Current Crisis Demonstrates Anti-Democratic Nature of Financial System

by Paul Jay

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.