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Tuesday, January 24

A few choice words about poetic justice and the Washington Consensus

I'm adding David Bosco's April 6, 2011 report for Foreign Policy, Is the Washington Consensus dying? to my MENA's New Left post, in which I mentioned in passing that Mackell's complaints about the Washington Consensus weren't entirely unjustified. The 'money' quotes in Bosco's report(which he took from the Bretton Woods Project):
World Bank chief economist Justin Lin continues to stir the waters by pushing for increased global investment to boost growth and by suggesting that developing country governments need more interventionist industrial policies.

Lin, a Chinese national, speaking to the G24 group of developing countries in mid-March, called for "a global push for investment along the line of Keynesian stimulus [which] is the key for a sustained global recovery."

He argued that current policies of richer countries risked locking in a period of low growth, but "a push for investment will increase the demand for capital goods and reduce manufacturing sectors' underutilisation of capacity in high-income countries, which in turn will increase "employment, consumption, demand for housing, opportunity for private investment, and growth."

This runs contrary to the austerity measures being pursued by many countries at the behest of the IMF.
I don't have anything against the basic tenets that make up the Washington Consensus (aka neoliberalism) any more than I have something against capitalism. But as long-time readers of this blog know I've had plenty against the indiscriminate, state-imposed application of neoliberal tenets in countries that have had neither the deep democratic political and judicial infrastructures nor the social safety nets of Margaret Thatcher's England or Ronald Reagan's America.

The cookie-cutter application of neoliberal shock therapy to developing countries(which includes the sudden privatization of state-run industries) has unleashed havoc in one country after another, created entire classes of super-oligarchs, given capitalism a bad name, driven large numbers of people toward (or back toward) communist ideas, caused them to cling ever more tightly to Keynes's economic nostrums and caused them to thorougly despite not only the United States but the entire 'West.' And -- and -- transformed a small insurgency in Iraq that initially had no chance of getting off the ground into a monster that took thousands of lives.

So it's poetic justice that the developing country of China, which managed to resist the worst of neoliberal shock therapy, is now in a position to lecture the World Bank and IMF -- and the United States -- about overzealous application of the Washington Consensus. Hah!

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