Requiem for the American Dream: The 10 Principles of Concentration of Wealth & Power

“Democracy puts power into the hands of the general population and takes it away from the privileged and the powerful. It’s a principle of concentration of wealth and power.”

In this quote, Chomsky defines democracy as a tool for the broader population to contest those in power. Throughout the book, Chomsky explores ways that the extremely wealthy have increasingly consolidated power at the expense of the general population. This phenomenon has accelerated in the US since the 1970s.

“The Senate had most of the power, but it also was the most remote from the population.”

Chomsky believes that the US Constitution as designed by Madison doesn’t reflect true democracy because it deliberately ignores the concerns of the people in favor of the elites. This quote shows how the Senate, which at the time was appointed, was deliberately kept away from public influence.

“Aristotle’s solution was the opposite—he proposed what we would nowadays call a welfare state.”

Throughout the book, Chomsky links his deep skepticism for the corporate elite’s concentration of power to philosophical concepts devised during Classical Antiquity. His purpose here is to discourage immediate dismissal of leftist ideals as extreme or unfathomable. This passage demonstrates how defending the welfare state—often considered a radical position in the US—is consistent with what Aristotle proposed in the 3rd century BC.

“The United States was a settler-colonial society, the most brutal form of imperialism.”

Here, Chomsky emphasizes that many early economic gains of the US were founded on a violent history of slavery and destruction. In other words, America’s wealth wasn’t generated through freedom but was largely predicated on the subjugation of Native Americans and Black slaves.

“If you look at the history of the United States, it’s a constant struggle between these two tendencies [a democratizing tendency from the population and a non-democratic one coming from the wealthy and powerful].”

In this statement, Chomsky sets the stage for his argument on the rise of neoliberalism in the 1970s as a reaction to the successes of the civil rights movement of the previous decade. He argues that the US is founded on principles of freedom and justice, but in practice, both the democratizing forces (defined as giving power to the people) and the antidemocratic forces (the concentration of power by the elite) fight each other for control.

“There has been an enormous, concentrated, coordinated business offensive beginning in the ‘70s to try to beat back the egalitarian efforts that went right through the Nixon years.”

In this passage, Chomsky highlights the 1970s as the beginning of the rise of neoliberalism. Furthermore, he argues that this attack against democracy is planned and coordinated by businesses. In other words, US elites (along with their international counterparts) launched an offensive against women, workers, and other minorities for control of society.

“This notion of being “anti-American” is quite an interesting one—it’s actually a totalitarian notion—it isn’t used in free societies.”

Here, Chomsky points out that the practice of zealously defending corporate values as “American” values reflects totalitarian practices. In other words, corporations employ the same language and psychology as tyrannical states to consolidate power and keep the public in check. Chomsky uses this comparison to highlight the inappropriateness of this corporate-engineered practice in free societies.

“Back in the 1950s, as for many years before, the United States economy was based largely on production. […] Financial institutions used to be a relatively small part of the economy and their task was to distribute unused assets like bank savings to productive activity.”

This quote illustrates how profoundly financialization changed the shape of the US economy and affected working-class lives. Whereas manufacturing was mainly done domestically, and the generation of wealth depended on workers’ productivity, financialization robbed them of their power by shifting the means of generating profit. Chomsky argues that businesses generate more profits through manipulating capital than through actual production of goods.

“In fact, what are called international “free trade agreements” are not free trade at all. The trade system was reconstructed with a very explicit design of putting working people in competition with one another all over the world.”

This passage highlights how international free trade agreements hurt workers everywhere. The free international market model enables businesses to easily offshore manufacturing to countries where labor costs are low and regulations are few. In this way, businesses can profit by using workers who live in desperate conditions, and domestic workers must then compete with their exploited international counterparts for jobs.

“Now, the plutonomy is much more rigorously following Adam Smith’s vile maxim: ‘All for ourselves, nothing for anyone else’.”

Chomsky argues in this passage that financial institutions, which shifted their production to reflect the needs of the international plutonomy, perpetuate a vicious cycle of selfishness, leaving behind an increasingly powerless and impoverished working class. The plutonomy is composed of wealthy elites whose only concern is to increase their own prestige and power. Chomsky later argues that their ideals don’t reflect the broader needs of the public and are often detrimental to the environment. A further concentration of power by the plutonomy would thus be profoundly destructive for everyone else.

“The tax system has been redesigned so that the taxes that are paid by the very wealthy are reduced and, correspondingly, the tax burden on the rest of the population’s increased.”

In this passage, Chomsky opposes tax cuts for the wealthy by highlighting the devastating consequences they bring to the rest of the public. He highlights elsewhere that no evidence shows that pay cuts create better opportunities for generating wealth. Rather, pay cuts only enrich the already powerful but are detrimental to the lower classes.

“The “political revolution” that Bernie Sanders called for, rightly, would not have greatly surprised Dwight Eisenhower. What that means is the spectrum has shifted so far to the right that what the population wants, and what was once mainstream, now looks radical and extremist.”

In this passage, Chomsky refers to Eisenhower to highlight how the social reforms proposed by the “radical” left of more recent times are not at all extreme by historical standards. Corporations shifted the US political spectrum to the right in recent decades. By influencing media and education, businesses and elites successfully sold the idea that any social program that reduces corporate power is detrimental to US society and to the economy.

“Social Security is based on a principle. It’s based on a principle of solidarity.”

Here, Chomsky establishes solidarity as one of the fundamental principles of democracy. Elsewhere, he defines solidarity as the unselfish act of helping others, a clear contrast to the “vile maxim” practiced by corporations. This quote thus affirms that social programs are inherently democratic because they protect the people and promote altruism.

“We have the only health care system in the advanced world that is based overwhelmingly on virtually unregulated private health care, and that is extremely inefficient and very costly.”

In this passage, the author challenges the core US healthcare system by pointing out its economic inefficiency compared to healthcare systems in other developed countries. Chomsky considers the US privatization of healthcare and the broader lack of social safety programs the result of corporate greed—that is, in consolidating their power, corporations prioritize profit over public welfare.

“Power has become so concentrated that not only are the banks “too big to fail,” but as one economist put it, they are also “too big to jail”.”

Chomsky highlights how investment banks can attempt any number of risky ventures with no consequences for their actions because of their inflated power in US policy. Corporations and financial institutions wield so much control that they often can do no wrong—even when their actions are criminal.

“But the rich and powerful, they don’t want a capitalist system. They want to be able to run to the “nanny state” as soon as they’re in trouble, and get bailed out by the taxpayer.”

When considered in tandem with the previous quote, this demonstrates how profoundly corporations control US society. They’re above legal systems and beyond failure. Taxpayer money remedies their mistakes. In this passage, Chomsky highlights the precariousness of this concentration of power.

“Corporations are state-created legal fictions.”

This quote points out that legal systems often treat corporations like people, even though doing so is fictitious. Chomsky later highlights how international free trade agreements sometimes grant greater freedom to corporations than to immigrants. This once again demonstrates the power that businesses hold over governments and legal courts.

“You don’t build a better-functioning democracy, or a party for that matter, by voting once every four years.”

Chomsky argues here that activism and organization are crucial to fight back against corporate control. Policy reflects the needs of the elite and is largely divorced from public opinion. Voting on its own is therefore no longer enough to dismantle the power structure.

“A major reason for the concentrated, almost fanatic attack on unions and organized labor is they are a democratizing force.”

Here, Chomsky underlines the importance of unions as the first and last line of defense against corporate control. He considers unions the solution because they grant power to the workers in America’s capitalist society. Therefore, to help keep the public in line, corporate interests vilify the effectiveness of unions in rallying people against business tycoons.

“So on the one hand, people have to be induced to hate government, while on the other hand, they have to support government because private business relies extensively on state support—all the way from high-technology economy to bailouts, to international force, and so on—a vast spectrum.”

This passage highlights the double standard in Republican policies. The US political right encourages people to celebrate a reduced government, yet corporations rely on government bailouts when they fail. Meanwhile, these same elites teach the public to shun social programs designed to help them. In other words, corporations care only for their own interests and therefore lead the public to cater to corporate interests that are detrimental to public interests.

“If you can fabricate wants, make obtaining things that are just about within your reach the essence of life, they’re going to be trapped into becoming consumers.”

Here, Chomsky summarizes the corporate strategy of fabricating consumers to keep them from organizing and fighting against corporate control. By manipulating people into desiring certain products, corporations trap the public in a system of work and consumption that hinders critical thought and collective action. Chomsky consider this an insidious and dangerous method of control.

“If you’ve ever turned on your television set, you know that hundreds of millions of dollars are spent to try to create uninformed consumers who will make irrational choices—that’s what advertising is.”

In this passage, Chomsky reveals the disconnect between economic theory and practice. Whereas students are taught to consider consumers as rational and informed, corporations actively work to do the opposite. By withholding information and forcing irrational decisions, they maximize their power and induce mindless consumption.

“Government policy is designed to implement state power and the power of dominant elements within the society. Here, it means mainly the corporate sector. The welfare of the population is secondary, and often not cared for at all.”

This quote exposes policy as divorced from the needs of the people. Chomsky argues that government programs are structured to defend the interests of the elite to the detriment of the general public. This is a means to consolidate power and a method for the “masters of society” to further enrich themselves.