Economy Brooklyn, New York in March of 2012

Published on May 19th, 2012 | by Rhonda Winter


Chomsky’s “Plutonomy & the Precariat” Explains Why Jobs aren’t Coming Back

Brooklyn, New York in March of 2012

Earlier this month Noam Chomsky published an incisive essay entitled: Plutonomy and the Precariat: On the History of the U.S. Economy in Decline*, which clearly elucidates how the extreme concentration of wealth with the 1% has transpired because our country no longer manufactures actual things — bankers, stock brokers and financiers simply manipulate the idea of money. The United States has mutated into a vastly economically stratified oligarchy, 99% of whom have almost no political power or influence in our nation’s participatory “democracy”.

In this brief excerpt, Chomsky explains how these huge shifts in our economic structure have ravaged the working class, many of whom have a pervasive sense of despair and no hope that meaningful employment will ever return:

“In the 1930s, unemployed working people could anticipate that their jobs would come back. If you’re a worker in manufacturing today — the current level of unemployment there is approximately like the Depression — and current tendencies persist, those jobs aren’t going to come back.

The change took place in the 1970s. There are a lot of reasons for it. One of the underlying factors, discussed mainly by economic historian Robert Brenner, was the falling rate of profit in manufacturing. There were other factors. It led to major changes in the economy — a reversal of several hundred years of progress towards industrialization and development that turned into a process of de-industrialization and de-development. Of course, manufacturing production continued overseas very profitably, but it’s no good for the work force. 

Along with that came a significant shift of the economy from productive enterprise — producing things people need or could use — to financial manipulation. The financialization of the economy really took off at that time.


On Banks


Before the 1970s, banks were banks. They did what banks were supposed to do in a state capitalist economy: they took unused funds from your bank account, for example, and transferred them to some potentially useful purpose like helping a family buy a home or send a kid to college. That changed dramatically in the 1970s. Until then, there had been no financial crises since the Great Depression. The 1950s and 1960s had been a period of enormous growth, the highest in American history, maybe in economic history.

And it was egalitarian. The lowest quintile did about as well as the highest quintile. Lots of people moved into reasonable lifestyles — what’s called the “middle class” here, the “working class” in other countries — but it was real. And the 1960s accelerated it. The activism of those years, after a pretty dismal decade, really civilized the country in lots of ways that are permanent. 

When the 1970s came along, there were sudden and sharp changes: De-industrialization, the off-shoring of production, and the shift to financial institutions, which grew enormously. I should say that, in the 1950s and 1960s, there was also the development of what several decades later became the high-tech economy: Computers, the Internet, the IT Revolution developed substantially in the state sector. 

The developments that took place during the 1970s set off a vicious cycle. It led to the concentration of wealth increasingly in the hands of the financial sector. This doesn’t benefit the economy — it probably harms it and society — but it did lead to a tremendous concentration of wealth.”


You can read Noam Chomsky’s essay in its entirety at


* In case you were wondering, Plutonomy describes an economy that is significantly influenced by the very wealthy, and the Precariat is you and me, individuals who are, according to Wikipedia: 
“…suffering from precarcity, which is a condition of existence without predictability or security, affecting material or psychological welfare. Specifically, it is applied to the condition of lack of job security, in other words intermittent or underemployment and the resultant precarious existence.”

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was raised by wolves, and subsequently has difficulty interacting with other humans; she can also be found on and Twitter.

2 Responses to Chomsky’s “Plutonomy & the Precariat” Explains Why Jobs aren’t Coming Back

  1. Uncle B says:

    Fails to mention the “proletariat”! For a fact now non-existent in the U.S.A. and Canada! They were burnt in the American Holocaust, not “lost in the sixties” but utterly destroyed, and exterminated from American soil. Later history, and history written in Mandarin today tells of them – some 40 or 45, some 50, even 55 or 60, “Downsized”! Laid off from a life time job! A blue collar “profession”, defeated, broken trusts, broken men swindled, or as they would say, “screwed blued and tattooed”, without benefits left to die, never to succeed at even reproduction, their children even refused fair medical treatment at the doctors door for lack of money. We witness their existence by the ruins they left behind, Detroit City and the ‘Mo-Town Sound”, the American Rust Belt. Gary Indiana, the popular tunes of the late 50’s 60’s and early seventies before the “Pain” took over. We see the Desotos, the Imperials, the Pontiacs, the Packards, the Hudson’s, the Nash, the Studebaker’s, the Kaisers, the Monarch’s, only on the web now. We also witness today in America a well earned and decided mis-trust of all things corporate, of Capitalists and of their system, even as the jobs are shipped off-shore to Asian factories, modern clean, Super-Factories in China, financed on these proletariat’s backs, where the work is easy enough now for even 89 pound Asian women eating rice and veggies with some meat on the side, to pull 12 hour shifts 7 days a week! If we had had it so cushie! I could give up my O2 tank today! Try that in the Bethlehem Steel Mills of the 60’s in America! Were this generation of proletariat mistreated? This is the true shame of America and Capitalism. Anybody that could stand up could get a job then, the trick was in keeping it! Company Liabilities? You kidding? Folks do not be fooled by this glib propagandist from the air conditioned Ivory Towers of America! He has my generation’s blood on his hands, he has the proletariat to thank for his fat stock port-folio and he is responsible by his choices for their demise in America!

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