[PEN-L:49] Re: free-market ideology

[Gary Dymski <dymski@xxxxxxxxxxxx>]

I am sorry for bursting in late to what has probably been a party. I was
in Brazil for 10 days, giving some talks on financial crisis and developments
in the global financial system. I did a pretty brutal triage on my stored-up
pen-l mail on my return, and don't know if Marty's post led to some
discussion.  Let me throw in my two cents worth.

1.  There is a widespread view among our co-thinkers in the South that
Krugman, Sachs et al are in it for themselves -- surfers was a word one
friend at UNICAMP used. These guys are always reading only as far as they
have to until they get the next brilliant modeling idea. Further,

2. I agree completely with Marty that they are all about themselves.  And they
will steal ruthlessly from those outside what Leonard Rapping called "the
money river." And as for that, if you have to ask what it is, you ain't in it.

3.  Solutions:  we have to take ourselves more seriously, and take our research
more seriously, and start preparing and building for the next phase of
developments
as if we will actually have a voice.  Otherwise it's all posturing on our
part, and
we can go crackpot at no cost.  Tom Palley likes to say, "it takes a number to
beat  a number, and a model to beat a model," and he is on point.  In a world
of multiple-equilibrium models, anything is possible.  THis is the ultimate
meaning of
the asymmetric information information/game-theory revolution in micro --
anything
can happen, multiple or even infinite equilibria can appear.  So "they" can
always
make a story that might fit a given set of initial conditions.  What about
us?  Have
we pulled down the data, looked hard at the institutional details, and tried
to figure
out what we have to say that is different and even motivated by Keynes and Marx?
I think many of us do that.  Many have a hard time because of the brutal
teaching
schedules that come along with getting the jobs we can get.  You get a burst of
research from your diss. and momentum, then you get overwhelmed with campus
assignments and teaching and the day to day, then you're on the sidelines. So
what to do?  The point of the political economic approach, left-style, is that
everything counts -- household relations, class relations, financial
structures,
and so on. I don't think any one solution is appropriate.  Some people can
retain focus and single in on one thing; others are connectors and do their
work by wiring students into the network of an alternative way of thinking.

4.  Message:  We insist that oppression, whether gender/class/race/other, is
a central principle of today's dynamics, that the realm of choice is shoehorned
into a corner by the exigency of power.  We insist that speculative fever and
the desire to escape responsibility and earn returns without sweat have led
markets
to destroy national plans and aspirations.  I had to explain what a "drive-by
shooting" was to a crowd in Ipanema to get across the point that their daily
8% drops in the Bovespa index were just collateral damage in the global
search for security. Our competitors don't embrace the twin poles of power
and of uncertainty as the reference points for analysis and understanding
"the real" (knowing the impossibility and contingency of that ..).  They only
want enough of the juice to drive their boats further up river.  So we must
try to go further, be braver, be more connected, more honest.

People everywhere want to know what are the connections between economic
injustice, global speculation and boom and bust, and market evolution.  We
cannot wait for genius to lead the way. We must push ahead into the murk
and gloom of the now; however, we must honor one another in this great,
twilight fight of our time. It matters what we do, it matters what we say and
think, it matters whether we fight or cave.  Fight, fight the dying of the
light.

Sorry for the sermon.  Please note that on Sept. 14 the new Trade and
Development Report of UNCTAD will be released, and it is a great document,
a broad statement of the situation and the choices now before humankind.
Check it out.

Gary D.

At 05:02 PM 9/3/98 -0700, you wrote:
>
>I may be trying to create a problem where none exists, but I worry about
>how we understand and respond to recent cracks in the mainstream
>free-market consensus.  It is of course very satisfying to see criticisms
>of the IMF/WB or free market policies from unexpected sources.  And groups
>like the Heritage foundation (and Republican party) get a lot more
>attention when they attack the IMF then when we do.  Similarly a statement
>by Krugman calling for exchange controls puts the issue to the top of the
>global political agenda, while left calls for regulation of capital flows
>were rarely even given a mention at the end of an article.  So, not only
>is it satisfying, these criticisms help to raise the visibility of
>alternative policies (although not always of our arguments).
>
>But, what now.  We all know that the Heritage Foundation dislikes the IMF
>for reasons different than we do.  For example, it just wants the free
>market to work better.  And Krugman's criticism of unregulated currency
>movements is not tied to a vision of social transformation.  Even the
>announcement by Malaysia that it will introduce controls, while welcome
>and wise, does not represent a fundamental shift in political vision or
>economic strategy.
>
>So, in short, what can/should we do to try and build on these
>developments, to take advantage of these recognitions of market failure so
>as to widen the debate to include a critique of capitalism itself.  I fear
>that we might end up just quoting from the Krugman's and Stiglitz's,
>giving them added credibility, only to find ourselves at a dead end (with
>no added public credibility or voice) when they shift gears (as they will)
>in response to class forces and dynamics reflecting their own
>institutional positions.
>
>So my question: in what ways, if any, should this current
>trend/development influence our own political efforts in this period.
>Should we just ignore it, promote it, take aim at it for its limited
>understanding?  Comments or reactions appreciated.
>
>Marty Hart-Landsberg
>
>
Gary Dymski
Department of Economics
University of California, Riverside
Riverside, CA 92521-0427
Phone: 909-787-5037 x1570
Fax: 909-787-5685
Email:  dymski@xxxxxxxxxxxx (office)
             gdymski@xxxxxxxxxxxxx (home)