Thursday, June 12, 2003

Just in case you doubted the fact that mainstream economics hasn't a clue about development, Jeff Madrik of the New York Times inadvertently proves it again.

In the article titled "Looking Beyond Free Trade," Madrik boldly states " In the last decade, economists have discovered how much more difficult development is than just promoting trade and free markets." And the comments grow more inanane as the article goes on.
Although it certainly looks as if Mr. Bush is moving in the right direction, questions arise over his tenacity and whether his commitment to development will essentially be only about free trade. "Free trade agreements are at best only part of the solution," said Robert Z. Lawrence, a Harvard economist. "They must be complemented with other reforms."
First of all, "free trade" is now a euphemism for neoliberalism. The "free trade" agreements constituting the WTO are only tangentially about trade and even less so about "free" trade. They are mostly about managing the political tensions between states which arise from economic integration, whether trade in goods, trade in services, intellectual property rights, investment, food safety, government procurement, government regulation, etc. etc. etc.

"Free trade" is hardly doing the Global South a favor, either. Any country in the South with the power to do so has fought against what the North labels "free trade". One look at South America today will prove the point.

The article seems to believe that the Washington Consensus is behind us and that "development is now clearly about elbow grease, not canned ideas. It is about tenacity and pragmatism, not political values or the export of ways of doing business that are congenial to our own companies." While it may be personally pleasing to be naive, it is not helpful to anyone. The "Monterrey Consensus" of 2002 is merely the "Washington Consensus in a sombrero", and it will take a lot more than announcing an AIDS fund to change the exploitative foundations of the global economy, a key aspect of that foundation being "free trade".


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