We know what Americans and other industrialized nations have learned from the now global economic crisis, but what about other developing nations that are just trying to escape poverty? what do they learn about the power of markets to completely decimate any progress they have made? As you can imagine, the response is mixed.
"Some countries are already taking the wrong prescriptions from recent events. Honduran President Manuel Zelaya told the U.N. General Assembly last month that the lesson of the crash was "the market's laws were demonic, satisfying only the few." Paraguayan President Fernando Lugo said the "market mechanism" and "immoral speculation" were a mistake. Brazilian President Luiz Inácio Lula da Silva Lula added that speculators have "spawned the anguish of entire peoples" and Brazilians needed "indispensable interventions by state authorities.""
the editorial goes on to say that the study of development economics, which deals with developing economies and how to make them richer, became an area of study after the Great Depression. As such, it has a definite bias towards government intervention, and it may be part of this anti-market reaction. Granted, the market isnt perfect, but this view completely ignores the years of prosperity before and after the New Deal. They just see that governments need to help out sometimes and instead of deciding between "light and heavy regulation", they are choosing between totally free market economics and innovation-stifling state intervention. According to the article, these countries will now start ignoring the entrepreneurs that could help transform their economy in favor of heavy state intervention (which they can't really afford anyway). Another excerpt:
"How much poverty has endured because individual entrepreneurs were shunned in favor of the likes of the $5 billion state-owned Ajaokuta Steel Mill in Nigeria, which never produced a bar of steel? Or because African governments spend their time preparing World Bank-required national Poverty Reduction Strategy Reports instead of freeing space for innovators?
We will never know. But we do know that the free market has a long-run track record of creating prosperity -- even with the occasional crash. The Depression's deceptive intellectual legacy is that development flows from all-knowing states rather than creative individuals. Here's hoping that the backlash to today's crash will not spawn another round of bad economics for the poor."
this isnt the lesson the US wants its less developed allies to learn from our mismanagement.
1 comment:
The consequences of the Western Nations hypocrisy at its worse, or best rather. We tell countries to prescribe to our. There are guidelines upon guidelines to follow these developing countries have to follow before they get any sort of a few million dollars of loans with ridiculous interest rates for what? This is what will happen to them. I hope more countries recognize this is the route deregulation will take. The market becomes the authoritarian power, the same power all the people were thinking about socialist and communist countries.
Now we have CEO welfare the same thing all those fiscal conservatives didn't want for people who were actually struggling. They couldn't make the connection from the bottom up so they were against government assistance. but now people are all concerned now that its' the wealthy fucking up and irresponsible middle and upper middle class that's messing up. We better get our act together, too many people think that stuff in their own community, city, state, country and world don't matter to them when it does. but by the time they figure it out, it's too late.
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