A challenge to Brad DeLong on PEN-L

Louis Proyect lnp3 at panix.com
Wed May 9 13:07:55 MDT 2001

If, for the purposes of argument, we assume all the growth data are
accurate and properly indicative, and restrict ourselves to the last 20
years, the neoliberal argument seems to fare much better if one takes China
and India as the rule, and Africa and Latin America as the exception, where
the anti side seems to fare better if one takes Africa and Latin America as
the rule, and China and India as the exception.  In the former case,
marketization seems to have dramatically improved the rate of growth in
living standards over the previous 20 years; in the latter case,
improvement on average looks closer to flat, with several dramatic cases of
reversal; and overall, several people have argued, rates of growth are much
less than they were during the years 1950-1970.  So in the first case, the
neoliberal approach looks to have succeeded, and the latter, failed.  Both
areas contain roughly the same amount of population.

Do you think that's a fair starting point?  Because then I have few
questions about exceptionality of China and India.  They are obviously
exceptional in terms of their size, which it seems would give them some
advantages other third world countries can't replicate.  But on top of
that, when compared with Africa and Latin America, both countries seem to
have *not* taken the route specified by the BW institutions.  Neither had a
fully convertible currency in the beginning (I think) and China still
doesn't today. Neither have done much privatizing.  (India has privatized
all of one firm, within the last year, and it has been a complete
disaster.)  Both are notorious havens for software piracy which seems to
have done them much good.  Both have and still do exercise at times a heavy
hand over foreign investment.

In short, while both approaches are inconsistent and unique, their
development models look more like Korea's pre-1997 model than like the IMF
model.  And neither country (I think) has ever gone through a structural
adjustment program.  So what distinguishes them from their colleagues in
Africa and Latin America, besides their size, is that they never gave up
control to the IMF.

Read like that, rather than recommending the Washington consensus, their
success seems rather to be a good argument for Walden Bello's program of
abolishing the WTO.  Bello says that legally that would place us back in
the world of GATT which, he argues, allowed more room for "deviant" and
effective growth schemes like this.  And of course it would rid the world
of TRIPs, which you are vigorously against on principle.

The China-India/rest of the world comparison also seems to be a good prima
facie argument for abolishing strutural adjustment programs -- which would
mean abolishing the IMF and World Bank as we know them.

So are you a closet abolitionist?  Or do you interpret this comparison

Michael Pollak

Louis Proyect
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