[...] He’s pre-capitalist, a figure of the Enlightenment. What we would call capitalism he despised. People read snippets of Adam Smith, the few phrases they teach in school. Everybody reads the first paragraph of The Wealth of Nations where he talks about how wonderful the division of labor is. But not many people get to the point hundreds of pages later, where he says that division of labor will destroy human beings and turn them into creatures as stupid and ignorant as it is possible for a human being to be. And therefore in any civilized society the government is going to have to take some measures to prevent division of labor from proceeding to its limits.

He did give an argument for markets, but the argument was that under conditions of perfect liberty, markets will lead to perfect equality. That’s the argument for them, because he thought equality of condition (not just opportunity) is what you should be aiming at. It goes on and on. He gave a devastating critique of what we would call North-South policies. He was talking about England and India. He bitterly condemned the British experiments they were carrying out which were devastating India.

He also made remarks which ought to be truisms about the way states work. He pointed out that it’s totally senseless to talk about a nation and what we would nowadays call “national interests.” He simply observed in passing, because it’s so obvious, that in England, which is what he’s discussing—and it was the most democratic society of the day—the principal architects of policy are the “merchants and manufacturers,” and they make certain that their own interests are, in his words, “most peculiarly attended to,” no matter what the effect on others, including the people of England, who, he argued, suffered from their policies. He didn’t have the data to prove it at the time, but he was probably right.

This truism was a century later called class analysis, but you don’t have to go to Marx to find it. It’s very explicit in Adam Smith. [...]

The other part of the story is the development of corporations, which is an interesting story in itself. Adam Smith didn’t say much about them, but he did criticize the early stages of them. Jefferson lived long enough to see the beginnings, and he was very strongly opposed to them. But the development of corporations really took place in the early twentieth century and very late in the nineteenth century. Originally corporations existed as a public service. People would get together to build a bridge and they would be incorporated for that purpose by the state. They built the bridge and that’s it. They were supposed to have a public interest function. Well into the 1870s, states were removing corporate charters. They were granted by the state. They didn’t have any other authority. They were fictions. They were removing corporate charters because they weren’t serving a public function. But then you get into the period of trusts and various efforts to consolidate power that were beginning to be made in the late nineteenth century. It’s interesting to look at the literature. The courts didn’t really accept it. There were some hints about it. It wasn’t until the early twentieth century that courts and lawyers designed a new socioeconomic system. It was never done by legislation. It was done mostly by courts and lawyers and the power they could exercise over individual states. New Jersey was the first state that granted corporations any right they wanted. Of course, all the capital in the country suddenly started to flow to New Jersey, for obvious reasons. Then the other states had to do the same thing just to defend themselves or be wiped out. It’s kind of a small-scale globalization. Then the courts and the corporate lawyers came along and created a whole new body of doctrine which gave corporations authority and power that they had never had before. [...] We think of corporations as immutable, but they were designed. It’s a conscious design which worked as Adam Smith said: the principal architects of policy consolidate state power and use it for their interests. It was certainly not popular will. It’s basically court decisions and lawyers’ decisions, which created a form of private tyranny which is now more massive in many ways than even state tyranny was. These are major parts of modern twentieth-century history. The classical liberals would be horrified. They didn’t even imagine this. But the smaller things that they saw, they were already horrified about. This would have totally scandalized Adam Smith or Jefferson or anyone like that.

[...] Sometimes when I’ve having an extremely boring phone call, I try to calculate how many centuries I’d have to live in order to read the urgent books if I were to read twenty-four hours a day, seven days a week at some speed reading pace. It’s pretty depressing. So the answer to your question is, I don’t get anywhere near doing what I would like to do.

First of all, I’m usually fuming inside, so what you see on the outside isn’t necessarily what’s inside. But as far as questions, the only thing I ever get irritated about is elite intellectuals, the stuff they do I do find irritating. I shouldn’t. I should expect it. But I do find it irritating. But on the other hand, what you’re describing as inane questions usually strike me as perfectly honest questions. People have no reason to believe anything other than what they’re saying. If you think about where the questioner is coming from, what the person has been exposed to, that’s a very rational and intelligent question. It may sound inane from some other point of view, but it’s not at all inane from within the framework in which it’s being raised. It’s usually quite reasonable. So there’s nothing to be irritated about.

You may be sorry about the conditions in which the questions arise. The thing to do is to try to help them get out of their intellectual confinement, which is not just accidental, as I mentioned. There are huge efforts that do go into making people, to borrow Adam Smith’s phrase, “as stupid and ignorant as it’s possible for a human being to be.” A lot of the educational system is designed for that, if you think about it, it’s designed for obedience and passivity. From childhood, a lot of it is designed to prevent people from being independent and creative. If you’re independent-minded in school, you’re probably going to get in trouble very early on. That’s not the trait that’s being preferred or cultivated. When people live through all this stuff, plus corporate propaganda, plus television, plus the press and the whole mass, the deluge of ideological distortion that goes on, they ask questions that from another point of view sound inane, but from their point of view are completely reasonable.

[...] not only did he agree with the whole Enlightenment tradition that, as he put it, “the goal of production is to produce free people,” (“free men,” he said, but that’s many years ago). That’s the goal of production, not to produce commodities. He was a major theorist of democracy. There were many different, conflicting strands to democratic theory, but the one I’m talking about held that democracy requires dissolution of private power. He said as long as there is private control over the economic system, talk about democracy is a joke. Repeating basically Adam Smith, Dewey said, Politics is the shadow that big business casts over society. He said attenuating the shadow doesn’t do much. Reforms are still going to leave it tyrannical. Basically a classical liberal view. His main point was that you can’t even talk about democracy until you have democratic control of industry, commerce, banking, everything. That means control by the people who work in the institutions, and the communities.

[...] the people who make it into elite graduate
programs are that tiny minority who haven’t had the creativity and
independence beaten out of them. It doesn’t work 100%.

There was some interesting stuff written about this by Sam Bowles
and Herb Gintis, two economists, in their work on the American
educational system some years back. They pointed out that the
educational system is divided into fragments. The part that’s directed
towards working people and the general population is indeed designed
to impose obedience. But the education for elites can’t quite do that. It
has to allow creativity and independence. Otherwise they won’t be able
to do their job of making money. [...]

[...] Some major events took place in the early 1970s, very significant. One of them was the breakdown of the Bretton Woods system, which we’ve talked about. That’s one force that set in motion very substantial changes that gave a big acceleration to the growth of multinationals. Transnational corporations now have an enormous role in the world economy. These are just incredible private tyrannies. They make totalitarian states look mild by comparison.

The other huge change was the extraordinary growth in financial capital. First of all, it’s exploded in scale. It’s absolutely astronomical. There are close to a trillion dollars moving every day just in trading. Also the total composition of capital in international exchange has radically shifted. So in 1970, before the destruction of the Bretton Woods system, which meant regulated exchanges, about ninety percent of the capital in international exchanges was real economy related, related to investment and trade. Ten percent was speculative. By 1990 the figures were reversed. By 1994, the last report I saw was 95% speculative and it’s probably gone up since. That has an extraordinary effect.

[...] it’s a matter of people paying for their own subordination. Maybe it’s fun to watch baseball games. In fact, I like it, too. But the fact of the matter is that the way this stuff functions in the society is to marginalize the people. It’s kind of like gladiatorial contests in Rome. The idea is to try to get the great beast to pay attention to something else and not what we powerful and privileged people are doing to them. That’s what all the hoopla is basically about, I would guess

[...] a couple of years ago, Congress passed the Transportation Subsidy Act to give the states money to support transportation. It was intended to maintain public transportation and also to fill potholes in the roads. But the figures just came out, in the same month of December, and it showed something like ninety-six percent of it went to private transportation and virtually nothing to public transportation. That’s the point of getting things down to the state level. Big corporations can play around with governments these days, but state governments they can control far more easily. They can play one state against another much more easily than one country against another. That’s the purpose of what they call “devolution,” let’s get things down to the people, the states. Corporations can really kick them in the face, and nobody has a chance. So the idea will be that you get block grants that go to the states, no federal control, meaning no democratic control. It will go precisely to the powerful interests. We know who they are: the construction business, the automobile corporations, and so on. Meaning whatever there is of public transportation is very likely to decline.

[...] The whole welfare “debate,” as it’s called, is based on the assumption that raising children isn’t work. It’s not like speculating on stock markets. That’s real work. So if a woman is taking care of a kid, she’s not doing anything. Domestic work altogether is not considered work because women do it. That gives an extraordinary distortion to the nature of the economy. It amounts to transfer payments from working women, from women altogether and working women in particular, to others. They don’t get social security for raising a child. [...]

[...] If I’m asked about what I mean by anarchism, I always point out that what it means is an effort to undermine any form of illegitimate authority, whether it’s in the home or between men and women or parents and children or corporations and workers or the state and its people. It’s all forms of authority that have to justify themselves and almost never can. [...]