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

Chomsky defines this as the process by which profit is increasingly generated through financial institutions such as investment banks and financial markets rather than through the manufacture of goods. Financialization helps concentrate power to the elite and—combined with offshoring—devaluates the average worker.

This refers to the corporate practice of moving manufacturing to other countries, where labor cost is cheaper (and regulations are often less stringent), to maximize profit. Chomsky argues that this practice often exploits overseas workers and forces them to work in unsafe environments. In addition, offshoring results in a loss of power for domestic workers, whose demands for better salaries and working conditions corporations can easily be ignore due to a ready supply of exploited international workers.

This is named after James Madison, the fourth US president, who believed that democracy should be controlled by an “enlightened” elite rather than distributed equally across the population. In practice, this model assumes that an uninformed public is better off following rules set by the architects of society, who are better equipped to design policy and lead society. Chomsky argues that the incredible amount of power currently held by US corporations is reminiscent of the Madisonian model.

In Principle 6, Chomsky defines this concept as a belief in letting the market run everything. In theory, it approximates Adam Smith’s concept of the free market and profoundly opposes government interference in economic matters. In practice, however, corporations rely on government bailouts and use policy to maximize their own rights. In other words, Chomsky points out that neoliberalism, when practiced by corporations, differs vastly from its theoretical definition.