31 October 2003

Is the US crypto-socialist?

So just how lean and mean is the US free-enterprise machine that President George W Bush and his conservative allies celebrate as the most efficient and beneficial way of delivering government to the people? Not very, according to economist James K Galbraith, in a provocative paper published recently.

It is an argument that Asian governments, annealed in the disaster of the Asian financial crisis of 1997-98, would do well to listen to. In a 28-page policy brief titled What Is the American Model Really About? written for the Levy Economics Institute of Bard College in New York, Galbraith argues that the United States is hardly an untrammeled model of free enterprise. Quite the contrary.

And, he writes, those nations seeking to emulate the US model should look far beyond the capitalistic rhetoric that has come to be known as the 'Washington consensus'. The Washington consensus generally encompasses the development strategy articulated by the World Bank and the International Monetary Fund (IMF). Its stern prescription includes deregulation, privatization and the free setting of prices and especially wages in competitive markets, without interference from labor unions or concern for the shape of the resulting distribution, Galbraith writes.

I would have thought crony-capitalist was a btter description than crypto-socialist.

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