from corporate watch, Chomsky was interviewed in April.

kelly



                           Feature #9: Microsoft
     _________________________________________________________________

             Noam Chomsky, photo by Donna Coveney/MIT March '92

               A CORPORATE WATCH INTERVIEW WITH NOAM CHOMSKY

   Corporate Watch's Anna Couey and Joshua Karliner caught up with Noam
   Chomsky by telephone at his home in the Boston area to ask him about
   Microsoft and Bill Gates. The following is a transcript of our far
   ranging conversation.
     _________________________________________________________________

   CW: So our first question is, how significant do you see the recent
   skirmishes between the Department of Justice and Microsoft? Do you see
   it as an important turn of events?

   NC: There's some significance. We shouldn't exaggerate it. If there
   are three major corporations controlling what is essentially public
   property and a public creation, namely the Internet,
   telecommunications, and so on, that's not a whole lot better than one
   corporation controlling, but it's maybe a minor difference. The
   question is to what extent parasites like Microsoft should be
   parasites off the public system, or should be granted any rights at
   all.

   CW: Give us a little bit of historical context. How does what's
   happening with Microsoft's growing power, and its role in society fit
   into the history of U.S. Corporate power, the evolution of
   corporations?

   NC: Here's a brief history, a thumbnail sketch.

   There were corporations as far back as the 18th century, and beyond.
   In the United States, corporations were public bodies. Basically, they
   were associations. A bunch of people could get together and say we
   want to build a bridge over this river, and could get a state charter
   which allowed them to do that, precisely that and nothing more. The
   corporation had no rights of individual persons. The model for the
   corporation back at the time of the framing of the Constitution was a
   municipality. Through the 19th century, that began to change.

   It's important to remember that the constitutional system was not
   designed in the first place to defend the rights of people. Rather,
   the rights of people had to be balanced, as Madison put it, against
   what he called "the rights of property." Well of course, property has
   no rights: my pen has no rights. Maybe I have a right to it, but the
   pen has no rights. So, this is just a code phrase for the rights of
   people with property. The constitutional system was founded on the
   principle that the rights of people with property have to be
   privileged; they have rights because they're people, but they also
   have special rights because they have property. As Madison put it in
   the constitutional debates, the goal of government must be "to protect
   the minority of the opulent against the majority." That's the way the
   system was set up.

   In the United States, around the turn of the century, through radical
   judicial activism, the courts changed crucially the concept of the
   corporation. They simply redefined them so as to grant not only
   privileges to property owners, but also to what legal historians call
   "collectivist legal entities." Corporations, in other words, were
   granted early in this century the rights of persons, in fact, immortal
   persons, and persons of immense power. And they were freed from the
   need to restrict themselves to the grants of state charters.

   That's a very big change. It's essentially establishing major private
   tyrannies, which are furthermore unaccountable, because they're
   protected by First Amendment rights, freedom from search and seizure
   and so on, so you can't figure out what they're doing.

   After the Second World War, it was well understood in the business
   world that they were going to have to have state coordination,
   subsidy, and a kind of socialization of costs and risks. The only
   question was how to do that. The method that was hit upon pretty
   quickly was the "Pentagon system" (including the DOE, AEC, NASA).
   These publicly-subsidized systems have been the core of the dynamic
   sectors of the American economy ever since (much the same is true of
   biotechnology, pharmaceuticals, etc., relying on different public
   sources). And that certainly leads right to Microsoft.

   So how does Microsoft achieve its enormous profits? Well, Bill Gates
   is pretty frank about it. He says they do it by "embracing and
   extending" the ideas of others. They're based on computers, for
   example. Computers were created at public expense and public
   initiative. In the 1950s when they were being developed, it was about
   100% public expense. The same is true of the Internet. The ideas, the
   initiatives, the software, the hardware -- these were created for
   about 30 years at public initiative and expense, and it's just now
   being handed over to guys like Bill Gates.

   CW: What are the social and cultural impacts of allowing, not only a
   monopoly, but even if it's just a few large corporations, dominating
   something as basic as human speech, communication with each other?

   NC: It's a form of tyranny. But, that's the whole point of
   corporatization -- to try to remove the public from making decisions
   over their own fate, to limit the public arena, to control opinion, to
   make sure that the fundamental decisions that determine how the world
   is going to be run -- which includes production, commerce,
   distribution, thought, social policy, foreign policy, everything --
   are not in the hands of the public, but rather in the hands of highly
   concentrated private power. In effect, tyranny unaccountable to the
   public. And there are various modalities for doing this. One is to
   have the communication system, the so-called information system, in
   the hands of a network of, fewer or more doesn't matter that much,
   private tyrannies.

   Let's take the media in the United States. These are corporate media,
   overwhelmingly. Even the so-called public media are not very
   different. They are just huge corporations that sell audiences to
   advertisers in other businesses. And they're supposed to constitute
   the communications system. It's not complicated to figure out what's
   going to come out of this. That includes also the entertainment
   industries, so-called, the various modalities for diverting people
   from the public arena, and so on.

   And there are new things happening all the time. Like right at this
   minute, there's a dramatic example, that's the Multilateral Agreement
   on Investment (MAI), which is supposed to be signed this month, but
   they're not going to make it. The negotiations have been going on in
   secret for about three years. It's essentially a huge corporate power
   play, trying to give "investors" -- that doesn't mean the guy working
   on the shop floor, it means the board of directors of GE, of Merrill
   Lynch, and so on -- to give investors extraordinary rights. That's
   being done in secret because the people involved, which is the whole
   business community incidentally, know that the public is going to hate
   it. So therefore the media are keeping it secret. And it's an
   astonishing feat for three years to keep quiet about what everyone
   knows to be a major set of decisions, which are going to lock
   countries into certain arrangements. It'll prevent public policy. Now
   you can argue that it's a good thing, a bad thing, you can argue what
   you like, but there's no doubt about how the public is going to react,
   and there's no doubt about the fact that the media, which have been
   well aware of this from the beginning have succeeded in virtually not
   mentioning it.

   CW: How would a company like Microsoft benefit from the MAI?

   NC: They could move capital freely. They could invest it where they
   like. There would be no restrictions on anything they do. A country,
   or a town, like say, Cambridge, Massachusetts, where I live, where I
   work, could not impose conditions on consumer protection,
   environmental control, investment and set-asides for minorities or
   women, you name it, that would be ruled out.

   Now exactly how far this would go depends on the disposition to
   enforce it. These things are not determined by words. There's nothing
   in the Constitution, or the amendments to the Constitution, which
   allows private tyrannies to have the right to personhood. It's just
   power, not the wording. What the MAI would mean in practice depends on
   what the power relations are, like whether people object to it so
   strenuously they won't allow it to happen, maybe by riots, or
   whatever. So those are the terms that they're going to try to impose.

   A crucial element of this is what they call the ratchet effect; that
   is existing legislation is to be allowed, but it has to be removed
   over time. It has to be rolled back, and no new legislation can be
   introduced conflicting with the rights of Microsoft to do anything
   they like in the international arena, or domestically. Well over time
   that's supposed to have a ratchet effect, to turn the world over more
   and more in the hands of the major private tyrannies, like Microsoft,
   with their alliances and interactions.

   CW: Economist Brian Arthur argues that with the rapidly changing
   nature of technology, no one will remain in a monopoly position for
   long, so that monopoly power in the technology industries is different
   than what we've historically seen, and is nothing to worry about.

   NC: But there never was monopoly power; or there very rarely was
   monopoly power. Take highly concentrated power systems, like the
   energy industries. But they're not strictly speaking monopolies. Shell
   and Exxon are competitors. This is a highly managed system of market
   administration, with enormous state power entering in the interests of
   a small collection of private tyrannies.

   It's very rare to find a real monopoly. AT&T was a monopoly for a
   time, that's why it could create things like the transistor, for
   example. It was a monopoly, so therefore they could charge high rates.
   But that's certainly unusual.

   CW: Do you think the whole monopoly issue is something to be concerned
   about?

   NC: These are oligopolies; they are small groups of highly
   concentrated power systems which are integrated with one another. If
   one of them were to get total control of some system, other powers
   probably wouldn't allow it. In fact, that's what you're seeing.

   CW: So, you don't think Bill Gates is a latter-day John D.
   Rockefeller?

   NC: John D. Rockefeller wasn't a monopolist. Standard Oil didn't run
   the whole industry; they tried. But other power centers simply don't
   want to allow that amount of power to one of them.

   CW: Then in fact, maybe there is a parallel there between Gates and
   Rockefeller, or not?

   NC: Think of the feudal system. You had kings and princes and bishops
   and lords and so on. They for the most part did not want power to be
   totally concentrated, they didn't want total tyrants. They each had
   their fiefdoms they wanted to maintain in a system of highly
   concentrated power. They just wanted to make sure the population, the
   rabble so-called, wouldn't be part of it. It's for this reason the
   question of monopoly -- I don't want to say it's not important -- but
   it's by no means the core of the issue.

   It is indeed unlikely that any pure monopoly could be sustained.
   Remember that this changing technology that they're talking about is
   overwhelmingly technology that's developed at public initiative and
   public expense. Like the Internet after all, 30 years of development
   by the public then handed over to private power. That's market
   capitalism.

   CW: How has that transfer from the public to the private sphere
   changed the Internet?

   NC: As long as the Internet was under control of the Pentagon, it was
   free. People could use it freely [for] information sharing. That
   remained true when it stayed within the state sector of the National
   Science Foundation.

   As late as about 1994, people like say, Bill Gates, had no interest in
   the Internet. He wouldn't even go to conferences about it, because he
   didn't see a way to make a profit from it. Now it's being handed over
   to private corporations, and they tell you pretty much what they want
   to do. They want to take large parts of the Internet and cut it out of
   the public domain altogether, turn it into intranets, which are fenced
   off with firewalls, and used simply for internal corporate operations.

   They want to control access, and that's a large part of Microsoft's
   efforts: control access in such a way that people who access the
   Internet will be guided to things that *they* want, like home
   marketing service, or diversion, or something or other. If you really
   know exactly what you want to find, and have enough information and
   energy, you may be able to find what you want. But they want to make
   that as difficult as possible. And that's perfectly natural. If you
   were on the board of directors of Microsoft, sure, that's what you'd
   try to do.

   Well, you know, these things don't *have* to happen. The public
   institution created a public entity which can be kept under public
   control. But that's going to mean a lot of hard work at every level,
   from Congress down to local organizations, unions, other citizens'
   groups which will struggle against it in all the usual ways.

   CW: What would it look like if it were under public control?

   NC: It would look like it did before, except much more accessible
   because more people would have access to it. And with no constraints.
   People could just use it freely. That has been done, as long as it was
   in the public domain. It wasn't perfect, but it had more or less the
   right kind of structure. That's what Microsoft and others want to
   destroy.

   CW: And when you say that, you're referring to the Internet as it was
   15 years ago.

   NC: We're specifically talking about the Internet. But more generally
   the media has for most of this century, and increasingly in recent
   years, been under corporate power. But that's not always been the
   case. It doesn't have to be the case. We don't have to go back very
   far to find differences. As recently as the 1950s, there were about
   800 labor newspapers reaching 20-30 million people a week, with a very
   different point of view. You go back further, the community-based and
   labor-based and other media were basically on par with the corporate
   media early in this century. These are not laws of nature, they're
   just the results of high concentration of power granted by the state
   through judicial activism and other private pressure, which can be
   reversed and overcome.

   CW: So take the increasing concentration in the technology that we're
   looking at with Microsoft and some of these other companies, and
   compare it with recent mergers in the defense, media, insurance, and
   banking industries, and especially the context of globalization. Are
   we looking at a new stage in global capitalism, or is this just a
   continuation of business as usual?

   NC: By gross measures, contemporary globalization is bringing the
   world back to what it was about a century ago. In the early part of
   the century, under basically British domination and the gold standard,
   if you look at the amount of trade, and then the financial flow, and
   so on, relative to the size of the economy, we're pretty much
   returning to that now, after a decline between the two World Wars.

   Now there are some differences. For example, the speed of financial
   transactions has been much enhanced in the last 25 years through the
   so-called telecommunications revolution, which was a revolution
   largely within the state sector. Most of the system was designed,
   developed, and maintained at public expense, then handed over to
   private profit.

   State actions also broke down the post-war international economic
   system, the Bretton Woods system in the early 1970s. It was dismantled
   by Richard Nixon, with US and British initiative primarily. The system
   of regulation of capital flows was dismantled, and that, along with
   the state-initiated telecommunications revolution led to an enormous
   explosion of speculative capital flow, which is now well over a
   trillion dollars a day, and is mostly non-productive. If you go back
   to around 1970, international capital flows were about 90% related to
   the real economy, like trade and investment. By now, at most a few
   percent are related to the real economy. Most have to do with
   financial manipulations, speculations against currencies, things which
   are really destructive to the economy. And that is a change that
   wasn't true, not only wasn't true 100 years ago, it wasn't true 40
   years ago. So there are changes. And you can see their effects.

   That's surely part of the reason for the fact that the recent period,
   the last 25 years, has been a period of unusually slow economic
   growth, of low productivity growth, of stagnation or decline of wages
   and incomes for probably two thirds of the population, even in a rich
   country like this. And enormously high profits for a very small part
   of the population. And it's worse in the Third World.

   You can read in the New York Times, the lead article in the "Week in
   Review" yesterday, Sunday, April 12, that America is prospering and
   happy. And you look at the Americans they're talking about, it turns
   out it's not the roughly two thirds of the population whose incomes
   are stagnating or declining, it's the people who own stock. So, ok,
   they're undoubtedly doing great, except that about 1% of households
   have about 50% of the stock, and it's roughly the same with other
   assets. Most of the rest is owned by the top 10% of the population. So
   sure, America is happy, and America is prosperous, if America means
   what the New York Times means by it. They're the narrow set of elites
   that they speak for and to.

   CW: We are curious about this potential for many-to-many
   communications, and the fact that software, as a way of doing things
   carries cultural values, and impacts language and perception. And what
   kind of impacts there are around having technology being developed by
   corporations such as Microsoft.

   NC: I don't think there's really any answer to that. It depends who's
   participating, who's active, who's influencing the direction of
   things, and so on. If it's being influenced and controlled by the
   Disney Corporation and others it will reflect their interests. If
   there is largely public initiative, then it will reflect public
   interests.

   CW: So it gets back to the question of taking it back.

   NC: That's the question. Ultimately it's a question of whether
   democracy's going to be allowed to exist, and to what extent. And it's
   entirely natural that the business world, along with the state, which
   they largely dominate, would want to limit democracy. It threatens
   them. It always has been threatening. That's why we have a huge public
   relations industry dedicated to, as they put it, controlling the
   public mind.

   CW: What kinds of things can people do to try to expand and reclaim
   democracy and the public space from corporations?

   NC: Well, the first thing they have to do is find out what's happening
   to them. So if you have none of that information, you can't do much.
   For example, it's impossible to oppose, say, the Multilateral
   Agreement on Investment, if you don't know it exists. That's the point
   of the secrecy. You can't oppose the specific form of globalization
   that's taking place, unless you understand it. You'd have to not only
   read the headlines which say market economy's triumphed, but you also
   have to read Alan Greenspan, the head of the Federal Reserve, when
   he's talking internally; when he says, look the health of the economy
   depends on a wonderful achievement that we've brought about, namely
   "worker insecurity." That's his term. Worker insecurity--that is not
   knowing if you're going to have a job tomorrow. It is a great boon for
   the health of the economy because it keeps wages down. It's great: it
   keeps profits up and wages down.

   Well, unless people know those things, they can't do much about them.
   So the first thing that has to be done is to create for ourselves, for
   the population, systems of interchange, interaction, and so on. Like
   Corporate Watch, Public Citizen, other popular groupings, which
   provide to the public the kinds of information and understanding, that
   they won't otherwise have. After that they have to struggle against
   it, in lots of ways which are open to them. It can be done right
   through pressure on Congress, or demonstrations, or creation of
   alternative institutions. And it should aim, in my opinion, not just
   at narrow questions, like preventing monopoly, but also at deeper
   questions, like why do private tyrannies have rights altogether?

   CW: What do you think about the potential of all the alternative media
   that's burgeoning on the Internet, given the current trends?

   NC: That's a matter for action, not for speculation. It's like asking
   40 years ago what's the likelihood that we'd have a minimal health
   care system like Medicare? These things happen if people struggle for
   them. The business world, Microsoft, they're highly class conscious.
   They're basically vulgar marxists, who see themselves engaged in a
   bitter class struggle. Of course they're always going to be at it. The
   question is whether they have that field to themselves. And the deeper
   question is whether they should be allowed to participate; I don't
   think they should.