World 28 June 2010 The high cost of neoliberalism Financial liberalisation undermines democracy, handing power to a “virtual senate” that acts on beha By Noam Chomsky In the contemporary world of state-capitalist nations, loss of sovereignty can lead to a diminution of democracy, and a decline in the ability of states to conduct social and economic policy on their own terms. History shows that, more often than not, loss of sovereignty leads to liberalisation imposed in the interests of the powerful. In recent years, the regime thus imposed has been called "neoliberalism". It is not a very good term, as the social-economic regime in question is not new; nor is it liberal, at least as the concept was understood by classical liberals. The very design of neoliberal principles is a direct attack on democracy. The central doctrine of neoliberalism is financial liberalisation, which took off in the early 1970s. Some of its effects are well known. With the increase in speculative capital flows, countries were forced to set aside much larger reserves to protect their currencies from attack. It is striking that countries which maintained capital controls - among them India and China - avoided the worst of the Asian financial crisis of 1997-98. In the United States, meanwhile, the share of the financial sector in corporate profit rose from just a few per cent in the 1960s to over 30 per cent in 2004. Concentration also increased sharply, thanks largely to the deregulatory zeal of the Clinton administration. By 2009, the share of banking industry assets held by the 20 largest institutions stood at 70 per cent. Among the consequences of financialisation is the creation of what an analysis by the investment bank Citigroup calls "plutonomy". The bank's analysts describe a world that is dividing into two blocs: the plutonomy and the rest. The US, UK and Canada are the key plutonomies: economies in which growth is powered by - and largely consumed by - the wealthy few. In plutonomies, these rich consumers take a disproportionately large slice of the national pie. Two-thirds of the world's economic growth is driven by consumption, primarily in the plutonomies, which monopolise profits as well. The virtual senate Citigroup's "plutonomy stock basket" has far outperformed the world index of developed markets since 1985, when the Reagan-Thatcher programmes for enriching the very wealthy were taking off. This is a substantial extension of the "80-20 rule" that is taught in business schools: 20 per cent of your customers provide 80 per cent of the profits, and you may be better off without the other 80 per cent. Corporations recognised years ago that modern information technology allows them to identify profitable customers to whom they can provide grand treatment, while deliberately offering skimpy services to the rest, creating a form of "consumer apartheid". Financial liberalisation also creates what some international economists have called a "virtual senate" of investors and lenders, who "conduct moment-by-moment referendums" on government policies. If the virtual senate determines that those policies are irrational - meaning that they are designed to benefit people, not profit - then it can exercise its "veto power" by capital flight, attacks on currency and other means. Take one recent example: after Hugo Chávez was elected president of Venezuela, capital flight escalated to the point where assets held abroad by wealthy Venezuelans equalled a fifth of the country's GDP. With capital flow liberalised, governments face a "dual constituency": voters and the virtual senate. And even in the richest countries, the private constituency tends to prevail. The Bretton Woods system put in place at the end of the Second World War was designed on the understanding that capital controls and regulated currencies would create a space for government action responding to public will - for some measure of democracy, that is. Keynes considered the most important achievement of Bretton Woods to be the establishment of the right of governments to restrict capital movement. In dramatic contrast, in the neoliberal phase that followed, the US treasury department came to regard free capital mobility as a "fundamental right", unlike such alleged rights as those guaranteed by the United Nations Universal Declaration of 1948: to health, education, decent employment and security - entitlements that the Reagan and Bush administrations dismissed as "preposterous", "letters to Santa Claus", mere "myths". In earlier years, the public had not been much of a problem. In his definitive history of the international monetary system, the economist Barry Eichengreen observes that, in the 19th century, governments had not yet been "politicised by universal male suffrage and the rise of trade unionism and parliamentary labour parties". This meant that the severe costs imposed by the virtual senate of lenders and investors could be transferred to the general population. But with the radicalisation of the general public during the Great Depression and the anti-fascist war that followed, this luxury was no longer available to private power and wealth. Hence, in the Bretton Woods system, Eichengreen writes, "limits on capital mobility substituted for limits on democracy as a source of insulation from market pressures". It is only necessary to add the obvious corollary: with the dismantling of that system from the 1970s on, functioning democracy was restricted. Real choices In Latin America, specialists and polling organisations have, for some time, observed that the extension of formal democracy was accompanied by an increasing disillusionment about democracy and a lack of faith in democratic institutions. A persuasive explanation for these disturbing tendencies was given by the Argentinian political scientist Atilio Boron, who pointed out that the new wave of democratisation in Latin America coincided with neoliberal economic "reforms", which undermine effective democracy. The phenomenon extends worldwide, although it appears that the tendency may have reversed in recent years, with departures from neoliberal orthodoxy. The annual polls on Latin American opinion by the Chilean polling agency Latinobarómetro, and their reception in the west, are interesting in this respect. Few elements of the reigning western orthodoxy are upheld with more fervour than the view that Chávez is a tyrant dedicated to the destruction of democracy. The polls are therefore a serious annoyance that have to be overcome by the usual device: suppression. The November 2007 poll had the same irritating results as in the preceding few years: Venezuela ranked second behind Uruguay in satisfaction with democracy and third in satisfaction with leaders. It ranked first in the assessment of the current and future economic situation, equality and justice, and education standards. True, it ranked only 11th in favouring a market economy but, even with this flaw, overall it ranked highest in Latin America on matters of democracy, justice and optimism, far above the US favourites Colombia, Peru, Mexico and Chile. The Latin America analyst Mark Turner has written of an "almost total English-speaking blackout about the results of this important snapshot of [Latin American] views and opinions". He also found the usual exception: there were reports of the finding that Chávez is about as unpopular as Bush in Latin America, a fact that will come as little surprise to those who are familiar with the bitterly hostile coverage to which the Venezuelan president is subjected in the media, not least (and this is an odd feature of this putative dictatorship) in his country. In the US, faith in institutions has been declining steadily. It is interesting to compare recent presidential elections in the richest country in the world and the poorest country in South America, Bolivia. In the 2004 US presidential election, voters had a choice between two men born to wealth and privilege, who attended the same elite university, joined the same secret society where privileged young men are trained to take their place in the ruling class, and were able to run in the election because they were supported by pretty much the same conglomerations of private power. Their announced programmes were similar, consistent with the needs of their primary constituency: wealth and privilege. By contrast, in the December 2005 election in Bolivia, voters were familiar with the issues: control of resources, cultural rights for the indigenous majority, problems of justice in a complex multi-ethnic society and many others. They eventually chose Evo Morales, someone from their own ranks, and not a representative of narrow sectors of privilege. There was real participation, extending over years of intense struggle and organisation. Election day was not just a brief interlude for pushing a lever and then retreating to passivity and private concerns, but one phase in ongoing participation in the workings of the society. The comparison, and it is not the only one, raises some questions about where democracy promotion is most needed. Latin America has real choices, for the first time in its history. The usual modalities of imperial control - violence and economic strangulation - are much more limited than before. There are lively and vibrant popular organisations providing the essential basis for meaningful democracy. Latin American and other former colonies have enormous internal problems and there are sure to be many setbacks, but there are promising developments as well. It is in these parts of the world that today's democratic wave finds its basis and its home. That is why the World Social Forum has met in Porto Alegre, Mumbai, Caracas, Nairobi, not in northern cities, though by now the global forum has spawned many regional and local offshoots, doing valuable work geared to problems of significance in their own regions. The former colonies, in Latin America in particular, have a better chance than ever before to overcome centuries of subjugation, violence and foreign intervention, which they have so far survived as dependencies with islands of luxury in a sea of misery. These are exciting prospects for Latin America, and if the hopes can be realised, even partially, the results cannot fail to have a large-scale global impact as well. Extracted from "Hopes and Prospects" by Noam Chomsky (Hamish Hamilton, £18.99)© Noam Chomsky 2010 penguin.co.uk
Show Hide image Education 23 February 2016 Head in the cloud As we download ever more of our lives on to electronic devices, are we destroying our own internal memory? By Sophie McBain Follow @@semcbain I do not remember my husband’s telephone number, or my best friend’s address. I have forgotten my cousin’s birthday, my seven times table, the date my grandfather died. When I write, I keep at least a dozen internet tabs open to look up names and facts I should easily be able to recall. There are so many things I no longer know, simple things that matter to me in practical and personal ways, yet I usually get by just fine. Apart from the few occasions when my phone has run out of battery at a crucial moment, or the day I accidentally plunged it into hot tea, or the evening my handbag was stolen, it hasn’t seemed to matter that I have downloaded most of my working memory on to electronic devices. It feels a small inconvenience, given that I can access information equivalent to tens of billions of books on a gadget that fits into my back pocket. For thousands of years, human beings have relied on stone tablets, scrolls, books or Post-it notes to remember things that their minds cannot retain, but there is something profoundly different about the way we remember and forget in the internet age. It is not only our memory of facts that is changing. Our episodic memory, the mind’s ability to relive past experiences – the surprising sting of an old humiliation revisited, the thrill and discomfort of a first kiss, those seemingly endless childhood summers – is affected, too. The average Briton now spends almost nine hours a day staring at their phone, computer or television, and when more of our lives are lived on screen, more of our memories will be formed there. We are recording more about ourselves and our experiences than ever before, and though in the past this required deliberate effort, such as sitting down to write a diary, or filing away a letter, or posing for a portrait, today this process can be effortless, even unintentional. Never before have people had access to such comprehensive and accurate personal histories – and so little power to rewrite them. My internet history faithfully documents my desktop meanderings, even when I resurface from hours of browsing with little memory of where I have been or what I have read. My Gmail account now contains over 35,000 emails received since 2005. It has preserved the banal – long-expired special offers, obsolete arrangements for post-work drinks – alongside the life-changing. Loves and break-ups are chronicled here; jobs, births and weddings are announced; deaths are grieved. My Facebook profile page has developed into a crowdsourced, if assiduously edited, photo album of my social life over the past decade. My phone is a museum of quick-fire text exchanges. With a few clicks, I can retrieve, in mind-numbing detail, information about my previous movements, thoughts and feelings. So could someone else. Even my most private digital memories are not mine alone. They have become data to be restructured, repackaged, aggregated, copied, deleted, monetised or sold by internet firms. Our digital memories extend far beyond our reach. In the late 1990s the philosopher David Chalmers coined the term “the extended mind” to describe how when we use pen and paper, calculators, or laptops to help us think or remember, these external objects are incorporated into our cognitive processes. “The technology we use becomes part of our minds, extending our minds and indeed our selves into the world,” Chalmers said in a 2011 Ted talk. Our iPhones have not been physically implanted into our brains, he explained, but it’s as if they have been. There’s a big difference between offloading memory on to a notepad and doing it on to a smartphone. One is a passive receptacle, the other is active. A notebook won’t reorganise the information you give it or ping you an alert; its layout and functions won’t change overnight; its contents aren’t part-owned by the stationery firm that made it. The more we extend our minds online, the harder it is becoming to keep control of our digital pasts, or to tell where our memories begin or end. And, while society’s collective memory is expanding at an astonishing rate, our internal, individual ones are shrinking. *** Our brains are lazy; we are reluctant to remember things when we can in effect delegate the task to someone or something else. You can observe this by listening to couples, who often consult one another’s memories: “What was the name of that nice Chinese restaurant we went to the other day?” Subconsciously, partners distribute responsibility for remembering information according to each other’s strengths. I ask my husband for directions, he consults me on people’s names. In one study conducted in 1991, psychologists assigned a series of memory exercises to pairs of students, some of whom had been dating for at least three months and some of whom did not know one another. The dating couples remembered more than the non-dating pairs. They also remembered more unique information; when a fact fell into their partner’s area of expertise, they were more likely to forget it. In a similar way, when we know that a computer can remember something for us we are less likely to remember it ourselves. For a study published by the journal Science in 1991, people were asked to type some trivia facts into a computer. Those who believed the facts would be saved at the end of the experiment remembered less than those who thought they would be deleted – even when they were explicitly asked to memorise them. In an era when technology is doing ever more remembering, it is unsurprising that we are more inclined to forget. It is sometimes suggested that in time the worry that the internet is making us forgetful will sound as silly as early fears that books would do the same. But the internet is not an incremental step in the progression of written culture, it is revolutionising the way we consume information. When you pull an encyclopaedia down from a library shelf, it is obvious that you are retrieving a fact you have forgotten, or never knew. Google is so fast and easy to use that we can forget we have consulted it at all: we are at risk of confusing the internet’s memory with our own. A Harvard University project in 2013 found that when people were allowed to use Google to check their answers to trivia questions they rated their own intelligence and memories more highly – even if they were given artificially low test results. Students usually believed more often that Google was confirming a fact they already knew, rather than providing them with new information. This changed when Adrian Ward, now an assistant professor at the University of Austin, who designed the study as part of his PhD research, mimicked a slow internet connection so that students were forced to wait 25 seconds to read the answer to a Google query. The delay, he noted, stripped them of the “feeling of knowing” because they became more aware that they were consulting an external source. In the internet age, Ward writes, people “may offload more and more information while losing sight of the distinction between information stored in their minds and information stored online”. By blurring the distinction between our personal and our digital memories, modern technology could encourage intellectual complacency, making people less curious about new information because they feel they already know it, and less likely to pay attention to detail because our computers are remembering it. What if the same could be said for our own lives: are we less attentive to our experiences because we know that computers will record them for us? An experiment by the American psychologist Linda Henkel suggests this could be the case; she has found that when people take photographs at museums they are more likely to forget details of what they have seen. To some extent, we’re all tourists exploring the world from behind a camera, too distracted by our digital memories to inhabit our analogue lives fully. Relying on computers to remember telephone numbers or trivia does not seem to deprive our internal memories of too much – provided you can remember where you’ve stored it, factual information is fairly straightforward to retrieve. Yet a digital memory is a poor substitute for the richness of a personal experience revisited, and our autobiographical memories cannot be “retrieved” by opening the relevant online file. Our relationship with the past is capricious. Sometimes an old photograph can appear completely unfamiliar, while at other times the faintest hint – the smell of an ex-lover’s perfume on a crowded Tube carriage – can induce overwhelming nostalgia. Remembering is in part a feeling, of recognition, of having been there, of reinhabiting a former self. This feeling is misleading; we often imagine memories offer an authentic insight into our past. They do not. Memory is closely linked to self-identity, but it is a poor personal record. Remembering is a creative act. It is closely linked to imagining. When people suffer from dementia they are often robbed not only of the past but also of the future; without memory it is hard to construct an idea of future events. We often mistakenly convert our imaginings into memories – scientists call the process “imagination inflation”. This puts biological memories at odds with digital ones. While memories stored online can be retrieved intact, our internal memories are constantly changing and evolving. Each time we relive a memory, we reconfigure it to suit our present needs and world-view. In his book Pieces of Light, an exploration of the new science of memory, the neuroscientist Charles Fernyhough compares the construction of memory to storytelling. To impose meaning on to our chaotic, complex lives we need to know which sections to abridge and which details can be ignored. “We are all natural born storytellers. We are constantly editing and remaking our memory stories as our knowledge and emotions change. They may be fictions, but they are our fictions,” Fernyhough writes. We do not write these stories alone. The human mind is suggestible. In 2013, scientists at MIT made international headlines when they said they had successfully implanted a false memory into a mouse using a form of light stimulation, but human beings implant false memories into each other all the time, using more low-tech methods. Friends and family members are forever distorting one another’s memories. I remember distinctly being teased for my Dutch accent at school and indignantly telling my mother when I arrived home that, “It’s pronounced one, two, three. Not one, two, tree.” My brother is sure it was him. The anecdote is tightly woven into the story of our pasts, but one of us must be wrong. When we record our personal memories online we open up new possibilities for their verification but we also create different opportunities for their distortion. In subtle ways, internet firms are manipulating our digital memories all the time – and we are often dangerously unaware of it. *** Facebook occasionally gives me a reminder of Mahmoud Tlissy, the caretaker at my former office in Libya who died quietly of pancreatic cancer in 2011 while the civil war was raging. Every so often he sends me a picture of a multicoloured heart via a free app that outlived him. Mahmoud was a kind man with a sardonic sense of humour, a deep smoker’s laugh and a fondness for recounting his wild days as a student in Prague. I am always pleased to be reminded of him, but I feel uncomfortable because I doubt he would have chosen such a naff way to communicate with me after death. Our digital lives will survive us, sending out e-hearts and populating databases long after we have dropped off the census. When we deposit our life memories online, they start to develop lives of their own. Those who want to limit the extent to which their lives are recorded digitally are swimming against the tide. Internet firms have a commercial interest in encouraging us not only to offload more personal information online, but also to use digital technology to reflect on our lives. Take Facebook, which was developed as a means of communicating but is becoming a tool for remembering and memorialising, too. The first Facebook users, who were university students in 2004, are mostly in their thirties now. Their graduations, first jobs, first loves, marriages and first children are likely to be recorded on the site; friends who have died young are likely to be mourned on it. The website understands that nostalgia is a powerful marketing tool, and so it has released gimmicky tools, such as automated videos, to help people “look back”. These new online forms of remembrance are becoming popular. On Instagram and Twitter it is common for users to post sentimental old snaps under the hashtag #tbt, which stands for “Throwback Thursday”. Every day, seven million people check Timehop, an app that says it “helps you see the best moments of your past” by showing you old tweets, photos and online messages. Such tools are presented as a way of enriching our ability to relive the past but they are limiting. We can use them to tell stories about our lives, but the pace and structure of the narrative is defined for us. Remembering is an imaginative act, but internet firms are selling nostalgia by algorithm – and we’re buying it. At their most ambitious, tech companies are offering the possibility of objective and complete insight into our pasts. In the future, “digital memories” could “[enhance] personal reflection in much the same way as the internet has aided scientific investigations”, the computer scientists Gordon Bell and Jim Gemmell wrote in the magazine Scientific American in 2006. The assumption is that our complex, emotional autobiographic memories can be captured as data to be ordered, quantified and analysed – and that computer programs could make better sense of them than our own, flawed brains. The pair have been collaborating on a Microsoft Research “life-logging” project since 2001, in which Bell logs everything he has said, written, seen and heard into a specially designed database. Bell understood that the greatest challenge is finding a way to make digital archives usable. Without a program to help us extract information, digital memories are virtually useless: imagine trying to retrieve a telephone number from a month’s worth of continuous video footage. In our increasingly life-logged futures, we will all depend on powerful computer programs to index, analyse, repackage and retrieve our digital memories for us. The act of remembering will become automated. We will no longer make our “own fictions”. This might sound like a distant sci-fi fantasy, but we are a long way there. Billions of people share their news and views by email or on social media daily, and unwittingly leave digital trails as they browse the web. The use of tracking devices to measure and record sleep, diet, exercise patterns, health and even mood is increasing. In the future, these comprehensive databases could prove very useful. When you go to the doctor, you might be able to provide details of your precise diet, exercise and sleep patterns. When a relationship breaks down you could be left with many gigabytes of digital memory to explore and make sense of. Did you really always put him down? Should you have broken up four years ago? In a few years’ time there could be an app for that. Our reliance on digital memories is self-perpetuating: the more we depend on computer memories to provide us with detailed personal data, the more inadequate our own minds seem. Yet the fallibility of the human memory isn’t a design flaw, it is one of its best features. Recently, I typed the name of an ex-boyfriend into my Gmail search bar. This wasn’t like opening a box of old letters. For a start, I could access both sides of our email correspondence. Second, I could browse dozens of G-chats, instant messaging conversations so mundane and spontaneous that reading them can feel more like eavesdropping on a former self, or a stranger. The messages surprised me. I had remembered the relationship as short-lived and volatile but lacking any depth of feeling. So why had I sent those long, late-night emails? And what could explain his shorter, no less dramatic replies, “Will u ever speak to me again? You will ignore this I suspect but I love you.” Did he love me? Was I really so hurt? I barely recognise myself as the author of my messages; the feelings seem to belong to someone else. My digital archives will offer a very different narrative from the half-truths and lies I tell myself, but I am more at home with my fictions. The “me” at the centre of my own memories is constantly evolving, but my digital identity is frozen in time. I feel a different person now; my computer suggests otherwise. Practically, this can pose problems (many of us are in possession of teenage social media posts we hope will never be made public) and psychologically it matters, too. To a greater or lesser extent, we all want to shed our former selves – but digital memories keep us firmly connected to our past. Forgetting and misremembering is a source of freedom: the freedom to reinvent oneself, to move on, to rewrite our stories. It means that old wounds need not hurt for ever, that love can be allowed to fade, that people can change. With every passing year, we are shackling ourselves more tightly to our digital legacies, and relying more heavily on computer programs to narrate our personal histories for us. It is becoming ever harder to escape the past, or remake the future. Years from now, our digitally enhanced memories could allow us to have near-perfect recall, but who would want to live with their head in the cloud? Sophie McBain is an NS contributing writer. This article was a runner-up in the 2015 Bodley Head FT Essay Prize Sophie McBain is a freelance writer based in Cairo. She was previously an assistant editor at the New Statesman. This article first appeared in the 18 February 2016 issue of the New Statesman, A storm is coming
