Rollback - Part I
by Noam Chomsky
Z Magazine, January 1995
The elections of 1994 are described as a "political earthquake,"
a "triumph of conservatism" that reflects the continuing
"drift to the right" on the part of the American population.
The victorious Gingrich army of well-trained, well-funded "conservatives"
call for a Contract with America that will finally "get government
off our backs" so that we can return to the happy days when
the free market reigned. They will restore "family values,"
ridding us of "the excesses of the welfare state" and
the other residues of the failed "big government" policies
of New Deal liberalism and Johnson's "Great Society."
By dismantling the "nanny state" they will succeed,
where the Democrats have failed, to achieve the shared goal of
all elite and leadership elements: to "create jobs for Americans"
and win security and freedom for the "middle class."
And they will take over and successfully lead the crusade to establish
the American Dream of free market democracy, worldwide.
One of the great achievements of contemporary ideological
warfare has been to debase the terms of political discourse so
thoroughly that such statements as these are not entirely false,
if we keep to what has become conventional usage. As Orwell predicted,
this achievement has undermined the possibility even of talking
sensibly about what is happening in the world. Still, independent
minds -- including any authentic conservatives who might be located
in the outer reaches of the political arena or intellectual world
-- can refuse to be swept up in the fashionable currents and use
terms with their actual meanings to describe what is happening,
1. The Triumph of Conservatism
Most of this, we also heard just ten years ago, when Reagan
was elected by a 2-1 vote, the second "conservative landslide"
in four years. In his 1980 triumph, presidential historian William
Leuchtenberg observed, "Reagan, far from having won in a
landslide, got little more than a bare majority of the popular
vote and only 28% of the potential electorate, and exit polls
showed that the vote was not "for Reagan" but "against
Carter," who had in fact initiated the policies that the
Reaganites took up and implemented, with the general support of
congressional Democrats: accelerating military spending (meaning,
in particular, the state sector of the economy) while cutting
back programs that aid the vast majority. Polls in 1980 revealed
that 11% of Reagan voters chose him because "he's a real
conservative" -- whatever that term is supposed to mean.
In 1984, despite vast attempts to get out the vote, the totals
increased by 1%. The percentage who chose Reagan because he was
a "real conservative" dropped to 4%, while 70% of all
voters with an opinion on the matter opposed Reaganite legislative
programs, and public opinion studies showed a continuation of
the steady drift towards a kind of New Deal-style welfare state
liberalism on the part of the general population. Their concerns
and desires were not articulated in the political system, however;
one reason, surely, why voting was so sharply skewed towards privileged
The reasons why voting is so dramatically an elite affair
in the United States are revealed by comparative studies. Analysis
of thirty democracies showed "a significant correlation between
high voter turnout and the presence of political parties representing
clearly defined strata of society -- that is, parties strongly
tied to specific income classes, religious groupings, or language
groups" (political commentator Thomas Edsall, 1984). In economic
policy, Edsall added, the U.S. political system fails to represent
"the interests of the bottom three-fifths of society."
To use a phrase that is unspeakable in polite society without
shock quotes, when the "class interests" of the privileged
and powerful are the guiding commitment of all political parties,
people who do not share these interests tend to stay home. The
class pattern of abstention "seems inseparably linked to
another crucial comparative peculiarity of the American political
system," political scientist William Dean Burnham observed:
"the total absence of a socialist or laborite party as an
organized competitor in the electoral market." That absence
relates to and is fortified by the effective dismantling of civil
society: unions, political organizations, and so on.1
In the 1980s, the U.S. and Britain took the lead in the "triumph
of conservatism," accelerating processes already underway.
They therefore lead the developed world in impoverishment and
degradation, inequality, homelessness, destruction of family values,
hunger, and other values of contemporary "conservatism."
A study by the British charitable organization Action for Children,
founded in 1869 with the Queen as patron, concludes that "the
gap between rich and poor is as wide today as it was in Victorian
times," and in some ways worse. A million and a half families
cannot afford to provide their children with "the diet fed
to a similar child living in a Bethnal Green Workhouse in 1876,"
a "sad reflection on British society." Britain has proportionately
more children living in poverty than any European country apart
from Portugal and Ireland, and the proportion is rising faster
than any country in Europe, though the U.S. still holds the lead.
Britain has also not yet matched the achievements of the doctrinal
system crafted by our highly class conscious business community,
with the assistance of those whom the lively 19th century working
class press called "the bought priesthood" of respectable
intellectuals. The fact that there is "class conflict"
and that the rich and powerful mobilize state power to serve their
interests, a truism to Adam Smith, remains within popular consciousness.
The 1994 Gallup Political and Economic Index gives interesting
information about popular attitudes on these matters (I put aside
small numbers, 3%-10%, expressing no opinion). The study reports
that over four-fifths of the population think "there is a
class struggle in this country" and that "too little"
is being done "to level up the classes." Two-thirds
"disagree strongly" with the statement "Britain
is a classless society." Nine out of ten feel that the Government
does "too little" for "the working class,"
four-fifths that it does "too much" for "the well-to-do,"
and over 90% that it does "too little" for "people
living on small pensions/income." Half also think it does
"too little" for "the middle classes." Three-fourths
"think of Britain as divided into haves and have-nots,"
and a third describe themselves as among "the haves."2
Let's return to 1994, the next in the series of "conservative
landslides," this time under the leadership of Newt Gingrich.
"Republicans claimed about 52 percent of all votes cast for
candidates in contested House seats, slightly better than a two-point
improvement from 1992" (Richard Morin, director of polling
for the Washington Post). One out of six voters described the
outcome as "an affirmation of the Republican agenda";
60% said it "was a repudiation of the Democrats." A
"more conservative Congress" was considered to be an
issue by a rousing 12% of the voters. An "overwhelming majority
had never heard of" the Gingrich Contract with America, articulating
the Republican agenda, though a majority opposed one of its central
components: "defense increases," a code-word for public
subsidies to advanced industry. The chief pollster of the Los
Angeles Times pointed out that just before the election, 61% of
those polled said "that spending for domestic programs should
All of this echoes the situation of a decade ago.
The opposition to Democrats is more nuanced. Clinton-style
"New Democrats" -- in effect, moderate Republicans --
"lost their seats at twice the rate of their more liberal
colleagues," Ken Silverstein and Alexander Cockburn report.
The "more liberal" Democrats are those who tried to
activate the old Democratic coalition of working people, women,
the poor: the majority of the population who see themselves, correctly,
as effectively disenfranchised.
To put these figures in further perspective, it must be recalled
that voting was even more heavily skewed towards the wealthy and
privileged than before. As compared with 1992, 7% more voters
were wealthy, 7% fewer were working class, political scientist
Peter Levine comments, noting also that Democrats were overwhelmingly
preferred by voters who earn less than $30,000 a year and ran
even with Republicans in the $30,000-$49,000 range. There was
also a very large gender and color gap, white males voting mostly
Republican, while women, Blacks and Hispanics voted for Democrats
(overwhelmingly, in the Black-Hispanic category, where participation
was low). Those with no more than high school education, along
with those with postgraduate education, favored Democrats. Those
who sensed a decline in their standard of living voted for Republicans
by close to two to one -- mostly white males with just high school
degrees "whose economic futures are highly uncertain,"
Thomas Edsall observes; just those who would have been part of
a left-populist coalition committed to equitable economic growth
and political democracy, were such an option to intrude into our
business-run political system.
The message, however, was just the opposite: Clinton must
abandon the left-wing agenda that the voters had just overwhelmingly
rejected and return to what he had promised to be in 1992: a "New
Democrat." And he was quick to pick up the cues. In a satellite
address to the National League of cities, "Clinton used some
variation of the words `work,' `jobs' or `working families' more
than 40 times as he raised `New Democrat' themes such as welfare
reform, national service, lifelong job training, and the need
to `attack problems that feed dependency'," the Boston Globe
reported under the headline: "Clinton seen returning to `New
Democrat' stance." The report didn't say when he had left
that stance for some different one, on any issue of importance
to rich and powerful. If he had, Business Week hadn't noticed.
"Corporate America did fine riding in tandem with Clinton,"
the journal reports, though "it did equally well when they
Despite all his efforts to please, still business "basically
hates the Clinton Administration," Business Week continues,
and gives him "little credit" for advancing the corporate
agenda. Why? The reasons they give, and cite from polls of executives,
are hard to take seriously. But there is one very good reason.
Leading sectors of wealth and privilege taste blood. They think,
with some reason, that they have the world's population by the
throat, and are in a position to roll back the hated welfare state
for the general population and everything that goes with it: health
and safety standards, labor rights and human rights generally,
indeed any infringement on their right to pursue "the vile
maxim," as Adam Smith described the goal of the masters:
"all for ourselves, and nothing for other people." Given
that awareness, it makes sense to "hate" anyone who
may have a somewhat flawed commitment to the sole human value:
"Gain Wealth, forgetting all but Self," "the New
Spirit of the Age" denounced by the lively and vigorous working
class press 150 years ago, as working people fought to save human
values from the rising tide of private tyranny.3
Yet another factor, scarcely noted here, has to be taken into
account in evaluating the electoral results. Under the headline
"Big money still garners the big vote," George Graham
observed in the London Financial Times that money "spoke
as loud as ever in the most expensive campaign on record."
With a few notable exceptions, electoral victory tracked campaign
financing closely -- again, no departure from the norm and natural
in a political system in which the less affluent majority does
not participate and is scarcely represented.4
Voters selected "welfare reform" as their top priority,
with health care reform second and crime also ranking high. These
choices, which in part reflect a grasp of reality, also have to
be understood against the background of recent propaganda offensives.
To begin with reality, for most of the population, conditions
of life and work are grim and declining, something new in the
history of industrial society. Median income declined even during
the "Clinton recovery," falling to 7% below the 1989
level by late 1993, the Census Bureau reported. The decline was
accompanied by -- and in no small measure caused by -- much-lauded
improvements in "flexibility of labor markets." The
latter is a technical term referring to elimination of job security
and other such "market rigidities" that interfere with
"economic health," another ideological construct. As
designed for the purposes of population control, "economic
health" is unrelated to the welfare of the population but
crafted to measure what is valued by the rich: speculators, bond
holders, investors, professionals who serve the state-corporate
sector. Continuing the decline during the Reagan years, after
a decade of stagnation, pay for private sector employees fell
4% from 1988 to 1994, with blue collar wages suffering most and
white collar wages still below 1990 and well below 1988. Despite
much misleading hype, the Bureau of Labor Statistics reports a
continuing "shift to lower-wage industries and higher wage-occupations,"
executive and professional, while noting that the overwhelming
majority of these are in lower-paid service industries (motel
manager, and the like). That means sharply increased inequality,
with the majority suffering reductions in absolute terms along
with much worse work conditions.5
But some folks are doing just fine. "The percentage of
corporate income devoted to payrolls is hovering near a record
low," Fortune magazine reported in November, having dropped
sharply during the "conservative landslide" of the early
1980s, and again since 1992. With the "New Democrats"
at the helm, "1993 was a bracingly upbeat year for the FORTUNE
500," the journal exulted in its April 1994 annual review
of the state of the important people, who posted "dazzling"
profits despite "virtually stagnant" sales growth. The
ecstatic story was headed: "Hats Off! It Was a Heck of a
Year" -- at least, for those who matter.6
While in part realistic, the expressed concerns of voters
reflect the great victories of the ideological warfare that has
been conducted with relentless intensity since the early 1970s
in the effort to overcome the perceived "crisis of democracy."
Across the political spectrum, privileged sectors were naturally
appalled by the attempts of the great majority of the population
to escape from the apathy and marginalization that is their proper
place and to enter the political arena, forgetting that in a democracy
the role of the "ignorant and meddlesome outsiders"
is to be mere "spectators," not "participants,"
as Walter Lippmann put it in his progressive essays on democracy
70 years ago, expressing the doctrines of "Wilsonian idealism."
It therefore became necessary to renew with much greater intensity
the constant campaign to tame and cage that "great beast,"
as Alexander Hamilton termed the "people" with horror
and indignation as he was laying the foundations for state-guided
industrial democracy. The beast may not yet be tamed, but it is
being caged; sometimes quite literally, sometimes in chains of
dogma and deceit, an important victory.
We may recall, in passing, that fear of democracy and freedom
has always been one of the factors motivating the terror and sometimes
outright aggression undertaken to eliminate "rotten apples"
that might "spoil the barrel" and "viruses"
that might "infect others," in the terminology favored
by leading planners -- the main concern, of course, being independence,
whatever cast it takes. That helps explain the passion of Washington's
terrorist wars in Central America in recent years, or to take
a current example, Washington's not-so-tacit support for its trainees
and associates in the Haitian military as they did their necessary
work, and the restoration of the rule of their backers among the
Haitian elite under the guise of "democracy," now that
the work is done and the Generals can be sent off to the life
of luxury, which, they understood correctly, would be their reward
for services rendered. Behind the supercilious racist rhetoric
about "civilizing Aristide" and teaching him "lessons
in democracy" lies a real fear: that the democratic virus
in Haiti might even infect these shores. People here might realize
that we have a great deal to learn about democracy from the peasants
and slum-dwellers of Haiti, who constructed a vibrant civil society
that offered the "great beast" a chance to take some
control over their lives. Their crime brings to mind the call
for freedom for all people that was sounded for the first time
in Haiti two centuries ago, outraging the civilized opinion of
One consequence of the huge propaganda campaigns of the past
several decades is the mood of "antipolitics" reported
in feature stories. Concealed from public view is the fact that
"politics is the shadow cast on society by big business,"
as John Dewey stated the truism familiar at least since Adam Smith,
adding that as long as this is so, "the attenuation of the
shadow will not change the substance." Reforms are of limited
utility. Democracy requires that the source of the shadow be removed,
not only because of its domination of the political arena, but
because the very institutions of private power undermine democracy
and freedom; again, an observation familar back to the Founding
But the source of the shadow has to be driven from the mind.
Naturally, this is a leading theme of the literature of the ultraright
foundations that are seeking to drive the educational system and
media towards an even narrower fringe of the permissible spectrum.
At the other extreme, Clinton campaign literature spoke movingly
about workers and their firms and how government must help them;
missing from the picture were bosses, profits, investors, and
the like. There are "entrepreneurs," nice folk who appear
now and then to help the workers and their firms. They then sink
into the background along with the unmentionables, who are laboring
for the common good, selflessly seeking to provide jobs and decent
lives for ordinary people in the "civil society" in
which all participate.7
The fanaticism of the effort to conceal the obvious has reached
comic proportions. After the latest APEC summit in Jakarta in
November, front-page headlines announced that "Clinton Is
Stern With Indonesia On Rights but Gleeful on Trade" (New
York Times). The "sternness on rights" consisted of
a few whimpers denounced by Indonesian human rights activists
and labor leaders (those still out of jail), but the Glee on Trade
was real enough. It reflects the successes of "the Administration's
campaign of commercial diplomacy" that "will mean jobs
for Americans," Times political correspondent Elaine Sciolino
reported with admiration. Clinton firmed up $40 billion in joint
projects in his campaign for "jobs for Americans"; at
least $35 billion, possibly more, was an arrangement between Exxon
and the Indonesian state oil company Pertamina to develop an off-shore
natural gas field, which could "mean new jobs for US businesses
that help set up wells and off-shore platforms," the Boston
Globe reported. Exxon's Indonesia affiliate and Pertamina are
expected to sell the liquified gas almost exclusively in Asia.
GE, Hughes, Fluor Daniel, and other major corporations won contracts
as well for projects in Indonesia. Another Exxon-Pertamina project
is a new plant to supply Indonesia's state-owned electricity company,
the London Financial Times added, noting also that U.S. taxpayers
are generously helping to fund the projects by credits from the
U.S. Export-Import Bank, "part of new US `Tied-Aid' credit
All of this is sure to provide a huge flow of jobs for Americans
-- at least lawyers, bankers, executives and managers, maybe a
handful of skilled workers for a short period. But profits for
U.S. investors? Perish the thought! The good news for U.S. workers
caused a sharp increase in Exxon's stock.8
Another victory for efficient propaganda is that people wildly
overestimate the percentage of the federal budget that goes to
foreign aid and welfare. In fact, over half of discretionary federal
spending is devoted to the military, one reason why "the
United States faces social and structural economic problems of
a magnitude unknown to other economically advanced states,"
Benjamin Schwarz of the RAND corporation notes, including "higher
rates of infant mortality, illiteracy, malnutrition, and poverty
than any other advanced industrialized country." All getting
worse, predictably, as the class war of the past decades intensifies
in vigor and savagery. A study of the Bread for the World Institute
reported a considerable decline in people suffering from hunger
throughout the world in the 1980s, with only two exceptions: Africa,
which registered an increase from 36% to 37%, and the United States,
where the numbers increased 50% from 1985 to 1990 as "conservative"
reforms took hold, increasing since.
The problem is most severe among children, with effects that
are permanent: it is well-known that "development of the
brain is strongly influenced by the quality of the nourishment
and nurturance given to infants and children," among other
effects of "adverse environments" early in life that
can lead "to permanent defects in memory and learning"
(medical researchers John Frank and Fraser Mustard). But hunger
among the elderly is also "surging," the Wall Street
Journal reports: "several million older Americans are going
hungry -- and their numbers are growing steadily," despite
a federal law in force for 20 years "aimed at providing free
meals to anyone over 60." Many are literally "starving
to death" while some 5 million, about 16% of the population
over 60, "are either hungry or malnourished to some degree"
-- again, phenomena unknown in other developed societies, which
lag behind us in the crusade for freedom and justice. "The
level of malnutrition and real hunger is only increasing,"
the assistant secretary for aging at the U.S. Department of Health
To fully comprehend the meaning of such facts, one must bear
in mind the unparalleled advantages of the United States. To select
merely one indication, health and life expectancy levels of mid-18th
century Americans were not achieved by the upper classes in Britain
until the early 20th century -- not to speak of less privileged
parts of the world. The social and economic catastrophe of American
capitalism is quite an extraordinary phenomenon -- for the "great
beast," that is.9
Only 30% of the population are aware that military spending
is the largest item on the Federal budget, and few of those know
its scale or its purpose. Over a quarter think foreign aid is
the biggest item. In fact, it is barely detectable. The U.S. has
the most miserly record among the developed countries. The record
is even worse if we exclude the parts intended to enhance U.S.
control over Middle East energy reserves, "aid" to Israel,
Egypt, and Turkey. By far the largest per capita component goes
to a rich country, Israel -- artificially rich, because of the
completely unparalleled flow of foreign capital including not
just "aid" but also tax-deductible contributions that
are used to maintain the sharp divisions between first- and second-class
citizens, and (despite disclaimers) for the joint U.S.-Israel
project of incorporating the bulk of the occupied territories
within the eventual state of Israel. Eliminate that, and U.S.
aid virtually vanishes -- putting aside its character and effects.
One-fifth of the population believe welfare to be the largest
Federal expense. It is not too surprising, then, that the top
priority for voters in 1994 was "welfare reform" (46%).
The welfare system is "just out of control," voters
felt, though it pays to look more closely at actual attitudes.
44% of respondents feel that we are spending "too much"
on welfare and 23% "too little, economist Nancy Folbre notes,
but when the phrase "assistance to the poor" is substituted
for "welfare" in the same question, 13% say we are spending
"too much" and 64% "too little." A reasonable
speculation is that many people have absorbed Reaganite lies about
"welfare Queens" (by insinuation, Black) driving Cadillacs,
and believe that working people are supporting rich welfare recipients
-- as they are, but not in the sense they imagine; we return to
As already noted, the second-ranking priority for voters was
health care reform (37%), though the impressive ideological warfare
of the past year has left people utterly confused about what the
realistic options might be. Public debate was framed within narrow
bounds, the Clinton plan being the "liberal option,"
with a few gestures to the "radical extremists" who
thought the U.S. might consider joining the rest of the industrial
world. The incomprehensible Clinton plan -- basically, a giveaway
to huge insurance companies -- was rejected as just another "big
government" proposal that would place people's fate in the
hands of pointy-headed bureaucrats who steal our money by imposing
a crushing tax burden; a publicly funded insurance program, to
the extent it could even be considered, is still more odious in
The option preferred by the privileged is for the fate of
everyone else to be in the hands of insurance company executives
whose goal, as Milton Friedman can explain, is to ensure maximum
profit and market share: meaning the worst possible health care;
elimination of personal choice except for the rich; huge bureaucracies
to micro-manage physicians; public subsidy for advertising, profits,
and multiple layers of high-paid managers and executives; and
other massive inefficiencies that drive the U.S. off the spectrum
in costs for heath care. The real meaning of the "conservative"
option was illustrated right after the November election at the
annual scientific convention of the American Heart Association,
where leading specialists reported that insurers are increasingly
unwilling to pay for preventive care that would reduce hospitalization
rates by 75% (Dr. Lynne Stevenson of Boston's Brigham and Women's
hospital). In contrast, they are quite willing to pay for heart
transplants -- high tech operations that enrich the right people
One radical extremist thought that rarely reached threshold
is that in a civilized society, the costs of health care should
be borne by progressive taxation, on the basis of the principle
that the poor should be exempted from taxation, which should "tax
the higher portions of property in geometrical progression as
they rise" -- as observed by the noted Marxist Thomas Jefferson
in a letter to his fellow-subversive James Madison. The United
States is, again, off the spectrum on this aspect of human rights
and needs, as measured by public share of health-care spending
(which is as progressive as the tax system). The U.S. is far below
any country that has achieved any form of development, even Greece
and Portugal; it is barely above Turkey.11
2. "Really existing conservatism"
The propaganda victories come into sharper focus when we compare
popular perceptions with social and economic realities. Take welfare.
It has sharply declined in real terms since 1970, Nancy Folbre
observes, a downward spiral that is continuing, with more reductions
in Aid to Families with Dependent Children (AFDC) in 1991 than
in any year since 1981. From 1970, maximum AFDC benefits for a
family of three with no other income fell over 40%, and the national
average of AFDC benefits and food stamps combined is now at the
level of AFDC alone in 1960 (before the food-stamp program was
A still more severe distortion is the unspoken premise that
child care is not work: it comes free, like women's domestic labor
generally -- "the main reason why free-enterprise economies
have worked relatively well over the decades," economist
Sylvia Ann Hewlett comments. Child care therefore contrasts with
Real Work: speculating in currency markets, devising tax shelters
for the rich, arranging mergers and acquisitions that significantly
reduce R&D and hence economic growth, and other contributions
that rank high on the scale of social utility and merit according
to standard dogma, which measures it by economic reward to the
"worker." In particular, single women taking care of
children are plainly not working, and therefore must be driven
to the official workforce on grounds of "economic efficiency"
(not to speak of justice), bipartisan doctrine holds. The assumptions
are somewhere between nonsensical and insane, though reasonable
enough within the general intellectual culture, with its tacit
dedication to class warfare.
Even on the narrowest grounds, Folbre observes in the American
Economic Association proceedings, "public policy literally
transfers resources from parents to non-parents by providing social
insurance based on participation in paid employment without explicitly
valuing time, effort, or money devoted to children," who
are, in the longer term, the crucial factor determining "economic
health" even in the highly distorted ideological sense of
the technical notion. When real incomes in the middle quintile
(about $30,000 in 1992 dollars) are adjusted for child care costs,
they decline slightly through the 1970s, quite sharply from 1980
to the present as "conservatism triumphed."12
Responding to the "public mood" that has been shaped
by a propaganda offensive of unusual intensity and fervor, the
highest priority for the new Gingrich conservatives is to dismantle
the welfare system. They announced at once that they would repeal
the Food Stamp Act of 1977, the Child Nutrition Act of 1966, the
National School Lunch Act of 1946, the Emergency Food Assistance
Act of 1983, and other Federals laws intended to prevent hunger,
particularly among children, which has not increased rapidly enough
to satisfy the advocates of "family values" and "free
market" verities. Furthermore, what programs remain are to
be transferred to states, so as to bar any response to the typical
sharp increase in need for food assistance when there is a recession,
as in 1991-2, when food stamp rolls sometimes grew by 300,000
people a month. The plans will "lead to a dramatic increase
in hunger," Senator Patrick Leahy observed realistically;
but that's nothing that has ever troubled the more loyal servants
of the rich. Also on the legislative agenda -- with the support
of the New Democrats -- are work obligations for mothers (who
do not "work," by ideological fiat) and reduction of
AFDC, the main Federal Welfare program, which reaches 14.3 million
people, over 9 million of them young children, who must "learn
responsibility" and internalize our values: that there are
no human rights, apart from what can be won in the labor market.
It would be unfair, however, to regard the leader, Newt Gingrich,
as a heartless wretch. He proposes that the money saved from AFDC
programs be used to build orphanages or "group homes"
for children of families rendered destitute -- the state being
the proper provider for children, not their mothers, under the
doctrine of "family values." Perhaps the proposal is
intended as a special contribution to the 1994 International Year
of the Family. Or perhaps it is simply another useful federal
subsidy, providing benefits to the construction industry, lawyers,
and other people of the right sort.13
The real meaning of "free market conservatism" is
illustrated by a closer look at the most passionate enthusiasts
for "getting the government off our backs" and letting
the market reign undisturbed. Take Newt Gingrich, the leader of
the victorious congressional army who are taking over under a
"master plan" that relied on huge contributions for
Gingrich's GOPAC committee from corporate donors and others whose
identity is a carefully-guarded secret. The measures are of dubious
legality; GOPAC is now being sued by the Federal Elections Commission
on grounds that it "failed to register and report as a political
committee." But legal questions aside, the power play was
"a calculated political operation, unique on the contemporary
American political scene" (Ellen Miller, director of the
nonpartisan Center for Responsive Politics), yet another blow
at the despised principles of democracy and the pretensions of
the "great beast" to meddle where it doesn't belong.14
Gingrich represents Cobb County Georgia, which the New York
Times -- reasonably enough -- selected in a recent front-page
story to illustrate the rising tide of "conservatism"
aimed at ridding us of the "nanny state." The headline
reads "Conservatism Flowering Among the Malls," in this
wealthy suburb of Atlanta, one of several that "offer --
particularly to whites -- a sense of prosperity and safety, conservative
Southern values and a relaxed, friendly way of life." It's
a "Norman Rockwell world with fiber optic computers and jet
airplanes," Gingrich comments with pride. With its "history
of inhospitality toward blacks," Cobb County is scrupulously
insulated from any urban infection so that the inhabitants can
enjoy the fruits of their "entrepreneurial values" and
market enthusiasms in "the conservative heart of a conservative
region," defended in Congress by the leader of the conservative
A small footnote: Cobb County receives more federal subsidies
than any suburban county in the country, with two exceptions:
Arlington Virginia, effectively part of the Federal Government,
and Brevard County Florida, the home of the Kennedy Space Center.
When we move out of the state system itself, Cobb County is the
leading beneficiary of the "nanny state." Its largest
employer is Lockheed Aeronautical Systems Company, which is designing
the F-22 advanced tactical fighter and other military aircraft.
72% of the workforce are in white-collar jobs "in expanding
areas of the economy like insurance, electronics and computers,
and trade" -- all carefully tended by "the nanny state."
It's remarkably easy for conservative entrepreneurial values to
flourish while one is feeding happily at the public trough. Meanwhile
praises to market miracles reach the heavens, notably where "conservatism
is flowering among the malls."15
An interesting sidelight is the silence over this matter during
the electoral campaign, when Gingrich propaganda was smashing
the New Democrats. Notably absent is a simple rejoinder that would
have stopped the juggernaut in its tracks: Gingrich is the country's
leading advocate of the welfare state -- for the rich. The reasons
for the silence are not hard to discern: class interests prevail
over narrow electoral ones. It's agreed across the board that
the rich must be protected from market discipline by a powerful
and interventionist welfare state.
Gingrich is the author of the "Contract with America,"
which calls for extending the double-edged "free market":
state protection and public subsidy for the rich, market discipline
for the poor. The Contract calls for "cuts in social spending,"
denying aid to children of "minor mothers" and those
on welfare. Republican leaders add that they will support reductions
proposed in the plan submitted by John Kasich, top Republican
on the Budget Committee; its biggest cut is to be $50 billion
from Medicare and Medicaid, the health programs for the elderly
and the poor. But the Contract calls for an increase in welfare
for the rich, by the classic means: regressive fiscal measures,
and outright subsidy. These include increased tax exemptions for
gifts and estates, capital gains cuts, reduced regulation for
protection of health and safety standards, investment subsidies,
more favorable rules for depreciation, and most important: "strengthening
our national defense" so that we can better "maintain
our credibility around the world" -- so that anyone who gets
funny ideas, like priests and nuns in Latin America, will understand
that "What We Say Goes," as George Bush defined the
New World Order while bombs and missiles were raining on Iraq.16
"National defense" is, of course, a sick joke, which
would elicit ridicule outside of a commissar culture. The U.S.
faces no threats, and already spends almost as much on "defense"
as the rest of the world combined. As in the past, military spending
is arguably increasing security threats, for example, by arms
exports, which now provide 25% of revenue for "defense"
contractors and dominate the international arms market, increasing
sharply since the end of the Cold War. Clinton has just added
an important innovation: for the first time, policy will "factor
the health of U.S. weapons makers and the shape of the domestic
economy into decisions on whether to approve foreign arms sales,"
the press reports; a natural step, now that the Soviet pretext
has collapsed and it becomes necessary to face the facts more
Unlike "defense" and "security," military
expenditures are no joke. They ensure that we will be able to
"behave, with others, multilaterally when we can and unilaterally
as we must," the Clinton version of the traditional doctrine,
delivered to the UN Security Council by Ambassador Madeleine Albright
as it wavered over a resolution condemning Iraq. Albright instructed
the Council that if need be, the U.S. would act alone because
"We recognize this area as vital to U.S. national interests"
-- and we recognize no limits or constraints, surely nothing as
ridiculous as international law, human rights, or the United Nations,
as we pursue our role as self-appointed global enforcer.18
Apart from maintaining a particular form of "stability"
in the interests of the world rulers, the Pentagon must continue
to provide lavishly for Newt Gingrich and his rich constituents
by means of a taxpayer subsidy to advanced industry. Nothing has
changed in this regard since the early post-war period, when the
business world recognized that the aircraft industry, established
by public funds and wartime profiteering, "cannot satisfactorily
exist in a pure, uncompetitive, unsubsidized, `free enterprise'
economy" (Fortune) and that "the government is their
only possible savior" (Business Week). For well-known reasons,
the Pentagon system was revitalized as the "savior,"
sustaining and expanding the industry, now the leading "civilian"
exporter, along with steel and metals generally, electronics,
chemicals, machine tools, and other central components of the
industrial economy. As long as the fable could be sustained, the
Cold War provided the pretext. The fraud was conscious, at least
among those minimally astute. The first Secretary of the Air Force,
Stuart Symington, put the matter plainly in January 1948: "The
word to talk was not `subsidy'; the word to talk was `security'."
As industry representative in Washington, Symington regularly
demanded enough procurement funds in the military budget to "meet
the requirements of the aircraft industry," in his words.
The story continues without essential change until today, in just
about every functioning sector of the economy, and surely in Cobb
Furthermore, the story goes back to the origins of the Republic:
economic historian Paul Bairoch describes the United States as
the "mother country and bastion of modern protectionism,"
which was "born in the United States" -- which may be
unfair to our British predecessors, no laggards in the art. Protectionism
is only one form of state intervention, and not the major one.
As in the British case, there are intermittent deviations from
the commitment to protect the rich from market discipline, related
to the expectation of temporary gain under conditions of dominance.
When need arises, "conservatives" are quick to call
for increased state intervention, as in the Reagan years. Had
market forces been allowed to function, there would be no U.S.
steel or automobile industry today, not to speak of computer chips
and electronics generally. The Reaganites simply closed the market
to Japanese competition while pouring in public funds.
Then-Secretary of the Treasury, James Baker proudly proclaimed
to a business audience that Reagan had "granted more import
relief to US industry than any of his predecessors in more than
half a century." He was far too modest: it was actually more
all his predecessors combined, doubling import restrictions to
23%. One of the few authentic free trade advocates, international
economist Fred Bergsten, added that the Reagan Administration
specialized in the kind of "managed trade" that most
"restricts trade and closes markets," voluntary export
restraint agreements -- which are "voluntary" in the
sense that protection payments to the Mafia enforcer are "voluntary."
This is "the most insidious form of protectionism,"
Bergsten pointed out, which "raises prices, reduces competition
and reinforces cartel behavior." The 1994 Economic Report
to Congress estimates that Reaganite protectionist measures reduced
US manufacturing imports by about one-fifth. Such measures have
been expanded under Clinton, one recent example being the proposal
to spend $1 billion to subsidize development and production of
flat-panel computer display screens, subsidies barred by the GATT
accords signed a few weeks earlier.19
This is just the tip of the iceberg. The "bought priesthood"
may spin tales about market discipline and its virtues, but business
executives and the government that is their "shadow"
will tolerate no such nonsense -- for the rich, that is.
Gingrich's Contract is remarkably brazen. Thus the proposals
for welfare for the rich appear under the heading "The Job
Creation and Wage Enhancement Act." The section does include
a provision for measures "to create jobs and raise worker
wages" -- with the word "unfunded" quietly added.
But no matter. In contemporary Newspeak, the word "jobs"
means "profits," so it is indeed a "job creation"
proposal, which will continue to "enhance" wages downwards.
The pattern is virtually exceptionless. Former Senate Democratic
leader George Mitchell was replaced in November by Olympia Snowe,
a prominent conservative, whose campaign focused on protecting
the Portsmouth Naval shipyard and Loring Air Force base -- that
is, making sure that Federal largesse continues to flow, the benefits
heavily skewed towards the wealthy, though the official mantra
is "jobs." Even looking just at the narrow matter of
welfare, we find much the same thing. The Center for Popular Economics
(Amherst) estimates that when we consider direct benefits and
tax breaks -- masked welfare payments -- an average household
with income under $10,000 receives about 60% of the welfare provided
to households with income over $100,000. Looking at details, total
payments for food stamps in 1993 amounted to $25 billion, welfare
and family support $16 billion, and supplemental security income
(poor, elderly, disabled) $21 billion. These figures may be compared
with the $49 billion in deductions for interest payments, mostly
mortgage payments (80% to families with incomes over $50,000,
skewed more radically toward the higher reaches, for obvious reasons).
Farm price supports, again skewed toward the wealthy, amounted
to $16 billion. Total payments to the poor "add up to less
than the three largest tax breaks that benefit the middle class
and wealthy: deductions for retirement plans, the deduction for
home mortgage interest and the exemption of health-insurance premiums
that companies pay for their employees," Michael Wines reports
in the Times in a rare window opened to the real world, noting
further that "most tax breaks and payments to the well-situated
are practically exempt from the debate over controlling expenditures."20
This, of course, is the merest fragment, not counting such
matters as "business expenses" (dinners at elegant restaurants,
prize seats at the opera and sporting events, club memberships,
etc.), all small in comparison with the massive subsidies through
the system of protection and subsidy by the "nanny state."
Simply to indicate scale, in Canada, less extreme than the U.S.
in its dedication to a nanny state for the rich, the National
Council of Welfare estimates that day care facilities for the
750,000 children who need them would cost $1.5 billion, not a
great deal more than the tax money lost by the business entertainment
Reacting to the "Contract," Labor Secretary Robert
Reich suggested that Congress end "corporate welfare as we
know it," removing tax breaks for particular industries and
agriculture that amount to tens of billions a year. He also noted
that over a quarter of taxes go to pay interest on the national
debt, most of it accumulated by the statist reactionaries of the
1980s, who played their spend-and-borrow games under the conservative
disguise. Reich's speech on economic and social policy was prominently
reported -- in the London Financial Times, though for accuracy,
it did receive a few lines under "World-Wide Notes"
in the Wall Street Journal, the same day.22
The principles are clear and explicit: free markets are fine
for the Third World and its growing counterpart at home. Mothers
with dependent children can be sternly lectured on the need for
self-reliance, but not dependent executives and investors, please.
For them, the welfare state must flourish.
Focusing on rich countries like ours is highly misleading,
to put it mildly. The double-edged "free market ideology"
has by far its most lethal effects in the traditional colonial
domains, which, apart from the Japan-based area, are mostly an
utter disaster, improving here and there only by ideologically-based
economic measures that dispense with effects on people. While
almost all industrial societies have become more protectionist
in past years, the Reaganites generally led the pack. The effects
on the South have been devastating, compounding the consequences
of the IMF-World Bank structural adjustment programs, which have
had a brutal impact on the poor majority while benefiting foreign
investors and elite sectors linked to them.
Market distortions by the rich have been a major factor in
doubling the already huge gap between the poorest and richest
countries in the past generation. The 1992 UN Development Report
estimates that various protectionist and financial measures taken
by the rich countries have deprived the South of $1/2 trillion
a year, about 12 times total "aid" -- most of it publicly-subsidized
export promotion. This behavior is "virtually criminal,"
the distinguished Irish diplomat and author Erskine Childers observed
recently. He also notes that the West, under U.S. lead, blocked
a 1991 resolution tabled at the General Assembly by the South
against "economic measures as a means of political and economic
coercion against developing countries," the favored technique,
apart from terror, by which the U.S. has sought to destroy such
independent upstarts as Cuba and Nicaragua -- while never ceasing
to sing odes to the free market. The fact is "very little
known," Childers writes, "because of course such things
do not get reported by the dominant Northern media." He hopes
that some day this "wholesale moral abdication by Northern
countries" will lead to "their utter shame before their
own citizens," shame that will "start on the day when
Northern academicians and NGOs" institute "a Blackmail
Watch" to stand alongside the Human Rights Watches.23
Not tomorrow, we can be sure of that.
With hopelessly inadequate apologies to the victims, I'll
put aside that terrible story of major crimes against humanity,
for which we bear continuing responsibility.
Next month, I'll turn to two topics: the specific measures
that are being used to control the surplus population, and the
general background against which these crimes against humanity
proceed. The former include the growing "crime industry,"
unrelated to crime but closely related to the need to cage those
growing categories of the population who have no role to play
in enriching the wealthy and privileged, and therefore lack rights
by "conservative" values. Another striking component
is the war against families and children that was led by Reagan-Thatcher
conservatives and is now to be sharply enhanced. Yet another is
the effort to restore something like the Satanic Mills of the
early period of industrialization, for those who retain some rights
under reigning values. All of this is entirely reasonable, as
major tendencies in the global economy of the past quarter century
have at least raised the possibility that the world might be driven
to an extreme form of totalitarian domination by wealthy and powerful
sectors, with the gains for human rights, freedom, and democracy
won in bitter struggle over centuries now reversed -- a shift
from "containment" to "rollback," to borrow
some of the (largely deceitful) terminology of foreign policy
1 For references, see my Turning the Tide (South End, 1985),
chap. 5, sec. 2.2.
2 See my World Orders, Old and New (Columbia, 1994); Gallup
Political and Economic Index, Report 404, April 1994.
3 John Aloysius Farrell, BG, Dec. 3; BW, Oct. 10, 1994. See
Norman Ware, The Industrial Worker: 1840-1860 (Ivan Dee, 1990;
reprint of 1924 edition).
4 Morin, WP weekly, Nov. 21-27; LA Times, Nov. 20, cited by
Doug Henwood, Nation, Dec. 12; Silverstein-Cockburn, Counterpunch,
Nov. 15; Gerald Seib, WSJ, Nov. 11; Levine, letter, NYT, Nov.
25; Richard Berke, NYT, Nov. 10; Edsall, WP weekly, Nov. 28-Dec.
4; George Graham, Nov. 10, 1994.
5 Aaron Bernstein, Business Week, Oct. 10, 1994. For more
detail, see my World Orders, Old and New (Columbia, 1994); See
Edward Herman, this issue.
6 Fortune, Nov. 14, April 18, 1994.
7 See World Orders, for details and references.
8 Sciolino, Andrew Pollack, NYT; Susan Hightower, AP, Boston
Globe; Manuela Saragosa, FT. Nov. 17, 1994.
9 Robin Toner, NYT, Nov. 16; Toner misinterprets the figures,
failing to distinguish discretionary spending. Schwarz, "The
Arcana of Empire and the Dilemma of American National Security,"
Salmagundi, Winter-Spring 1994; Theo Francis, Chicago Tribune,
Oct. 14; Michael McCarthy, WSJ, Nov. 8, 1994. Frank and Mustard,
"The Determinants of Health from a Historical Perspective,"
Daedalus: Health and Wealth, Fall 1994.
10 Folbre, Village Voice Literary Supplement, Nov. 1992.
11 Robert Knox, BG, Nov. 16, 1994. Jefferson quoted by John
Manley, "The American Dream," Nature, Society, and Thought
vol. 1.4, 1988. Robert Evans, "Health Care as a Threat to
Health," Daedalus, op. cit. Voter priorities, Seib, op. cit.;
budget estimates, Toner, op. cit.
12 Hewlett, Child Neglect in Rich Societies (UNICEF, 1993).
Folbre, op. cit.; "Children as Public Goods," AEA Papers
and Proceedings 84.2, May 1994. Marc Breslow, Dollars and Sense,
13 Jason DeParle, NYT, Nov. 13; Robert Pear, NYT, Nov. 22,
14 Michael Kranish, BG, Nov. 20, 1994.
15 Peter Applebome, NYT, Aug. 1, 1994.
16 David Rosenbaum, NYT, Nov. 1, 1994.
17 BG-LA Times, Nov. 15, 1994.
18 Jules Kagian, Middle East International, 21 Oct. 1994.
19 See World Orders. Bairoch, Economics and World History
(Chicago 1993). Keith Bradsher, NYT, April 27, 1994.
20 John Milne, BG, Nov. 9, 1994; Nancy Folber and the Center
for Popular Economics, The New Field Guide to the U.S. Economy
(New Press, 1995); Wines, NYT, Nov. 20, 1994.
21 Linda McQuaig, The Wealthy Banker's Wife (Penguin 1993).
22 Jurek Martin, "Attack on business tax breaks,"
FT, Nov. 23, 1994. Pacifica Radio, Nov. 22; tapes distributed
by David Barsamian.
23 Childers, "The Demand for Equity and Equality: The
North-South Divide in the United Nations." Conference of
the Jamahir Society, 2 July 1994, Geneva.
This article was originally published in Z Magazine, an independent
magazine of critical thinking on political, cultural, social,
and economic life in the U.S.