Feature #9 Microsoft found on http www corpwatch org _________________________________________________________________ Noam Chomsky photo by Donna Coveney MIT March 92 A CORPORATE WATCH INTERVIEW WITH NOAM CHOMSKY Corporate Watch s Anna Couey and Joshua Karliner caught up with Noam Chomsky by telephone at his home in the Boston area to ask him about Microsoft and Bill Gates The following is a transcript of our far ranging conversation _________________________________________________________________ CW So our first question is how significant do you see the recent skirmishes between the Department of Justice and Microsoft Do you see it as an important turn of events NC There s some significance We shouldn t exaggerate it If there are three major corporations controlling what is essentially public property and a public creation namely the Internet telecommunications and so on that s not a whole lot better than one corporation controlling but it s maybe a minor difference The question is to what extent parasites like Microsoft should be parasites off the public system or should be granted any rights at all CW Give us a little bit of historical context How does what s happening with Microsoft s growing power and its role in society fit into the history of U S Corporate power the evolution of corporations NC Here s a brief history a thumbnail sketch There were corporations as far back as the 18th century and beyond In the United States corporations were public bodies Basically they were associations A bunch of people could get together and say we want to build a bridge over this river and could get a state charter which allowed them to do that precisely that and nothing more The corporation had no rights of individual persons The model for the corporation back at the time of the framing of the Constitution was a municipality Through the 19th century that began to change It s important to remember that the constitutional system was not designed in the first place to defend the rights of people Rather the rights of people had to be balanced as Madison put it against what he called the rights of property Well of course property has no rights my pen has no rights Maybe I have a right to it but the pen has no rights So this is just a code phrase for the rights of people with property The constitutional system was founded on the principle that the rights of people with property have to be privileged they have rights because they re people but they also have special rights because they have property As Madison put it in the constitutional debates the goal of government must be to protect the minority of the opulent against the majority That s the way the system was set up In the United States around the turn of the century through radical judicial activism the courts changed crucially the concept of the corporation They simply redefined them so as to grant not only privileges to property owners but also to what legal historians call collectivist legal entities Corporations in other words were granted early in this century the rights of persons in fact immortal persons and persons of immense power And they were freed from the need to restrict themselves to the grants of state charters That s a very big change It s essentially establishing major private tyrannies which are furthermore unaccountable because they re protected by First Amendment rights freedom from search and seizure and so on so you can t figure out what they re doing After the Second World War it was well understood in the business world that they were going to have to have state coordination subsidy and a kind of socialization of costs and risks The only question was how to do that The method that was hit upon pretty quickly was the Pentagon system (including the DOE AEC NASA) These publicly-subsidized systems have been the core of the dynamic sectors of the American economy ever since (much the same is true of biotechnology pharmaceuticals etc relying on different public sources) And that certainly leads right to Microsoft So how does Microsoft achieve its enormous profits Well Bill Gates is pretty frank about it He says they do it by embracing and extending the ideas of others They re based on computers for example Computers were created at public expense and public initiative In the 1950s when they were being developed it was about 100% public expense The same is true of the Internet The ideas the initiatives the software the hardware -- these were created for about 30 years at public initiative and expense and it s just now being handed over to guys like Bill Gates CW What are the social and cultural impacts of allowing not only a monopoly but even if it s just a few large corporations dominating something as basic as human speech communication with each other NC It s a form of tyranny But that s the whole point of corporatization -- to try to remove the public from making decisions over their own fate to limit the public arena to control opinion to make sure that the fundamental decisions that determine how the world is going to be run -- which includes production commerce distribution thought social policy foreign policy everything -- are not in the hands of the public but rather in the hands of highly concentrated private power In effect tyranny unaccountable to the public And there are various modalities for doing this One is to have the communication system the so-called information system in the hands of a network of fewer or more doesn t matter that much private tyrannies Let s take the media in the United States These are corporate media overwhelmingly Even the so-called public media are not very different They are just huge corporations that sell audiences to advertisers in other businesses And they re supposed to constitute the communications system It s not complicated to figure out what s going to come out of this That includes also the entertainment industries so-called the various modalities for diverting people from the public arena and so on And there are new things happening all the time Like right at this minute there s a dramatic example that s the Multilateral Agreement on Investment (MAI) which is supposed to be signed this month but they re not going to make it The negotiations have been going on in secret for about three years It s essentially a huge corporate power play trying to give investors -- that doesn t mean the guy working on the shop floor it means the board of directors of GE of Merrill Lynch and so on -- to give investors extraordinary rights That s being done in secret because the people involved which is the whole business community incidentally know that the public is going to hate it So therefore the media are keeping it secret And it s an astonishing feat for three years to keep quiet about what everyone knows to be a major set of decisions which are going to lock countries into certain arrangements It ll prevent public policy Now you can argue that it s a good thing a bad thing you can argue what you like but there s no doubt about how the public is going to react and there s no doubt about the fact that the media which have been well aware of this from the beginning have succeeded in virtually not mentioning it CW How would a company like Microsoft benefit from the MAI NC They could move capital freely They could invest it where they like There would be no restrictions on anything they do A country or a town like say Cambridge Massachusetts where I live where I work could not impose conditions on consumer protection environmental control investment and set-asides for minorities or women you name it that would be ruled out Now exactly how far this would go depends on the disposition to enforce it These things are not determined by words There s nothing in the Constitution or the amendments to the Constitution which allows private tyrannies to have the right to personhood It s just power not the wording What the MAI would mean in practice depends on what the power relations are like whether people object to it so strenuously they won t allow it to happen maybe by riots or whatever So those are the terms that they re going to try to impose A crucial element of this is what they call the ratchet effect that is existing legislation is to be allowed but it has to be removed over time It has to be rolled back and no new legislation can be introduced conflicting with the rights of Microsoft to do anything they like in the international arena or domestically Well over time that s supposed to have a ratchet effect to turn the world over more and more in the hands of the major private tyrannies like Microsoft with their alliances and interactions CW Economist Brian Arthur argues that with the rapidly changing nature of technology no one will remain in a monopoly position for long so that monopoly power in the technology industries is different than what we ve historically seen and is nothing to worry about NC But there never was monopoly power or there very rarely was monopoly power Take highly concentrated power systems like the energy industries But they re not strictly speaking monopolies Shell and Exxon are competitors This is a highly managed system of market administration with enormous state power entering in the interests of a small collection of private tyrannies It s very rare to find a real monopoly AT&T was a monopoly for a time that s why it could create things like the transistor for example It was a monopoly so therefore they could charge high rates But that s certainly unusual CW Do you think the whole monopoly issue is something to be concerned about NC These are oligopolies they are small groups of highly concentrated power systems which are integrated with one another If one of them were to get total control of some system other powers probably wouldn t allow it In fact that s what you re seeing CW So you don t think Bill Gates is a latter-day John D Rockefeller NC John D Rockefeller wasn t a monopolist Standard Oil didn t run the whole industry they tried But other power centers simply don t want to allow that amount of power to one of them CW Then in fact maybe there is a parallel there between Gates and Rockefeller or not NC Think of the feudal system You had kings and princes and bishops and lords and so on They for the most part did not want power to be totally concentrated they didn t want total tyrants They each had their fiefdoms they wanted to maintain in a system of highly concentrated power They just wanted to make sure the population the rabble so-called wouldn t be part of it It s for this reason the question of monopoly -- I don t want to say it s not important -- but it s by no means the core of the issue It is indeed unlikely that any pure monopoly could be sustained Remember that this changing technology that they re talking about is overwhelmingly technology that s developed at public initiative and public expense Like the Internet after all 30 years of development by the public then handed over to private power That s market capitalism CW How has that transfer from the public to the private sphere changed the Internet NC As long as the Internet was under control of the Pentagon it was free People could use it freely for information sharing That remained true when it stayed within the state sector of the National Science Foundation As late as about 1994 people like say Bill Gates had no interest in the Internet He wouldn t even go to conferences about it because he didn t see a way to make a profit from it Now it s being handed over to private corporations and they tell you pretty much what they want to do They want to take large parts of the Internet and cut it out of the public domain altogether turn it into intranets which are fenced off with firewalls and used simply for internal corporate operations They want to control access and that s a large part of Microsoft s efforts control access in such a way that people who access the Internet will be guided to things that *they* want like home marketing service or diversion or something or other If you really know exactly what you want to find and have enough information and energy you may be able to find what you want But they want to make that as difficult as possible And that s perfectly natural If you were on the board of directors of Microsoft sure that s what you d try to do Well you know these things don t *have* to happen The public institution created a public entity which can be kept under public control But that s going to mean a lot of hard work at every level from Congress down to local organizations unions other citizens groups which will struggle against it in all the usual ways CW What would it look like if it were under public control NC It would look like it did before except much more accessible because more people would have access to it And with no constraints People could just use it freely That has been done as long as it was in the public domain It wasn t perfect but it had more or less the right kind of structure That s what Microsoft and others want to destroy CW And when you say that you re referring to the Internet as it was 15 years ago NC We re specifically talking about the Internet But more generally the media has for most of this century and increasingly in recent years been under corporate power But that s not always been the case It doesn t have to be the case We don t have to go back very far to find differences As recently as the 1950s there were about 800 labor newspapers reaching 20-30 million people a week with a very different point of view You go back further the community-based and labor-based and other media were basically on par with the corporate media early in this century These are not laws of nature they re just the results of high concentration of power granted by the state through judicial activism and other private pressure which can be reversed and overcome CW So take the increasing concentration in the technology that we re looking at with Microsoft and some of these other companies and compare it with recent mergers in the defense media insurance and banking industries and especially the context of globalization Are we looking at a new stage in global capitalism or is this just a continuation of business as usual NC By gross measures contemporary globalization is bringing the world back to what it was about a century ago In the early part of the century under basically British domination and the gold standard if you look at the amount of trade and then the financial flow and so on relative to the size of the economy we re pretty much returning to that now after a decline between the two World Wars Now there are some differences For example the speed of financial transactions has been much enhanced in the last 25 years through the so-called telecommunications revolution which was a revolution largely within the state sector Most of the system was designed developed and maintained at public expense then handed over to private profit State actions also broke down the post-war international economic system the Bretton Woods system in the early 1970s It was dismantled by Richard Nixon with US and British initiative primarily The system of regulation of capital flows was dismantled and that along with the state-initiated telecommunications revolution led to an enormous explosion of speculative capital flow which is now well over a trillion dollars a day and is mostly non-productive If you go back to around 1970 international capital flows were about 90% related to the real economy like trade and investment By now at most a few percent are related to the real economy Most have to do with financial manipulations speculations against currencies things which are really destructive to the economy And that is a change that wasn t true not only wasn t true 100 years ago it wasn t true 40 years ago So there are changes And you can see their effects That s surely part of the reason for the fact that the recent period the last 25 years has been a period of unusually slow economic growth of low productivity growth of stagnation or decline of wages and incomes for probably two thirds of the population even in a rich country like this And enormously high profits for a very small part of the population And it s worse in the Third World You can read in the New York Times the lead article in the Week in Review yesterday Sunday April 12 that America is prospering and happy And you look at the Americans they re talking about it turns out it s not the roughly two thirds of the population whose incomes are stagnating or declining it s the people who own stock So ok they re undoubtedly doing great except that about 1% of households have about 50% of the stock and it s roughly the same with other assets Most of the rest is owned by the top 10% of the population So sure America is happy and America is prosperous if America means what the New York Times means by it They re the narrow set of elites that they speak for and to CW We are curious about this potential for many-to-many communications and the fact that software as a way of doing things carries cultural values and impacts language and perception And what kind of impacts there are around having technology being developed by corporations such as Microsoft NC I don t think there s really any answer to that It depends who s participating who s active who s influencing the direction of things and so on If it s being influenced and controlled by the Disney Corporation and others it will reflect their interests If there is largely public initiative then it will reflect public interests CW So it gets back to the question of taking it back NC That s the question Ultimately it s a question of whether democracy s going to be allowed to exist and to what extent And it s entirely natural that the business world along with the state which they largely dominate would want to limit democracy It threatens them It always has been threatening That s why we have a huge public relations industry dedicated to as they put it controlling the public mind CW What kinds of things can people do to try to expand and reclaim democracy and the public space from corporations NC Well the first thing they have to do is find out what s happening to them So if you have none of that information you can t do much For example it s impossible to oppose say the Multilateral Agreement on Investment if you don t know it exists That s the point of the secrecy You can t oppose the specific form of globalization that s taking place unless you understand it You d have to not only read the headlines which say market economy s triumphed but you also have to read Alan Greenspan the head of the Federal Reserve when he s talking internally when he says look the health of the economy depends on a wonderful achievement that we ve brought about namely worker insecurity That s his term Worker insecurity--that is not knowing if you re going to have a job tomorrow It is a great boon for the health of the economy because it keeps wages down It s great it keeps profits up and wages down Well unless people know those things they can t do much about them So the first thing that has to be done is to create for ourselves for the population systems of interchange interaction and so on Like Corporate Watch Public Citizen other popular groupings which provide to the public the kinds of information and understanding that they won t otherwise have After that they have to struggle against it in lots of ways which are open to them It can be done right through pressure on Congress or demonstrations or creation of alternative institutions And it should aim in my opinion not just at narrow questions like preventing monopoly but also at deeper questions like why do private tyrannies have rights altogether CW What do you think about the potential of all the alternative media that s burgeoning on the Internet given the current trends NC That s a matter for action not for speculation It s like asking 40 years ago what s the likelihood that we d have a minimal health care system like Medicare These things happen if people struggle for them The business world Microsoft they re highly class conscious They re basically vulgar marxists who see themselves engaged in a bitter class struggle Of course they re always going to be at it The question is whether they have that field to themselves And the deeper question is whether they should be allowed to participate I don t think they should