Globalization and its Discontents

Noam Chomsky debates with Washington Post readers

Washington Post, May 16, 2000,

Lecturer and author Noam Chomsky will be online Tuesday, May 16 at 1 p.m. to discuss globalization, free trade and the vote to extend permanent normal trade relations to China. Chomsky is currently Institute Professor and Professor of Linguistics at the Massachusetts Institute of Technology.

Chomsky has written and lectured widely on linguistics, philosophy, intellectual history, contemporary issues, international affairs and U.S. foreign policy. The author of numerous books, Chomsky’s most recent works include “The Common Good: Profit Over People” and “The New Military Humanism: Lessons from Kosovo.” Chomsky discussed his views on globalization and debt relief in the April 24, 2000 issue of The Nation. On Tuesday May 16, Noam Chomsky will answer washigntonpost.com users’s question on these and other issues.

Noam Chomsky was born on December 7, 1928 in Philadelphia, Pennsylvania. He received his undergraduate degree and his PhD in linguistics from the University of Pennsylvania. Chomsky joined the staff of the Massachusetts Institute of Technology in 1955 and in 1961 was appointed full professor in the Department of Modern Languages and Linguistics (now the Department of Linguistics and Philosophy.) From 1966 to 1976 he held the Ferrari P. Ward Professorship of Modern Languages and Linguistics. In 1976 he was appointed Institute Professor.

Submit questions for Noam Chomsky.

Taipei, Taiwan, Republic of China: 1. Do you believe that the type of statement made last week by Ford Motor Company regarding corporate social responsibility represents a step toward voluntary self-policing that is a realistic solution under global competition? If not, should efforts be made toward developing global regulations or toward localization efforts?

Tom Burgess,
Social Studies Teacher, Taipei American School

Noam Chomsky: A corporation is a form of private tyranny. Its directors have a responsibility to increase profit and market share, not to do good works. If they fail that responsibility, they will be removed. They have some latitude for public relations purposes, and the talk about corporate responsibility falls within that territory. But it makes no sense to regard them as benevolent institutions, freed from their institutional role. It is a public responsibility to enforce decent behavior.
Morgantown, WV: Are there any salutary aspects of the
much over-used word, ‘globalization’?

Noam Chomsky: You are right to be skeptical about the term. What is called “globalization” is a specific form of international integration, designed and instituted for particular purposes. There are many possible alternatives. This particular form happens to be geared to the interests of private power, manufacturing corporations and financial institutions, closely linked to powerful states. Effects on others are incidental. Sometimes they happen to be beneficial, often not.
Bethesda, MD: What is your view on the explanations given for the US bombing of the Chinese embassy? Do you think it is affecting the MFN debate?

Noam Chomsky: The explanation given for the bombing of the Embassy was not very convincing, but could be correct. I doubt that the Embassy was chosen as a target. That would have made little sense. I also do not think it is a major factor in the MFN debate. It was a major issue in China of course. Not here.
NYC, NY: Does the transfer of wealth from the US to China (by reducing trade restrictions) really increase the growth of a Chinese middle class? And will this middle class accumulate enough wealth to spread the concentration of power in China?

Noam Chomsky: I wouldn’t expect the trade deals with China to transfer wealth from the US to China. Rather, in both countries it will contribute to transfering wealth to privileged sectors and away from the general populations — though as always, they might enjoy some benefits, as an incidental by-product. The largest effect will probably within China. Opening China’s borders to US imports and allowing a good part of its economy to be taken over by US financial institutions, and other concomitants of these agreements, are likely to be highly beneficial to elements of Chinese society that take part in these arrangements, possibly quite harmful to most of the population — who have no voice. They are not represented by their government, surely not ours.
Washington, DC: What exactly does America stand to gain from extending normal trade relations with China? Is it something that would benefit China more? China already seems to be a trade powerhouse. How would this trade be affected during a possible armed conflict?

Noam Chomsky: It is misleading to ask what “America” gains or loses. Or “China.” Gains and losses are distributed within the societies. The “normal trade relations” happen to include extreme forms of protectionism to benefit US corporations(for example, a patent regime that would have prevented development in today’s rich societies, including the US, had they submitted to it), but no meaningful protection for the rights of ordinary people, working people in particular, or Chinese peasants who are likely to suffer gravely. Working people in the US may lose, investors in the US and financial institutions will surely gain. When one says that China is a “powerhouse,” bear in mind that much of that is foreign-owned production. The effects on Chinese society are in fact complex. In armed conflict, all bets are off.
Washington, DC: Why is it that the groups that have organized the resistance to the WTO and World Bank/IMF have failed to bring blacks and latinos into the movement in significant numbers.

Mike Fekula
Washington, DC

Noam Chomsky: More generally, poor people are underrepresented. Race-class correlations in the US are significant, a fact which partially accounts for the correct observation you make. In general, more privileged people have more opportunities. That includes opportunities to take part in public protest and resistance. The costs are, roughly, inversely proportional to privilege, just as opportunities correlate pretty well with privilege. These are large factors to keep in mind.
Knoxville, Tenn.: The New York Times has written that the protestors against free-trade are wrong, including the AFL-CIO. Even the pro-environment/Democratic presidential candidate Al Gore favors MFN status for China. How and why can they be so wrong on the subject?

And while I admire the fact that students are getting involved in protesting something, there is a seriously anti-science component to the anti-globalization movement. Does this trou[ble you]?

Noam Chomsky: Did the NYT, Gore, etc., say why the protestors are wrong? Or even what their positions are? For one thing, the issue is not simply “free trade.” What is called “free trade” has highly protectionist elements. What is at issue are investor rights agreements, not free trade. The protestors, including the AFL-CIO, have good reasons to oppose investor rights agreements that insist on very high protection for property rights (often resulting, in fact, from taxpayer subsidy), but little or no protection for the rights of flesh-and-blood people, including rights of working people — both in the US and in other countries. That’s not oppostion to “free trade.” It is worth remembering that the press has refused even to permit the official positions of the labor movement to appear. Thus during the NAFTA debate, the labor movement had a clearly developed position, not opposed to a NAFTA, but opposed to this particular version. Its analysis and proposals happened to be rather similar to those of Congress’s own research bureau, the Office of Technology Assessment. But while the labor movement was constantly berated on false grounds, its actual position was never reported. The observation generalizes.
washington, dc: What are examples or principles of the sort of international trade that you think should exist?

Noam Chomsky: There can be no general answer to this, except banalities. Trade is not a value in itself. It’s good or bad, depending on its costs and benefits for people — including people of future generations (which is what environmental issues are basically about). Trade can have welfare benefits, it also carries plenty of costs, many of which are not counted, though they are severe (pollution, resource waste and depletion, etc.). We should compare the costs and benefits, case by case, and decide democratically how policies should be set in the light of the best assessment that can be made about these matters. Note also that what is called “trade” is to a large extent not trade in any meaningful sense. A substantial consists of intrafirm transfers that happens to cross borders, that is, centrally managed interactions in violation of market principles. The same is true of outsourcing, a way to increase profits but often harming people. There are also complex strategic alliances among firms. If we try to calculate all these factors, it would almost surely turn out that the majority of what is called “trade” is actually in large part centrally managed. Furthermore, the term “trade” is extended to cover capital flow, which is something entirely different — and is astronomical, if we take into account speculative flows, which have been liberalized under the mislabelled “free trade regime,” and are almost surely harmful to the economy, just as they serve to undermine democratic choice.
Marlborough, Mass.: (1) How many centuries will it take before the PRC becomes a serious trading partner of the USA or any other highly industrialized western nation? They may have over one billion people, but very few of them have any real money and they have a history of importing a $ value equal to a TINY fraction of what we historically have been importing from them.

(2)Why should we have “permanent” normal trade relations with any country? This seems to imply that we are locked into some kind of relationship from which exiting would be difficult if the original reasons change over time.

Noam Chomsky: We should bear in mind that a few centuries ago, India and China were the commercial and manufacturing centers of the world. As recently as the 1860s, England was concerned that it could not compete with Chinese manufactures — one of the reason why it forced Opium on China. What we look at today is the result of a few centuries of violence and conquest, which might be reversed and modified — surely should be. What China will become is very hard to say. Little is understood about matters of this complexity.

As for “permanent relations,” these do not exist. Relations can always change, and always do. But it makes sense to have some kind of relatively orderly framework for international relations, including economic relations. The question is what should they be. Should they be designed for the interests of investors, lenders, manufacturing corporations, investment firms, etc.? Or for the interests of the general population? The answers are complex, and lead to quite different conceptions of how relatively stable relations should be established. There is, furthermore, a very important point that your question brings up. It is now largely conceded that the point of NAFTA was not to yield the economic benefits that were widely proclaimed (and by now disproven). Rather, to “lock Mexico into the reforms” of the 1980s, by arrangements that could not easily be changed if a more democratic government came about. These “reforms” were fine for US investors and rich Mexicans, but a disaster for most of the population. Real wages declines sharply during the “reforms,” and have been declining further since NAFTA. These are some reasons to be skeptical about arrangements that are made to appear “permanent.”
Paris, France: Dr. Chomsky,
Hernando De Soto of the Institute for Liberty and Democracy in Lima, Peru has tried to help people by reforming government bureaucracies. His premise is that enforceable property rights help the poor since they can use their land or home as capital when they apply for loans. Without clear titles, they cannot get financing. What do you think of Dr. De Soto’s thesis and how he is trying to put them into practice? Wouldn’t Permanent Normal Trade Relations help bring China more firmly into the “mainstream” of economic relations and improve the rule of law in that country?

Noam Chomsky: It depends on what the “enforceable property rights” are. Under some circumstances, granting clear title, etc., might be helpful to people. When property rights are granted to power and privilege, it can be expected to be harmful to most people. Furthermore, the rights and concerns of sane people go beyond individual ownership. There is also social property and concerns — e.g., the right to a liveable environment, and the concern that the kid down the street gets a good education. That is, or should be, a large part of a decent human life, and should be a background to the (sometimes legitimate) concern for individual property rights. Also to be borne in mind is that collectivist legal entities (corporations) have been granted rights of persons, and rights that go far beyond, mostly by radical judicial activism. We should always ask what “property rights” — or any rights — these entities should have.

About bring China into the “mainstream,” depends what mainstream you have in mind. The mainstream of the specific form of “globalization” that has been instituted in the past 25 years has had many harmful effects. Rates of growth of the economy and productivity have slowed, wages have stagnated or declined for a great many people (in the US, a majority of nonsupervisory workers), the work load has sharply increased, benefits have declined, social indicators have deteriorated over a considerable range, and so on — with far worse consequences in the South (the former colonial world), which is why the nonaligned countries (accounting for 80% of the world’s population), have strongly condemned this form of globalization, just last April in fact, in major conferences that were scarcely reported in the US. We should be asking what kind of “mainstream” we would like to see, for ourselves as well, not just for the people of China — who, remember, have no voice in what is going on.
Washington D.C.: A shift in information results in a shift in the balance of power. Will this theory apply economically and or militarily to the United States if PNTR is passed?

Noam Chomsky: I’m not sure I grasp the question. There are shifts in control over information, some quite significant. One example is the increasing concentration of media control, quite startling over the past 20 years (that includes not just press, but what is often called “popular culture” generally). There are also serious questions about the future of the internet. Like most dynamic sectors of the economy, this is largely the product of the vast state sector, meaning that the public bore the costs and risks for several decades, until it was handed over to private power, as a huge gift from the public (which was uanaware), just a few years ago. What the future of this system will be is now a terrain of struggle. When it was under public control, it was commonly called an “information superhighway.” Now the catchword is “e-commerce”. Something else we should remember is that for centuries, and particularly in the 20th century, creating “artificial wants” and stimulating wild and harmful consumerism has been quite consciously regarded as an effective device of social control. These are very live issues. I suspect they are not what you had in mind, but that I did not grasp.
Bethesda, MD: Mr. Chomsky, I have been an admirer of your work for a long time. Thanks for doing this discussion today.

Recently the Washington Post (I think) quoted Chinese human rights activists as saying that MFN status for China will help promote human rights; the argument is that a policy of engagement with the country will give us the standing to monitor and call for redress of human rights abuses. What do you think of this argument?

Noam Chomsky: I’d like to believe that, but see very little reason to. There’s a presupposition that has to be evaluated, not just accepted as a given truth: that US power systems (government, corporate) have a record of promoting human rights and overcoming human rights abuses. This is not the place to try to review the record. I’ll simply say that there is, I think, overwhelming evidence that this presupposition is not correct. Not just for the US; for other great powers as well. The story is not uniform, but is also not attractive. Insofar as there has been concern for human rights, it’s the result of substantial popular pressure and struggle. There’s nothing automatic about it.
washingtonpost.com: If PNTR is passed, will it hurt the labor movement’s ability to influence change and successfully lobby congress on future issues? Is this a test of labor’s current and future influence on government?

Noam Chomsky: I think one of the main goals of the corporate-state sponsors of these proposals is to weaken the US labor movement, and popular sovereignty generally. It’s a large question, and I cannot try to deal with it here, but one central aspect of “globalization” is the transfer of power to make decisions to the hands of private concentrations of power, and away from “governments,” which means away from the public, to the extent that these governments are democratic. That’s a regular consequence of financial liberalization. It’s also a consequence of allowing corporate power to distribute production. Even the threat of transfer is a powerful weapon against working people. It increases “worker insecurity,” something that is supposed to be “good for the economy,” according to the reigning ideology. The World Bank has gone so far as to declare that “flexibility of labor markets” — which, they recognize, means making workers more insecure — must be a central feature of “reforms.” The misnamed “free trade agreements” contribute to this process. In many respects, the weaken the labor movement, and popular democracy generally.
Lansdowne, PA: In your view, what should our position be in relation to China and MFN?

Noam Chomsky: My own view is that the whole framework is severely flawed. The kind of international integration that should be pursued should be seriously rethought. It doesn’t have to take the form of “globalization” geared to the the needs of corporate power. If the system is modified along the lines that I think should be seriously considered, privileging quite different rights and concerns, the question of relations to China will take a different form. If we assume the system as given, with all of its (in my view, very severe) flaws, the questions are much narrower: what will be the human consequences of fixing “permanent” relations with China within this (severly flawed) system. I don’t think there is a simple answer to that. The likelihood, I think, is that the main effects will be for the people of China, who will lose opportunities for long-term constructive independent development, and will lose potential control over their economy and society (potential, because they don’t have it now, surely). For the US, corporate power will surely benefit, but working people — that is, most people — are likely to be harmed in many ways.
Washington DC: How is it that something so obviously immoral, such as importing good produced by exploitative labor practices, can be overlooked by our nations leaders? Even by “liberals”? Are we too assume that they are corrupt, or is there more to it than that?

Noam Chomsky: Why should one expect leaders — of our country or others — to be concerned by exploitative labor practices? A century and a half ago, working people near where I’m typing this, in Eastern Massachusetts, were condemning wage labor as hardly different from slavery, and calling for those who work in the plants to own them. Makes sense, I think.