Thankyou Noam...

Occupy the Future

by: Noam Chomsky, Truthout | Speech
 

American flag hoisted during @StudentsOccupy march at Occupy Boston on October 10, 2011. (Photo: Weekly Dig)

(This article is adapted from Noam Chomsky's talk at the Occupy Boston encampment on Dewey Square on Oct. 22. He spoke as part of the Howard Zinn Memorial Lecture Series held by Occupy Boston's on-site Free University. Zinn was a historian, activist and author of "A People's History of the United States.")

Delivering a Howard Zinn lecture is a bittersweet experience for me. I regret that he's not here to take part in and invigorate a movement that would have been the dream of his life. Indeed, he laid a lot of the groundwork for it.

If the bonds and associations being established in these remarkable events can be sustained through a long, hard period ahead, victories don't come quickly, the Occupy protests could mark a significant moment in American history.

I've never seen anything quite like the Occupy movement in scale and character, here and worldwide. The Occupy outposts are trying to create cooperative communities that just might be the basis for the kinds of lasting organizations necessary to overcome the barriers ahead and the backlash that's already coming.

That the Occupy movement is unprecedented seems appropriate because this is an unprecedented era, not just at this moment but since the 1970s.

To read more articles by Noam Chomsky and others in the Public Intellectual Project, click here.

The 1970s marked a turning point for the United States. Since the country began, it had been a developing society, not always in very pretty ways, but with general progress toward industrialization and wealth.

Even in dark times, the expectation was that the progress would continue. I'm just old enough to remember the Great Depression. By the mid-1930s, even though the situation was objectively much harsher than today, the spirit was quite different.

A militant labor movement was organizing, the CIO (Congress of Industrial Organizations) and others, and workers were staging sit-down strikes, just one step from taking over the factories and running them themselves.

Under popular pressure, New Deal legislation was passed. The prevailing sense was that we would get out of the hard times.

Now there's a sense of hopelessness, sometimes despair. This is quite new in our history. During the 1930s, working people could anticipate that the jobs would come back. Today, if you're a worker in manufacturing, with unemployment practically at Depression levels, you know that those jobs may be gone forever if current policies persist.

That change in the American outlook has evolved since the 1970s. In a reversal, several centuries of industrialization turned to de-industrialization. Of course manufacturing continued, but overseas, very profitable, though harmful to the workforce.

The economy shifted to financialization. Financial institutions expanded enormously. A vicious cycle between finance and politics accelerated. Increasingly, wealth concentrated in the financial sector. Politicians, faced with the rising cost of campaigns, were driven ever deeper into the pockets of wealthy backers.

And the politicians rewarded them with policies favorable to Wall Street: deregulation, tax changes, relaxation of rules of corporate governance, which intensified the vicious cycle. Collapse was inevitable. In 2008, the government once again came to the rescue of Wall Street firms presumably too big to fail, with leaders too big to jail.

Today, for the one-tenth of 1 percent of the population who benefited most from these decades of greed and deceit, everything is fine.

In 2005, Citigroup, which, by the way, has repeatedly been saved by government bailouts, saw the wealthy as a growth opportunity. The bank released a brochure for investors that urged them to put their money into something called the Plutonomy Index, which identified stocks in companies that cater to the luxury market.

"The world is dividing into two blocs, the plutonomy and the rest," Citigroup summarized. "The U.S., U.K. and Canada are the key plutonomies, economies powered by the wealthy."

As for the non-rich, they're sometimes called the precariat, people who live a precarious existence at the periphery of society. The "periphery" however, has become a substantial proportion of the population in the U.S. and elsewhere.

So we have the plutonomy and the precariat: the 1 percent and the 99 percent, as Occupy sees it, not literal numbers, but the right picture.

The historic reversal in people's confidence about the future is a reflection of tendencies that could become irreversible. The Occupy protests are the first major popular reaction that could change the dynamic.

I've kept to domestic issues. But two dangerous developments in the international arena overshadow everything else.

For the first time in human history, there are real threats to the survival of the human species. Since 1945 we have had nuclear weapons, and it seems a miracle we have survived them. But policies of the Obama administration and its allies are encouraging escalation.

The other threat, of course, is environmental catastrophe. Practically every country in the world is taking at least halting steps to do something about it. The United States is taking steps backward. A propaganda system, openly acknowledged by the business community, declares that climate change is all a liberal hoax: Why pay attention to these scientists?

If this intransigence continues in the richest, most powerful country in the world, the catastrophe won't be averted.

Something must be done in a disciplined, sustained way, and soon. It won't be easy to proceed. There will be hardships and failures, it's inevitable. But unless the process that's taking place here and elsewhere in the country and around the world continues to grow and becomes a major force in society and politics, the chances for a decent future are bleak.

You can't achieve significant initiatives without a large, active, popular base. It's necessary to get out into the country and help people understand what the Occupy movement is about, what they themselves can do, and what the consequences are of not doing anything.

Organizing such a base involves education and activism. Education doesn't mean telling people what to believe, it means learning from them and with them.

Karl Marx said, “The task is not just to understand the world but to change it.” A variant to keep in mind is that if you want to change the world you'd better try to understand it. That doesn't mean listening to a talk or reading a book, though that's helpful sometimes. You learn from participating. You learn from others. You learn from the people you're trying to organize. We all have to gain the understanding and the experience to formulate and implement ideas.

The most exciting aspect of the Occupy movement is the construction of the linkages that are taking place all over. If they can be sustained and expanded, Occupy can lead to dedicated efforts to set society on a more humane course.

© 2011 Noam Chomsky

Protesters hit the City of London


Protesters descended on the City of London today as part of worldwide demonstrations against corporate greed and cutbacks.

A protester stands on the steps of St Paul's Cathedral in London. Photo: Matthew Sparkes
 

Inspired by America's "Occupy Wall Street" and Spain's "Indignants", people took to the streets in Sydney, Hong Kong and Tokyo in the opening hours of the unprecedented global outcry.
Anger over unemployment and opposition to the financial elite hung over the protests in 951 cities in 82 countries, which coincided with a Paris meeting of G20 financial powers pre-occupied by the eurozone debt crisis.
But the demands and the sense of urgency among the activists varied depending on the city.
In London, more than 1,000 protesters gathered outside St Paul's Cathedral and struggled against police officers on horseback to enter Paternoster Square, the home of the London Stock Exchange.
Speaking at the protest, political campaigner Peter Tatchell proposed a one-off 20pc emergency tax on the net wealth of the richest 10pc of the UK population, as well as the introduction of a "Tobin Tax" on financial transactions.
"The richest 10pc of the UK population have a combined personal wealth of £4 million, million. A one-off 20pc tax on those people would raise £800 billion," he said.
"Those people can afford it, they'd feel no pain, they're so fabulously wealthy.
"With that sum of money you could pay off the entire government deficit. No need for any public spending cuts."
At the same time, a Tobin Tax would: "reduce speculation and be good for the economy, and raise at least £100 billion a year. Within two years this would enable us to clear the entire Government deficit," he argued.
"Rich people who are not prepared to pay their way are traitors to this country, they're putting their own personal selfishness before the interests of the public."
Hundreds protested in Asian cities, while up to 200,000 are reportedly expected in Rome where many are furious at Prime Minister Silvio Berlusconi's handling of a sovereign debt crisis.
Around 500 people gathered in the heart of Hong Kong's financial district to vent their anger at the inequities and excesses of free-market capitalism, while demonstrators in Tokyo also voiced fury at the Fukushima nuclear accident.
Wong Weng-chi, a demonstrator from a group calling themselves "Left 21", said the "Occupy Central" rally in Hong Kong was more than just an act of solidarity with the Wall Street protest, which began in September.
"Hong Kong is a key financial hub in Asia, it is a base that serves many multinational financial institutions. It is a base that serves many capitalists and the upper class to monopolise the wealth," he told AFP.
Around 600 demonstrators in Sydney set up camp outside Australia's central bank, where the plight of refugees and Aboriginal Australians was added to the financial concerns.
In Tokyo, around 100 protesters marched through the streets, shouting "Occupy Tokyo!". They added anti-nuclear slogans as they passed the offices of Tokyo Electic Power Co, the operator of the stricken Fukushima plant.
Tomoko Horaguchi, a 22-year-old student at Hosei University, said she was moved by the protesters on Wall Street.
"I feel the same anger," Horaguchi said. "In particular I am angry at nuclear power plants. Only one percent of people want to run them still."
The organisers, relying heavily on Facebook and Twitter, say demonstrations will be held in 951 cities across 82 countries in Europe, North America, Latin America, Asia and Africa.
The "indignant" protests first took hold in Spain, which has a jobless rate of 20.89 percent rising to 46.1 percent for 16-24 year olds, where for a month activists lived in a ramshackle camp in Puerta del Sol.
They then spread to Europe, finding strong backing in crisis-hit countries like Greece, and then worldwide - last month reaching the centre of global capitalism in Wall Street.
Since September 17 several hundred people have occupied a camp in a small park in the New York financial district.

Protect what ?

Protectionism beckons as leaders push world into Depression

The world savings rate has surpassed its modern-era high of 24pc. This is the killer in the global system. It is why we are at imminent risk of tipping into a second, deeper leg of intractable depression.

In Europe, policy is still on deflationary settings, with protestors in Athens fighting back against austerity measures. 
 Photo: REUTERS

The International Monetary Fund (IMF) expects the savings mountain to rise yet further next year as the governments of Europe, Britain, and the US tighten belts, in unison, by up to 2pc of GDP.
This is double the intensity of the last big synchronized squeeze in 1980.
They will do so before the private sector is ready to grasp the baton, and without stimulus from the trade surplus states (Germany, China, Japan) to offset the contraction in demand.
Put another way, there is a chronic lack of consumption in the world. "This probably comes as a surprise to most people, gorged on propaganda about excessive debt and the need for retrenchment," said Charles Dumas from Lombard Street Research.
The inevitable outcome of one-sided austerity polices in the Anglo-sphere and Club Med is a self-feeding downward slide for the whole global system, a variant of 1930s debt-deflation. "Excess savers refuse to acknowledge that if world savings are demonstrably too high, healthy recovery depends on the surplus countries saving less," he said.
Mr Dumas said China's "grotesque and destructive" policies of over-investment (50pc of GDP) and under-consumption (36pc of GDP) are unprecedented in history, but at least China's currency advantage is being eroded by wage inflation.
His full wrath is reserved for the "fallacious and malignant policies" of Angela Merkel and Wolfgang Schauble in Germany. They are enforcing a Gold Standard outcome on the whole eurozone. "Suffused with self-righteousness, they insist that the imbalances must be put right only by deficit-country deflation."
The sheer scale of global imbalances is made clear in a paper by Stephen Cecchetti at the Bank for International Settlements.
His paper contains a chart showing that combined surplus/deficits reached 6pc of world GDP in the boom, far beyond the extremes that led to the US losing patience in 1985 and imposing the Plaza Accord. The gap narrowed post-Lehman but is widening again.
Money flows are even more out of kilter. Cross-border liabilities have jumped from $15 trillion to $100 trillion in fifteen years, or 150pc of global GDP. This creates a very big risk.
"Gross financial flows can stop suddenly, or even reverse. They can overwhelm weak or weakly regulated financial systems," said Mr Cecchetti.
Well, yes, this is now happening. Did anybody think about this when they unleashed globalisation with its elemental deformity, free trade without free currencies?
The self-correction mechanism is jammed. China holds down the yuan against the dollar through a dirty peg. Germany and its satellites hold down the D-mark against Club Med covertly through the mechanism of EMU.
This outcome in Europe is not deliberate (I hope); it is not a German plot; it is the unintended effect of a currency union created by ideologues against Bundesbank advice, and which has calamitous implications for German foreign policy and for Latin social stability.
My sympathies go to the hard-working citizens of Germany, Spain, Italy, Portugal, and Ireland for being led into this impasse by foolish elites.
A global system biased towards export dumping has had unhappy effects on the US, UK, and Club Med. These countries have faced a Morton’s Folk over recent years: an implicit choice between job losses at home, or accepting credit bubbles to mask the pain.
They chose bubbles. That was a mistake. This strategy of buying time cannot safely be repeated because fiscal woes are already near "boiling point", in the words of the BIS. “Drastic improvements will be necessary to prevent debt ratios from exploding," it said.
Bank of England Governor Mervyn King called recently for a "grand bargain" of the world's major powers to break the vicious circle and ensure that the burden of adjustment does not fall on debtors alone.
"The need to act in the collective interest has yet to be recognised. Unless it is, it will be only a matter of time before one or more countries resort to protectionism. That could, as in the 1930s, lead to a disastrous collapse in activity around the world," he said.
We are not there yet, but a global double-dip would take us to the edge. US democracy cannot allow America’s precious stimulus to leak out to countries that have bent their exchange rates, tax systems, and industrial structures towards predatory export advantage. It cannot let broad (U6) unemployment ratchet up to 20pc or more.
If the White House will not do it, Congress will. Capitol Hill is already launching its latest bill to label China a currency violator, and open the way for retaliatory sanctions.
"They get away with economic murder and thus far our country has just said, 'Oh, we don't care. This legislation will send a huge shot across China's bow,” said Senator Chuck Schumer.
The risk – or solution? – is that the US will opt for a variant of Imperial Preference, the pro-growth bloc created behind tariff walls by the British Empire with Scandinavia, Argentina and other like-minded states in 1932. This experiment has been air-brushed out of history by free trade hegemonists.
One can imagine how this might unfold. North America would clamp down on dumping, at first gingerly, before escalating towards a cascade of Smoot-Hawley tariffs and barriers. Mexico and Central America would join. Brazil and Mercosur would find it irresistible because that is where the demand would be, and BRIC solidarity would wither on the vine.
By then you would have the US recovering behind its wall, while surplus states were recoiling from severe shock. Britain would face the moment of truth, offered salvation in the `Pact of the Americas’ or slow asphyxiation by trade ties to EMU’s deflation machine. Portugal and Spain would face the same fateful choice. This is how the EU might end.
Ultimately, America would get its way. Korea and the Asian Tigers would come knocking. The austerity brigade and mercantilists would be shut out until they capitulated. The rules of world trade system would be redrawn.
The IMF's Christine Lagarde understands the risks intuitively. The global economy is entering a "dangerous new phase", she warns. Leaders must prepare for "bold and collective action to break the vicious cycle of weak growth and weak balance sheets feeding negatively off each other". Central banks must stand ready to "dive back into unconventional waters as needed."
But how many infantry divisions does the IMF command, to paraphrase Stalin? Power resides in the G20, where debtors and creditors have radically contrasting views. The body cannot even start to offer a solution.
A US double-dip is not yet a foregone conclusion. America’s M3 money supply is last growing decently again at 5.6pc, which would in normal circumstances signal some recovery next year. The latest GDP and confidence data in the US have not been as bad as feared.
Ajay Kapur from Deutsche Bank said investors have to decide whether the market slump of recent weeks is a “panic like the LTCM sell-off in late-1998 that proved to be a great buying opportunity, or the first leg in what could eventually be a pervasive global recession. We believe it is the latter.”
He said the triple warnings from US leading indicators (ECRI, the Philly Fed’s 'Anxious Index', and the earnings revision index) all point to recession, while China is “probably over-tightening” into a global slump.
In Europe, policy is still on deflationary settings, with Italy and Spain having to tighten fiscal yet further to meet their budget targets. The European Central Bank is overseeing a collapse in real M1 deposits in Italy of around 6pc, annualized over the last six-months.
Michael Darda from MKM Partners said the ECB has made such a hash of monetary policy that nominal GDP for the whole eurozone may even start to contract.
That is astonishing. If correct, there is no hope of averting a debt spiral in Italy and Spain. Any such outcome will test the EU’s bail-out machinery to destruction within months.
Mr King’s “disastrous collapse” is staring policy-makers in the face.