>Sunday, September 13, 1998
>
> PERSPECTIVE ON ASIAN ECONOMIES
> Culprit Is Unregulated Capital
> A 'Tobin Tax,' rather than misguided austerity, will avert
> greater upheavals.
> By JONATHAN KIRSHNER
>
>
> The world's great financial powers and institutions
> continue to scramble in an effort to contain the
>Asian financial crisis. But the one-size-fits-all austerity
>packages that the International Monetary Fund is
>shipping to East Asia target the domestic symptoms,
>not the international causes, of the crisis there. They
>will not solve the underlying economic problem.
<snip>
>
>Jonathan Kirshner, Author of "Currency and Coercion:
>the Political Economy of International Monetary Power"
>(Princeton University Press, 1995), Is a Professor in the
>Government Department at Cornell University
>
>Copyright 1998 Los Angeles Times. All Rights Reserved
Is the fact that this is written by someone in the Government Department significant about the way the debate is moving? We now have South Africa in the Non-Aligned Movement calling for the raising of international currency transaction costs, and this article dusting off Tobin.
Most significant seems to me the acceptable way the arguments were put. The analogy with pollution could get somewhere. The suggestion that Adam Smith recognised there are some problems where the market does not work beneficially, is useful. (Indeed of course all markets in history have been regulated.) More seriously Adam Smith's arguments are in the context of assumption that society exists. Unlike Mrs Thatcher, Adam Smith believed in society.
So even without any abandonment of capitalism, the gathering of these sort of arguments is signalling the death knell of the neo-liberal total laissez faire caricature of economics.
Ideas are not enough, and their emergence and success is often the result of objectively existing forces elsewhere. It looks as if the USA and Europe are going to stabilise, and remain content and could well continue to benefit from the uneven accumulation of capital globally in a world operating at much below its capacity. But perhaps "emergent markets" may remain an area of volatility, which will raise this issue to higher prominence.
Perhaps also international rivalry will develop futher between the major currency networks, and Europe in particular will see the advantage in competition of pressing the case for removing the regulation of the world economy from the benign and unseen hands of the USA, by at least making the process of regulation explicit and conscious.
Chris Burford
London