Two from Brad

Brad DeLong jbdelong at uclink.berkeley.edu
Wed Mar 27 07:46:30 PST 2002



> >Date: Tue, 26 Mar 2002 22:58:12 -0800
>>From: Brad DeLong
>>Subject: Re: Naomi Klein in Argentina
>
>In the interests of frank discussion here, I'd like to point out that it's
>looking very much like Brad was right and I was wrong on the question of
>hyperinflation in Argentina. I still think that the provincial scrip was a
>side issue, but the latest proposal by the central government to pay public
>employees in Lecops (when comparable government debt is trading at a 90%
>interest rate) suggests that debasement of the currency is a formality.
>Well done Brad and all that.

Well, I'd much rather be wrong. First, the last thing Argentinians need is another depression/hyperinflation. Second, the fact that Argentina successfully implemented 80% of the neoliberal program and yet is still crashing and burning is a powerful argument against it--you're never going to be able to successfully implement 100% of anything, and so successful development strategies need to be robust against market and government failures.

This moves me several steps toward Patrick Bond: Keynesianism in one country with stringent controls on international financial linkages looks much better in my eyes for development than it did two years ago. But it is so hard to raise the capital for industrial development internally; it would be so beneficial if a way could be found to use the industrial core's vast surpluses of capital...

Brad DeLong



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