OT - Noam Chomsky Connects the Dots

War, Neoliberalism and Empire in the 21st Century
Sameer Dossani Interviews Noam Chomsky

Sameer Dossani: Let's talk about the recently passed Iraqi oil law.
It's well known that the law was drafted in the U.S. and then
consulted on by very few Iraqis all loyal to Prime Minister Noori al-
Maliki, then finally pushed through the Iraqi parliament. This law
paves the way for regionalization and privatization of Iraqi oil.
What's the U.S. economic agenda in Iraq and will it be able to carry
that agenda out, given the disastrous nature of the occupation so far?

Noam Chomsky: It's not very clear. What you said is correct. The law
was not even seen by the Iraqi Parliament until it was finished, so
it's an inside job. Exactly what this entails is still kind of open.
It allows for Production Sharing Agreements (PSAs) which have
traditionally been a way of gouging the producer and ensuring that
foreign corporations have control and make huge profits. It's quite
different from other contractual arrangements in the region--it's what
they used to have but they've since nationalized their oil production
and countries set terms more in their own interest with the
corporations that are moving in. This law is vague on that so it
leaves it open.

As far as the U.S. economic interests I think we have to make a
distinction. The primary interest, and that's true throughout the
Middle East, even in Saudi Arabia, the major energy producer, has
always been control, not access, and not profit. Profit is a secondary
interest and access is a tertiary interest.

So in the years when the U.S. was not using Middle East oil at all,
[the U.S.] was the largest producer and the largest exporter, it still
had the same policies. It wanted to control the sources of oil and the
reasons are understood. In the mid-1940s, the State Department made it
clear that the oil resources of the region, primarily then Saudi
Arabia, were a stupendous source of strategic power which made the
Middle East the most strategically important area of the world. They
also added that its one of the greatest material prizes in world
history. But the basic point is that it's a source of strategic power,
meaning that if you control the energy resources, then you can control
the world, because the world needs the energy resources.

This was made explicit by George Kennan when he was one of the Middle
East planners [in the U.S. State Department]. [He said that] control
over Middle East oil will give us veto power over our rivals. He was
specifically talking about Japan, in case Japan industrialized, it was
devastated by the war still, we'll have veto power as long we control
the oil. And that's been understood through the years. So in the early
stages of the Iraq war [former U.S. National Security Advisor]
Zbigniew Brzezinski, who's one of the more astute of the planners--he
was not terribly enthusiastic about the war--said that if the U.S.
wins the war, which means that it succeeds in imposing a client regime
in Iraq, then the U.S. will have critical leverage over its industrial
rivals in Europe and Asia because it will have its hand on the spigot.

And that is also understood very well at the highest level of the
administration. So a few months ago, *** Cheney said that control
over [oil] pipelines can be "tools for intimidation and [blackmail]".
He was talking about control over pipelines in the hands of others, so
if our enemies have it, it's a tool of intimidation and coercion. But
of course the same is true if it is in our hands. We're not supposed
to think that because we're supposed to be noble, but the rest of the
world certainly understands it. Yes, it's a tool of intimidation and
coercion, whether it's the direction of pipelines or whether its
control over the production or over the regimes in question, and
control can take many forms.

So that's the primary concern--control. A secondary concern is
undoubtedly profit for U.S.-based corporations and British based
corporations and several others of course. And yes [in the case of the
Iraqi oil law] that's a possibility. The Production Sharing Agreements
and the other arrangements for long-term contracts at ridiculous
rates, those are expected to be sources of immense profit as they have
been in the past, so for example a couple of weeks ago Exxon-Mobil
posted its profits for 2006 which are the highest for any corporation
in U.S. history. That broke the record of the preceding year, which
also happened to be Exxon-Mobil and the other energy corporations are
doing just great--they have money pouring out of their ears. And the
same with the corporations that link to them, like Haliburton, Bechtel
and so on.

The material prize of oil production is not just from energy. It's
also from many other things. Take Saudi Arabia or the [United Arab]
Emirates. They have huge constriction projects paid for by petro-
dollars which recycle back to Bechtel and other major construction
companies. A lot of it goes right back to U.S. military industry. So
these are huge markets for U.S. military exports and the military
industry in the United States is very closely linked to the high-tech
economy generally. So it's a sort of a cycle--high prices for oil, the
petro-dollars pour back to the U.S. for major construction projects
for high-tech industry, for development, for purchasing treasury
securities which helps bolster the economy--it's a major part of the
economy and of course it's not just the United States. Britain, France
and others are trying very hard to sell them the same things and
sometimes succeeding. There was a big bribery scandal in Britain
recently because of efforts to bribe Saudi officials into buying jet
aircraft and so on. So the basic idea of the energy system is that it
should be under the control of loyal clients of the United States, and
they're allowed to enrich themselves, become super rich in fact, but
the petro-dollars are basically to cycle back to the West, primarily
the United States in various forms. So that's a secondary concern.

A tertiary concern is access. That's much less of a concern. One of
the reasons is that the distribution systems are pretty much in the
hands of big energy corporations anyway and once oil is on the high
seas, it can go anywhere. So access is not considered a major problem.
Political scientists, when they make fun of the idea that the U.S.
invaded Iraq to gain its oil, they point out is that the U.S. can get
Middle East oil in other ways so therefore that can't be the reason.
That's true, but it's irrelevant because the true issues are and
always have been control and secondarily profit and in fact U.S.
intelligence projections for the coming years have emphasized that
while the U.S. should control Middle East energy for the traditional
reasons, it should rely primarily on more stable Atlantic basin
resources, namely West Africa and the Western hemisphere. They're more
secure, presumably and therefore we can use those, but we should
control the Middle East oil because it is a stupendous source of
strategic power.

SD: The difficulties surround the occupation Iraq has deflected the
U.S.'s attention away from other parts of the world, including Latin
America. Recently, Venezuelan President Hugo Chavez and others such as
Rafael Correa of Ecuador, Evo Morales of Bolivia, have been talking
about regional trade agreements such as ALBA and, in the case of
Venezuela, aid packages that are supposedly designed to actually
benefit local populations as opposed to transnational companies.
Critics claim that these policies are a) unsustainable, because they
depend on revenues from Venezuela's oil wealth, and b) self serving
for the government of Hugo Chavez. What is your response to these
criticisms?

NC: It's very odd criticism in the first place. Are U.S. aid programs
sustainable? No, not if there's a depression or even a recession.
Furthermore, U.S. aid happens to be about the lowest relative to the
economy of any advanced society so there isn't much of it in the first
place and it also can be withdrawn at any time and often is.

As for doing it for self interest, what do you think other countries
provide aid for? They're perfectly open about it. Sometimes, there's
something done for altruistic reasons maybe by Norway, but
overwhelmingly, aid is openly presented as "in our interest", not just
by the U.S. but by Britain and France and others. It is part of
general strategic policies of controlling whatever part of the world
you can. So, if in fact Venezuela's doing it for that reason, that
just says, "yeah, they're just like us". So whatever that is, it's not
a criticism.

What are the reasons? Well, they're complicated. First of all, there's
a background. For the first time in 500 years since the Spanish
conquest Latin America--especially South America--is beginning to move
towards some sort of integration. Actually it's a dual type of
integration. Part of it is international integration meaning the
countries are becoming more integrated with one another. The
traditional structure in LA has been that each of the countries is
primarily oriented towards Western imperial powers. So [economies are
oriented toward trade with] Spain, and in recent years mostly the
United States, not with one another. That's even true of the
transportation systems. They're designed for export of resources
abroad and import of luxury goods for the rich within.

There's a very clear contrast with East Asia. East Asia is resource
poor, Latin America is resource rich. You would have expected Latin
America to have rapid growth, not East Asia, but it didn't. One of the
reasons is that Latin America adhered very rigorously to the neo-
liberal policies of the last 25 years, the IMF World Bank policies,
and those are basically offshoots of the U.S. Treasury department.
They adhered to the rules and they suffered severely--most of the
population that is. The rich sectors did ok. East Asia just
disregarded the rules and followed the same kinds of programs that the
rich countries themselves, including the U.S., had followed to gain
their wealth and power. So East Asia grew, but in addition to that, if
you look at say imports and exports, Latin America exported raw
materials, which is low income basically, and imported luxury goods
for the wealthy. East Asia imported capital goods and moved up the
ladder of industrial progress and ended up exporting high technology
goods.

SD: What do you mean by "capital goods"?

NC: Machine tools, things that you can use for producing commodities,
electronics, bio-technology and so on. I mean those are the high-value
exports, not rice. I mean for the U.S., rice is such a low value
export that agribusiness has to get about 40% of its profit from U.S.
government subsidies, provided primarily since the Reagan
administration, as part of their efforts to undermine markets--they
love rhetoric about markets, but they greatly dislike the concept
applied to us. And the terms of trade tend to decline for commodities,
you know there's variation, but they tend to decline for primary
commodities as compared with high value goods like industrial exports.
So [economists like to talk about] this notion called "comparative
advantage", you should produce what you're good at, but the way
countries develop is by rejecting that principle and acting in order
to shift their comparative advantage.

So let's take the United States. 200 years ago the comparative
advantage of the United States was exporting fish and fur, and maybe
cotton, thanks to slavery. If the U.S. had followed the principles
that are dictated to the poor countries, we'd be a sparsely populated,
pretty poor country, exporting primary resources. Instead, the United
States violated all of the rules--the rules of the economists and the
neo-liberal principles. It imposed extremely high tariffs on imports
from Britain, textiles at first, later steel and others, and it had
the highest tariffs in the world, the highest protection in the world
in the 19th century. As a result, it was able to shift its comparative
advantage from primary resource exports to manufacturing, finally high-
tech technology and so on, and that goes on right until today. Only
the poor countries are supposed to follow the principles that
economists dictate. In the United States there's a state sector of the
economy, which is the core of high-technology advanced production.
That's where computers come from, and the Internet, and lasers, and
containers for trade; civilian aircraft are mostly an offshoot of the
military industry, right now moving on to genetic engineering, bio-
technology, pharmaceuticals, and so on. Research and development--
which are the risky, costly parts of development--those costs are
imposed on the public by funding through the state sector and
development in the state sector. When there are profits to be made
it's handed over to private corporations and that's the basic
structure of the advanced economy.

That's one reason why the U.S. simply can't enter into the free trade
agreement--it just doesn't accept market systems internally. So going
back to East Asia and Latin America, Latin America followed the rules
and became impoverished; East Asia ignored the rules, and was able to
grow and develop pretty much the way the rich countries had
themselves. So one form of integration in Latin America is integration
of the societies with one another, although the alternative is the
more far-reaching version of this, but there are others. And the
second form of integration is internal. Latin America at last is
beginning to do something, not much, but something about the internal
fracturing of the societies, which is extreme. Each of those societies
is characterized by a very wealthy small elite, and a huge
impoverished mass. There's also a pretty close correlation to race.
The wealthy elite tends to be the white, Europeanized part of the
society; the huge impoverished mass tends to be the Mestizo, Indian,
Black part of the society. Not a perfect correlation, but it's very
noticeable. And that's beginning to be addressed, in large part as a
result of the pressure of mass popular movements, which are very
significant in Latin America now more than any other part of the
world.

It's in this context that the Venezuelan phenomenon surfaces.
Venezuela is indeed now, under Chavez, using its oil wealth to
accelerate these processes--both the international integration and the
internal integration. It's helped countries of the region free
themselves from U.S. controls, exercised in part through the
traditional threat of violence, which has been much weakened, and in
part through economic controls. That's why country after country is
kicking out the IMF, restructuring their debts, or refusing to pay
them, often with the specific help of Venezuela. In Argentina
particularly, Venezuela bought about a third of the debt and enabled
Argentina to "rid herself of the IMF" as the President [Nestor
Kirchner] put it. The international integration is also proceeding,
not just through Venezuela. It doesn't get reported here because it's
sort of not the right story, but a lot of things are happening. So in
early December for example, there was a meeting of all South American
leaders in Cochabamba, Bolivia--which is right at the heart of Morales
territory, Indian territory--and they proposed, they had constructive
ideas and suggestions which could lead towards sort of a European
Union type structure for South America.

The more extreme version of this, advanced version of it is ALBA,
which you mentioned, the Venezuelan initiative, but there are others.
MERCOSUR, which is a regional trade alliance is stumbling, but it
exists. There are great barriers to integration, it's not an easy
matter to dismantle 500 years of history, either internally or
regionally, but there are steps towards it, and Venezuela is playing a
significant role in them. In the U.S. there's kind of a new party line
on this matter. The party line is that, OK, we admit the subcontinent
is drifting to the Left, but there are good Leftists and bad Leftists,
and we have to distinguish between them. The bad Leftists are Chavez,
of course, Morales, and probably Correa, not certain yet, and
Kirschner's also one of the bad ones. The good Leftists are Lula in
Brazil, García in Peru, they don't know about Bachelet in Chile, and
so on.

In order to maintain this propaganda line, it's necessary to suppress
quite a lot of facts. For example, the Cochabamba conference that I
mentioned, or the fact that when Lula was reelected in last October,
his first foreign trip and one of his first acts was to visit Caracas
to support Chávez and his electoral campaign, and to dedicate a joint
Venezuelan-Brazilian project, a major bridge over the Orinoco river,
and to discuss some other projects. Well that doesn't fit the story
so, as far as I can tell, I don't think it was reported anywhere in
the United States--I didn't check everything, but I couldn't find it--
and many other things like that. I mean with any kind of propaganda,
there's at least some thread of truth to it, but it's much more
complex than that. There's a real will towards integration and popular
pressure towards internal integration, which are very significant.
It's worth remembering that these are steps toward reversing a 500-
year-old pattern, and among other things, it's weakening the
traditional measures of U.S. control over South America. So the kind
of governments the U.S. is supporting now, including Lula, are the
kinds of governments they might well have been overthrowing not many
years ago.

SD: In Latin America, Venezuela is only one part of the general
discontent that is driving governments away from the IMF. But in other
parts of the world, notably Africa, the IMF and its neoliberal
diktaats are as strong as ever, and the predictable result is that
extreme poverty is still on the rise. Other countries -- for example
India -- are not under this pressure but still are wildly pursuing
neoliberal economic policies. What hope do you see for citizens and
movements in these places? Are there lessons to be learned from the
case of Latin America? How can we in the U.S. be supportive of
struggles for economic justice in these places?

A lot depends on what we do. After all [the U.S. is] the most powerful
country in the world and the richest country in the world and has
enormous influence. These policies that you describe are not without
reason called the Washington Consensus; that's where they emanate
from.

Sub-Saharan Africa and Latin America are the two areas of the world
that most rigorously followed the neo-liberal principles, the orthodox
principles of the Washington Consensus, and those are the two parts of
the world that suffered most severely. And you're right, in Sub-
Saharan Africa it largely continues. They simply do not have the
resources, the capacities, the countries are torn to shreds as a
result of history of imperial conquest and devastation, and they've
not been able to put themselves back together again. Their hopes for
revival after the the formal end of colonialism were pretty much
shattered by Western intervention. So for example, the murder of
[Patrice]Lumumba in the Congo, which is the richest, and potentially
the most powerful country of the region, and the installation of the
corrupt and brutal murderer Mobuto [Sese Seko] not long after, I mean
that set off a chain of catastrophes which is still devastating the
area and no sign of resolution.

The French in their regions of Africa did the same. One gangster after
another, the French backed state terrorism, and did all sorts of
things. And pretty much the British, too, in their regions. So [many
African countries] have a hideous legacy to overcome, and it's very
difficult, and they're not getting much support from the outside. But
we should be doing what we can to support authentic liberation
struggles within the countries.

It's too complicated to go into the history here, but it's worth
remembering many of the things that happened. So for example, when the
Portuguese empire collapsed in the mid-70's, the former Portuguese
colonies had a chance, Angola, Mozambique, a couple other Portuguese
colonies, might have moved towards some sort of independent
development. But South Africa, with U.S. backing, would not allow it--
remember that's apartheid South Africa. So for example in Angola,
South African troops backed by the United States just invaded to try
to throw out the elected government, and again, with U.S. support,
supported terrorist movements, the Savimbi movement, to try to
undermine the government, and they would have succeeded had it not
been for the fact that Cuba sent forces to support the government.

That led to hysteria in the United States. You had [the U.S.
Ambassador to the United Nations] Daniel Moynihan saying 'the Russians
are trying to cut our lifeline, our oil supplies to the Middle East',
[Henry] Kissinger raving and so on, and it was all, believed to be or
presented to be a Russian operation. In fact, we now know from
excellent contemporary U.S. scholarship that it was a Cuban
initiative--it was mainly Piero Gleijeses at Johns Hopkins University
who's going through the archival material and has done outstanding
scholarship. What happened is that Cuba entered on its own initiative
and very selflessly--they never took any credit for what they were
doing, it's still mostly unknown--but Cuban troops beat back the South
African offensive, and not only did that prevent the re-conquest of
Angola, but it also had extraordinary symbolic significance. Those
Cuban troops were black, and that broke the kind of mythology of white
conquest; it was the first time that black soldiers had defeated
advanced white armies, South African with U.S. backing. And that was a
very important, had a very important effect on all of Africa. For the
South African whites it was a sign that their conquest was not
permanent. And for blacks in South Africa and elsewhere in the region,
it showed that you don't have to subordinate yourself to white power.

That breaking of the hold of the mythology of [white] power is
extremely significant, not just in this case. The same is true with
many other cases, slavery, the women's movement, all sorts of things.
Just breaking the idea that you must subject yourself to overwhelming
power, when that's broken, a lot collapses with it. So that was a very
important step towards the liberation of Africa, and Cuba deserves
enormous respect for this, also for never taking credit for it,
because they wanted the credit to be taken by the African countries
themselves. It's only now beginning to be known, and mostly only known
in scholarly circles because you don't get front page stories in the
New York Times about topics like this. And then Angola fell into total
catastrophe, mainly because of the depredations of the U.S.-backed
terrorist forces, which were horrendous, and now it's a horror story.
Similar things were happening elsewhere. The United Nations commission
on Africa estimated that in the former Portuguese colonies alone--
Mozambique and Angola--about a million and a half people were killed
by South African aggression backed by the Reagan administration, just
during the Reagan years. That's a pretty serious catastrophe. They
also estimated about 60 billion dollars of damage, and the French and
Algeria and their regions elsewhere were doing pretty much the same.
It's a hideous, ugly story, and sub-Saharan Africa has a long way to
go to extricate itself from these centuries of destruction still
continuing.

India is a complicated story; it has been independent since 1947.
Before the British conquest back in the 18th century, India and China
had been the commercial and industrial centers of the world. British
conquest turned India into a poor, peasant society. [The British]
built roads and infrastructure, but they were mostly for the benefit
of the invaders, the export of goods and so on. There were hideous
famines--Mike Davis has a wonderful book on this Victorian famines,
huge famines that could have easily been prevented, right thru the
British rule up to the very end in the 1940s. Since Indian
independence, they resumed their growth and there were no more
famines; it became a more or less governable society and was beginning
to develop. In the 1980s, there was a significant increase in the rate
of growth. In the 1990s, they instituted the so-called neo-liberal
reforms on their own, I mean, that was not under IMF control, as you
said, and since then there have been changes.

They're very highly praised in the West--you know, the Thomas Friedman-
style adulation of the new India--and in fact growth has increased,
and a sector of the society has become much better off, has been
raised from poverty. But remember that means a sector of the society;
the large majority of the society is deeply impoverished, maybe even
harmed by the neo-liberal policies, the same policies that are
responsible for the marvelous labs in Hyderabad and Bangalore - which
are indeed marvelous, I've seen them and they're just like MIT - and
there is increase in the wealth of that sector of society. Those same
policies are undermining the large majority of the population, which
is peasant-based. Also the government has withdrawn support for
peasant agriculture, meaning cheap credits, irrigation, rural aid,
assistance programs, and so on, and they've also kind of pressured the
poor farmers to turn from subsistence crops to export crops--that's
the advice of economists generally.

Mexico, for example, under NAFTA was supposed to turn away from
producing rice for the population and corn, turned away from that to,
say, producing flowers for export to the United States with "more
valued added". In some seminar somewhere that might look good, but in
the real world it happens not to work for very simple reasons.
Commodity prices tend to vary quite a lot, and if there's like a
natural disaster, say a hurricane or whatever, and you're producing
flowers, they might be wiped out that year, just like the citrus crop
has been pretty much wiped out in California this year because of the
cold spell. Well if you're agribusiness, you can handle that. So
wiping out the citrus crop in California may raise the price of
oranges in the United States, but U.S. agribusiness is going to
survive it just fine. However, poor farmers cannot, I mean a farmer
can't tell his children 'don't bother eating this year' because cotton
prices went down, or because a storm wiped out our flowers, and 'maybe
you'll be able to eat the next year', you can't do that. So what you
have to do is to try to get credit. Well with the government having
withdrawn support for the vast majority of the population, you go to
usurers, who charge you huge levels of interest, which you're not
going to be able to pay, so then you have to sell off the little plot
of land you have, and pretty soon you can't support your family at
all, so you commit suicide.

And in fact the rate of peasant suicides has been rising [in India]
about as fast as the adulation by Thomas Friedman for the marvels of
the economy. The per capita grain intake for people in India has
declined, the average has declined considerably, since the onset of
the reforms. Manufacturing productivity has gone way up, manufacturing
wages have gone way down. At the beginning of the so-called reforms,
India was ranked around 124th or so in the UN development rankings,
which measure infant mortality and so on. Since the reforms have been
undertaken, it's actually declined--the last time I looked I think it
was 127th, it certainly hasn't advanced.

Well, these are parts, I can go on, but these are the several aspects
of the Indian development story. For some it's been very good, and for
others it's been, at best, stagnation, at worst, a disaster. And
remember, for huge parts of India, like say for women, life is kind of
like under the Taliban. Careful studies of say [the Indian state of]
Uttar Pradesh, which maybe has 160 million people, has found that they
have about the lowest female to male ratio in the world and it's not
because of female infanticide, it's because of the way women are
treated, which would make the Taliban look pretty decent. And these
are huge areas, and they're not getting better, many are getting
worse. The same is true in China, it's harder to say about China, it's
a closed society, I don't know the details, but it's probably quite
similar. India's a more open society so there's a lot of evidence.

Going back to Mexico and producing corn and beans, I mean, why is
there a vast increase in illegal immigration from Mexico in recent
years? It's partly the predicted effects of NAFTA. If you flood, the
worst is yet to happen but even the beginning of it, if you flood
Mexico with U.S. agribusiness exports, which are highly subsidized--
that's how they get their profits--then Mexican farmers aren't going
to be able to compete. Then comes the economists' theory, you know,
turn from producing corn and beans and rice to producing flowers and
[other] export crops, and you have the mode I described, and people
can't survive. So there's a flight of people from the countryside to
the cities where there are no jobs because Mexican businesses can't
compete with U.S. multinationals, which are given enormous advantages
under the mislabeled trade agreements. And yes, you get a flight of
population [across the border]. The price of tortillas, you know, the
basic food for the poor, it's gone out of sight, people can't pay for
it. If you're growing your own food, you can manage, or if there's a
subsistence agriculture, yeah, you can kind of manage, but not when
you abandon it.

Again, for parts of the population it's been a benefit, so the number
of billionaires has gone way up, just like in India. India now ranks
very high internationally among the number of billionaires, but also
for peasant suicides, and for severe malnutrition and so on. These
countries, which are pretty rich, [are in some respects doing worse
than] the poorest countries. GDP per capita in India is below Bolivia.
That's nothing to rave about, Bolivia is the poorest country in South
America. These are several sides of the same policies.

Remember that when NAFTA was enacted in 1994, another policy was
enacted. In 1994, Clinton militarized the border in Operation
Gatekeeper. Now previously, that had been a pretty open border. The
border, of course, was established by conquest, like most borders. And
there were similar people on both sides, people who would cross the
border to visit their friends and relatives and that sort of thing.
Now the border was militarized in 1994. OK, maybe it's a coincidence,
more likely I think it's because the Clinton administration understood
that their glowing predictions [about the benefits of NAFTA] were for
propaganda, and that the likelihood was that there would be effects in
Mexico which would lead to substantial flight, immigration, joined by
people fleeing the wreckage of Central America after Reagan's
terrorist wars there. And yes, now you have what they call an
immigration crisis. These things are connected, you can't look at them
in isolation.

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