Market Democracy in a Neoliberal Order

Noam Chomsky

Excerpted from Profit Over People, 1998


… The announcement of the Clinton Doctrine was accompanied by a prize example to illustrate the victorious principles the administration’s achievement in Haiti. Since this is again offered as the strongest case, it is appropriate to look at it.

True, Haiti’s elected president was allowed to return, but only after the popular organizations had been subjected to three years of terror by forces that retained close connections to Washington throughout; the Clinton Administration still refuses to turn over to Haiti 160,000 pages of documents on state terror seized by U.S. military forces-"to avoid embarrassing revelations" about U.S. government involvement with the coup regime, according to Human Rights Watch. It was also necessary to put President Aristide through "a crash course in democracy and capitalism," as his leading supporter in Washington described the process of civilizing the troublesome priest.

The device is not unknown elsewhere, as an unwelcome transition to formal democracy is contemplated.

As a condition on his return, Aristide was compelled to accept an economic program that directs the policies of the Haitian government to the needs of "Civil Society, especially the private sector, both national and foreign" U.S. investors are designated to be the core of Haitian civil society, along with wealthy Haitians who backed the military coup, but not the Haitian peasants and slum dwellers who organized a civil society so lively and vibrant that they were even able to elect their own president against overwhelming odds, eliciting instant U.S. hostility and efforts to subvert Haiti’s first democratic regime.

The unacceptable acts of the "ignorant and meddlesome outsiders" in Haiti were reversed by violence, with direct U.S. complicity, not only through contacts with the state terrorists in charge The Organization of American States declared an embargo. The Bush and Clinton Administrations undermined it from the start by exempting U.S. firms, and also by secretly authorizing the Texaco Oil Company to supply the coup regime and its wealthy supporters in violation of the official sanctions, a crucial fact that was prominently revealed the day before U.S. troops landed to "restore democracy"’ but has yet to reach the public, and is another unlikely candidate for the historical record.

Now democracy has been restored. The new government has been forced to abandon the democratic and reformist programs that scandalized Washington, and to follow the policies of Washington’s candidate in the 1990 election, in which he received 14 percent of the vote.

The background of this triumph provides no little insight into the "political and economic principles" that are to lead us to a glorious future. Haiti was one of the world’s richest colonial prizes (along with Bengal) and the source of a good part of France’s wealth. It has been largely under U.S. control and tutelage since Wilson’s Marines invaded eighty years ago. By now the country is such a catastrophe that it may scarcely be habitable in the not-too-distant future. In 1981 a USAID-World Bank development strategy was initiated, based on assembly plants and agro-export, shifting land from food for local consumption. USAID forecast "a historic change toward deeper market interdependence with the United States" in what would become "the Taiwan of the Caribbean." The World Bank concurred, offering the usual prescriptions for "expansion of private enterprises" and minimization of "social objectives," thus increasing inequality and poverty and reducing health and educational levels. It may be noted, for what it is worth, that these standard prescriptions are offered side by side with sermons on the need to reduce inequality and poverty and improve health and educational levels. In the Haitian case, the consequences were the usual ones profits for U.S. manufacturers and the Haitian super-rich, and a decline of 56 percent in Haitian wages through the 1980s- in short, an "economic miracle." Haiti remained Haiti, not Taiwan, which had followed a radically different course, as advisers must surely know.

It was the effort of Haiti’s first democratic government to alleviate the growing disaster that called forth Washington’s hostility and the military coup and terror that followed. With "democracy restored," USAID is withholding aid to ensure that cement and flour mills are privatized for the benefit of wealthy Haitians and foreign investors (Haitian "Civil Society," according to the orders that accompanied the restoration of democracy), while barring expenditures for health and education. Agribusiness receives ample funding, but no resources are made available for peasant agriculture and handicrafts, which provide the income of the overwhelming majority of the population. Foreign-owned assembly plants that employ workers (mostly women) at well below subsistence pay under horrendous working conditions benefit from cheap electricity, subsidized by the generous supervisor. But for the Haitian poor-the general population-there can be no subsidies for electricity, fuel, water, or food; these are prohibited by IMF rules on the principled grounds that they constitute "price control."

Before the "reforms" were instituted, local rice production supplied virtually all domestic needs, with important linkages to the domestic economy. Thanks to one-sided" liberalization," it now provides only 50 percent, with the predictable effects on the economy. Haiti must "reform," eliminating tariffs in accord with the stern principles of economic science-which, by some miracle of logic, exempt U.S. agribusiness; it continues to receive huge public subsidies, increased by the Reagan Administration to the point where they provided 40 percent of growers’ gross incomes by 1987. The natural consequences are understood a 1995 USAID report observes that the "export-driven trade and investment policy" that Washington mandates will "relentlessly squeeze the domestic rice farmer," who will be forced to turn to the more rational pursuit of agro-export for the benefit of U.S. investors, in accord with the principles of rational expectations theory.

By such methods, the most impoverished country in the hemisphere has been turned into a leading purchaser of U.S.-produced rice, enriching publicly subsidized U.S. enterprises. Those lucky enough to have received a good Western education can doubtless explain that the benefits will trickle down to Haitian peasants and slum dwellers-ultimately.

The prize example tells us more about the meaning and implications of the victory for "democracy and open markets."

Haitians seem to understand the lessons, even if doctrinal managers in the West prefer a different picture. Parliamentary elections in April 1997 brought forth "a dismal 5 percent" of voters, the press reported, thus raising the question, "Did Haiti Fail U.S. Hope?" We have sacrificed so much to bring them democracy, but they are ungrateful and unworthy. One can see why "realists" urge that we stay aloof from crusades of "global meliorism."