There is a very constrictive concept of freedom. It's not the freedom of a working person to control their work, their lives, and so on; it's their freedom to submit themselves to control by a higher authority. That's called 'freedom', but not 'democracy'. They don't like democracy and they're right; capitalism and democracy really are inconsistent.
Actually, what's called libertarianism in the United States, is about as an extreme example of anti-libertarianism that you can imagine. They're in favour of private tyranny – the worst kind of tyranny. Tyranny by private, unaccountable, concentrations of wealth. When they say, “Well, we don't want government interference in the market”, they mean that. They mean - maybe they don't understand it, but if you think it through, it's pretty obvious – the kind of interference in the market they want blocked is the kind that would permit unconstrained tyranny on the part of totally unaccountable private tyrannies, which is what corporations are.
It's worth bearing in mind how radically opposed this is to classical liberalism. They like to invoke, say, Adam Smith. But if you read Adam Smith, he said the opposite. He's famous for not, you know, the claim is that he was opposed to regulation – government regulation – interference in markets. That's not true. He was in favour of regulation, as he put it, when it benefits the working man. He was against interference when it benefited the masters. That's traditional classical liberalism.
This, what's called 'libertarian' in the United States, which likes to invoke the history that you’ve concocted, is radically opposed to basic classical libertarian principles and it's kind of astonishing to me that a lot of young people - say, college students - are attracted by this kind of thing. I mean, you can, after all, read the classical text.
So take, say, Adam Smith. Adam Smith, at the time – he's the icon, you know. He was considered to be a dangerous radical at the time, because he was pretty anti-capitalist in this pre-capitalist era that he was opposed to, and he condemned what he called the 'vile maxim of the masters of mankind': all for ourselves and nothing for anyone else. That's an abomination. Take the phrase 'invisible hand' – everybody's learnt that in high school or college – Adam Smith actually did use the term, rarely. But take a look how he used it. In Wealth of Nations, his major work, it's used once. And if you look at the context, it's an argument against what is now call neo-liberal globalisation and what he argued is this (in terms of England, of course): he said, suppose in England that the merchants and manufacturers invested abroad & imported from abroad; he said, well that would be profitable for them, but it would be harmful to the people of England. However, they will have enough of a commitment to their own country, to England (it's called a 'home bias', in the literature); they'll have enough of a 'home bias' so that, as if by an invisible hand, they'll keep to the less profitable actions and England will be saved from the ravages of what we call neo-liberal globalisation. That's the one use of the term in Wealth of Nations.
In his other major work, Moral Sentiments, the term is also used once, and the context is this - remember, England is basically an agricultural country then - he says: suppose a landlord accumulates an enormous amount of land everyone else has to work for. He says: well, it won't turn out too badly, and the reason is that the landlord will be motivated by his natural sympathy for other people. So he will make sure that the necessities of life and the goods available will be distributed equitably to the people on his land, and it will end up with a relatively equal and just distribution of wealth, “as if by an invisible hand”. That's his other use of the term.
Just compare that with what you're taught in school, or what you read in the newspapers. And it goes across the board. Like, everybody probably has read the first paragraphs of Wealth of Nations, which talks about how wonderful it is that the butcher pursues his interests, and the baker pursues his interests, and we're all happy, so we should be in favour of a division of labour. Everybody's read that. How many people have read a couple of hundred pages into Wealth of Nations, where he has a bitter attack on division of labour for interesting reasons, and reasons that were standard in the Enlightenment in which he lived (very different from ours)? He says if you pursue division of labour, people will be directed to actions in which they'll complete the same mechanical actions over and over. They'll be de-skilled and that's the goal of management for over over 100 years: de-skill the workforce. He says that's what will happen if you pursue division of labour. He goes on to say, this will turn people into creatures as stupid and as ignorant as a human being can possibly be and, therefore, in any civilised society, the government will have to intervene to prevent any development like this. That's Adam Smith's view of division of labour.
Next step – now, here's a research project. Take the standard edition (scholarly edition) of Wealth of Nations produced by the University of Chicago Press – naturally, on the bicentennial – with a scholarly apparatus (you know, footnotes and everything else) – and take a look at the Index. There's a scholarly index. Look up 'division of labour'. This part of the book is not referenced. You can't find it, unless you decided to read 700 pages; then you can find it.
But that's his concept of the division of labour, and it continues like this – and I'm not extolling, you know, a lot of things that you can harshly criticise, like his advice to the colonies – but, nevertheless, it's a very different picture from what's called 'libertarianism' or 'capitalism' today.
Capitalist democracy would self destruct - capitalism would self destruct – and that's why it hasn't been instituted. The masters understand that they cannot survive a capitalist economy – a laissez fair economy.
Take a look at the history; it's pretty interesting.
So the United States, when it was independent – so it could reject the rules of sound economics and develop. There were other countries that were poised for an industrial revolution and were given the same advice. Like Egypt and India. In fact, India already was the commercial and industrial centre of the world, moreso than England . Egypt was poised for an industrial revolution and it's not impossible that it might have developed as a rich, agrarian society. It had cotton – produced cotton. As I said, that's the main product (like oil today), and it didn't need slaves. It had peasants. It had a developmental government aimed that the industrial development. It could have taken off – just as India could have taken off. But they were not free to reject sound economics because they were ruled by British force. So they were forced to accept sound economics, and Egypt became Egypt, and the United States became the United States. India went through a century of de-development before it finally got independent.
That's what happens when you apply laissez fair principles. In fact, that's essentially how the Third World and the First World divided. Take a look at the countries that developed. They are the countries who violated the principles. England, the United States, Germany, France, Netherlands. One country of the south. One country developed: Japan. The one country that wasn't colonised and was able to pursue the same course that the rich countries developed.
I mentioned that in mid Nineteenth Century – 1846 - Britain was so far ahead of the rest of the world in industrial development that they did decide that laissez faire would be possible, so that moved to what's called a 'free trade era'.
First of all, they imposed sharp constraints on it. They've cut off the Empire. India. India was not allowed. Others could not invest in India, their main possession; and India was not allowed to develop. And there were other restrictions.
Pretty soon, British capitalists called the game off because they couldn't compete. By the 1920s, they couldn't compete with Japanese production so they literally closed off the Empire to Japanese exports. It's part of the background for the Pacific War of the 1940s.
The United States did the same with a smaller empire in the Philippines. The Dutch did the same with Indonesia. All the imperial systems decided: no more free trade, we can't compete. So they closed off the empire and Japan had no markets, no resources, and they went to war. That's a large part of the background.
The United States, in 1945, did move towards laissez fair. In fact it was an important conference (the united states was basically running the world at that point, for obvious reasons) – there was a hemispheric conference called by Washington in February 1945 in Mexico, where the western hemisphere was compelled to adopt an economic charter for the Americas, which banned any interference with market principles. The goal was, in the State Department reports, to oppose the new nationalism in Latin America, which is based on the idea that the people of a country should benefit from the country's resources. That's 'evil', we can't allow that; it's Western and US investors who have to benefit from the resources.
So that was the economic charter of the Americas imposed on the countries of the southern hemisphere, with one exception – here. The United States did not follow those policies. Quite the contrary.
As I mentioned, there was a massive development of a state based economy with an industrial policy – the kind that created the modern high-tech economy. You can see it right across the river. Take look at MIT, one of the main centres of this **** If you had a look at MIT in the 1950s (when I got there) it was surrounded by electronics-based high-tech firms, like Raytheon and iTech, and huge IT firms. Take a look at MIT today, take a look at the buildings, it's Novartis, Pfizer and so on. The reason's completely obvious: during the 50s and 60s, the cutting edge of the economy was electronics based, so the way to get the public to pay for it was to scream 'Russians!' and to get them to pay higher taxes for the Pentagon, and then the Pentagon would fund the research and development – like my own salary, for example (I shouldn't complain too much) – and, of course, private industry was around there like vultures to pick up the products and the research and to market.
Well, since the 70s, the cutting edge of the economy has been moving towards be biology based, so funding – government funding – has shifted. Pentagon funding is declining. Funding from the NIH and other so-called health related government institutions is increasing, and the private corporations understand that. So, now, Novartis, genetic engineering firms and so on, are hanging around trying to pick up the research that you're paying for, so that they can market it and make profits. It's just transparent. It's in front of our eyes, and it takes a very effective educational system to prevent people from seeing it. It's virtually transparent. That's the way this really exists in capitalist democracy, folks.
A final word about democracy then, before I have to leave.
There's a major attack on democracy all the way through. But by now it's reached the point which is pretty remarkable. Take a look at one of the main topics in the mainstream political science (and we're not talking about radicals). Mainstream political science is comparing public attitudes with public policy. It's a fairly straight-forward – it's hard work but a straight-forward effort. We have the public policy so you can see it. There's extensive polling. Quite reliable generally and consistent in its results. It gives you a good sense of what public attitudes are, and the results of this are published in the major books and articles - with references, if you like. The results are very straight-forward. About 70% of the population – the lowest 70% on the income scale – are literally disenfranchised. Their opinions have no affect on policy. Their elected representatives don't pay any attention to them. That's one of the reasons why many of them don't bother voting: they're not going to pay attention to them anyway. You know, I've read the technical literature to understand it in other ways. As you move up the income scale, you get a little more influence on policy. When you get to the top (and contrary to the Occupy Movement, it's not 1% - it's more like one-tenth of 1%) - when you get to the top where the massive concentration of wealth is, they basically set policies. That's not democracy; that's plutocracy. And that's what we have accepted. The good thing about it is that it's changeable. It's not controlled by force. We are very free in that respect, thanks to victories over the centuries. It's not possible now for a corporation to do what Andrew Carnegie, the great pacifist, did in 1890. That gives a lot of options and you have to make use of them.
I'm afraid I've got to leave.
[17:35] APPLAUSE
*Part re interference in market they want blocked & tyranny reads kind of funny to me. It's the interference they want blocked so they can get away with tyranny is what he's getting at, I think. But the sentence seems confusing (to me).
*I disagree with the last part, about there not being rule by force. We are ruled by force & there's nothing we can do. Look what happens to protesters. When they're not beaten, imprisoned etc, martial law is imposed and they're beaten and imprisoned if they dare break curfew, I guess.
EU-NATO IMPERIALISM ❌ 