Posts Tagged ‘US’
The Role of Ideas
As the US sub-prime debacle transformed into a full-blown economic crisis and marked the demise of free market capitalism yet again, the somewhat fanatic move towards state capitalism reeked of familiarity. The last time we saw something similar was during and after the Great Depression when tumbling stock markets and the ensuing economic turmoil worldwide prompted many to wonder if Adam Smith’s invisible hand had really guided them towards economic prosperity and growth or something more sinister. The temporary solace was found in Keynesianism – a sort of state-managed capitalism, if you will – which ultimately gave way to statism – a full-fledged state-operated economy, with massive consequences (one that resulted in WWII). Extremism appears to find its way into the economy whenever a huge, irreversible event affecting the lives of billions of people across the globe occurs. While we worry about all the ‘buy America’, ‘buy China’ and ‘buy ‘Country X’’ clauses that governments worldwide are relentlessly pursuing, the greater worry is perhaps as Joseph Stiglitz puts it plainly, a fear that developing countries might learn the wrong lesson and turn away from markets totally and head towards the disastrous path of state planning and socialism, interpreting what’s happening in the US as conclusive evidence that free market capitalism, represented by the deregulation and privatization of sectors and firms and trade liberalization, is no doubt the embodiment of economic colonialization. The role of ideas may be abstract but it is no less significant as the actions that were informed by it.
Joseph Stiglitz on the role of ideas: http://www.vanityfair.com/politics/features/2009/07/third-world-debt200907
On ‘Buy America’: http://www.ft.com/cms/s/0/e36fa92a-6057-11de-a09b-00144feabdc0.html?nclick_check=1
On ‘Buy China’: http://www.rgemonitor.com/globalmacro-monitor/257223/wto_looking_closely_at_chinese_trade_restrictions
On US trade policy: http://www.rgemonitor.com/piie-monitor/257188/obama_needs_to_be_bold_on_trade
On the Great Depression: http://news.bbc.co.uk/2/hi/business/7656949.stm
On the US sub-prime and current crisis: http://www.bbc.co.uk/worldservice/documentaries/2007/12/071227_debt_threat_1.shtml
