Noam Chomsky Discusses the Hypocrisies of Capitalism in the Financial Capital of the World

Noam Chomsky and former finance minister of Greece Yanis Varoufakis recently spoke at the New York Public Library about the hypocrisies of the finance and tech industries — and what neoliberalism really means.

Full transcript below:

NOAM CHOMSKY: One of the paradoxes of neoliberalism is that it’s not new and it’s not liberal. (applause)

YANIS VAROUFAKIS: Exactly. Exactly.

NOAM CHOMSKY: If you look at what you describe is a form of hypocrisy but the same is true of saying that we should not support tax-funded institutions. The financial sector is basically tax-funded.


NOAM CHOMSKY: You recall the IMF study of the leading American banks, which determined that virtually all their profits come from their implicit government insurance policy, cheap credit, access to higher credit ratings, incentives to take risky transactions which are profitable but then if it’s problematic, you guys pay for it, or just take the basis of the contemporary economy, which actually I’ve been privileged to see developing in government-subsidized laboratories for decades. MIT, where I’ve been since the 1950s, is one of the institutions where the government, the funnel in the early days was the Pentagon, was pouring in money to create the basis for the high-tech economy of the future and the profitmaking of the institutions that are regarded as private enterprises. It was decades of work under public funding with a very anticapitalist ideology. So according to capitalist principles, if someone invests in a risky enterprise over a long period and thirty years later it makes some profit, they’re supposed to get part of the profit, but it doesn’t work like that here. It was the taxpayer who invested for decades. The profit goes to Apple and Microsoft, not to the taxpayer.

YANIS VAROUFAKIS: Indeed, indeed. If you take an iPhone apart, every single technology in it was developed by some government grant, every single one.

NOAM CHOMSKY: And for long periods.

YANIS VAROUFAKIS: And some of them by government grants from other countries, like WiFi from the Australian Commonwealth.

NOAM CHOMSKY: And it’s — you see an interesting picture of it from a place like MIT, or other major research institutions. So if you walked around the building where I work fifty years ago, you would have seen electronic firms, Raytheon, ITech, others, IBM, there to essentially rob the technology that’s being developed at public expense and seeing if they can turn it into something applicable for profits. You walk around the institution today, you see different buildings, you see Novartis, Pfizer, other pharmaceutical, big pharmaceutical corporations. Why? Because the cutting edge of the economy has shifted from electronics based to biology based, so therefore the predators in the so-called private sector are there to see what they can pick up from the taxpayer-funded research in the fundamental biological sciences, and that’s called free enterprise and a free-market system. So speak of hypocrisy, it’s pretty hard to go beyond that.

YANIS VAROUFAKIS: Quite right. This hypocrisy is fundamental to the whole enterprise culture of capitalism from 250 years ago.

NOAM CHOMSKY: From the beginning.