Naomi Klein vs. Alan Greenspan on crony capitalism in the US

NAOMI KLEIN: There is something that I was quite interested in in your book, which was your definition of corruption and crony capitalism. You said, “When a government’s leaders or businesses routinely seek out private sector individuals or businesses and, in exchange for political support, bestow favors on them, the society is said to be in the grip of crony capitalism.” You say, “The favors generally take the form of monopoly access to certain markets, preferred access to sales of government assets, and special access to those in power.” I kept thinking about Halliburton, Blackwater, Lockheed and Boeing. You were referring to Indonesia at the time, but I’m wondering, according to your definition—and we’re seeing these extraordinary—we’re seeing contracting emerging, as in the words of the New York Times, a fourth arm of government. Front page of the New York Times talks about $6 billion being investigated for criminal activity in contract allocation in Iraq. I’m wondering whether you think the United States is a crony capitalist economy, according to your definition?

ALAN GREENSPAN: Every economy exists, no matter what the level of democracy, has elements of crony capitalism. It’s—given human nature and given the democratic structures, which we all, I assume, adhere to, that is an inevitable consequence. The major issue is, is it the dominant force within an economy? It was the dominant force under Suharto. It is not the dominant force in this country.

NAOMI KLEIN: Well, how about this: in 2003, when you were head of the Federal Reserve, the US government handed out 3,500 contracts to companies to perform security functions. In 2006, the year that you left the Federal Reserve, they handed out 115,000 such contracts. It seems to me that it is becoming a dominant force.

ALAN GREENSPAN: Are you talking about the contracts that the Federal Reserve put out?

NAOMI KLEIN: I’m talking about the crony capitalist system of a Republican government handing out an extraordinary level of contracts to private companies, who then support these politicians with the political favors that you’re describing in your book, in your definition of crony capitalism.

ALAN GREENSPAN: Federal Reserve is doing this or the government?

NAOMI KLEIN: You’ve overseen an explosion of the contract economy.

AMY GOODMAN: Final word, Alan Greenspan.

ALAN GREENSPAN: I’m sorry. I misunderstand what you’re saying. Are you saying the Federal Reserve is doing that or the government is doing it?

NAOMI KLEIN: I’m saying that the US government is doing it.

ALAN GREENSPAN: Well, the US government has to purchase equipment from the private sector. It doesn’t produce it itself. And you may characterize it in many different ways. And, obviously, I’m not going to deny that there’s all sorts of corruption, which goes on in every country. The problem, essentially, for a democratic society is to maintain the civil liberties of the society and suppress that. Corruption, embezzlement, fraud, these are all characteristics which exist everywhere. It is regrettably the way human nature functions, whether we like it or not. What successful economies do is keep it to a minimum. No one has ever eliminated any of that stuff.