Representative Press Blog

Costs are socialized, profits are privatized

Chomsky points out how our economy really works, most Americans are ignorant of this fact. I was flipping through the channels and just happened to catch a mention of something called the "National Nanotechnology Initiative" for a few seconds on the History Channel. It said that the budget was $961 million in 2004. I thought "holy crap", yet another example that puts a lie to the "Capitalist economy" that the public is brainwashed with.

I looked up the "National Nanotechnology Initiative" on the Internet and found it was yet another example of government money being given as a gift to the private sector. The average American is fed the story that we are a Capitalist economy and that companies invest in their business and reap the returns. The reality is that huge amounts of taxpayer money is used to keep big companies in business, welfare for the rich that many Americans are unaware of.

From the Funding page of the National Nanotechnology Initiative, this paragraph is very revealing: "The Federal government historically has funded R&D where there is potential for a technology to greatly impact the national economy, but where adequate private investment is lacking due to early stage technical risks. The success of this investment strategy is reflected in papers supporting recent patents, nearly two-thirds of which cited federal support for the relevant research."

This violates the basic logic of our so called "Capitalist System"! The average American is sold the story that Capitalists take the risks with their money, that they invest in business and that they deserve the huge returns because they risked their own money. The above sentence is another example that exposes the fact that the big boys play by different rules.

"Federal funding for nanotechnology R&D has increased sixfold, from $116 million in 1997 to an estimated $961 million in 2004. The 2005 budget request that President Bush has sent to Congress calls for a total NNI budget of $982 million, which represents an additional 2% increase." Funding THis now at a time when the little people are told that they must tighten their belts yet the super rich get their handouts increased.

Keep in mind that the Nanotechnology Initiative (NNI) is just one of the federal R&D programs that pump taxpayer money into private pockets. Chomsky explains, " It’s not simply the subsidies to agribusiness and the protection, that’s a small part of it; the major part is that there is a dynamic state sector in the economy which is the core of economic innovation and development. Research and development takes place mainly in the state sector. Take the entire new economy, computers, telecommunications, the internet, now biotechnology and so on, the costs are largely socialized through various mechanisms such as the institution we’re now talking in (MIT) which is part of the system. Costs are socialized, risks are socialized and if anything comes out decades later it’s handed over to private power"

also see my post The Fraud of Neoliberal Economic Theory