2014 "Noam Chomsky": Why you can not have a Capitalist Democracy!
I’m not—I started by saying that one of the relations between capitalism and democracy is contradiction. You can’t have capitalist democracy. And the people who really sort of believe in markets—or at least pretend to—understand that.
So if you read Milton Friedman and other apostles of so-called libertarianism, they don’t call for democracy. They call for what they call “freedom,” which is a very restrictive concept of freedom. It’s not the freedom of a working person to control their work, their lives, and so on. It’s their “freedom” to submit themselves to control by a higher authority. That’s called freedom—but not democracy. They don’t like democracy. And they’re right: capitalism and democracy really are inconsistent.
Actually, what’s called “libertarianism” in the United States is about as extreme an example of anti-libertarianism as you can imagine. They are in favor of private tyranny—the worst kind of tyranny: tyranny by unaccountable private concentrations of wealth.
When they say, “Well, we don’t want government interference in the market,” they mean it. Maybe they don’t understand it, but if you think it through, it’s pretty obvious: the kind of interference they want to block is the kind that would constrain tyranny on the part of totally unaccountable private tyrannies—which is what corporations are.
It’s worth bearing in mind how radically opposed this is to classical liberalism. They like to invoke, say, Adam Smith. But if you read Adam Smith, he said the opposite. He’s famous, you know—the claim is that he was opposed to government regulation or interference in markets. It’s not true. He was in favor of regulation, as he put it, when it benefits the working man. He was against interference when it benefited the masters.
That’s traditional classical liberalism. What’s called libertarianism in the United States, which likes to invoke this fictionalized history, is radically opposed to basic classical liberal principles. And it’s kind of astonishing to me that a lot of young people—college students—are attracted to this kind of thing. I mean, you can’t, after all, read the classical texts.
Take Adam Smith. He’s the icon of libertarianism. But at the time, he was considered a dangerous radical. It was a pre-capitalist era, but he was opposed to what was emerging. He condemned what he called “the vile maxim of the masters of mankind”: All for ourselves and nothing for anyone else. That’s an abomination.
Take the phrase invisible hand. Everybody learned that in high school or college. Adam Smith actually used the term—rarely. But look at how he used it.
In Wealth of Nations, his major work, the phrase appears once. The context? He was concerned with England. He said: Suppose merchants and manufacturers invest abroad and import from abroad. That would be profitable for them but harmful to the people of England. However, they will have enough commitment to their own country—a “home bias,” as it’s now called—so that, as if by an invisible hand, they will keep to the less profitable actions, and England will be saved from the ravages of what we now call neoliberal globalization.
That’s the one use of the term in Wealth of Nations.
In his other major work, The Theory of Moral Sentiments, the term appears once again. England was largely agrarian then. Smith says: Suppose some landlord accumulates an enormous amount of land and everyone else has to work for him. That won’t turn out too badly, he argues, because the landlord will be motivated by his natural sympathy for others. He will make sure the necessities of life are distributed equitably to the people on his land. And it will result in a relatively equal and just distribution of wealth—as if by an invisible hand.
That’s the other use of the term.
Compare that to what you’re taught in school or read in the newspapers.
Everyone has read the first paragraphs of Wealth of Nations, where Smith talks about how wonderful it is that the butcher and baker pursue their self-interest, and we’re all better off. So, we should favor the division of labor, right?
But how many people have read a few hundred pages in, where Smith launches a bitter attack on the division of labor? For interesting reasons—reasons that were common in the Enlightenment environment in which he lived, very different from ours.
He says: If division of labor is pursued, people will be directed to actions in which they repeat the same mechanical operations over and over. They’ll be deskilled.
That’s been the goal of management for over a century: deskill the workforce.
Smith continues: this will turn people into “creatures as stupid and ignorant as it is possible for a human being to become.” Therefore, in any civilized society, the government must intervene to prevent such a development.