Name: Profit Over People
Rating: 4.3 (355 reviews)
Author: Noam Chomsky

What’s in it for me? 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 Blink, 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.

The hidden power of the WTO

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.

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.

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.

Key ideas in Profit Over People

What is Profit Over People about?

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.

About the Author

Noam Chomsky is a world-renowned figure in linguistics and politics. He revolutionized the field of linguistics with his groundbreaking work in syntactic structures. Chomsky is also known for his outspoken criticism of US foreign policy, demonstrated in his renowned works Manufacturing Consent and Hegemony or Survival.