CAPITALISM ACCORDING TO CHOMSKY. PART II OF 3.

The next point which Chomsky makes concerns his understanding of state capitalism. It is more debatable although if stripped off its idiosyncratic understanding of the term, which clashes, for instance, with mine, and taken as a figure of speech, rather than as an academic definition, it immediately becomes acceptable, and even somewhat gains in clarity, liberated from its verbal confinement to freedom of interpretation.

“Every industrial society is one form or another of state capitalism. Systems, like capitalism and socialism and communism, have never been tried. What we’ve had since the Industrial Revolution was some form of state capitalism. It has been overwhelmed, certainly, in the last century, by big conglomerations of capital corporate structures, interlinked with one another, forming strategic alliances, administering markets, and so on. And all tied up with a very powerful state. So, it is some other kind of system, call it whatever you want. Corporate-administered markets in a powerful state system.”

And now, here he goes again. Not exactly cogent to the narrow subject of this entry, but very interesting. I am not going to cut this passage out for whatever reason: “Actually, the Soviet Union was something like that. They did not have General Electric, they had more concentration of the state system, but, apart from that, it worked rather like a state-capitalist system. And do these systems work? Yeah, they kind of work. For example, the Soviet Union was a monstrosity, but it had a pretty fast growth rate, a rate unknown in Western economies. In the 1960’s the economy started to stagnate and decline, but for a long period they had a growth rate that was very alarming to Western leaders.”

The interesting implications of this thought relate to the immediate future of post-Soviet Russia, should its leadership allow state capitalism in my definition to flourish. To do precisely that, the Kremlin might now consider a re-institution of certain elements of the pre-stagnant Soviet monstrosity, allowing the nation to enjoy the best of both worlds, thus giving Russia a distinctive edge in the global economic competition. As Chomsky notes, “We live in a world of irrational financial markets, dominated by the herd instinct, which today seriously threatens the global economy. But we have political remedies to cure such economic ills.”

So, assuming a powerful control over the national economy, which, as a prospect, has already impressed a number of Western investors, the Kremlin may consequently find a mechanism for addressing this market irrationality and suppressing the herd instinct, thus assuaging the looming threat to the global economy ad majorem Russiae gloriam.

To be continued…