If that is the big question, I think that it is quite simply an empirical question, not one for too much deep thought. Chomsky bitterly condemns the turn away from the Keynesian welfare state (if that's the correct term) and appreciates the ability of macro policy to stabilize things greatly.
However, I really think that this is a rather uninteresting topic. Whether or not policies can be found which will help the system function more smoothly is not in question (they can, and Jamie Galbraith argues eloquently for a return to them in his latest book *Created Unequal*, on which he is giving a seminar on the PKT list later this month). The real question is if the ruling class can be pressured enough to institute them.
> .... Instead of dismissing Mattick as too dogmatic
>a Marxist for himself (what a silly unscientific comment that I am
>surprised Chosmky made for his Barksy bio), ...
Actually, Chomsky said something a bit less harsh, that Mattick was "too orthodox a Marxist for my taste"; and I don't think that this sentiment is silly or "unscientific" (how's he supposed to express this sort of thing "scientifically"?).
>surprised Chosmky made for his Barksy bio), Chomsky should actually engage
>his attempt to interpret "Marx's theory of capitalist development as
>simultaneously a theory of capitalist crisis, due fundamentally not to the
>disproportionalities or underconsumption
>favored by most Marxists, but to the tendential fall in the rate of
>profit. As Mattick showed in numerous essays, most Marxist
>theorists...share with bourgeois economics a focus on the circulation of
>commodities and the realization of surplus value. Marx, in contrast,
>focues on the production of surplus value, to argue that the very process
>by which exploitation is enhanced leads over time to a decline in the rate
>of profit on total capital. Mattick's main contribution to the critique of
>economics was to demonstrate that this Janus faced process by its nature
>is not overcome by the various forms of Keynesian state regulation of the
>market economy. By the late 1950s he had succeeded in showing that the
>continued existence of the capitalist structure as the basis of the 'mixed
>economy' implied the latter's destabilization in the not too distant
>future by the same crisis mechanism that had put an end to earlier periods
>of prosperity." Paul Mattick, Jr in Biographical Dictionary of Neo
>Marxism, ed. Robert A Gorman.
Well, this sounds a bit orthodoxish to me. Where has the crisis in profitability been? When is the "not too distant future"? Marx was saying the same thing 150 years ago... What, finally, is a "crisis"?