Patrick Bond writes:
``Chuck, nope, I would say that `foreign investment' means mainly assuring that the commercial banks which lent during the 1970s and investment houses which came in during the mid-1990s get repaid in forex, under the cover of WB structural adjustment programme and project funding. `Foreign investment' in terms of FDI plant/equipment (in the productive circuitry of K) is still pretty small beer, compared to the role of the WB supplying forex for debt and portfolio investment repayments. No time right now to do the numbers; maybe Doug will help.
Then again, there's also the post-development (post-structuralist) critique of WB programmes (Escobar, Ferguson, Sacks, Shiva) because they promote institutional power under cover of `development discourse.'
Anyhow, it's long overdue that policywonk comrades formulate an alternative local development financing model -- combining capital controls, reflationary monetary policy and financial repression, prescribed assets for local-currency development projects, democratised trade finance, and a general shift in power away from rentiers/speculators -- which can help make the case for shutting the WB and IMF once and for all.''
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Patrick, thanks for the answer. Distinctions like that help make a difference in the way I am trying to understand what is going on.
I was just reading Brad de Long's review of Joseph Stiglitz in my web wonderings pursuing thoughts and questions on WTO, IMF, WB. I think Brad posted a reference to this review sometime last year.
(http://econ161.berkeley.edu/Econ_Articles/Reviews/stiglitz_role.html)
I want to quote some sections of this review for a particular purpose which should be clear below. However, it will not be clear from the later context that I am not going after Brad de Long. I wouldn't know how in any event. I am using his review of neoliberalism because he managed to frame something that is important (in my mind) to go after and to remember.
``Joseph Stiglitz appears to be an exception. He tries to set forth the intellectual core of the `third way'--a pragmatic approach that sees governments and markets as complements, with the government having a particularly important role in ensuring equality of opportunity (while resigning itself to enormous inequality of outcomes).''
The review characterizes neo-liberal economics as partly a
``counsel of despair...
After World War II in Latin America, and at the achievement of independence elsewhere outside the global economy's core, there were high hopes that social democracy (or something further to the left) could be successfully instituted. And there were high hopes that such social democratic or socialist regimes would enable peoples living outside the core to cut a generation or more off of what had been a lengthy, bloody, and cruel three- or four-generation process of industrialization and democratization in northwest Europe and its settler colonies.
Social democratic or socialist governments would from the beginning establish strong redistributive social insurance states to severely reduce the income and wealth inequalities that had been characteristic of Bismarckian Germany or the Gilded Age United States. They would put into place the physical infrastructure to reduce infant mortality and disease that the aristocracies and bourgeoisies of northwest Europe had not thought profitable. They would spend money like water on education...
By the end of the 70s, however it was clear to all except bindered ideologues that something had gone very wrong with social democracy at the periphery...
The nationalized commanding heights of the economy turned out more often than not to become employment bureaus for the politically well-connected...
Hence the policy advice of neoliberalism as a counsel of despair: get the state's nose out of the economy as much as possible...
A counsel of hope
...The hope is that the prospects for rapid market-generated economic development outside the global economy's industrial core are very bright...''
Thus we and much of the world have been lead to the adoption of open markets under minimal state controls and have ushered in the era of neo-liberalism from the 1980s to the present. The historical logic is that there was no viable alternative. The Clinton administration's policies have been directed at the globalization of this program, the `bet on globalization' as `The only live utopian program...'.
There doesn't seem to be any thing particularly wrong with these observations at first glance since they appear to be a common sense synopsis of what has happened.
But... There is a gigantic and yawning void here that may only be visible to those without some form of attention deficit disorder. Ponder the phrase, `...something had gone very wrong with social democracy at the periphery...' Just what might that be? What went wrong?
Does anyone recall something called the Cold War? See. Apparently, we have completely forgotten that the US government and its ruling elite with its corporate apparatus waged almost a century long war on any form of social democracy, spending roughly a quarter of our GDP in the last half century on the battle, year in and year out. Did it just skip our minds that virtually the entire persuasive might of mass media in all its splendor pounded our brains minute by minute for fifty years with nothing but a vast celebration of capital's brilliant triumph over the deadly diseases of socialism and communism? Has there been even a day gone by in the last decade without some laudatory note of this great victory?
So, then Capital won. We decimated any government, organization, or group that ever entertained a hope of providing a demonstration of how social democracy, socialism or god forbid, communism might work in the obverse to government promulgated capitalism. It should hardly be a surprise then, if now, when we turn around, there seems to be no other alternative, does it?
To read the above quoted passages, you would think that central and theoretically representational controls, management, and direction of a nation's economic system has been a catastrophic failure, in which such plans naturally collapsed from their own weight. Hardly. Systems of all kinds, not ready to roll over to serve our geo-political needs and to pay comprehensive returns back to our corporate interests were systematically undermined, attacked, and exterminated, and then scoffed at for dying so miserably. That was the master plan for the entire cold war, wasn't it?
If there were ever a pyrrhic victory, this is it. And. Just look at what's been won. I would characterize it as a stupifyingly bland, soul dead white noise broadcast from every corner of our brilliantly lighted cell blocks. From an infinity of Pelican Bays, we can only dream of those silences and the dark warming embrace of Piranesi's interiors.
So, the lie at the heart of the neoliberal apology is that what we see is a consequence of natural and indeterminant forces beyond our understanding or control. Well, fucking duh. Didn't we just spend fifty years engineering these consequences? How can it be a shock that they have arrived?
It seems to me more interesting to observe, that since these centrally engineered policies which protect and promote capital and their consequent results have succeeded, then in fact, centrally controlled and coordinated plans do work after all. It is a lie to pretend that they don't work. After all, if they didn't, then we didn't win the cold war, did we? So which is it?
Oceania has always been at war with Eurasia.
``Do you know that Newspeak is the only language in the world whose vocabulary gets smaller every year?.
Winston did know that, of course. He smiled, sympathetically he hoped, not trusting himself to speak. Syme bit off another fragment of the dark-colored bread, chewed it briefly, and went on:
`Don't you see the whole aim of Newspeak is to narrow the range of thought? In the end we shall make thoughtcrime literally impossible, because there will be no words in which to express it...'''
Chuck Grimes