- “Profit Over People” by Noam Chomsky criticizes neoliberalism for exacerbating economic inequality and prioritizing corporate interests.
- The book highlights the negative consequences of deregulation, globalization, and the influence of multinational corporations on global politics.
- Chomsky’s critical analysis encourages readers to rethink the prevailing economic and political ideologies that shape our world.
Profit Over People (1999) is a deep dive into the often hidden world of neoliberalism, revealing how global power structures and US policies are influenced by corporate interests. You’ll be taken on a journey that uncovers an economic system geared toward the affluent, often to the detriment of the many.
Table of Contents
Introduction: Discover how neoliberalism puts profit over people
Have you ever found yourself contemplating the complexities of the world economy? Perhaps wondering why certain countries seem to hold the reins of global financial power while others struggle with poverty and dependency? If these questions have ever crossed your mind, you’re certainly not alone. They point toward an intricate global narrative that’s been centuries in the making, one that influences the lives of billions daily.
In this summary, you’ll journey through the intricate tapestry of neoliberalism, its historical roots, and its impacts on our global society. You’ll delve into the layers of this economic doctrine that advocates for unbridled free-market capitalism, its champions, and its far-reaching consequences, from the United States to Latin America and from Britain to India. By the end, this knowledge will make you better equipped to critically evaluate economic policies, to navigate the world of international trade, and to contribute meaningfully to discussions on global economic fairness and justice. As we navigate the economic tides of the twenty-first century, such understanding is not simply an intellectual exercise, but a vital tool for shaping a more equitable and just society.
Unmasking neoliberal capitalism
Neoliberalism. It’s a term you might associate with Adam Smith or liberal ideas. If so, you’re not too far off. In fact, neoliberalism is a whole worldview, a perspective that shapes how governments and societies operate. At its heart, neoliberalism is all about free market capitalism. It’s the belief that governments should step aside and let the market run the show, from setting prices to determining wages. So far, so good – after all, who wouldn’t want more freedom and choice?
Well, it’s not as straightforward as it might seem. It turns out that when one takes neoliberalism’s promises and pits them against reality, things often look a bit different. Take the infamous “Washington consensus,” for example. Crafted by the US government and international financial institutions, this consensus was all about market-oriented principles. Trade liberalization, market-determined prices, inflation control, and privatization – all under the overarching theme of “Government, get out of the way.”
Its stated aim was to boost economic growth in developing nations, though it wasn’t formally agreed upon by any particular group or government. But when it was imposed on more vulnerable societies, well, let’s just say the effects were far from beneficial – so much so, that some have started calling these institutions a de facto world government in a new imperial age.
Look at the United States, for instance. Its post-WWII prosperity positioned it at the helm, enabling it to design a global system serving its interests. Latin America is a great way to illustrate this. The main threat to America’s interests in the region? “Radical” and “nationalistic” regimes that actually responded to popular demands for better living standards and development. These tendencies were seen as contradictory to the requirements for a political and economic climate conducive to private investment, profit repatriation, and the protection of raw materials.
This sparked some serious intervention from the United States. We saw this play out vividly in Chile in 1973, when the US supported a coup to topple democratically elected Salvador Allende because of his socialist policies. Or take Guatemala in 1954, where a US-backed coup overthrew President Jacobo Arbenz who sought agrarian land reforms. And let’s not forget the Contras in Nicaragua during the 1980s, supported by the US to undermine the Sandinista government, which prioritized social programs for the populace. These actions clearly prioritized certain economic interests over democratic values and the well-being of the local population.
It’s not just on the American continent where neoliberalism has been embraced with open arms. Countries like Britain, after a good few centuries of protectionism and state power, decided to jump on the liberal internationalism bandwagon. But here’s the twist – they also made sure to protect their own industries from foreign competition while squashing development in other nations.
An excellent example is India’s iron industry. Once a leading player, it was destroyed by free-market doctrine. In the name of opening up markets, Britain flooded India with cheap iron and steel products, outcompeting the local industry. At the same time, India was not allowed to develop its own manufacturing capacity due to restrictive trade policies.
The result? India’s iron industry, once prosperous, was decimated, leaving a once-thriving economy grappling with deindustrialization and dependency. Consequently, British corporations reaped significant benefits, bolstering their dominance in the global iron and steel industry, all while securing a vast and captive market for their products.
At the end of the day, neoliberal free market capitalism seems more designed to serve the interests of power and profit rather than the common good. What we need is a critical evaluation of these dominant doctrines, considering historical lessons, facts, and the interests of different countries and their people. And, above all, we need to ensure that the future is shaped by the collective interests and well-being of people worldwide, not just by the so-called “principal architects” of policy.
Looking back a few decades, the United Nations was the primary platform where the United States, among other powerful nations, would wield its influence. The UN was supposed to be a democratic space where all nations had a say, but the truth was a little more complicated. The US, along with other heavyweights, used the UN as a stage on which to assert its values and interests.
But as times changed, so did the US’s preferred platform. We saw a noticeable shift to the World Trade Organization, or WTO. Why the WTO? Well, its primary focus is on trade and economic policies – areas where the US, being a powerhouse economy, can flex its muscles. What’s more, the WTO’s dispute resolution mechanism gives it teeth, something the more diplomatically inclined UN lacks.
Fast-forward to today, and the WTO is far from just a venue for cutting trade deals. It’s become a key player in shaping the global economic rulebook, and the US has scored some major wins in exporting its free-market values.
The WTO’s telecommunications agreement is one interesting example of the United States’ expansive influence. On the surface, it’s about setting a level playing field in the global telecom market. But dig a little deeper, and you’ll see it’s been a pretty useful tool for the US to dive right into the internal affairs of other countries.
So what does this mean in real terms? Let’s say there’s a country that has strict regulations around foreign investments in its telecommunications sector. The US, armed with this WTO agreement, can exert pressure on that country to relax its rules. And we’re not talking gentle nudging here. It can demand changes to the country’s laws and practices – all to ensure American corporations can invest freely and operate without a hitch.
Now, you might be wondering, has this actually happened? The answer is a resounding “yes.” We’ve seen situations in which the US, under this agreement, has successfully pushed for liberalization of telecom sectors in other countries. And while that sounds like a win for the idea of free markets, it often results in US and other foreign corporations gaining substantial control over another country’s vital communication networks.
The outcome of this? Well, the telecommunications industry in these countries often ends up highly concentrated, with foreign corporations having significant control. It means less competition from local businesses, and it also raises questions about a country’s autonomy over its own critical infrastructure. There may be short-term economic gains, but the long-term impacts on local industries and national sovereignty are far from clear cut.
There’s one set of rules for the US – and another for everyone else
It’s fair to say the US has a pretty selective approach when it comes to international cooperation. They’re all about multilateralism when it comes to trade and the World Trade Organization, but when it comes to other issues, like climate change or certain conflicts, they sometimes don’t follow their own rules.
To understand this better, let’s take a look at what the US did in Nicaragua in the 1980s. At the time, Central America was bubbling with revolutions and political changes, and the US had its interests deeply rooted there. At the time, Nicaragua was ruled by a socialist-leaning government called the Sandinistas, which the US saw as a threat to its interests in the region.
Believing in the domino theory – that if one country fell to communism, others would follow – the US decided to support a counter-revolutionary group in Nicaragua, the Contras, to challenge the Sandinistas. This resulted in a bloody conflict that brought devastation to the country.
Nicaragua, feeling aggrieved by this intervention, took an unprecedented step and brought a case against the United States to the International Court of Justice. They accused the US of violating international law by supporting a military and paramilitary campaign against the government.
The ICJ, after hearing the case, agreed with Nicaragua and ruled that the US had indeed violated international law. It was a historic moment, marking the first time the ICJ had ruled against the United States in such a manner.
But the US didn’t take it well. They rejected the jurisdiction of the ICJ in this case, basically saying, “You don’t have the power to judge us.” This rejection was a clear demonstration of the US’s selective approach to international law. When it suits them, they participate in international cooperation, but when things don’t go their way, they’re willing to step outside those norms. This act significantly undermined the credibility of international institutions and left a lasting impression of US attitudes toward international law and democracy.
Nicaragua isn’t the only place where the US has acted like a spoiled child. Take Cuba, for example. For 60 years now, the US has weaponized an economic embargo on the island nation. Why? In an attempt to impose its will on the Cuban people – all the while steadfastly disregarding international law. And once again, it does this against the will of the international community, a vast majority of which believes the embargo is illegal.
And the Cuban people? Well, they aren’t blind. They see this embargo as the root cause of their hardships, yet they remain remarkably resilient, standing tall behind their revolution. Amid all the struggles, Cuba’s still lending a helping hand globally, dispatching doctors and medical professionals to corners of the world in dire need.
This might be starting to sound like a broken record, but it bears repeating: these so-called “American values” and free trade advocacies often act as smoke screens that serve the interests of the powerful, frequently undermining the welfare of the everyday people. Whether it’s Thatcher’s Britain, the telecom wrangling at the WTO, Nicaragua, or Cuba, it’s a tale as old as time – economics intertwining with power, influence, and control.
The truth about free-trade agreements
Every now and then, you probably hear about big trade deals on the news. You know, those agreements that governments around the world often tout as “game-changers,” promising they will usher in prosperity for everyone involved.
Let’s take a trip back to the early ‘90s, when a little agreement known as the North American Free Trade Agreement (NAFTA) was being born. Signed into existence in 1994, it was a pact among the United States, Mexico, and Canada, and was sold under the promise of prosperity and economic growth for all three countries. The rhetoric was all about eliminating trade barriers, increasing investment opportunities, and generally making everyone’s lives a bit better.
However, it’s one thing to make promises, and quite another to deliver on them. And in NAFTA’s case, the reality fell drastically short of the dream, especially for Mexico. When NAFTA was implemented, it led to a significant restructuring of the Mexican economy, particularly in the agricultural sector. Suddenly, corn from the US was flooding into Mexico. It was cheaper, thanks to subsidies from the US government, and small-scale Mexican farmers just couldn’t compete. Many lost their livelihoods, and the country as a whole became more dependent on food imports.
In fact, from 1990 to 2000, the number of Mexicans living in extreme poverty in rural areas rose by almost a third. Agriculture shifted toward export and animal feeds, which was great for agribusiness and foreign consumers, but not so great for the Mexican people, who faced increasing malnutrition.
What we’re seeing here is a global system that’s been deliberately designed to serve the rich, while everyone else gets left behind. And it’s not just about money – this system is undermining democracy and human rights on a massive scale. Luckily, people are pushing back.
Just look at the 1994 Zapatista uprising in Chiapas, Mexico. Those involved were primarily indigenous peasants, who chose New Year’s Day, the very day the North American Free Trade Agreement came into effect, to make their stand. It was a powerful statement, a fight against centuries of systemic injustice.
Their actions were bold. They took control of towns and cities, demanding their rights to land, culture, and self-determination. What’s more, they used both direct action and digital communication, becoming one of the first movements to use the internet to garner global support.
While they didn’t overthrow the system, they did force the Mexican government to negotiate. The Zapatistas gained substantial autonomy in some areas – and, more importantly, they awakened a global consciousness about indigenous rights and the destructive impacts of global capitalism. Their resistance continues to be a beacon of hope for marginalized groups around the world.
Summary
Neoliberalism, while advocating for free market capitalism, has often resulted in socioeconomic imbalances globally. Policies under the guise of neoliberalism have been manipulated by powerful entities, particularly the United States, to advance their own interests.
The detrimental impact of such policies has been evident in Latin America, India, and with international bodies such as the WTO. The US’s imposition of the Washington consensus and interventions in countries like Chile and Guatemala highlight the prioritization of economic interests over democratic values. This was also apparent in the manipulation of trade policies that decimated India’s iron industry and the telecommunications agreement through the WTO. Furthermore, the US’s actions toward Nicaragua and Cuba demonstrate its selective commitment to international law. Last, the negative outcomes of NAFTA emphasized persistent power imbalances, while also revealing the resilience of marginalized groups, as seen with the Zapatista uprising in Mexico.
Born in Philadelphia in 1928, NOAM CHOMSKY is known throughout the world for his political writings, activism, and for for his groundbreaking work in linguistics. A professor at Massachusetts Institute of Technology since 1955, Chomsky gained recognition in academic circles for his theory of transformational grammar, which drew attention to the syntactic universality of all human languages. But it is as a critic of unending war, corporate control and neoliberalism that Chomsky has become one of the country’s most well known public intellectuals. The 1969 publication of American Power and the New Mandarins marked the beginning of Chomsky’s rigorous public criticism of American hegemony and its lieges. Since then, with his tireless scholarship and an unflagging sense of moral responsibility, he has become one of the most influential writers in the world. Chomsky is the author of Manufacturing Consent: The Political Economy of the Mass Media (with Edward S. Herman), Profit Over People: Neoliberalism and Global Order, and over one hundred other books. To this day Noam Chomsky remains an active and uncompromising voice of dissent.
Genres
Economics, Politics, Nonfiction, Philosophy, History, Sociology, Political Science, Society, Theory, Social Justice, Government, Free Enterprise and Capitalism, Economic Policy and Development, Theory of Politics
Table of Contents
Introduction p. 7
Neoliberalism and Global Order p. 19
Consent without Consent: Regimenting the Public Mind p. 43
The Passion for Free Markets p. 65
Market Democracy in a Neoliberal Order: Doctrines and Reality p. 91
The Zapatista Uprising p. 121
“The Ultimate Weapon” p. 131
“Hordes of Vigilantes” p. 159
Index p. 169
Review
Chomsky argues that neoliberalism, an economic ideology that prioritizes market-driven policies, deregulation, and privatization, has led to a range of negative consequences for people worldwide. He contends that this ideology is inherently designed to benefit corporations and the wealthy elite, often at the expense of the majority of the population. Chomsky explores how neoliberal policies have been promoted and implemented by powerful actors, including multinational corporations and international financial institutions like the World Bank and the International Monetary Fund.
Chomsky highlights several key points in the book:
- Economic Inequality: Chomsky asserts that neoliberalism has exacerbated economic inequality, leading to the concentration of wealth in the hands of a few while undermining the economic security of the middle and working classes.
- Deregulation: He criticizes the trend of deregulation, arguing that it has allowed corporations to engage in harmful practices without sufficient oversight, which has had disastrous consequences, such as the 2008 financial crisis.
- Globalization: Chomsky examines the impact of globalization under neoliberal policies, emphasizing how it often results in the exploitation of cheap labor in developing countries and the weakening of workers’ rights worldwide.
- Environmental Consequences: The book also discusses the environmental costs of neoliberalism, as corporations pursue profit at the expense of sustainable practices and ecological well-being.
- Geopolitical Influence: Chomsky delves into the influence of neoliberalism on global politics, emphasizing the power dynamics between nations and international institutions that serve the interests of corporate elites.
“Profit Over People” is a highly critical and thought-provoking book that challenges the prevailing economic and political ideologies. Chomsky’s argument against neoliberalism is well-researched and well-articulated. He presents a compelling case for how neoliberal policies have contributed to growing economic inequality, weakened workers’ rights, and harmed the environment.
Chomsky’s perspective is rooted in a strong critique of corporate power and its influence on governments and international institutions. He provides readers with a deeper understanding of how neoliberalism has shaped the global order, and the consequences this has for individuals and societies.
While the book provides valuable insights, it is important to note that Chomsky’s views are not universally accepted, and there are differing opinions on the impact of neoliberalism. Some readers may find his arguments to be ideologically driven, and it is advisable to approach the book with an open mind and consider alternative perspectives.
In conclusion, “Profit Over People: Neoliberalism and Global Order” is a significant work that challenges the status quo and encourages readers to think critically about the economic and political systems that shape our world. It is a valuable resource for those interested in political economy, globalization, and the impact of neoliberalism on society.