An End to Capitalism?

From Noam Chomsky's blog:

The state-corporate system is quite remote from anything that might be called “capitalism” or a “market system,” though it has elements of both.

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Capitalism, as it is popularly understood in the United States, ended many decades ago. I've been re-reading Understanding Power: The Indispensable Chomsky lately and I've come across some passages that have reminded me that we haven't been living under capitalism, really, since before the Great Depression. The turbulent economy of the 1930s proved once and for all that the "free market" is ultimately extremely unstable: the "ruthless discipline" of the market can become so harsh and destructive when too many investors are stupid with their money, which happens all too often, that the entire system collapses.

Decades ago, economist John Maynard Keynes understood this perfectly, and because his was the most dominant voice in the field at the time, most other economists understood this, too. Keynes' solution to the problem of economic recession was for the government to intervene by spending lots and lots of money which serves to kick-start the economy. FDR took this advice to heart with his New Deal spending programs, but it wasn't until the massive Federal economic planning and spending of WWII that the Great Depression actually ended. After the war, the threat of severe recession returned, and the American elite, looking at their recent wartime economic experience, decided that a permanent war economy would protect from economic collapse.

Indeed, the US has been existing under such conditions since the 1940s. The countless billions of dollars spent on unused aircraft, missiles, ships, and other high-tech instruments of war have clumsily filtered their way into the overall economy, keeping "capitalism" as an institution afloat much longer than it ever could have without such government support. "Neo-liberalism?" "Free markets?" It's all a bunch of bullshit, smoke, and mirrors. Plain, old fashioned Keynesian spending has been keeping the economy going for my entire life and longer. And that's not capitalism; it's something else. Sadly, virtually all public economic discussion in the US, indeed in the industrialized world, is in terms of "free markets," which simply amounts to propaganda serving the super-wealthy and their corporations, the biggest beneficiaries of government welfare in the history of the world.

Now for the irony. The economy could be supported in this way by government spending on anything; it doesn't have to be military spending. We could be using these billions of dollars to feed the hungry, educate the illiterate, heal the sick, and still have the same kind of economic impact. That's what they've been doing in Western Europe for decades, and that's why their economies are competitive with ours even while their standards of living are measurably better than ours. We've been conned, bigtime.

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