Friday, March 18, 2005


The neoliberal theology runs deep, very deep, in our social and scientific fabric, afflicting multitudes with the pathology of globalmania. Take Paul Krugman. Of course, Krugman has built a career on cheerleading for the neoliberal globalization agenda: academic pulications, poster-session addresses, consultancies, speaker's bureau lectures, and so forth. Everyone wants to pay money to hear someone tell them what they already believe.

But Krugman is ultimately a scientist (okay, a social scientist), and as a scientist he cannot sit idle in the face of mounting evidence that the policies for which he has been proselytizing don't seem to be working (this is the big point that separates him from a Cato "economist". In the real world, almost all countries in the world have drank the Kool Aid that Krugman and countless others with even more zeal have been shilling. The result? More countries in financial crisis, more inequality, more poverty, less economic growth. Take two of these and don't call us when your economy falls into ruin. That's not to say that some economists have tried to show that in fact the neoliberal policy agenda has been good for developing countries, it's just that to do so they must employ heroically unrealistic and statistically indefensible methods to make the case. In fact, the only countries that are actually performing well, economically speaking, are those who have resisted the siren song of the globalmaniacs. Namely, China, India, and a handful of others mostly in East and Southeast Asia who for one reason or another have been able to resist downing the purple liquid.

Which brings us to Krugman's column this morning in the NYT. In the first few column inches, Krugman lambasts Bush's World Bank President pick, Paul Wolfowitz, for his ideological embrace of the neoliberal agenda in reconstructing Iraq--in other words, for mixing and serving up an Iraq sized pitcher of Kool Aid.

Here is what Krugman has to say about the neoliberal agenda:

Through much of the 1990's, they [developing countries--ed.] bought into the "Washington consensus" - which we should note came from Clinton administration officials as well as from Wall Street economists and conservative think tanks - which said that privatization, deregulation and free trade would lead to economic takeoff. Instead, growth remained sluggish, inequality increased, and the region was struck by a series of economic crises.

The real risk of Wolfowitz though, according to Krugman, is that his style risks souring developing countries such that they retreat from such economic reforms:

The backlash has reached our closest neighbor. Mexico's current president, Vicente Fox, a former Coca-Cola executive, is a firm believer in free markets. But his administration is widely considered a failure. Meanwhile, Mexico City's leftist mayor, Manuel López Obrador, has become immensely popular. And his populist rhetoric has raised fears that if he becomes president he will roll back the free-market and free-trade policies of the past two decades.

In the very next breath after castigating the record of neoliberalism--the brand of economic (and political) policies Wolfowitz will foist upon developing countries from his would-be World Bank perch--Krugman laments and fears that countries will forsake these very same policies. Yes, this globalmania is an alarming pathology, relegating those it afflicts to a state utter oblivion to their own logical inconsistencies and rendering them deaf to cognitive dissonance.


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