Abandoning the (admittedly flawed) Washington Consensus, in its 2006 Trade & Development report UNCTAD is calling for a return to the politics of Friedrich List and his National System with a little supportive inflationism added in (naturally).
Henry Clay would be proud!
This is very scary fro, of course, this will do nothing to encourage genuine entrepreneurship (stable money, low taxes and solid property rights are needed for that), but it will promote immediate trade friction and – as in an historical record written in blood (the US War against the States, Prussia from Bismarck-to-WWI, Rhodes to Empire preference’, Smoot-Hawley, the New Deal, National-Socialist autarky and ‘lebensraum’, etc) – aggravate political tensions, too
Not something a fractious world really needs at this stage!
The relevant summary is produced here:
National policies for productive dynamism
The central argument of UNCTAD´s Trade and Development Report 2006 is that in order for developing countries to meet their responsibilities under the Global Partnership for Development, developing countries need to have proactive macroeconomic, trade and industrial policies so that they can accelerate private investment, upgrade their technology and stimulate the creative forces of markets.
The far-reaching reforms undertaken by most developing countries in the 1980s and 1990s under the influence of international financial organizations and lenders did not deliver what they promised. These reforms emphasized:
• Greater macroeconomic stability
• Greater reliance on market forces emphasizing the efficient allocation of resources
• Rapid opening up of developing country economies to international competition and capital flows
But private investment did not rise and many economies stagnated or retracted and inequality increased.
Deviating from this conventional reform agenda, the Trade and Development Report 2006 argues that the accumulation of capital and structural change that are needed in developing economies cannot be left alone to market forces that give exclusive attention to an efficient allocation of resources.
Government policy must support the creative forces of markets through an open-economy industrial policy. Policy support to the private sector in the form of temporary tariff protection and temporary subsidies provided on the basis of clearly established operational goals should stimulate risk-taking, innovative entrepreneurial decisions.
Implementing some temporary protection does not imply adopting an “anti-trade” strategy, but is a key element of policies aimed at “strategic trade integration”.
Monetary and exchange-rate policy should further support investment and growth through low real interest rates and competitive exchange rates. Additional non-monetary instruments should be used for price stabilization.
{ 9 comments }
While List’s system may not be desirable, developing nations require some government assistance to make up for the past centuries of colonialism, robbery, and exploitation perpetrated by the rulers and capitalist classes of the more technologically sophisticated ones. A good starting point would be to repeal the disastrous IP policies which contradict social justice, hamper developing nations, and have historically been advanced by the capitalist elite to protect their own interests.
This is very discouraging. Poor countries tried this in the 60′s and 70′s. It was a disaster! That’s why they decided to give the Washington Consenus a try. Look for the trickle of illegal immigrant from Latin America to become a flood as some countries turn to the left and others try this version of recycled mercantilism.
Anarchist said;
“developing nations require some government assistance to make up for the past centuries of colonialism, robbery, and exploitation perpetrated by the rulers and capitalist classes of the more technologically sophisticated ones.”
Baloney. You will simply substitute one set of robbers for another. Only truly free markets will help.
“A good starting point would be to repeal the disastrous IP policies which contradict social justice, hamper developing nations, and have historically been advanced by the capitalist elite to protect their own interests.”
On this issue I couldn’t agree with you more!
“While List’s system may not be desirable, developing nations require some government assistance to make up for the past centuries of colonialism, robbery, and exploitation perpetrated by the rulers and capitalist classes of the more technologically sophisticated ones.”
So long as they are still ruled by democratic exploiters and robbers, that won’t do much good. When they have freedom in their country then you should not worry, capital will pour in to help them.
Anarchist,
While I agree with you on the IP issue, you don’t solve past acts of statist policies with future acts of statist policies.
I am assuming you are what I like to call an “austrian marxist”, in the kevin carson/keith preston mold, i.e. when you condemn capitalism, you are not condemning the free market per se, but merely state regulated capitalism; the state-ran capitalism (which I would call corporatism) that provides “socialism for the rich” through patents, tariffs, comyright law, fiat money, and heavy-handed land regulation. Of course nowadays we have both “socialism for the rich” through patents, tariffs, fiat money, and heavy-handed regulation while we provide socialism for the poor as well through welfare, progressive taxation, public services, education benefits, etc. etc.
I think the only difference between an Austrian Anarchocapitalist and a “free market marxist” are views on land ownership, tenure, etc.
Free Market Marxist would seem to me to be the Granddaddy of all contradictions.
I don’t quite toe the Anacho side of the equation in all respects. But I think we should abolish corporations “which are a creature and creation of the State, not of the free market” Central banking and fiat money of course are the big demons of the state. Patent protections are also a creation of the state, not of the market, and those need to be abolished as well.
There are limited situations where statist interventions are required to sweep away past statist interventions. However, none of these limited situations apply to the arena of international affairs.
Mark Brabson,
Yes. The term “free market” and the views of 99% of Marxists are indeed massive contradictions. But what about those who interpret Marx’s condemnation of capitalism NOT as a condemnation of the free market, but of a system highly distorted by the actions of the state?
I’ve been reading Kevin Carson’s “Studies in Mutualist Political Economy” and he has come up with some interesting points. He condemns patents, currency monopolies, tariffs, etc., but also takes a distinctly Austrian-libertarian approach to labor. Carson continually refers to what he calls “unequal terms of trade”, by which he is referring to state actions that favor one party in a transaction.
When he applies this to the Marxist focus on the employer’s unequal advantage in trade with his employees, he cites Murray Rothbard (countless times) when he makes the following claim (paraphrased, of course):
Heavy state regulation of land ownership has increased the supply, dramatically, of non-agricultural workers. This pushes down their wages because they do not have the alternative of homesteading their own land. It makes a lot of sense and it’s something I’ve never thought of. IT was even more pronounced at the beginning of the Industrial Revolution in England, where the state seized communal/cooperative land and gave it to the well-connected. Those expelled from their land increased the size of the pool of industrial workers, thereby pushing down their wages to a level lower than they would be in a free market.
That is, if it wasn’t for government expropriation of private and communal land, their wages would be higher.
I’m pretty sure Carson is not a Marxist. He greatly prefers Proudhon.
The enclosure acts seem insufficient to explain all the “state capitalist” systems around the world, rather than just england. The United States had a lot of open land which people homesteaded, and I don’t think the government really started grabbing onto huge chunks and not letting anyone develop them until the progressive era. Was the U.S completely different from England during this time? What equivalent to the enclosure act did we have? What about every country other than England? I guess I just don’t place as much significance on the past. I’m not really a true believer in the-singularity-is-near or whatnot, but I’m still with Arnold Kling. I haven’t read Carson’s book, but he seems, like many lefties, to have a somewhat zero-sum perspective on the economy. The bargaining power of labor vs employers is unbalanced or something. They have the advantage. We’ve got to do something about them. What would be the correct ratio of power and how would that even be measured? What do you intend to do? I’m all for scrapping things that inhibit the creation of wealth, but trying to right past wrongs in the name of “justice” for the oppressed poor people always ends badly. For the poster boy of that today, see Zimbabwe.
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