Kicking Away the Ladder, Part 2

If you look at the state sector in the United States, your taxes have been
funding growth for years. Now the funding is shifting. Pentagon funding
is declining and funding for the National Institute of Health and other
health-related parts of the government is going up. 

Take a look MIT, take a look at the funding that is going on. There is
a pretty of good reason for it. 

In the early post-war period, the first 25 years, the cutting edge of the
economy was electronics-based and the way to fool the public into paying
for that was to scream, “The Russians are coming” or “Grenada is coming”
or somebody. Then we have to have a big defense system and fund the computers
and Internet and microelectronics and so on, and later hand it over to
private corporations for profit. 

But now the cutting edge of the economy is biology-based, so therefore
government funding has to shift—you have to have some other excuse for
government funding: we will cure cancer, whatever it is. Meanwhile you
have engineering and biotechnology being paid for by the same people, namely,
you, with the profits going to whatever private corporations will be able
to milk them when something is developed. 

There are a lot of different devices. Like one critical part of the trade
agreements is what is called Intellectual Property Rights and that is a
fancy term that means “state guaranteed monopoly pricing rights.” So pharmaceutical
corporations can charge very high prices because they have a monopoly and
that monopoly is given to them by state power under the pretext of free

They claim that they need it for research and development, but that is
a fraud. It has been well investigated by Dean Baker, an excellent economist.
 You can get some information on this from a book he just wrote, which
is actually free if you go online.  It is called The Conservative Nanny
, which is about the real economy. One part of that has to do with
the production of drugs. Baker calculated that if you increase the state
subsidy to 100 percent and force the companies on the market, drug savings
would be a huge benefit for consumers. But that is not the way existing
capitalism works. 

Let’s turn to NAFTA in 1994. Something happened in 1994 along with NAFTA.
 It was called “Operation Gatekeeper,” instituted by the Clinton administration.
It militarized the U.S./Mexican border. Previously it was a fairly open
border. Like most borders it was established by conquest. But pretty much
the same people lived on both sides and moved across the borders in both
directions, but that was not going to work anymore after NAFTA. They had
to militarize it. 

Why? Well, it was understood what the effect of NAFTA was going to be for
Mexico. Mexican farmers were not going to be able to compete with state-subsidized
U.S. agribusiness. So people were going to flee and a lot of them were
going to flee to the United States. They were going to be joined by people
fleeing from the wreckage of Washington’s terrorist wars in Central America
in the 1980s. So what is the solution? The solution is to build a wall.
First, destroy their economy and then keep them out. 

There is a real solution, promote or at least permit development. But that
is counter to the interest of those who pretty much rule the world, or,
at least, own it, or hope to. 

Well, control of Latin America has been the earliest and major goal of
U.S. foreign policy—and it remains very central. That is partly for resource
and  market investment, as well as for ideological reasons. These are discussed
in internal records where planners point out that we cannot expect to achieve
a successful order elsewhere in the world unless we control Latin America.
So it’s important to keep it under control. There are traditional methods
of control—violence and economic strangulation. But they are losing their

U.S. military coups used to be routine. The most recent attempt was 2002
in Venezuela, and Washington, of course, supported the coup and probably
instigated it. The coup installed a rich businessperson and his first act
was to disband Parliament, eliminate the Supreme Court, and get rid of
every other vestige of democracy—that’s what the U.S. calls “democracy

The coup was quickly reversed in a popular uprising, restoring the elected
government. Washington had to turn to subversion, a propaganda war, and
very substantial aid to the supporters of the coup, under the guise of
democracy promotion. For example, the opposition candidate in the election
supported the coup. Can you imagine what would happen in the United States
if there was a military coup and one of its supporters then ran for president?

Well, Central America was pretty much subdued, at least temporarily, by
Reaganite terror throughout the 1980s, but the region from Venezuela to
Argentina is now falling out of control. Venezuela is forging closer relations
with China. It’s planning to sell increasing amounts of oil to China. That
is part of its effort to diversify exports and reduce its dependence on
the openly hostile U.S. government. In fact Latin America as a whole is
increasing trade and other relations with China and also Europe. But China
is more worrisome to the United States, with very likely expansion for
the raw material exporters like Brazil and Chile. China is investing in
Latin America and challenging U.S. dominance. 

If you look at U.S. public documents, China is regarded as the main potential
threat, but not a military threat. Of the major powers it’s been the most
restrained in military expenditures. But it is a threat. The threat is
it can’t be intimidated. When the U.S. shakes its fist at Europe and tells
them to stop investing in Iran, Europeans immediately pull out. China just
moves in.  They have been there for 3,000 years. They cannot be intimidated,
which is very frightening to the U.S. Put yourself in the situation of
a Mafia Don, and suppose there is somebody that can’t be intimidated. And
international affairs are pretty much like the Mafia. In Latin America,
China is just moving along. 

Elsewhere too. You might recall last spring the Bush administration decided
to insult the president of China. He came to visit Washington and they
insulted him by not inviting  him to a state dinner, only to a state lunch.
He took it pretty calmly and he then flew to Saudi Arabia where he entered
into new trade investment relations with Saudi Arabia, which is the oldest
and most valued U.S. ally in the Middle East. 

Getting back to Venezuela, it joined a South American economic bloc and
was welcomed as opening a new chapter in integration. Venezuela supplied
Argentina with fuel oil to help stave off an energy crisis and bought about
a third of the Argentine debt. That is one element of a region-wide effort
to free the countries from the controls of the International Monetary Fund.
 This is after two decades of disastrous effects of conformity to its rules.
The way Argentine President Kirchner put it, “The IMF has acted towards
our country as a promoter and vehicle of policies that cause poverty and
pain among the Argentine people.” That is approximately what he said when
he announced his decision to pay almost a trillion dollars, in his words,
“to rid Argentina of the IMF forever.” And by radically violating IMF rules
Argentina did enjoy a substantial economic recovery from the disaster that
was left by IMF policies. Other countries are going in the same direction. 

Steps towards Latin American independence advanced further with the election
of Evo Morales in Bolivia last December—a real democratic election, the
kind that does not take place in the West. The election of Rafael Correa
in Ecuador was another step. Morales moved very quickly to reach a series
of energy agreements with Venezuela and he committed himself to reversing
the neo-liberal policies that Bolivia had pursued rigorously for 25 years,
leaving the country with lower per capita income than at the outset. 

In Brazil, now considered by the U.S. as one of the good guys, it was necessary
to ignore the fact that the first thing President Lula did after his re-election
was fly to Venezuela to offer his support to Chavez in the upcoming election
there and also to promote regional integration by inaugurating a joing
Venezuelan-Brazilian-built bridge across the Orinoco river and overseeing
work by Brazil’s state oil companies. 

In addition, the indigenous populations are becoming much more active and
influential, and many of them want oil and gas—and other resources—to be
domestically controlled. In some cases they oppose production altogether.
 Some are even calling for an Indian nation in South America, which challenges
the race/class divide that goes back to the Spanish conquests. The elite
that run the place are mostly white, European. The population are mostly
Indians, black, mised race.  That is a fairly sharp distinction. 

Internal economic integration is also taking place for the first time since
the Spanish conquest. Elites in the past, the white elites, have been linked
to the imperial powers, but not to one another, and that is beginning to

Latin America is now, I think, the most exciting part of the world and
there are opportunities for cooperative development and interchange that
are quite real. One step towards that is the solidarity movements that
developed in the United States in the 1980s and 1990s. That was something
new. During hundreds of years of Western imperialism, no one in France
ever thought to live in an Algerian village and no one ever thought of
going to a Vietnamese village to live with the people to help them and
support them and protect them with a white face.  But that started in the
1980s on a substantial scale. Thousands of people, many of them from churches,
organized what is now a mass popular movement all over the world. 

The internal developments in much of Latin America, as you know, are strongly
influenced by mass popular movements, which are coming together in the
global justice movement. Where this will lead, nobody can say. But there
are definitely opportunities now for real progress towards more freedom
and justice in cooperation across the hemisphere—and beyond. 


Noam Chomsky is a linguist, social critic, and author of numerous articles
and books, including
Failed States. This talk was given at City Life/Vida
Urbana in January 2007. It was transcribed for Z by Mary Peacock.