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Message: <blockquote data-quote="rickyb" data-source="post: 2852699" data-attributes="member: 56035">chomsky on whether we have a pure capitalist economy or not, and markets.<a href="http://www.truthdig.com/arts_culture/page2/noam_chomsky_looks_at_how_the_system_rigged_ensure_corporations_20170517" target="_blank">Noam Chomsky Looks at How the System Is Rigged to Ensure That Corporations Always Win</a>The last bailout was unprecedented in scale. These corporations were kept viable in a period where, in a capitalist economy, they would’ve crashed. But we don’t have a capitalist economy — business wouldn’t accept that, and they have enough power to prevent it — so, therefore, the public comes in to pour literally trillions of dollars into the hands of failing corporations and maintain them. And that’s true in all sorts of ways. There’s one major technical study of bailouts over several years that concludes that probably 25 percent — a study of the hundred biggest corporations on the Fortune list by two well-known economists — 25 percent of them survived thanks to public subsidy at some point, and most of the rest gained from it. So while this is unprecedented in scale, there’s nothing new about it. The same is true after all financial crises....Let the Market PrevailThe simplest definition of “neoliberalism” is “let the market run everything.” Get the government out of policy formation except to support market activities. Nobody really means that. Those are measures applied to the poor and the weak but not to yourself. And that runs all through modern economic history back to the 17th century. They didn’t call it neoliberalism then.Take Adam Smith’s recommendations to the newly liberated colonies. He was the great economist of the day, and he gave the colonies advice — which is essentially what the World Bank and IMF tell poor countries today, and the poor in the United States too. He said that the colonies should concentrate on what they’re good at — that was later called “comparative advantage” — export primary products, like agricultural products, fish and fur, and import superior British goods. Furthermore, don’t try to monopolize your resources. The main resource in those days was cotton. That was like the fuel of the early Industrial Revolution. He pointed out to the colonies that that would improve the total economic product, and so on.Of course, the colonies were liberated, so they were free to completely ignore “sound economics” as it was called. They imposed high tariffs to block superior British goods — at first textiles, later steel and so on — and therefore were able to develop domestic industry. They tried very hard and, in fact, almost succeeded in monopolizing cotton — that was a large part of the point of the conquest of Texas and half of Mexico. The reasons were very explicit — the Jacksonian presidents said if we can monopolize cotton, we can bring Britain to their knees. They won’t be able to survive if we control the main import that they need. So, without going further into the details, the colonies did exactly the opposite of the neoliberal prescriptions (which, incidentally, Britain had also done as it developed). Meanwhile the poor and oppressed, they had these principles rammed down their throats. So India, Egypt, Ireland and others, they were deindustrialized, deteriorated — something that continues even now.And that’s happening right in front of our eyes. Take inside the United States — for the large majority of the population, the principle is you’ve got to “let the market prevail.” Cut back entitlements, cut back or destroy Social Security, cut back or reduce the limited health care — just let the market run everything. But not for the rich. For the rich, the state is a powerful state, which is ready to move in as soon as you get into trouble and bail you out. Take Reagan, he’s the icon of neoliberalism, free markets and so on. He was the most protectionist president in postwar American history. He doubled protectionist barriers to try to protect incompetent US management from superior Japanese production. Again, he bailed out banks instead of letting them pay the costs. In fact, government actually grew during the Reagan years relative to the economy, and that’s the icon of neoliberalism. I should add that his “Star Wars” program, SDI, was advertised openly to the business world as a government stimulus, a kind of cash cow that they could milk. But that was for the rich — meanwhile, for the poor, let market principles prevail, don’t expect any help from the government, the government is the problem, not the solution and so on. That’s essentially neoliberalism. It has this dual character, which goes right back in economic history. One set of rules for the rich. Opposite set of rules for the poor.</blockquote>

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