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Published on Tuesday, October 21, 2008 by The Real News Network
Chomsky On The Economy
Current Crisis Demonstrates Anti-Democratic Nature of Financial System
In part two of their interview, Paul Jay asks Prof. Noam Chomsky to weigh-in on the dominant subject of the day, the economic crisis. While Prof. Chomsky agrees that the current crisis is a very serious one that will have broad implications for the broader society, he points out that the foreseeable Medicare-induced economic crisis will "dwarf" the current one in magnitude.
With the current credit freeze in U.S. financial markets Chomsky is interested in George Bush's perspective, seeing his mentality as the source for the financial crisis. Chomsky interprets Bush's proposal, "We hate democracy, we don't want the public to be involved in decisions about things. We want to go back to the profit motive, meaning that a private tyranny....should look out for itself, not for the public interest."
While on one hand, state-restricted markets are democratic by design in that they allow people to take control--through their government--of financial institutions to force them to include externalities and risks to the broader population in their decision-making. The other hand is that these factors are such that profit-seeking enterprises will not accommodate them when left to their own volition, given that free markets do not put a price on these externalities.
"Do we want private concentrations of power to make decisions for their own benefit or do we want the public to be concerned to make decisions for the public welfare?" Chomsky says this is the question we as a country need to answer in order to return to an effective democratic process, especially in light of the current financial crisis.
© 2008 The Real News Network
Posted in Economy/Trade, Bailout
20 Comments so far
Show Allthe profit pirates enslave us with the "free market" ploy
Chomsky is a linguist, playing with the definition meaning and development of human expression, playing around the edges with words and the effect they have on his audience, mostly the self righteous, self deluders and theoreticians of the elite world.
In Africa because of the superstition and ignorant of the masses, albinos who are already discriminated against are sought out to be killed and their body parts, hair, bones, and organs, are used by “juju men”, witch-doctors, as raw materials to fabricate quack cures for poverty. http://news.bbc.co.uk/2/hi/africa/7649420.stm
Capitalism died 30 years ago. It is being kept alive only in the imagination of those who “believe” that the value of a roof above their head should infinitely increase exponentially so as to afford them greater asset security and that such a phenomenon would not hurt anyone. It would not prevent those with less or no assets from entering the Ponzi Scheme or from being ostracised into depravation. The fraudulent sales of Sub-Prime mortgages and subsequent foreclosures, now leading to the polluting of speculative financial investment instruments with these failing and fraudulent debts was the final act of a system that has only been sustained by transfusing the life blood and cannibalizing the weakest, most innocent and vulnerable for the profit of the few.
The cancerous elitist system has spread around the world and come home feeding need and greed of the many to satisfy the few and is now in its death throws as it devours its own.
Greed, egotism and gluttony are, in most ethnologies, considered as sins (as is usury) and should not normally be the most dominant of human motives. But, if society encourages and even educates its youth to compete to the highest degree of these traits, crowning the best with success, celebrating and emulating the few at the very top then it is obvious what kind of world results and the toll such social structure takes on limited planetary resources.
Humanity and nature has equally the capacity to reward selflessness endeavour, balanced husbandry, cooperation, understanding, harmony, wisdom and compassion. Who’s responsibility is it to change the status quo, the “haves” or the “have nots”? Of course, all of us, but just ask an average spoiled kid in California and another with nothing but a Kalashnikov in DR Congo, what he wants most, education or entertainment? Their respective answer may indicate some hope to us all.
"Current Crisis Demonstrates Anti-Democratic Nature of Financial System"
ROFLMAO!!
Current crisis??? How about the implementation of the FEDERAL RESERVE??!! Which was deemed unconstitutional.
And their COLLECTION AGENCY the I.R.S.??!!
The Supreme Court TWO TIMES stated they COULD NOT "invent" another way of taxing the Lemming's income un-apportioned.
Those 2 facts alone should SCREAM anti-democratic.And when you throw in the fact that MANY lackeys for the I.R.S. don't file a 1040 because they KNOW there's no law saying we have to, should make even a nation of automatons like us begin MASSIVE marches to the bastion of the foul, Washington D.C.
Alan MacDonald
Lordy, Lordy, Lordy, with Chomsky and many political analysts now recognizing the well-known 'market failure' of 'negative externality cost dumping' as being the seminal element of the corporatist Empire's Ponzi 'gaming' of the system, and with reformed political 'leaders' like Gore acknowledging in print that "a radical right-wing 'faction' (corporate empire) is contemptuous of the belief that any concept of a 'public good' even exists", it's starting to look like the 'corporatist Empire' controlling our country by hiding behind the facade of its two-party, 'Vichy' sham of a government is finally --- finally going to be exposed for what it is and how it uses economic cancer to destroy democracy and extend its entrenched ruling-elite Empire.
But wait. Which of the presidential candidates is exposing this deadly truth?
In fact, which of the candidates (or their parties) is even breathing a word about this 'corporatist Empire' that is killing democracy in our country.
And which of the presidential candidates (that we are 'allowed' to vote for), or their entrenched parties, is going to lift a friggin finger to mention, let alone actually fight against this 'corporatist Empire' --- that has almost totally snuffed out democracy?
NONE!!! NOT A FRIGGIN ONE!!!
Only Ralph Nader will 'call out' the corporatist Empire for the guileful and deadly cancer that it is to our democracy.
Only Ralph Nader will ignite a continuation of the American Revolution, that was begun against the dual tyranny and dual oppressions of the British Empire against both the indivisible political AND economic rights of free men for which our fore fathers fought and died.
Anti democratic is true at the core of corporations. All the nominations are given and/or accepted by the board. The board sets the salaries. 'Elections' for boards are Soviet style with only 1 candidate per board seat.
Shareholders are routinely lied to and prevented from controlling any part of the company. It is virtually impossible for shareholders to even stop illegal activity or require investigation of potential illegal or unethical behavior.
One way to reduce the size and number of financial upsets would be to require transparent corporate books, increase shareholder rights and break up corporations that are 'too big to fail'.
I don't care what he charges, Chomsky's financial dealings are no threat to the economy. I also doubt that anyone HAS to pay him unless they use his services-quite different from the fascist bailout and war in Iraq whose costs are borrowed in my name without my approval.
CHOMSKY'S GAME:
The profit motive is what drives Chomsky, a man who claims to be left of Lenin, a dissident speaking out of conviction.
However, Chomsky said if he wasn't paid, he couldn't do what he does. He charges $12,000 to speak, perhaps that's per hour. He charged $35 to individuals wanting to speak to him personally after one speech. He has set up a trust fund for his grown children in order to avoid paying tax. Royalties to some of his books are paid into this trust. Chomsky also invests in any corporation that's profitable for his wealth, regardless of the damage that corporation is doing, either to people or the environment.
Chomsky said he is not a hypocrite for making money out of speaking because he has NOT told others NOT to do what he is doing.
I could go on, but Chomsky fanatics are too stupid to see that Chomsky REALIZES nothing is going to change and so is ENRICHING himself by selling his views to gullible fools.
Let me guess what Chomsky has said about the upcoming election: vote for Obama!
Chomsky's articles are copyright. So much for getting the word out to save lives. So much for a man of conviction listening to his conscience. If you want to get the word out, you must PAY Chomsky.
Chomsky never mentions real dissidents, people who have risked so much in their lives to try to change things, because he doesn't want his fanatics to know that he's a fraud, a CAPITALIST, selling information for money, while risking ABSOLUTELY NOTHING!
By comparison, an African musician, Fela Kuti, was - several times - beaten up and arrested, and his mother murdered by the Nigerian army for speaking out about corruption in Nigeria. Nigeria is a major oil supplier to the U.S. America helps prop up Nigeria's corrupt government. Fela Kuti also condemned Reagan and Thatcher, and corporate globalization, something OBAMA has endorsed.
Shut the hell up. As if you dont work and spend that money on yourself. Talk about gullibility and hypocrisy.
Utilizing smear campaigns based on articles posted at the hoover institute should tell you something, but if you just dont get it you ought to take your concern to Chomsky. He responds to emails daily.
You have no idea what he does with the money he makes from speeches and private talks.
And why is setting up a trust for his family a bad thing?
Capitalism doesnt mean selling things, or copyrighting ones work.
I pay taxes that feed the war machines but I wouldnt say that that makes me a fraud and a warmonger. Yes I advocate a different society but until it is achieved I still live in this one and have to make the best of it. Use to my advantage and to foster the reality of the world I would like to see.
Again, youre failing to recognize two important things: 1) the kind of society we all have to currently live in regardless of whether we like it or not and 2) how he spends his money that he makes (im hinting at donations to charities and so forth).
Realizing that this society doesnt take care of its own Chomsky is right in providing for his family.
You might want to personally inquire into how much he donates to charities, and whether he charges $12,000 for every talk, or whether $35 is charged for journalists or not. Remember, he isnt charging you to reply to emails!
And Chomsky regularly points out that he is not the hero and that the real hero's are those organize events like those that he speaks at and other important social groups. He has pointed out that if anything he uses his popularity to aid those groups by drawing attention to them, which he does. So your claim is total BS.
This is what I am picking up on you: you play the part of the antagonist and thats it.
Alan MacDonald
staying sane, Chomsky, Zinn, Nader, and many others are beyond reproach --- they have dedicated their lives to the progressive cause of real democracy and justice no less than any patriots who have fought and died for these same goals.
Think about the implication of what Chomsky said: he couldn't do what he does if he wasn't paid. Yet, there he is telling others to do something without being paid, to put their future happiness, or even their lives, at risk for NOTHING!
Chomsky IS a hypocrite!
When does Chomsky ever "tell" anyone to do anything?
He functions mostly as a critic, not a leader.
When single individuals amass more wealth than whole nations, or even small groups of nations, something is seriously wrong. The “comedy” (read truth) of George Carlin makes more sense every time I watch it.
"free markets do not put a price on these externalities"
A Friedmanite "free market" externalizes costs (dumps them on the public in the dark of night). But in a TRULY free market, there are no externalities. In a truly free market, everyone involved, producers and consumers have roughly similar amounts of power, or ability to influence public policies, define the rules of the game, and define the society's better interests.
Adam Smith assumed consumers, i.e. the people, had the power to influence production, such as is easily observed in small markets. You've heard "the customer is always right" - well this producer shares power with the consumer. This power sharing or balancing in the markets should be the goal of public policy.
Contrast this with Milton Friedman's greed darwinism, economic anarchy, in which the few with the most ambition to dominate (elites) take over the production, the public policies, and the ideals and values of the people and the society, to turn the people into mere cogs in the machine, a monstrous, dangerous, unstable, unsustainable slave-driving borg.
Kaka on Friedman. The economic model that works for the people restricts producers in size and scope so that a much larger number of people share in ownership of production (the average asset ownership and enterprise size should be ten man-powers). In such a larger pool, the wild insane greed of the few becomes diluted by the common sense of the many. Producers are restricted to taking production orders. Producers are not allowed to influence public policy or manipulate public values and opinions. The people are enlightened and have responsibility to make demands in the markets (and the civic sphere) that reflect the society's better interests, e.g. environmental stewardship and non-economic values such as peace, stability, justice, health.
Well, the one thing that has change is the scale of the people who dominate a market. When we were talking about local producers, this made more sense. All of the writings of that era are generally concerned about government power and government actions because the size and power of a government usually dwarfed any local business people.
But, now we are talking about massive concentrations of power and money that in many ways dwartthe power of governments. Control of governments is bought by people for whom an investment of a few hundred million is not such a big deal. Especially not when compared with the payoffs of hundreds of billions of dollars coming back from the government they now control.
Markets can be tilted by big massive players who dominate the market. That's more the problem we face today, rather than any theoretical debate over the theory of markets in general.
In other words, consumers can control smaller producers with their decisions. But, when a producer is so huge that they dominate the market, drive any competition away, and are the sole determiner of the choice the consumer gets, then this stops working.
----------------------------
"To know, and not to do, is not to know"
www.samsonsworld.blogspot.com
thats not true. you can go back to pre-globalization and see where local producers were ravaging consumers.
the idea that if we just had small economies then things would be better and markets would be acceptable doesnt make any sense.
besides, there are many things that cannot be sustained with small economies. not every local community can sustain the science, technology, medicine and educational industries and institutions needed. so what you are going to have is larger and larger economies to produce those things.
whether on a small or large scale there are too many inherent flaws in market systems.
Tax-payer funded Universities could cover all four of your examples to the extent needed for comfortable living without recourse to market systems.
We shouldn't confuse shrinking the size of enterprise with shrinking "economies". A U.S. economy and World economy with many times the current number of "markets" for many times the current number of enterprises would be just a large as an "economy" and pehaps larger.
I think the goal should be BOTH shrinking the "playing field" of market systems by removing human needs from the game, AND increasing competition in markets by encouraging many smaller enterprises, by in turn encouraging many smaller markets.
The beauty is that much can be done on this right now with simple moves at both the State and Federal levels of Government. Targeted taxation and tariffs could shrink the size of markets. Tax-incentives, lending regulation, and direct grants could increase the number and proportion of smaller enterprises. Social Welfare programs supporting Health, taxes and lending regulation, and public and collective ownership concepts supporting Housing and Food, and the prevention of the privitization movement when it comes to Water, would work together shrink the over-all "playing field" for market systems.
State Governments can even simply properly fund their universities and community colleges, allowing free tuition with more retsricted admission. General and technical education would then be removed from the market of loans and consumer debt on entering the work force would be reduced. This "Original Debt" is a very powerful factor in pushing people toward employment with large enterprises and away from small, local, and self-owned enterprises -a kind of "brain drain" that gives large enterprises huge advantage.
Small enterprises and small markets have a place in the macroeconomic future as they both increase resiliency in the larger economy.
Don't Panic,
-matti.
i dont even think you understand what you just wrote, because in all honesty it was total nonsense. you make sweeping statements with nothing to substantiate them, a fact not lost on me. and you completely misunderstand the nature and reality of markets to think small ones could withstand big programs or remain small.
lets use an analogy that i think is quite apt. all of the market ideologues on the left - im excluding the friedmanites - think that if we just regulate it and control it enough then it will "have a place" in our society.
would you think it wise to keep a tiger as a pet, even if kept in a cage?
the nature of this animal is not to be a domesticated pet and the risk involved even in keeping one caged is absurd.
market based systems produce certain anti-social behaviors (ie greed and domination)that to pain ourselves to constrain those natural tendencies is ridiculous.
Yes indeed, truthaddict, you do have the truth. Adam Smith was certainly referring to the era of what most mean by globalization when he wrote the following:
"All for ourselves, and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind."
And, yes, he meant the masters of mankind were businessmen:
"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."
I sure would like to see an example of a "TRULY free market."
Alan MacDonald
truthaddict, how about the market for ideas on CD?
It's a fully open and competitive market for the product (ideas), it reduces prices of the product dramatically (almost to zero), it is self clearing, and all participants have fully informed and open access.
what is a feasible solution to market-based or centrally planned economies?
how do we participate in economic planning and decision-making?
participatory economics (parecon)