Economic Update: Noam Chomsky on Fragile US Empire

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In this week’s show, Prof. Wolff gives updates on US freight workers strike preparations; progressives and labor targeting municipal government; Chipotle store-closing to stop unionizing, and Occupy Wall Street's "Debt Collective" $5.8 billion student loan forgiveness win. In the second half of the show, Prof. Wolff interviews Noam Chomsky on the decline and fragility of the US empire, the role of US military, and the rise of fascism as a coping mechanism.

Transcript has been edited for clarity

Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives. I'm your host, Richard Wolff.

Today's program we’ll be talking about the strike by United States railroad workers that's being developed as we speak. We're going to talk about the Chipotle Corporation closing those restaurants where workers are organizing and fighting for unions and beginning to talk about strikes. Other issues as well, and then the second half we'll have an interview with the one and only Noam Chomsky. So, let me begin.

Railroad workers last struck in the United States back in 1991, so we're talking about 30 years during which there hasn't been a job action of the kind we call a “strike” by this group of important workers. And I want to talk about them, - not only because they haven't struck, - but because these are better-paid workers, at least as the wages go in the United States, and they're becoming an important force, striking and unionizing, too. It's not just important as that is, it's not just the workers at Starbucks or Amazon that we've been hearing so much about, but it's all through the labor movement, all through the different categories of work, that workers are becoming more militant, demanding better conditions, not tolerating what they might have tolerated for a long time.

Railroad workers are overwhelmingly male, - many of them are former military, - and, relative to other workers, they're pretty well paid. The mean conductor, the average conductor salary, - about $68,000. The average engineer salary, $73,000. With benefits and so on. It's a considerable pay package, but it isn't enough for these workers, and there are very good reasons why, but before I tell you that, I want to make sure everybody understands that if the last 30 years were a problem, the last five were extreme.

The period of leading up to the pandemic, the pandemic, the crash, the inflation, they put a cap on a deteriorating situation, and clearly took this group of workers over the edge in terms of what they tolerate. How do I know that? Because when they voted on whether or not to strike in the middle of July of this year, the vote in favor of striking was 99% of those who voted.

The two biggest freight rail companies in this country, BNSF and Union Pacific, both had wonderful years in 2021. It might have been a pandemic of horrible proportions in the first half, and it might have added a horrible inflation in the second, but the railroad freight companies did well: $6 Billion in profits for BNSF, - was up 16% from 2020, - and Union Pacific with $6.5 Billion in profit, was likewise up 16% in 2021 compared to the year before. So, the companies were doing great at the same time that the pandemic, the crash, and the inflation was really walloping the workers, and they won't stand for it. The last time they struck, in 1991, the strike only lasted 24 hours before Congress ordered, and the workers obeyed, going back to work. We will see what happens this time.

Ten unions are involved. The leader is the Brotherhood of Locomotive Engineers and Trainmen. Over the last five years the number of jobs we're talking about fell from 125,000 to 100,000. That's one measure of how bad the situation got. Over the same period, the increase in fatalities among these workers was 60%. Accidents and injuries went up 9.4%. The work got harder, the work got more dangerous, but the pay didn't get a lot better. Meanwhile, pandemic justified weird schedules, - good for the company, not for the workers, - and then the inflation.

President Biden has the right and is expected to appoint a three-person commission to “cool things off”, as they say, until September. But this is a strike of people who are saying “we want better conditions”, “we want better accommodation to us”, just like everybody else in a long-suffering working class.

My next update has to do with a shift in American politics. You know, the big corporations, having been able to kind of stymie the federal government, between the Republicans and the Democrats, and back-and-forth, very little gets done up there, as most of you have noticed. And what is beginning to happen is that the labor movement demanding the way these railroad workers are, the kind of attention and the kind of support they should have been getting for a long time, are beginning to shift their focus away from a blocked, unable to act federal government. They're going lower, and not to the States but to the municipalities, - a stunning recent activity exemplified when the city of Los Angeles passed a special group of ordinances governing restaurant and other workers in Los Angeles, improving their pay, improving their job security. There, there was an alliance between a progressive machine in the local city and its supporters and the labor movement, and they got the kind of progressive legislation that the government in Washington is blocked from doing one way or another. And there's a lesson there for progressives and the Labor movement. If you get together, you may be able to do at the municipal level all kinds of things that are not available with the power of money concentrated, as it is, on the Federal and State governments.

My next update has to do with this Chipotle chain. The Chipotle chain, as I'm sure many of you know, is all over the country, and recently in Augusta, Maine, a union effort got underway, as is happening elsewhere, and it really got into high gear. The workers there went for a union. And once they showed that they have the majority support, the Chipotle did a very interesting thing: it closed its outlet in Augusta, Maine. The leaders of the strike and the human unionization effort there have already filed two unfair labor practice complaints, with the NLRB, and we will watch how those come out. There are other Chipotle efforts: Lansing, Michigan is one well-known where they're going to be unionizing, and Flushing, Queens in New York City, is another one. This is according to the lawyer for the union efforts, Jeffrey Young.

And I want to point out there's good reason to believe that the workers need unions. Let me give you an example. In the year 2020, two years ago, the office of Attorney General Maura Healey, - that's in the state of Massachusetts, - explains that Chipotle's more than 50 corporate-owned Massachusetts outlets had an estimated, - and get this, - 13,253 child labor violations, and other state wage and labor law violations, just in the four years from 2015 to 2019. Examples included a minor working past midnight, - that's not legal in Massachusetts, - and 16- and 17-year old employees working beyond the nine-hour daily limit, and the 48-hour weekly limit. That's right, Chipotle ripping off the young people who work there in large numbers.

I want to address this retaliation by the corporations, when they're caught like this and when the workers act like this, forming a union, so they can't be abused like this. The Chipotle company closes the store. At that point, of course, the risk is workers will be without a job. They'll go find another job, they'll move out of town, they'll feel very depressed. We can all imagine what that's like, or we've gone through it.

There's a suggestion I would make that would solve that problem. The cities in this country, if we got together and pushed, could use something called “eminent domain”. That is a legal right every city has to seize property, to take property that is in the view of the city not in the general interest of the population, force the owner to sell it at a legally determined market price, and take it over. The cities could do that, saying that an empty store, a closed store, simply because workers want a union level of support, is a social interest, and the city has an interest in having stores that are well maintained, workers well-paid, and so forth. The city could then take the restaurant, once it closed, and say to the workers “Okay, now it’s yours, it's a worker co-op.” The city owns it, we will allow you to pay over time, so it becomes yours, call it a rent if you like, call it a payment plan, if you like. It really doesn't matter. The workers would keep their jobs, the community would keep its Chipotle type store, and the workers would become entrepreneurs, just like that, overnight. And you know what? It would make a lot of corporations think a lot longer and a lot harder before they close their stores if it meant that they might lose them.

My last update that we'll have time for, is really just a shout out. On June 1st of this year the United States Department of Education announced that $5.8 Billion worth of student loans would no longer have to be repaid. These are the loans outstanding at that time taken out by students at the for-profit Corinthian Colleges, three or four of them, as I recall. Corinthian Colleges were a kind of fraudulent operation that existed from1995 to 2015. For 20 years they made grandiose promises to students who took out big fat federal loans to get an education, a horrible exploitation of young people's hopes and dreams. When they folded, when the fraud was exposed, and the Corinthian Colleges stopped, of course people were stuck with debts but didn't have the education. And even when they got it earlier, it didn't count for very much because the promises were empty. A group of young people, associated with the Occupy Wall Street movement that many of you remember, calling themselves the Debt Collective, went to work on law and other ways of clawing back from the federal government, getting debt relief for abused, misled students, and after many years of struggle, this Occupy Wall Street movement succeeded. Almost $6 Billion of relief for student debtors.

We've come to the end of the first part of today's show, and before we move on, I want to remind everyone that Economic Update is produced by [email protected], a small donor-funded, non-profit media organization celebrating 10 years of producing content focused on critical system analysis, and visions of a more democratic and equitable world. For instance, my book “Understanding Socialism”, tackles the taboos of socialism while unveiling the often-hidden histories of it, and offers a way forward by establishing real democracy in the workplace. It is available, as all of our products are at [email protected] I also want to thank our growing community of supporters that make this show and everything we do possible.

Please stay with us. We'll be right back with Professor Noam Chomsky.

[Wolff] Welcome back, friends, to the second half of today's Economic Update. Well, all I can say is that is an honor, a genuine honor for me, as well as a pleasure, to welcome to our microphones and to our cameras, Noam Chomsky. I'll say that silly old thing about how he doesn't need an introduction, because you all know him, but I'm going to give you a brief one anyway. He was born in 1928 in Philadelphia. He did his studies, both undergraduate and graduate, at the University of Pennsylvania, before joining the faculty at MIT, where he stayed for 60 years, and became a globally renowned linguist and philosopher. He left MIT eventually, and became laureate professor at the University of Arizona. He is internationally renowned, and many times honored as one of the world's great linguists, philosophers, and critical public intellectuals.

So, first of all, Professor Chomsky, thank you very much for joining us.

[Chomsky] My pleasure to be with you.

[Wolff] Okay, I want to jump right in. You and Vijay Prashad have recently produced a book called “The Withdrawal”, and it has to do with the US's military misadventures in Iraq, Libya, and Afghanistan. Do you think it is a reasonable understanding of what is happening in the world today, to speak of a decline of, an end, if you like, of the US empire in the world, the one that basically came into its modern form after World War 2? Something like the decline of the Roman or Greek or British empire. Is that a reasonable understanding from your perspective?

[Chomsky] Well, over a long stretch, the US domination of the world has of course declined. It hit its peak, as you said, at the end of World War 2. At that point, the United States had a position of global power that had no remote analog in human history. US controlled the western hemisphere, controlled both oceans, controlled the opposite sides of both oceans. Other industrial powers had been devastated by the war. The United States gained enormously economically through the war. Manufacturing production practically quadrupled. It had maybe 40-50% of the world's wealth. Nothing like that in history. Couldn't obviously, couldn't last forever. In fact, within a couple of years it declined.1949, China became independent, what's called in the United States “the loss of China”. The terminology expresses the conception of how the world is supposed to be run.

After that, Industrial powers reconstituted themselves. The third world began to decolonize, got the non-aligned movement. By about, say 1970, the world was what's called “tripolar”. Major center in North America, based on the United States, in Europe based on Germany mainly, and in Asia at that point based mainly on Japan. Since then, other changes have taken place. Collapse of the Soviet Union, maybe short period of euphoria in the United States: “We can take over the world again”. Of course, that couldn’t last. We're now in a period where the analogy to the Roman Empire is not completely wrong. As in the case of Rome, the United States is under severe attack from within. The society's collapsing from within. In many ways, internationally, it has overwhelming power, so in the military dimension no combination of states is even close.

In other words, so-called soft power like trade, commercial relations, and so on, it's being overcome by China. The United States is trying to hold it back but doesn't know how to do it. You can't overcome economic development infrastructure, building loans and so on, with bombs. So, China's constructing this enormous Eurasian system, the Belt and Road Initiative, includes India, Pakistan, and Russia. Its extending to Africa, where China is now the main, has the major trade relations, even to Latin America, the United States’ backdoor. All the United States can do in response to this is extend, use its comparative advantage in military force. So, the US is now constructing what's called a ring of what are called “sentinel states”, heavily armed, aimed at China. Advanced precision weapons. South Korea. Taiwan. Japan. New Zealand. Australia. India is kind of a reluctant partner, not really participating. The idea is to try to prevent what's called “Chinese Aggression”. What's Chinese Aggression? Well, it's not off the coast of California. There are confrontations off the border of China. But the main Chinese aggression is its development, which cannot be contained by military force.

Now, there's another conflict developing in Europe. Putin's invasion of Ukraine, in the short term, at least, gave the United States a wonderful shot in the arm, great gift. It pushed Europe into the US pocket. Now, there has been a background conflict since the end of the Second World War, about whether Europe would be essentially a satellite of the United States within the NATO framework, the Atlanticist framework, or whether Europe would move on an independent course, become what was called the “Third Force” in international affairs, a long line sketched by DeGaulle, Willy Brandt’s Ostpolitik, Gorbachev's proposals for a European common home from Lisbon to Vladivostok with new military alliances. That was another option. Well, for the short term, at least, that's been blocked by Putin's invasion, which handed Europe to the United States on a silver platter, best gift he could have given Washington's imperial pretenses. Whether this could last, is very much an open question, because it's not at all clear that Europe can really survive in any great viable way if it breaks from Russia and Eurasia. Notice that Russia is the barrier between Europe and the Eurasian land mass that China is developing so extensively, bringing in the East Asian economies.

The US is, if you look at it in what are called geopolitical terms, the US now is kind of an exaggerated case of what England was for centuries. England was an island off the coast of Europe, and its main strategies were to try to keep Europe from becoming unified. The United States is now kind of an island off the coast of Eurasia, and its goals are to keep it from becoming unified. That means incorporating.

[Wolff] So, let me ask you then what seems to me, the follow-up question. If it is correct, as you argue, that the United States, in some ways perhaps Europe also, is tearing itself apart from within, in the social divisions, class divisions and all the other fighting and splitting of the society apart. And then all it has to hold onto its empire is the military. It doesn't look really good for the United States to be falling apart inside and having to rely on military in the face of the Chinese and other economic powerhouse that outgrows the United States and has been doing that for 30 years. It does look like this is an effort to stop something that has very little chance of success.

[Chomsky] Well, it's very interesting to see how in the internally dysfunctional United States this problem is being faced. So, it's commonly observed that Congress is dysfunctional, can’t do anything. That's a curious way of saying that the Republican party has simply gone off the rails. They're not a parliamentary party in any traditional sense. Their policy is very explicit: announces it will just block everything, make sure that the country will be harmed as much as possible, so it will be blamed on the Democrats, and we can retake power. It's quite open, says it in almost those words. So, the GOP blocks everything in Congress, but they accepted one thing: a “China Competition Act”. The United States’ US infrastructure is falling apart, the bridges are collapsing, the electric grid, it doesn't work, the only end of it, there's a sharp cutback in development, there's a huge shortage of chips, because they're not producing chips here, so what can we do about it? Well, one possibility would be to pass legislation to carry, as during the Second World War, or the First War period, with massive government intervention to develop the economy. Can't do that, so therefore they passed the China Competition Act. We can rebuild our roads and bridges to compete with China. It's the only way it could get through. The only way the GOP would allow it to go through is a China Competition Act. Well, of course, it's symbolic of the internal destruction and disorder.

We, incidentally, today, just today, learned something new about it. There's a new report that came out which people should look at, from Axios, which is usually fairly reliable. It's a description of something that kind of slipped under the radar in the last days of the Trump years. Right before Trump left office, he had a directive establishing what was called “Schedule F” for civil servants, a plan to potentially remove the entire civil service system, - at least the leading elements of it, and to replace them by Trump loyalists. The civil service bureaucracy has traditionally been basically nonpartisan, just keeps functioning whoever's in office. But this was an effort to change it radically, to make sure that the leading elements are Trump's loyalists, and they will run what's left of the government as an organization beholden to the ultimate leader. There's a name for that. That's outright Fascism, not proto-fascism. Well, when Biden came in, he rescinded the offer, the order, but the Republicans are probably coming back, and there's now debate in Congress about what to do about it. The House passed a resolution, calling for legislation to block it. Senate's not going to accept it. GOP won't accept it, because they want it to come back in.

[Wolff] Professor Chomsky, I wish we had much more time. I would like to thank you very, very much. And, to my audience, what can I say? This is a very unusual opportunity to hear somebody explain what has been happening to us, and what we face as we go forward. And, as always, I look forward to speaking with you again, next week.


Transcript by Ed Nelson

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About our guest: Noam Chomsky was born on December 7, 1928 in Philadelphia, Pennsylvania. His undergraduate and graduate degrees are from the University of Pennsylvania. He joined the staff of the Massachusetts Institute in 1955, retiring as Institute Professor after 60 years, and taking a position as Laureate Professor at the University of Arizona. He is a member of many professional societies in the US and abroad and has received many awards and honorary degrees. He has written and lectured widely on linguistics, philosophy, intellectual history, contemporary issues, international affairs and U.S. foreign policy, and has been engaged with many activist movements in the US and abroad.

Latest book out August 30: The Withdrawal Iraq, Libya, Afghanistan, and the Fragility of U.S. Power published by New Press

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Showing 3 comments

  • Sonny Wiehe
    commented 2022-08-14 17:59:04 -0400
    “Arguably, corporate multinational interests have dictated U.S. foreign policy since the Second World War.” Edward Dodson

    Not a hard argument to make. You could easily argue this dictatorship reaches further back to WWI ( assisted largely by the 1913 Federal Reserve Act) when multinational interests first flexed their consolidated global economic power thereby establishing a political coup d’etat across a multitude of sovereign nations simultaneously. The growth of the U.S. debt (facilitated by the Federal Reserve) exploded; it jumped from $1.23B in 1916 to $12.5 B in 1918. It doubled that amount by 1919. At a U.S. debt level of $30.6T today in the U.S. (and with many other governments wallowing in similar debt), the global financial cartels have never looked back on the fabulous profiteering involved with steering governments to their will. Those who hold the purse strings call the shots.
  • Sonny Wiehe
    commented 2022-08-14 17:28:48 -0400
    Why does every answer to any question posed to Noam Chomsky have to result in a diatribe? Sometimes you just need to get to the point already.
  • Edward Dodson
    commented 2022-08-10 15:12:58 -0400
    To add to the perspectives offered by Noam Chomsky, one would benefit by reading Jonathan Kwitny’s 1984 book “Endless Enemies”. Arguably, corporate multinational interests have dictated U.S. foreign policy since the Second World War. I saw this personally as a member of a team of “Western” advisers invited by some Russians in the 1990s to explain why Russia should not privatize ownership of the nation’s land and natural resources or adopt the same financial system that was in the West subject to periodic collapses. Our input was heard but countered by that of the World Bank, International Monetary Fund and economists such as Jeffrey Sachs. Russians, as a result, came under the domination of a self-serving oligarchy and, eventually, the entrenched leadership of Vladimir Putin.
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