ReOrient global Keynesianism (5) - Galbraith

["g kohler" <kohlerg@xxxxxxxx>]

ReOrient global Keynesianism (5) - Galbraith

The sharp increase in global inequality after 1981, as diagnosed by
Galbraith (see below), coincides with a sharp increase after 1981 of unequal
exchange between non-OECD and OECD countries  (see Figure 1 below).

Gernot Köhler

------------ Galbraith quotation ------------------
Reference: "Free marketeers putting on a poor show" by James K. Galbraith,
*The Age* (Australia), 27 July 2001

[quote] . . . the global trend in inequality was stable in the 1960s,
slightly downward in the 1970s, and up sharply after 1981 and since. What
accounts for this? Technology? Trade? We think not. Rather, the timing
points mainly at the quasi-violent financial regime change of the early
1980s: rising real interest rates, debt crises and the triumph of private
global finance. In many ways the pattern resembles what we find in
individual countries (such as Chile) after a coup d'etat.

And so to policy. Above all, we think it clear that the financial order of
the past 28 years cannot deliver sustainable economic development worldwide.
Therefore it is necessary to rebuild an architecture of financial
stabilisation and control similar to the old Bretton Woods system, but
better suited to our multi-polar world.
[end quote]

-----------  Figure 1  ----------------------------------------
Unequal exchange (Global T-value), 1960-98

[Figure 1 is attached as a jpg file 44 KB]

(The T value measures the annual income loss incurred by periphery and
semi-periphery countries due to unfair exchange rates - for example, an
aggregate loss of 1.7 trillion dollars in the late 1990s)

Reference:
Figure 1 from: G. Köhler, "Time Series of Unequal Exchange,
1960-1998," in: G. Köhler and E.J. Chaves (eds), Globalization:
Critical Perspectives. Nova Science, USA, 2003 (see, amazon.com)

Attachment: Kohler, Figure 1, Unequal Exchange 1960-98.jpg
Description: JPEG image