> It is an admission that
> state structures and political controls in developing countries are such
> that governments cannot perform the kinds of growth-promoting and
> income-redistributing missions that we take for granted in the social
> democracies of Europe, that attempts at social democracy tend to collapse
> into corruption and kleptocracy, and that the best shot at development is
> to try to cut the interface between government and economy--privatize
> businesses, diminish regulation, abandon independent monetary policy for
> currency boards, bet that the most rapid road to increasing incomes and
> productivity is to make one's economy hostage to the good opinion of
> foreign investors...
I am not knowledgeable to have an opinion here. However, this seems to be a choicebetween corrupt elites on this view. I'm currently reading about the British during the Initial Industrial Revolution, and one is very hard put to see much difference in ruling elites, crony capitalism, kleptocracy looked equally present back then or ours now. Its remarkable, how stable both codes of morality and lack of adherence to them seem to characterize human behavior over the long term in either European midieval or Capitalist Society. However, I think the marginal profitablity of capitalist style thievery is higher now, especially for a developing country and for the elites of these countries who probably have way too much power vis a vie the citizens of their own countries. I frankly think Chomsky has a point that lack of Capital Controls were and are a disaster, and as he points out "radicals" at the World Bank like Joe Stiglitz seem to share this point of view. Again this is ignorant opinion which may rapidly change on further reading of the evidence.
The chief indicator of successful industrialization seems to be the combined size and strength of the middle class (petty bourgeoise), (too much concentratation of wealth and power in a capitalist regime is a disaster in a Capitalist Industrializing Society) and the working class in a pseudo -- borgeoise society (i.e. like say like South Korea and Poland on the successful end, and Indonesia and Russia on the less successful end.
As far as rapid industrialization goes in the very undeveloped world, China is probably the best model we have despite its corruption, exploitation and butchery. When one has a socialist elite and beaurocracy corrupt or otherwise there is at least the police and the party to prevent Capital flight. This police provides a level of anxiety and lack of security for their socialist corporate managerial class which is probably an partial substitute for market discipline. Very unfortunately its not only the elites that suffer from this sort of discipline, its also the undeveloped socialist partial substitute for unemployment.
On an optimistic note it might be possible that the Chinese will moderate their lack of bourgeoise liberties and totalitarianism as they further develop using market discipline as a substitute for a totalitarian state or better yet come up with a new solution which we may all eventually copy. I hope that there is a "third way" which is much better communist or ortherwise that will develop in some backwater and not be crushed by outside corrupt elites
--mike
-- Michael Cohen mike at cns.bu.edu Work: 677 Beacon, Street, Rm313 Boston, Mass 02115 Home: 25 Stearns Rd, #3 Brookline, Mass 02146 Tel-Work: 617-353-9484 Tel-Home:617-734-8828 Tel-FAX:617-353-7755