[lbo-talk] Announcing Muhammad Yunus' Candidacy to Head theWorld Bank

[tfast]

Robert writes:
>
> But if you compare this to much (most? nearly all?) of the agenda of
> the World Bank... suppose you could reallocate all the money from
> education and health sector and water privatization and building large
> dams to microcredit. wouldn't that be a good thing?
>
There is a lot of evidence that piping money in at this level overwhelms and
is actually destructive to local economies causing everything from wild
speculation in local property markets to rapid degeneration of relative
prices leading to an incoherent boom.  Small amounts of credit can
facilitate exchanges that would have happened save for the absence of money.
Large infusions tend to overwhelm local markets.

In other words local economies have an absorptive capacity.  Any measure
which does not increase the absorptive capacity threatens to undermine local
markets and leave locals worse off once the gush works it way through and
devaluation sets in.

I am afraid there is simply no substitute for public planning in economies
which do not already have robust private institutions of coordination and
planning.i.e in economies that are already developed.

Neoliberalism was such a colossal failure for the south precisely because
markets must be created, i.e., they are not just waiting to be liberated by
disparate individuals walking around with pockets full of cash.  And the
creation of robust private markets takes a long time and a lot of public and
private institutions.

*In this regard* new institutionalism looks radical compared to the
neoclassical ontology.  Even the world Bank is making the "radical" shift in
perspective and in this regard,IMHO, Yunus would be a step back for the
World Bank because he is neoliberalism redux.

Travis


> ---------- Forwarded message ----------
> From: Michael Perelman <michael at ecst.csuchico.edu>
> To: lbo-talk at lbo-talk.org
> Date: Fri, 1 Jun 2007 14:13:31 -0700
> Subject: Re: [lbo-talk] Announcing Muhammad Yunus' Candidacy to Head
> the World Bank
>
> For the World Bank to become useless would be a great step forward.
>
> On Fri, Jun 01, 2007 at 02:35:31PM -0400, Doug Henwood wrote:
> >
> > On Jun 1, 2007, at 1:56 PM, Robert Naiman wrote:
> >
> > > Announcing Muhammad Yunus' Candidacy to Head the World Bank Hotlist
> > > by Robert Naiman Fri Jun 01, 2007 at 09:43:04 AM PDT
> >
> > Do you have any evidence that microlending actually works? I haven't
> > looked at the issue in a while, but last time I did, it was useless.
> >
> > Doug
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