Oh man, there is so much wrong with that article, I don't even know where to begin. Convenient statistic taking, citing the years between 75 and 86 as having 0 economic growth. Can you see the problem with selectively choosing your data? I'll help you out here: There was a depression. It lasted about three years (not ten!). Since then, growth has surged and has averaged growth much higher than was previously possible. So tell me...which is the faster car, the ferrari or the beetle? Not so fast...the ferrari made a mistake and had to turn around in the middle of the race...so even though he caught back up and won the race, we can just discard that data because at one point in time, for a limited period of time it was bad. He then goes on to cite other ridiculous distorted facts. Here is some help for you...whenever somebody quotes an "average", start running. Saying the word "average doesn't tell you anything about how the average was computed, nor do averages ever tell the full picture. Ever hear the story about the statistician who drowned in a lake that averaged 1 inch of depth? He goes on to quote things that are negatives (of which there always will be) in his opinion (like a widened gap between rich and poor), which any neoliberal would say is a good thing, and helps the economy to grow. Last of all, he dismisses all of the incredible good that has come of it in one sentence. Biased? No way...couldn't possibly be that This one was quite ripe as well. He goes on to explain the faults of neoliberalization...none of which were faults of neoliberalization. In fact, almost all of the problems cited have absolutely nothing to do with neoliberalization. They have to do with corruption. I sure hope you don't equate neoliberalization with corruption, because there are million more arguments where that came from. In fact, Argentina is making a pretty good case for progressive corruption as we speak. Tell me something...If I wake up and eat eggs every day before school, and then go to school and have a bad case of gas, does it make sense to blame my gas problems on school? You mean, like the US? I'm sure neoliberalization turned our economy into a disaster when we came from behind. Besides, I think you want to retract that argument anyway. You wouldn't want to argue that the US would benefit from neoliberalization right now, would you? But you do have a pretty good statement there...they were propped up by Britain...although indirectly. Hong Kong's rapid growth under neoliberalization had much to do with the fact that it had a very developed banking industry...something that Britain allowed to flourish. Go ahead...I'm waiting for the selective statistics. I absolutely can't hold myself in. It is a free trade success story. It is also a free market success story. Don't confuse the two. With over 40 years of 5% economic growth, you are gonna have to do a lot of fudging (like the two articles you cited) to prove to anybody that neoliberalization was a failure.
And when it gets scary, people demand them and are willing to pay the price for them. I'm not worried at all. Forsight...it can always change the world for the better. Too bad nobody could have predicted that automobiles would soon be mass produced with gasoline engines. Well...maybe Henry Ford could. Do yourself a favor, and take a look at a Popular Mechanics rag from the 70s and tell us how good a job all those technology experts did at foreseeing the future. Was it a waste? Of course it was...in hindsight. My point stands though...when things are needed (ie demanded), they are produced, and more commonly than not, at a profit. Yes, money provides a good incentive to produce the things that are beneficial to society.
Yet South America on a whole did better over that same period than Chile. And it took the nationalization of the banking system to get things under control there. Sure it does - the word "average" has a specific definition in mathematics/statistic. There is only one way to compute an average. No statistic does. The blue line in your chart is the per capita GDP - an average. It doesn't reflect the fact that real wages are down, as are mean and median wages, signaling a massive transfer of wealth in Chile to the upper class (alot like here since Reagan, actually). In US history the periods of greatest economic growth occurred during times of higher tariffs and more protectionism. It's a pointless waste of my time. You have your dogma, and no amount of data will change your mind. No it's not. They built up their industries thru government planning and strong protectionism. Just like post-war Germany and Japan.
The high unemployment and sharp downturn in output were effects of shock therapy, not neoliberalization itself. Shock therapy is basically an economically unsustainable rapid shift towards neoliberalization. In other words, the crash happened not because of neoliberalization, but because of the rapid transition to neoliberalization. Just like Poland, given some time, the effects of shock therapy faded and neoliberalization produced massive economic growth. My point that I was making was that neoliberalization has boosted the economies of certain countries. Per capita GDP is almost an embodiment of the perfect tool to measure economic growth. Per Capita GDP is entirely relevant to my claim, and it does support it completely. Once again, I would love to see your data set for this. It should be interesting to note where your data begins. Oh you mean, like posting articles about neoliberalization that don't address neoliberalization but blindly blame internal corruption on it? Like posting articles that detail the negatives of neoliberalization in multiple paragraphs, and then brushing off its massive benefits in less than a sentence? Great job with the idea of dogma If you mean government planning like in terms of deficit spending and infrastructural investment, fine. Anything else seems to be concentrated in the 1960's, which would hardly explain its growth outside of that specific decade.
http://www.mskousen.com/Books/Articles/graph1.html Despite the silliness of making the assertion that one graph say it all, this article does a great job of showing the strong correlation between economic growth and economic freedom.
Wow, is there any glibertarian talking point you won't uncritically swallow whole? In this post, we'll look at the glibertarian myths of Singapore, Hong Kong and Taiwan as free market paragons. I'll have to get to Chile and Argentina later although they too aren't the stories that glibertarians wish to bleieve they are. 1) Singapore is the easiest to deal with as it is justly famous as not only a political and social nanny-state but as a story of successful government interventionism. But don't just take my word for it. Here's Singapore’s former Deputy Prime Minister, Dr Goh Keng Swee on Singapore's belief in planning: "The government has to be the planner and the mobilizer of the economic effort but the free enterprise system, correctly nurtured and adroitly handled can serve as a powerful and versatile instrument of economic growth." After 1959 when Singapore was granted self-governance, Lee Kuan Yew, the country’s prime minister, followed through on a combination of repression and achievement-based policies, thus ensuring the political supremacy of his party, the PAP. Singapore’s ambassador to the United States, Chan Heng Chee described the situation thusly: "Politics disappeared [and Singapore became] an administrative state." PAP politicians and bureaucrats were given a free rein in directing economic policy. As part of its development strategy, Singapore formed a quasi-governmental agency known as the Economic Development Board (EDB), which over time evolved into a super-hospitality agency for Multinational Corporations, a promotion agency for local enterprises as well as an agency devoted to economic development with overseas offices in the world's major cities. The EDB closely monitored world markets and companies deemed beneficial to Singapore based on criteria like commitment, value added, skill content and capital intensity were identified and initiatives were then made to get them to invest in Singapore. According to Alan Murray, former chairman and CEO of Mobil Corporation, "It was really the EDB that created the specific economic incentives … that made us choose Singapore as a place to make these big investments rather than some of the other countries in the region." Rolling five-years plans were also drafted to coordinate the development of infrastructure to suit the needs of foreign investors; in addition, the Singapore government has also involved itself in direct production through multi-billion corporations like Singapore International Airlines (SIA), PSA, and Singapore Telecommunications (SingTel). Apart from industrial planning, the Singapore government’s influence also extends to saving rates and the labor market. Through a social security scheme known as the Central Provident Fund (CPF), the government has been able to impose compulsory abstinence reminiscent of the Soviet Union. In addition, the government has also through the Post Office Savings Bank (POSB) increased voluntary private savings by exempting the tax on interest earned through accounts with POSB, most of the money deposited was required to be used to buy government securities. Through the National Wages Council (NWC), the government has also been able to exercise some control over wages and other aspects of the labor market. So much for Singapore as libertarian paradise. 2) Hong Kong also has not had a laissez-faire economic system. First, there has been the support from Britian as it tried to maintain influence in Asia. Also, the HK government was and is the largest owner of land in Hong Kong and through land sales it has influenced land prices to improve the competitiveness of manufacturers. Moreover, the public housing program has accommodated approximately half of the population. There are arguments that the public housing program functions as a form of subsidy for low-wage workers and provides a safety net for small entrepreneurs who are risking their savings in starting new businesses. Land revenues have also allowed the delivery of a relatively extensive welfare system under which healthcare and education are subsidized while maintaining low levels of taxation. HK has also been the ironic prime beneficiary of the Maoist victory on the mainland in 1949, as the colony became the sole place of trade between mainland China and the Western world, as the Maoiss increasingly isolated the country from outside influence. This near monopoly was only briefly interrupted during the Korean War. The PRC initiated a set of economic reforms in 1978, making Hong Kong the main source of foreign investments to the mainland. A Special Economic Zone was established the following year in the Chinese city of Shenzhen, located immediately north of the mainland's border with Hong Kong. The economy of Hong Kong gradually displaced textiles and manufacturing with services, as the financial and banking sectors became increasingly dominant to service the flow of investment from the Chinese diaspora in Taiwan, Singapore and other Asian enclaves back to the mainland. 3) Taiwan's KMT party has served a role on that island that the PAP served in Singapore. After the Nationalist forces retreated to Taiwan, a land reform law, inspired by the same one that the Americans had enacted in occupied Japan, destroyed the landlord class which also happened in Japan and created an higher number of small peasants whom, with the help of the state, increased the agricultural output dramatically. This freed up more and more of the agricultural workforce to migrate in the urban sectors. However, the government imposed to the peasants an unequal exchange with the industrial economy, with credit and fertilizer controls and a non monetary exchange to trade farming supplies for rice. With the control of the banks (at the time, being the property of the KMT Government!), and import licenses, the KMT oriented the Taiwanese economy to import substitutive industrialization, creating initial capitalism in a fully protected market. With the help of USAID, the KMT also created a massive industrial infrastructure, communications system, and developed the educational system. Several government bodies were created and 4-year plans were also enacted. In the 1960s, the KMT implemented an import-substitution policy and the Taiwanese economy became, and still is, export-oriented. This occurred because the domestic market had become incapable of high enough growth. The KMT government created an ambitious program to restructure the whole economy of Taiwan. In 1960, a 19-point economic and Financial Reform program reduced market controls, stimulated exports and designed a strategy to attract foreign companies and foreign capitals. A special export processing area was created in 1964 but the nucleus of the industrial structure was national, and it was composed by a large number of small and medium sized enterprises supported by the government in the form of subsidies and special credits loaned by the banks. By the 1980s, Taiwan had become an economic power, with a mature and diversified economy, solid presence in international markets and huge foreign exchange reserves. Although not as involved in running the economy as during the initial phases of economic development, the KMT still directly controls 'strategically important' industries. In total, the government controls 27 national corporations with the largest 12 operating under the supervision of the Ministry of Economic Affairs (MOEA). Besides these general strategies, the government has also invested heavily in industries that the private sector believes too risky and has also steered changes in Taiwan's economy by providing preferential loans, tax incentives, tariff duty and trade restrictions, regulation of exchange rates and finally the implementation of liberalisation policies. Finally, the government still supports agriculture because of its strategic importance in maintaining the economy and feeding the people in emergencies. This support has taken the form of lowering the tax rate for farmers, as well as continued government purchases of surplus rice. If you want to learn more, I suggest these: The Rise of Asia by Frank Tipton Governing the Market by Robert Wade Willem van Kemenade's book China, Hong Kong, Taiwan, Inc. is also a good introduction to HK's place in the greater Chinese economic sphere. Happy reading!
You are addressing neoliberalism, not neoliberalization. Subtle difference, I know...but it is enough that you were not addressing my point. You were addressing my ideology. BTW, thanks for the book suggestions. I saw The Rise of Asia last time I was at Barnes and Noble...I'll take a look next time I'm there.
Your distinctions make no sense unless you're arguing that success was built by national units of domestic fascism operating in a framework in which those units trade freely with each other. The problem with that is that most of the Asian "miracles" were begun and carried out amidst protectionist policies (or, in the case of Hong Kong, with the advantage of monopoly with a very large trading partner) within a global framework geared towards America as the imperial center. After all, the critical period for the Asians was the late 1950s through late 1960s when the Bretton Woods arrangement was still intact. It was only AFTER they had reached a "critical mass", so to speak, in the 1970s in Japan and HK, the 1980s in Singapore and Taiwan, and the 1990 elsewhere (inclusing South Korea in the late 1990s) that they became able to indulge in the luxury of loosening some (but not all) of the government planning regimes, capital controls, protectionist measures, etc. although there is still a hefty element of that in the Asian economies today. The successes in Asia came because those countries followed a well-planned and executed series of plans that were flexible and recognized the need for gradual change in strategy and process. China is now following a similar course and its successes come in stark contrast to Russia which was foolish enough to swallow the "free market" snake oil. If it wasn't for their natural gas reserves, I'd hate to imagine what it would be like there now.
Once again, you are confusing the effects of Shock Therapy with the effects of Free Markets. Chile and Poland also suffered the same drawbacks from shock therapy, and while it wasn't as bad, they weathered the storm and have began their rapid growth toward development. Since russia was a massively complex communist system, with strong central control, a large population, and virtually zero private industry to start with, Russia's shock therapy (well, not exactly, but similar) was the primary reason for such strong debilitating effects. Since transitions will always have differing effects to established economic systems, making blanket statements about a system based on the effects of transition would be misleading at best.
I don't mind. Really...since I have been here, it has been quite amusing watching the rep cocksuckathon between some of the liberals here. I'm bewildered and even yet more amused at the fact that you chose to not highlight the name of Superdave.
I was the founding member of the Don't Take dannytoone Seriously Foundation for People Who Post Good and I get no credit whatsoever. I am to not taking dannytoone seriously what Hillary was to Fabian.
Thanks for admitting that. Really...its hard for many of the people here to admit that they can't think about anything objectively if it doesn't come from a liberal viewpoint. I appreciate your honesty.
Yeah, you would have to think about that, and it is hard to do when you are used to getting by on reflexes...
Washington 's stimulus plans make sense in theory. Putting more money in Americans ' pockets should translate into some combination of more savings and more consumption, and the extra consumption should generate demand for more goods and services output, and eventually more hiring that could create a virtuous growth cycle. Lowering business ' taxes and borrowing costs would produce similar effects. Yet the geniuses running policy for the White House, the Congress, and the Fed forgot one vital detail. More spending generates more U.S. growth mainly if households and businesses buy goods and services made in America. It 's true that when Americans buy imports, important sectors of the economy like retail and wholesale and transportation benefit. But many of the critical revenues, wages, and purchases created by production leak overseas. This drain, moreover, is greatly magnified when talking about industries that have all but vanished from the United States -- which happen to be the consumer goods sectors likely to dominate stimulus-induced purchases. In fact, in 2006 -- the last year for which detailed data exists -- more than 61 cents out of every dollar Americans spent on consumer goods went to buy imports. In 1997, that figure was only slightly over 38 cents. Moreover, in many major consumer goods categories, the rates of import penetration are much higher -- nearly 96 percent for men 's dress and sport shirts, more than 90 percent for men 's non-athletic shoes, nearly 90 percent for women 's coats and more than 86 percent for women 's blouses. Many of the numbers outside apparel are sky-high as well -- nearly 89 percent for luggage, 92 percent for consumer electronics products, and nearly 71 percent for household vacuum cleaners. http://www.madison.com/wsj/home/forum/270579
Free trade allows us a cheap and cushy lifestyle. Free trade, combined with populist economic stimulus is a bitch. And a waste of money.
Ignore the evidence to the contrary. Neoliberal free trade policies have made America (and it's middle class) economically stronger than ever. That's what the Church of Neoliberalism says, and so that's how it is. (I should add - trade is good. It's the engine of economic growth. Developing goods that can be sold on the global market is what elevates you to "economic powerhouse" status. We just don't export anything anymore, because "free trade" has meant it's much cheaper for companies to move production overseas, and thus transfer production costs - money to the working class - into higher profits for the wealthy shareowners. The historic evidence shows that you develop industries with global appeal by protecting those companies from outside competition; at least until they are mature enough to compete... often on a field slanted to their benefit. The rest of the world is catching up with us in capability.)
So in other words, a few people in America's business community are just starting to think about the long-term implications of the race to the bottom they and their lapdogs in right-wing politics started in the late 1970s. They're just now noticing that our "growth" since the halcyon days of the mid-1990s has been based more on artificially created asset bubbles than on real productive growth? I do love how Hufbauer says people were "against trade". Who argued against all trade? And were they arguing that we go back to Stone Age subsistence farming? What a joke. The question has always been about what kind of trade relationships the world should have. That is to say, whether the global trading system would be either: 1. the top-down imperial so-called "free trade" model imposed largely by America's corporate and government elites to Brasilify the world, including here in the USA by breaking the back of our middle class or 2. one of the various "fair trade" models proposed by more realistic thinkers who believe the best course is to build up the global middle class -including here in the USA- rather than trying to squash it. Of course, this is where libertarians start huffing and puffing and substituting bumper-sticker slogans, talking points, straw men and accusations of pedantry (used against arguments too intellectually demanding for the accuser to understand) for reason and facts. Speaking of which... Danny, please compare and contrast the Russian experience while putting into practice the prescriptions of the free market U. of Chicago "shock therapy" of with China's more government-driven and planned approach as it marches from the lunacy of Maoism to a more modern neo-fascist approach. And remember, China was even less industrialized than the Soviet Union when it began its "reforms". btw, since you're not up on political science, here are some definitions of and facts about fascism I just quickly grabbed from Wikipedia because I'm too lazy at this time to go haul out my books on the topic and type their definitions by hand. Please note that when I use the term "fascism" to describe China, I'm trying to use the technical term that I think best describes what is going on over there and ignoring the perjorative connotations of the term. Anyway, to Wikipedia... "Fascism is an authoritarian political ideology (generally tied to a mass movement) that considers the individual subordinate to the interests of the state, party or society as a whole. Fascists seek to forge a type of national unity, usually based on (but not limited to) ethnic, cultural, racial, religious attributes. The key attribute of fascism is intolerance of others: other religions, languages, political views, economic systems, cultural practices, etc. Various scholars attribute different characteristics to fascism, but the following elements are usually seen as its integral parts: nationalism, statism, militarism, totalitarianism, anti-communism, corporatism, populism, collectivism, autocracy and opposition to political and economic liberalism." Mussolini defined fascism as being a right-wing collectivistic ideology in opposition to socialism, liberalism, democracy and individualism. He wrote in The Big Book of Fascism: "Anti-individualistic, the fascist conception of life stresses the importance of the State and accepts the individual only insofar as his interests coincide with those of the State, which stands for the conscience and the universal will of man as a historic entity.... The fascist conception of the State is all-embracing; outside of it no human or spiritual values can exist, much less have value.... Fascism is therefore opposed to that form of democracy which equates a nation to the majority, lowering it to the level of the largest number.... We are free to believe that this is the century of authority, a century tending to the 'right', a Fascist century. If the nineteenth century was the century of the individual (liberalism implies individualism) we are free to believe that this is the 'collective' century, and therefore the century of the State." Former Columbia University Professor Robert O. Paxton has written that: "Fascism may be defined as a form of political behavior marked by obsessive preoccupation with community decline, humiliation, or victim-hood and by compensatory cults of unity, energy, and purity, in which a mass-based party of committed nationalist militants, working in uneasy but effective collaboration with traditional elites, abandons democratic liberties and pursues with redemptive violence and without ethical or legal restraints goals of internal cleansing and external expansion." Stanley Payne's Fascism: Comparison and Definition (1980) uses a lengthy itemized list of characteristics to identify fascism, including the creation of an authoritarian state; a regulated, state-integrated economic sector; fascist symbolism; anti-liberalism; anti-communism; anti-conservatism. Fascism also operated from a Social Darwinist view of human relations. Their aim was to promote "superior" individuals and weed out the weak. In terms of economic practice, this meant promoting the interests of successful businessmen while destroying trade unions and other organizations of the working class. Lawrence Britt suggests that protection of corporate power is an essential part of fascism. Historian Gaetano Salvemini argued in 1936 that fascism makes taxpayers responsible to private enterprise, because "the State pays for the blunders of private enterprise... Profit is private and individual. Loss is public and social." While some fascist theoreticians wanted to subordinate capitalism completely to the State (which was a rather self-contradictory position as it would then largely cease to be capitalism), historically the fascists got on rather wel with private enterprise. Economic policy in the first few years of Italian fascism was largely liberal, with the Ministry of Finance controlled by the old liberal Alberto De Stefani. The government undertook a low-key laissez-faire program - the tax system was restructured (February 1925 law, 23 June 1927 decree-law, etc.), there were attempts to attract foreign investment and establish trade agreements, efforts were made to balance the budget and cut subsidies. The 10% tax on capital invested in banking and industrial sectors was repealed, while the tax on directors and administrators of anonymous companies was cut down by half. All foreign capital was exonerated of taxes, while the luxury tax was also repealed. Mussolini also opposed municipalization <ie. nationalization- ratdog> of enterprises. The 19 April 1923 law abandoned life insurance to private companies, repealing the 1912 law which had created a State Institute for insurances and which had envisioned to give a state monopoly ten years later. Furthermore, a 19 November 1922 decree suppressed the Commission on War Profits, while the 20 August 1923 law suppressed the inheritance tax inside the family circle. In 1925, the Italian state abandoned its monopoly on telephones' infrastructure, while the state production of matches was handed over to a private "Consortium of matches' productors." In some sectors, the state did intervene. Thus, following the deflation crisis which started in 1926, banks such as the Banco di Roma, the Banco di Napoli or the Banco di Sicilia were assisted by the state. Fascists were most vocal in their opposition to finance capitalism, interest charging, and profiteering. Some fascists, particularly Nazis, considered finance capitalism a "parasitic" "Jewish conspiracy". Nevertheless, fascists also opposed Marxian Socialism and independent trade unions. So that's Wikipedia. I think it's actually a fairly decent summary. Please note, btw, that fascism is not necessarily anti-semitic and I was only speaking of the economics of fascism when describing the developments in China. There are also various degrees of fascism. I consider Singapore, Taiwan, South Korea, Indonesia and many of the USA's less savory allies to have been more or less fascist-lite with a government-driven drive towards national economic self-advancement that put collective economic achievement ahead of individual human rights. I certainly would not have wanted to live in any of them until very recently and I wouldn't want to live I some of them still. So when I said that "Your distinctions make no sense unless you're arguing that success was built by national units of domestic fascism operating in a framework in which those units trade freely with each other", that's what I meant by "national units of domestic fascism". In other words, the city-states and countries that you are trying to paint as havens of libertarianism and free trade were anything but even if they operated abroad within the global so-called "free trade" system. They each had at least some form of protectionism whether it was government-created special trading zones, backing from a Western imperial power, various subsidies and mercantilist tax policies, suppression of labor rights, etc. In fact, if you look at the paragraph beginning "Fascism also operated from a Social Darwinist view...", you can clearly see where American capitalism has borrowed applied some fascist concepts and practicies right here. I hope I haven't been too "pedantic" for you. Please let me know if I have so I can dumb down my argument for you.
Let me help you out here, with some general not-stolen-from-wikipedia definitions: Neoliberalism: A political ideology that represents a belief in the superiority of loosely controlled lassaiz-fair markets and maximized personal economic liberty. Neoliberalization: A process which economic controls and sanctions are loosened and personal economic liberty is increased. ------------------------------------------- Now, when I say that I am not saying that these states were neoliberal, nor am I saying that they aimed to be neoliberal. I am stating that as they loosened their standards and increased personal economic liberties. Your constant quest to prove everything that I say wrong is forcing you to make up "corrections" to arguments that I never made. In fact...I still can't figure out where you extrapolated a fascism argument out of what I said. BTW, the Chicago school never advised shock therapy. In fact, the speed at which Pinochet made his reforms worried his economic advocates, because they knew that it would cause the effects of shock therapy. It is quite funny that someone so informed and intellectual such as yourself gets these things wrong on such a regular basis.