Sunday, January 27, 2008

BAD SAMARITANS Chalmers Johnson on Bad Samaritans: "Ha-Joon Chang is a Cambridge economist who specializes in the abject poverty of the Third World and its people, groups, nations, and empires, and their doctrines that are responsible for this condition. His new book is a discursive, well-written account of what he calls the 'Bad Samaritans', 'people in the rich countries who preach free markets and free trade to the poor countries in order to capture larger shares of the latter's markets and preempt the emergence of possible competitors. They are saying 'do as we say, not as we did' and act as Bad Samaritans, taking advantage of others who are in trouble'. He is frankly contemptuous of New York Times columnist Thomas Friedman's best-seller 'The Lexus and the Olive Tree' (2000) and its argument that Toyota's Lexus automobile represents the rich world brought about by neoliberal economics whereas the olive tree stands for the static world of no or low economic growth. The fact is that had the Japanese government followed the free-trade economists back in the early 1960s, there would have been no Lexus. Toyota today would be, at best, a junior partner to some Western car manufacturer or, worse, have been wiped out. In Chang's conception, there are two kinds of Bad Samaritans. There are the genuine, powerful 'ladder-kickers' working in the 'unholy trinity' of the International Monetary Fund (IMF), the World Bank, and the World Trade Organization (WTO). Then there are the 'ideologues - those who believe in Bad Samaritan policies because they think those policies are 'right', not because they personally benefit from them much, if at all.' Both groups adhere to a doctrine they call 'neoliberalism'. It became the dominant economic model of the English-speaking world in the 1970s and prevails at the present time. Neoliberalism (sometimes called the 'Washington Consensus') is a rerun of what economists suffering from 'historical amnesia' believe were the key characteristics of the international economy in the golden age of liberalism (1870-1913). Thomas Friedman calls this complex of policies the 'Golden Straitjacket', the wearing of which, no matter how uncomfortable, is allegedly the only route to economic success. The complex includes privatizing state-owned enterprises, maintaining low inflation, shrinking the size of the state bureaucracy, balancing the national budget, liberalizing trade, deregulating foreign investment, making the currency freely convertible, reducing corruption, and privatizing pensions. It is called neoliberalism because of its acceptance of rich-country monopolies over intellectual property rights (patents, copyrights, etc.), the granting to a country's central bank of a monopoly to issue bank notes, and its assertion that political democracy is conducive to economic growth, none of which were parts of classical liberalism. The Golden Straitjacket is what the unholy trinity tries to force on poor countries. It is the doctrinal orthodoxy taught in all mainstream academic economics departments and for which numerous Nobel prizes in economics have been awarded. In addition to being an economist, Ha-Joon Chang is a historian and an empiricist (as distinct from a deductive theorist working from what are stipulated to be laws of economic behavior). He notes that the histories of today's rich countries contradict virtually all the Golden Straitjacket dicta, many of which are logically a result rather than a cause of economic growth (for example, trade liberalization). His basic conclusion: 'Practically all of today's developed countries, including Britain and the US, the supposed homes of the free market and free trade, have become rich on the basis of policy recipes that go against neo-liberal economics.' All of today's rich countries used protection and subsidies to encourage their manufacturing industries, and they discriminated powerfully against foreign investors. All such policies are anathema in today's economic orthodoxy and are now severely restricted by multilateral treaties, like the WTO agreements, and proscribed by aid donors and international financial organizations, particularly the IMF and the World Bank." Neoliberals know exactly what they are after, and know exactly how it will affect millions of people. We have seen it in practice by Pinochet and it is essentially a form of corporate fascism. Neoliberals are the organizers of global poverty. Low wages mean high profits for them. However, they forget one thing, and that is that it is the spending power of the nation that keeps the economy going. Even Bush realized that: AP: "The success of the federal $150 billion emergency economic stimulus plan will hinge on whether American consumers do what they do best - spend, spend, spend. The stimulus has been debated in Washington for more than a week as the economic outlook worsened, and now Americans are armed with specifics: Individuals will get up to $600, working couples $1,200 and those with children $300 more per child." A naked neoliberalism cannot but end in a global revolution. Neoliberalism is a new form of global colonialism in which sovereign nations no longer exist and corporate totalitarians decide on all issues. Naomi Klein's The Shock Doctrine shows exactly what it is all about. Watch a short film. 11:43:30 AM

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