PEOPLE MAY BE CONFUSED ABOUT THE CAUSES OF THE GREAT INEQUALITY
THEY SEE, BUT THEY UNDERSTAND THAT BUSINESS AND GOVERNMENT ARE NOT TO BE
TRUSTED. NOW, MORE THAN EVER, CHOMSKY'S INSIGHT INTO THE MECHANICS AND ROLE OF
PROPAGANDA IS CRUCIAL.
Like all of us, I was sorry to learn that Lies of Our Times could not be sustained. It's a real loss, and another signal that we have our work cut out for us in times that are in many ways ominous, but that also offer a good deal of hope. I had been writing occasional pieces for LOOT, informal reflections on the passing scene. It began with a suggestion by Ed Herman that I put my letter-answering neurosis to some broader use. Thanks for inviting me to take another crack at it.
Today happens to be July 4 as always, marked by lofty rhetoric about the significance of this traditional American celebration of independence and democracy (and maybe a day at the beach). Reality is not so uplifting. Independence Day was designed by the first state propaganda agency, Woodrow Wilson's Committee on Public Information (CPI), created during World War I to whip a pacifist country into anti- German frenzy and, incidentally, to beat down the threat of labor which frightened respectable people after such events as the IWW (Industrial Workers of the World) victory in the Lawrence, Mass., strike of 1912. The CPI's successes greatly impressed the business world; one of its members, Edward Bernays, became the leading figure in the vastly expanding public relations industry. Also much impressed was Adolf Hitler, who attributed Germany's failure in World War I to the ideological victories of the British and U.S. propaganda agencies, which overwhelmed Germany's efforts. Next time, Germany would be in the competition, he vowed. The influence of the great generalissimo on the propaganda front, as Wilson was described by political scientist Harold Lasswell, was not slight. Independence Day was one contribution.
This particular propaganda exercise began with business-government initiatives to Americanize immigrants, to inculcate loyalty and obedience and expel from their minds alien notions about the rights of working people. Such programs would turn immigrants into the natural foe of the IWW and other destructive forces that undermine the country's ideals and institutions, the CPI founding document read. At a major conference of civic organizations (organized labor excluded), government and private organizations of all kinds and creeds had pledged themselves to cooperate in carrying out Americanization as a national endeavor, the organizers reported, while issuing plans for a successful Americanization program for the coming Fourth of July. The CPI took up the cudgels, now using the wartime fanaticism it had helped engender as another weapon against pacifists, agitators and other anti-American groups, notably the hated Wobblies.2 The General- issimo joined in with a May 1918 endorsement. The title of the indoctrination ceremonies was to be Americanization Day ; on reflection, Independence Day seemed preferable.
Labor leaders were aware of what was happening. A United Mine Workers (UMW) official objected that the business-government project was
"attempting to set up a paternalism that will bring the workers of this country even more absolutely under the control of the employers, ... strengthening the chain of industrial tyranny in this country. ... [That is what lies behind these efforts] to sanctify and confirm oppression by waving the American flag in the face of its victims and by insidiously stigmatizing as unpatriotic any attempts they may make to throw off the yoke of the exploiting interests [that the organizers] represent."
But labor could not compete with state-corporate power, and lost this battle just as it failed to save May Day. (A jingoist holiday in the U.S., it is celebrated elsewhere as a labor festival which was begun in solidarity with the struggles of brutalized American workers.)
As the war ended and industrial strife renewed, Generalissimo Wilson launched his Red Scare, which devastated labor and independent thought, initiating a reign of virtually unchallenged business rule that was happily thought to be permanent.
Many of the features of a corporate-run, propaganda-managed democracy are illustrated by the achievements of the Generalissimo and his business associates, among them the very concept of Americanism and anti-American. Such notions are expected in totalitarian cultures ( anti-Sovietism, etc.), though rarely elsewhere. Their prominent place in a society that is unusually free is a far more significant phenomenon, hence rarely investigated.
Wre living in a strange period. Z magazine's Mike Albert described the country as an organizer's paradise. True, though there are chilling prospects as well. Perhaps the most likely in the short run at least is the continuation, even acceleration, of the deliberate policy of driving the country toward a kind of Third World model, with sectors of great privilege, growing numbers of people sinking into poverty or real misery, and a superfluous population confined in slums or expelled to the rapidly expanding prison system. Lurking not too deeply in the shadows is the threat of movements of a fascist character, perhaps with a populist streak (as often in the past), and imbued with the religious extremism that is a striking feature of American culture.
But there are also more hopeful opportunities in a country where over 80 percent of the population recognize that the economic system is inherently unfair and the government run for the benefit of the few and the special interests, not the people. (This figure is up from a steady 50 percent for a similarly worded question in earlier years though what is meant by special interests is another question.) The general population stubbornly maintains social democratic attitudes that have resisted the propaganda assaults of the past half century. Substantial majorities believe the government should assist people in need, oppose increased Pentagon spending and budget-balancing that entails cuts for health and education (contrary to the message of many a headline and lead paragraph), and so on, pretty much across the board.
There has, furthermore, been no genetic change since the mid-19th century when a lively and independent press run by factory girls, mechanics, and other working people condemned the degradation and the loss of that self-respect which had made the mechanics and laborers the pride of the world, as free people were forced to sell themselves, not what they produced. Its writers described the destruction of the spirit of free institutions, with working people reduced to a state of servitude in which they see a moneyed aristocracy hanging over us like a mighty avalanche threatening annihilation to every man who dares to question their right to enslave and oppress the poor and unfortunate. They bitterly condemned the New Spirit of the Age: Gain Wealth, forgetting all but Self, a demeaning and shameful doctrine that no decent person could tolerate.
They who work in the mills ought to own them, working people wrote without benefit of radical intellectuals. In that way, they would overcome the monarchical principles that were taking root on democratic soil well before the modern corporation was given its remarkable powers early in this century, mainly by courts and lawyers. Years later, that became a rallying cry for the organized labor movement. It is by the people who do the work that the hours of labour, the conditions of employment, the division of the produce is to be determined, Henry Demarest Lloyd urged in what labor historian David Montgomery calls a clarion call to the 1893 AFL convention. It is by the workers themselves, Lloyd continued, that the captains of industry are to be chosen, and chosen to be servants, not masters. It is for the welfare of all that the coordinated labour of all must be directed. ... This is democracy.
Such values and insights into reality have only recently been suppressed, and can be recovered.
While attitudes are resilient remarkably so, given that they receive little support and are often held in virtual isolation the propaganda offensive has taken its toll. Irrational cults are proliferating alongside of the traditional supercult of mainstream intellectual culture, with its mindless rituals about the Purpose of America and the dedication of our leaders to democracy, markets, and human rights, all visibly under attack. People who would have been working to build the CIO 60 years ago are now joining paramilitary organizations. Many people are not only angry not surprisingly, as their lives and world collapse but also deeply confused.
There are many illustrations of this. While over 80 percent of the population think that workers have too little influence, only 20 percent feel that way about unions and 40 percent consider them too influential. Despite a huge propaganda barrage, popular opposition to NAFTA remained high coupled, however, with condemnation of unions lobbying for very much the views of the NAFTA critics, something they may not have known, thanks to the exclusion of the major union positions from the media.
The welfare debate reveals similar confusions. The same people who believe that the government should help the poor oppose welfare. Few are aware that the Pentagon system is largely a welfare system for the rich, catering to welfare freaks like Newt Gingrich, who brings more federal subsidies to his district than any other suburban county outside the federal system itself while his wealthy constituents self-righteously denounce the nanny state and commentators admire the entrepreneurial values of people who know only how to feed at the public trough. Nor are many aware that the Pentagon system was established in explicit recognition that high-tech industry could not survive in a competitive, unsubsidized, `free enterprise' economy, and that the private sector has relied extensively on such subsidy, including advanced technology readily transferred to commercial use, until the present, as is at last being investigated and acknowledged even in mainstream academic work. The authors believe that their (useful) discoveries refute beliefs of analysts from both the right and the left, but that is because they ignore the business press and left publications, which have long made just the same points. They conclude that the defense industrial base should be maintained appropriately, on the understanding that the wealthy must be protected from market discipline and the population tricked into subsidizing them. Nor are many likely to discover the euphoria in the business press about record-shattering profit growth while real wages continue their decline from 1980.
Nazi Propagandists organized massive campaigns to win hearts and minds as in the 1937 May Day rally, Nuremberg Square.Propaganda depicting unions as the enemy of the worker, welfare queens driving Cadillacs and breeding like rabbits, liberal elites and pointy-headed bureaucrats stealing our money and interfering in our lives, and the rest of the familiar refrain, may have left attitudes substantially unchanged. But it has reduced much of the population to bewilderment and irrationality. If the current mood is one of antipolitics, that is in no small measure a tribute to the success of campaigns to erase the understanding of elementary reality expressed by the UMW leader quoted earlier. That reality, traceable back at least to Adam Smith, was well-described by John Dewey: Politics is the shadow cast on society by big business, and as long as this is so, the attenuation of the shadow will not change the substance.
The scale and intensity of these propaganda crusades is rarely appreciated, and little studied. What has been unearthed confirms the judgment of the late Alex Carey, the Australian social scientist who pioneered the investigation of corporate propaganda, including his study of Americanization campaigns, from which I drew earlier. The twentieth century has been characterized by three developments of great political importance, Carey wrote in a 1978 paper:the growth of democracy; the growth of corporate power; and the growth of corporate propaganda as a means of protecting corporate power against democracy. From their modern origins, the corporations that now dominate much of the domestic and global economies, casting their shadow on all other aspects of life, recognized the need to control the public mind and engineer consent by what their leaders frankly called propaganda in more honest days.
In his 1943 classic, Business As a System of Power, Robert Brady pointed out a natural correlation: Propaganda tends to be more prevalent in societies that are more free. At the same time, in his (unpublished) introduction to Animal Farm on literary censorship in England, George Orwell observed that in free societies, Unpopular ideas can be silenced, and inconvenient facts kept dark, without any need for any official ban. Dewey, Robert Dahl, and others made similar observations, which have been supported in the last few years by substantial documentation. It is intriguing to see the reaction among the more passionate ideologues, who take such work to imply that its authors believe that the U.S. is a totalitarian or fascist society, equivalent to Soviet Russia or Nazi Germany; they utterly fail to comprehend that the clear and explicit thesis is precisely the opposite. (I'm citing current commentary, so foolishly as to be hardly worth refuting, and interesting only for what it reveals about the intellectual culture.)
Seventy years ago, the business world and the responsible men who arrogated to themselves the right of political and doctrinal management assumed mistakenly, the popular struggles of the 1930s revealed that the great beast, as Alexander Hamilton termed the people, had been caged. Business reacted with alarm, warning of the hazard facing industrialists in the newly realized political power of the masses.
We are definitely heading for adversity unless their thinking is directed to more proper channels, the National Association of Manufacturers (NAM) warned. Its PR budget increased over 20-fold from 1934 to 1937.
The hazard only grew in severity as Americans joined the social democratic currents sweeping the world after the war. One PR firm warned in 1947 that our present economic system, and the men who run it, have three years maybe five at the outside to resell our so-far preferred way of life as against competing systems. A huge campaign was undertaken to win the everlasting battle for the minds of men, in the words of the chair of the NAM's PR Advisory Committee; only the tools of the PR industry were powerful enough to stem the current drift toward Socialism, he warned. From 1946 to 1950, the NAM distributed over 18 million pamphlets: Forty percent went to employees as part of extensive programs to indoctrinate employees, Fortune reported; the rest mostly to students and community leaders. Business propaganda had a circulation of 70 million people, Fortune editor Daniel Bell wrote, along with other propaganda that was staggering and prodigious in scale. By the early 1950s, 20 million people a week were watching business-sponsored films. The entertainment industry was enlisted for the cause, portraying unions as the enemy, the outsider disrupting the harmony of the American way of life, and otherwise helping to indoctrinate citizens with the capitalist story, as business leaders formulated the task. Every aspect of social life was targeted, and permeated: schools and universities, churches, even recreational programs. By 1954, business propaganda in public schools reached half the amount spent on textbooks.
The floor of the New York Stock Exchange.
Labor sought to combat the plan to sell the American people on the virtues of big business, recognizing that the commercial media would follow the policy of damning labor at every opportunity while carefully glossing over the sins of the banking and industrial magnates who really control the nation. With a circulation of 20-30 million, the 800 labor newspapers that still survived sought to expose racial hatred and all kinds of antidemocratic words and deeds and to provide antidotes for the worst poisons of the kept press. But labor utterly lacked the resources to compete.
The story continues to the present, including the concerted efforts of corporate America to change the attitudes and values of workers and convert worker apathy into corporate allegiance, advertising Council campaigns saturating the media and reaching practically everybody (Fortune), university Chairs of Free Enterprise and other measures to subvert the educational system, as well as the whole panoply of devices available to those for whom cost is no consideration. So effectively has functioning civil society been dismantled, that Congress can now ram through programs opposed by large majorities who are left in fear, anger, and hopelessness.
The achievement is real. For working people, David Montgomery observes, the most important part of the Jeffersonian legacy was the shelter it provided to free association, diversity of beliefs and behavior, and defiance of alleged social superiors in society. The structures of civil society obstructed bourgeois control of American life at every turn. Hence, the unremitting campaigns to demolish the independent press and eliminate effective forms of community solidarity, from trade unions to political clubs and organizations. They have been conducted with passionate intensity and considerable success.
The propaganda assault is fully in accord with prevailing concepts of democracy, a matter I've discussed at length elsewhere. It adapts to the conditions of 20th century America the principle on which the sociopolitical system was founded: To protect the minority of the opulent against the majority, as James Madison formulated the primary concern of government in the debates of the Constitutional Convention in 1787. But history records many successes of popular resistance and struggle and only the most dedicated commissar can believe that it is somehow at an end.
This year is a stellar one in one respect at least: Fones-Wolf's Selling Free Enterprise: The Business Assault on Labor and Liberalism, 1945-1960, the first extensive academic study of corporate propaganda appeared, and Carey's essays on the American system of thought control are finally available, at least in Australia. The discussion of corporate propaganda in this letter is largely drawn from this important work.
We can take heart in other current developments, among them, the huge growth of the left. We learn of its scale from the congressional program to defund the left outlined by Stephen Moore of the Cato Institute, which helped develop the project. Republicans Take Aim at Left-Leaning Groups, a headline in the Wall Street Journal reads. Leading the campaign, Newt Gingrich blasts those who would extort money out of the taxpayer unlike the Speaker of the House who holds the prize. The issue is philosophical, a policy analyst at the Heritage Foundation explains: Taxpayers should not be forced to support activities they may not agree with. So that explains why the Heritage Foundation budget proposal, basically adopted by Congress, calls for an increase in the Pentagon budget (beyond what the military requests) in accord with the wishes of one out of six taxpayers, while sharply cutting funds for education, drug addiction programs, the environment, and other social spending favored by two-thirds of the public.
Philosophy is a subtle discipline, beyond the ken of ordinary mortals.
What then is the left that has to be barred from its evil practice of extorting public funds? By far the major criminal targeted is Catholic Charities, which receives public funds to help run more than a dozen programs ranging from low-income heating assistance to Head Start, the Wall Street Journal reports, with the aid of nuns and priests working for very low wages ... out of faith, a health-policy advocate at Catholic Charities adds. Next on the list of extortionists are the American Association of Retired Persons and the National Council of Senior Citizens, which run programs aimed at helping elderly Americans find jobs. Their depravity is highlighted by another article in the Journal, which notes that hunger among the elderly is surging, as several million older Americans are going hungry and their numbers are growing steadily, many literally starving to death. Next comes the World Wildlife Fund. And far below, the National Center for Neighborhood Enterprise, the only target not identified as left-leaning.
There will be no human cost to defunding the left, the Heritage Foundation policy analyst explains: If these charities are doing something that people want to support, they'll get adequate funding from the private sector.
The terms of political discourse have been virtually deprived of meaning, but it is helpful to learn how the reactionary statists in the guise of libertarians understand the concepts the people and the left.
The people are the private sector, which can provide adequate funding. The people are thus a shrinking category in a country with far higher inequality than any other in the developed world, now reaching the artificially inflated level of 1929, right before the crash. The share of marketable net worth held by the top one percent is now twice that of England and 50 percent higher than that of France, the nearest competitor. In 1980, differences among these countries were slight, but Reaganite programs directed 60 percent of marketable wealth gain to the top 1 percent of income recipients, while the bottom 40 percent suffered an absolute loss of net worth in real terms; other measures are still more stark.
As for the left, it consists of anyone with the slightest concern for the featherless bipeds who do not rank among the people a rather flattering image, for those who consider themselves on the left. These non-people are to be subjected to the harsh and morally purifying discipline of the market. But not the minority of the opulent, who can shelter under the wings of the nanny state they nurture. Such are the doctrines of the people.
The awesome scale of the left is revealed further in a study by the Clemson University Center for Policy Studies, one of the many components of the huge right-wing assault against independent schools in recent years. The study condemns corporations for funding left-wing groups, such as the National Audubon Society, the Trilateral Commission, and the Council on Foreign Relations. Contrary to what some of us have believed, the left has the media on its side as well, including the Newspaper of Record, the New York Times, which Foreign Policy editor Charles William Maynes calls the establishment left in one of the many odes to Washington's crusade to spread the cause of democracy.
So the left can hardly complain of marginalization. It includes major institutions, as well as just about everyone who isn't an outright monster removed from the moral realm, if we can believe the few embattled souls who are at last trying to weaken its grip on the social order.
Still, the left has its problems. One is that the lefties of Catholic Charities and the American Association of Retired Persons are going to find it harder to locate the non-people they seek to assist. So we learn from New York Mayor Rudolph Giuliani, who finally came clean about his fiscal policies, including the radically regressive shift in the tax burden that he and the governor are implementing: reduction in taxes on the rich ( all of the Mayor's tax cuts benefit business, the Times comments) and increase in taxes on the poor (concealed as rise in subway fares for school children and working people, higher tuition at city schools, etc.). Coupled with severe cutbacks in public funds that serve public needs, these policies should help the poor move out of New York State, enabling them to move freely around the country, the report in the establishment left press explained under the headline: Giuliani Sees Welfare Cuts Providing a Chance to Move.
At last, those who were bound by the welfare system are liberated from their chains. The compassion for the poor brings tears to the eyes.
Where will the liberated masses go? Perhaps to favelas on the outskirts, so they can be free to find their way into the city somehow to do the dirty work for those who are entitled to enjoy the richest city in the world, with inequality greater than Guatemala and with 40 percent of children already below the poverty line before these new measures of tough love are instituted.
Bleeding hearts who cannot comprehend the benefits being lavished on the poor should at least be able to see that there is no alternative. The lesson of the next few years may be that New York is simply not wealthy or economically vital enough to afford the extensive public sector that it has created over the post great Depression period, we learn from an expert opinion featured in a Times front-page story. The loss of economic vitality is real enough, in part a result of government policy that eliminated a flourishing manufacturing base in favor of the expanding financial sector. The city's wealth is another matter. The expert opinion to which the Times turned is the report to investors of the J.P. Morgan investment firm, fifth in the ranking of commercial banks in the current Fortune 500 listing, suffering from a mere $1.2 billion in profits in 1994. To be sure, it was not a great year for J.P. Morgan as compared with the stunning profit increase of 54 percent for the 500 with a mere 2.6 percent increase of employment and 8.2 percent sales gain in one of the most profitable years ever for American business, Fortune reported exultantly. The business press hailed another banner year for U.S. corporate profits, while U.S. household wealth seems to have actually fallen in this fourth straight year of double-digit profit growth and 14th straight year of decline in real wages. The Fortune 500 have attained new heights of economic might, with revenues close to two-thirds of the gross domestic product, a good bit more than Germany or Britain, not to speak of their power over the global economy an impressive concentration of power in unaccountable private tyrannies, and for the people, a welcome blow against democracy and markets.
We live in lean and mean times, and everyone has to tighten their belts; so the mantra goes. In reality, the country is awash in capital, with surging profits that are overflowing the coffers of Corporate America, Business Week exulted even before the grand news came in about the record-breaking final quarter of 1994, with a phenomenal 71 percent advance for the 900 companies in BW's Corporate Scoreboard.
Third World model heads north. Here, a boy survives by scavenging in smoke-shrouded Guatelemala City Dump.Tough love is just the right phrase: love for the rich, and tough for everyone else.
The business press explains Why Profits Will Keep Booming, and the 1994-95 annual review of The State of Working America explains why wages and family wealth are likely to keep falling. Deliberate social policy to achieve these goals is facilitated by significant changes in the international economy from the 1970s; the restoration of a huge sector of the traditional Third World to its service role with the end of the Cold War, offering new weapons against what the business press calls the pampered Western workers with their luxurious lifestyles, added a further contribution.
One crucial factor was the deregulation of financial markets in the early 1970s. Its consequences were quickly understood. In 1978, economist James Tobin proposed that foreign exchange transactions be taxed to slow the hemorrhage of capital from the real economy (investment and trade) to financial manipulations that now constitute 95 percent of foreign exchange transactions (as compared with 10 percent of a far smaller total in 1970). As Tobin observed at this early stage, these processes would drive the world toward a low-growth, low-wage economy. A study directed by Paul Volcker, formerly head of the Federal Reserve, attributes about half of the substantial slowdown in growth since the early 1970s to this factor.
International economist David Felix makes the interesting observation that even the productive sectors that would benefit from the Tobin tax have joined financial capital in resisting it. The reason, he suggests, is that elites generally are bonded by a common objective, ... to shrink, perhaps even to liquidate, the welfare state. The instant mobility of huge sums of financial capital is a potent weapon to force governments to follow fiscally responsible policies, which can bring home the sharply two-tiered Third World model to the rich societies. By enhancing the shadow cast by big business over society and restricting the capacity of governments to respond to the public will, these processes also undermine the threat of democracy, another welcome consequence. The shared elite interest, Felix suggests, overcomes the narrower self-interest of the owners and managers of productive sectors of the economy.
The suggestion is a reasonable one. The history of business and political economy yields many examples of the subordination of narrow gain to the broader interest of the opulent minority, which is unusually class conscious in a business-run society like ours. Illustrations include central features of the modern world: the creation and sustenance of the Pentagon system of corporate welfare despite its well-known inefficiencies; the openly proclaimed strategy of diversion of soaring profits to creation of excess capacity abroad as a weapon against the domestic working class; the design of automation within the state system to enhance managerial control and de-skill workers even at the cost of efficiency and profitability; and many other examples, including a large part of the foreign policy.
In the real world, the left includes a considerable majority of the population, to judge by public opinion and the lessons of history or it should, if the authentic left could get its act together. That is where hope lies, in otherwise dismal times.
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