I met up with Noam Chomsky, professor of linguistics at MIT and political activist, to discuss the socio-economic instability of Europe. The interview in Slovenian translation was originally published in Mladina. I’m publishing here the original transcript to make Chomsky’s critical thoughts available to an English speaking audience.

Boston, 22 October 2013

Europe is very wealthy, it can afford plenty of luxuries for rich bankers. It can certainly afford a limited welfare state.Noam CHOMSKY

I think that the troika is now reduced because the IMF has pulled out, recognising that the policies that they were recommending were disastrous. So I don’t think that the phrase ‘necessary intervention’ is quite accurate. These were decisions largely made by the Bundesbank to impose a harsh austerity during the period of recession which is a recipe for disaster. Actually the IMF came out with a major study of a couple of hundred cases of efforts to carry out austerity under recession. And they all are harmful, sometimes seriously so. What’s needed during recession is stimulus. In this case, although, the US federal reserve actually I think did a better job than the European Central bank. Not as much as they should’ve done because of the political constraints. They did at least try to stimulate the economy when it needed a government stimulus. Europe did the opposite. The effect of it is, pretty much, to severely harm the peripheral countries like Greece and Spain and Italy,  but also to strike a blow at the welfare state, which is one of Europe’s great contributions to civilisation in the last centuries, [or at least] in the recent period. Mario Draghi, at one point informed the Wall Street Journal, as he put it, that the social contract is dead—we can’t afford it. Which is just not true. Europe is very wealthy, it can afford plenty of luxuries for rich bankers. It can certainly afford a limited welfare state. But these measures are severely harming and as far as Greece is concerned, it’s going to end up being a colony of Germany. It’s in fact why the Greeks are talking about the German occupation, but not for that reason.

Greece contributed to German economy: it was a major export market. The banks made risky loans, made a lot of money and then crashed for a number of reasons. But the way the western capitalism works [is such that] the capitalist principles are not allowed to apply to the wealthy. I mean if I lend you money and I know that it’s a risky loan so I ask for high interest and I make a lot of money.

And if at some point you can’t pay. You can’t turn to your neighbours and say: “you pay”. I don’t ask somebody to bail me out because I made a risky loan but that’s the way it works in the international quasi-capitalist system. Those who made the loans are not considered responsible for the failure of their bad loans, after they’ve made plenty of profit with risky investments. And it’s called, well it’s a kind of, an international insurance policy, in United States it’s a government insurance policy, and in the EU it’s an EU wide insurance policy for the big banks—which is a recipe for disaster. You can see it in case after case. In Spain and in Ireland. The collapse was primarily a result of banking failure—but the banks were bailed out—not the countries. In the United States it’s called “too big to fail”. It’s a government insurance policy for the banks. Actually there was another IMF study that came out not long ago which estimated that the profits of the big banks in the United States are almost entirely due to the government insurance policy. Which does not only include bailouts but also opportunities for cheap credit, and so on, which amounts to a lot of gain. So when the JP Morgan and Chase pay a $13 billion fine for basically criminal behaviour it’s of course a dent but nothing is compared to what they’re getting simply by having a government insurance policy. In Europe, it’s the troika policies. The population should pay for the risky, careless behaviour of the bankers.

I don’t ask somebody to bail me out because I made a risky loan but that’s the way it works in the international quasi-capitalist system.Noam CHOMSKY

Europe has been kind of stagnating since 2008. Not all of Europe. Northern countries are doing okay. But the periphery, countries like Ireland, was severely harmed. All in all, Europe has not undergone a healthy sustainable growth that it is capable of with proper economic policies. I tend to agree with people like Stiglitz and Krugman and many others. What’s needed — and in fact the IMF sees it too by now — what’s needed in times of recession when there’s not enough demand coming for investment and public spending is government spending.

There’s a very striking decline of democracy in Europe.Noam CHOMSKY

There’s a very striking decline of democracy in Europe. It is in fact so severe that even the Wall Street Journal has been astonished. And the Wall Street Journal—hardly a bastion of liberalism, American style liberalism—had an article recently just running through the elections in Europe. And what it pointed out is that no matter who gets elected, from one end of the spectrum to the other, whether it’s a communist or whatever it is, they follow the same policies. Because the population is not  determining the policy. It’s bureaucrats in Brussels. That’s very remote from democracy. And it doesn’t have to be like that but given the way the system has evolved, there’s a very severe decline in responsiveness to public opinion which is a measure of democracy. It’s true in the United States too, but in a different way. In the US where the matters are quite carefully studied — it is one of the major topics in academic political science — one of them the main topics is the relation between public attitudes and public policy which is pretty easy to study. Public policy is visible. Attitudes you can determine from quite extensive and careful polling. And it turns out, in the best regarded work, that about 70% of the public is essentially disenfranchised. Their opinions have no influence on policy. That’s the lower 70% on the wealth income scale. As you move up that scale, you begin to get more influence, the political system is a little more responsive to their needs. When you get to the very top, they get what they want—they are the ones that set policy. That’s plutocracy, not democracy. In Europe there’s just another variant of it with the population being excluded from the decisions over core socio-economic policy.

They are certainly not passive. There has been quite a lot of active protest but it has not yet, at least, impinged, except peripherally, on the political decision making which is just divorced from public opinion by the nature of the institutions that have evolved. Planning is in the hands, as you said in the beginning, of the troika. Now the IMF are somewhat excluding themselves. And that’s a severe democratic deficit—very severe.

This time, there’s been taps on the wrist and fines.Noam CHOMSKY

There has been success in getting particular individuals to pay some of the cost of the actions for which they were responsible. But there has been very little institutional impact. Actually it’s quite striking here: during the current financial crisis, so far, there have been no criminal penalties for those who were involved. To go back to, say, the major crisis of the Reagan years, the savings and loans disaster, was nowhere near as serious as this. I think about 1000 people or so ended up in jail. In the early Bush years, high executives of major corporations like Enron were jailed for their criminal activities. This time, there’s been taps on the wrist and fines. Sometimes big fines like in the case of JP Morgan and Chase. Fines that they can absorb. But not penalties for the individuals involved. It’s kind of increasing, there’s by now some effort to assess blame, but the people who are suffering are not the rich bankers, it’s the people who are losing their homes and can’t get jobs. Just today in fact there was a study that came out on the unemployment rate. It turns out the unemployment rate has been slowly going down. That’s almost entirely—maybe entirely—due to the fact that the people are simply dropping out the work force. so the rate is going down, but the unemployment is not going down. It’s a sign of real social disaster, people who drop out of the workforce are saying my life is over. The worse tragedy is for young people: generations have been lost, in Europe even more so. This is very serious.

It’s easy to say but hard to do. What they should do, in my opinion, is take a look at some of the few successes of the economy in Spain for instance, like Mandrigan which has weathered the crisis pretty well. It’s worker-owned, a major conglomerate in the Basque country. It can raise a lot of questions about it, but it appears to be weathering the crisis reasonably well. And my own feeling is that if the society and economy were democratised, which means that enterprises are in the hands of, what are called, stakeholders, the workforce, in the community, then things would be done quite differently. And I think that’s true here too. As I say, it’s easy to say and hard to do because the minute you try that, there is tremendous reaction to try to block it. Actually Spain has experience with this: in 1936 there was a very widespread and quite successful social revolution in Catalonia, Aragon and other regions with lots of establishment of cooperative enterprises who were not controlled by firms. There was pretty good coordination between industrial sectors in Catalonia in the rural areas but it was smashed by violence, by the coordinated attack from all three international actors: the communists, the fascists, and the liberal democracies. Now they disagreed on a lot of things, but they were not going to let this to function. Piece by piece it is happening in United States too, in the old rustbelt were the regions where industrial economy largely collapsed. There is by now a rise of not huge but substantial worker and community owned enterprises which are doing pretty well and spreading. I think that’s the answer and in Spain it has a rich history as it should in people’s minds, if it hasn’t been totally wiped out in the fascist period.

I think a lot of people just feel helpless. Partly because of the decline of the labour movement. In the United States, it’s striking. The organised labour, which has always been at the forefront of social change and political action, has been decimated by decades of very harsh business attack. My now, in the private sector, unionisolation is below 7%. And unionisation has also been demonised by massive propaganda, it’s a huge assault that has been going on since the end of the Second World War. You can see it in the press, cinema, everywhere. For example, when I go to Europe or Australia, for example, I often give talks in union halls—inconceivable here. There are no such things. Any action, political action, organising meetings let’s say or talks in offices, movement offices, it’s either in churches or universities. Because those are the institutions that exist really. Is okay, but it’s an indication of the decline in opportunities for the people to work together and get together. And this has to be overcome. It’s happened before. For example, in the United States in the 1920s, the labour movement was totally crushed mostly by violence. But in the 1930s, it revived, it became quite powerful—basically forced through the New Deal measures which gave a kind of limited welfare state in the United States. And that can happen again. But it’s not going to happen by itself.

Well. It really doesn’t really matter. That’s a personal, subjective question. Whether you’re an optimist or a pessimist, you do exactly the same things. You have a choice. You can say I’m going to give up, it’s hopeless, in which case you’re helping the worst happen. Or you could say, look, there are chances, I’ll pursue them and things might get a little better. That’s the choice. It doesn’t matter what your personal subjective estimate is. Now if you want to know the truth, the whole species is hurdling towards disaster. Because of environmental catastrophes alone. It keeps getting worse very ominous. And no one is doing anything about it. That’s not going to wait. The banks can be bailed out but you can’t be bail out a destroyed climate.

It’s been a long time. I grew up in the depression. When I was three or four years old, I could see people coming to the door trying to sell rags so that they could have a piece of bread to eat. Riding with my mother on a trolley cart and seeing women textile workers on strike, being beaten bloody by security forces. My parents were teachers, we weren’t starving. We had a reasonably decent lifestyle. But plenty of relatives were unemployed, surviving—and doing pretty well on New Deal measures when they came along. And that’s never changed. Take Greece. Or take Spain for example—I happened to be pretty interested in Spain when I was a child, particularly in the Spanish revolution. I was following it closely and even wrote about it as a child. When the British moved into Greece in 1944—I was 15 by then—I was bitterly opposed to the British atrocities when they tried to crush the Greek resistance and effectively restored the traditional quasi-fascist order. They couldn’t do it so they called in the Americans to finish the job up. Greece is still suffering from it. The Golden Dawn, the neonazi party in Greece, has roots that go way back to the 30s and whom the west was helping to establish. All of this was obvious. So there’s plenty to be concerned about. But there’s a lot that can be done. If you think about it, just in the last generation, since the 1960s, there has been a lot of progress. A real civilising effect. Take, say, the status of women. In the United States, a very free country by comparative standards—you know, it’s not a repressive dictatorship. When the country was founded, in 1770s, the US adopted a British common law under which women were really not people, they were property. A woman was the property of her father, transferred over to her husband. And that remained true until very recently. It wasn’t until 1975 that the Supreme Court determined the women are fit for jury duty, that they are peers—people, in other words. Women were not guaranteed the right to serve on jury duties until 1975. The last generation is changing enormously. That’s real liberation  for a large part of the population. And this is not the only case. For example, there’s a lot more opposition to aggression and violence today than there was in the 1960s. There is a lot of misunderstanding around that, I think. Compare the Vietnam war with the Iraq war. What’s commonly claimed is that the Vietnam war had a lot of protests and that had an effect on policy, whereas the Iraq war didn’t have protests. In fact it’s the opposite. In the case of the Iraq war, the protest were so strong that even before the war—this is the first time in the history of the Western imperialism—there were massive protests before the war was officially launched. And that had an effect. The government never even dared to try the measures that Kennedy and Johnson had carried out with virtually no protests in South Vietnam. It was horrible enough but it could’ve been a lot worse. And I think all this—and a lot more—shows that, as I mentioned, there’s regression in the labour movement, the crushing of the labour movement. But by large the trajectory overtime is upward, slowly. Whether it’s rapid enough to avoid major disasters, we don’t know. But there’s reason for trying.

… there’s reason for trying.Noam CHOMSKY

There’s no single solution for everything. Marx once pointed out that he anticipated that the communism that he’d hoped for—and never said much about—would solve people’s animal needs but would leave them to face their human needs. Which is a much harder problem.