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Subject: CHOMSKY -- "Vile Maxim of the Masters" (I)
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*Subject: Chomsky/Z: Year 501 (part II), Part 2/8
*From: [e-mail]
The following article by Noam Chomsky appeared in:
     Z Magazine, July-August 1992
and is reprinted here with the magazine's permission.
=================================================================
Year 501: World Orders Old and New: Part II (PART 2 OF 8; 11.5KB)
=================================================================

2. The "Vile Maxim of the Masters"
------------------------------------------------------------

The world economy has not returned to the growth rates of the
Bretton Woods era.  The decline of the South was particularly
severe in Africa and Latin America, where it was accompanied by
rampant state terror.  The catastrophe was accelerated by the
neoliberal economic doctrines dictated by the world rulers.  The
UN Economic Commission for Africa found that countries pursuing
the recommended IMF programs had lower growth rates than those
that relied on the public sector for basic human needs.  The
disastrous impact of neoliberal policies in Latin America was
particularly striking, heightened by the openness of their
economies to international capital markets.  This led to huge
capital flight, unlike the East Asian state-run economies which
allow no such frivolity. <<<NB: See _Deterring Democracy_, chap.
7; Nancy Wright, _Multinational Monitor_, April 1990, cited in
Gar Alperovitz and Kai Bird, _Diplomatic History_, Spring 1992;
James Petras, _Monthly Review_, May 1992.>>>

There is a technical term for the predictable effects of the
dictates of the powerful; they are called "economic miracles" --
meaning, improvement of the investment climate and the prospects
for domestic elites associated with the foreign beneficiaries,
along with rapid increase in poverty, starvation, and general
misery for the undeserving public.  Another concomitant is great
satisfaction and self-adulation in the commissar culture.

Meanwhile, the same state authorities and their minions preach
ruinous economic doctrines and block the way to independent
development in the South, and in numerous other ways ensure that
wealth and power centralize among the truly deserving in the
corporate board rooms.  It is not their business that the
doctrines they preach have regularly been evaded when necessary
by the victors in the game while punishing those subjected to
these dogmas, once again through the 1980s.  Approved doctrine
holds that the "trickle down" and "export promotion" policies
that have always led to disaster in the past will succeed today.
And they will, for the usual beneficiaries, who run the process
and understand it well enough.  The basic truth is captured in
the headline of a lead article in the _Wall Street Journal_ on
the "initial [sic] social costs" of the "shock therapy"
administered by their benefactors: "People Say the New Wealth Is
Slow to Trickle Down; Leaders: Stay the Course." <<<NB: Thomas
Kamm, _WSJ_, April 16, 1992.>>>

On occasion, developed societies too take the rhetoric seriously
and fail to protect themselves from the destructive impact of
unregulated markets.  The consequences are the same, though not
so lethal as in the traditional colonial domains.  Australia in
the 1980s is a case in point.  Deregulation and other free market
experiments (carried out by a labor government that adopted the
prescriptions of the right) created what one leading economic
commentator calls a "capital disaster" (Tom Fitzgerald).  The
approved policies succeeded in reducing national income by over
5% a year by the end of the decade.  Real wages declined,
Australian enterprises fell under foreign control, and the
country advanced towards the status of a resource base for the
Japan-centered state capitalist region, which maintained its
dynamic growth thanks to radical departures from neoliberal
dogma. <<<NB: Tom Fitzgerald, _Between Life and Economics_ (1990
Boyer lectures of the Australian Broadcasting Company, ABC,
1990).>>>

Fitzgerald observes that nothing different should be expected
from selective obeisance to Adam Smith, ignoring his warnings
about "the vile maxim of the masters": "All for themselves, and
nothing for other people."

The rich industrial societies themselves are taking on something
of a Third World cast, with islands of extreme wealth and
privilege amidst a rising sea of poverty and despair.  This is
particularly true of the US and Britain, subjected to
Reagan-Thatcher discipline.  Continental Europe is not too far
behind, despite the residual power of labor and the social
contract it has defended, and Europe's ability to export its
slums through the device of "guest workers." The distribution of
privilege and despair in a society with the enormous advantages
of ours is not, of course, what one finds in Brazil or Mexico.
But the tendencies are not hard to see.

The collapse of the Soviet empire offers new means to establish
the North-South divide more firmly within the rich societies.
During the May 1992 strike of public workers in Germany, the
chairman of Daimler-Benz warned that the corporation might
respond to strikes of production workers by transferring
manufacturing facilities for its Mercedes cars elsewhere, perhaps
to Russia, with its ample supply of trained, educated, healthy
and (it is hoped) docile workers. <<<NB: Marc Fisher, "Why Are
German Workers Striking? To Preserve Their Soft Life," _WP_
service, _International Herald Tribune_, May 4, 1992.>>>  The
chairman of General Motors can wield similar threats with regard
to Mexico and other sectors of the Third World that remained
economic colonies of the West, and thus do not offer as favorable
a work force.  Capital can readily move; people cannot, or are
not permitted to.

It is not that Daimler-Benz is greatly suffering from the labor
costs that management deplores.  Two weeks after issuing the
threat to move Mercedes production to Russia, the same chief
executive, Edzard Reuter, announced the "excellent result" of an
exceptionally strong first quarter performance for 1992, with a
profit rise of 14% and a 16% increase in sales, largely abroad:
German workers are not quite the intended market for the Mercedes
division, the chief profit earner for this huge conglomerate.
Such facts, however, do not impress the US press, where the news
columns bitterly assailed the strikers for their "soft life,"
long vacations, and general lack of understanding of their
proper place as tools of production for the rich and powerful.
They should learn the lessons taught to American workers by the
Caterpillar corporation at the same time: profits and
productivity up, wages down, the right to strike effectively
eliminated by the free resort to "permanent replacement
workers." <<<NB: Andrew Fisher, _FT_, May 20; Fisher, _op.
cit._; Elaine Bernard, "The Defeat at Caterpillar," ms. Harvard
Trade Union Program, May 1992.>>>

These are the fruits of the fierce corporate campaign undertaken
as soon as American workers finally won the right to organize in
the mid-1930s, after long years of bitter struggle and violent
repression unmatched in the industrial world.  Perhaps we may
even return to the days when the admired philanthropist Andrew
Carnegie could preach the virtues of "honest, industrious,
self-denying poverty" to the victims of the great depression of
1896, shortly after he had brutally crushed the Homestead steel
strike, to great media applause, while announcing that the
defeated workers had sent him a wire saying "Kind master, tell us
what you wish us to do and we will do it for you." It was because
he knew "how sweet and happy and pure the home of honest poverty
is" that Carnegie sympathized with the rich, he explained,
meanwhile sharing their grim fate in his lavishly-appointed
mansions. <<<NB: Patricia Cayo Saxton, _The War on Labor and the
Left_ (Westview, 1991, 83f.).>>>

So a well-ordered society should run, according to the "vile
maxim of the masters."

It is, therefore, only natural that when the battered unions
finally recognize the reality of the ceaseless class war waged
against them by the highly class-conscious corporate sector, the
business press should react with wonder at the fact that some
_unions_ still cling to outdated "class-warfare ideology" and
the "battered Marxist view" that "workers form a class of
citizens with shared interests separate from those who own and
control business" -- not to speak of such "quirks" as low pay for
executives, who are treated like other members (_New York
Times_).  The masters, in contrast, keep firmly to this "battered
Marxist view," often expressing it in vulgar Marxist rhetoric --
with values reversed, of course. <<<NB: Barnaby Feder, _NYT_, May
25, 1992.>>>

Under existing conditions of social organization and
concentration of power, selective free trade is hardly likely to
increase the general welfare, as it might under other social
arrangements.  The two-year experience of the US-Canada free
trade agreement illustrates the process.  Canada has lost
hundreds of thousands of jobs, many to industrialized regions of
the US where government regulations virtually bar labor
organizing (the Orwellian term is "right to work," meaning
"effectively illegal to organize").  These state policies,
natural in a business-run society with the public largely
marginalized, leave workers unprotected and much easier to
exploit than in Canada, with its more vigorous union movement and
its cultural climate of solidarity.  The agreement has also been
used to require Canada to sell water to the US even in times of
local water scarcity; to abandon measures to protect the
threatened Pacific salmon; to bring pesticide regulations in line
with laxer US standards; to ban sale of irradiated food and steps
to reduce emissions from lead, zinc and copper smelters; and to
end subsidies for replanting of forests after logging.  All such
practices have been judged illegal barriers to free trade.  By
similar reasoning, the US objects to a GATT provision that allows
countries to restrict food exports in times of need, demanding
that US agribusiness must control raw materials no matter what
the human cost.

At the same time, Canada, an asbestos exporter, is bringing
charges against the US for imposing EPA standards on asbestos use
in violation of trade commitments and the "international
scientific evidence" about health risks of asbestos: the EPA has
improperly gone beyond the "least burdensome requirements" for
the corporations, Canada claims.  At the GATT negotiations, the
US is backing corporate proposals to restrict environmental and
consumer protection to cases supported by "scientific evidence,"
to be judged by an agency made up of government officials and
executives from chemical and food corporations. <<<NB: Jim
Stanford, "Going South: Cheap Labour as an Unfair Subsidy in
North American Free Trade," Canadian Centre for Policy
Alternatives, Dec. 1991; Edward Goldsmith, Mark Ritchie, _The
Ecologist_, Nov./Dec. 1990; Kevin Watkins, _Fixing the Rules_
(Catholic Institute of International Relations, London, 1992,
102); brief amicus curiae of Government of Canada, US Court of
Appeals, "Corrosion Proof Fittings, et al., vs. EPA and William
K. Riley," May 22, 1990.>>>


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