by Noam Chomsky
In These Times
March 5, 2013
There is “capitalism” and then there is “really existing capitalism.”
The term “capitalism” is commonly used to refer to the U.S. economic system, with substantial state intervention ranging from subsidies for creative innovation to the “too-big-to-fail” government insurance policy for banks.
The official doctrines suffer from a number of familiar “market inefficiencies,” among them the failure to take into account the effects on others in market transactions. The consequences of these “externalities” can be substantial. The current financial crisis is an illustration. It is partly traceable to the major banks and investment firms’ ignoring “systemic risk”—the possibility that the whole system would collapse—when they undertook risky transactions.
Environmental catastrophe is far more serious: The externality that is being ignored is the fate of the species. And there is nowhere to run, cap in hand, for a bailout.