Brad De Long wrote:
> Meltzer Report.
>
> There are a bunch of people who think that problems with the world
> economy arise because it is not laissez-faire enough--that the World
> Bank and IMF are bad because they are institutions of collective
> self-government that interfere with the free operation of the market
> by creating moral hazard, pushing prices away from market equilibrium
> values, and so on.
>
But that is what the IMF does: provide free risk insurance for (mostly) Wall Street investors. A sort of state socialist insurance scheme for the richest people in the world. The people who pay for the IMF SAP's aren't the ones who borrowed it nor did they derive any benefit from the loan money, in most cases they suffer even more. The poorest and most weakest people in the world shoulder the risk for the richest and most powerful. Is that fair? Where I come from we call it extortion. Consistent libertarians are against state socialism period. Socialists ,as I see it, are against socialism for capitalists and capitalism for socialists.
The laissez-faire crowd are out to lunch as they have always been. If their theory is correct as they maintain it is, with Pentacostal fervor, just why has the world evolved such institutions that they decry as "ruining the self-adjusting market processes". Can't all be the product of failures trying to get rich through the state. Laissez faire economic history is worse than its philosophy. The irony and coup-de-grace is that laissez faire can only be introduced through force of the state. When given the chance, most people in general would rather co-operate than compete against each other which in all cases makes life worse. You have to be taught and forced to live and act like something in a laissez faire ecnomic model.
Laissez-faire development strategies have been an obvious and complete failure. Laissez faire people sometimes offer the 'economic miracle' of Pinochet's Chile as an example of free market success. It was neither a success nor was it free market. At best, it gave extreme inequality and jail for those who think another way is better.The more theoretically inclined offer up medievil Iceland as an example of successful laissez faire.
>
> No. The point of the pro-IMF movement is to give Koreans and others a
> better set of choices: the first requirement of a better set of
> choices is an IMF that is well enough funded that it doesn't have to
> make getting its money back soon--and thus an export surplus on the
> part of borrowing countries--its highest priority.
Sounds like a Hobson's choice to me. The point isn't to devise nicer and more efficient ways to help get Wall Street its investments back. A nice and efficient ruling class is still a ruling class. A hangman is a hangman is a hangman.Not good enough. In practice, the IMF and the system of which it is part narrow the choices a particular country has: either you can deal with the IMF or you can deal with the U.S. marines. There are *huge* U.S. military bases in S.Korea, it is unlikely they will thumb their noses at the IMF.
>
> Even with the conditions, the fact that the Korean government went
> for the deal the IMF offered suggests that it was a good deal for
> Korea--a much better deal than no conditionality and no IMF loan
> would have been.
You know the old saw: If you hold a gun to someone's head, they do have a choice: take the bullet or do as you say. If you force me to _____ that's a pretty good deal compared to the bullet.
> We want to build up more winners on the periphery that learn from and
> about the technologies of the industrial core. You want to build up
> more autarkic losers on the periphery.
>
Again, who is "we". A fallacy of composition. What is true for one country cannot be true for all other countries. You can only sell so many cars TV's and other assorted electronic junk to the Euro-American market. Too many countries competing to sell the same goods to Euro-America has resulted in declining terms of trade for them. Basic stuff.
Sam Pawlett