Noam Chomsky (2014) on Economics & Classical Liberalism
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Professor Noam Chomsky discusses misinterpretations of classical liberal tradition, origins of really existing capitalism and history of free trade in the U.S. and in the world. Interview was recorded on July 23rd, 2014 (Boston, MIT) by Antti Jauhiainen & Joona-Hermanni Mäkinen (Parecon Finland). About Noam Chomsky Avram Noam Chomsky is an American linguist, philosopher, political activist, author, and lecturer. He is an Institute Professor and Professor Emeritus of Linguistics at the Massachusetts Institute of Technology. About Parecon Finland Parecon Finland aims to help bring issues of democracy and environmental sustainability more into the focus of discussion on economy and economics in Finland. The organization writes commentaries, organizes events and talks, and publishes material related to such key issues as market reforms, local economies, climate change and political and economic democracy. www.osallisuustalous.fi keywords: noam chomsky, parecon finland, capitalism, liberalism, history, economy, free trade, adam smith, invisible hand, economics
Comments
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This is a quite extreme reading of Smith, whom is straightforward in his intention with regards to the "invisible hand" concept.
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Has he ever debated an economist? Classical or Keynesian? I'd really like to see that.
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Noam Chomsky commits the fatal flaw of thinking that he is in expert in all fields of political and economic science because he is an expert in the field of Linguistics.
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I don't think a person who opposes property rights has the right to speak of a "correct" interpretation of classical liberalism. When you oppose property rights, like Chomsky does, then you automatically advocate an authoritarian state. Here's why: If there is no right for individuals to claim property then property can only be collective. If property is only collective then there must always be a grand authority to allocate resources to the collective and to ensure that no new private property arises. In other words, nothing short of what any other Communist dictatorship in history has done. On the other hand, if property is owned collectively on a voluntary basis. That is, there is no force upon the rest of society to conform to collective ownership, then that is still a form of private propety. Such voluntarily based collective ownership is already allowed in classical liberal thought. There is no need for socialist revisionism of Chomsky to allow for this, since no classical liberal opposes collective ownership on a voluntary level.
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"The statesman who should attempt to direct private people in what manner they ought to employ their capitals, would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it." Best quote in the book
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"He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was not part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it." - Adam Smith.. Thats the quote from Wealth of Nations..
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Ignored by most Smith interpreters is his treatment of land ownership and the private appropriation of the rent of land. His analysis was not as direct as that provided a century later by Henry George, but Smith explained that rent arises out of population growth and aggregate demand rather than by what any individual owner of land does or does not do to improve the land held. Thus, rent is a surplus that can be publicly collected without adversely impacting the production of wealth. Failure to do so gives to government (or a governing elite) the excuse to tax earned income, wealth produced by labor and capital (e.g., buildings and machinery) and commerce. The result has been centuries of entrenched landed privilege at the expense of those who actually labor and produce goods or services.
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