Keynes Question

Rob Schaap rws at comedu.canberra.edu.au
Fri May 11 05:19:04 PDT 2001


G'day all,

Sez one economist (a bloke I always respect and almost never agree with, except that time he so neatly nailed Keth Windschuttle to the cross of unthinking ignorant vitriolic reaction):

"A couple of years ago everyone seemed to agree that the international financial institutions needed major reform. Half the critics (the Jeffrey Sachs-Joseph Stiglitz wing, with which I tend to agree) believed the institutions were too scrooge-like: he IMF was forcing countries into deflationary policies that caused severe depressions. Half the critics (the Ralph Nader-Wall Street Journal wing) believed the institutions were too generous and liberal: the IMF's generosity had encouraged overlending and overproduction that had caused widespread crisis. But even though the directions of the proposed reforms were directly opposed, everyone seemed to agree that such major reforms were absolutely necessary."

Now, could it be that there are other positions? What about agreeing with Sachs/Stiglitz but taking the IMF to task for its links to the US treasury, its arch ethnocentric universalism, the particular people it effectively gave the money to, and what they did with the money?

I reckon those questions would want answering if we're properly to get to this conclusion (and to avoid a pessimist's view that much of what apparently worked has neither improved the lives of the working class nor solved a tendency to crisis not unlike the '97 disasters.

" ... work needs to be done to rebuild support for a crisis-management system that seems--ironically--to have worked relatively well in the past decade. And if support cannot be rebuilt, than a new system of crisis management that can command broad political support needs to be built in its place."



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