UN Calls for Overthrow of Free Market Ideology

via Dollars & Sense:



UN Calls for Overthrow of Free Market Ideology
by Dollars and Sense


From yesterday's Telegraph..

The United Nations has called for a return to state-led "industrial policy" for poorer countries in what amounts to a rejection of the free-market thinking that has dominated global institutions for the last 30 years.

By Ambrose Evans-Pritchard
Published: 8:04PM BST 16 Jul 2009


Supachai Panitchpakdi, head of the UN Conference on Trade and Development (UNCTAD), said the financial crisis had exposed the deep failings of growth models adopted in Africa, the Pacific, and parts of Asia, usually under pressure from the West.

"Some advanced countries may be seeing an end to the crisis but it's still darkness at the end of tunnel for the least developed, and many of them are going backwards. We're talking about a billion malnourished people," he said in London.

Capital flows to poorer states and export earnings have together collapsed by $2 trillion (£1.22 trillion) since the credit crunch began. "This is an alarming trend, and it's not a result of their own doing," he said.

Mr Supachai said the world had spent some $5 trillion on financial support since the crisis began but almost nothing has reached the most vulnerable countries. "There is very little trickle down," he said.

While Eastern Europe has been rescued by the International Monetary Fund, the world's 49 "least developed countries' (LDCs) are too poor to meet the loan conditions. .........(more)

The complete piece is at: http://www.dollarsandsense.org/blog/2009/07/un-calls-for-overthrow-of-free-market.html

only benefits the wealthy, not the people.

Certainly, the free market should play a role in any economy. But accepting it as some magic cure-all is asinine.

Maybe Kim Il Sung was right that self-reliance is the way to go; even a shithouse rat's stopped watch is right twice a day.

Trying to develop crops for export put these countries on the end of a yoyo that was tied to western whims. Better that they should develop local crops grown by local farmers for local consumption. Then if they have any surplus, they can trade that on the world market.

But in the snake oil we sell, they raise cash crops, sell them to us at low prices, and we sell them back food...assuming their crops aren't screwed. Meanwhile, we mine their gold and drill their oil right next door, and their kids get sick. Great system.

it's more a return to the pre-monetarist era of government investing in industry.

Although for much of the Third World this will be a new era since the global institutions of free market capitalism and US power projection forbid attempts by Third World countries to invest in their local industries. The First World preferred the the Third World to remain as cheap exporters of raw materials to First World nations.

As I understand it, Juche is supposed to be government heavily invested in local industry, making trade with other countries insignificant (NK obviously missed the mark on that one). Also, the First World has decided that no, they really don't want Third World raw materials. They would rather ship subsidized corn and cotton to them, and get back cheap, cheap clothing in return. They want to use the Third World to dump excess crop production to keep the price up at home, and take advantage of the cheap labor.

So if there is no longer any point to trading with lesser developed countries, maybe they can be left in peace. Without the interference, they may just work out for themselves a local economy that is self-sufficient. In these days of cheap energy and easy transportation, we tend to forget that prior to 100 years ago, self-sufficient economies were the rule, not the exception. Before the Industrial Revolution, most people grew their own food, built their own houses, and sewed their own clothes.

on the basis that trade with other countries would weaken the North Korean revolution due to bourgeois economic and cultural influences. A similar system to Juche was performed by the Albanian government under Hoxha.

These systems have little relation to pre-1970 Keynesian economics which were practiced by many First World countries, this is what various governments are proposing a return to.

"In these days of cheap energy and easy transportation, we tend to forget that prior to 100 years ago, self-sufficient economies were the rule, not the exception. Before the Industrial Revolution, most people grew their own food, built their own houses, and sewed their own clothes."

I think your timing is a bit off. The major world economies of 100 years ago, Britain, Germany, France and the USA all imported raw materials from the Third World and exported manufactured goods between themselves and to the colonial areas in which they dominated. In the First World, advanced consumer societies already existed. Mechanised agriculture was already the norm 100 years ago and indeed the USA was already at the forefront of this 150 years ago. Self-sufficient economies were rather rare 100 years ago.

Okay, make it 150 years. You miss the point I was making: prior to these trade economies springing up, be it in the 1850s or even a couple decades earlier, most of the world's population lived in self-sufficient communities. If crops could not be grown or building materials found, towns didn't last long. You can see proof of that driving around Nevada. There are hundreds of old silver mining ghost towns, where they had to import food and lumber and everything else, and when the silver ran out, so did the people.

Perhaps your definition of "self-sufficient" is different from mine. I think of subsistence farmers (a majority of the world's population, by the way) as "self-sufficient", especially when they make their lodgings from mud and wattle that they find nearby and when they make their clothing from local items.



The people in the photo above are entirely self-sufficient, getting all they need from their local environment and not engaging in very much trade at all. When they do trade, they are looking for what we would call "big ticket items" or major purchases; they might trade a pig for some metal tools. Considering the number of people that modern capitalism has overlooked, from the tribes in New Guinea, to indigenous peoples in South America, Africa, to peasants in India and China, I would still maintain that most of the world's population has to be self-sufficient, and trade has done little to better their situation.

killing us here too. Unless there is strict oversight (which there is virtually none), CEO's and big corporations owe nothing to the people, just to their bottom line. That type of thinking gets us tainted milk, poisoned toys, defective products and who knows what else we have gotten. No jobs and jobs lost that will never recover, families failing into poverty and that is just here - I can fathom this: "We're talking about a billion malnourished people" ... the numbers are so large that it boggles the mind that we live in a world where we do so little to care for others.

A billion human beings as real as any of us, malnourished. How do we dismiss that? And people suffering right here in the US, for God's sake how do we forget them?

Because the people who are doing ok think that they somehow earned that status. I'm not usually a vindictive person, but I enjoy watching the smug get a taste of reality in the form of getting what they casually dismissed.

n/t

:kick:

could this be the end of neoliberalism?

My Mom has a birthday this month and I'm thinking about giving her that book as part of her birthday present. There are parts of the copy that I have that I need to re-read.

n/t

The free market system should be overthrown worldwide.

Ideological purism is silly.

The original article key passage was


Decrying a "false dichotomy" between the virtues of the free market and the alleged vice of state dirigisme, it said there is much to learn from the calibrated "industrial policies" of Malaysia, Sweden, Taiwan, and Finland.



In other words the idea of overthrowing a market economy for a state driven economy would be as wrong as a an unfettered free market.


The original author is clearly indicating that the free market but modified (calibrated) and not overthrown.


Finland, for example, has long had a state determined and state run market. During the cold war the famous 'Finish Solution' was to have political nuetrality with Stalinist USSR but have complete trade. They became the primary factory source for the USSR for higher quality consumer goods (but goods that would be considered largely inferior in the West). When the state economy of the USSR collapsed the state market system of Finland also collapsed and for a while Finland experienced the highest suicide rates in the world.

Had Finland been calibrated to be less directed by the state market they would have been able to develop the same export markets as Sweden and Denmark and would not have had the huge crash that it did.