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, and why.

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 sectors.

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 be increased."

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 diverged."

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 that day.

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 Fathers.

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 offers."

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 reports.

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 that.10

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 that respect.

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 and institutions.

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 initiated).

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 triumph.

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 honestly.17

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 County.

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 deduction.21

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 discussion.




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, Nov./Dec. 1994.

13 Jason DeParle, NYT, Nov. 13; Robert Pear, NYT, Nov. 22, 1994.

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.

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