MN Summer Book Club Choice- Stiglitz and Klein

unaligned wrote:

Slim Buddha wrote:

cactus flower wrote:

Slim Buddha wrote:

cactus flower wrote:

arnaudherve wrote:

Anything that makes the European standards superior is a threat to global trade.

Anything that allows third world rurals to survive through local ways is a threat to global trade.

It seems that globalised trade requires us all to follow the doctrines of Milton Friedman.

I think we are coming out of the dark age of Monetarism and the Friedmanist nonsense. This obviously doesn't work. There are other economists who disagree fundamentally with neoliberal economics and they are the ones forming opinion now. Rogoff, DeLong and Rodrik in particular are making themselves be heard.

Indeed, all the once upon a time followers of Friedman are now screaming for regulation. But they want regulation to bale them out and protect them from their own lunacy. I think the No vote in Ireland may have been in part a reaction against the neoliberal / neoconservative project. On the ground, Latin America who have experienced the worst of it are rejecting it.

To what extent do you think the WTO is a US interest project, and to what extent does it benefit owners of capital outside the US ?

I think neoliberalism is very much a US project and is a much more political project than the apologists for it admit. The core values of neoliberalism sets the owners of capital against the providers of labour and neoliberalism is designed to ensure capital wins everytime. That is why in every country, regardless of the type of government (from Pinochet in Chile to Douglas in New Zealand) the middle class has shrunk under neoliberalism. Not alone that,the economic results of neoliberalism have been poor. New Zealand's economic under 15 years of neoliberalist economics was embarrassingly bad. However, a change in the electoral system in 1996 is designed to ensure that in the unicameral parliamentary system in New Zealand, such a dogma can never again be implemented by the likes of Douglas and his fanatical Finance Minister Ruth Richardson.

Of course, this option was not open to the Chilean people and the legacy of Pinochet economically is, among other things, a totally private health service (the public service is starved of funding and to a large extent relies on charity). We all use the US as an example of what can happen when a health service is totally given over to commercial, for-profit interests. Chile is a better example, I think, because the privatisation of the health service was so dependent on the correct health insurance mechanism being in place. For all Harney's efforts in commercialising our health service, it seems to me that she hasn't got the insurance right (for her purposes) yet, and if you don't fatten the milch cow of the health service first, then the result for the profiteers will not be optimised.

You are of course correct when you say the neoliberals are screaming for regulation. But this is to save their own asses, nothing more. The point must be hammered home to them that theirs is an utterly failed dogma. It creates greater levels of poverty, it shrinks the backbone of any economy, the middle class; it hoovers profits upwards to the owners of capital and debts are shifted to the public account. Basically it is rubbish and now that everybody knows it, not just the community of international economists, it is time to move on, deconstruct the international architecture of globalisation and build it again, free of the neoliberalist virus.

I believe there will be no agreement on Doha. Ever. The entire discussion is operating within an economic theory that is no longer valid and the developing countries have copped on to this. The WTO has no future in its present construction and the main agreements (GATT, GATS, TRIPS, TRIMS and a few others) need to be re-negotiated. It would be better if they did that than try to persevere with the current system because if they do, the WTO is signing its own death warrant. After all, in 1992 there were only 16 Regional Trade Agreements. Now there are nearly 350. The WTO is becoming irrelevant in any case.

As to whether it benefits owners of capital outside the US, I believe it does. Globalisation has been a great boon to Nestlè, for example. Only 5% of its revenues are made in its home country, Switzerland, the rest is made abroad. Outsourcing, off-shoring etc. has brought Nestlè enormous economies in streamlining costs, having a direct impact on profits which are all re-patriated to Vevey. There are many companies like Nestlè whose profits have greatly increased due to the neoliberalist nature of globalisation. These companies have an interest in preserving the status quo. So burying Friedman will be no easy task.

Very interesting and informative post Slim Buddha, thanks.

I am bumping this because what appears to me to be happening in the US is a classic "Shock" doctrine assault on the American people by a tiny wealth owning elite. Klein wrote in "The Shock Doctrine" that economic crises are used by the neoliberals to launch a shock assault and push through punitive and permanent measures that transfer wealth from the working and middle classes to the wealthy political and financial elite. She talked about how just that happened in Canada at a time of economic crises, as well as New Orleans after Hurricane Katrina and the many better known examples around the globe.

She obviously has a lot to say about what is going on this week.

http://www.democracynow.org/2008/9/24/naomi_klein_now_is_the_time

One example of senators contributions from yesterday's hearing in Washington:

Quote :

SEN. CHRIS DODD: Barely seventy-two hours ago, Secretary Paulson presented a proposal that he believes, and others do as well, is urgently needed to protect our economy. This proposal is stunning and unprecedented in its scope and lack of detail, I might add. It would allow the Secretary of the Treasury to intervene in our economy by purchasing at least $700 billion of toxic assets. It would allow the Secretary to hold onto those assets for years and to pay millions of dollars to handpicked firms to manage those assets.

It would do nothing, in my view, to help a single family save a home, at least not upfront. It would do nothing to stop even a single CEO from dumping billions of dollars of toxic assets on the backs of American taxpayers, while at the same time do nothing to stop the very authors of this calamity to walk away with bonuses and golden parachutes worth millions of dollars. And it would allow the Secretary and his successors to act with utter and absolute impunity, without review by any agency or a court of law. After reading this proposal, I can only conclude that it is not just our economy that is at risk, but our Constitution, as well.

http://www.democracynow.org/2008/9/24/bush_admin_faces_congressional_skeptics_on

Make no mistake about it, the Paulson plan is designed to salvage the obscene wealth raked off the US economy by his own reckless actions (soon to be investigated by the F.B.I. ?) and would leave the wider population of the US literally going hungry. It is an attempted financial and political coup, as it would leave an incoming Democratic government hogtied and with no option other than to slash every budget.

These people even want to privatise welfare.

NY Times

An interesting article on the "Military Industrial Complex", which explains in some detail how military and commercial interests intertwine.

Retired, or semi-retired US Generals can step between a public role to a lobbyist role for suppliers. The waters can be very muddy, when they are lobbying and profferring strategic advice at the same time.
I put is in the Klein thread, because her writing provides an overview of how these interests feed off each other.