Corporate Watch Interviews Noam Chomsky

[Jay Fenello]

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Subject: Corporate Watch Interviews Noam Chomsky
Date: Fri, 07 Apr 2000 15:23:54 -0400
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A CORPORATE WATCH INTERVIEW WITH NOAM CHOMSKY
By Anna Couey and Joshua Karliner
Corporate Watch is a Web Project at
www.corpwatch.org

CW: 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: 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 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 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 at its outset. The ideas, the initiatives, the software, the
hardware -- these were created at public initiative and expense, and it's
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. 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.

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 --
extraordinary rights. It'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, it 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. What the MAI would mean in
practice depends not only or firstly on the words, but 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.

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 or any corporation to do anything
they like in the international arena, or domestically. Over time that's
supposed to have a ratchet effect, to turn the world over more and more to
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.
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.

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 little 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
other diversion. If you really know exactly what you want to find, and have
enough information and energy, you may be able to find it. 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 internet can be
kept under public control. Access could be promoted for all. More,
providers could be subsidized so that what is available online won't be
mostly the ideas and the entertainments and the commercial marketplaces put
there by private institutions with great wealth. 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 privatization
and commercialization 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, at the moment. But more
generally 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, and community-based and labor-based and
other media were basically on par with the corporate media early in this
century. The elimination of all this results from 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: 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.

###

Respectfully,

Jay Fenello,
New Media Strategies
------------------------------------
http://www.fenello.com 770-392-9480
Aligning with Purpose(sm) ... for a Better World
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"If we want to change the world, we have to
begin by changing ourselves" -- Deepak Chopra