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Excerpt: "Europe's policies make sense only on one assumption: that the goal is to try and undermine and unravel the welfare state."

Author, historian and political commentator Noam Chomsky. (photo: Ben Rusk/flickr)
Author, historian and political commentator Noam Chomsky. (photo: Ben Rusk/flickr)



Unraveling the Welfare State

By Noam Chomsky, Stuart A. Brown, Chris Gilson, European Politics and Policy

23 December 12

 

hat do you think the use of technocratic governments in Europe says about European democracy?

There are two problems with it. First of all it shouldn’t happen, at least if anybody believes in democracy. Secondly, the policies that they’re following are just driving Europe into deeper and deeper problems. The idea of imposing austerity during a recession makes no sense whatsoever. There are problems, especially in the southern European countries, but in Greece the problems are not alleviated by compelling the country to reduce its growth because the debt relative to GDP simply increases, and that’s what the policies have been doing. In the case of Spain, which is a different case, the country was actually doing quite well up until the crash: it had a budget surplus. There were problems, but they were problems caused by banks, not by the government, including German banks, who were lending in the style of their US counterparts (subprime mortgages). So the financial system crashed and then austerity was imposed on Spain, which is the worst policy. It increases unemployment, it reduces growth; it does bail out banks and investors, but that shouldn’t be the prime concern.

Europe needs stimulus – even the IMF is coming around to that position – and there’s plenty of capacity for stimulus. Europe’s a rich place, there are plenty of reserves available to the European Central Bank. The Bundesbank doesn’t like it, investors don’t like it, banks don’t like it, but those are the policies which should be pursued. Even writers in the US business press agree with that. If Europe doesn’t change policy, they’re just going to go into a deeper recession. The European Commission just released its report on expectations for next year, which are for very low growth and increasing unemployment, which is the main problem. It’s a very serious problem: unemployment is destroying a generation, which is not a trivial matter. It’s also economically outlandish. If people are forced into unemployment then that’s not only extremely harmful from a human point of view – to individuals – but even from an economic point of view. It means there are unused resources, which could be used to grow and develop.

Europe’s policies make sense only on one assumption: that the goal is to try and undermine and unravel the welfare state. And that’s almost been said. Mario Draghi, the President of the European Central Bank, had an interview with the Wall Street Journal where he said that the social contract in Europe is dead. He wasn’t advocating it, he was describing it, but that’s essentially what the policies lead to. Perhaps not ‘dead’, that’s an exaggeration, but under attack.

Is the rise of the far-right in countries like Greece and France simply another symptom of the eurozone crisis?

There can’t be any doubt. I mean in Greece it’s obvious, though in France it’s been going on for a while. It’s based on anti-Islamic, anti-Muslim racism. Actually it goes beyond that in France. There are things which, amazingly to me, aren’t being discussed. Suppose that France today began expelling Jews from the country and driving them to a place where they would be attacked, repressed, and driven into poverty and misery. You can’t even describe the uproar that would follow, but that’s exactly what France is doing: not to the Jews, but to the Roma, who were treated pretty much the same by the Nazis as the Jews were. They were Holocaust victims. They’re being forced out to Romania and Hungary where they’ve got a miserable future ahead of them and there’s barely a word being said about this. And that’s not the far-right, that’s across the spectrum, which is pretty remarkable I think.

But the developments of the far-right are frightening in Europe. Germany is also experiencing something similar. For example there are neo-Nazi groups in Germany, though they don’t call themselves ‘neo-Nazi’, which are now organising to condemn the bombing of Dresden, claiming that 250,000 people were killed: ten times the actual number. Well, I think the bombing of Dresden was indeed a crime – a major crime – but not the way that neo-Nazi groups are using it. If you go a little farther east, say to Hungary, just last week a legislator, Zsolt Barath from the far-right Jobbik party, made a scandalous speech in which he was denouncing the presence of Jews in decision-making positions: “we’ve got to make a list of them, identify them, get rid of this cancer” and so on. You know, I’m old enough to remember that personally from the 1930s, but we all know what it means. That’s happening in large parts of Europe – mostly through anti-Muslim racism – and it’s a frightening phenomenon.

In the short-term, can you see Europe resolving its crisis?

Right now the eurozone is just putting off its problems – what’s called ‘kicking the can down the road’ – it’s not addressing them. There are serious problems. The eurozone, in my view, is a positive development in general, but it’s being handled in a way that is undermining the promise it should have. I think it’s widely agreed that there has to be more political union. You can’t have a system in which countries cannot control their own currencies and have austerity imposed on them, when they can’t carry out the measures that any other country would carry out if it were in economic crisis. That’s just an impossible situation and it has to be dealt with.

It should also be recognised that Europe is suffering to an extent from its relative humanity. If you compare Europe with North America, the single currency was agreed upon approximately when the North American Free Trade Agreement (NAFTA) was established, but they were done in very different ways. Before poorer states were brought into the project in Europe there were significant efforts made to raise their standards in many ways, using reforms, subsidies and other measures. This was done so that they wouldn’t undermine the employment and living standards of workers in more developed European countries. That’s a relatively humane way of moving towards integration. In the United States, something quite similar was proposed by the US labour movement and even by the US Congress research bureau, but it was dismissed without comment. Instead Mexico was integrated, in a fashion, in a way that was quite harmful to Mexicans and also to American and Canadian workers. Europe is suffering from that.

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+13 # Dom 2012-12-23 15:34
Democracy is not about bowling together but about managing together those powers that immediately and significantly affect the lives and circumstances of others and one's self. Exercising power can be humbling when the consequences are palpable rather than statistical-and rather different from wielding power at a distance, at, say, an "undisclosed bunker somewhere in northern Virginia."

excerpt taken from Democracy incorporated : managed democracy and the specter of inverted totalitarianism by Sheldon S. Wolin.
 
 
+9 # joedeane 2012-12-24 10:50
With a bit of history, we should understand that one of the primary objectives of fascism is replacement of the liberal state with an authoritarian corporate state in pursuit of an empire of nation states. In the USA the form of corporatism that has come about is neo-liberal and the form of empire neo-conservativ e. Destruction of our civil rights and liberties is part of this program. Neo-liberalism is now applied to Europe with the intention of destroying social democracy and liberalism world wide. The reality of neo-fascism is staring us in the face.
 
 
+2 # MindDoc 2012-12-24 18:52
It was staring Charlie Chaplin in the face, too, enough so that he used his bully pulpit, even without words, to visualize the New World techno-fascism on the rise (or anti-human-work erism in the name of "efficiency", "productivity", or "certainty").

http://bit.ly/CCcogs - clip from "Modern Times"

In the holiday spirit... (May I have more porridge, please?)
Be kind... Merry Christmas, Happy New Year!
 
 
-5 # brux 2012-12-23 18:04
> First of all it shouldn’t happen, at least if anybody believes in democracy.

Very interesting .... here's a guy who is one of the foremost experts on language and he rushed right on by the implications of this statement.

Is it that no one believes in democracy, and who are the no ones?

And what does it matter who or if everyone believes in democracy if democracy is in fact not the state that we are in, and not even the direction we are moving?

Noam?
 
 
+3 # RLF 2012-12-24 08:53
" It means there are unused resources, which could be used to grow and develop."

This too is an assumption that Chomsky makes which is typical of modern economics. the world has to get to a no growth, no population growth sustainability or the world is history. Time to stop accumulating and shrink.
 
 
-7 # tonywicher 2012-12-24 11:15
Hardly. There are no such limits. The universe is endless and so is the potential for growth. The ruling class doesn't mind solutions involving killing off six billion people or so. Prince Charles wants to come back as a virus and do the job himself. We do indeed have plenty of resources, but the economic system prevents them from being used.
 
 
+4 # BradFromSalem 2012-12-24 15:15
tonywicher,

I agree with your point and totally disagree with zero growth proponents such as RLF. A policy of zero growth means no scientific advancemenmts, no improvements to thew way we live. It is true we may have already nearly exhausted blind consumption of physical resources, but that is not all there is to growth. Growth will come from re purposing many of those resources already exhausted in their raw form. We can also discover and invent new resources; with new ways to use those and the ones that we still have.

I believe it is more myth than fact that around Lincoln's time someone proposed closing the patent office because everything had been invented. Sounds like a modern Republican's reason to cut a budget.

There is one resource that is totally inexhaustible, the imagination of the human mind. But, of course, we must keep it fed via the imagination food; education.
 
 
+5 # Granny Weatherwax 2012-12-24 18:45
The universe might be endless (still to be proven) but I don't know of anyone living outside this very finite planet, which has no life rafts.

I therefore concur with RLF, although his statement bears being nuanced.
 
 
+4 # brux 2012-12-23 18:11
> Europe’s policies make sense only on one assumption: that the goal is to try and undermine and unravel the welfare state.

Just come out and say it Mr. Chomsky, and if you understand it so well, tell us how this can be stopped if there is not democracy. If it cannot be stopped then what are people supposed to do to avoid large scale unrest or war?
 
 
-7 # MidwestTom 2012-12-23 22:47
Both Europe and the United States are being eaten alive in the manufacturing world by countries that have little or no welfare systems. If we were to stop selling weapons to the rest 0f the of the world we would probably add 4 to 6 percent to our budget deficit. We have increased government support as the unemployment has risen, but we are reaching a financial limit. Europe has already hit their limit. Employed people today whould save as much as they7 can, I am afraid that harder times are coming.
 
 
+12 # BradFromSalem 2012-12-24 08:16
Tom,

How can you say that China has no welfare system? In case you haven't checked lately, China is still Communist, the ultimate in Socialism. The other countries that have absorbed much of our manufacturing have kept costs down because they do have socialist styled programs funded by the entire tax base, not by the lowly paid individuals.

Outsourcing of manufacturing or any other task is not long term cost effective in most cases to medium to small manufacturers. How about instead of building your costing models on silos, use Venn diagrams to determine where the costs overlaps exist. You will find under an integrated analysis that socializing costs actually simplifies the pricing model of both goods and labor.
 
 
+8 # reiverpacific 2012-12-24 12:49
Quoting MidwestTom:
Both Europe and the United States are being eaten alive in the manufacturing world by countries that have little or no welfare systems. If we were to stop selling weapons to the rest 0f the of the world we would probably add 4 to 6 percent to our budget deficit. We have increased government support as the unemployment has risen, but we are reaching a financial limit. Europe has already hit their limit. Employed people today whould save as much as they7 can, I am afraid that harder times are coming.

Now what welfare system is that (in the USA) again?
No comparison can be made here with ANY European country and it's the same forces who keep a social safety net from developing here that are trying to roll them back in Europe via faux-"Austerity".
But they will fail, as once such a net is in place, the average citizen will fight hard to keep it almost sacred.
The US has never been allowed to develop a full safety net since the New Deal and the right is trying to destroy even that.
 
 
+3 # rlhollow 2012-12-24 00:51
"Kicking the can down the road." I don't get that: Aren't we all heading "down the road"? Where else are we supposed to go? Right now, though, Europe just throws away thousands of jobs, because they're starving the consumers.
 
 
+21 # grandma lynn 2012-12-24 01:21
When the Rev. Jesse Jackson ran for President in 1984 and again in 1988 he instructed us about our economy's hemorrhaging with the greatly increased military spending of Reagan's terms. He gestured blood lost from the circulatory system, because money spent on military goods created high-priced goods that mainly were not used (unless we had war). Military contracts employ the lowest number of people compared to other kinds of employment. Countries that are enticed to buy our military goods spend money, there, that isn't being spent on their social needs, so another hemorrhaging is happening. Jackson proposed cutting the U. S. military budget back then by as much as 15%. Instead our military spending has escalated, escalated. We went from nuclear arms race spending (spending Russia out of the picture) to spending in a race with our own yearly-budget spending. I think that in both Europe and the U.S. we are seeing Jackson's reasoning proving true. Military spending is the most expensive and the least employing, and it skews rational spending that keeps the money circulating. It puts it into the hands of the wealthy, though it was public-owned money to that point that it got turned over to military contractors and their investors.
 
 
+8 # grandma lynn 2012-12-24 01:30
In 1984 and 1988 when Rev. Jesse Jackson ran for President, he instructed us about military spending (as under Reagan for eight years) "hemorrhaging the economy." He gestured lost blood flowing from a severed artery. Money spent on military was money taken out of normal, common circulation. Money spent on military was not spent on social needs, and it produced goods we don't use (unless at war). We did and do sell these highest-priced goods to other countries, including the European natins now in economic distress, so in that way we hemmorhage those economies too. Money spent on military contracts employs the least number of people compared to the same money spent on domestic and social needs. Jackson proposed, back then, cutting the military budget by as much as 15%. Instead it has raced ahead, obscene in its size. We spent Russia out of the picture. Now we do a race by ourselves. When we know that Wal-mart, by banking its sales dollars in Arkansas rather than locally, hemmorhages a local economy, we must picture the seriousness that Jackson identified with military spending. What else would we have by now, but too few dollars to do what we need (and increasing national debt) and a rich investor class and banking class that, as the saying goes, made out like bandits?
 
 
+5 # Vern Radul 2012-12-24 02:20
One way to help undermine and eliminate the welfare state is to stop all donations to members of the Democratic and Republican parties.

Which would go a long way to stopping all welfare to wall street and the military industrial congressional complex and undermine the rapidly developing US police state.
 
 
+23 # CragJensen 2012-12-24 03:31
The problem isn't Noam or what he has written here - it's the banks and the governments that collude with banks that are the problem.. And beyond the banks is the wealthiest of the wealthiest elite. There are enough resources to go around and then some. Yet they are not going around because they are being amassed and hoarded by the ultra-wealthy. And - the reason the ultra-wealthy elite grab and hold all the money they can is (in-part) to gain power over other's who are part of the same elite group. And in the process they buy governments and seek to control the lives of all those who are not in their little group.
I would hope that Noam, when he uses the word "democracy" - is talking about a Constitutional Democracy - the kind where individuals have inalienable rights. Otherwise democracy is just a form of mob rule.
But the mob will not rule as long as the ultra-wealthy elite hold the proverbial purse springs. And neither will a healthy Constitutional Democracy flourish, thrive and evolve as long as the ultra-wealthy power elite is ever-so willing and able to buy and control any given government that is in charge of executing the laws derived from its Constitution.
 
 
+19 # CragJensen 2012-12-24 03:32
_continued____

Democracy went up for sale a long time ago and the folks that bought it are probably not the kind of people most other folks would like to associate with. They are liars, cheats, thieves and murderers but boy – can they ever throw a party). They are the true Deciders on this planet and they are devout Fascists. And we, the common folk, knowingly or unknowingly make them richer and more powerful and us – poorer and less powerful by the day.
 
 
+12 # J.L. Morin 2012-12-24 04:25
There are enough economists at the IMF to figure out that 'austerity' in the face of recession will seal the lower middle class's fate. Look at the extravagant party with carnival menu the IMF just threw for its own, right in the face of the the 'fiscal cliff' and other new flavors of 'austerity', clear evidence of the real direction banks are taking.

-- J.L. Morin, author of "Occupy's 1st bestselling novel" TRADING DREAMS, free at Kindle January 2-6
 
 
+6 # wwway 2012-12-24 06:59
Believe in democracy? Democracy is a process that ensures the people get the government they deserve.
In America Republicans have convinced "the people" that their neighobr is getting a better deal in life. This justifies dismantling the very system which has provided opportunities and upward mobility.
Conservatives don't believe in democracy. Never have. Never will. They know that "the people" are selfish, and fickle and easily ungrateful. For example, some truly believe that they should benefit from union organizing without paying dues.
Yes, democracy is a process that ensures the people get the government they deserve. Selling the notion of democracy to end democracy. What a pitty.
 
 
+12 # genierae 2012-12-24 07:02
The problem is unrestrained capitalism that rewards only the wealthy at the expense of the rest of us. In a true democracy, which this country has never been, the will of the people would come first. The common good would be the first priority and our "representative s" in Washington would either work for us or be thrown out of office. Unfortunately the American people have been conditioned to resist collective action by the constant demonization of socialism. I do believe that we are experiencing a new wave of consciousness-r aising across this planet and people are waking up. Rise and shine America, we are living in a new day! It's time to create a new world.
 
 
+11 # Depressionborn 2012-12-24 07:24
The problem is
WITHIN OUR SOCIETY

A great civilization is not conquered from without, until it has destroyed itself from within. The essential causes of Rome's decline lay in her people, her morals, her class struggle, her failing trade, her bureaucratic despotism, her stifling taxes, her consuming wars."
Will Durant,
The Story Of Civilization III
 
 
-12 # moafu@yahoo.com 2012-12-24 07:59
The welfare state concept works perfectly...... ..until the government runs out of OTHER PEOPLE'S MONEY !! That's when things will unravel !
 
 
+11 # independentmind 2012-12-24 10:32
The idea is that everyone pays in and if need be, uses the funds. That means typically that many of us will never use it, some will. The problem comes in when too many NEED it because they do not have jobs that pay a living wage, so even though they work, they cannot make ends meet. The problem comes right back to the fact that there is too much wealth concentrated at the top.
 
 
+3 # jky1291 2012-12-24 17:02
PRECISELY, CLEARLY, SUCCINCTLY, EXACTLY RIGHT!!!
 
 
+11 # dloehr 2012-12-24 09:13
Austerity isn't about economics. It's about removing social safety nets for all but the very rich. Two books come to mind, and both seem important to understand. The first is CONFESSIONS OF AN ECONOMIC HIT MAN by John Perkins. The second is Naomi Klein's THE SHOCK DOCTRINE. The "New World Order" is to be run by bankers, for the rich. But the masses will rebel against this wholesale robbery. So in the New World Order, they must be controlled, by force when necessary. This has been called "the Pinochet option." As Naomi Klein spells out, there are three parts to this wholesale assault on the vast majority of cities. First, sell off the government's services -- which were paid for by the people, through taxes. The code word here is "privatization. " Second, "deregulation," means removing all legal impediments to this theft. Third, "cuts to social spending," is to cripple all but the wealthy and well-connected, creating a two-tier society of the 99% and the 1% (or the .001%). In every country where this has been tried, from Indonesia in the 1960s, Chile in 1972, to the US since 9-11, police/army violence have been necessary to control the masses. While pundits cry that these "human rights abuses" are tragic, Klein put it more accurately. What's going on (now in Europe, beginning to appear here) is an extraordinarily violent robbery.
 
 
+2 # anarchteacher 2012-12-24 10:25
Led by Bismarck in Prussia, the New Right fashioned a right-wing collectivism based on war, militarism, protectionism, and the compulsory cartelization of business and industry — a giant network of controls, regulations, subsidies, and privileges which forged a great partnership of Big Government with certain favored elements in big business and industry.

Something had to be done, too, about the new phenomenon of a massive number of industrial wage workers — the "proletariat." During the eighteenth and early nineteenth centuries, indeed until the late nineteenth century, the mass of workers favored laissez-faire and the free competitive market as best for their wages and working conditions as workers, and for a cheap and widening range of consumer goods as consumers. New conservatives, spearheaded by Bismarck in Germany and Disraeli in Britain, weakened the libertarian will of the workers by shedding crocodile tears about the condition of the industrial labor force, and cartelizing and regulating industry, not accidentally hobbling efficient competition. Finally, in the early twentieth century, the new conservative "corporate state" — then and now the dominant political system in the Western world — incorporated "responsible" and corporatist trade unions as junior partners to Big Government and favored big businesses in the new corporatist decision-making system. The ruling elites performed a gigantic con job on the deluded public, a con job that continues to this day.
 
 
+2 # Joeconserve 2012-12-24 10:41
On this day before we celebrate the birth of our Lord some 2015 years ago I recommend you all to take a moment and reflect on the human person who is basically good.
 
 
+3 # Smokey 2012-12-24 11:18
It's close to Christmas Eve and some comments about community and compassion are appropriate.... Democracy is very important but democracy, by itself, doesn't take us to compassion and social justice. Mob rule has often been a problem. Ask gay men and lesbians, racial and religious minorities, people with mental illness, and other groups that have been kicked around in democratic systems.

What's happening in Europe and in the United States involves more than "the decline of the welfare state." Perhaps we should discuss "the decline of community values, compassion, and civilization." The powerful corporations that manage much of the global economy don't give a damn about what happens in a particular town or nation. Unless there are immediate opportunities to make or protect money.

Government alone won't fix the problem. Although good government is very important. What's needed to secure and maintain justice and kindness looks suspiciously like "religion" and even "anarchy." Something that's voluntary - because religion that is forced is just another form of government - and cooperative and that's concerned about individual needs.

Religion and anarchy? ("Communitarian ism.") Something to think about on Christmas Eve and on other occasions. At some point, try to get beyond government and power politics.
 
 
+3 # ajd3dahm 2012-12-24 12:16
The attack on the social contract appears to be related to the diversity of the citizenship. The Scandinavian states are homogeneous and are strong social welfare states. Attacks on social services in the US are usually against the undeserving, associated with people 'who are not like me'. There was strong support for welfare programs in northern Europe states before the Euro-community was formed.

It is time to look critically at the causes of the breakdown of the welfare state and deal with the racism that is at its core.
 
 
-1 # Mannstein 2012-12-25 19:29
Greece's major problem is tax avoidance on the part of the rich to the tune of 30 Billion Euros annualy. This may not sound like a lot by US standards but for Greece it is huge. The new Greek Finance Minister is trying to cure this problem by overhauling the tax system. Why should northern EU countries' taxpayers be on the hook for Greece's debt while wealthy Greeks cheat on their taxes? If I were a German taxpayer I'd be pissed as well. As for the Dresden death count 35,000 bodies were positively identified shortly after the destruction. Bodies which could not be identified were included in the count. There were certainly more than 35,000. Many of the victims consisted of the 600,000 refugees from Breslau in the east who had arrived in the city attempting to flee the Red Rapists.
 
 
+1 # TomThumb 2012-12-31 11:23
The purpose of this manufactured debt crisis is to pare back or, ideally, end social programs. At least in the US, the same people whe manufactured the crisis are the ones now shouting about the urgency of solving it.
Forcing or tricking a nation to incur large amounts of debt and then using that as a hammer to extract further wealth from the population is the favorite method of neo-colonialism or neo-imperialism . Tommy Rimes
 

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