Public Expense & Private Profit

From the blog of Noam Chomsky:

For computers, the period from development to commercially viable sales was about 30 years (depending on how you count). For the internet, it was also about 30 years within the state system before it was handed over, by a process that remains obscure, to private corporations.

And it’s not a matter of public companies going private. IBM was a private corporation when it was making use of the government-funded MIT and Harvard computers, in government-funded labs (or fully government labs), to learn how to move from punched cards to electronic computers, and by the time it was going off on its own in the 60s, most of its production was for government agencies. Public support takes many different forms: funding, grants, government labs, procurement, etc. There are plenty of details in print. I reviewed some of Alan Greenspan’s fantasies on this in a chapter of “Rogue States,” dealing with the interesting history of transistors, technically “private” but in fact developed at public expense—the only illustration he gave of the “entrepreneurial initiative” and “consumer choice” that drives the economy; the others were textbook cases of R&D within the public sector.

Click here for the rest.

The bottom line here is that capitalism, as conventionally understood, doesn't work. Indeed, the private and public sectors have a symbiotic relationship, and it's probably safe to say that one cannot exist without the other. Chomsky, writing elsewhere, has even asserted that American capitalism would have collapsed after WWII if it weren't for a massive influx into the economy of government military spending--this isn't hard to swallow; we've spent trillions of dollars on defense over the years, and such spending and its effects on the economy cannot be ignored. But ignore is exactly what the proponents of the "free market" do, ramming down our throats platitudes about entrepreneurialsm and the way things work.

Get this straight: there is no "free market," and any line of reasoning that depends on the existence of such a myth is flawed from the get-go.

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