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In a recent interview in Jacobin<\/a><\/em>,\u00a0<\/strong>linguist, philosopher, and political activist Noam Chomsky\u00a0<\/strong>gave an interesting answer to\u00a0a\u00a0question about the American\u00a0capitalist system. He\u00a0basically said we don’t have one. We have something else, more akin to\u00a0“state capitalism.”<\/p>\n And by not being engaged and involved in the political process, we’ve allowed\u00a0corporations and banks to “run things,” to take over government. We’ve felt powerless to effect change, and we’ve allowed them to suck\u00a0up resources that should be going to fund projects and policies that directly help us and the communities where\u00a0we live.<\/p>\n Chomsky’s\u00a0comment on our so called “capitalist system:”<\/p>\n What\u2019s called \u201cthe capitalist system\u201d is very far from any model of capitalism or market. Take the fossil fuels industries: there was a recent study<\/a> by the IMF, which tried to estimate the subsidy that energy corporations get from governments. The total was colossal. I think it was around $5 trillion annually. That\u2019s got nothing to do with markets and capitalism.<\/p><\/blockquote>\n I think Chomsky is saying that our\u00a0form of capitalism is not one Adam Smith would recognize.\u00a0In our version, fossil fuel companies fund politicians, who then vote for industry subsidies.\u00a0Even though\u00a0the industry is a big contributor to climate change, the\u00a0government continues to promote\u00a0fossil fuels. Bought senators and congressmen continue to give away money to a highly profitable industry that doesn’t need it.\u00a0Money in politics has a life of its own, and it’s not benign. If a senator or\u00a0congressperson\u00a0stops voting for subsidies, there’s\u00a0hell to pay\u00a0when he or she\u00a0is\u00a0up for reelection. Not only will they no longer\u00a0get campaign donations, they will have\u00a0money being spent against them. We\u00a0live under the illusion that\u00a0\u00a0we have a \u201cfree-market\u201d economy, when its more akin to\u00a0a\u00a0mafia-run protection racket.<\/p>\n Chomsky turns the conversation to\u00a0banks:<\/p>\n And the same is true of other components of the so-called capitalist system. By now, in the US and other Western countries, there\u2019s been, during the neoliberal period, a sharp increase in the financialization of the economy. Financial institutions in the US had about 40 percent of corporate profits on the eve of the 2008 collapse, for which they had a large share of responsibility.<\/p>\n There\u2019s another IMF study that investigated the profits of American banks, and it found that they were almost entirely dependent on implicit public subsidies. There\u2019s a kind of a guarantee\u2014it\u2019s not on paper, but it\u2019s an implicit guarantee\u2014that if they get into trouble they will be bailed out. That\u2019s called too-big-to-fail.<\/p>\n And the credit rating agencies of course know that, they take that into account, and with high credit ratings, financial institutions get privileged access to cheaper credit, they get subsidies if things go wrong and many other incentives, which effectively amounts to perhaps their total profit. The business press tried to make an estimate of this number and guessed about $80 billion a year. That\u2019s got nothing to do with capitalism.<\/p><\/blockquote>\n It’s clear that without massive subsidies and bailouts, the banks would be insolvent. In a real capitalist system they would have been failed businesses.\u00a0Chomsky is not the first to point this out. For nearly imploding the\u00a0world economy, banks were rewarded with access to free money, which they use, not for repairing the damage they did to main street, but for speculation. Thanks to Bill Clinton removing the wall\u00a0between traditional and investment\u00a0banking, big\u00a0banks continue to operate like gambling casinos.<\/p>\n Corporations, too, have been borrowing money at very low, or no interest for stock buy-backs, which raises stock prices and CEO pay. Profits are off-shored and tax-sheltered. Nothing big banks and big corporations are doing right now is helping middle class and working people.\u00a0Chomsky continues:<\/p>\n It\u2019s the same in many other sectors of the economy. So the real question is, will this system of state capitalism, which is what it is, survive the continued use of fossil fuels? And the answer to that is, of course, no.<\/p>\n By now, there\u2019s a pretty strong consensus among scientists who say that a large majority of the remaining fossil fuels, maybe 80 percent, have to be left in the ground if we hope to avoid a temperature rise which would be pretty lethal. And, unfortunately, that\u2019s not happening. Humans may be destroying their chances for a decent survival. It won\u2019t kill everybody, but it would change<\/a> the world dramatically.<\/p><\/blockquote>\n This is Chomsky\u2019s conclusion if the\u00a0current situation were to continue. But there’s a rebellion brewing against the status quo. Bernie Sanders in the US, Jeremy Corbyn in the UK, Alex Tsipris in Greece, and Pablo Iglesias in Spain are openly challenging the corporate\/bank\/billionaire grip on their respective governments. And in Canada, the Liberal Party just won back control of Parliament after\u00a0nine years of the conservative Harper government. So, there’s reason for hope.<\/p>\n We can\u2019t pin all our hopes on another Wall Street-funded candidate. Chomsky thinks\u00a0it\u00a0will take pressure from a large popular movement to effectively challenge the grip of money and power on government. The job of activists and organizers, he\u00a0says, is to help people understand they have power, and even though they feel powerless, they\u2019re not powerless. \u201cPeople feel impotent, but that has to be overcome.\u201d<\/p>\n About Bernie Sanders, Chomsky feels it\u2019s pretty unlikely in a system of bought elections that he could win. And even if he won, he would be abandoned by both corporate parties, In other words, he couldn\u2019t get much done. But,\u00a0even if he loses he will have made a positive contribution. Chiomsky says:<\/p>\n In fact, the Sanders campaign I think is valuable\u2014it\u2019s opening up issues, it\u2019s maybe pressing the mainstream Democrats a little bit in a progressive direction, and it is mobilizing a lot of popular forces, and the most positive outcome would be if they remain after the election.<\/p>\n It\u2019s a serious mistake to just to be geared to the quadrennial electoral extravaganza and then go home. That\u2019s not the way changes take place. The mobilization could lead to a continuing popular organization, which could maybe have an effect in the long run.<\/p><\/blockquote>\nGetting a person or party elected is not enough<\/h2>\n
A little history<\/h2>\n