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

In the introduction, Chomsky presents the current US system as profoundly undemocratic. He begins by defining democracy as the capacity for public opinion to influence policy. He then observes that according to the principle of concentration of wealth and power, the privileged and powerful sectors always sought to undermine democracy for personal gain because wealth and power tend to congregate: Electoral campaigns require increasingly more funds, which shifts power to the wealthy, who can then manipulate policy to fit their own needs. This vicious cycle allows the US elite to implement policies favorable to the concentration of wealth and power—such as deregulation, tax reduction for the rich, and rules for corporate governance—at the expense of the middle and lower classes.

In 1776, US economist Adam Smith wrote in Wealth of Nations that the main architects of policy (whom he dubbed the “masters of mankind”) care only about their own interests and disregard the needs of the general population. Smith calls this rule “the vile maxim” and sums it up as “all for ourselves and nothing for anyone else” (xiv). Chomsky points out that due to the lack of popular reaction among the general population to this maxim, it—ironically—became increasingly popular among the elite in modern America.

The wealthy elite successfully consolidate power by undermining democratic processes. Chomsky observes that much of US history can be summed up as a struggle between lower classes fighting for freedom and elites fighting to consolidate domination and control. This back-and-forth dates to the writing of the US Constitution.

Chomsky then argues that the constitutional system designed by James Madison exemplified the concentration of power by the elite. The Senate, which at the time was not elected but selected by state legislatures, held the most power. In comparison, the House of Representatives, which was much closer to the people, didn’t play as significant a role in policy. This framework directly reflects Madison’s belief that democracy should be strictly limited: The uneducated population should follow the lead of the enlightened elite, and the government should protect the interests of the opulent minority, particularly landowners, from the will of the majority (Secret Proceedings and Debates of the Convention Assembled at Philadelphia, in the Year 1787, quoted in Chomsky xvi). Ultimately, Madison observed that if democracy were liberally applied, the poor would revolt against the rich. To prevent this, he sought to limit democracy.

In contrast, Thomas Jefferson distinguished between democrats and aristocrats. According to his logic, the Madisonian system concentrates power to a distinguished class whose purpose is to make decisions for the rest of the population in a system reminiscent of the aristocracy. Democrats, conversely, believe that people should hold the power.

This debate on the ideal political system dates back to classical Greece. Chomsky highlights Aristotle’s Politics as one of the first in-depth studies on this topic. Although Aristotle concluded that democracies reigned as the best system, he, like Madison, anticipated that the poor would organize against the wealthy if they were too deprived. However, unlike Madison, Aristotle chose to remedy this situation by implementing a welfare state rather than limiting freedom. He argued that reducing inequality would alleviate the burdens of the lower classes and keep them content. Chomsky agrees with the Aristotelian solution: Reducing inequality alleviates social burdens and helps people live healthier lives; in contrast, limiting democracy only helps concentrate power to a privileged few.

Chomsky notes that the US is a settler-colonial society and accumulated wealth by murdering Indigenous people and subjugating Black slaves. Therefore, its struggle with democracy can’t be divorced from its history. For example, slave states noticed that the British court became increasingly intolerant of slavery, which incentivized them to seek independence. Thus, US history is divided into periods of intense democratization (initiated from the bottom) and intense reactionary measures (initiated from the top). The civil rights movement of the 1960s is a perfect example of what Chomsky dubs a “civilizing” effort. This period of organization and activism brought about increased freedom for Black Americans, women, and other minorities. Although the following period was logically one of reaction and backlash, Chomsky confesses that he didn’t anticipate the sheer strength of the elites’ opposition.

The Powell Memorandum was a confidential text commissioned by Supreme Court justice Lewis F. Powell Jr. in 1971 and sent to the Chamber of Commerce. Its main purpose was to warn business tycoons against losing control of US society. It claimed that capitalists were under threat of a leftist takeover. Similar concerns were voiced on the international front. For example, the Trilateral Commission—an organization that aims to foster cooperation between North America, Japan, and Western Europe—decried the democratization of the 1960s. It was concerned about the radicalization of youths and argued that educational institutions such as schools and churches failed to properly “indoctrinate” their target audience (19).

Chomsky believes that these events heralded the beginning of a coordinated business attack on democracy—on the ideological front. The wealthy and powerful sought to control the press and the education system to push back against the political gains that women, Black Americans, youths, and other minorities obtained in the previous decade. For example, K-12 learning began to focus on mechanical skill rather than creativity, and college tuition began to skyrocket. If students are taught to never question authority and then shackled by debt, their options for the future and their capacity to fight for change become limited. This ideological reaction against the gains of the 1960s isn’t agreed on by the masses but rather is imposed by the elites, or “masters of society” (145).

The dismissal of critics as “anti-American,” which exacerbates indoctrination, is a common practice in totalitarian regimes to control the population—and is also rampant in the US. By labeling any resistance against the corporate state as an attack on society, culture, and the people, those who wield power can effectively dissuade others from fighting back. This reaction, however, didn’t stem only from ideological differences. In the next section, Chomsky describes how corporate tycoons worked to completely redesign the economy.