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US debt crisis: “We’ve never had anything remotely resembling capitalism…”

As the US obsesses over how to avoid a default on its loans, deep divisions within the ethos of the American society are becoming apparent.

There are those who are intent on maintaining military spending at a record high and safeguarding tax breaks to the wealthiest while cutting spending on social services as a way out of the quagmire. Then there are others who are looking at this crisis as an opportunity to recalibrate the values at the heart of the American economy. Unfortunately, it looks likely that President Obama will capitulate to the former, cornered by the demands of the right-wing Republicans and the frightful rise of the American Tea Party.

It is peculiar to note that one of the American Tea Party’s policy platforms calls for little/no government intervention into the economy, mistakenly convinced that government involvement hinders not helps the corporatist capitalist economy. The deal done over US debt ceiling shows us that this is simply not true.

As America becomes even more hypnotised by the drone of the 24 news cycle, it risks further deluding itself that neoliberal economic orthodoxy is part and parcel of a natural state of affairs. With the lessons of the 2008 GFC fading quickly from its collective memory, the US is once again subscribing to an economic institution which has shown time and time again, its cruel disregard for the well being of the majority in favour of the super profits for the few.

With this conflict in mind, it’s worth recalling Professor Noam Chomsky, who when asked if humanity could ever live peacefully under capitalism, had this to say…

“We’ve never had anything remotely resembling capitalism, because the owning class wouldn’t permit it”.

Chomsky points out that what we in fact have is State/Corporatist Capitalism, not Free-Market Capitalism, and suggests that if true capitalist institutions were established, then the current beneficiaries in our global economies would suffer. And put simply, big business’ stanglehold over Capitol Hill won’t allow it.

For interest sake, I would like to see the type of economy that would prevail if the US Right got their way and the state stopped intervening in the market economy. Surely it couldn’t be worse than what we’re faced with today??

But the deal put forward to raise the US debt ceiling is again testament to the fact that our current global economies are run by powerful state interventions – intervention which protect big business’ interests- and as Chomsky says, “everyone seems to know this except the economists themselves”.