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  • Chomsky on the Economy

    A little late in posting this, but it's still relevant.

    Chomsky makes some good points, but one that I latched on to are his observations regarding recent cries of socialism and the fact that socialism with regard to economic growth should come as no surprise - it's been a staple of the American economy since at least World War II.

    Originally posted by Noam Chomsky
    There's a lot of wailing now about "socializing" the economy by bailing out financial institutions. Yeah, in a way we are, but that's icing on the cake. The whole economy's been socialized since — well actually forever, but certainly since the Second World War. This mythology that the economy is based on entrepreneurial initiative and consumer choice, well ok, to an extent it is. For example at the marketing end, you can choose one electronic device and not another. But the core of the economy relies very heavily on the state sector, and transparently so. So for example to take the last economic boom which was based on information technology — where did that come from? Computers and the Internet. Computers and the Internet were almost entirely within the state system for about 30 years — research, development, procurement, other devices — before they were finally handed over to private enterprise for profit-making. It wasn't an instantaneous switch, but that's roughly the picture. And that's the picture pretty much for the core of the economy.
    ...
    So yes, socialization of risk and cost (but not profit) is partially new for the financial institutions, but it's just added on to what's been happening all along.
    He also lends support to what Obama is currently claiming as justification for healthcare spending in the federal budget - the unsustainable costs of healthcare in America, including medicare, will cripple the Federal budget far more than any short term spending. This is a simple fact that, as far as I have seen, many media outlets (not to mention congressional representatives) are simply ignoring. That's dishonest.

    Originally posted by Noam Chomsky
    And there's going to have to be some way to deal with the elephant in the closet, one of the major threats to the American economy, the increase in healthcare costs. That's often masked as "entitlements" so that they can wrap in Social Security, as part of an effort to undermine Social Security. But in fact Social Security is pretty sound; probably as sound as its ever been, and what problems there are could probably be addressed with small fixes. But Medicare is huge, and its costs are going way up, and that's primarily because of the privatized healthcare system which is highly inefficient. It's very costly and it has very poor outcomes. The U.S. has twice the per capita costs of other industrialized countries and it has some of the worst outcomes. The major difference between the U.S. system and others is that this one is so heavily privatized, leading to huge administrative costs, bureaucratization, surveillance costs and so on. Now that's going to have to be dealt with somehow because it's a growing burden on the economy and its huge; it'll dwarf the federal budget if current tendencies persist.
    I don't always agree with Chomsky, but I always enjoy his perspective. He tends to take a long and wide view of history and policy, and does so with very little bias. I find it refreshing because it makes short-term analyses (what you often find in the media) appear as what they all to often are - small and small-minded.

    Full interview: http://www.fpif.org/fpiftxt/5860

  • #2
    Re: Chomsky on the Economy

    Interesting... I'll have to check out the full article.

    The major difference between the U.S. system and others is that this one is so heavily privatized, leading to huge administrative costs, bureaucratization, surveillance costs and so on.
    Not sure I follow the logic there... is he implying that the gov't could do something more 'efficiently' than the incentivized private sector? If so, that seems silly to me. I'm not necessarily saying they couldn't do it cheaper/better/whatever, but, to me, government represents pure bureaucratization and inefficiency.

    I'd suggest that the main reason health costs are so high here is NOT inefficiency or unreasonable administrative costs - it's because doctors have to spend half their salary on malpractice insurance! I don't know what the solution is, but our society is suing itself into bankruptcy.

    Comment


    • #3
      Re: Chomsky on the Economy

      I think it's been posted before, but for those that haven't watched the Frontline episode: Sick Around the World. They go into many countries and examine the differences and similarities in healthcare systems. The US has a lot to change, but there is no perfect system.

      http://www.pbs.org/wgbh/pages/frontl...roundtheworld/

      Many people feel Fox News is not biased, and on the other side of the spectrum many people think Chomsky is not biased.

      Comment


      • #4
        Re: Chomsky on the Economy

        Originally posted by Hambergler View Post
        I think it's been posted before, but for those that haven't watched the Frontline episode: Sick Around the World. They go into many countries and examine the differences and similarities in healthcare systems. The US has a lot to change, but there is no perfect system.

        http://www.pbs.org/wgbh/pages/frontl...roundtheworld/
        No there isn't, but the list of things to change in the U.S. becomes more and more obvious. I agree with Obama, it's foolish to think we can't afford to change this (and spend money on doing it). In many ways, the Sweedish did this (replaced a system similar to ours with a quasi-public health care system) and it paid off. It also makes better public policy to have a healthcare system that is funded more through public money than by profit. Profit margins in basic healthcare can create a very immoral and unfair and harmful (in terms of public health) conflict of interest. Think about it - the industry is supposed to be making people better, but depends on more people being sick. The answer to filling that interest gap is not in private industry or insurance.

        Originally posted by Hambergler
        Many people feel Fox News is not biased, and on the other side of the spectrum many people think Chomsky is not biased.
        Where did this come out of? You've probably heard me say it before - every human being is biased. Even animals are biased. Chomsky is biased, but by equality or fairness instead of by presupposition/prejudice based on factors like patriotism/allegiance, education/upbringing, or plain ignorance. For example, he's often criticized for his apparent bias towards Palestinians and the Palestinian cause (or in other words, anti-Israel). This isn't bias though - it's based on the notion of fairness - that, at a certain level, no individual/group/organization/country should have any more or less power or influence over another. He doesn't view the conflict as anything closely resembling a level playing field, and to that I don't think anyone can say that he's wrong. Like I said, his tends to be a bias of equality and fairness, which (at least to me) seems to run contrary to the concept of bias in and of itself.

        The thing that fascinates me about Chomsky is that it is very difficult to disprove the arguments behind his logic. His conclusions sometimes seem off-base, but when viewed as sum of their parts, are often irrefutable. If this often results in showing American policy in a negative light, it is often because that policy is of empire - that the policy itself is unfairly imposed for the sake of its own benefit, despite any cost to outside parties - it is, in a general sense, biased from an actionary standpoint.

        Fox News presents a much different bias - while one would want to think that as a journalism business their opinions are guided by fact more than anything else (as is the case of Chomsky, who isn't even a journalist), they have a long record of not only mis-representing facts but purposefully doing so to serve a prejudicial/presupposed view of events. This essentially amounts to an opinion-based news network, where bias becomes a main ingredient.

        I do not see how one could compare the two, other than a Chomsky reader would most likely dislike Fox News and a Fox news viewer would most likely reject Chomsky's viewpoint. Bias is not the reason for this.
        Last edited by Mosely; 03-25-2009, 03:49 PM.

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        • #5
          Re: Chomsky on the Economy

          Originally posted by AMosely View Post
          well thought out and clearly written words
          I'd +rep you if I could - that is very well written.

          Comment


          • #6
            Re: Chomsky on the Economy

            Originally posted by AMosely View Post
            No there isn't, but the list of things to change in the U.S. becomes more and more obvious. I agree with Obama, it's foolish to think we can't afford to change this (and spend money on doing it). In many ways, the Sweedish did this (replaced a system similar to ours with a quasi-public health care system) and it paid off. It also makes better public policy to have a healthcare system that is funded more through public money than by profit. Profit margins in basic healthcare can create a very immoral and unfair and harmful (in terms of public health) conflict of interest. Think about it - the industry is supposed to be making people better, but depends on more people being sick. The answer to filling that interest gap is not in private industry or insurance.
            I agree 100%. Profit should not the be motivation for helping people, but as the video shows. Any way you re-shape the play-doh the people are going to get pinched.

            Originally posted by AMosely View Post
            Where did this come out of?
            Originally posted by AMosely View Post
            He tends to take a long and wide view of history and policy, and does so with very little bias.
            I really like Chomsky and I have been listening to him for years, but there is no way that I can say that he is not two short stones away from being a full fledged communist. That's the one thing I don't like about him. He has been stuck in those ideas since the sixties. I will take all the pitfalls of capitalism or "imperialism" to communism.

            Originally posted by AMosely View Post
            You've probably heard me say it before - every human being is biased. Even animals are biased.
            Agreed, but that is a cop out. We are not talking about coke and pepsi we are talking about socialism and capitalism.


            Originally posted by AMosely View Post
            Chomsky is biased, but by equality or fairness instead of by presupposition/prejudice based on factors like patriotism/allegiance, education/upbringing, or plain ignorance.
            Different factors are important to diffrent people. The fox news crowd value patriotism, religion, God. Taking away any of these values will never equal equality or fairness to them.


            My initial point was if ones neutral idles in the same place as someone elses, one cannot see thier bias.

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            • #7
              Re: Chomsky on the Economy

              Right. Although Chomsky is a very well versed speaker and an extremely brilliant man, he has pretty much communist logic. He hates the rich capitalist idealists in our society. Ironic considering he charges tens of thousands of dollars for speaking engagements. Hmm.
              "Common sense is not so common." -Voltaire

              Comment


              • #8
                Re: Chomsky on the Economy

                "Chomsky" sounds vaguely Russian. Plus all this talk about how socialism is great... Dear Lord, HE'S A RUSSIAN SPY! Get that damn Red!

                Comment


                • #9
                  Re: Chomsky on the Economy

                  You think Chomsky is a communist!? What!? What the heck is communist logic anyway?

                  Comment


                  • #10
                    Re: Chomsky on the Economy

                    From roughly 1950 until the early 1970s there was a period of unprecedented economic growth and egalitarian economic growth. So the lowest quintile did as well — in fact they even did a little bit better — than the highest quintile.
                    It has always seemed that any system where the lower classes don't gain more than the upper classes during times of growth has a basic flaw. It just makes sense they would gain more because they start out with so much less.

                    He also explains very well what I was trying to get at, in part, in my risk thread.

                    The market is inefficient because it can't factor in systemic risk. Because of this the government is actually taking on that part of the risk factor. All this capitalism talk is kinda silly because what we really have is pockets of capitalism protected by the government. What I mean by that is that there is capitalism on the small scale, between individuals. But on the large scale there is no real risk outside the risk taken on by the society as a whole.

                    I think an example of this is the recent changes to bankruptcy laws. The credit card companies wanted government to greatly reduce their risk. They where not happy doing the work of making good loans.
                    Last edited by El_Gringo_Grande; 03-25-2009, 08:28 PM.
                    Iím not racists, I have republican friends. Radio show host.
                    - "The essence of tyranny is the denial of complexity". -Jacob Burkhardt
                    - "A foolish consistency is the hobgoblin of little minds" - Emerson
                    - "People should not be afraid of it's government, government should be afraid of it's People." - Line from V for Vendetta
                    - If software were as unreliable as economic theory, there wouldn't be a plane made of anything other than paper that could get off the ground. Jim Fawcette
                    - "Let me now state what seems to me the decisive objection to any conservatism which deserves to be called such. It is that by its very nature it cannot offer an alternative to the direction in which we are moving." -Friedrich Hayek
                    - "Don't waist your time on me your already the voice inside my head." Blink 182 to my wife

                    Comment


                    • #11
                      Re: Chomsky on the Economy

                      Originally posted by War.mongeR1 View Post
                      Right. Although Chomsky is a very well versed speaker and an extremely brilliant man, he has pretty much communist logic. He hates the rich capitalist idealists in our society. Ironic considering he charges tens of thousands of dollars for speaking engagements. Hmm.
                      Actually he does not, and in fact would argue that most common forms of communism are in fact among the worst kinds of collective control of power over a population. He's an American because he believes America is (still) the most free society on Earth, and I think he's right. Free both in terms of individual freedoms as well as market freedoms (like being able to make money off of books and speaking engagements).

                      What I like about him is that although he certainly doesn't take these freedoms for granted, he's vigilant about being blinded by those freedoms - becoming too comfortable in a society where oligarchy and the 'traditional' (for lack of a better word) sources of power continue to not only hold on to that power but to use that power to control information and squelch opposition.

                      He doesn't hate the 'rich capitalist idealists' in American society, either - in fact, he doesn't even believe the American economy is truly capitalist - and that is probably more true now then it ever has been. His thinking is that American capitalism is actually more like 'state capitalism,' in other words, state-sponsored, and to a certain extent state controlled (state meaning government or other collective control). I think we're all witnessing this being played out in right now - it is what Tim Geithner is working on 24x7.

                      For some quick looks at his thoughts on state capitalism, check out this 1991 interview on the collapse of the Soviet Union and a more recent 2008 essay on the current recession.

                      Chomsky's logic defies a lot of traditional thought, so it's hard to discredit it using traditional thought (or common branding like 'communism' or 'capitalist'). Same goes for politics:

                      Originally posted by Noam Chomsky
                      The United States effectively has a one-party system, the business party, with two factions, Republicans and Democrats. There are differences between them. In his study Unequal Democracy: The Political Economy of the New Gilded Age, Larry Bartels shows that during the past six decades "real incomes of middle-class families have grown twice as fast under Democrats as they have under Republicans, while the real incomes of working-poor families have grown six times as fast under Democrats as they have under Republicans".

                      Differences can be detected in the current election as well. Voters should consider them, but without illusions about the political parties, and with the recognition that consistently over the centuries, progressive legislation and social welfare have been won by popular struggles, not gifts from above.
                      Above all, this shows what Chomsky is about - social equality (and inequality), fairness (and unfairness) in power and legislation and how these elements have played out on the world stage. It should be fairly obvious at this point that unfortunately, the terms in parentheses have traditionally taken the role of a rabbit versus the hare. In the long run, we can all hope that the hare (human and civil rights, the greater good, etc) wins out in the end.

                      Comment


                      • #12
                        Re: Chomsky on the Economy

                        Chomsky believes that the primary reason our health care is so expensive is because it is not sufficiently government run, and yet his only bias is fairness? Our health care is expensive in no small part because the government is too involved with it, and it is has been insulated from the normal pressures of a competitive market for years due to government subsidies. When no one can afford health insurance except by going through the government subsidy, that gives government de facto control over the market by controlling the subsidy.

                        Comment


                        • #13
                          Re: Chomsky on the Economy

                          Originally posted by Kerostasis View Post
                          Chomsky believes that the primary reason our health care is so expensive is because it is not sufficiently government run, and yet his only bias is fairness? Our health care is expensive in no small part because the government is too involved with it, and it is has been insulated from the normal pressures of a competitive market for years due to government subsidies. When no one can afford health insurance except by going through the government subsidy, that gives government de facto control over the market by controlling the subsidy.
                          Your argument only works if you think that the only people that should get health care are those that can pay for it and that the quality of health care a person receives should be determined by how much they can pay.

                          It only works if you want to treat health care like mp3 players.

                          Name me one place where "the market" has provided all people with good health care cheaply.

                          I will grant you that because the U.S. government is only partially in the costs have been allowed to go crazy. I think that calls for more government involvement, not less.
                          Iím not racists, I have republican friends. Radio show host.
                          - "The essence of tyranny is the denial of complexity". -Jacob Burkhardt
                          - "A foolish consistency is the hobgoblin of little minds" - Emerson
                          - "People should not be afraid of it's government, government should be afraid of it's People." - Line from V for Vendetta
                          - If software were as unreliable as economic theory, there wouldn't be a plane made of anything other than paper that could get off the ground. Jim Fawcette
                          - "Let me now state what seems to me the decisive objection to any conservatism which deserves to be called such. It is that by its very nature it cannot offer an alternative to the direction in which we are moving." -Friedrich Hayek
                          - "Don't waist your time on me your already the voice inside my head." Blink 182 to my wife

                          Comment


                          • #14
                            Re: Chomsky on the Economy

                            Over on Intelligence Squared they had a debate about who is to blame, the Government or Wall Street.

                            In the end most of the audience picked Government. This is because the backers of that idea basically said Wall Street is evil, we know this. We know those people on wall street will do anything to make a buck including lying and cheating and outright stealing. You cannot blame them for their evilness. It is Governments fault because Government is the one that is supposed to be protecting us from those bad Wall Street people.

                            This seems to be the attitude of many in these forums as well. That the main problem is that Government trusted Wall Street and did not assume it was up to something bad the entire time.

                            You know, I am starting to agree. I agree that we have to assume that wall street is bad and must be reigned in big time.
                            Iím not racists, I have republican friends. Radio show host.
                            - "The essence of tyranny is the denial of complexity". -Jacob Burkhardt
                            - "A foolish consistency is the hobgoblin of little minds" - Emerson
                            - "People should not be afraid of it's government, government should be afraid of it's People." - Line from V for Vendetta
                            - If software were as unreliable as economic theory, there wouldn't be a plane made of anything other than paper that could get off the ground. Jim Fawcette
                            - "Let me now state what seems to me the decisive objection to any conservatism which deserves to be called such. It is that by its very nature it cannot offer an alternative to the direction in which we are moving." -Friedrich Hayek
                            - "Don't waist your time on me your already the voice inside my head." Blink 182 to my wife

                            Comment


                            • #15
                              Re: Chomsky on the Economy

                              Originally posted by El_Gringo_Grande View Post
                              Your argument only works if you think that the only people that should get health care are those that can pay for it and that the quality of health care a person receives should be determined by how much they can pay.
                              It works best that way, but thats not the only way it works. It is possible to offer health care to the less fortunate without completely gutting the competitive nature of the market. How many people actually pay for their own health care these days? It's virtually unheard of. Even abstracting another level, how many people actually buy their own health insurance? It happens occasionally, but probably a good 90% of the health insurance market is run through corporate plans, meaning individuals never get the chance to choose their own provider. So if your provider sucks, what can you do about it? Get another job, and hope HR at the new company picked a better one?

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