of the founders of modern American political science, Harold Lasswell.
In an article on propaganda, he says that we should not succumb to
"democratic dogmatisms about men being the best judges of their own
interests." They're not, they're too "stupid," they're too "ignorant."
We're the best judges of their interests, and although they have this
official right to vote, we have to make sure they don't make any use of it
in an unreasonable way. We do that by controlling the public mind, by
propaganda. This was before the Second World War. After the Second World
War the term propaganda took on bad connotations and people did not want
to use the word anymore. But that was pre-World War II, so you were
allowed to use it.


And it continues. After the second world war, the business world,
particularly in the United States but in fact worldwide, was appalled by
the fact that most of the world, the industrial world, was being swept by
radical democratic ideas--takeover of factories and all sorts of
activities, including in the United States incidentally--and the business
world was terrified. You can read it in their manuals and pronouncements.
They say we have a few years to try to reverse this tide, we have to fight
"the everlasting battle for the minds of men," and "indoctrinate citizens
with the capitalist story" until "they are able to play back the story
with remarkable fidelity." Huge campaigns took place, covering everything
you can imagine. In factories you have a captive audience, so they ran
what they called economics lectures on the principles of "free
enterprise," and Americanism lectures that went on radio and television.
They aimed at churches and schools, even to sports leagues. There was a
huge coordinated campaign, with many purposes. It demonized unions. It
instilled the idea that the government can't do anything for you--it's not
your government anyway, it's some thing out there which takes money from
you. The government isn't anything that you have, and what it does is
harmful, stealing your money and taxes and so on, and the only real kind
of freedom is freedom to function in a market economy. You should be a
consumer and not worry about anything else except maybe diversions,
entertainment, sports and so on.


These are self-conscious campaigns, designed to control people and to make
sure that the formal mechanisms of democracy really don't function. In a
third world country you can do what is essentially the same thing more
simply: put in a military dictatorship and send out the death squads. In
societies where people have won a degree of freedom from state coercion,
you have to turn instead to the techniques of propaganda, control of the
mind, of course all on the assumption that people are not only malleable
but that they're better off if they're molded and you are the one who
molds them. There is a very striking similarity between Leninist and
Western liberal doctrine on this, they're almost interchangeable. I've
sometimes run paragraphs side by side, and if you change a few names you
can hardly see the difference.


I think that helps account for the appeal of behaviorist doctrine. It
gives a kind of moral basis for all this.


TW: So it lives on outside of academia, outside of science?


As an intellectual claim about how people actually are, it's pretty hard
to take seriously in the sciences anymore.


TW: With the global economic crisis growing deeper and deeper ever since
last summer, several mainstream economists are finally saying that we're
about to see a replay of the Great Depression. Even Clinton and Blair
produce rhetoric about the need to regulate markets and Business Week
argues the case for capital controls. What is happening and what does this
tell us about this past decade of capitalist triumphalism?


The triumphalism was an expression of the fact that a very small section
of the population was becoming enriched. But this crisis happens to be now
at a point where it's hitting rich people, and that's why it's a crisis.
But in fact the crisis has been going on for 25 years. There was a period
after the second world war, sometimes called the Golden Age of capitalism,
in which there were historically unprecedented growth rates over most of
the industrialized world. There was also growth of the social contract,
labor rights, workplace reforms, as well as growth of both the economy and
productivity. That sort of continued into the late 1960s, more or less.


From the early 1970s, the industrial world has been in a long downturn.
Since the early 1970s growth rates have slowed, both of the economy and of
productivity, wages and incomes have basically stagnated for most of the
population; for a period, corporate profits were lowered, but in the
1990s--and that's the triumphalism--corporate profits shot up, sky-high.
Read the business press in the United States, every year: "dazzling,"
"stupendous," they ran out of adjectives a long time ago. And that's the
triumphalism. For a small sector of the population, this long downturn
happened to lead to extreme wealth mostly via redistribution upward. That
is why inequality is so radically increased.


Take, say, the recovery in the United States, the latest stage of the
business cycle in the United States, from about 1991 until now. In fact,
it's the slowest postwar recovery. And it's the first one in American
history in which most of the population has been left out. Wages and
incomes are barely getting back to their 1989 level, let alone their level
of the 1970s. One thing that is booming, however, is the stock market.
When you read - this is pre-August, still triumphalist - the stories about
"the fairy-tale economy," about Americans being "smug and prosperous,"
there is only one example that's given: that's the stock market. But close
to 50 percent of the stocks are held by one percent of households; and
most of the rest is held by the top ten percent so that roughly 90 percent
of the stocks are held by ten percent of the population. And in fact if
you look more closely, the richest one half percent holds about forty
percent of the stock. And for that sector, the economy no doubt is a
fairy-tale economy. But for maybe two thirds of the population or perhaps
as much as 70 percent of working people, wages have either stagnated or
declined, working conditions have gotten worse, working hours have gotten
longer, and you have to have both husband and wife working just to keep
food on the table. It's been a long slowdown across the industrial world,
and it has hit the underdeveloped world in much harsher ways.


You can roughly date when it happened, it's from the early 1970s. And
there was one crucial event that took place in the early 1970s, namely the
Bretton Woods system was dismantled. The Bretton Woods system - the
postwar economic system - was based on an effort to free trade from
restraints (freedom of trade was considered something to work for), but to
simultaneously regulate finance. So the Bretton Woods system was not
solely a liberalization system - it called for liberalization of trade but
regulation of finance and fixed exchange rates. Capital controls were
permitted, and there was something like a gold standard except that it was
a dollar standard, with the dollar pegged to gold. The IMF in its rules
was to maintain stability of exchange rates and to cut back capital
flight. For example the rules of the IMF prohibit giving credits to cover
capital flight. The rules are not honored nowadays, but they're there.


This system was dismantled from the early 1970s. The U.S. took the first
steps to break it down, Britain went along, and gradually other financial
powers went along as well, and so the rest of the world just had to do it
too. Some parts held back, like South Korea, they maintained the system of
controls through the late 1980s. And then they were more or less forced to
give them up. That was a condition for entry into the OECD. And the United
States put enormous pressure on them to overvalue their currency and to
take more American imports and to deregulate their financial markets and
so on, and they gave in. Next you had this huge market failure, which is
largely what it is: the so-called Asian crisis. By now it's fairly widely
recognized.


First, the pundits were talking about crony capitalism and that sort of
thing, as an explanation, which is nonsense - I mean, it's there, of
course, but it's here too, it's everywhere, and it was there during the
growth period as well. What was different about the recent period of
decline was that you had an almost classic failure of financial markets, a
huge flow of capital, huge borrowing, private borrowing, private lending,
and an extraordinary flow of herd-like behavior, and then pulling it all
out in another irrational, herd-like action. And this is very familiar.
Keynes warned about it 60 years ago, when he argued that finance ought to
be closely regulated and controlled, as indeed it sort of is internally.
So internally to the United States, the banks want to keep it controlled
or otherwise everything blows up.


But during this neoliberal escapade of the rich after dismantling Bretton
Woods, they were having a ball, and it was great for them, the super rich,
while most of the population suffered. And they spread the conditions
supporting this sort of triumph far and wide. And now the crisis is
hitting home, hitting them too, so now it's called a crisis.


Notice that there is nothing new about the volatility - since the early
1970s, markets have become much more volatile, contrary to the predictions
of many famed economists. Milton Friedman predicted with confidence that,
free the exchange rates, let the market rule, and everything will settle
down, it will all be stable. It went exactly the other way. With capital
restraints reduced, with limits on how capital could be moved about,
markets became far more volatile, with very sharp ups and downs. The IMF
recently released a report saying that of its roughly 180 members, about
20% had suffered severe financial crises, and about 60 percent, some
number around that neighborhood, had suffered fairly serious ones, over
this post World War Two triumphalist period (1980 to 1995). This is the
way financial markets operate. There is no theory of financial markets.
It's mostly amateur psychology. When you read economists - Alan Greenspan
and so on - talking about economic policy, it's mostly, this is going to
inspire confidence, or this will make people feel better, or something
like that. You can sort of dress it up in formulas if you like, but it's a
kind of amateur psychology, no real theory applied.


It's known descriptively that highly irrational behavior, even from the
point of view of market doctrine, takes place all the time. So in a
rational market, investors are supposed to look for economic fundamentals,
they're supposed to value solid manufacturing capacity and fiscal
austerity and all that kind of stuff. They are not supposed to do what is
called technical trading, to look for short-term patterns and see if you
can make a tiny gain by playing this and that game over a period of weeks,
or days, or even hours. But the latter is exactly what they do. About 80
percent of the capital in foreign exchange has a turnaround time of less
than a week, much of it a day or less. And what this is, it's smart guys,
a lot of Ph.D.s in math who are working for Wall Street firms on
sophisticated techniques to extrapolate little changes in currency
fluctuations and so on, so that you can make a lot of money fast.


It finally hit home that this is a real crisis when one of the big hedge
funds collapsed, which wasn't supposed to happen, but that's the game
they're playing. Not only does it not contribute to the economy, it harms
it.


TW: And now the tax payers are paying the bill.


In some manner the public bails it out, that's the name of the game.
Capitalism means, we don't take the risks, the public takes the risks, we
take the profits. As much as possible, risk and cost have to be
socialized, profits privatized. It's the basic principle. But the thing
has become so serious that by now even the major establishments are
worrying about it.


So what they're now talking about in the G-7, and the finance ministers,
and Business Week, and the Financial Times and so on, is what critics have
been saying all along, that unless there is some regulation, careful
regulation in fact, of financial flows, and some penalty for short-term
speculation, you're going to have serious problems. And in fact there have
been problems, in blow-up after blow-up. Now they're even willing to talk
about things that were anathema to them until recently, like the Tobin
tax.


The Tobin tax was proposed more than 20 years ago by a Nobel prize-winning
economist, who pointed out that unless you do something to throw sand in
the gears of short-term, speculative capital flows, it's going to
seriously harm the international economy. Well, nobody wanted to hear
that, because that was challenging the orthodoxy that markets are
wonderful, which was an orthodoxy precisely because it was benefiting rich
people, not because there was any logic in it - the usual story. There was
a major study done on the Tobin tax by a group of quite well-known
international economists, about five years ago I guess. The UN Development
Program wanted to distribute it, and they were apparently put under
pressure by the Clinton administration not to so the book is known mostly
to technical economists. Not all of the authors thought it was a great
idea. It includes people like the chief economist of the IMF, who didn't
particularly like it. But it was a serious discussion of its possibility,
and this type discussion was just not supposed to be on the agenda. In
today's newspapers, however, they're talking about it. What's the
difference? Well, now the rich people are in trouble. So it's a sudden
crisis -- a crisis for the wealthy and powerful whereas up until now, it
was just a crisis for everybody else.


TW: Given the risk that the world economy might spin out of control
completely now, and considering that last time, in the 1930s, it took a
world war to overcome the depression, how worried do you think we ought to
be about the prospect of war?


The prospect of war is much less, but for other reasons. Europe is, in
modern history at least, the most violent part of the world. One of the
reasons why Europe conquered the world is that it created a culture of
war, based on centuries of mutual massacre and slaughter - both a culture
of war and a technology of war. But that largely came to an end in 1945,
and for a very simple reason. Everybody could understand that the next
time we play this game, we're all dead. The techniques of destruction had
reached such a point that war is simply not an option for rich and
powerful countries. If they try it once more, that's the end. Now,
somebody may be irrational enough to do it anyway, but within anything
remotely like the domain of rationality, where you can at least begin to
talk about prediction, there isn't going to be war among the powerful
countries. And this is understood.


For example, right in the middle of the Gulf War, somebody at the Pentagon
leaked to the press - which buried it -- an interesting document. When any
new administration comes in, the CIA and the Defense Intelligence Agency
and so on give them a kind of intelligence assessment of the world, a
strategic analysis of the world. Someone leaked part of the Bush
administration strategic analysis (this would have been from early 1989),
and one part of it dealt with war. Here is approximately what it said: it
said in case of a conflict with "much weaker enemies" (implication: that's
the only kind of conflict we're ever going to get into), we must defeat
them "decisively and rapidly," because anything else will "undercut
political support." So no more bombing of South Vietnam for fifteen years,
and certainly we don't go to war with any major power.


This was well before the Gulf War. In fact at that time Saddam Hussein was
a great friend, so he wasn't contemplated as a target - but that's what
you can do. You can invade Panama, kidnap Noriega and get out in a couple
of weeks, bomb the Sudan, bomb Libya, bomb Iraq from a distance, very
fast, and don't get involved in more than a few days of fighting. That
kind of thing you can do with a much weaker enemy, rapidly and decisively,
but nothing else. So as long as you're within the domain of rationality,
the chances of war involving major powers I think, are extremely slight,
unless they're fighting a much weaker enemy. And even that's not so simple
anymore.


But to return to your other point, what actually overcame the depression
was not so much the war as the semi-command economies. The British economy
started to pick up in the late 1930s, when it sort of deliberalized and
became a kind of semi-command economy. The U.S. was barely at war, there
was no fighting here. But the wartime economy not only overcame the
depression, it flourished as industrial production tripled, and so on. But
that was a semi-command economy, it was highly coordinated from
Washington, run by corporate executives, with wage and price controls,
industrial policy deciding what would be produced, and so on. And that
worked like a charm. Just like it worked in England - England in fact
out-produced Germany and came close to the United States.


So the mobilization of the economy did overcome the depression. The war
was taking place and that was the justification for it, but the war was
not what overcame the depression in itself. This was pretty well
understood. The consensus among American economists and businessmen and
others in the mid-forties was that with the government-coordinated economy
declining, after the war, they were going to go right back to the
depression due to market failures. And so there was an interesting
discussion in the late forties, quite open. It's in the business press,
I've quoted parts of it at times, and it's very interesting. There was
recognition that we've got to do something to get the government to
stimulate the economy again or else we'll go back to the depression.


It was understood -- you didn't have to read Keynes to figure it out --
that you could stimulate the economy in a lot of different ways. You could
stimulate it with social spending, or you could stimulate it with military
spending. There there was a perfectly sane discussion, in Business Week
actually, of which to do. And the conclusion was: well, social spending is
not a good idea, and military spending is a great idea. The reason is that
social spending has a downside. Yes, it can pump the economy. But it also
has a democratizing effect, because people are interested in social
spending; they want to know where you're going to build a hospital or a
road or something, and they become involved. They have no opinions about
what jet plane to build. Social spending also gives people more security
and better conditions, better education, more means of communicating, more
ability to withstand threats of unemployment. It makes people, workers,
more powerful, that is, and thereby better able to win higher wages and
better conditions.

So social spending has a democratizing effect, it has a redistributive
effect, and it's not a direct gift to corporations. Military spending,
however, has none of those defects; it's non-democratizing - on the
contrary, people are frightened and they shelter under the umbrella of
power. And while it aids corporations it doesn't directly improve the lot
of workers; it rather tends to reinforce workplace discipline. So it's a
direct gift to corporations. It redistributes upward. And it's easy to
sell if you terrify the public. So what emerges is a Pentagon-based
industrial policy program, one which is now buckling a bit, due to the
excessive liberalizing of capital movements, and thus, one which has to be
repaired a bit, so that it once again benefits the rich, as intended.