I interviewed Paul Craig Roberts on March 27th. This is part one of a two part interview.
Here's the link to the audio recording Podcast.
Thanks to Don Caldarazzo for doing the transcript.
Rob Kall: And welcome to the Rob Kall Bottom Up Radio Show, WNJC 1360 AM, reaching metro Philly and South New Jersey, out of Washington Township, New Jersey, sponsored by Opednews.com . Just Google the words "Liberal news," and Opednews.com shows up at the top of your Google search, or one or two [1 or 2] on your Bing.com search. But we're left of Liberal, really. And we're certainly not a Democratic or a Republican site at Opednews.com .
My guest tonight is Paul Craig Roberts. He's a former editor at the Wall Street Journal, he was policy director at the Treasury, and in recent years he has been just kicking butt talking about the truth about the economy, about the Constitution, about the rights in America, and the future of America. He's got a new book out: The Failure of Laissez Faire Capitalism and Economic Dissolution of the West. Welcome to the show, Paul.
Paul Craig Roberts: Hey, glad to be with you, Rob.
Rob Kall: I think this is the fourth of fifth time I've had you on the show, which may make you one of the most, or the most, frequently revisited guests. Your website is Paulcraigroberts.org . I wanted to start off citing a little bit from your new book. It just came out the beginning of the year. You say in it, "The collapse of the Soviet Union in 1991 and the rise of the high speed internet have proved to be the economic and political undoing of the West."
That's a big deal! I'd like you to dissect each of those a little bit. I thought that collapse of the Soviet Union was a pretty good thing. Why are you saying it's so bad for the US?
Paul Craig Roberts: Well, you know, Rob, it led to that Neoconservative nonsense about the end of History, which of course unleashed the notion of American hegemony over the world, and the ideology behind all of the wars and the aggression that the United States has been conducting since the George W. Bush administration. But I'm speaking in the book economically; and what happened economically because of the collapse of the Soviet Union and the rise of the high speed internet is that it made it possible for Western corporations (corporations in the United States, Europe) to arbitrage labor across national borders.
In other words, when the Soviets collapsed, it had a big impact on thinking in Communist China and Socialist India. Their response to the failure of the Soviet Union was to open their vast, underutilized labor to Western capital. So the corporations found out that they could produce for their home market offshore in India or China, dramatically drop the labor cost, and thereby dramatically increase the profits flowing in capital gains to shareholders and in performance bonuses to executives.
So the collapse of the Soviet Union began the arbitrage of of labor, and it ended up separating Americans from the production of the goods and services that they consume. The economy has been dead in the water ever since, and the Federal Reserve under Alan Greenspan tried to substitute - for the missing growth in consumer income in employment - consumer indebtedness. So we had the rise in consumer indebtedness, the real estate bubble, the various financial frauds, and the ongoing financial crisis.
Rob Kall: You also said about this being caused by the high speed internet. How's that tie in?
Paul Craig Roberts: Right. That's what I'm getting to now.
Rob Kall: OK.
Paul Craig Roberts: The manufacturing goods were produced offshore and sent in. Now. What the high speed internet allowed the corporations to do was to offshore the production of professional services, such as software engineering, information technology; and now, of course, research, design. They could hire people in India to do this work, and they could send it in on the high speed internet, and so we have seen the employment for Americans in rapidly growing fields such as software engineering and information technology simply dry up. The work is now done offshore and sent in on the internet. So the consequence of Soviet collapse was to destroy American manufacturing jobs, and to destroy professional service jobs that had always been the ladder of upward mobility for American university graduates.