Interview with Noam Chomsky
( There is plenty in there for Anti-Government crowd too, but it is nice to hear something else for a change too) - Devoish
<<<em>LF: As we speak, there are shareholder actions taking place in Detroit and San Francisco. Are those worthwhile, good targets?
NC: They’re ok, but remember, stock ownership in the US is very highly concentrated. [Shareholder actions are] something, but it’s like the old Communist Party in the USSR, it would be nice to see more protest inside the Communist Party but it’s not democracy. It’s not going to happen. [Shareholder actions] are a good step, but they’re mostly symbolic. Why not stakeholder action? There’s no economic principal that says that management should be responsive to shareholders, in fact you can read in texts of business economics that they could just as well have a system in which the management is responsible to stakeholders.
LF: But you hear it all the time that under law, the CEO’s required to increase dividends to shareholders.
NC: It’s kind of a secondary commitment of the CEO. The first commitment is raise your salary. One of the ways to raise your salary sometimes is to have short-term profits but there are many other ways. In the last thirty years there have been very substantial legal changes to corporate governance so by now CEOs pretty much pick the boards that give them salaries and bonuses. That’s one of the reasons why the CEO-to-payment [ratio] has so sharply escalated in this country in contrast to Europe. (They’re similar societies and it’s bad enough there, but here we’re in the stratosphere. ] There’s no particular reason for it. Stakeholders — meaning workers and community – the CEO could just as well be responsible to them. This presupposes there ought to be management but why does there have to be management? Why not have the stakeholders run the industry?
LF: Worker co-ops are a growing movement. One question that I hear is — will change come from changing ownership if you don’t change the profit paradigm?
NC: It’s a little like asking if shareholder voting is a good idea, or the Buffet rule is a good idea. Yes, it’s a good step, a small step. Worker ownership within a state capitalist, semi-market system is better than private ownership but it has inherent problems. Markets have well-known inherent inefficiencies. They’re very destructive. The obvious one, in a market system, in a really functioning one, whoever’s making the decisions doesn’t pay attention to what are called externalities,effects on others. I sell you a car, if our eyes are open we’ll make a good deal for ourselves but we’re not asking how it’s going to affect her [over there.] It will, there’ll be more congestion, gas prices will go up, there will be environmental effects and that multiplies over the whole population. Well, that’s very serious.
Take a look at the financial crisis. Ever since the New Deal regulation was essentially dismantled, there have been regular financial crises and one of the fundamental reasons, it’s understood, is that the CEO of Goldman Sachs or CitiGroup does not pay attention to what’s calledsystemic risk. Maybe you make a risky transaction and you cover your own potential losses, but you don’t take into account the fact that if it crashes it may crash the entire system. Which is what a financial crash is.
The much more serious example of this is environmental impacts. In the case of financial institutions when they crash, the taxpayer comes to the rescue, but if you destroy the environment no one is going to come to the rescue…
LF: So it sounds as if you might support something like the Cleveland model where the ownership of the company is actually held by members of the community as well as the workers…
NC: That’s a step forward but you also have to get beyond that to dismantle the system of production for profit rather than production for use. That means dismantling at least large parts of market systems. Take the most advanced case: Mondragon. It’s worker owned, it’s not worker managed, although the management does come from the workforce often, but it’s in a market system and they still exploit workers in South America, and they do things that are harmful to the society as a whole and they have no choice. If you’re in a system where you must make profit in order to survive. You are compelled to ignore negative externalities, effects on others.
Markets also have a very bad psychological effect. They drive people to a conception of themselves and society in which you’re only after your own good, not the good of others and that’s extremely harmful.
LF: Have you ever had a taste of a non market system — had a flash of optimism –– oh this is how we could live?
NC: A functioning family for example, and there are bigger groups, cooperatives are a case in point. It certainly can be done. The biggest I know is Mondragon but there are many in between and a lot more could be done. Right here in Boston in one of the suburbs about two years ago, there was a small but profitable enterprise building high tech equipment. The multi-national who owned the company didn’t want to keep it on the books so they decided to close it down. The workforce and the union, UE (United Electrical workers), offered to buy it, and the community was supportive. It could have worked if there had been popular support. If there had been an Occupy movement then, I think that could have been a great thing for them to concentrate on. If it had worked you would have had another profitable, worker-owned and worker managed profitable enterprise. There‘s a fair amount of that already around the country. Gar Alperovitz has written about them, Seymour Melman has worked on them. Jonathan Feldman was working on these things.
There are real examples and I don’t see why they shouldn’t survive. Of course they’re going to be beaten back. The power system is not going to want them any more than they want popular democracy any more than the states of middle east and the west are going to tolerate the Arab spring… .They’re going to try to beat it back.
LF: They tried to beat back the sit-in strikes back in the 1930s. What we forget is entire communities turned out to support those strikes. In Flint, cordons of women stood between the strikers and the police.
NC: Go back a century to Homestead, the worker run town, and they had to send in the National Guard to destroy them.>>