Dr. Paul Craig Roberts was educated at Georgia Tech, the University of Virginia, the University of California, Berkeley, and Oxford University where he was a member of Merton College. He has been the Assistant Secretary of the US Treasury in the Reagan administration, a member of the US Congressional staff, an associate editor and columnist for the Wall Street Journal, and a columnist for Business Week, the Scripps Howard News Service, and Creators Syndicate. He was also a Senior Research Fellow for the Hoover Institution at Stanford University and was appointed to the William E. Simon Chair in Political Economy at Georgetown University’s Center for Strategic and International Studies. He is currently the chairman of the Institute for Political Economy and has authored or coauthored ten books and umerous articles in scholarly journals. He has testified before committees of Congress on 30 occasions. Dr. Roberts was awarded the US Treasury’s Meritorious Service Award for “outstanding contributions to the formulation of US economic policy,” and France’s Legion of Honor as “the artisan of a renewal in economic science and policy, after half a century of state interventionism.” Dr. Roberts recently communicated with Nilantha Ilangamuwa, Editor, Torture Magazine.
NI: You worked at the US treasury as Assistant Secretary during the Reagan administration, when the world economy changed towards neo-liberalism, and you are famous for being a co-founder of Reaganomics. How did this happen? What was your contribution to changing the model of world economy?
PCR: Reaganomics is a term the media attached to an innovation in economic theory and policy known as supply-side economics. Supply-side economics is not an ideology and it is not neo-liberalism.
I do not think that the Reagan administration changed the model of the world economy or that the administration thought of itself as neoliberal. What the Reagan administration did was to change the macroeconomic policy that had prevailed in the post-war English speaking world. That policy, known as Keynesian demand management, relied on government fiscal policy and monetary policy in order to maintain full employment and low inflation. If unemployment was the problem, government would enact a budget deficit and the central bank would expand money and credit. The monetary and fiscal stimulus would boost aggregate demand, and the increased spending would raise the level of employment. If inflation was the problem, the government would enact a budget surplus and the central bank would reduce the growth rate of money and credit.
This was how the policy was supposed to work. For example, in the early 1960s US economists understood the reduction in marginal income tax rates championed by President John F. Kennedy as a stimulus to consumer demand. Prior to Reagan, economists did not understand that fiscal policy could increase or decrease aggregate supply.
The demand management policy broke down during the Carter presidency. Each boost to employment had to be “paid for” with a higher rate of inflation, and each attack on inflation had to be “paid for” with a higher rate of unemployment. These worsening trade-offs became known as “stagflation.”
The only economists who had an answer to the problem of stagflation were the few supply-side economists of which I was one. Supply-side economics was an innovation in economic theory and in economic policy. Supply-side economists said that fiscal policy directly impacts aggregate supply. For example, a reduction in marginal tax rates (the rate of tax on additional income) changes important relative prices. It makes leisure more expensive in terms of foregone current income, and it makes current consumption more expensive in terms of foregone future income. Therefore, a reduction in marginal tax rates does not merely increase consumer demand. The lower tax rates result in an increase in labor and investment inputs, and aggregate supply increases. The demand management policy had stimulated demand, but the high marginal tax rates discouraged or made weaker the response of supply to demand. Therefore, prices rose. Supply-side economists said that the solution to stagflation was to change the policy mix: a tighter monetary policy and a looser fiscal policy. In other words, reduce the monetary stimulus and increase the supply incentives.
The policy worked, and the worsening “Phillips curve” trade-offs between employment and inflation disappeared. President Reagan had two main goals: to end stagflation and to end the Cold War. He campaigned on the supply-side policy. In order to get the policy implemented, he appointed me Assistant Secretary of the Treasury for Economic Policy. Later he associated me with his second goal by appointing me to a secret committee. Reagan thought that the Soviet economy was too decrepit to withstand the stress of a high-tech arms race. He believed that by threatening the Soviets with an arms race, he could bring them to negotiate the end of the Cold War.
The CIA told Reagan that the Soviets would win the arms race, because it was a centrally planned economy that controlled investment and could allocate as many resources as necessary to the military. Reagan did not believe the CIA and appointed a committee to make the determination. The committee concluded that the Soviet economy would be unable to compete in an arms race.
NI: The United States’ image was still reeling from the Vietnam War, which ended in 1975, when President Jimmy Carter came in to power. America had learnt an expensive lesson from the loss of more than 57,000 American servicemen in the jungles of Southeast Asia. However, during Carter administration there were also tremendous conflicts from Afghanistan to Iran, Grenada to Nicaragua. It was a hot time in the Cold War. Then in 1980 Ronald Reagan won the election, and had won the Cold War by the time he left office. How was the Reagan administration different from other presidencies?
PCR: Reagan achieved both of his goals, and that is what makes him different from other presidents. The military conflicts during the Reagan years were minor, and, unlike the military conflicts of the George W. Bush and Obama regimes, were not conflicts on behalf of US world hegemony. Reagan said that if he was to be successful in bringing the Soviets to an agreement to end the Cold War, he had to draw the line in the sand and prevent any further communist expansion, whether in Afghanistan, Grenada, or Nicaragua. He said that if more countries fell to communism and became Soviet clients, the Soviets would be too confident to negotiate an end to the Cold War.
NI: Your book entitled, “Alienation and the Soviet Economy”, has extensively examined the economic policy of the USSR and their weaknesses in planning. Could you please share with us how their weakness benefited the US to develop a neo-liberal economy and an identity as the leader of the West?
PCR: My book explains the Soviet economy as the outcome of an ideological attempt to remake human nature and society by substituting a planned economy for the unplanned market economy. Paradoxically, the collapse of the Soviet Union is one of the two developments (the other being the rise of the high speed Internet) that wrecked the US economy. When the Soviet Union collapsed, the American neoconservatives spoke of “the end of history,” by which they meant that American capitalism was the only viable socio-economic system. The Soviet collapse caused the communists in China and socialists in India to rethink their approaches and to get on the winning side. These two Asian giants opened their vast under-utilized labor forces to western capital.
The era of jobs offshoring began. US corporations, pressed by Wall Street for higher profits, by large retailers such as WalMart, and by the cap that Congress placed on executive pay that is not performance based,” moved the production of goods for US markets offshore where labor costs were a small fraction of US wages. This development caused profits to rise, but separated American consumers from the incomes associated with the goods and services that they consume. The same happened to professional service jobs, such as software engineering, Information Technology, and research and design. The ladders for upward mobility for Americans were dismantled. Wages and employment fell, medical benefits were lost, and careers disappeared.
The system by which First World corporations offshore the production of goods and services that they market in their home countries is called “globalism.” Globalism is turning the US into a third world country. For the past two decades, the only jobs the US economy has been able to create are in lowly paid domestic services, such as waitresses, bartenders, and hospital orderlies. There has been no increase in real income for the bulk of the population. The gains in income and wealth are concentrated at the very top, and the distribution of income is now the worst in the developed world and worse than many Third World countries. The economy of the Reagan years is simply gone, disappeared.
NI: In more recent years, especially after 9/11, you became a critical analyst of US foreign policy. When did things start going wrong in the US and how did it happen?
PCR: Things began going wrong in the US when the US became “the sole superpower.” American neoconservatives had a triumphal attitude and spread their attitude to the public and Congress with their propaganda. They argued that American capitalism had to be spread to the rest of the world, even if it had to be imposed by force of arms. Americans, neoconservatives proclaimed, were “the indispensable people,” who had the right and the responsibility to impose their way on the world. Neoconservatives used the US Endowment for Democracy to foment “color revolutions” in former Soviet republics. The event of 9/11 provided neoconservatives with the opportunity to initiate US military invasions and “regime change” in the Middle East, Afghanistan, and North Africa.
NI: Let’s start talking about our main subject – torture. I recall from our very first communication that you said you didn’t have much of an idea about torture except in the context of the US and Israel. What analysis can you share, regarding torture involving the United States?
PCR: In the US torture is prohibited by the US Constitution and by US statutory law. It is also prohibited by the Geneva Conventions and international law. I do not know why the George W. Bush regime violated US and international law and tortured “detainees”, most of whom were hapless individuals kidnapped by war lords and sold to the Americans for the bounty. It is well known among intelligence services that torture does not produce reliable information. Generally, a tortured person invents a story to tell his tormentors in order to stop the torture. Soviet dissidents accused of fantastic plots and tortured to elicit the names of their coconspirators, would give the names of dead people.
One dissident wrote that, expecting to be arrested, he memorized the names on gravestones.
In my opinion, the Bush regime, a neoconservative regime, used the hyped fear about the threat of “Muslim terrorism” to get the acquiescence of the American public, Congress and the federal courts to torture, arguing that torture was necessary in order to protect Americans from events such as 9/11.
The neoconservatives reasoned that if the executive branch could violate, with impunity, both constitutional and legal prohibitions against torture, the precedent could be expanded to habeas corpus, due process, and to free speech, free assembly, (protests) and to criticism of the government’s policies, which is being redefined as “aiding and abetting terrorism.”
Once law and the Constitution could be side-lined, the regime could escape war criminal accountability for its wars of naked aggression. President Obama won the presidential election, because voters expected him to stop the wars, stop the torture, and to hold the Bush regime criminals accountable.
However, Obama found the new powers convenient and held on to them and expanded them. He refused to hold the Bush regime criminals accountable. He had the illegal and unconstitutional powers asserted by the Bush regime codified in US law. And Obama asserted new powers—the right to murder American citizens of whom he was suspicious, without due process of law. What the Bush and Obama regimes have done is to turn the United States into a Gestapo-like police state. Prior to Bush/Obama it was illegal for the government to spy on Americans without cause presented to a court, which, if convinced, would provide a warrant. Now every aspect of Americans’ lives are routinely watched, their movements, their emails, their internet usage, and even their purchases. Not only are air travelers subjected to intimate searches, but train and bus travelers too, and car and truck traffic on interstate highways is stopped and searched. There have been no terrorist attacks on trains, buses, or highway travel. Yet, the freedom of mobility in the US has been compromised even more than it was in the Soviet Union with the system of internal passports.
NI: What is your suggested solution to this critique? In other words how can the responsible governments correct things and lead their people towards freedom?
PCR: In the US, government is no longer accountable to law or to the people. Whoever is elected to the presidency or to Congress is accountable to the powerful private interest groups that provide the funds for the political campaign. Having purchased the government, the special interests expect government to serve them. The military/security complex makes billions of dollars in profits from wars, whether hot or cold. Peace is not in the interest of the military/security complex. Peace reduces the profits of the armaments industry and it reduces the power of the CIA, Homeland Security, Pentagon, FBI, and National Security Agency. In America today, peace is for sissies.
NI: Just hours after the release of the State Department’s annual human rights report, you wrote an opinion saying that the US government was the second worst human rights abuser on the planet and the sole enabler of the worst abuser –Israel. If this is true, US pressure for human rights reforms in other countries seems hypocritical. Do you want the US government to stop talking to these other countries? If the US doesn’t have the right to criticize human rights violence in other countries, who does?
PCR: To use biblical language, the US government focuses attention on the mote in Syria’s or Iran’s or China’s eye in order to direct attention away from the beam in its own eye. It is Washington that conducted war for eight years in Iraq, killing hundreds of thousands of people on false pretenses.
It is Washington that is conducting war for eleven years in Afghanistan on false pretenses, killing an unknown, but large, number of Afghans. It is Washington that is violating the sovereignty of Pakistan and Yemen, murdering people in these countries daily on false pretenses. It was Washington that organized the overthrow of the Libyan government, leaving the country in total chaos, with untold deaths. It is Washington that is responsible for endless violence in Somalia. It is Washington that has sent US troops to four African countries as part of the new imperialist venture known as the US Africa Command. How can a government that commits massive violations of human rights in Afghanistan, Pakistan, the Middle East, Africa, and at home lecture, or speak to, any other country about human rights? The world accepts this unbelievable hypocrisy because of the success of US propaganda during the Cold War. The propaganda placed the white hat firmly on the head of the US government.
NI: You opposed the war in Afghanistan, Iraq, Libya and other ongoing conflicts in East Asia as well. We saw how torture occurred in those wars. Perhaps the most high profile and visible case of torture in recent years was the public execution of Muammar Gaddafi. Torture has become a norm, regardless of the victim’s guilt or innocence. There are numerous international conventions against torture but torture still exists in many places. What are your feelings about this? Why are events moving in that direction?
PCR: In the 20th century, the West, which was hardly innocent, nevertheless stood for civil liberty, for law as a shield of the people instead of a weapon in the hands of the government. In Hitler’s Germany and Stalin’s Soviet Union, law was a weapon in the hands of the government. Today the US has caught up with Hitler and Stalin. Law in the US is a weapon in the hands of the government.
In my opinion, neoconservative triumphalism has destroyed American morality and left hubris in its place. Americans are overwhelmed by how great and good and moral and indispensable they are. American hubris raises Americans above everyone else in the world. Americans can torture, murder, invade, and still lecture the rest of the world about human rights.
NI: In one of your pieces published last April, you pointed out, “I agree that there is a lot of evil in every country and civilization. In the struggle between good and evil, religion has at times been on the side of evil. However, the notion of moral progress cannot so easily be thrown out.” As you say, in many countries liberty was lost, though the notion of moral progress cannot be easily thrown out. Can you explain more about this interesting conclusion?
PCR: I don’t know enough about the nonwestern world to answer this question with confidence. The point I was making is that the struggle between good and evil is ancient. In various historical periods evil prevails; in other periods good prevails. This means that moral concepts survive even during the periods of the prevalence of evil. As I have written, not far into the past, slavery was a fact of life, not a moral issue. Today, even the worst government would not openly legitimize slavery, although tax slavery, except for the mega-rich who control the governments, exists everywhere in the West.
The point is that we cannot give up hope that the world can be returned to a moral existence. What is discouraging is that it is no longer the West, and certainly not the US government, that is the upholder of “the rights of mankind.”
NI: How can we change for the better? Where should it start if we are to achieve a torture free society?
PCR. In my opinion, there is no prospect for a moral and torture free world until the West is held accountable for its crimes. The war crimes tribunal in Malaysia was a beginning. The convictions of the Bush regime monsters have no legal authority, but the convictions assert morality authority. If the Malaysian war crimes tribunal is repeated in many other countries, the US and UK war criminals and their NATO (The North Atlantic Treaty Organization) puppet criminals would not be able to travel beyond their own borders. The image would be created of Western leaders hunted by the rest of the world for their criminal actions. This is the only way to re-empower morality as a force in history.
Western governments have become the antithesis of morality.
Nilantha Ilangamuwa is journalist and the editor of the Sri Lanka Guardian, an online daily newspaper based in Colombo, Sri Lanka. Recently he stared a bi-monthly magazine on torture, published by the Asian Human Rights Commission based in Hong Kong and Rehabilitation and Research Centre for Torture Victims based in Denmark. Torture: Asian and Global Perspectives is a new initiative which is focuses mainly on torture and its related issues globally. Writers, who interested in having their views of this subject published, may submit their articles to email@example.com or firstname.lastname@example.org.