In my readings for graduate school, I have been introduced to authors that one does not commonly find in retail bookstores, as academics often do not write for the public, and their material tends to be dry – too much information and not enough conclusions. Consequently, well-researched academic work does not usually sell as well as popular “non-fiction.” I feel fortunate to have chosen a course that requires evenings spent grinding through works which are not always interesting because the benefit has been that I have a broader perspective on history and current events than I would have from reading popular literature. When I come across works by popular “intellectuals” on bookstore shelves, I often feel that their world views are shaped by misunderstandings of current events or a lack of perspective that comes from selective memory - reading history only for evidence that supports popular, and hence “saleable” conclusions.

This explains the persistence of socialist and populist ideas even after nearly a century of history that repudiates socialism’s most basic assumptions about the world. Part of the fault lies with the universities, where professors who were students during the 1960s still hold fast to their cherished beliefs about social justice and class struggle, despite mounting evidence that these beliefs are based on fundamental misconceptions about the real world. The faculty (and students) of U.S. universities are not alone in the hemisphere in allowing their own emotions to override their professional discipline. Until recently, the University of Guadalajara called itself a popular, socialist, Marxist university (una universidad marxista, socialista, y popular), and the University of Mexico took a similar point of view even though they did not state it so formally. In Mexico, the liberal arts have been taught in conformity with Marxist and populist ideologies for decades. This introduces into the classroom a set of beliefs that are class-conscious, moralistic, and which favor authoritarian political systems. The students then take these ideas with them, and embrace them as a component of a liberal education. The University of Guadalajara’s former motto indicates, “Marxist,” “socialist,” and “popular” are synonymous in the public mind. They are synonymous because of the natural tendency of well-meaning people to side with life’s underdogs – the “folk” as one of my least-favorite authors called them. That’s fine, but the equivocation lies in the next step: taking the side of the poor implies taking a stand against the “rich.” No one with a moral conscience can fail to be moved by the of poverty and misery in the world, and to suspect that the guilty parties are those who stand opposed to the poor on so many political issues: their oppressors, “the rich.”

According to popular, socialist thought, it is the rich who cause the world’s poverty and misery. This oversimplified and misconceived view is a result of the triumph of feeling over thinking – of emotion over logic – and is a testament to the propensity for smart people to embrace emotional issues, unrestrained by academic discipline or a respect for unpleasant realities of human nature and economics. It disregards the complexity and depth of societies – even highly stratified societies – and fosters an “us” against “them” mentality as one looks at world social and economic issues. Consequently, many well-educated people do not support capitalism, as they see in it an endorsement of unregulated commercial exploitation. That explains why in academic circles, “neoliberalism” is always substituted for “capitalism” or “free enterprise,” as it is meant to imply a return to the liberalism of the nineteenth century (hence “neo”), and the monopolies and excesses that accompanied it.

I am personally not in favor of unregulated capitalism any more than I am in favor of over-regulated capitalism. I think that the state has a duty to protect its citizens, and that duty is exercised through prudent regulation. On the other hand, I do not accept the division of the world into “the folk,” and the “the rich” who exploit them. This is simplistic and argumentative. It ignores the universality of economic behavior, and the desire of nearly all people for self-enrichment and self-expression. It ignores the nearly universal failure of state-run economies and of “popular” policies that emphasize current consumption (state spending) over less generous but more sustainable “neoliberal” policies. What is true for policy within countries is also true for policy between countries. The world is not a “zero-sum” game, wherein the wealth of some countries comes only at the expense of others. This is dependency-theory nonsense.  Neoliberal economic policy is concerned with both maximizing profits and maximizing individual economic (and political) freedom, while state-enforced remedies for “social justice” always require that wealth be confiscated from those who create it, and distributed to those who are not necessarily most needy, but who are most politically relevant. The ironic result has been that “populist” ideology promotes policies that are both authoritarian and economically unworkable! The poverty in the Third World has many causes, most of which are internal: authoritarian government, state manipulation of the economy for the benefit of privileged groups, an under-educated workforce, and overpopulation… to name a few.

Among many U.S. intellectuals, profit is associated not only with exploitation, but with consumption, which is considered vulgar as well as selfish. This is precisely because we already consume anywhere from 10 to 50 times what our counterparts in the developing world consume (depending, obviously, on what country you use for a comparison). Ironically, most of the world is concerned with increasing their level of consumption. What is vulgar here is a matter of adequate food, clothing and education elsewhere. With that in mind, I want to introduce the proposition that, despite cultural differences, the "economic behavior" of people around the world is remarkable similar and naturally capitalistic. Despite cultural differences between peoples, economic behavior is based on a remarkably similar set of standards and expectations across nations and cultures. Whether one is selling produce in a mercado al aire libre in Valparaiso or cellular phones from a store in Monterrey, Mexico, or selling real estate in New York City, one’s primary interest is in making a profit. To that end, one expects certain legal protections for one’s property and for enforcement of agreements with others. One relies on transportation and communication to stay in business. One manages for efficiency of time and money. The merchants, the salesman, the entrepreneur, all seek their own economic benefit, regardless of their respective culture. In doing so, they each seek ways to reduce risk, cost, and uncertainty. The result is the pursuit of efficiency and profit has been the engine for creating incredible wealth in the world.

The fact that it is so unevenly distributed is often the result of a lack of governmental support for policies and legal protections that reduce risk, cost and uncertainty, or that reduce the barriers to economic participation by those living on the margins of life. The history of popular authoritarian governments in the Americas is a showcase of  arbitrary or destructive government policies and disrespect for individual property rights. These policies are meant to protect against economic realities and the process of "natural selection" in a neoliberal economic environment. We all want to be protected, even from reality itself. This protection, however, is unsustainable, and interferes with the process of competition that encourages efficiency and productivity. There is something to be said for the social benefits of competent management and efficient use of society’s resources – both natural and human. Economist Joseph Schumpeter used the words "creative destruction" to describe the process of competition in which some enterprises and groups (as well as political institutions) fail while others endure. This process does not universally benefit the “rich” at the expense of the “poor,” but rather bestows benefits and costs across national and class lines. Change always works to the disadvantage of some and the advantage of others, which explains why opposition to free trade comes from multiple sectors of society. This is an aspect of human nature that must be acknowledged if one wants to talk about meaningful solutions to poverty. 

The fight against global capitalism is a fight against the uncomfortable process of change, and the charge of “unfair” competition represents insecurity in the face of unpredictable results. Fear of change is not confined to labor. Protected industries in each country are on the side of the “working classes” when it is politically convenient. They want to preserve the government subsidies and trade barriers which spare them from competition, just as U.S. labor unions want to preserve the level of wages and benefits which they have come to regard as an entitlement of life in the United States. This provides the fuel for the argument that industry in the U.S. is not actually in favor of “free markets.” What advocates of this point of view have uncovered is that businessmen, like consumers and labor leaders, favor whatever policy benefits them economically in the short-run. American labor unions and protected industries, like other opponents of free trade, recognize that open markets imply competition, which implies risk. Technology and open markets accelerate this process of change, making it even more threatening.

One of the best books I have read about the universality of economic behavior and the internal causes of Third World poverty is Hernando De Soto’s The Other Path: The Invisible Revolution in the Third World. It is a study of the informal economy of Peru done by De Soto and his group of researchers in the late 1980s, and De Soto’s group showed actually went through the processes necessary to license and operate numerous small-businesses, such as opening a market stall or driving a taxi. His study showed that the costs imposed on small operators and entrepreneurs by the state bureaucracy were tremendous, and helped explain why the “informal” economy constituted about 60% of the Peruvian economy. He found, for example, that it took over seven months to register a garment shop with the Peruvian bureaucracy, and cost $1,230 (USD) in fees and licenses. That represented 31 times the monthly minimum wage in Peru, and condemned most of the working poor to life in the informal economy. Without official recognition, these working poor had no legal legitimacy; no legal means to enforce contracts or to borrow money, or the security that allows for any kind of long-range planning.  De Soto’s work has since had a remarkable influence in South America, and his Institute for Liberty and Democracy now works with governments and private foundations across the globe to promote “poor people’s capitalism.”

I was looking for this institute on the Internet, when I ran across an article titled “Democracia y Mercados en el Nuevo Orden Mundial,” written by American author and liberal intellectual Noam Chomsky. I was both horrified and fascinated, having read Chomsky’s previous work and found it a classic example of populist New Left thinking. When I found his ideas translated into Spanish and posted on a website under a title which suggested a contradiction between "democracy" and "markets," I was soon diverted from my original purpose. I never did find Hernando de Soto's organization on the Internet, but have taken some time instead to translate Chomsky's article for myself, and to write this essay in response. As editor of a website magazine that promotes the discussion of issues such as globalization between cultures, I hope to generate an inter-cultural discussion about globalization, and Chomsky's essay provides me with a good point of departure. I am trying to contact the party responsible for its publication for permission to reprint it on the Café Mundo website. (In case I’m not granted that permission, you can read Chomsky's article in Spanish on the internet at the site http://archipielago.org.)

How do I introduce Noam Chomsky? He is a linguist by training, and (former?) professor at Massachusetts Institute of Technology. His essays are contemporary, critical, and focused on New Left themes. His work is polemic, and full of harsh attacks on the usual suspects: the United States, international corporations, the "rich," and capitalist institutions. Although his writing is strident to the point of sarcasm, he maintains the pretense of objectivity by incorporating a lot of historical examples – particularly from the period from World War II to the 1980s. There he finds ample ammunition for his contention that the history of the U.S. and the Third World shows that the U.S. is a military and economic predator, with an agenda of economic conquest and suppression of human rights. The argument follows that free trade and international lending policies are nothing more than a cover behind which the U.S. operates to extend its control over other sovereign nations. In this role, the U.S. acts not for national security, but for powerful commercial interests (who apparently run the U.S. government). Their agenda is to maintain Third World populations in virtual servitude to their own interests.

For a quick review of Chomsky’s major themes, you can buy The Chomsky Trilogy that contains three short books: What Uncle Sam Really Wants, Secrets, Lies and Democracy, and The Prosperous Few and the Restless Many.( Chomsky is self-published, and promotes his voluminous work in each of these issues.) His books are representative of  “popular” intellectual thought, which relies less on academic credentials than on popular sentiment for its success. This is not to say that Chomsky has no academic credentials. He has been called “brilliant” for his work in linguistics, particularly for his discovery of the link between language and human neurology. What is interesting is that he did not become a popular intellectual figure until he began to lecture and write about topics entirely outside of his area of expertise, beginning with the Vietnam War. Chomsky has taken popular sympathy issues such as globalization and inequality, and become an intellectual spokesman for the poor and the working classes, although I seriously doubt that he has spent much time side-by-side with the blue collar workers, or that he has any idea what it is like to be a migrant from the countryside looking for work in Latin America. How does this man hold himself out as a representative of the poor with any credibility? He is accepted on the strength of his convictions, and his moral outrage at inequality – all of which says something about the credulity of his readers and their willingness to accept the “popular” socialist world view. 

Popular intellectuals present the “neoliberal” as an economic creature with no soul, and no sense of responsibility for his or her  fellow man. He must be constrained by civil society, presumably through government activism. This keeps the neoliberal from becoming wealthy the only way that the popular socialist model sees wealth being created: at someone else’s expense! Chomsky apparently shares the “popular, socialist” world view that the world's economy is a "zero-sum" game - that the system that has made some countries wealthy necessarily impoverished other countries in the process. This world view is fundamentally and logically flawed. It holds that the world is divided into two classes of people - rich and poor - whose interests are naturally opposed, and who are therefore naturally locked in a "class war." To make this simplistic world view even less complicated, and at the same time emotionally appealing, identifying them with corporations dehumanizes “the rich”. The role of corporations in the world can be understood simply in terms of exploitation: corporations are the steamrollers and the workers are the pavement. The rich are at the controls of the steamrollers.

Given this view of the way people interact economically, it follows that to fight class oppression; one must take up the fight against corporations as a moral obligation. They are, after all, the soldiers of the rich in the war against the poor. In criticizing Chomsky's work and this set of assumptions which he shares with much of the academic world, I am hoping to encourage a more complex, and more complete view of the world - one that recognizes that corporations are just voluntary associations of individuals who join together to invest in a common enterprise and make money - that corporations are not inherently evil, nor do they have identities and personalities separate from those of the people who run them. What I want to suggest as an alternative to the popular, socialist paradigm is that the interests of the various economic classes that make up all societies are often harmonious. When corporations make money, the benefits accrue not just to their stockholders and managers, but to the workers as well. Conversely, that cheap labor is not as reliable a guarantee of profits as productive labor, and productivity is a function of education, motivation and technology. A workforce that functions on starvation wages is useful for only the most low-level type of manufacturing, and gives the company only a temporary cost advantage in a competitive world where productivity and not low wages ultimately determines profitability.

A summary of the popular, socialist ideas to which I want to respond are: that the world is a contest for power between "rich" and "poor," that the poor create wealth which the rich expropriate, and that the poverty of developing countries is a deliberate result of U.S. bullying and corporate greed. These are false or arbitrary constructions. The world is more complex than this in a number of ways:

- there is a large and growing international "middle class" that has risen in the late twentieth century, and which enjoys a degree of wealth and freedom that is unprecedented in history;

- the poor aspire to be "bourgeoisie" in every modern state, and engage in very similar forms of economic behavior where there is economic opportunity;

- the spread of liberal politics (in the classic sense), is replacing dictatorship and oligarchy with tolerant liberal societies, creating a world where the individual has more power and more freedom than ever before to pursue his own economic rewards;

- moreover, the movement toward open politics and tolerant forms of government is complimentary to the process of globalization, and the increased interdependence it brings.

With that summary of my general objection to the popular socialist paradigm, and to Noam Chomsky’s scholarship, allow me to go through his article  “Democracia y Mercados en el Nuevo Orden Mundial” for a look at the specific arguments and evidence of the global capitalist agenda, and its sinister consequences. It is unfair to take cuttings from another scholar's work and argue against them as isolated statements, yet Chomsky's work lends itself to this kind of criticism because he tends to make a number of loosely related points which contribute to his overall assault on capitalism, U.S. foreign policy and corporate interests. In other words, his critique is aimed loosely at a number of evils, which he implies are related by a shared interest in capitalism and the projection of U.S. power.

Rather than take Chomsky's article point-by-point,  I will try to extract what I feel are the core arguments and discuss them. Otherwise, one is bogged down in rhetorical issues such as Chomsky's long discussion about whether or not the U.S. has a moral right to act in a "unilateral" manner when its interests are at stake. He implies that U.S. foreign policy should be "multilateral" - meaning that the U.S. should give up its prerogative to act independently on the international scene. He states plainly that the U.S. attempts to deny developing nations their right to act unilaterally, while reserving this right to itself. I also will not respond to charges that U.S. actions in Central America have left these "client" states "devastated" and "covered with hundreds of miles of tortured and mutilated corpses." In a contest of literary hyperbole, Chomsky will win, and I don't feel that I can defend the actions of the U.S. government in Central America anyway.

To defend capitalism and free markets is not to defend United States policy toward Latin America, which has been tragically misguided. This was particularly true during the climax of the Cold War years. In the article posted on the Internet, Noam Chomsky relates how the U.S. government's fight against "communism" translated into support for repressive military regimes, particularly in Central America. So it was. U.S. aid to the government of El Salvador, for example, amounted to over $4.5 billion during the 1980s, and constituted as much as half of the Salvadoran government's entire budget. U.S. aid propped up unpopular dictatorships in Nicaragua, Guatemala and El Salvador in particular, and prolonged the period of state-sponsored terror these governments employed against their own citizens. Chomsky and other members of the New Left refuse to see U.S. policy as an unfortunate outgrowth of the Cold War mentality that has dominated U.S. foreign policy since before World War II. Instead, Chomsky sees the Cold War as nothing more than a convenient excuse for the U.S. government to do what it has wanted to do all along: crush popular elements striving for self-expression in Vietnam, Central America, and the Middle East. The rhetoric about the menace of Communism has been only a thin disguise for protecting the interests of international capital. Although this is supported by what Chomsky's publisher calls "massive evidence," it is a conclusion that is actually supported only by a very selective reading of the facts. The U.S. had no more commercial interests in Guatemala than it had in Vietnam, and the expense of propping up an unpopular dictatorship only made sense in response to a military threat - however misguided that perception was. If the U.S. aims had actually been commercial, more subtle forms of coercion would have served them more effectively than did prolonging a civil war!

Actually, U.S. policy in Central America had a schizophrenic character since the 1970s, when the Carter administration linked military aid to human-rights considerations through the 1980s, when the U.S. supported the efforts of the peace proposals of the OAS, and the linking of continued aid to progress in the peace talks with the FMLN and the URNG. After the peace accords of 1992, the U.S. supported the efforts of the UN Observer Mission and the Truth Commission, which documented 22,000 reports of human rights abuses and named 102 Salvadoran military officers in connection with those abuses. All I can offer in defense of the U.S. policy of military aid and involvement in Central America in the 1980s is the observation that after the fall of the Russian communist party collapsed in 1989, U.S. military aid to Central American dictatorships sharply declined. After the “communist threat” no longer had any credibility, U.S. foreign policy came more into line with the rhetoric of support for “self-determination” of peoples.

Furthermore, military intervention in Central America was undertaken as an ideological enterprise by the Reagan administration and its supporters. I have come across no evidence that U.S. corporations were behind this, or that they exerted their influence in Congress to continue military appropriations. In fact, Congress struggled with the administration over this issue throughout the 1980s. As early as 1982, the U.S. Congress was fighting the Reagan administration over military appropriations to Central America. Reagan repeatedly invoked presidential emergency powers to send money to the Salvadoran government without Congressional approval. When he unveiled the Caribbean Basin Initiative in 1982, Congress supported it for its economic development features, but limited or eliminated military aid components. When the Initiative passed Congress, it allowed for $10 million in military aid to Honduras, but appropriated none of the $35 million in military aid that Reagan had requested for El Salvador. (For a comprehensive account of U.S. policy in Central America during the 1980s, let me recommend William LeoGrande's book, In Our Own Backyard, (Chapel Hill: University of North Carolina Press, 1998)

  After the end of the Cold War, Congress became more aggressive about limiting aid to Central American states, and tying aid to progress on human rights. In 1990, the U.S. Senate withheld half of El Salvador's military aid until the Cristiani government "demonstrated good faith" in its talks with the FMLN, put an end to military assassinations, and opened an inquiry into the deaths of six Jesuit priests killed at the Central American University. USAID and the Inter-American Development Bank directed U.S. aid and loans to El Salvador's National Reconstruction Plan and other investments in education and infrastructure. One may rightly say that these actions were "too little, too late," but they support my point that the U.S. was in Central America out of a misplaced fear of communism insurgency, rather than as part of a capitalist/imperialist agenda or class war against the poor. If our purpose really had been to oppress the poor, the U.S. could certainly have found new excuses to continue military aid to Guatemala and El Salvador after 1989.

This accusation of committing (or funding) atrocities out of economic self-interest is particularly offensive to me, as I feel that it is an unscholarly and manipulative argument. It reminds me of the argument the New Left put forward about Vietnam: that the war was fought for the benefit of U.S. corporations who profited from government military contracts. Chomsky states that the Cold War was nothing but a pretext to kill troublesome campesinos and preserve the influence of foreign bankers and multinational corporations in the region. This is spiteful nonsense. The U.S. deserves criticism for its misguided efforts to "contain communist insurgency" in Latin America, just as it does for Vietnam. These wars, however, were not profitable for the U.S. taxpayer to whom Congress and the President are ultimately responsible. The argument that the U.S. government has been run by large corporations, especially those industries profiting from military sales (General Dynamics and Lockheed?) needs some substantiation before it can be given any credibility.

This entire argument fits nicely into the socialist world-view of the New Left, but ignores the influence the Cold War has had on U.S. policymakers since before World War II. Fighting Communist "aggression" has been the single most forceful idea in U.S. foreign policy in this century, and is still being voiced today by Republican congressmen to justify continued sanctions against Cuba. U.S. industry could only profit from a reduction of the trade barriers to Cuba, yet they are prevented from this opportunity by the very political leaders that the New Left says are under corporate control! This is contradictory, and indicates that anti-communism is more than empty rhetoric. If there are Congressmen today who still believe that Castro represents a "communist threat" to Central America, imagine how strong this misperception must have been during the Reagan years. As paranoid and misguided as U.S. efforts to "contain communism" have been, they were not behind-the-scenes efforts of U.S. corporations to make money from the destruction of other countries. That position is both cynical and unsupportable.

Chomsky even states that President Bush's involvement in Panama was intended to restore power to a "clique of European bankers and drug traffickers." How, I wonder, did the U.S. benefit by installing European bankers and drug traffickers in power in Panama? Chomsky supports this argument indirectly, saying that the U.S. invasion of Panama was just business as usual for the U.S.. It represents a continuation of U.S. foreign policy since Woodrow Wilson invaded Haiti in 1915. Well, I confess that it was in the tradition of the Monroe and Roosevelt Doctrines that maintain that the U.S. has an interest in keeping order in the Caribbean. Despite the obvious moral case regarding intrusion into another country's domestic affairs, the U.S. presence benefited Haiti economically. The marines built roads that connected Haiti's rural farmers with the cities, and gave them better access to urban markets. The U.S. built irrigation and telephone systems, which contributed to the country's economic growth. The U.S. trained a professional national guard to keep domestic peace. Sugar, cotton and coffee exports increased under U.S. occupation, partly because of infrastructure improvements and partly because of the improved business climate that comes with stable government.

When the U.S. left in 1934, a series of strong-arm presidents ruled until 1946, when a coup placed Garde d' Haiti in control. Two more dictators followed - "Papa Doc" Duvalier and his son - who ruled until 1886. I wonder... if Noam Chomsky had to choose a period when he would have lived in Haiti, would he have chosen the time under American occupation, or under a Haitian dictator? This is not a facetious question. "Self determination" is an ideal that applies only to countries with democratic processes. Before unilaterally condemning U.S. intervention in Latin America, I would like to see some evidence that "the folk" were either represented in their own governments, or that they were economically better off without U.S. intervention. The two cases I will concede in advance are Chile in the 1970s, and Guatemala and El Salvador under the Reagan administration, but those represent extremes in U.S. policy mistakes.

Chomsky's condemnation against the U.S. is full of historical examples from the Cold War era. In one case, he quotes John Foster Dulles, Secretary of State under Eisenhower and architect of the Cold War policy of "massive retaliation." Dulles's comments to Eisenhower about Communism's appeal to the poor is intended to serve as evidence that U.S. government policy has been a tool of a global capitalist project for the last 50 years. This is an equivocation. Chomsky wants the reader to assume that the comments of one of America's most extreme Cold Warriors is representative of American policy under Bush and Clinton. John Foster Dulles' "massive retaliation" speech in 1953 cost the U.S. the support of its European allies Vietnam. The Europeans heard Dulles and concluded that the U.S., was prepared to use nuclear weapons in Vietnam - a logical assumption given Dulles' view of the revolution in Vietnam as a direct projection of the Soviet power! I do not feel that it is objective or scholarly of Chomsky to compare actions and policies of the U.S. during the early 1950s with U.S. policy today. In fact, I don't think it's fair to compare U.S. policy under Ronald Reagan with U.S. policy today. The world situation has changed, and so has the willingness of the U.S. Congress and the U.S. public to allow U.S. intervention in other countries for "security" interests. The war in Kuwait, the intervention in Somalia, and the occupation of Kosovo were all in response to war initiated by other parties, and were done for humanitarian reasons as well as for U.S. security concerns. In fact, other than protecting oil supplies in the Middle East, it is hard to imagine how the U.S. profited or hoped to gain from its humanitarian missions under the Clinton administration.

Aside from deliberately introduces a bias into his argument, Chomsky leaves unanswered the question of how one mitigates the “destruction” in the economic process of creative destruction, while retaining its good features. Frankly, I don’t think Chomsky has an answer. He is more interested in expressing moral outrage, than in the risky proposition of proposing solutions. Popular intellectuals become best-selling authors and highly-paid speakers by appealing to the public’s sense of injustice; not by educating the public to the complexities of workable solutions. Having said that, I must concede that Chomsky and other advocates of protectionism have a point to make in that the “destruction” in creative destruction should be mitigated to lessen the suffering of those whose jobs are at risk. This is an argument for political intervention in the name of compassion; not an argument for replacing capitalism with less dynamic institutions.

As for the “creative” or dynamic aspects of capitalism, they can be preserved in emerging economies through a similar process of mitigation. Most industries in developing countries are at a disadvantage to their wealthy and technologically advanced competitors. Global competition not only threatens their inefficiencies: it threatens their existence. Here there is a good argument for a limited period of government protection to allow domestic industry to develop. Recent history has a lesson to teach in this regard. The countries most successful in developing internal industry used government protection for a limited time, and did so to prepare themselves to compete internationally (Korea and Taiwan). The countries least successful in developing internal industry used government protection as a permanent subsidy, linked to a political spoils system that purchased loyalty to the government (Mexico). In a world where change is inevitable, the best way to protect those who lose in the short-term is to provide them with short-term protection, and the tools and opportunities to prosper in the long-term. To do otherwise ignores the history of statist economic policies, and the ironic consequences to all sectors of society when government attempts to “protect” everyone.

My favorite example is Mexico, which successfully chained economic development to the political process for most of the 20^th century, and achieved enviable growth during nearly forty years following World War II. The Mexican miracle was funded by oil and borrowed money, however, and made unsustainable by politicians who used economic policy to “buy” political patronage. When the inevitable occurred, and Mexico’s government expenses and debt became unsupportable, the country suffered the economic collapse of the early 1980s. This was followed by the austerity measures of Miguel de la Madrid, Salinas de Gortari and Ernesto Zedillo, which the New Left would say put Mexico under the thumb of “international capital.” It also reduced the government’s participation in the total economy from over 25 percent in the early 1980s to less than 8 percent by 1993. For those who believe that the interference of the IMF and the World Bank in the affairs of Latin American countries is “undemocratic,” consider that popular elements of Mexico and other popular-authoritarian states have been incorporated into the government only through co-option. In other words, their loyalty was purchased by government handouts and subsidies – continuing a patron-client relationship that dates back to colonial times. No wonder that the Mexican people just removed the PRI from office once they had the opportunity to do so by civil action. The hint of revolution was in the air the night of July 2, as the “official” election results began to come it, and people began to gather in public squares and plazas in cities throughout the country! Mexican society has been subordinate to its own government for over seventy years – its loyalty purchased with government subsidies and promises. The election shows that the Mexican people have come to identify their own government’s management of the country as the source of much of their misery. My wife is from Guadalajara, and she speaks sadly of the twentieth century as one of lost opportunities for Mexico.

Mexico’s case, like that of Brazil, Argentina and Chile in earlier years, serves as proof that authoritarian regimes are NOT the result of “neoliberal” economic policies or intrusion of international capital into the affairs of sovereign countries. I have already conceded the examples of U.S. intrusions into Chile and much of Central America under the Nixon and Reagan administrations, but it is important to realize that these represented misplaced fears about U.S. “security interests.” Unfortunately, these examples are used to identify capitalism with authoritarianism and oligarchy. Actually, “populist” governments in South America that followed socialist policies (Argentina under Perón, Brazil under Vargas, Mexico under Echeverría) were not democratic. They acted as agents for the poor, but did not install the political institutions and legal systems that promote popular participation and protect individual rights. They were just as authoritarian as the military governments that replaced them.

Chomsky avoids a broad look at South American history in order to concentrate on the injustices associated with U.S. interventions. He then makes that since the U.S. was involved in supporting military governments, that such behavior is an inevitable result of the institutions of capitalism. This is an equivocation that confuses U.S. foreign policy actions with free market institutions in general. Actually, capitalism has succeeded in replacing popular, socialist economic systems on its own merits – through attraction rather than oppression. The United States can no more impose capitalism on an unwilling world than it could impose its will on a small Southeast Asian country. It can no more create a capitalist “new world order” than could the Soviet Union create a communist “new world order.” Individual countries will ultimately get the political and economic systems that they choose, and that they deserve.

With that point, I will close this critique of Chomsky’s article, and of the “socialist, popular” world view. There is much more that can be said about this subject, but the I have made the most important points that I think should be made to the reader. They are summarized below.

The socialist world view of the New Left is popular because it is moralistic, and attractive to people who are concerned with injustice. It is both appealing and flawed in its simplicity, for it allows even the least educated a moment of dignity, as they rise above the crowd on the strength of their moral indignation.

The idea that some nations are poor because other nations are rich promotes a mistaken “zero-sum” view of economic relationships. No one in Latin America is poorer because Bill Gates (of Microsoft) is a billionaire. Quite the opposite: one person’s wealth creates another person’s opportunity.

Self-interest is not a North American or European cultural trait, but a universal feature of economic behavior. Consequently, the most enduring and successful institutions are those that provide a political and legal framework that promotes individual responsibility and legitimizes the individual’s “pursuit of happiness.”

Noam Chomsky is an advocate for the simplified world view that reduces human relationships to “class war” between the rich (acting through corporations) and the poor, who provide the wealth that corporations exploit. This variation of dependency theory leads to the false premise that social justice is achieved by imposing the interests of “the folk” over the inhuman institution of the corporation. The state, of course, becomes the agent and proxy for “the folk” with ironic consequences.

Chomsky’s historical proof of the United States’ agenda for world domination is based on the deplorable actions the U.S. committed in developing countries during the Cold War. The words and actions of John Foster Dulles and Ronald Reagan do not represent the intentions of the U.S. today. More to the point of his essay, Chomsky’s litany of U.S. atrocities is not proof of any kind that capitalist institutions rely on state terror for their success.

Lastly, and perhaps most important, liberal intellectuals find much to condemn in their moralistic approach to world problems. Like the university professors who teach about things they have never experienced, popular intellectuals offer moralistic rhetoric in place of workable solutions. State sponsorship of marginalized groups ha been tried in many countries under many forms – usually with ironic results. When a nation’s economy is managed for ideological or political ends, the result has been that everyone suffers – rich and poor together.