Noam Chomsky says that there has always been economic intervention by the state in the so-called free market economy countries.

11 Mar 09 | Press TV

In an exclusive interview with Press TV, Chomsky was asked why economic analysts did not predict the latest economic crisis.

Chomsky replied that many economists predicted such a crisis in the 1970s after the financialization of the economy.

He went on to say that in the post-World War II era, the Bretton Woods system was established, which allowed currency speculation and huge flows of capital, to the detriment of industrial production.

Chomsky explained that over the past two decades, countries like China experienced breakneck economic growth through export orientation and the rejection of Washington’s neoliberal rules, which surprised economic analysts.

Asked about the recent bailouts in the US and Europe and the fact that state intervention is contrary to a free market economy, Chomsky replied that there has always been economic intervention by the state in rich countries but this was never openly acknowledged.

Commenting on the economic boom or the tech bubble during the Clinton administration, Chomsky noted that advanced technology such as pharmaceuticals and information technology was handed over from the state sector to the free market after 30 years at that time.

Chomsky said Ronald Reagan, the “high priest of the free economy”, was actually an economic protectionist whose bailout of the Continental Illinois National Bank and Trust Company resulted in a huge deficit.

The Continental Illinois National Bank and Trust Company experienced a fall in its overall asset quality during the early 1980s.

Part One (7:32):

Part Two (7:32):

Part Three (7:32):

Noam Chomsky is Institute Professor of Linguistics (Emeritus) at the Massachusetts Institute of Technology, known as the “father of modern lingustics”, cognitive scientist, political activist, most cited living author of over 100 books on linguistics, political science, and media, one of the world’s leading intellectuals and of an elite few in the history of the world to be at the top of two fields: linguistics and political science.

Comments
  1. […] Chomsky’s Lectern: State Intervention Common in ‘Free Market’ (11 Mar 09) […]

  2. […] Chomsky’s Lectern: State Intervention Common in ‘Free Market’ (11 Mar 09) […]

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