Washington Consensus

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Economics Rules: The Rights and Wrongs of the Dismal Science by Dani Rodrik

airline deregulation, Alan Greenspan, Albert Einstein, bank run, barriers to entry, behavioural economics, Bretton Woods, business cycle, butterfly effect, capital controls, carbon tax, Carmen Reinhart, central bank independence, collective bargaining, congestion pricing, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, distributed generation, Donald Davies, Edward Glaeser, endogenous growth, Eugene Fama: efficient market hypothesis, Everything should be made as simple as possible, Fellow of the Royal Society, financial deregulation, financial innovation, floating exchange rates, fudge factor, full employment, George Akerlof, Gini coefficient, Growth in a Time of Debt, income inequality, inflation targeting, informal economy, information asymmetry, invisible hand, Jean Tirole, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, labor-force participation, liquidity trap, loss aversion, low skilled workers, market design, market fundamentalism, minimum wage unemployment, oil shock, open economy, Pareto efficiency, Paul Samuelson, price elasticity of demand, price stability, prisoner's dilemma, profit maximization, public intellectual, quantitative easing, randomized controlled trial, rent control, rent-seeking, Richard Thaler, risk/return, Robert Shiller, school vouchers, South Sea Bubble, spectrum auction, The Market for Lemons, the scientific method, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, trade liberalization, trade route, ultimatum game, University of East Anglia, unorthodox policies, Vilfredo Pareto, Washington Consensus, white flight

But the term “Washington Consensus” fit the zeitgeist of the era only too well. Advocates of the Washington Consensus—whether in its original or expanded versions—presented it as good economics. For them, the policies reflected what sound economics teaches: Free markets and competition enable the efficient allocation of scarce resources. Government regulations, trade restrictions, and state ownership create waste and hamper economic growth. But this was an economics that did not go beyond Econ 101, as the advocates ought to have recognized. One problem was that the Washington Consensus skated over the deeper institutional underpinnings of a market economy, without which none of the market-oriented reforms could reliably deliver their intended benefits.

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Andrews, “Greenspan Concedes Error on Regulation,” New York Times, October 23, 2008, http://www.nytimes.com/2008/10/24/business/economy/24panel.html?_r=0. 9. John Williamson, “A Short History of the Washington Consensus” (paper commissioned by Fundación CIDOB for the conference “From the Washington Consensus towards a New Global Governance,” Barcelona, September 24–25, 2004). 10. Dani Rodrik, “Goodbye Washington Consensus, Hello Washington Confusion?: A Review of the World Bank’s Economic Growth in the 1990s: Learning from a Decade of Reform,” Journal of Economic Literature 44, no. 4 (December 2006): 973–87. 11.

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As the importance of institutions sank in, because of the poor response of many economies to Washington Consensus policies, reform efforts expanded in their direction. But it is one thing to slash import tariffs or remove ceilings on interest rates—two common enough approaches—and quite another to install, on short order, institutions that advanced economies acquired over decades, if not centuries. A useful reform agenda had to work with existing institutions, not engage in wishful thinking. Further still, the Washington Consensus presented a universal recipe. It presumed that all developing countries were pretty much alike—suffering from similar syndromes and in need of an undifferentiated list of reforms.

Making Globalization Work by Joseph E. Stiglitz

"World Economic Forum" Davos, affirmative action, Alan Greenspan, Andrei Shleifer, Asian financial crisis, banking crisis, barriers to entry, benefit corporation, Berlin Wall, blood diamond, business process, capital controls, carbon tax, central bank independence, corporate governance, corporate social responsibility, currency manipulation / currency intervention, Doha Development Round, Exxon Valdez, Fall of the Berlin Wall, Firefox, full employment, Garrett Hardin, Gini coefficient, global reserve currency, Global Witness, Great Leap Forward, Gunnar Myrdal, happiness index / gross national happiness, illegal immigration, income inequality, income per capita, incomplete markets, Indoor air pollution, informal economy, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), inventory management, invisible hand, John Markoff, Jones Act, Kenneth Arrow, Kenneth Rogoff, low interest rates, low skilled workers, manufacturing employment, market fundamentalism, Martin Wolf, microcredit, moral hazard, negative emissions, new economy, North Sea oil, offshore financial centre, oil rush, open borders, open economy, price stability, profit maximization, purchasing power parity, quantitative trading / quantitative finance, race to the bottom, reserve currency, rising living standards, risk tolerance, Seymour Hersh, Silicon Valley, special drawing rights, statistical model, the market place, The Wealth of Nations by Adam Smith, Thomas L Friedman, trade liberalization, Tragedy of the Commons, trickle-down economics, union organizing, Washington Consensus, zero-sum game

It was during this period that Latin American economic policies changed dramatically, with most countries adopting Washington Consensus policies. As high inflation broke out in many of the countries, the Washington Consensus’s focus on fighting inflation made sense. Their governments had not been working well for them, and the appeal of the Washington Consensus—minimizing the role of government—was understandable. As countries like Argentina adopted the Washington Consensus policies, praise was heaped upon them. When price stability was restored and growth resumed, the World Bank and the IMF claimed credit for the success; the case for the Washington Consensus had been made. But, as it turned out, the growth was not sustainable.

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By 2003, even the IMF had conceded that, at least for many developing countries, capital market liberalization had led not to more growth, just to more instability.13 Trade and capital market liberalization were two key components of a broader policy framework, known as the Washington Consensus—a consensus forged between the IMF (located on 19th Street), the World Bank (on 18th Street), and the U.S. Treasury (on 15th Street)—on what constituted the set of policies that would best promote development.14 It emphasized downscaling of government, deregulation, and rapid liberalization and privatization. By the early years of the millennium, confidence in the Washington Consensus was fraying, and a post–Washington Consensus consensus was emerging. The Washington Consensus had, for instance, paid too little attention to issues of equity, employment, and competition, to pacing and sequencing of reforms, or to how privatizations were conducted.

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As officials there reflect on the lessons of that brutal experience, they have come to reject even more firmly the Washington Consensus market fundamentalism which opened their countries to the ravages of the speculators. And they have put more emphasis on equity and on policies to help the poor. Growth has recovered, but these students of the “class of’97” have not forgotten the lessons. Latin America East Asia demonstrated the success of a course markedly different from the Washington Consensus, with a role for government far larger than the minimalist role allowed by market fundamentalism. Meanwhile, Latin America embraced the Washington Consensus policies more wholeheartedly than any other region (indeed, the term was first coined with reference to policies advocated for that region).

Falling Behind: Explaining the Development Gap Between Latin America and the United States by Francis Fukuyama

Andrei Shleifer, Atahualpa, barriers to entry, Berlin Wall, British Empire, business climate, Cass Sunstein, central bank independence, collective bargaining, colonial rule, conceptual framework, creative destruction, crony capitalism, European colonialism, Fall of the Berlin Wall, first-past-the-post, Francis Fukuyama: the end of history, Francisco Pizarro, Hernando de Soto, income inequality, income per capita, land reform, land tenure, Monroe Doctrine, moral hazard, New Urbanism, oil shock, open economy, public intellectual, purchasing power parity, rent-seeking, Ronald Reagan, The Wealth of Nations by Adam Smith, total factor productivity, trade liberalization, transaction costs, upwardly mobile, Washington Consensus, zero-sum game

Burki and Perry, The Long March. 27. Burki and Perry, Beyond the Washington Consensus. 28. Ibid., p. 5. 29. Kuczynski and Williamson, After the Washington Consensus, p. 2. 30. Ibid., p. 308. 31. Ibid., p. 34. 32. Dani Rodrik, “After Neoliberalism, What?” remarks at the Banco Nacional de Desenvolvimento Econômico e Social (BNDES) seminar on New Paths of Development, Rio de Janeiro, September 2003, quoted in Patricio Navia and Andres Velasco, “The Politics of Second-Generation Reforms,” in Kuczynski and Williamson, After the Washington Consensus, p. 269. 33. Ibid. 34. Terry Lynn Karl, “The Vicious Cycle of Inequality in Latin America,” in What Justice?

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At the same time, the characteristics of that turning point appeared to dissipate any doubt as to the validity of the model of development that 42 The Historical Context had just received the most clamorous favorable verdict in world history. This helps to explain the enthusiasm with which most Latin American countries decided to resolve, once and for all, the age-old problem of endorsing the principles of the so-called Washington Consensus. As is well known, the neoliberal model prescribed by the Washington Consensus came significantly short of fulfilling its initial promises, but that did not preclude the later posing of the question of Latin America’s development gap in its original terms. More influential on this point was the fact that, once the Cold War was over and, with it, the contrast between capitalist development and the alternative proposed by socialism, the specific characteristics of different experiences within the framework of capitalism came to dominate the debate.

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This became increasingly the case as the twentieth century peaked because of the challenge of competitiveness in the international marketplace. Asia competed and Latin America followed, but very slowly and with growing resistance toward the end of the century to the so-called liberal economic models embodied in the Washington Consensus.3 By the end of the 1990s, fierce resistance to the reform agenda had developed in many countries, leaving the Washington Consensus in tatters. The challenge in the twenty-first century is to undo or neutralize the errors and lapses in judgment of the old century. To do so will require a major reassessment of both the resources and the leadership required to close the gap with the United States and with developing Asia.

The Next Factory of the World: How Chinese Investment Is Reshaping Africa by Irene Yuan Sun

"World Economic Forum" Davos, asset light, barriers to entry, Bretton Woods, business logic, capital controls, clean water, Computer Numeric Control, deindustrialization, demographic dividend, Deng Xiaoping, Donald Trump, European colonialism, floating exchange rates, full employment, global supply chain, Great Leap Forward, invisible hand, job automation, low skilled workers, M-Pesa, manufacturing employment, means of production, mobile money, Multi Fibre Arrangement, post-industrial society, profit motive, purchasing power parity, race to the bottom, RAND corporation, Ronald Reagan, Shenzhen special economic zone , Shenzhen was a fishing village, Silicon Valley, Skype, special economic zone, structural adjustment programs, tacit knowledge, Triangle Shirtwaist Factory, union organizing, Washington Consensus, working-age population

On the global level, it was clear by the mid-2000s that the Washington Consensus had failed. Even the coiner of the term admitted in 2002 that “[t]he results have been disappointing, to say the least, particularly in terms of growth, employment, and poverty reduction.”5 To make matters worse, the implementation of Washington Consensus policies contributed to growing inequality within countries and to increasingly frequent financial crises.6 Rodrik wrote in 2006, “Proponents and critics alike agree that the policies spawned by the Washington Consensus have not produced the desired results. The debate now is not over whether the Washington Consensus is dead or alive, but over what will replace it.”7 Over the past decade, the monolithic orthodoxy of the Washington Consensus has splintered into several camps that, while not directly contradicting one another, emphasize differing ingredients as being critical to success in development.

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Dani Rodrik, “Goodbye Washington Consensus, Hello Washington Confusion? A Review of the World Bank’s Economic Growth in the 1990s: Learning from a Decade of Reform,” Journal of Economic Literature 44 (December 2006): 973–987. The classic formulation of the ten policy instruments generally considered to make up the Washington Consensus comes from John Williamson, who formalized the package in 1989. See John Williamson, ed., Latin American Adjustment: How Much Has It Happened? (Washington, DC: Institute for International Economics, 1990). 5. John Williamson, “Did the Washington Consensus Fail?” (Washington, DC: Peterson Institute for International Economics, November 6, 2002), http://www.iie.com/publications/papers/paper.cfm?

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It is worth noting that this advice is very different from what mainstream development institutions have been dispensing to poor countries for the past two generations. In the 1980s and 1990s, expert advice converged around the Washington Consensus. Influenced by the Ronald Reagan–Margaret Thatcher push for bigger roles for markets and smaller roles for government, the Washington Consensus advocated a sharp curb on government spending and involvement in shaping markets. Its pillars included ensuring macroeconomic stability, cutting subsidies, deregulating markets, privatizing national companies, and liberalizing trade—as Rodrik summarizes it: “Stabilize, privatize, and liberalize.”4 International financial institutions such as the International Monetary Fund and the World Bank played a large role in crystallizing this package into mainstream orthodoxy and guaranteeing its implementation, often by making much-needed economic assistance to developing countries conditional on their agreement to these prescriptive reforms.

The Globalization Paradox: Democracy and the Future of the World Economy by Dani Rodrik

"World Economic Forum" Davos, affirmative action, Alan Greenspan, Asian financial crisis, bank run, banking crisis, Bear Stearns, bilateral investment treaty, borderless world, Bretton Woods, British Empire, business cycle, capital controls, Carmen Reinhart, central bank independence, classic study, collective bargaining, colonial rule, Corn Laws, corporate governance, corporate social responsibility, credit crunch, Credit Default Swap, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, Doha Development Round, en.wikipedia.org, endogenous growth, eurozone crisis, export processing zone, financial deregulation, financial innovation, floating exchange rates, frictionless, frictionless market, full employment, George Akerlof, guest worker program, Hernando de Soto, immigration reform, income inequality, income per capita, industrial cluster, information asymmetry, joint-stock company, Kenneth Rogoff, land reform, liberal capitalism, light touch regulation, Long Term Capital Management, low interest rates, low skilled workers, margin call, market bubble, market fundamentalism, Martin Wolf, mass immigration, Mexican peso crisis / tequila crisis, microcredit, Monroe Doctrine, moral hazard, Multi Fibre Arrangement, night-watchman state, non-tariff barriers, offshore financial centre, oil shock, open borders, open economy, Paul Samuelson, precautionary principle, price stability, profit maximization, race to the bottom, regulatory arbitrage, Savings and loan crisis, savings glut, Silicon Valley, special drawing rights, special economic zone, subprime mortgage crisis, The Wealth of Nations by Adam Smith, Thomas L Friedman, Tobin tax, too big to fail, trade liberalization, trade route, transaction costs, tulip mania, Washington Consensus, World Values Survey

As he spent more time in Africa, he would increasingly focus on domestic constraints on development: low levels of education, poor health standards, dismal agricultural productivity, and inadequate investment in public infrastructure.23 The failure of the Washington Consensus left economists with a conundrum. Repudiating the specific reforms on the agenda was not an attractive option. Trade liberalization, deregulation, privatization, and the other reforms still seemed eminently reasonable: they would make poor nations’ policies look more like those of the advanced market economies. An explicit rejection of these reforms would have forced economists to abandon some of their most fundamental tenets. The problem with the Washington Consensus had to lie elsewhere. The rehabilitation took the form of retaining the Washington Consensus but expanding it to include a wide range of additional reforms.

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Journal of Monetary Economics, vol. 53, no. 5 (July 2006), pp. 981–1019. 20 John Williamson, “Did the Washington Consensus Fail?” Outline of Speech at the Center for Strategic and International Studies, Washington, DC, November 6, 2002, online at http://www.iie.com/publications/papers/ paper.cfm?ResearchID=488. The term “damaged brand” was used in Moisés Naím, “Washington Consensus: A Damaged Brand,” Financial Times, October 28, 2002. British prime minister Gordon Brown officially pronounced the death of the Washington Consensus in early 2009. 21 Sachs and Warner, “Economic Reform,” p. 44. 22 See Dani Rodrik, “Growth Strategies,” in Philippe Aghion and Steven Durlauf, eds., Handbook of Economic Growth, Vol. 1A (Amsterdam: North-Holland, 2005). 23 Jeffrey Sachs’s more recent worldview is captured in Jeffrey D.

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An early version of the revisionist package was codified in the so-called “Washington Consensus.” Coined in 1989 by the economist John Williamson, the term originally referred to some of the common elements in the reforms that Latin American countries had embarked on at the time. Williamson’s original list contained ten distinct reforms, with a heavy emphasis on deregulation, trade and financial liberalization, privatization, avoidance of currency overvaluation, and fiscal discipline. Over time, the “Washington Consensus” was transformed into a more doctrinaire approach, a mantra for the über-liberalizers.

Profit Over People: Neoliberalism and Global Order by Noam Chomsky

Alan Greenspan, Bernie Sanders, Bretton Woods, classic study, declining real wages, deindustrialization, full employment, invisible hand, Jim Simons, joint-stock company, land reform, liberal capitalism, manufacturing employment, means of production, Monroe Doctrine, Nixon triggered the end of the Bretton Woods system, public intellectual, Ronald Reagan, strikebreaker, structural adjustment programs, Telecommunications Act of 1996, The Wealth of Nations by Adam Smith, Thomas Malthus, union organizing, Washington Consensus

The term “neoliberalism” suggests a system of principles that is both new and based on classical liberal ideas: Adam Smith is revered as the patron saint. The doctrinal system is also known as the “Washington consensus,” which suggests something about global order. A closer look shows that the suggestion about global order is fairly accurate, but not the rest. The doctrines are not new, and the basic assumptions are far from those that have animated the liberal tradition since the Enlightenment. THE WASHINGTON CONSENSUS The neoliberal Washington consensus is an array of market oriented principles designed by the government of the United States and the international financial institutions that it largely dominates, and implemented by them in various ways—for the more vulnerable societies, often as stringent structural adjustment programs.

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Smith’s concern was “the wealth of nations,” but he understood that the “national interest” is largely a delusion: within the “nation” there are sharply conflicting interests, and to understand policy and its effects we have to ask where power lies and how it is exercised, what later came to be called class analysis. The “principal architects” of the neoliberal “Washington consensus” are the masters of the private economy, mainly huge corporations that control much of the international economy and have the means to dominate policy formation as well as the structuring of thought and opinion. The United States has a special role in the system for obvious reasons. To borrow the words of diplomatic historian Gerald Haines, who is also senior historian of the CIA, “Following World War II the United States assumed, out of self-interest, responsibility for the welfare of the world capitalist system.”

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By 1990 the percentages were reversed, and by 1995 about 95 percent of the vastly greater sums were speculative, with daily flows regularly exceeding the combined foreign exchange reserves of the seven biggest industrial powers, over $1 trillion a day, and very short-term: about 80 percent with round trips of a week or less. Prominent economists warned over twenty years ago that the process would lead to a low-growth, low-wage economy, and suggested fairly simple measures that might prevent these consequences. But the principal architects of the Washington consensus preferred the predictable effects, including very high profits. These effects were augmented by the (short-term) sharp rise in oil prices and the telecommunications revolution, both related to the huge state sector of the US economy, to which I will return. The so-called “Communist” states were outside this global system.

Free Market Missionaries: The Corporate Manipulation of Community Values by Sharon Beder

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, Alan Greenspan, anti-communist, battle of ideas, business climate, Cornelius Vanderbilt, corporate governance, electricity market, en.wikipedia.org, full employment, Herbert Marcuse, Ida Tarbell, income inequality, invisible hand, junk bonds, liquidationism / Banker’s doctrine / the Treasury view, minimum wage unemployment, Mont Pelerin Society, new economy, old-boy network, popular capitalism, Powell Memorandum, price mechanism, profit motive, Ralph Nader, rent control, risk/return, road to serfdom, Ronald Reagan, school vouchers, shareholder value, spread of share-ownership, structural adjustment programs, The Chicago School, the market place, The Wealth of Nations by Adam Smith, Thomas L Friedman, Torches of Freedom, trade liberalization, traveling salesman, trickle-down economics, two and twenty, Upton Sinclair, Washington Consensus, wealth creators, young professional

Thailand’s Minister of Finance, Tarrin Nimmanahaeminda, received his BA from Harvard and obtained an MBA in finance at Stanford as well . . .13 THE WASHINGTON CONSENSUS AND STRUCTURAL ADJUSTMENT In 1990 John Williamson, an economist with experience working for the World Bank, the IMF, and the UK Treasury, compiled a list of free market policies that were being pressed onto Latin American nations ‘by the powers-that-be in Washington’. He called this package of economic ‘reforms’ the ‘Washington Consensus’.14 The World Bank calls it the ‘market-friendly view’. His list covered: • Fiscal Discipline: Reduced budget deficits at all levels of government (after taking account of debt). • Public Expenditure Priorities: Redirecting government expenditure from areas of public demand that provide little economic return to areas with ‘high economic returns and the potential to improve income distribution, such as primary health and education, and infrastructure’. • Tax Reform: Broadening the tax base and cutting marginal tax rates to provide more incentive to high income earners to invest their money. • Financial Liberalization: Aiming towards market-determined interest rates and the abolition of preferential interest rates for privileged borrowers. • Exchange Rates: Setting exchange ‘to induce a rapid growth in nontraditional exports’, as well as to ensure exporters remain competitive. • Trade Liberalization: Reduction of tariffs and trade restrictions. • Foreign Direct Investment: Abolition of barriers to investment by foreign firms and foreign firms to be treated on the same basis as local firms. • Privatization: Privatizing government businesses and assets. • Deregulation: Abolition of regulations that impede investment or restrict competition, and requirement that all regulations be justified ‘by such criteria as safety, environmental protection, or prudential supervision of financial institutions’. • Property Rights: Securing property rights without excessive costs.15 ECONOMIC ADVISERS 149 These measures, a codified version of the Chicago School prescriptions, were measures that would expand business opportunities, reduce the cost of doing business and minimize the regulations that business would have to abide by.

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. • Property Rights: Securing property rights without excessive costs.15 ECONOMIC ADVISERS 149 These measures, a codified version of the Chicago School prescriptions, were measures that would expand business opportunities, reduce the cost of doing business and minimize the regulations that business would have to abide by. They were the policies being promoted by corporate-funded think tanks in the US and the UK. The ‘Washington Consensus’ was pushed by Washington policy networks supported by large corporations and international financial interests and incorporated into an economic reform agenda for most countries in the world. Williamson recognized the role of economic advisers in achieving the Washington Consensus. He used the term ‘technopols’ to describe the ‘burgeoning breed of economic technocrats who assume positions of political responsibility’.16 These people were not only ‘able to judge what institutions and policies are needed in specific circumstances in order to further economic objectives’ but also had the political skills and ability to persuade others to adopt those policies.17 Technopols, like corporate-funded think tanks, played a key role in ensuring business-friendly measures were adopted in affluent countries by governments of many different political persuasions during the 1980s, including the conservative governments of Margaret Thatcher in Britain, Ronald Reagan in the US and Brian Mulroney in Canada, and labour/social democratic governments in Australia and New Zealand.

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Some countries that had declined the IMF’s ‘enhanced structural adjustment’ loans were in contrast better off.27 ECONOMIC ADVISERS 151 In the two decades before the introduction of the Washington Consensus, when government spending and welfare schemes were looked on with approval (1960–1980), the income per person grew by 73 per cent in Latin America and 34 per cent in Africa. In the following two decades, as the Washington consensus was implemented, incomes in Africa declined by 23 per cent and the Latin American economies have only grown by 6 per cent.28 In developing countries life expectancy has dropped.

Austerity: The History of a Dangerous Idea by Mark Blyth

"there is no alternative" (TINA), accounting loophole / creative accounting, Alan Greenspan, balance sheet recession, bank run, banking crisis, Bear Stearns, Black Swan, book value, Bretton Woods, business cycle, buy and hold, capital controls, Carmen Reinhart, Celtic Tiger, central bank independence, centre right, collateralized debt obligation, correlation does not imply causation, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency peg, debt deflation, deindustrialization, disintermediation, diversification, en.wikipedia.org, ending welfare as we know it, Eugene Fama: efficient market hypothesis, eurozone crisis, financial engineering, financial repression, fixed income, floating exchange rates, Fractional reserve banking, full employment, German hyperinflation, Gini coefficient, global reserve currency, Greenspan put, Growth in a Time of Debt, high-speed rail, Hyman Minsky, income inequality, information asymmetry, interest rate swap, invisible hand, Irish property bubble, Joseph Schumpeter, Kenneth Rogoff, liberal capitalism, liquidationism / Banker’s doctrine / the Treasury view, Long Term Capital Management, low interest rates, market bubble, market clearing, Martin Wolf, Minsky moment, money market fund, moral hazard, mortgage debt, mortgage tax deduction, Occupy movement, offshore financial centre, paradox of thrift, Philip Mirowski, Phillips curve, Post-Keynesian economics, price stability, quantitative easing, rent-seeking, reserve currency, road to serfdom, Robert Solow, savings glut, short selling, structural adjustment programs, tail risk, The Great Moderation, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, Tobin tax, too big to fail, Two Sigma, unorthodox policies, value at risk, Washington Consensus, zero-sum game

The most remarkable thing about this ordoliberalization of Europe is how it replicates the same error often attributed to the Anglo-American economies: the insistence that all developing states follow their liberal instruction sheets to get rich, the so-called Washington Consensus approach to development that we shall discuss shortly. The basic objection made by late-developing states, such as the countries of East Asia, to the Washington Consensus/Anglo-American idea “liberalize and then growth follows” was twofold. First, this understanding mistakes the outcomes of growth, stable public finances, low inflation, cost competitiveness, and so on, for the causes of growth.

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In the case of the developing world, however, the IMF became the financial police force behind the implementation of what were termed “structural adjustment programs”: also known as the Washington Consensus checklist applied in practice.82 As Dani Rodrik notes, IMF policy in this period, aided and abetted by the World Bank, devolved to a mantra of “stabilize, privative, and liberalize” as “codified in John Williamson’s well-known Washington Consensus.”83 The result was a series of one-size-fits-all policies that were applied from Azerbaijan to Zambia whose objective was to “minimize fiscal deficits, minimize inflation, minimize tariffs, maximize privatization, maximize liberalization of finance.”84 It was, in other words, “expansionary fiscal austerity” in a developmental form, and the results were, by and large, terrible.

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As the model’s author Jacques Polak put it, what the IMF sought to do was to distinguish between “credit to the private sector (usually to be encouraged) and credit to the government sector (usually to be discouraged)” because the “balance of payments problems that brought countries to seek the assistance of the IMF were typically due to bursts of excessive domestic expansion [that] could usually be cured by the introduction of financial restraint.”90 The reason for such an austere policy was that “excessive expansion” causes both the current account and fiscal deficits to rise, which will “crowd out investment by the private sector.”91 In short, deep beneath the IMF’s Keynesian surface in the 1940s a set of classical liberal assumptions was built into a model of the behavior of states that would not have been out of place in the British Treasury of the 1920s.92 The Polak model, a mainstay of IMF practice, primed the IMF to accept the conclusions of the Washington Consensus long before Washington Consensus ideas became the austere instruction sheet of the 1990s. That the liberal contradictions at the heart of postwar Keynesianism came into their first flowering at the IMF was not surprising. After all, the top management of this organization was from its inception dominated by people who hailed from central banks, treasuries, and ministries of finance—the institutions in which the “can’t live with it, don’t want to pay for it” form of liberalism was most likely to survive.93 Given all this, you might think that the limited success of “austerity in the Global South” would encourage a rethink of these policies.

Profiting Without Producing: How Finance Exploits Us All by Costas Lapavitsas

Alan Greenspan, Andrei Shleifer, asset-backed security, bank run, banking crisis, Basel III, Bear Stearns, borderless world, Branko Milanovic, Bretton Woods, business cycle, capital controls, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, computer age, conceptual framework, corporate governance, credit crunch, Credit Default Swap, David Graeber, David Ricardo: comparative advantage, disintermediation, diversified portfolio, Erik Brynjolfsson, eurozone crisis, everywhere but in the productivity statistics, false flag, financial deregulation, financial independence, financial innovation, financial intermediation, financial repression, Flash crash, full employment, general purpose technology, Glass-Steagall Act, global value chain, global village, High speed trading, Hyman Minsky, income inequality, inflation targeting, informal economy, information asymmetry, intangible asset, job satisfaction, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, liberal capitalism, London Interbank Offered Rate, low interest rates, low skilled workers, M-Pesa, market bubble, means of production, Minsky moment, Modern Monetary Theory, Money creation, money market fund, moral hazard, mortgage debt, Network effects, new economy, oil shock, open economy, pensions crisis, post-Fordism, Post-Keynesian economics, price stability, Productivity paradox, profit maximization, purchasing power parity, quantitative easing, quantitative trading / quantitative finance, race to the bottom, regulatory arbitrage, reserve currency, Robert Shiller, Robert Solow, savings glut, Scramble for Africa, secular stagnation, shareholder value, Simon Kuznets, special drawing rights, Thales of Miletus, The Chicago School, The Great Moderation, the payments system, The Wealth of Nations by Adam Smith, Tobin tax, too big to fail, total factor productivity, trade liberalization, transaction costs, union organizing, value at risk, Washington Consensus, zero-sum game

Others, however, have looked at these changes from a more sympathetic perspective; see, for instance, Neil Gilbert, Transformation of the Welfare State, Oxford: Oxford University Press, 2002. 24 The term ‘subordinate financialization’ was originally suggested by Jeff Powell. 25 The term ‘Washington Consensus’ was coined by John Williamson; see Williamson, ‘What Washington Means by Policy Reform’, in Latin American Readjustment: How Much has Happened?, ed. John Williamson, Washington: Institute for International Economics, 1990; John Williamson, ‘The Washington Consensus Revisited’, in Economic and Social Development into the XXI Century, ed. Louis Emmerij, Washington: Inter-American Development Bank, 1997. Joseph Stiglitz has put forth a sustained critique of the Washington Consensus in an effort to develop a Post-Washington Consensus drawing on the notion of market failure typically through information asymmetries; Joseph Stiglitz, ‘More Instruments and Broader Goals: Moving Toward the Post Washington Consensus’, 7 January 1998; Joseph Stiglitz, ‘Whither Reform?

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The results in terms of investment, efficiency and growth have been mediocre, but financial liberalization in developing countries has gradually accrued several other features, including introduction of stock markets; by the late 1980s it had morphed into an integrated development strategy, the Washington Consensus. Guided and enforced by the World Bank and the IMF, the Washington Consensus forced changes in domestic finance in developing countries generally favouring a shift away from bank-based, relational, government-controlled structures toward market-based, arm’s-length, private institutions and mechanisms.25 Financialization of developing countries began to take shape on this basis in the late 1990s and the 2000s. A fundamental component of the Washington Consensus has been the opening of domestic economies to international capital flows, typically on the grounds that capital would flow from rich to poor countries, thus promoting development.

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Joseph Stiglitz has put forth a sustained critique of the Washington Consensus in an effort to develop a Post-Washington Consensus drawing on the notion of market failure typically through information asymmetries; Joseph Stiglitz, ‘More Instruments and Broader Goals: Moving Toward the Post Washington Consensus’, 7 January 1998; Joseph Stiglitz, ‘Whither Reform? Ten Years Of The Transition’, World Bank, Annual Bank Conference On Development Economics, 28–30 April 1999. For analysis of both the Washington and the Post-Washington Consensus from a Marxist and heterodox standpoint, see Ben Fine, Costas Lapavitsas, and Jonathan Pincus (eds), Development Policy in the Twenty-first Century: Beyond the Post-Washington Consensus, London: Routledge, 2001; and Costas Lapavitsas and Makoto Noguchi (eds), Beyond Market-Driven Development: Drawing on the Experience of Asia and Latin America, London: Routledge, 2005. 26 For the factors accounting for the growth of FDI, bank and portfolio flows between developed and developing as well as among developing countries, see the world investment reports by UNCTAD for the years 1999, 2002, 2003, 2005, and 2006. 27 Considerable care is needed in interpreting FDI.

The Retreat of Western Liberalism by Edward Luce

"World Economic Forum" Davos, 3D printing, affirmative action, Airbnb, Alan Greenspan, basic income, Berlin Wall, Bernie Sanders, Boris Johnson, Branko Milanovic, bread and circuses, Bretton Woods, Brexit referendum, business cycle, call centre, carried interest, centre right, Charles Lindbergh, cognitive dissonance, colonial exploitation, colonial rule, computer age, corporate raider, cuban missile crisis, currency manipulation / currency intervention, disinformation, Dissolution of the Soviet Union, Doha Development Round, Donald Trump, double entry bookkeeping, driverless car, Erik Brynjolfsson, European colonialism, everywhere but in the productivity statistics, Evgeny Morozov, fake news, Fall of the Berlin Wall, Francis Fukuyama: the end of history, future of work, gentrification, George Santayana, gig economy, Gini coefficient, global pandemic, global supply chain, Great Leap Forward, illegal immigration, imperial preference, income inequality, independent contractor, informal economy, Internet of things, Jaron Lanier, knowledge economy, lateral thinking, Les Trente Glorieuses, liberal capitalism, Marc Andreessen, Mark Zuckerberg, Martin Wolf, mass immigration, means of production, meritocracy, microaggression, Monroe Doctrine, moral panic, more computing power than Apollo, mutually assured destruction, new economy, New Urbanism, Norman Mailer, offshore financial centre, one-China policy, opioid epidemic / opioid crisis, Peace of Westphalia, Peter Thiel, plutocrats, precariat, purchasing power parity, reserve currency, reshoring, Richard Florida, Robert Gordon, Robert Solow, Ronald Reagan, Second Machine Age, self-driving car, sharing economy, Silicon Valley, Silicon Valley billionaire, Skype, Snapchat, software is eating the world, South China Sea, Steve Bannon, Steve Jobs, superstar cities, telepresence, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas L Friedman, Tyler Cowen, Tyler Cowen: Great Stagnation, universal basic income, unpaid internship, Washington Consensus, We are the 99%, We wanted flying cars, instead we got 140 characters, white flight, World Values Survey, Yogi Berra

But our response so far has been to accelerate the shift. Donald Trump’s victory crystallises the West’s failure to come to terms with the reality it faces. —— At some point during the 2008 global financial crisis, the Washington Consensus died. In truth, that economic model had been declared a ‘damaged brand’ back in 2003 by John Williamson, the man who coined the term in the late 1980s.13 The Washington Consensus prescribed open trading systems, free movement of capital and central bank monetary discipline. Countries that swallowed the prescription suffered terribly during the 1995 Mexican tesobono crisis, the 1997 Asian flu crisis, and in Russia, Brazil and elsewhere during the later 1990s.

…

South Korea and Mexico duly liberalised their capital accounts to join in the early 1990s. The destabilising effects of the hot money that flooded into those economies and then out again was almost instant. Most of the world has since chosen China’s more pragmatic path of opening slowly and on its own terms. China’s unorthodox route to development exposed the limits of the Washington Consensus. It had assumed that there was one way to do things, and that the rest of the world would have little choice but to adopt it. China is simply too big, and too important to the world’s bottom line, to push around. Other developing countries have followed China’s cue. Call it the Beijing Consensus.

…

I began this book with a reminiscence about the fall of the Berlin Wall. A decade later, I found myself employed as speechwriter to Lawrence Summers, when he was the US Secretary of the Treasury in the Clinton administration. Looking back, I am astonished at that era’s unshakeable self-confidence. This was the high noon of the Washington Consensus. Alongside Alan Greenspan, the chairman of the US Federal Reserve, and Robert Rubin, the previous Treasury Secretary, Summers personified the global intellectual elite. Though often abrasive, he is also brilliant – especially when he is wrong. But when the facts change he is capable of changing his mind.

What's Wrong With Economics: A Primer for the Perplexed by Robert Skidelsky

additive manufacturing, agricultural Revolution, behavioural economics, Black Swan, Bretton Woods, business cycle, carbon tax, Cass Sunstein, central bank independence, cognitive bias, conceptual framework, Corn Laws, corporate social responsibility, correlation does not imply causation, creative destruction, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, degrowth, disruptive innovation, Donald Trump, Dr. Strangelove, full employment, George Akerlof, George Santayana, global supply chain, global village, Gunnar Myrdal, happiness index / gross national happiness, hindsight bias, Hyman Minsky, income inequality, index fund, inflation targeting, information asymmetry, Internet Archive, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Arrow, knowledge economy, labour market flexibility, loss aversion, Mahbub ul Haq, Mark Zuckerberg, market clearing, market friction, market fundamentalism, Martin Wolf, means of production, Modern Monetary Theory, moral hazard, paradox of thrift, Pareto efficiency, Paul Samuelson, Philip Mirowski, Phillips curve, precariat, price anchoring, principal–agent problem, rent-seeking, Richard Thaler, road to serfdom, Robert Shiller, Robert Solow, Ronald Coase, shareholder value, Silicon Valley, Simon Kuznets, sunk-cost fallacy, survivorship bias, technoutopianism, The Chicago School, The Market for Lemons, The Nature of the Firm, the scientific method, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, Thorstein Veblen, Tragedy of the Commons, transaction costs, transfer pricing, Vilfredo Pareto, Washington Consensus, Wolfgang Streeck, zero-sum game

This chapter traces ‘growth’ economics from the insights of the classical economists to the emergence of development economics as a distinct subfield of economics in the second half of the twentieth century, and the gradual dissolution of the developmental perspective into the neoclassical Washington Consensus. Population If the economist is a tragedian, the Revd Thomas Malthus has a claim to be considered its tragedian in chief. Before Malthus there was the allure of a more prosperous future; after him gloom. For the first fifty years of the nineteenth century, economics was known as the ‘dismal science’.

…

First in the field were the ‘big push’ theories of the 1940s and 1950s, designed to turn poor countries into rich ones in double-quick time. These were based on a structuralist analysis of the economy, ancestrally derived from the doctrines of Friedrich List. The alleged failure of the big push growth policies led, in the 1970s and 1980s, to a swing back to neoclassical economics, which came to be embodied in the Washington Consensus. Structuralism Development theories can be called structural because they take as their unit of analysis the structure of the world capitalist system. They viewed this not as an integrated market peopled by competitive firms but as a binary system with an advanced centre and a lagging periphery.

…

Dependency theory brings us back to the picture of the economist as tragedian. Because development of the periphery within the capitalist system is cut off, a socialist revolution is the only path to the conquest of poverty. This will at the same time destroy capitalism at the centre, by undercutting its sole remaining source of profit. Washington Consensus A more durable reaction to the alleged failure of import-substitution policies was a drift back to neoclassical economics. It started to be argued that what was needed was not expensive steel mills and motor car industries which could not sell their products for hard currencies, but labour-intensive production based on exploiting the existing comparative advantage poor countries enjoyed in cheap, docile labour.

State-Building: Governance and World Order in the 21st Century by Francis Fukuyama

Asian financial crisis, behavioural economics, Berlin Wall, Bretton Woods, centre right, corporate governance, demand response, Doha Development Round, European colonialism, failed state, Fall of the Berlin Wall, Francis Fukuyama: the end of history, George Akerlof, Hernando de Soto, information asymmetry, liberal world order, Live Aid, Nick Leeson, Pareto efficiency, Potemkin village, precautionary principle, price stability, principal–agent problem, rent-seeking, road to serfdom, Ronald Coase, structural adjustment programs, Suez crisis 1956, tacit knowledge, technology bubble, The Market for Lemons, The Nature of the Firm, transaction costs, vertical integration, Washington Consensus, Westphalian system

In response to these trends, the advice offered by international financial institutions (IFIs) like the International Monetary Fund (IMF) and World Bank, as well as by the U.S. government, emphasized a collection of measures intended to reduce the degree of state intervention in economic affairs—a package designated as the “Washington consensus” by one of its formulators (Williamson 1994) or as “neoliberalism” by its detractors in Latin America. The Washington consensus has been relentlessly attacked in the early twenty-first century, not just by antiglobalization protesters but also by academic critics with better credentials in economics (see Rodrik 1997; Stiglitz 2002). In retrospect, there was nothing wrong with the Washington consensus per se: The state sectors of developing countries were in very many cases obstacles to growth and could only be fixed in the long run through economic liberalization.

…

There is no question that it is better to be in quadrant I than in quadrant IV, but is it better to be in quadrant II, with strong institutions and an extensive state, or quadrant III, with weak institutions and a limited state? In the early 1990s many economists preferred quadrant III on the grounds that markets would be selforganizing or that institutions and residual state capabilities would somehow take care of themselves. The so-called Washington consensus was a perfectly sensible list of economic policy measures that were designed to move countries leftward along the X-axis through reduced tariff protection, privatization, reduction of subsidies, deregulation, and so forth. There is no reason, after all, for the Brazilian government to operate steel mills or for Argentina to create a domestic automobile industry.

…

(In Kenya, for example, the employees of the office of the president grew from 18,213 in 1971 to 43,230 in 1990.) No international lender or bilateral donor at any time wanted this outcome, yet none were able to structure their conditionality in a way to prevent it from happening because of their inability to control local political outcomes. Many proponents of the Washington consensus now say that they of course understood the importance of institutions, rule of law, and the proper sequencing of reforms. But Y-axis questions of state capacity and state-building were largely absent from policy discussion in the late 1980s to early 1990s. There were very few warnings issued from Washington-based policymakers about the dangers of liberalization in the absence of proper institutions.

Capitalism 4.0: The Birth of a New Economy in the Aftermath of Crisis by Anatole Kaletsky

"World Economic Forum" Davos, Alan Greenspan, bank run, banking crisis, Bear Stearns, behavioural economics, Benoit Mandelbrot, Berlin Wall, Black Swan, bond market vigilante , bonus culture, Bretton Woods, BRICs, business cycle, buy and hold, Carmen Reinhart, classic study, cognitive dissonance, collapse of Lehman Brothers, Corn Laws, correlation does not imply causation, creative destruction, credit crunch, currency manipulation / currency intervention, currency risk, David Ricardo: comparative advantage, deglobalization, Deng Xiaoping, eat what you kill, Edward Glaeser, electricity market, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, F. W. de Klerk, failed state, Fall of the Berlin Wall, financial deregulation, financial innovation, Financial Instability Hypothesis, floating exchange rates, foreign exchange controls, full employment, geopolitical risk, George Akerlof, global rebalancing, Goodhart's law, Great Leap Forward, Hyman Minsky, income inequality, information asymmetry, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, Kickstarter, laissez-faire capitalism, long and variable lags, Long Term Capital Management, low interest rates, mandelbrot fractal, market design, market fundamentalism, Martin Wolf, military-industrial complex, Minsky moment, Modern Monetary Theory, Money creation, money market fund, moral hazard, mortgage debt, Nelson Mandela, new economy, Nixon triggered the end of the Bretton Woods system, Northern Rock, offshore financial centre, oil shock, paradox of thrift, Pareto efficiency, Paul Samuelson, Paul Volcker talking about ATMs, peak oil, pets.com, Ponzi scheme, post-industrial society, price stability, profit maximization, profit motive, quantitative easing, Ralph Waldo Emerson, random walk, rent-seeking, reserve currency, rising living standards, Robert Shiller, Robert Solow, Ronald Reagan, Savings and loan crisis, seminal paper, shareholder value, short selling, South Sea Bubble, sovereign wealth fund, special drawing rights, statistical model, systems thinking, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, too big to fail, Vilfredo Pareto, Washington Consensus, zero-sum game

Available from http://www2.goldmansachs.com/ideas/brics/book/BRIC-Full.pdf. 2 Summarizing the conclusions of April 2009 G20 summit in London Gordon Brown declared: “The old Washington Consensus is over.” See Jonathan Weisman and Alistair Macdonald, “Obama, Brown Strike Similar Note on Economy,” Wall Street Journal, April 3, 2009. See also a 2009 article by John Williamson, who coined the phrase: John Williamson, “The ‘Washington Consensus’: Another Near-Death Experience?” Peterson Institute for International Economics, April 10, 2009. Available from http://www.iie.com/realtime/?p=604. See as well Dani Rodrik, “Is There a New Washington Consensus?” Business Standard, June 12, 2008. 3 Unattributable interview with the author in Anatole Kaletsky, “We Need a New Capitalism to Take on China, The Times, London, February 4, 2010. 4 “‘China’s Spirit,’ a ‘Great Wall’ at Heart Built to Ward Off Global Crisis,” People’s Daily, July 30, 2009. 5 Joshua Cooper Ramo, The Beijing Consensus. 6 Two of the best recent books are Will Hutton, The Writing on the Wall: China and the West in the 21st Century, and Bill Emmott, Rivals: How the Power Struggle Between China, India and Japan Will Shape Our Next Decade. 7 If China continues to grow at an average annual rate of 8 percent without any interruption, its living standards will catch up with those in Portugal, the poorest western European country, by around 2030.

…

Now, after watching the near-collapse of global capitalism and the damage done to Western democracies by the crisis, citizens, as well as political leaders, of many developing countries are having second thoughts. The apparent failure of Western capitalism has discredited liberalism in the eyes of many developing countries, as even the principle promoters of the Washington Consensus, the IMF and World Bank, have acknowledged in a series of confessional reports.2 As a senior U.S. diplomat remarked a few months after the crisis: “Developing countries have lost interest in the old Washington Consensus that promoted democracy and liberal economics. Wherever I go in the world, governments and business leaders talk about the new Beijing Consensus—the Chinese route to prosperity and power.

…

Bush, far from supporting the U.S. government’s attempts to save the economy and financial system, formed an unholy alliance with neo-socialists and unrepentant Marxists to declare that free-enterprise capitalism was dead. Instead of the American Century, proclaimed by neo-conservatives a few years earlier, China’s rise to global dominance in the decades ahead now seemed as inevitable. Around the world, finance ministers and diplomats prepared to abandon the Washington Consensus presented to developing countries throughout the previous twenty years as the only way to achieve economic progress.1 The Beijing Consensus was the new buzzword, even if no one was quite sure what it meant.2 Yet within a few months of the collapse of Lehman and the election of a new American government, it became obvious that reports of capitalism’s death were exaggerated and premature.

The Globalization of Inequality by François Bourguignon

Berlin Wall, Branko Milanovic, Capital in the Twenty-First Century by Thomas Piketty, collective bargaining, Credit Default Swap, deglobalization, deindustrialization, Doha Development Round, Edward Glaeser, European colonialism, Fall of the Berlin Wall, financial deregulation, financial intermediation, gender pay gap, Gini coefficient, Glass-Steagall Act, income inequality, income per capita, labor-force participation, liberal capitalism, low interest rates, minimum wage unemployment, offshore financial centre, open economy, Pareto efficiency, purchasing power parity, race to the bottom, Robert Gordon, Simon Kuznets, structural adjustment programs, The Spirit Level, too big to fail, very high income, Washington Consensus

., 87 Russia, 37, 46t Saez, Emmanuel, 48, 160–61 savings, 93, 174 Segal, Paul, 13n4 Sen, Amartya, 14, 61 Senegal, 46t, 54 sensitive urban zones (ZUS), 66 shocks, 38, 55, 91–92, 175 Singapore, 34, 82 Slemrod, Joel, 160–61 Slim, Carlos, 111 social justice, 2, 24, 60, 70, 142 social security, 37 South Africa, 16, 23, 46t, 156 South Korea, 34, 46t, 57, 82 Soviet Union, 26, 37, 75, 149, 153 Spain, 6, 46t, 53, 102, 135 standard of living, 184; absolute, 23, 31–32; after normalization, 29; average, 2, 13, 16, 18, 21, 43; between countries, 2–3, 7, 10, 17, 33, 36, 38–39, 42; China and, 120–22; convergence and, 7, 147–48; countries included in estimation of, 46t; definitions of, 17; distribution and, 16, 18, 24, 26–27; evolution of inequality and, 25–26, 41, 43–45, 46t, 53– 55, 58, 60–62, 67, 69, 73; extreme deciles of, 18, 21–23, 28, 36; factor of proportionality and, 13; fairer globalization and, 146–48, 154, 156–58, 160, 165, 168–69; GDP measurement of, 14 (see also gross domestic product (GDP) measurement); global inequality and, 10–26, 29, 31–33, 36, 39; globalization and, 120–23, 126, 138, 143; great gap in, 33–36; international inequality and, 17; median, 24; OECD countries and, 11–12, 43, 50–52, 64, 94, 99, 102, 107, 120, 149, 159, 162, 164–65; Povcal data and, 12; purchasing power and, 11, 13, 19–24, 27f, 28, 50, 80, 144, 158, 178; relative gap in, 18, 20, 30– 32, 36; rise in inequality and, 106–8, 113–14; welfare and, 31; within countries and, 2 Stiglitz, Joseph, 4, 14, 136n10, 138 subsidies, 109–10, 175 superstars, 85–87, 89–90 surveys: evolution of inequality and, 42t, 43–45, 56, 68n17, 69– 71; fairer globalization and, 169; global inequality and, 10, 12– 15, 20n10, 21–22, 29, 42t, 43– 208 surveys (cont.) 45; globalization and, 127n4, 141n15; PISA, 169–70 Sweden, 46t, 51f, 59, 87, 90, 92– 94, 164, 171–72 Taiwan, 34, 82 taxes: Brazil and, 173; capital mobility and, 93; Chile and, 173; China and, 165; credit and, 164; cutting rates of, 188; educational policy and, 167–73; effective rate of, 159–60; emerging economies and, 165; estate, 187; evolution of inequality of, 12–14, 37, 48, 50, 56n5; fairer globalization and, 148, 158–73, 175, 181–83; France and, 92–93; Germany and, 92; globalization and, 129–30, 135–36, 142–45; havens for, 160, 162, 182, 187, 189; ignoring role of, 12–13; income, 37, 89n10, 92–93, 145, 159, 161–65, 170; India and, 165; inheritance, 145, 171–73; institutions and, 92–94; investment and, 92; labor and, 159– 60, 171; liberalization and, 93; Morocco and, 173; national inequality and, 158–73, 175, 181– 83; profit and, 93; rate ceiling on, 161–62; Reagan and, 92; redistribution through, 4, 158–67; reform and, 92–94, 163, 183, 189; rise in inequality and, 74, 89n10, 91–94, 104, 114–15; Sweden and, 92–93, 172; Thatcher and, 92; transfers and, 158–67; United Kingdom and, 92–94; United States and, 92– 93, 159–60, 164; value added, 92 Index technology: artists and, 86–87; communication, 78, 85–87, 96; data transfer, 78; development gap and, 34–35, 83; fairer globalization and, 156, 173; global inequality and, 3–4, 34–35; globalization and, 118–20, 125; income and, 34, 180; increased audiences and, 86–87; information, 78, 85, 88; movies and, 87; as product of globalization, 86; progress in, 3–4, 34–35, 76, 85– 86, 90–91, 114–15, 118–19, 125, 156, 173, 180; publishing and, 87; rise in inequality and, 34, 74, 76–78, 80, 82, 85–91, 96, 114–15, 180; sports and, 87; television and, 87; writers and, 86–87 terrorism, 139 Tetra Pak, 172 Thailand, 16 Thatcher, Margaret, 91–92, 94, 101 Theil coefficient, 18–19; decomposition of, 37–38, 42; evolution of inequality and, 42 Third World, 149 “too big to fail” concept, 174–75 transportation, 76, 155 TRIPS (Agreement on Trade-­ Related Aspects of Intellectual Property Rights), 156 tuition, 170 U2 (band), 87 Uganda, 46t, 54 unions, 100–106, 108, 156, 179 United Kingdom: Big Bang and, 95; competition and, 78–79; deregulation and, 94, 97n14; evolution of inequality and, 46t, 50, 51f, 59, 67, 68n17; fairer global- Index209 ization and, 163, 169; manufacturing and, 80; real earnings loss and, 78; rise in inequality and, 21, 91–94, 97n14; taxes and, 92–94; Thatcher and, 91–92, 94, 101 United Nations, 149, 185 United States: African Growth Opportunity Act (AGOA) and, 155; Cold War and, 149, 153; competition and, 78–79; Current Population Survey and, 21; deregulation and, 94–95, 97– 98, 102–8; evolution of inequality and, 47–50, 51f, 58, 59n9, 66–70, 73; fairer globalization and, 155, 159–61, 163–64, 169, 174–75, 182; Gini coefficient of, 21; globalization and, 135–39; manufacturing and, 80; Occupy Wall Street movement and, 6, 135; Reagan and, 91–92, 101; real earnings loss and, 78; rise in inequality and, 2, 4–6, 9, 11, 21, 33, 46t, 73, 77–80, 91–95, 97– 98, 102–8; taxes and, 92–93, 159–60, 164; Washington consensus and, 109–10, 153 U.S. Congressional Budget Office, 49–50 value added, 56–58, 60, 92 violence, 66, 133–35, 139 wage ladder effects, 78–79 Wall Street, 6, 90, 135 Washington consensus, 109–10, 153 wealth: bonuses and, 87, 174; developed/developing countries and, 3, 10, 16, 21, 28, 47, 58–60, 72; distribution of, 4 (see also distribution); evolution of inequality and, 58–60; executives and, 73, 88–89, 97, 174; fairer globalization and, 162, 164, 167, 170–73; globalization and, 125, 127, 129, 131–32, 139, 143–45; great gap and, 33–36; high incomes and, 50, 52, 56, 85–93, 97–99, 140, 143, 158–62, 164, 189; income gap and, 3, 5–6, 27f, 42t, 44t, 149; inflation and, 50, 95, 102, 110; inheritance and, 93, 144–45, 170–73; lawyers and, 89–90; measuring inequality and, 18; middle class and, 51, 71, 93, 109, 133–34, 136, 140; portfolios and, 88; poverty and, 1, 11, 15n6, 19–20, 22–25, 28–29, 32, 44t, 109, 117, 123, 126–27, 134, 144, 147–52, 164, 166, 175; purchasing power and, 11, 13, 19–24, 27f, 28, 50, 80, 144, 158, 178; real earnings loss and, 78; real estate and, 131; redistribution and, 167–73; relative gap and, 18, 28, 30, 31–32, 36; rise in inequality and, 74, 95, 98; superstars and, 85–87, 89–90; taxes and, 187 (see also taxes); transfers and, 4, 14, 48, 105, 110, 130, 135–36, 142, 148, 153, 158–67, 170, 175, 181, 183, 187 welfare: global, 31; individual, 6; rate of progress and, 5; social, 14; specific nations and, 7; United Kingdom and, 94 Wilkinson, Richard, 140 women: discrimination and, 64– 66, 69, 132, 142, 180–81; labor and, 114; rise in inequality and, 103 210 World Bank, 10, 11n2, 23, 29n16, 43, 54, 68n18, 90, 109, 149 World’s Apart (Milanovic), 4–5 World Trade Organization, 86, 154 World War I era, 37, 160 Index World War II era, 26, 34, 37, 48, 92, 162 writers, 86–87 Zaire, 151 Zucman, Gabriel, 59n8, 161–62

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These structural adjustment policies have often been criticized for their social costs, partly because they slowed growth and thus the reduction of poverty dramatically, and partly because they placed more of the brunt of the costs of these programs on the lower and middle classes, rather than on the high end of the income scale.23 The debt crisis began in Latin America, specifically in Mexico in 1982, and for a decade and a half it would have harsh consequences for the developing world, in particular in sub-­Saharan Africa and Latin America. The structural adjustment programs that the international financial institutions demanded in exchange for aid were grounded on a package of free market principles that were later baptized the “Washington consensus.” They resulted in deep institutional changes: commercial and financial liberalization, deregulation of goods, capital and labor markets, privatization, the elimination of consumer and producer subsidies, 23 See IMF-­IEO, Fiscal Adjustment in IMF-­Supported Programs, IMF, June 2002. 110 Chapter 3 cuts in social spending, and so forth.

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However, inequality had shot up in the adjustment process. The Gini coefficient, which was 0.50 in 1999, had risen to 0.54 in 2003 at the moment when the crisis was on the verge of turning back. It has since gone back down. While this is true, there is little doubt that several structural reforms typical of the Washington consensus, in contrast to policies focused more directly on reestablishing macroeconomic equilibrium, such as those used by the Argentine government in response to the 2001 crisis (devaluation, disinflation, budgetary tightening), have had an inegalitarian effect on certain countries. This is certainly the case for policies like the elimination of input and output price subsidies for small farmers, the abandoning of consumer price subsidies, the rise in prices for certain priva- The Forces behind R ising Inequality 111 tized services, and, after some time delay, the cuts in public social spending on education and health.

Dirty Secrets How Tax Havens Destroy the Economy by Richard Murphy

"Friedman doctrine" OR "shareholder theory", banking crisis, barriers to entry, Bernie Sanders, centre right, corporate governance, Donald Trump, Double Irish / Dutch Sandwich, en.wikipedia.org, Glass-Steagall Act, Global Witness, high net worth, income inequality, intangible asset, Leo Hollis, light touch regulation, moral hazard, Occupy movement, offshore financial centre, race to the bottom, Social Responsibility of Business Is to Increase Its Profits, Suez canal 1869, Suez crisis 1956, The Wealth of Nations by Adam Smith, transfer pricing, Washington Consensus

But the pervasiveness of this philosophy has had enormous spill-over effects. The world’s major economic institutions, such as the World Bank and IMF, have proved remarkably comfortable with the Washington Consensus. Their endorsement has resulted in its ten-point policy prescription being forcibly imposed on a great many countries, including a number of developing nations that have consequently suffered enormous losses of revenue and resources, as well as corruption. In addition, the Washington Consensus policy prescriptions have become the basis for the thinking of the vast majority of mainstream political parties in many of the world’s democracies.

…

In the last thirty-five years, neoliberalism achieved near-hegemonic status in economics faculties and government departments alike. The ideas implicit in it are treated as a revealed truth, rather than a construct of a particular group with an ideological agenda. These ideas can be summarised as the components of what is known as the Washington Consensus:10 1.Fiscal discipline, requiring strict criteria for limiting budget deficits; 2.Setting public expenditure priorities that spend away from subsidies and administration towards previously neglected fields with high economic returns; 3.Tax reform, embracing broadening of the tax base and cutting marginal tax rates; 4.Financial liberalisation, particularly with regard to interest rates that should be market-determined; 5.Exchange rates that promote exports; 6.Trade liberalisation; 7.Reduced barriers to foreign direct investment; 8.Privatisation; 9.Deregulation; 10.The protection of intellectual property rights.

…

From there, the spread of such policies was not limited to parties of the right; it is fair to suggest, for example, that the Clinton administration of 1992–2000 endorsed many of the same ideas. Indeed, its abolition of the Glass–Steagall Act, which deregulated much of the US banking sector, was influenced by the philosophy of the Washington Consensus. Tony Blair’s New Labour governments in the UK were equally neoliberal in their outlook. The results have been unsurprising. Over the recent period, social democracy has very largely ceased to be either social or democratic, under the influence of such economic thinking. Over time, it has become increasingly difficult for parties branded as something they are not to be elected, especially in Europe.

Getting Better: Why Global Development Is Succeeding--And How We Can Improve the World Even More by Charles Kenny

agricultural Revolution, Berlin Wall, British Empire, Charles Lindbergh, clean water, demographic transition, double entry bookkeeping, Edward Jenner, experimental subject, Fall of the Berlin Wall, germ theory of disease, Golden arches theory, Great Leap Forward, Gunnar Myrdal, income inequality, income per capita, Indoor air pollution, inventory management, Kickstarter, Milgram experiment, off grid, open borders, public intellectual, purchasing power parity, randomized controlled trial, Robert Solow, seminal paper, structural adjustment programs, The Wealth of Nations by Adam Smith, total factor productivity, Toyota Production System, trade liberalization, transaction costs, Tyler Cowen, very high income, Washington Consensus, X Prize

What connected these policies was a belief that governments had played an overactive role in promoting development, taking on tasks best left to the private sector and abusing powers best left unused. According to the Washington Consensus, widespread government interventionism was not only unnecessary to promote growth, it was the chief blockage to achieving that growth. Yet it was very difficult to push through Washington Consensus reforms, and when they were put into effect, they had limited impact, encouraging the profession to look elsewhere for ultimate explanations for low growth. If the reforms were right but not working, the problem had to be the reformers and the environment for reform.

…

This adapted model allowed for poorer countries to grow more slowly than rich ones indefinitely—at least until the factor or factors restricting the diffusion of technology to a poor country were removed. In tandem with these developments in economic theory, the 1980s saw the evolution of a set of development policy recommendations that came to be known as the Washington Consensus. It was “Washington” because it was spearheaded by US economists and policy wonks, and supported by the World Bank and International Monetary Fund headquartered in the American capital. And a “Consensus” because nearly everyone in Washington agreed about what the developing world should do to kick-start economic development.

…

He covered topics such as education, insufficient market reforms to encourage entrepreneurship, and authoritarian versus participatory methods of development. Going back a bit further, to 1776, we see that still other contentions about growth are firmly rooted in the founding document of economics, Adam Smith’s Wealth of Nations. In other words, the Nobel Prize winners, the Washington Consensus, the Rimsim modelers: All were echoing centuries-old ideas. This calls into question not their sincerity or their smarts but, rather, their originality. Economists have (for good or ill) “formalized” their interpretations in their models over the past forty years. Now, a statement suggesting that a culture of thrift might encourage savings and (through investment) impact growth, as it might be, has to be expressed in a conga line of formulas before it is worthy of publication in the American Economic Review.

Zero-Sum Future: American Power in an Age of Anxiety by Gideon Rachman

"World Economic Forum" Davos, Alan Greenspan, Asian financial crisis, bank run, battle of ideas, Berlin Wall, Big bang: deregulation of the City of London, Bonfire of the Vanities, borderless world, Bretton Woods, BRICs, capital controls, carbon tax, centre right, clean water, collapse of Lehman Brothers, colonial rule, currency manipulation / currency intervention, deindustrialization, Deng Xiaoping, Doha Development Round, energy security, failed state, Fall of the Berlin Wall, financial deregulation, Francis Fukuyama: the end of history, full employment, Glass-Steagall Act, global reserve currency, Global Witness, Golden arches theory, Great Leap Forward, greed is good, Greenspan put, Hernando de Soto, illegal immigration, income inequality, invisible hand, It's morning again in America, Jeff Bezos, laissez-faire capitalism, Live Aid, low interest rates, market fundamentalism, Martin Wolf, mass immigration, Mexican peso crisis / tequila crisis, Mikhail Gorbachev, moral hazard, mutually assured destruction, Naomi Klein, Nelson Mandela, offshore financial centre, Oklahoma City bombing, open borders, open economy, Peace of Westphalia, peak oil, pension reform, plutocrats, popular capitalism, price stability, RAND corporation, reserve currency, rising living standards, road to serfdom, Ronald Reagan, Savings and loan crisis, shareholder value, Sinatra Doctrine, sovereign wealth fund, special economic zone, Steve Jobs, Stewart Brand, Tax Reform Act of 1986, The Chicago School, The Great Moderation, The Myth of the Rational Market, Thomas Malthus, Timothy McVeigh, trickle-down economics, Washington Consensus, Winter of Discontent, zero-sum game

.: Cornell University Press, 2000), 2. 6. See Hernando de Soto, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else (London: Black Swan, 2001). 7. Williamson’s own account of what he meant can be found in John Williamson, “A Short History of the Washington Consensus,” Fundación CIDOB paper, presented at a conference titled “From the Washington Consensus Towards a New Global Governance,” Barcelona, September 24, 2004. Available from http://www.piie.com/publications/ papers/williamson0904-2.pdf. 8. Niall Ferguson, The Ascent of Money: A Financial History of the World (London: Allen Lane, 2008), 214. 9.

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Even Chile, where free-market reforms had been pursued by a military dictatorship under General Augusto Pinochet, had turned back toward democracy with the election of a civilian government in 1989. The democratic transformation of Latin America was accompanied by a free-market revolution. The Latin dictatorships had generally pursued protectionist and state-led economic strategies. Their democratic successors were much more likely to follow the orthodox economic strategies of the “Washington Consensus”: a crackdown on inflation, a welcome for foreign investment, a more open trading regime, and privatization. Latin America’s transformation illustrates how contagious political and economic ideas can be—jumping across borders with all the energy of a determined virus. The continent had been through periods of synchronized political change before.

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Prominent regional economists like the Peruvian Hernando de Soto became important contributors to the new liberal economics, with De Soto doing much to argue the case for the importance of property rights for the poor.6 Nonetheless, the new economics pursued across the continent came with the approval of the International Monetary Fund and the World Bank. Since both mighty institutions were based in Washington, the free-market prescription became known as the “Washington Consensus”—a phrase dreamed up by John Williamson, an economist at the Institute for International Economics.7 Across Latin America, government pursued the new consensus policies: cutting tariffs and taxes, making life easier for foreign investors, allowing markets to set interest and exchange rates, cutting regulation, privatizing.

The Corona Crash: How the Pandemic Will Change Capitalism by Grace Blakeley

Anthropocene, asset-backed security, basic income, Big Tech, bond market vigilante , Bretton Woods, business cycle, capital controls, carbon tax, central bank independence, coronavirus, corporate governance, COVID-19, creative destruction, credit crunch, crony capitalism, debt deflation, decarbonisation, degrowth, deindustrialization, don't be evil, financial deregulation, Francis Fukuyama: the end of history, full employment, gig economy, global pandemic, global value chain, green new deal, Greenspan put, income inequality, informal economy, inverted yield curve, invisible hand, Jeff Bezos, liberal capitalism, light touch regulation, lockdown, low interest rates, Martin Wolf, Modern Monetary Theory, moral hazard, move fast and break things, Network effects, North Sea oil, Northern Rock, offshore financial centre, pensions crisis, Philip Mirowski, post-war consensus, price mechanism, quantitative easing, regulatory arbitrage, rent control, reshoring, Rishi Sunak, savings glut, secular stagnation, shareholder value, social distancing, structural adjustment programs, too big to fail, universal basic income, unorthodox policies, Washington Consensus, yield curve

The Global South is continuously promised that, if it only sticks to the prescriptions delivered by the institutions of the Washington Consensus – the IMF and the World Bank – it will ‘catch up’ with the Global North. In fact, ongoing neocolonial and imperialistic relationships between the Global North and South, not to mention the huge amount of money that escapes the world’s poorest states through money laundering and tax avoidance, have prevented most states in the global South from doing so – and the growth of the tech monopolies has only made these problems worse.35 Rigid followers of the Washington Consensus have sacrificed the health and well-being of their workers to increase the profits of international capital.

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The IMF’s managing director, Kristalina Georgieva, has said that the fund has $1trn worth of resources to help its members tackle the pandemic, on top of the $160 billion in loans and grants already promised by the World Bank. But not all countries are eligible for these loans: preferential treatment is given to obedient adopters of the free trade and market based Washington Consensus. Unlike other poor countries, many of which are currently in deep debt distress, international investors have not yet turned on India and Bangladesh. As one of the first countries to implement the required neoliberal ‘reforms’, Bangladesh became something of a poster child for structural adjustment, even though poverty remains high.31 Today the country is highly dependent upon textiles manufacturing, where working conditions are notoriously poor, leading to disasters like the 2013 Dhaka factory collapse.

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States in core countries would undertake this investment themselves, while transferring technology and resources to governments in the Global South to allow them to do the same. New international development banks could also be created to support those states most at risk of extreme weather events, desertification and rising temperatures. A break with the rules and norms associated with the Washington Consensus could help to rebuild trust in international institutions and support a new era of fair and sustainable global cooperation. While such a scenario might seem far-fetched, the costs of not acting would be extraordinarily high. The coronavirus crisis has provided the world with an insight into what life might look like as our environmental systems begin to collapse under the pressures of unending capitalist accumulation: a world ripped apart by a series of natural disasters, where many are unable to access the resources they need to survive, and strict limits must be imposed upon normal economic activity to prevent further deterioration of our natural systems.

Straight Talk on Trade: Ideas for a Sane World Economy by Dani Rodrik

3D printing, airline deregulation, Asian financial crisis, bank run, barriers to entry, behavioural economics, Berlin Wall, Bernie Sanders, blue-collar work, Bretton Woods, BRICs, business cycle, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Carmen Reinhart, carried interest, central bank independence, centre right, collective bargaining, conceptual framework, continuous integration, corporate governance, corporate social responsibility, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, Donald Trump, endogenous growth, Eugene Fama: efficient market hypothesis, eurozone crisis, export processing zone, failed state, financial deregulation, financial innovation, financial intermediation, financial repression, floating exchange rates, full employment, future of work, general purpose technology, George Akerlof, global value chain, income inequality, inflation targeting, information asymmetry, investor state dispute settlement, invisible hand, Jean Tirole, Kenneth Rogoff, low interest rates, low skilled workers, manufacturing employment, market clearing, market fundamentalism, meta-analysis, moral hazard, Nelson Mandela, new economy, offshore financial centre, open borders, open economy, open immigration, Pareto efficiency, postindustrial economy, precautionary principle, price stability, public intellectual, pushing on a string, race to the bottom, randomized controlled trial, regulatory arbitrage, rent control, rent-seeking, Richard Thaler, Robert Gordon, Robert Shiller, Ronald Reagan, Sam Peltzman, Silicon Valley, Solyndra, special economic zone, spectrum auction, Steven Pinker, tacit knowledge, The Rise and Fall of American Growth, the scientific method, The Wealth of Nations by Adam Smith, Thomas L Friedman, too big to fail, total factor productivity, trade liberalization, transaction costs, Tyler Cowen, unorthodox policies, Washington Consensus, World Values Survey, zero-sum game, éminence grise

Structural reform as a remedy for slow (or no) growth has been around at least since the early 1980s. At that time, in return for “structural adjustment” loans, the World Bank insisted on economy-wide liberalizing reforms for developing countries in Asia, Africa, and the Middle East. These policies were then extended and codified in Latin America during the 1990s under the umbrella of the Washington Consensus. Many of the former socialist economies adopted similar policies (in some cases, voluntarily) when they opened up their economies during the 1990s. A serious look at the vast experience with privatization, deregulation, and liberalization since the 1980s—in Latin America, postsocialist economies, and Asia in particular—would have produced much less optimism about the reforms Athens was asked to swallow.

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Over time, this best-practice mind-set would come to dominate the practical and policy work of international organizations such as the World Bank, the International Monetary Fund, and the Organization for Economic Co-operation and Development. The detailed but fairly specific prescriptions of the Washington Consensus would be augmented by open-ended recommendations on reducing corruption, improving regulatory and judicial institutions, and enhancing governance more broadly. In an article published in 2000, I argued that the prevailing technocratic views on institutional reform were missing an important part of the picture.5 They ignored both the malleability and the context specificity of institutional designs.

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It was due to the fact that such models were neglected in favor of models that stressed efficient markets. Then there are the errors of commission—cases in which economists’ fixation on one particular model of the world makes them complicit in the administration of policies whose failure could have been predicted ahead of time. Economists’ advocacy of neoliberal “Washington Consensus” policies and of financial globalization falls into this category. What happened in both cases is that economists overlooked serious second-best complications, such as learning externalities and weak institutions, which blunted the reforms and, in some cases, caused them to backfire. The Peculiar Science of Economics The firestorm over the Reinhart-Rogoff analysis overshadowed what in fact was a salutary process of scrutiny and refinement of economic research.

The Extreme Centre: A Warning by Tariq Ali

Affordable Care Act / Obamacare, Berlin Wall, bonus culture, BRICs, British Empire, centre right, deindustrialization, Dr. Strangelove, Edward Snowden, Fall of the Berlin Wall, financial deregulation, first-past-the-post, full employment, Great Leap Forward, labour market flexibility, land reform, light touch regulation, means of production, Mikhail Gorbachev, military-industrial complex, Monroe Doctrine, mortgage debt, negative equity, Neil Kinnock, North Sea oil, obamacare, offshore financial centre, popular capitalism, reserve currency, Ronald Reagan, South China Sea, The Chicago School, The Wealth of Nations by Adam Smith, trade route, trickle-down economics, Washington Consensus, Westphalian system, Wolfgang Streeck

Today Germany is the strongest country in Europe, despite its truncated sovereignty, and the EU, expanded out of control as a result of Anglo-American pressure, is groaning like a sick bull. Early attempts by the Frenchman Jacques Delors to create a ‘social Europe’ foundered on the born-again fanaticism of the Washington Consensus: neoliberal capitalism was the only way forward. The EU had to accept the new rules: privatizations at home, wars and occupations abroad. The Northern Europeans (Britain and Scandinavia) and the East Europeans (delighted to accept new satellite status, with the US replacing the USSR) proved to be the most loyal and compliant of the EU vassal states.

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Bush: ‘The brutal fact is that Western Europe, and increasingly also Central Europe, remains largely an American protectorate, with its allied states reminiscent of ancient vassals and tributaries.’ Britain was so servile that it barely counted. Germany and France were important, and in any division between these two, the Germans should be supported. Brzezinski needn’t have worried. Under Jospin and Sarkozy the French Republic happily embraced the Washington Consensus, with French mediatic intellectuals proving even more willing than their German equivalents.7 There are no signs whatsoever of François Hollande breaking with this pattern, and in the unlikely event of a Red–Green victory at the next German elections, it would produce a government far closer to Washington than that of Angela Merkel.

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They are regarded as such not only at home, but also by those who fear US withdrawal abroad: vassal politicians and states in Europe, Asia, the Middle East, Africa, and the loyal few in South America. The rulers of the only vassal continent – Australia – would, given its geography, be equally disturbed to contemplate independence. Yet in both the Arab world and the heartlands of Western capitalism, the systemic order imposed through the Washington Consensus since the collapse of the Soviet Union has appeared to be in forward flight. The Arab world seeks to escape its recent history, while some European states, in the grip of parliamentary paralysis, dream of external deliverance from the very bankers who were responsible for the crash of 2008.

The Death of Money: The Coming Collapse of the International Monetary System by James Rickards

"World Economic Forum" Davos, Affordable Care Act / Obamacare, Alan Greenspan, Asian financial crisis, asset allocation, Ayatollah Khomeini, bank run, banking crisis, Bear Stearns, Ben Bernanke: helicopter money, bitcoin, Black Monday: stock market crash in 1987, Black Swan, Boeing 747, Bretton Woods, BRICs, business climate, business cycle, buy and hold, capital controls, Carmen Reinhart, central bank independence, centre right, collateralized debt obligation, collective bargaining, complexity theory, computer age, credit crunch, currency peg, David Graeber, debt deflation, Deng Xiaoping, diversification, Dr. Strangelove, Edward Snowden, eurozone crisis, fiat currency, financial engineering, financial innovation, financial intermediation, financial repression, fixed income, Flash crash, floating exchange rates, forward guidance, G4S, George Akerlof, global macro, global reserve currency, global supply chain, Goodhart's law, Growth in a Time of Debt, guns versus butter model, Herman Kahn, high-speed rail, income inequality, inflation targeting, information asymmetry, invisible hand, jitney, John Meriwether, junk bonds, Kenneth Rogoff, labor-force participation, Lao Tzu, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, Long Term Capital Management, low interest rates, mandelbrot fractal, margin call, market bubble, market clearing, market design, megaproject, Modern Monetary Theory, Money creation, money market fund, money: store of value / unit of account / medium of exchange, mutually assured destruction, Nixon triggered the end of the Bretton Woods system, obamacare, offshore financial centre, oil shale / tar sands, open economy, operational security, plutocrats, Ponzi scheme, power law, price stability, public intellectual, quantitative easing, RAND corporation, reserve currency, risk-adjusted returns, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, Satoshi Nakamoto, Silicon Valley, Silicon Valley startup, Skype, Solyndra, sovereign wealth fund, special drawing rights, Stuxnet, The Market for Lemons, Thomas Kuhn: the structure of scientific revolutions, Thomas L Friedman, too big to fail, trade route, undersea cable, uranium enrichment, Washington Consensus, working-age population, yield curve

■ From Bretton Woods to Beijing The euro project is a part of the more broadly based international monetary system, which itself is subject to considerable stress and periodic reformation. Since the Second World War, the system has passed through distinct phases known as Bretton Woods, the Washington Consensus, and the Beijing Consensus. All three of these phrases are shorthand for shared norms of behavior in international finance, what are called the rules of the game. The Washington Consensus arose after the collapse of the Bretton Woods system in the late 1970s. The international monetary system was saved between 1980 and 1983 as Paul Volcker raised interest rates, and Ronald Reagan lowered taxes, and together they created the sound-dollar or King Dollar policy.

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Williamson went on to describe what Washington meant by debtors “setting their houses in order.” He set forth ten policies that made up the Washington Consensus. These policies included commonsense initiatives such as fiscal discipline, elimination of wasteful subsidies, lower tax rates, positive real interest rates, openness to foreign investment, deregulation, and protection for property rights. The fact that these policies favored free-market capitalism and promoted the expansion of U.S. banks and corporations in global markets did not go unnoticed. By the early 2000s, the Washington Consensus was in tatters due to the rise of emerging market economies that viewed dollar hegemony as favoring the United States at their expense.

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This view was highlighted by the IMF response to the Asian financial crisis of 1997–98, in which IMF austerity plans resulted in riots and bloodshed in the cities of Jakarta and Seoul. Washington’s failure over time to adhere to its own fiscal prescriptions, combined with the acceleration of Asian economic growth after 1999, gave rise to the Beijing Consensus as a policy alternative to the Washington Consensus. The Beijing Consensus comes in conflicting versions and lacks the intellectual consistency that Williamson gave to the Washington Consensus. Author Joshua Cooper Ramo is credited with putting the phrase Beijing Consensus into wide use with his seminal 2004 article on the subject. Ramo’s analysis, while original and provocative, candidly admits that the definition of Beijing Consensus is amorphous: “the Beijing Consensus . . . is flexible enough that it is barely classifiable as a doctrine.”

Unsustainable Inequalities: Social Justice and the Environment by Lucas Chancel

"World Economic Forum" Davos, Anthropocene, behavioural economics, biodiversity loss, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, carbon tax, centre right, clean water, COVID-19, disinformation, Donald Trump, energy security, energy transition, financial deregulation, Francis Fukuyama: the end of history, Gini coefficient, green new deal, income inequality, Indoor air pollution, job satisfaction, low skilled workers, offshore financial centre, oil shock, price stability, purchasing power parity, Ronald Reagan, Simon Kuznets, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, Thorstein Veblen, trade liberalization, Tragedy of the Commons, transaction costs, urban planning, very high income, Washington Consensus

The term Washington Consensus refers to an ideological consensus between the governments of Ronald Reagan in the United States and Margaret Thatcher in Great Britain, at the beginning of the 1980s, subsequently transformed into a series of measures aimed at liberalizing commodity and capital markets and at reducing the role of the state in economic affairs. [On the controversy surrounding this term, see the 2004 paper by John Williamson, the English economist who coined it, “A Short History of the Washington Consensus” (commissioned by Fundación CIDOB for “From the Washington Consensus towards a new Global Governance,” Barcelona, Spain, September 24–25, 2004), https://piie.com/publications/papers/williamson0904-2.pdf.

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Before examining these other forces, let us pause for a moment to note parenthetically an interesting and, to say the least, surprising interpretation of the origins of financial liberalization advanced by Rawi Abdelal, an authority on international management at Harvard Business School. In spite of its name, Abdelal argues, the so-called Washington Consensus on financial liberalization was first devised in France under a leftist president, François Mitterrand, whose economic advisors saw loosening capital flows as a way to hasten the formation of a patrimonial (or propertied) middle class.23 As we have just seen, the growth of financial wealth over the past several decades has mainly benefited those at the summit of the pyramid.

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., 158n23; health care in, 20; income inequality in, 19, 24, 43, 45, 46, 47, 48; tax rates in, 55; vote to exit from E.U. by, 15; water consumption in, 72; well-being indicators in, 169n9 United Nations, 11–14, 60–61, 94, 142–144, 147, 150 United States: access to medical care in, 163n15; CO2e emissions by, 96–97, 98–99; energy consumption in, 69; environmental science initiatives in, 131–133; exit from Paris Agreement of, 32–33; extreme poverty in, 74; income inequality in, 19, 29, 32–33, 41, 42, 43, 45, 46, 48; land disputes in, 77; minimum wage in, 54, 159n26; opposition to SDGs by, 14; pollution in, 84, 133; public services in, 115–116; tax rates in, 55, 57; Washington Consensus, 53, 158n23; water consumption in, 72 vervets, 23 wage increases, 24, 27, 54, 159n26. See also economic inequality; wealth water: access to potable, 71–73, 116; contamination of, 86–87; public utilities networks for, 111, 115–117; shortages of, 73, 161n12. See also drought wealth: distribution of, 39–48, 111–113, 114; planetary destruction and, 95–97; political power of, 56–57.

The Glass Half-Empty: Debunking the Myth of Progress in the Twenty-First Century by Rodrigo Aguilera

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Alan Greenspan, Anthropocene, availability heuristic, barriers to entry, basic income, benefit corporation, Berlin Wall, Bernie Madoff, Bernie Sanders, bitcoin, Boris Johnson, Branko Milanovic, Bretton Woods, Brexit referendum, Capital in the Twenty-First Century by Thomas Piketty, capitalist realism, carbon footprint, Carmen Reinhart, centre right, clean water, cognitive bias, collapse of Lehman Brothers, Colonization of Mars, computer age, Corn Laws, corporate governance, corporate raider, creative destruction, cryptocurrency, cuban missile crisis, David Graeber, David Ricardo: comparative advantage, death from overwork, decarbonisation, deindustrialization, Deng Xiaoping, Doha Development Round, don't be evil, Donald Trump, Doomsday Clock, Dunning–Kruger effect, Elon Musk, European colonialism, fake news, Fall of the Berlin Wall, first-past-the-post, Francis Fukuyama: the end of history, fundamental attribution error, gig economy, Gini coefficient, Glass-Steagall Act, Great Leap Forward, green new deal, Hans Rosling, housing crisis, income inequality, income per capita, index fund, intangible asset, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jean Tirole, Jeff Bezos, Jeremy Corbyn, Jevons paradox, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, karōshi / gwarosa / guolaosi, Kenneth Rogoff, Kickstarter, lake wobegon effect, land value tax, Landlord’s Game, late capitalism, liberal capitalism, long peace, loss aversion, low interest rates, Mark Zuckerberg, market fundamentalism, means of production, meta-analysis, military-industrial complex, Mont Pelerin Society, moral hazard, moral panic, neoliberal agenda, Network effects, North Sea oil, Northern Rock, offshore financial centre, opioid epidemic / opioid crisis, Overton Window, Pareto efficiency, passive investing, Peter Thiel, plutocrats, principal–agent problem, profit motive, public intellectual, purchasing power parity, race to the bottom, rent-seeking, risk tolerance, road to serfdom, Robert Shiller, Robert Solow, savings glut, Scientific racism, secular stagnation, Silicon Valley, Silicon Valley ideology, Slavoj Žižek, Social Justice Warrior, Social Responsibility of Business Is to Increase Its Profits, sovereign wealth fund, Stanislav Petrov, Steven Pinker, structural adjustment programs, surveillance capitalism, tail risk, tech bro, TED Talk, The Spirit Level, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transatlantic slave trade, trolley problem, unbiased observer, universal basic income, Vilfredo Pareto, Washington Consensus, Winter of Discontent, Y2K, young professional, zero-sum game

The innumerable failures of free market “shock therapy” and structural adjustment in the developing world of the 1980s and 1990s, the mediocre economic outcomes of most countries that followed the Washington Consensus down to the letter, as well as the macroeconomic instability triggered by deregulation and over-financialization in the West make this as close to a truism in economics. If China is the triumph of free-market capitalism in pursuit of human progress, I rest my case. Table 3.1: The Beijing consensus was to not follow Washington’s Notes: These are the ten main policies that were the basis of the Washington Consensus as originally defined by economist John Williamson.35 The Washington Consensus was the prevalent set of economic policy prescriptions for much of the 1990s applied to developing countries, especially to those that were emerging from crisis.

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If New Optimists themselves don’t claim this openly, as does Norberg in this section’s opening quote, then there’s no dearth of free-market advocates and libertarians using these talking points for their own ends, like this piece from the Adam Smith Institute (a UK libertarian think tank) shows: OK, so what is it that our pushing of neoliberalism has done? You could look at that chart above from Max Roser. This last generation of globally applied neoliberalism, all that free trade, globalisation, that application of the Washington Consensus (that list of stupid things that governments should not do), what has been the effect? The greatest decline in absolute poverty in the history of our entire species. That decline has been so great that global inequality has been falling.27 By far the favorite New Optimist soundbite is a World Bank estimate that shows how extreme poverty in the world has dropped from 94% of the total population in 1820 to an estimate of less than 10% in 2015, the first time in history that it has reached the single digits.

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Indeed, the guiding principle of “Socialism with Chinese characteristics” which described Deng’s reforms was that China required market reforms to grow economically so that a true egalitarian socialist society could emerge in the longer-run — market logic as a means to an end. Of the ten points in the “Washington Consensus” that was the standard template for IMF- and World Bank-led structural economic reform in the 1980s and 1990s, China’s model brazenly violates half of them, and only partially adheres to the other half. Markets have certainly proven superior to communist central planning, which led to disastrous Maoist experiments like the Great Leap Forward that left thirty million dead from famine.

Planet of Slums by Mike Davis

barriers to entry, Branko Milanovic, Bretton Woods, British Empire, Brownian motion, centre right, clean water, company town, conceptual framework, crony capitalism, declining real wages, deindustrialization, Deng Xiaoping, disinformation, Dr. Strangelove, edge city, European colonialism, failed state, gentrification, Gini coefficient, Hernando de Soto, housing crisis, illegal immigration, income inequality, informal economy, Intergovernmental Panel on Climate Change (IPCC), Internet Archive, jitney, jobless men, Kibera, labor-force participation, land reform, land tenure, Lewis Mumford, liberation theology, low-wage service sector, mandelbrot fractal, market bubble, megacity, microcredit, Nelson Mandela, New Urbanism, Pearl River Delta, Ponzi scheme, RAND corporation, rent control, structural adjustment programs, surplus humans, upwardly mobile, urban planning, urban renewal, War on Poverty, Washington Consensus, working poor

.), Beyond Self-Help Housing, London 1992, pp. 298-99. 37 Andrew Harding, "Nairobi Slum Life," (series), Guardian, 4, 8, 10 and 15, October 2002. privatization of housing markets. However, the social state in the Third World was already withering away even before SAPs sounded the death knell for welfarism. Because so many experts working for the "Washington Consensus" have deemed government provision of urban housing to be an inevitable disaster, it is important to review some case histories, beginning with what, at first sight, seem to be the major exceptions to the rule of state failure. The two tropical cities where large-scale public housing has provided an alternative to slums are Singapore and Hong Kong.

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In a review of recent studies, including a major report by the London-based Panos Institute, Rita Abrahamsen concludes that "rather than empowering 'civil society,' the PRSP process has entrenched the position of a small, homogeneous 'iron triangle' of transnational professionals based in key government ministries (especially Finance), multilateral and bilateral development agencies and international NGOs."19 What Nobel laureate Joseph Stiglitz in his brief tenure as chief economist for the Bank described as an emerging "post-Washington Consensus" might be better characterized as "soft imperialism," with the major NGOs captive to the agenda of the international donors, and grassroots groups similarly dependent upon the international NGOs.20 For all the glowing rhetoric about democratization, self-help, social capital, and the strengthening of civil society, the actual power relations in this new NGO universe resemble nothing so much as traditional clientelism.

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Moreover, like the community organizations patronized by the War on Poverty in the 1960s, Third World NGOs have proven brilliant at coopting local leadership as well as hegemonizing the social space traditionally occupied by the Left Even if there are some celebrated exceptions - such as the militant NGOs so instrumental in creating the World Social Forums - the broad impact of the NGO/ "civil society revolution," as even some World Bank researchers acknowledge, has been to bureaucratize and deradicalize urban social movements.21 18 Sebastian Mallaby, The World's Banker: A Story of Failed States, Financial Crises, and the Wealth and Poverty of Nations, New York 2004, pp. 89-90, 145. 19 Rita Abrahamsen, "Review Essay: Poverty Reduction or Adjustment by Another Name?," Review of African Political Economy 99 (2004), p. 185. 20 Stiglitz's 1998 speech, "More Instruments and Broader Goals: Moving Towards the Post-Washington Consensus," is discussed in John Pender, "From 'Structural Adjustment' to 'Comprehensive Development Framework': Conditionality Transformed?," Third World Quarterly 22:3 (2001). 21 Imparato and Ruster, Slum Upgrading and Participation, p. 255. Thus development economist Diana Mitlin, writing about Latin s America, describes how, on one hand, NGOs "preempt community- ; level capacity-building as they take over decision-making and negotiating roles," while, on the other hand, they are constrained by "the difficulties of managing donor finance, with its emphasis on shortterm project funds, on financial accountabilities and on tangible outputs."22 Similarly in the case of urban Argentina, architect Ruben Gazzoli complains that NGOs monopolize expert knowledge and middleman roles in the same way as traditional political machines.23 Lea Jellinek, a social historian who has spent more than a quartercentury studying the poor in Jakarta, in turn, recounts how one famed NGO, a neighborhood microbank, "beginning as a small grassroots project driven by needs and capacities of local women," grew Frankenstein-like into a "large, complex, top—down, technically oriented bureaucracy" that was "less accountable to and supportive o f " its low-income base.24 From a Middle Eastern perspective, Asef Bayat deplores the hyperbole about NGOs, pointing out that "their potential for independent and democratic organization has generally been overestimated.

A Brief History of Neoliberalism by David Harvey

"World Economic Forum" Davos, affirmative action, air traffic controllers' union, Asian financial crisis, Berlin Wall, Bretton Woods, business climate, business cycle, California energy crisis, capital controls, centre right, collective bargaining, creative destruction, crony capitalism, debt deflation, declining real wages, deglobalization, deindustrialization, Deng Xiaoping, Fall of the Berlin Wall, financial deregulation, financial intermediation, financial repression, full employment, gentrification, George Gilder, Gini coefficient, global reserve currency, Great Leap Forward, illegal immigration, income inequality, informal economy, labour market flexibility, land tenure, late capitalism, Long Term Capital Management, low interest rates, low-wage service sector, manufacturing employment, market fundamentalism, mass immigration, means of production, megaproject, Mexican peso crisis / tequila crisis, military-industrial complex, Mont Pelerin Society, mortgage tax deduction, neoliberal agenda, new economy, Pearl River Delta, phenotype, Ponzi scheme, price mechanism, race to the bottom, rent-seeking, reserve currency, Ronald Reagan, Savings and loan crisis, Silicon Valley, special economic zone, structural adjustment programs, Suez crisis 1956, the built environment, The Chicago School, Tragedy of the Commons, transaction costs, union organizing, urban renewal, urban sprawl, Washington Consensus, We are all Keynesians now, Winter of Discontent

In retrospect it may seem as if the answer was both inevitable and obvious, but at the time, I think it is fair to say, no one really knew or understood with any certainty what kind of answer would work and how. The capitalist world stumbled towards neoliberalization as the answer through a series of gyrations and chaotic experiments that really only converged as a new orthodoxy with the articulation of what became known as the ‘Washington Consensus’ in the 1990s. By then, both Clinton and Blair could easily have reversed Nixon’s earlier statement and simply said ‘We are all neoliberals now.’ The uneven geographical development of neoliberalism, its frequently partial and lop-sided application from one state and social formation to another, testifies to the tentativeness of neoliberal solutions and the complex ways in which political forces, historical traditions, and existing institutional arrangements all shaped why and how the process of neoliberalization actually occurred.

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By the end of the decade most economics departments in the US research universities—and these helped train most of the world’s economists—had fallen into line by broadly cleaving to the neoliberal agenda that emphasized the control of inflation and sound public finance (rather than full employment and social protections) as primary goals of economic policy. All of these strands came together in the so-called ‘Washington Consensus’ of the mid-1990s.5 The US and UK models of neoliberalism were there defined as the answer to global problems. Considerable pressure was put even on Japan and Europe (to say nothing of the rest of the world) to take the neoliberal road. It was, therefore, Clinton and then Blair who, from the centre-left, did the most to consolidate the role of neoliberalism both at home and internationally.

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Whether it was all a matter of conscious though adaptive planning (‘groping the stones while crossing the river’ as Deng called it) or the working out, behind the backs of the party politicians, of an inexorable logic deriving from the initial premises of Deng’s market reforms, will doubtless long be debated.2 What can be said with precision, is that China, by not taking the ‘shock therapy’ path of instant privatization later foisted on Russia and central Europe by the IMF, the World Bank, and the ‘Washington Consensus’ in the 1990s, managed to avert the economic disasters that beset those countries. By taking its own peculiar path towards ‘socialism with Chinese characteristics’ or, as some now prefer to call it, ‘privatization with Chinese characteristics’, it managed to construct a form of state-manipulated market economy that delivered spectacular economic growth (averaging close to 10 per cent a year) and rising standards of living for a significant proportion of the population for more than twenty years.3 But the reforms also led to environmental degradation, social inequality, and eventually something that looks uncomfortably like the reconstitution of capitalist class power.

The Abandonment of the West by Michael Kimmage

Albert Einstein, anti-communist, Berlin Wall, Brexit referendum, British Empire, Charles Lindbergh, City Beautiful movement, classic study, deindustrialization, desegregation, disinformation, Donald Trump, European colonialism, Francis Fukuyama: the end of history, global pandemic, global supply chain, Gunnar Myrdal, interchangeable parts, Isaac Newton, It's morning again in America, Mahatma Gandhi, mass immigration, Mikhail Gorbachev, military-industrial complex, Monroe Doctrine, Nelson Mandela, Paris climate accords, Peace of Westphalia, profit motive, public intellectual, Ralph Waldo Emerson, RAND corporation, road to serfdom, Ronald Reagan, Ronald Reagan: Tear down this wall, Silicon Valley, South China Sea, Suez crisis 1956, Thomas L Friedman, transatlantic slave trade, urban planning, W. E. B. Du Bois, Washington Consensus

Starting in the 1990s, Eisenhower’s good cheer was much easier to come by in Western capitals, easier to maintain and easier to pin to the present moment.5 Clinton, Bush and Obama represented three different kinds of internationalist optimism. Clinton was an economic optimist; Bush, a geopolitical optimist; and Obama, an institutional optimist. Clinton began the “Washington consensus” whereby free trade and the elaboration of economic rules were to be the levers for prosperity and political-economic integration. The Washington consensus built on American advantages in business and technology, summing up the end phase of the Cold War. The Soviet Union had destroyed itself through economic inefficiency and by building mental and physical walls. To lower the barriers of economic and intellectual exchange was to open the world to creativity and, over time, to democracy: Clinton could make good on the economic liberties and the gospel of prosperity that Ronald Reagan had put before his Berlin audience in 1987.

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As he had been advised at Camp David right after September 11, removal of the autocrat Saddam Hussein was the necessary next step. The residents of the Middle East would find their way to democracy and economic freedom, and Bush’s freedom agenda was wider even than the Middle East. Obama substituted the liberal international order for the Washington consensus and for wars of choice. Law, institutions, education, charismatic leadership and order were his long game, the lifting of people from poverty and the multilateral cultivation of political dignity and shared decision making. Liberty and self-government were living ideals for these three presidents.

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Without doing too much to antagonize Washington, China pursued a foreign policy and an order of its own. Beijing had no reason to concede to the West when it could harness the liberal international order for the sake of aggrandizing China. In Beijing’s assessment, the liberal international order would be eclipsed at some point by an order of Chinese design. Other setbacks for the Washington consensus and the liberal international order were more local. The shifts registered in Europe first. Southern Europe’s economic stagnation sparked anger at alleged German domination of the European Union. In Central Europe, nationalism led some political leaders to defy Brussels and to thumb their noses at the liberal international order.

The Left Case Against the EU by Costas Lapavitsas

anti-work, antiwork, banking crisis, Bretton Woods, capital controls, central bank independence, collective bargaining, declining real wages, eurozone crisis, financial engineering, Francis Fukuyama: the end of history, global reserve currency, hiring and firing, low interest rates, machine translation, neoliberal agenda, offshore financial centre, post-work, price stability, quantitative easing, reserve currency, Ronald Reagan, Washington Consensus, Wolfgang Streeck

Broadly speaking, EU policies were of a piece with the neoliberal approach to developing country crises adopted by the IMF since the early 1980s, which gradually came to constitute the ‘Washington Consensus’ in economic policy. This is a neoliberal totem that has become characteristic of financialized capitalism and broadly advocates financial and labour market deregulation, fiscal austerity, and privatization. Over the years the ‘Washington Consensus’ has given rise to an extensive critical literature owing to its theoretical weaknesses and policy blunders.6 Far from curing the problems of stricken economies, austerity frequently has had a net destructive effect on output, employment, and productive capacity.

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‘The Political Economy of the European Economic and Monetary Union: Political Sources of an Economic Liability’, National Bureau of Economic Research Working Paper Series No. 6150, available at: http://www.nber.org/papers/w6150.pdf Fine B., C. Lapavitsas, and J. Pincus (eds) 2001. Development Policy in the Twenty-first Century: Beyond the Post-Washington Consensus, London: Routledge. Flassbeck, H. and C. Lapavitsas 2013. ‘The Systemic Crisis of the Euro: True Causes and Effective Therapies’, Rosa Luxemburg Stiftung Studien, available at: http://www.rosalux.de/fileadmin/rls_uploads/pdfs/Studien/Studien_The_systemic_crisis_web.pdf Flassbeck, H. and C.

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Index A Africa, migration from 6 asylum seekers see migrant crisis austerity destructive effect of 72 drives recession 80–2 effect of crisis 129 EMU regime of 10 German wages and 47 imposed during crisis 71, 72–3, 91 institutions for 77 left policies and 112 lifting 133 social problems from 129 Austria core of EU 8–9 Germany and 44, 63 authoritarianism Brexit and 139 migrant crisis and 120 right-wing support for 6 rise of 1, 11, 82 see also right politics B Bank of England 24 Banking Union 78 banks and financial institutions bailing-in 79 credit risk of states 75–6 debts shifted to public 73 Eurosystem 33–4 fiscal discipline and 38 Greek expansion of 89 Greek PSI and 95 Hayek on federalism and 15 interest rates 57–8 liquidity 73–5, 78, 91–2 national banks of states 33 neoliberal capitalism and 24 private lenders to periphery 69 quantitative easing 74, 80–1 reversing financialization 135 single currency and 22–3 stress tests 78 ‘sudden stops’ 68, 84 Belgium 26 Big Data 135 Bretton Woods Agreement collapse of 23–4, 27 fixed exchange rates 25–6 Britain financialization and 41 households/individuals 43 insights from Brexit 137–40 migrant crisis and 119 military hegemony 21 withdraws from EMS 30 Bundesbank model for ECB 31 no public debt purchases 74–5 stability of EMS 29 business EU neoliberal agenda 70 multinational corporations 38 self-employed in crisis 73 small and medium in crisis 73 see also industry C capitalism financialization 40–4, 41–4 see also neoliberalism Central/Eastern Europe collapse of communist bloc 2, 44 discredited socialism 8 EU expansion and 2 German FDI in 62–4 German industry and 64, 73 industry in 61–2 movement of workers 6 periphery in EU 9, 59–66 China 134, 136 class relations austerity and the Left 112 in Germany 46 Greek historical bloc 100–4 Marx and Engels on 127–8 neoliberalism against workers 10 perception of powerlessness 4–5 states and 20, 21 workers in EU 127–30 communism discredited 8 Greece’s KKE 106–7 not haunting Europe 127 Communist Manifesto, The (Marx and Engels) 127–8 competitiveness Germany’s edge 49–54, 59–9, 81 Greek loss of 85, 96, 97 monetary union and 50–2 in Southern periphery 70–1 conditionality for Greece 91–2 IMF and EU clash 99–100 labour and unions 91 neoliberal policies and 68–9, 76 Conservative Party, Britain 138–9 consumption German households 49 Greece in Eurozone 87 Czech Republic not in Eurozone 62 opening of economy 44 in periphery 9, 59 D debt austerity and 81 bad 80 bond-based in Greece 90 commercial credit 94 domestic credit 89 effects of bail-outs 96–7 Eurozone crisis 50 German lending 58–9 global crisis and 67 Greece restructures 92–3 interest rates 57 interstate lending 76 mutualization and bonds 75–6 no forgiveness 75–6 protecting EU banks 74–5 public and private 55–6, 56–7, 69, 72, 84, 88–90 rise of in Spain 69 Southern periphery 55–8 Delors, Jacques ideological expansion 2 social democracy in EU 7, 8 Delors Report (1989) 30 democracy Democracy in Europe Movement 121–2 EU deficit of 4–5, 113–18, 126–7 EU ideals of 1, 3 in Eurozone crisis 71, 117–18 Greek historical bloc 101–4 judiciary and 116–17 post-Brexit 140 powerless poor 5 against ruling elites 130 Democracy in Europe Movement (DiEM25) 121–2 Denmark, migrant crisis and 118 E Eastern Europe see Central/Eastern Europe economics ‘depoliticization’ of 3–4 ‘time-inconsistency’ 30–1 see also Eurozone crisis; global economic crisis; neoliberalism Emergency Liquidity Assistance 78 End of History and the Last Man, The (Fukuyama) 2 Engels, Friedrich The Communist Manifesto (with Marx) 127–8 environmental legislation 18 euro/single currency competitiveness of nations 50–2 creation of 18 dismantling 131–3 divisions in Left and 8 dollar exchange rate 86 Exchange Rate Mechanism 28 financialization of economies 37–8 flawed architecture of 33–6 formation of EMS 28 GDP and 54 German edge 49–54, 58–9, 59–66 German monetary hegemony 36–9 Germany as anchor/model 28–30, 98 Greece joins 97–8 Greek determination to remain 101–2 international competition 2–3 long-term interest rates 57–8 Maastricht and 14 Macron and 123 national peculiarities 22 neo-functionalists 32 neoliberal mechanisms of 10–12 neoliberal monetary policies 22–5 regime hardened 81–2 rising debt 55–8 Southern periphery 54–9 SSM and 78–9 Stability and Growth Pact 34, 49 stabilizing exchange rates 26–9 SYRIZA negotiations and 110–12 transnational mechanism of 25 see also Eurozone crisis Eurogroup 72, 132 Working Group 72, 118, 132 European Central Bank (ECB) 31 dismantling the EMU and 132 Eurobonds 75–6 Eurosystem and 33–4 Hayek’s ideas and 25 liquidity 73–5, 78, 91–2, 102 response to SYRIZA 110–12 slow effect of quantitative easing 80–1 see also Troika European Commission creation of 14 democratic deficit 113–14 increased fiscal powers 78 member state power 19 peripheral countries and 50 strength of 2 see also Troika European Court of Justice (ECJ) Brexit and 139 democratic deficit of 116–17 member state power 19 neoliberal ideology 122 rejecting 137 transnational presence 3 European Economic Community (EEC) see European Union (EU) European Financial Stability Facility (EFSF) 76 European Monetary System (EMS) 28–30, 31–2 European Monetary Union (EMU) see euro/single currency European Parliament 3 creation of 14 democratic deficit 114–16 member state power 19 European Semester 77 European Stability Mechanism (ESM) 34, 76, 94, 132 European Union (EU) attitude toward Greece 85 bail-outs for Greece 90–8 Brexit and 137–40 Central European expansion 2 clashes with IMF 99–100 class relations within 127–30 Delors and social democracy 7, 8 democratic deficit 113–18 failure in migrant crisis 118–20 Four Freedoms 13, 117, 139–40 hardens regime in crisis 99 Hayek and federalism 14–18 ideological expansion 2 impossibility of radical reform 121–6 instability of 1 integration push 14, 19 legislation 18 Macron and 123–6 neo-functionalists and intergovernmentalists 19–20 neoliberal agenda of 9–12, 70–9, 126–7 not federated 19, 35 perceived as progressive 129–30 peripheries 9, 21 power hierarchies 20 punitive interest rates 84 Social Chapter 7–8 state sovereignty and 79 see also euro/single currency; European Central Bank (ECB); European Commission; Eurozone crisis; Maastricht Treaty European Union Council decisions and democracy of 122 democratic deficit 113 Eurosystem 33–4 bonds and 75 Eurozone crisis attitudes in crisis 84 causes in Greece 83–6 competitiveness gap 81 democratic deficit of 117–18 effect of 129 Eurosystem 34 favours capital 5 Fiscal Compact 34–5 German hegemony 44 German industry and 59–60 Greek bail-outs 93–4 imposed austerity 76–8 policies drive recession 80–2 preventing euro collapse 70 priority of protecting lenders 98–9 public debt 50 sovereignty and 20–1 ‘sudden stops’ 67–70 treaty obligations 34 Excessive Deficit Procedure 77 Exchange Rate Mechanism 28, 30 exchange rates 25–9, 48 Bretton Woods system 25–6 dismantling EMU and 132 in Greek crisis 86, 92 ‘sudden stops’ and 69 F federalism Hayek and 14–18 single currency and 26–7 financial institutions see banks and financial institutions Fiscal Compact 77 foreign direct investment (FDI) 62, 63 Four Freedoms 13, 117, 139–40 France banks protected 73–4 core of EU 8–9 current account pressure 81 FDI in 64–5 financialization and 41 German edge over 60, 61 German neo-mercantilism 55 Germany as ‘anchor’ 29 households/individuals 43 idea of single currency 26 industry in 40 Macron and 122–6 migrant crisis and 119 military hegemony 21 nominal unit labour 51–2 private debt 55 productivity 53 public debt 56–7 push toward euro 31–2 Fukuyama, Francis The End of History 2 G Germany austerity and wages 47 bank-based system 42 banks protected 73–4 benefits in crisis 118 Central European periphery 59–66 competitive edge 49–54, 58–9, 81 crisis solidifies advantage 81–2 defeat of labour 44, 45–9 domestic economy 133 Europe as Deutschmark area 27–8 Eurozone hegemony 21, 31–3, 59–66 exchange rate 48 financialized economy of 40–4 Greek inflation and 86 Hartz Reforms 46–7 hegemony of 8–9, 25, 36–9 households/individuals 42–3 idea of single currency 26 imposes will in crisis 73 individuals/households 49 industrial interests 11 industry 64 infrastructure investment 49 labour and wages 41–2, 43–4, 53, 54 leadership in economic crisis 9 as lender 58–9 Macron’s France and 122–4 migrant crisis and 118–19 monetary ‘anchor’/model 28–30, 98 neo-mercantilism 55 nominal unit labour 51–2 opposes mutualization 75–6 ordoliberalism 45–6 outward FDI 62–4 private debt 55 productivity 53 public debt 56–7 reunification of 2, 32, 43 social democracy evaporates 48 global economic crisis banking collapse and 67 hegemony and hierarchy 3 globalization, effects of 134, 136–7 Greece admission to EU 1–2 agriculture 86–7, 97 banks and bail-outs 97 bond swaps 95 causes of crisis 83–6 civil service and 97 contraction of demand 94 current account deficit 84 default and exit prospect 103, 106, 107 determination to stay in 101–2 domestic credit 89 economy in EU 86–90 effect of Eurozone on 93 EU bail-outs 90–8 failure of SYRIZA 11 financialization and 38 first-bail out 93–4 historical bloc 100–4 industry 86–7, 97 joins Eurozone 97–8 laws on state debt 90, 95 long-term effects of bail-outs 96–8 loss of competitiveness 85 loss of sovereignty 97–8 no debt relief 75–6 no interstate lending 76 nominal unit labour 51–2 private debt 55 productivity 52, 53 prospect of default and exit 99 public debt 56–7, 84 refugee crisis 119–20 restructures debt 92–3 rising debt 69, 81, 87–90 second bail-out 94–5 services 86–7 Southern periphery 9, 54–9 strong growth 88 ‘sudden stop’ 69, 84 SYRIZA surrenders 109–12 SYRIZA’s rise to power 104–5 third bail-out 95–6, 111–12 treaty obligations and 34 Troika’s imposition 71–2 unable to devalue euro 92 unemployment in 80 welfare provision 90 H Hayek, Friedrich 141 federalism 22–3 interstate federalism 14–18 money and state 24–5 Hungary in Central European periphery 9 migrant crisis and 119 not in Eurozone 62 opening of economy 44 in periphery 59–66 I industry Central/Eastern European periphery 61–2 in Eurozone crisis 59–60 German 11, 40, 50, 64 Greek 86–7, 97 Hayek and federalism 16 inequality effect of crisis policies 73 financialization and 43 in Germany 46 left egalitarianism and 129 rising level of 5 tackling 133–4 inflation Eurosystem obligations 33–4 Greece and Germany 86 nominal remuneration 51 infrastructure, public investment 135–6 International Monetary Fund (IMF) clashes with EU on conditionality 99–100 protection of lenders 99 ‘sudden stops’ and 68 Washington Consensus 72 see also Troika investment declines in crisis 80 public 135–6 see also foreign direct investment Ireland credit bubble 89 debt shifted 72 investment in 88 no interstate lending 76 ‘sudden stop’ 69 treaty obligations and 34 Islam, migration crisis and 6 Italy core of EU 8–9 debt 55, 56–7 FDI in 64–5 German edge over 29, 55, 60, 61 industry in 40 nominal unit labour 51–2 productivity 53 K Keynesian economics 45 Mitterrand and 7 SYRIZA and 136 KKE (Communist Party, Greece) 106–7 L labour capital against 5 domestic demand and 133 effect of crisis 73 EU legislation 18 fiscal discipline imposed on 38 in France 125–6 in Germany 21, 41–2, 43–4, 45–9 Greek conditionality and 91 loss of democracy and 118 neoliberalism and 24 new technologies and 134–5 nominal unit 51–2 not an EU priority 70 opposition to capital 22 unemployment 46–7, 80, 96 wages 43, 53, 71, 77 see also class relations; trade unions Labour Party, Britain 139, 140 opposition to joining EEC 7 law, international 4 left politics austerity policies and 110–12 Brexit and Labour 140–1 class relations in EU 127–30 conflicts within Greece 106–8 confronting neoliberalism 131–7 discredited communism 8 dismantling EMU 131–3 EU hostility to SYRIZA 111–12 EU seen as progressive 129 industrial policies 135–6 infrastructure 135–6 insights from Brexit 137–40 lifting austerity 133 opposition to joining EEC 7 public investment 135–6 tackling inequality 133–4 world trade 136–7 Lisbon Treaty, Article 125 34 Luxembourg 63 M Maastricht Treaty class relations and 128 creation of EMU 8 crisis hardens policies of 70 federalism and 14 fiscal criteria 34 Four Freedoms 13 historical context of 14 ideological expansion 2 movement of workers 6 national policies and 116 neoliberal ascendancy 21 ‘no bail-out clause’ 34 principle of subsidiarity 18–19 Macroeconomic Imbalances Procedure 77 Macron, Emmanuel programme of 123–6 rise of 122–3 markets, money and 24–5 Marx, Karl The Communist Manifesto (with Engels) 127–8 ‘world money’ 37 media coverage of crisis 102–3 migrant crisis 5–6 Dublin regulations 118–19 moral and political failure 118–20 migration within EU 6 freedom of 13 Mitterrand, François, failure of 7 monetary policies ‘anchor’ country 28–30 Bretton Woods collapse 23–4, 27 fiscal discipline 31 French push to euro 31–2 Quantity Theory of Money 30–1 ‘Snake in the Tunnel’ 27 Sound Money 30–1, 32 in a treaty-based alliance 35 US and 35 see also euro/single currency; exchange rates N Negri, Toni 8 neo-functionalists EMU and 32 supranational bodies 19–20 neoliberalism antipathy to public sector 8 capital against labour 5 conditionality and 68–9, 76 confronting 131–7 defeats SYRIZA 111–12 democracy and EU law 116–17 effect on Greece 85 German hegemony and 9–12 German ordoliberalism 45–6 imposed in Eurozone crisis 70–9 influence in EU 98 after Maastricht 14 toward monetary union 22–5 power in EU relations 72 state institutions and 24 Thatcher/Reagan and 2 Netherlands core of EU 8–9 Germany and 44, 63 idea of single currency 26 O Outright Monetary Transactions 74 P Poland in Central European periphery 9 not in Eurozone 62 opening of economy 44 in periphery 59 Portugal admission to EU 2 economic growth of 88 financialization and 38 in Southern periphery 9 ‘sudden stop’ 69 treaty obligations and 34 poverty not an EU priority 70 unemployment and 80 see also inequality power relations credit money 23 democracy as dangerous 130 EU neoliberalism and 72 among EU states 20 Greek bail-outs and 97–8 hostility from neoliberals 136–7 world money 37 private sector involvement (PSI) 95 privatization, imposition of 71, 77 productivity comparisons 51–2 Greece 87 technological change and 134–5 proportionality principle 18–19 public sector debt shifted to 72 Eurozone crisis and 71 neoliberal antipathy toward 8 PSI and 95 R racism, Brexit and 139 Reagan, Ronald 2 refugees crisis of 5–6 migrant crisis 118–20 regulations Eurozone crisis and 71 imposed deregulation 72 right politics openings for authoritarianism 10 rejecting democracy 6 rights, individual 3 Riksbank, Sweden 24 Rome, Treaty of (1957) 13 Russia EEC and USSR 13–14 S Schröder, Gerhard, labour and 45–6 Securities Market Programme 74 service sector EU freedom of 13 Greece 86–7 Single European Act (1986), ideological expansion 2 Single Supervisory Mechanism (SSM), deals with failing banks 78–9 Six Pack 77 Slovakia opening of economy 44 in periphery 9, 59–66 Slovenia opening of economy 44 in periphery 9, 59–66 Smithsonian Agreement (1971) 27 social democrats decline of 9 EU seen as progressive 129–30 evaporates in Germany 48 social policies ‘depoliticization’ of 3–4 EU ideals of 3 EU legislation 18 IMF costs to 91 socialism, collapse of 8 Southern periphery, grouping of 9 see also France; Greece; Portugal; Spain sovereignty Brexit and 139–40 Greek loss of 97–8, 102 harmonization of EU law 116–17 plebeian class view of 130 states in EU 126–7 in treaty-based alliance 79 working-class perceptions 4–5 see also power relations; states Spain admission to EU 1–2 credit bubble 89 debt 56–7, 69, 72, 81 economic growth of 88 investment in 88 nominal unit labour 51–2 private debt 55 productivity 53 in Southern periphery 9, 54–9 unemployment in 80 Stability and Growth Pact hardening of 77 monitors fiscal structures 18 states class relations within 20, 21 competitiveness with EMU 50–2 credit risks of 75–6 euro fiscal discipline 31 monopoly over money 23 responsibility to others 79 sovereignty of 19, 35–6 supranational bodies 19–20 subsidiarity, principle of 18–19 Sweden, migrant crisis and 118 Syria, migration from 6 SYRIZA divisions within 106–8 failure of 11 Keynesianism 136 learning from failure 121, 131 rise to government 104–5 signs third bail-out 102 surrender of 105 T TARGET2 91 taxation avoidance practices 101 Eurozone crisis and 71 Greece increase in 93 Hayek on federalism and 15 immunity in Greece 90 on wealth 134 technology, economic changes and 134–5 Thatcher, Margaret, anti-labour neoliberalism 2 trade Brexit and 139–40 freedom of movement 13 globalization and 134 among member states 132 Hayek on tariffs 15–16 world economy 136–7 trade unions Greek conditionality and 91 weak in Germany 41 see also labour Troika 71 effect on Greece 91–2, 102 imposes neoliberalism 71–9 protection of lenders 98–9 Varoufakis’s negotiations 108–9 Tsipras, Alexis expectations of 105 initial strategy of 107 surrender of 109–12 Turkey, migrant crisis and 119, 120 Two Pack 77 U USA the dollar as world money 37 with EEC against USSR 13–14 financialization and 41 German FDI 63 monetary system 35 USSR 13–14 V Varoufakis, Yanis ‘democratizing’ EU 121 negotiating approach 108–9 sidelined 110 W Werner (Pierre) Report (1970) 26 POLITY END USER LICENSE AGREEMENT Go to www.politybooks.com/eula to access Polity’s ebook EULA.

Global Governance and Financial Crises by Meghnad Desai, Yahia Said

Asian financial crisis, bank run, banking crisis, Bretton Woods, business cycle, capital controls, central bank independence, corporate governance, creative destruction, credit crunch, crony capitalism, currency peg, deglobalization, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, financial repression, floating exchange rates, frictionless, frictionless market, German hyperinflation, information asymmetry, Japanese asset price bubble, knowledge economy, liberal capitalism, liberal world order, Long Term Capital Management, low interest rates, market bubble, Meghnad Desai, Mexican peso crisis / tequila crisis, moral hazard, Nick Leeson, Nixon triggered the end of the Bretton Woods system, oil shock, open economy, Post-Keynesian economics, price mechanism, price stability, Real Time Gross Settlement, rent-seeking, short selling, special drawing rights, structural adjustment programs, Tobin tax, transaction costs, Washington Consensus

Meanwhile, it originated its practice of lending into the arrears to countries unable to meet their schedule of debt service with the banks. The IMF: past and future 49 The doctrine of structural adjustment got a strong impetus from the collapse of East European Socialism. It entered the 1990s under the label of “the Washington Consensus.” It fostered the IMF in its role of financial agency for development, which got reconciled with mainstream economics now dedicated to supply side. Financial liberalization reached Latin America, Eastern Europe and Asia at an astounding speed. The rest of the story is well known. The disruptions provoked by financial liberalization in countries with weak financial structures and in international markets rigged with self-fulfilling speculation, triggered crises of a magnitude not seen since the Great Depression.

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The late financial crises had entailed so huge amount of credits and had shifted the priorities once more in such a way that an overhauling of the Fund’s mandate and a restructuring of its financial capacities are at stake. International LOLR Financial liberalization has not worked the way hoped for by the Washington Consensus. The private sector has indeed entered the financial game on both the debtor and the creditor sides. For emerging markets at least, the IMF no longer has to substitute failing capital markets in bringing resources to developing countries. But the late financial crises have amply shown that capital markets could fail otherwise.

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What an effective regionalism may supply, however, is some defence against financial turbulence. Financial crises have become significant once more because of the enormous financial flows which deregulation, floating currencies, and the abolition of exchange controls since the 1970s have unleashed. The new economic orthodoxy, dubbed in the 1980s as the Washington Consensus, has legitimated deregulation and in so doing has undermined national economic policies. Deregulation is now criticised, however, for threatening economic and political stability. The scale of the financial turbulence which has been observed in many countries in recent years, from the countries of Southeast Asia, Russia, Brazil, Argentina and the United States, has raised fears that a global financial crisis might be in the making, which would plunge the world into a major depression.

Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else by Chrystia Freeland

"World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Alan Greenspan, Albert Einstein, algorithmic trading, assortative mating, banking crisis, barriers to entry, Basel III, battle of ideas, Bear Stearns, behavioural economics, Bernie Madoff, Big bang: deregulation of the City of London, Black Monday: stock market crash in 1987, Black Swan, Boris Johnson, Branko Milanovic, Bretton Woods, BRICs, Bullingdon Club, business climate, call centre, carried interest, Cass Sunstein, Clayton Christensen, collapse of Lehman Brothers, commoditize, conceptual framework, corporate governance, creative destruction, credit crunch, Credit Default Swap, crony capitalism, Deng Xiaoping, disruptive innovation, don't be evil, double helix, energy security, estate planning, experimental subject, financial deregulation, financial engineering, financial innovation, Flash crash, Ford Model T, Frank Gehry, Gini coefficient, Glass-Steagall Act, global village, Goldman Sachs: Vampire Squid, Gordon Gekko, Guggenheim Bilbao, haute couture, high net worth, income inequality, invention of the steam engine, job automation, John Markoff, joint-stock company, Joseph Schumpeter, knowledge economy, knowledge worker, liberation theology, light touch regulation, linear programming, London Whale, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, Max Levchin, Mikhail Gorbachev, Moneyball by Michael Lewis explains big data, NetJets, new economy, Occupy movement, open economy, Peter Thiel, place-making, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, postindustrial economy, Potemkin village, profit motive, public intellectual, purchasing power parity, race to the bottom, rent-seeking, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, self-driving car, seminal paper, Sheryl Sandberg, short selling, Silicon Valley, Silicon Valley billionaire, Silicon Valley startup, Simon Kuznets, sovereign wealth fund, starchitect, stem cell, Steve Jobs, TED Talk, the long tail, the new new thing, The Spirit Level, The Wealth of Nations by Adam Smith, Tony Hsieh, too big to fail, trade route, trickle-down economics, Tyler Cowen: Great Stagnation, wage slave, Washington Consensus, winner-take-all economy, zero-sum game

The collapse of communism in the Soviet bloc and the adoption of market economics in communist China ended that ideology’s seventy-year-long intellectual and political challenge to capitalism, leaving the market economy as the only system anyone has come up with that works. That red threat was one reason the plutocrats accepted the Treaty of Detroit, and its even more generous European equivalents. The red surrender emboldened the advocates of the Washington Consensus and helped them to create the international institutions needed to underpin a globalized economy. These three transformations—the technology revolution, globalization, and the rise of the Washington Consensus—have coincided with an age of strong global economic growth, and also with the reemergence of the plutocrats, this time on a global scale. Among students of income inequality, there is a fierce debate about which of the three is the most important driver of the rise of the 1 percent.

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Our access to information and technological assistance in going through the mountains of chaff to get to the wheat—no society has ever had that. That is huge.” — This double-barreled economic shift has coincided with an equally consequential social and political one. MIT researchers Frank Levy and Peter Temin describe the transformation as a move from “The Treaty of Detroit” to the “Washington Consensus.” The Treaty of Detroit was the five-year contract agreed to in 1950 by the United Auto Workers and the big three manufacturers. That deal protected the carmakers from annual strikes; in exchange, it gave the workers generous health care coverage and pensions. Levy and Temin use “The Treaty of Detroit” as a shorthand to describe the broader set of political, social, and economic institutions that were established in the United States during the postwar era: strong unions, high taxes, and a high minimum wage.

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This was the decade of Ronald Reagan and Margaret Thatcher. They both sharply cut taxes at the top—Reagan slashed the highest marginal tax rate from 70 percent to 28 percent and reduced the maximum capital gains tax to 20 percent—reined in trade unions, cut social welfare spending, and deregulated the economy. This Washington Consensus was exported abroad, too. Its greatest impact, and its greatest validation, was in communist regimes. The collapse of communism in the Soviet bloc and the adoption of market economics in communist China ended that ideology’s seventy-year-long intellectual and political challenge to capitalism, leaving the market economy as the only system anyone has come up with that works.

How Asia Works by Joe Studwell

affirmative action, anti-communist, Asian financial crisis, bank run, banking crisis, barriers to entry, borderless world, Bretton Woods, British Empire, call centre, capital controls, central bank independence, collective bargaining, crony capitalism, cross-subsidies, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, demographic dividend, Deng Xiaoping, failed state, financial deregulation, financial repression, foreign exchange controls, Gini coefficient, glass ceiling, Great Leap Forward, high-speed rail, income inequality, income per capita, industrial robot, Joseph Schumpeter, Kenneth Arrow, land reform, land tenure, large denomination, liberal capitalism, low interest rates, market fragmentation, megaproject, non-tariff barriers, offshore financial centre, oil shock, open economy, passive investing, purchasing power parity, rent control, rent-seeking, Right to Buy, Ronald Coase, South China Sea, The Wealth of Nations by Adam Smith, TSMC, urban sprawl, Washington Consensus, working-age population

(China was omitted from the report.) 2 This was the ideologically charged era of the so-called Washington Consensus, when the World Bank, the International Monetary Fund and the US Treasury were united in their determination that the free market policies coming into vogue in the US and Britain were appropriate to all economies, no matter what their level of development.3 The vitriol of the debate was such that academic rigour was frequently a victim, as with the World Bank reports. Indeed, even the academic specialists on Japan, Korea and Taiwan who opposed the Washington Consensus position on economic development made suspect claims in order to bolster their case.

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Worse still, as the failings of half-hearted, poorly planned agricultural and manufacturing strategies became apparent from the 1980s, governments were tempted by the siren calls of the incipient Washington Consensus – the free market agenda for economic development that was being pressed on developing countries with increased vigour by the IMF, the World Bank and the US government. The loudest and most evangelical message of these agencies was that deregulating the financial sector could put the development efforts of lagging countries back on track. States were encouraged to privatise existing banks and license new banks, to take a laissez-faire attitude to international flows of capital and to expand stock markets. The argument of the Washington Consensus was that liberated capital would then itself identify the right investments to spur economic progress.

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There is no sense in a state getting ahead of this trend. The deregulation process is difficult enough to handle even once a state has developed its bureaucratic capacity. Japan, Korea and Taiwan each experienced financial crises when liberalising. But what was more important was that these states resisted pressure from the Washington Consensus and held off liberalisation until very substantial developmental progress had occurred. The key conduits for maintaining financial control in a developing economy have always been capital controls and banking systems – the latter because they are easier for states with limited bureaucratic capacity to manage than stock or bond markets.

America at the Crossroads: Democracy, Power, and the Neoconservative Legacy by Francis Fukuyama

affirmative action, Ayatollah Khomeini, Berlin Wall, Bretton Woods, cuban missile crisis, David Brooks, European colonialism, failed state, Francis Fukuyama: the end of history, information security, Internet Archive, John Perry Barlow, Mikhail Gorbachev, Monroe Doctrine, mutually assured destruction, New Journalism, no-fly zone, oil-for-food scandal, race to the bottom, RAND corporation, rent-seeking, road to serfdom, Ronald Reagan, Ronald Reagan: Tear down this wall, transaction costs, uranium enrichment, War on Poverty, Washington Consensus

The Internet was developed by the Defense Advanced Research Projects Agency as a means of communicating after a nuclear attack. 14. Historically, the Washington Consensus developed in response to the Latin American debt crisis of the 1980s, where heavy foreign borrowing and lack of fiscal discipline led to a pathological cycle of currency crisis, devaluation, expansionary monetary policy to cover fiscal deficits, hyperinflation, and then renewed exchange rate crisis. The economic policy measures outlined in the Washington Consensus were necessary to break this cycle, and through a painful series of adjustments countries like Mexico, Brazil, and Argentina managed, by the early 1990s, to stabilize their macroeconomic balances. 15.

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Much of the drive to Americanize the global economy came out of the private sector and the challenge posed by newly competitive U.S. companies and financial institutions. But American government policy was highly supportive of economic liberalization as well, in ways that generated a backlash that often went unperceived in Washington. The Washington Consensus was a package of orthodox economic liberalization measures that were often attached as conditions to structural adjustment lending packages by international financial institutions like the International Monetary Fund (IMF) and the World Bank for developing countries. 14 Had this type of U.S.

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Agency for International Development (USAID), 117, 134, 139, 149, 150, 151, 152-53, 2i2n39 Vernet, Daniel, 14 Vietnam War, 18, 121 Villepin, Dominique de, 100 Voice of America, 136, 150 Wall Street Journal, 34 warfare. See military, U.S.; nuclear proliferation; targeting precision Warsaw Pact, 29, 51 Washington Consensus, 109, 205ni4 weapons of mass destruction (WMDs): intelligence failures regarding, 5-6, 87, 90-91; as threat to United States, 46, 66, 79-81, 82, 203ni9 Weber, Max, 125 Weekly Standard, 40, 117 welfare state, 28, 38, 107 Wilson, James Q., 18-19, 115,206m Wilson, Woodrow, 49 Wilsonianism.

The Journey of Humanity: The Origins of Wealth and Inequality by Oded Galor

agricultural Revolution, Alfred Russel Wallace, Andrei Shleifer, Apollo 11, Berlin Wall, bioinformatics, colonial rule, Columbian Exchange, conceptual framework, COVID-19, creative destruction, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, deindustrialization, demographic dividend, demographic transition, Donald Trump, double entry bookkeeping, Easter island, European colonialism, Fall of the Berlin Wall, Francisco Pizarro, general purpose technology, germ theory of disease, income per capita, intermodal, invention of agriculture, invention of movable type, invention of the printing press, invention of the telegraph, James Hargreaves, James Watt: steam engine, Joseph-Marie Jacquard, Kenneth Arrow, longitudinal study, loss aversion, Louis Pasteur, means of production, out of africa, phenotype, rent-seeking, rising living standards, Robert Solow, Scramble for Africa, The Death and Life of Great American Cities, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Malthus, Walter Mischel, Washington Consensus, wikimedia commons, women in the workforce, working-age population, World Values Survey

An effective strategy would grapple instead with these primary factors as they are the ones that have invariably hindered the growth process and they often differ radically from one country to another. One conspicuous example of this misguided approach is the Washington Consensus – a set of policy recommendations for developing countries focused on trade liberalisation, the privatisation of government-owned enterprises, greater protections for property rights, deregulation, broadening the tax base and reducing marginal tax rates. Despite intense efforts by the World Bank and the International Monetary Fund to implement Washington Consensus–inspired reforms in the 1990s, they have had limited success in producing the desired results.[2] Privatisation of industry, trade liberalisation and secure property rights might be growth-conducive policies for countries that have already developed the social and cultural prerequisites for economic growth, but in environments where these foundations are absent, where social cohesion is tenuous and corruption well entrenched, such universal reforms have often been fruitless.

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., ‘Apidima Cave fossils provide earliest evidence of Homo sapiens in Eurasia’, Nature 571, no. 7766 (2019): 500–4. Hassan, Fekri A., ‘Demographic archaeology’, in Advances in Archaeological Method and Theory, Academic Press, 1981, pp. 225–79. Hausmann, Ricardo, Dani Rodrik and Andrés Velasco, ‘Growth Diagnostics’, The Washington Consensus Reconsidered: Towards a New Global Governance (2008): 324–55. Hausmann, Ricardo, Lant Pritchett and Dani Rodrik, ‘Growth Accelerations’, Journal of Economic Growth 10, no. 4 (2005): 303–29. Hazan, Moshe, and Binyamin Berdugo, ‘Child Labour, fertility, and Economic Growth’, The Economic Journal 112, no. 482 (2002): 810–28.

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Ridley, Matt, ‘The Rational Optimist: How Prosperity Evolves’, Brock Education: A Journal of Educational Research and Practice 21, no. 2 (2012). Roberts, Seán, and James Winters, ‘Social Structure and Language Structure: The New Nomothetic Approach’, Psychology of Language and Communication 16, no. 2 (2012): 89–112. Rodrik, Dani, ‘Goodbye Washington Consensus, Hello Washington Confusion? A Review of the World Bank’s Economic Growth in the 1990s: Learning from a Decade of Reform’, Journal of Economic Literature 44, no. 4 (2006): 973–87. Roebroeks, Wil, and Paola Villa, ‘On the earliest evidence for habitual use of fire in Europe’, Proceedings of the National Academy of Sciences 108, no. 13 (2011): 5209–14.

Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa by Dambisa Moyo

affirmative action, Asian financial crisis, belling the cat, Bob Geldof, Bretton Woods, business cycle, buy and hold, colonial rule, correlation does not imply causation, credit crunch, diversification, diversified portfolio, en.wikipedia.org, European colonialism, failed state, financial engineering, financial innovation, financial intermediation, Hernando de Soto, income inequality, information asymmetry, invisible hand, Live Aid, low interest rates, M-Pesa, market fundamentalism, Mexican peso crisis / tequila crisis, microcredit, moral hazard, Multics, Ponzi scheme, rent-seeking, risk free rate, Ronald Reagan, seminal paper, sovereign wealth fund, The Chicago School, trade liberalization, transaction costs, trickle-down economics, Washington Consensus, Yom Kippur War

During the 1980s bilateral flows also became more concessional in nature and by the early 1990s over 90 per cent were grants. Alongside rising government-to-government transfers (bilateral aid), multilateral institutions continued their aggressive march towards gaining greater importance – both in terms of the volume of aid disbursed and as architects of development policy. By 1989, the Washington Consensus (a standard reform package of economic policy prescriptions, mainly on monetary and fiscal policy for the countries most affected by economic crisis) became the backbone of the development strategy pursued by the Washington DC-based institutions (the IMF, World Bank, and US Treasury Department).

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There is more (much more) that needs to be done to undo the ills that have gone before, to rectify what has been an unmitigated disaster, and to get Africa onto a solid economic footing. While international donors and organizations must be commended for shifting the development ideology from the bad economic policies of the 1970s (mainly statist) to the good market policies on the books today (introduced on the back of the Washington Consensus), we need to remind them that without the elimination of aid effective implementation of the new, better, development regime will remain shoddy, ineffectual and even disastrous. Africa’s development impasse demands a new level of consciousness, a greater degree of innovation, and a generous dose of honesty about what works and what does not as far as development is concerned.

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Ucer, ‘Sub-Saharan Africa: Growth, Savings and Investment, 1986– 93’, IMF Occasional Paper No. 118, 2005 Hartung, William D. and Frida Berrigan, ‘U.S. Arms Transfers and Security Assistance to Israel: An Arms Trade Resource Center Fact Sheet’, 6 May 2002, at http://www.worldpolicy.org/projects/arms/reports/israel050602.html Harvard University, Washington Consensus, at http://www.cid.harvard.edu/cidtrade/issues/washington.html Hjertholm, Peter and Howard White, ‘Foreign Aid in Historical Perspective: Background and Trends’, in Tarp (ed.), Foreign Aid and Development Huntington, Samuel, Political Order in Changing Societies, New Haven: Yale University Press, 1968 Ibisin, David and Jake Lloyd Smith, ‘Tsunami disaster: UN “failing to co-ordinate relief efforts”’, Financial Times, 7 January 2005 IFAD Remittance Forum, ‘Sending Money Home: Worldwide Remittance Flows to Developing Countries’, at http://www.ifad.org/events/remittances/maps/ ING Microfinance Support, ‘A Billion to Gain?

What Would the Great Economists Do?: How Twelve Brilliant Minds Would Solve Today's Biggest Problems by Linda Yueh

3D printing, additive manufacturing, Asian financial crisis, augmented reality, bank run, banking crisis, basic income, Bear Stearns, Ben Bernanke: helicopter money, Berlin Wall, Bernie Sanders, Big bang: deregulation of the City of London, bike sharing, bitcoin, Branko Milanovic, Bretton Woods, BRICs, business cycle, Capital in the Twenty-First Century by Thomas Piketty, clean water, collective bargaining, computer age, Corn Laws, creative destruction, credit crunch, Credit Default Swap, cryptocurrency, currency peg, dark matter, David Ricardo: comparative advantage, debt deflation, declining real wages, deindustrialization, Deng Xiaoping, Doha Development Round, Donald Trump, endogenous growth, everywhere but in the productivity statistics, export processing zone, Fall of the Berlin Wall, fear of failure, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, fixed income, forward guidance, full employment, general purpose technology, Gini coefficient, Glass-Steagall Act, global supply chain, Great Leap Forward, Gunnar Myrdal, Hyman Minsky, income inequality, index card, indoor plumbing, industrial robot, information asymmetry, intangible asset, invisible hand, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, laissez-faire capitalism, land reform, lateral thinking, life extension, low interest rates, low-wage service sector, manufacturing employment, market bubble, means of production, middle-income trap, mittelstand, Money creation, Mont Pelerin Society, moral hazard, mortgage debt, negative equity, Nelson Mandela, non-tariff barriers, Northern Rock, Occupy movement, oil shale / tar sands, open economy, paradox of thrift, Paul Samuelson, price mechanism, price stability, Productivity paradox, purchasing power parity, quantitative easing, RAND corporation, rent control, rent-seeking, reserve currency, reshoring, road to serfdom, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, school vouchers, secular stagnation, Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, special economic zone, Steve Jobs, technological determinism, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, total factor productivity, trade liberalization, universal basic income, unorthodox policies, Washington Consensus, We are the 99%, women in the workforce, working-age population

This was avoided by China, which has led to talk of the so-called Beijing Consensus serving as an alternative model for newly marketizing nations. In vogue after the success of China’s growth and the critiques levelled at the Washington Consensus, could the Chinese model be a model for Myanmar as it embarks on a historical opening to the global economy? Of course, there may not even be a consensus about the Beijing Consensus, as the Chinese growth experience cannot be easily modelled. And there are many elements of China’s marketization process that are similar to the Washington version. The Washington Consensus was a model of economic development promulgated during the 1980s and 1990s that stemmed from the IMF and US Treasury, both located in Washington, DC.

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The model was premised on privatization and financial and trade liberalization. As a number of developing countries failed to benefit from following these prescriptions, which was seen both in the decade-long recession of the former Soviet Union during the 1990s and in the 1980s Latin American crisis, the Washington Consensus fell out of favour and developing countries sought an alternative. Some turned to China, whose market-oriented reforms proceeded at a more gradual pace and with sequencing of key reforms. For instance, state-owned enterprises were slowly reformed and were not subject to mass privatization until a couple of decades into the reform process.

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Although with a different stress, the end result is the same: industrialization supports economic development. That shift to industry could launch Myanmar into the rapid-growth phase experienced by other Asian countries. So, the Beijing Consensus perhaps offers a better set of guidelines for Myanmar than the Washington Consensus as it is derived from the experience of its East Asian neighbours. About 70 per cent of Myanmar’s population are employed in the agriculture and resources sector, which accounts for over half of the country’s economic output. It means that there is a lot of scope to industrialize, which can launch a country into fast growth as it ‘catches up’, as occurred in the East Asian ‘miracle’ economies of South Korea, Taiwan, Singapore and Hong Kong, which are among the few that have become rich in the post-war period.

Grave New World: The End of Globalization, the Return of History by Stephen D. King

"World Economic Forum" Davos, 9 dash line, Admiral Zheng, air freight, Alan Greenspan, Albert Einstein, Asian financial crisis, bank run, banking crisis, barriers to entry, Berlin Wall, Bernie Sanders, bilateral investment treaty, bitcoin, blockchain, Bonfire of the Vanities, borderless world, Bretton Woods, Brexit referendum, British Empire, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, collateralized debt obligation, colonial rule, corporate governance, credit crunch, currency manipulation / currency intervention, currency peg, currency risk, David Ricardo: comparative advantage, debt deflation, deindustrialization, Deng Xiaoping, Doha Development Round, Donald Trump, Edward Snowden, eurozone crisis, facts on the ground, failed state, Fall of the Berlin Wall, falling living standards, floating exchange rates, Francis Fukuyama: the end of history, full employment, George Akerlof, global supply chain, global value chain, Global Witness, Great Leap Forward, hydraulic fracturing, Hyman Minsky, imperial preference, income inequality, income per capita, incomplete markets, inflation targeting, information asymmetry, Internet of things, invisible hand, Jeremy Corbyn, joint-stock company, Kickstarter, Long Term Capital Management, low interest rates, Martin Wolf, mass immigration, Mexican peso crisis / tequila crisis, middle-income trap, moral hazard, Nixon shock, offshore financial centre, oil shock, old age dependency ratio, paradox of thrift, Peace of Westphalia, plutocrats, post-truth, price stability, profit maximization, quantitative easing, race to the bottom, rent-seeking, reserve currency, reshoring, rising living standards, Ronald Reagan, Savings and loan crisis, Scramble for Africa, Second Machine Age, Skype, South China Sea, special drawing rights, technology bubble, The Great Moderation, The Market for Lemons, the market place, The Rise and Fall of American Growth, trade liberalization, trade route, Washington Consensus, WikiLeaks, Yom Kippur War, zero-sum game

Elsewhere in the world, free-market philosophies were seemingly contributing to financial instability: most striking was the Asian Crisis of 1997/98 – which hit Thailand, South Korea, Indonesia, Malaysia and Hong Kong hard, even as communist China emerged relatively unscathed – and the broader emerging-market upheavals that followed. The phrase ‘Washington Consensus’ – which originally referred to a ten-point plan involving, inter alia, fiscal discipline, tax reform, trade liberalization, open cross-border capital markets, property rights and privatization3 – was reinterpreted pejoratively as a symbol of US ‘neo-liberalism’, leading to huge criticism of the post-war Washington-based institutions that, in earlier decades, had done so much to foster economic stability.

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Does the new international club provide a convenient scapegoat for the delivery of unpopular measures at home, as happened with the imposition of austerity measures in Southern European countries during the Eurozone crisis that began in 2010? Does the homogeneity of view associated with club membership – for example, adherence to the Washington Consensus or acceptance of inflation-targeting conventions – undermine otherwise legitimate protests at home? Does the new club limit the powers of domestic government through the growth of, for example, a supranational legal authority? And what happens if the views of the international statesman – and the new club he has now joined – are rejected by the nation he is supposed to represent?

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And Germany’s relations with the US temporarily soured when Edward Snowden’s WikiLeaks revealed that Chancellor Angela Merkel’s mobile phone had been hacked by the US National Security Agency. Presumably, Barack Obama was hastily removed from her speed dial. A third way might simply be a moral equivalent of the Washington Consensus. In this case, behaviours should somehow be judged relative to moral norms established by America’s Founding Fathers and subsequently delivered to the world through the benevolent exercise of American ‘soft power’. Yet the US itself has never offered a vision of moral stability. Notably, it has been unable to show any consistent approach in its foreign policies, especially in the Middle East.

The Fourth Revolution: The Global Race to Reinvent the State by John Micklethwait, Adrian Wooldridge

"World Economic Forum" Davos, Admiral Zheng, affirmative action, Affordable Care Act / Obamacare, Asian financial crisis, assortative mating, banking crisis, barriers to entry, battle of ideas, Berlin Wall, Bernie Madoff, bike sharing, Boris Johnson, Bretton Woods, British Empire, cashless society, central bank independence, Chelsea Manning, circulation of elites, classic study, Clayton Christensen, Corn Laws, corporate governance, credit crunch, crony capitalism, Deng Xiaoping, Detroit bankruptcy, disintermediation, Disneyland with the Death Penalty, driverless car, Edward Snowden, Etonian, failed state, Francis Fukuyama: the end of history, full employment, Gunnar Myrdal, income inequality, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", junk bonds, Khan Academy, Kickstarter, knowledge economy, Kodak vs Instagram, labor-force participation, laissez-faire capitalism, land reform, Les Trente Glorieuses, liberal capitalism, Martin Wolf, means of production, Michael Milken, minimum wage unemployment, mittelstand, mobile money, Mont Pelerin Society, Nelson Mandela, night-watchman state, Norman Macrae, obamacare, oil shale / tar sands, old age dependency ratio, open economy, Parag Khanna, Peace of Westphalia, pension reform, pensions crisis, personalized medicine, Peter Thiel, plutocrats, popular capitalism, profit maximization, public intellectual, rent control, rent-seeking, ride hailing / ride sharing, road to serfdom, Ronald Coase, Ronald Reagan, school choice, school vouchers, Shenzhen special economic zone , Silicon Valley, Skype, special economic zone, TED Talk, the long tail, three-martini lunch, too big to fail, total factor productivity, vertical integration, War on Poverty, Washington Consensus, Winter of Discontent, working-age population, zero-sum game

India, when it became independent in 1947, embraced British Fabianism even as it put a torch to British imperialism. In Latin America, despite their citizens’ love-hate relationship with the gringos in el norte, the region’s economies lurched forward two decades ago when most of them embraced “the Washington consensus” (a phrase invented by John Williamson to mean a combination of open markets and prudent economic management). Even in Pudong there is a recognition that, until recently, the Western model represented the gold standard of modernity. Freedom and democracy have been central to that. The rise of the Western state was not just a matter of setting up a competent civil service.

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Between 1985 and 2000 Western European governments sold off some $100 billion worth of state assets, including such well-known national champions as Lufthansa, Volkswagen, Renault, Elf, and ENI. “Industrial policy” was reduced to hanging on to a few golden shares in privatized companies. The postcommunist countries embraced the Washington consensus especially heartily. Russia privatized thousands of industrial enterprises. Leszek Balcerowicz, Poland’s finance minister after the fall of communism, declared that Thatcher was his “hero.” In Brazil, Fernando Henrique Cardoso introduced a Thatcher-inspired privatization program that, measured by the value of the assets sold, was twice as big as Britain’s.

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In South Korea, for instance, about 80 percent of what you get out of the system is tied to what you put in.15 In Asia as a whole, public-health spending is still only 2.5 percent of GDP, compared with about 7 percent in the OECD group of rich nations. The second reason is the crisis of the Western model of democracy and free-market capitalism. In the 1990s Lee’s lectures on Asian values seemed somewhat eccentric, even to Asians. The Washington consensus was sweeping all before it. Francis Fukuyama talked about “the total exhaustion of viable systematic alternatives to Western liberalism.”16 Rather than associating Deng Xiaoping’s China with economic greatness, Americans thought of the lone student walking toward the tanks in Tiananmen Square in 1989.

When the Money Runs Out: The End of Western Affluence by Stephen D. King

Alan Greenspan, Albert Einstein, Apollo 11, Asian financial crisis, asset-backed security, banking crisis, Basel III, Bear Stearns, Berlin Wall, Bernie Madoff, bond market vigilante , British Empire, business cycle, capital controls, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, congestion charging, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, cross-subsidies, currency risk, debt deflation, Deng Xiaoping, Diane Coyle, endowment effect, eurozone crisis, Fall of the Berlin Wall, financial innovation, financial repression, fixed income, floating exchange rates, Ford Model T, full employment, George Akerlof, German hyperinflation, Glass-Steagall Act, Hyman Minsky, income inequality, income per capita, inflation targeting, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, junk bonds, Kickstarter, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, London Interbank Offered Rate, loss aversion, low interest rates, market clearing, mass immigration, Minsky moment, moral hazard, mortgage debt, Neil Armstrong, new economy, New Urbanism, Nick Leeson, Northern Rock, Occupy movement, oil shale / tar sands, oil shock, old age dependency ratio, price mechanism, price stability, quantitative easing, railway mania, rent-seeking, reserve currency, rising living standards, risk free rate, Savings and loan crisis, seminal paper, South Sea Bubble, sovereign wealth fund, technology bubble, The Market for Lemons, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Tobin tax, too big to fail, trade route, trickle-down economics, Washington Consensus, women in the workforce, working-age population

The near-term losses in Asia were, in many cases, far bigger than those seen in the West following its later financial crisis but, having been written off as hotbeds of crony capitalism and, thus, doomed to fail, Asian economies were able to bounce back in style. There was no Western-style economic stagnation but, instead, a return to economic dynamism within just a handful of years. Yet the political response varied from nation to nation. In the early 1990s, Asian nations had increasingly adopted the so-called ‘Washington Consensus’, broadly speaking a commitment to low inflation, conservative fiscal policies and open cross-border capital markets. For a while, the policies seemed to work: Thailand, Korea, Malaysia and Indonesia all enjoyed rapid income gains thanks partly to heavy inflows of foreign financial investment.

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Others followed suit: Indonesia down over 13 per cent, Malaysia down more than 7 per cent and Korea down almost 6 per cent. As this financial and economic tsunami took hold, it seemed as though the Asian miracle was now over. Then came the fallout and finger-pointing. Western policy-makers, unable to believe there was anything wrong with the Washington Consensus, laid the blame fairly and squarely on the frailties of the Asian economic model. US Federal Reserve Governor Roger Ferguson offered the following – in hindsight, remarkable – musings on the subject at hand in a speech given in March 1998: One of the most important elements … has been the weakness of the banking sector in most of these countries.

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As a result, the economy slowly rebalanced away from growth led by domestic demand towards export-led growth (a polite way of saying that Malaysian workers saw the fruits of their labours heading abroad rather than staying at home). And although the economy collapsed in 1998, it thereafter delivered year after year of rapid economic expansion, having adjusted to the new global economic reality. Mahathir was also, however, quick to turn economic convention on its head. The Washington Consensus demanded that countries should open their capital markets to international investors. Mahathir argued that this policy had contributed to the crisis. On 1 September 1998, Bank Negara – the Malaysian central bank – released a statement announcing the imposition of capital controls, giving those holding ringgit offshore a month to bring their money back home.

Cape Town After Apartheid: Crime and Governance in the Divided City by Tony Roshan Samara

conceptual framework, deglobalization, gentrification, ghettoisation, global village, illegal immigration, late capitalism, moral panic, neoliberal agenda, New Urbanism, structural adjustment programs, unemployed young men, urban decay, urban planning, urban renewal, Washington Consensus, working poor

McChesney, Rich Media, Poor Democracy: Communication Politics in Dubious Times (Champaign: University of Illinois Press, 1999). 25.╯Walden Bello, “The Post-Washington Consensus: The Unraveling of a Doctrine of Development” (Focus on the Global South, October 18, 2008). http://focusweb.org/the-post-washington-dissensus.html?Itemid51 (accessed 200╇ ·â•‡ Notes to introduction November 11, 2010). See also Pedro-Palo Kuczynski and John Williamson, eds., After the Washington Consensus: Restarting Growth and Reform in Latin America (Washington, D.C.: Petersen Institute, 2003). 26.╯Mark Purcell, Empowering Democracy: Neoliberalization and the Struggle for Alternative Urban Futures (New York: Routledge, 2008); Mike Davis, Planet of Slums (New York: Verso, 2007); Jason Hackworth, The Neoliberal City: Governance, Ideology and Development in American Urbanism (Ithaca, N.Y.: Cornell University Press, 2007); McDonald, World City Syndrome; Helga Leinter, Jamie Peck, and Eric S.

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In the year following the 9/11 attacks and preceding the World Summit on Sustainable Development held in Johannesburg in August 2002, political and economic elites from British prime minister Tony Blair to UN Secretary General Kofi Annan and World Bank head James Wolfensohn went so far as to draw attention to the relationships among poverty, terrorism, and global security, arguing that underdevelopment was in fact a security issue.15 In March of that year, reformed neoliberal crusader Jeffery Sachs observed: “The extreme poverty of the bottom billion is shocking, morally intolerable and dangerous—a breeding ground of disease, terrorism and violence.”16 Growing unease about the instability that underdevelopment generates suggests that the narrower definition of security has not passed quietly into history along with the Cold War. Rather, the global development agenda of the now post–Washington Consensus continues to be constrained by and articulated through the national security interests of powerful states and transnational interests of global capital. The “pragmatic” agenda of global governance that has resulted is what Canadian political scientist Robert Cox calls global poor relief and riot control, in which the production of security means attempts “to prevent the way in which societies have been evolving through globalisation from destabilising the central structures of globalisation.”17 The merging of security and development agendas under conditions of globalization leads to a knitting together of international bodies—from the UN to aid organizations, military establishments, NGOs, private security companies, and multinational corporations—into transnational networks of global governance administered primarily from the global North.18 According to Peter Wilkin, these governance networks are not geared toward the amelioration of social crisis, but rather are structures assembled for “containment and quarantine of the effects of global poverty, . . . for protecting states from the world’s most impoverished people.”19 Despite the celebration with which many of today’s proponents 10 ╇ ·â•‡ Introduction of globalization greeted the end of the Cold War, a decidedly pessimistic core exists at the center of new elite approaches to security and development.

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Neoliberal principles of economic reform originally came to prominence through their application at the national level in the global South. Although change was already afoot in the nations and cities of the global North as well, it was the structural adjustment programs of the World Bank and the International Monetary Fund in the 1980s and 1990s, and the intimately related prescriptions of the Washington Consensus, that first drew attention and notoriety to the ascent of neoliberalism as a global governance force.22 The requirements for installing this new governance regime were substantial, and their implementation often Introduction╇ ·â•‡ 11 necessitated significant restructuring of the state and the strict management of often intense political resistance to all or part of the project.

The Making of Global Capitalism by Leo Panitch, Sam Gindin

accounting loophole / creative accounting, active measures, airline deregulation, Alan Greenspan, anti-communist, Asian financial crisis, asset-backed security, bank run, banking crisis, barriers to entry, Basel III, Bear Stearns, Big bang: deregulation of the City of London, bilateral investment treaty, book value, Branko Milanovic, Bretton Woods, BRICs, British Empire, business cycle, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon credits, Carmen Reinhart, central bank independence, classic study, collective bargaining, continuous integration, corporate governance, creative destruction, Credit Default Swap, crony capitalism, currency manipulation / currency intervention, currency peg, dark matter, democratizing finance, Deng Xiaoping, disintermediation, ending welfare as we know it, eurozone crisis, facts on the ground, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, floating exchange rates, foreign exchange controls, full employment, Gini coefficient, Glass-Steagall Act, global value chain, guest worker program, Hyman Minsky, imperial preference, income inequality, inflation targeting, interchangeable parts, interest rate swap, Kenneth Rogoff, Kickstarter, land reform, late capitalism, liberal capitalism, liquidity trap, London Interbank Offered Rate, Long Term Capital Management, low interest rates, manufacturing employment, market bubble, market fundamentalism, Martin Wolf, means of production, military-industrial complex, money market fund, money: store of value / unit of account / medium of exchange, Monroe Doctrine, moral hazard, mortgage debt, mortgage tax deduction, Myron Scholes, new economy, Nixon triggered the end of the Bretton Woods system, non-tariff barriers, Northern Rock, oil shock, precariat, price stability, proprietary trading, quantitative easing, Ralph Nader, RAND corporation, regulatory arbitrage, reserve currency, risk tolerance, Ronald Reagan, Savings and loan crisis, scientific management, seigniorage, shareholder value, short selling, Silicon Valley, sovereign wealth fund, special drawing rights, special economic zone, stock buybacks, structural adjustment programs, subprime mortgage crisis, Tax Reform Act of 1986, The Chicago School, The Great Moderation, the payments system, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transcontinental railway, trickle-down economics, union organizing, vertical integration, very high income, Washington Consensus, We are all Keynesians now, Works Progress Administration, zero-coupon bond, zero-sum game

The countries were Brazil, Chile, China, the Czech Republic, Hong King, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Poland, Russia, Singapore, and Thailand. 63 Christopher Rude, “The Role of Financial Discipline in Imperial Strategy,” Socialist Register 2005, London: Merlin, 2004, esp. pp. 90–1. 64 See Porter, Globalization and Finance, p. 64; and Bank of International Settlements, “Strengthening Banking Supervision Worldwide,” p. 4. 65 For a comprehensive analysis of the “new monetary policy consensus” that gave rise to the push for central bank independence and inflation-targeting regimes in developing countries, see the independent report for the UNDP by Alfredo Saad Filho, “Pro-Poor Monetary and Anti-Inflation Policies: Developing Alternatives to the New Monetary Policy Consensus,” Centre for Development Policy and Research Discussion Paper 2405, School of Oriental and African Studies, London, 2005. 66 Volcker and Gyohten, Changing Fortunes, p. 181. 67 Baker, Group of Seven, p. 79. 68 For an earlier discussion of this in the context of a critique of Robert Cox’s “outside-in” approach to the shift in the hierarchy of state apparatuses, see Panitch, “Globalization and the State.” 69 See John Williamson, “Did the Washington Consensus Fail?,” speech at the Center for Strategic and International Studies, November 6, 2002; and “A Short History of the Washington Consensus,” paper presented to the conference on From the Washington Consensus to a New Global Governance, Fundacion CIDOB, Barcelona, September 24–25, 2004, p. 7. 70 Devesh Kapur, John P. Lewis, and Richard Webb, The World Bank: Its First Half Century, Washington, DC: Brookings Institution Press, 1997, p. 510. 71 Frieden, Banking on the World, p. 65. 72 Harold James, “From Grandmotherliness to Governance: The Evolution of IMF Conditionality,” Finance and Development, December 1998, p. 45. 73 Sarah.

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The wide international range of US firms, as well as the relative size and importance of US markets, gave American state authorities “tremendous leverage in pressuring foreign firms and regulatory authorities” to adopt these rules and practices.1 But the inherent limits on the extraterritorial application of US law in a world of formally sovereign states also gave rise to extensive coordination of national regulations through international institutions like the newly created WTO, the World Bank, the Bank of International Settlements, and the IMF. The embrace of “structural adjustment” by so many states often depended on their desperation for emergency funds on the conditional terms of the “Washington Consensus.” Yet it was not amiss of James Boughton to point out that what was “included in that rubric was similar to the indigenous revolution or evolution in thinking in developed and developing countries” on the part of state elites as well as capitalist classes around the world.2 As we shall see, the interplay between “global norm making and national lawmaking” at the end of the twentieth century confirmed the extent to which the “spread of an international legal order with capitalism” still meant that “the power dynamics of political imperialism are embedded within the very juridical equality of sovereignty.”3 The Laws of Free Trade A key determinant of the realization of global capitalism at the end of the twentieth century was the capacity of the American state to maintain the postwar trajectory towards the liberalization of trade laws.

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What it did mean was that the latter were increasingly likely to restructure themselves so that their representation of non-financial interests would be more attuned to making demands and policy proposals that conformed to the exigencies of fiscal and monetary discipline.68 This sort of discipline figured at the very top of the set of policies that John Williamson was referring to when he famously coined the term “Washington Consensus” in 1989 to capture the neoliberal interface between the US Treasury and Federal Reserve, on the one hand, and the IMF and World Bank on the other.69 And central bank independence became the institutional change that, more than any other, signaled a state’s readiness to embrace the “structural adjustment” required to ensure that this discipline was enforced against democratic pressures for social expenditure.

Every Nation for Itself: Winners and Losers in a G-Zero World by Ian Bremmer

airport security, banking crisis, barriers to entry, Berlin Wall, blood diamond, Bretton Woods, BRICs, capital controls, clean water, creative destruction, Deng Xiaoping, Doha Development Round, energy security, European colonialism, failed state, global rebalancing, global supply chain, Global Witness, income inequality, informal economy, information security, Intergovernmental Panel on Climate Change (IPCC), Julian Assange, Kickstarter, Martin Wolf, mass immigration, Mikhail Gorbachev, military-industrial complex, mutually assured destruction, Nelson Mandela, Nixon shock, Nixon triggered the end of the Bretton Woods system, no-fly zone, nuclear winter, Parag Khanna, purchasing power parity, reserve currency, Ronald Reagan, smart grid, South China Sea, sovereign wealth fund, special economic zone, Stuxnet, trade route, uranium enrichment, Washington Consensus, WikiLeaks, Yom Kippur War

.* Then there is the International House of Pancakes, a chain of more than fifteen hundred restaurants whose global presence amounts to seventeen restaurants in Canada, twelve in Mexico, and two in Guatemala.9 Like IHOP and baseball’s Fall Classic, the World Bank and the International Monetary Fund, both headquartered in Washington, D.C., clearly bear the “made in America” label. Some critics charge that by conditioning financial support to needy countries on adoption of democratic, free-market reforms—an agenda dubbed the “Washington Consensus”—these institutions exist mainly as tools of U.S. foreign policy.10 That’s a caricature, but beyond the succession of Western leaders who have run these organizations, no one can deny that the U.S. and European governments retain formal and informal powers within them that no longer reflect the size of their contribution to the global economy’s strength.

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Japan’s rise also made clear once and for all that nothing barred ancient Eastern cultures from embracing Western capitalist values. As Japan grew stronger, many Americans began to view its rise as a threat to American hegemony. Yet unlike today’s China, Japan’s competitive edge flowed from a political and economic system in relative harmony with the Washington Consensus. By the 1970s, Western Europe and Japan were breaking free of postwar U.S. dominance, but political and economic values helped align their national interests. In 1975, the United States, Japan, Britain, West Germany, France, and Italy formed the G6 group of industrialized nations. A year later, Canada made it a G7.

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China has earned a lot of friends within cash-hungry governments in both the established and the emerging worlds, but it has little chance of capturing the hearts and minds of the people who live in these countries. The United States would also lack some of its advantages of the last century. Without the kind of unity imposed by the aftermath of World War II, there will not be a new Bretton Woods to align countries’ economic policies, no Washington Consensus that gives the United States global institutional dominance, no hunger in the rest of the world for U.S. exports or investment, and nothing like the ideological appeal that came from the thirst for democracy after years of fascist dictatorship or fear of a Soviet advance. To be sure, Cold War 2.0 is more likely to emerge than either the G2 or concert scenarios, but many factors limit the risk of a direct and destabilizing U.S.

Superclass: The Global Power Elite and the World They Are Making by David Rothkopf

"World Economic Forum" Davos, airport security, Alan Greenspan, anti-communist, asset allocation, Ayatollah Khomeini, bank run, barriers to entry, Bear Stearns, Berlin Wall, Big Tech, Bob Geldof, Branko Milanovic, Bretton Woods, BRICs, business cycle, carried interest, clean water, compensation consultant, corporate governance, creative destruction, crony capitalism, David Brooks, Doha Development Round, Donald Trump, fake news, financial innovation, fixed income, Francis Fukuyama: the end of history, Gini coefficient, global village, high net worth, income inequality, industrial cluster, informal economy, Internet Archive, Jeff Bezos, jimmy wales, John Elkington, joint-stock company, knowledge economy, Larry Ellison, liberal capitalism, Live Aid, Long Term Capital Management, Mahatma Gandhi, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, Martin Wolf, mass immigration, means of production, Mexican peso crisis / tequila crisis, Michael Milken, Mikhail Gorbachev, military-industrial complex, Nelson Mandela, old-boy network, open borders, plutocrats, Ponzi scheme, price mechanism, proprietary trading, Savings and loan crisis, shareholder value, Skype, special economic zone, Steve Jobs, Thorstein Veblen, too big to fail, trade liberalization, trickle-down economics, upwardly mobile, vertical integration, Vilfredo Pareto, Washington Consensus, William Langewiesche

For example, the financial community’s agenda for the IMF almost unquestioningly embraces policies of fiscal discipline with inadequate attention to social issues, even those that are directly linked to political sustainability of vital reforms in developing countries. It’s not that the core idea was wrong; it is that the balance was off. The same can be said of the Washington Consensus. The Washington Consensus is full of merit, yet its reforms were not sufficiently broad or balanced in scope. It did not focus enough on creating the new stakeholders of globalization by enabling the poor to accumulate and develop assets more rapidly, nor did it prioritize giving them the training and the access to capital they would need to do so—and thus it sowed the seeds of inequity in places like Chile and Brazil and the populist revivals that have occurred throughout Latin America and in Russia.

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After traveling around the world promoting market doctrine, he had been out-free-marketed. The lessons of the Chicago boys were so well learned, in fact, that they became practically a religion. Although Chile is a mostly Catholic nation, it could also be said to be one that worships at the altar of the “Washington Consensus,” the prescription of market-oriented reforms that became the primary intellectual product offered by the IMF, the World Bank, and other mainstream international financial institutions during the 1990s. The term was coined by John Williamson of Washington’s Institute for International Economics in a 1989 paper in which he described how old and generally discredited development ideas that had resulted in, among other things, the regional debt crisis of the ’80s, had been overtaken by what he described as a list of “ten policies that I thought more or less everyone in Washington would agree were needed more or less everywhere in Latin America.”

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Their interests actually grew less and less aligned with those of their workers and more tied to those of the investment bankers and others who could offer them big paydays or accelerated growth (read: wealth creation) for their companies. This was possible largely because the term “free market”—a bumper sticker description of the complex ideas described among those of Williamson’s Washington consensus—is typically a misnomer. There are always rules: those set by governments, like tax structures and incentives, often tuned to promote the development interests successfully promoted by segments of the business community; and those inherent to markets, like the fact that cost efficiency favors the creation of entities of scale, and compensation structures for bankers favor doing fewer big deals for big companies (which also typically have better credit profiles) rather than many for smaller companies or for individuals.

Second World: Empires and Influence in the New Global Order by Parag Khanna

Abraham Maslow, Admiral Zheng, affirmative action, anti-communist, Asian financial crisis, Bartolomé de las Casas, Branko Milanovic, British Empire, call centre, capital controls, central bank independence, cognitive dissonance, colonial rule, complexity theory, continuation of politics by other means, crony capitalism, death from overwork, Deng Xiaoping, different worldview, Dissolution of the Soviet Union, Donald Trump, dual-use technology, Edward Glaeser, energy security, European colonialism, export processing zone, facts on the ground, failed state, flex fuel, Francis Fukuyama: the end of history, friendly fire, gentrification, Gini coefficient, global reserve currency, global supply chain, Great Leap Forward, guns versus butter model, haute couture, Hernando de Soto, illegal immigration, income inequality, informal economy, invisible hand, Islamic Golden Age, karōshi / gwarosa / guolaosi, Khyber Pass, Kickstarter, knowledge economy, land reform, Londongrad, low cost airline, low skilled workers, mass immigration, means of production, megacity, meritocracy, military-industrial complex, Monroe Doctrine, Nelson Mandela, no-fly zone, oil shale / tar sands, oil shock, oil-for-food scandal, open borders, open economy, Parag Khanna, Pax Mongolica, Pearl River Delta, pirate software, Plutonomy: Buying Luxury, Explaining Global Imbalances, Potemkin village, price stability, race to the bottom, RAND corporation, reserve currency, restrictive zoning, rising living standards, Robert Solow, Ronald Reagan, Silicon Valley, Skype, South China Sea, special economic zone, stem cell, Stephen Hawking, Suez crisis 1956, Thomas L Friedman, trade route, trickle-down economics, uranium enrichment, urban renewal, Washington Consensus, women in the workforce

The result was the “lost decade” of the 1980s, in which Latin America became, in the words of former Venezuelan trade minister Moisés Naím, “Atlantis—the lost continent.”10 Crisis followed crisis. To make matters worse, the IMF responded to the United States “like thunder to lightning,” forcing Latin American regimes to tighten their belts as prescribed by the “Washington Consensus” orthodoxy of rapid liberalization, an international variant of trickle-down economics.11 Over a century after the Pan-American Union effort, the heated debate over how to meet Latin Americans’ rising expectations despite unequal American trade continues in the form of a proposed Free Trade Area of the Americas (FTAA) stretching from Alaska to Tierra del Fuego.

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But the United States must then convince Latin American leaders that China is not an alternative to American leadership but rather its complement. To date, however, America’s hot-and-cold style of diplomacy, careening between the extremes of absent and overbearing, has contributed to the rise of leftist leaders since the 1990s who respond to American encroachment with the rhetoric of cultural resistance, loudly bucking the Washington Consensus and the pleas to democratize. Even in so perfunctory a body as the Organization of American States (OAS), whose charter vainly emphasizes “respect for individual personalities,” America has been unable to introduce a peer-review mechanism anywhere near as sophisticated as Eastern Europe’s intra–second world levers.

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Such companies are happy to sign joint production agreements through “mixed companies” with murky standards, even if they have to pay a higher windfall tax—which Chávez uses to ratchet up pressure on European oil companies already operating in Venezuela. Since America has already thrown in its hand, will Europe play its cards to rein in Chávez? Between China and Chávez, Venezuela might still achieve a lasting contribution to both the spirit and practice of Latin American cooperation, one based on a post–Washington Consensus model of mutual aid and indigenous institutions. But history may also ultimately repeat itself in Venezuela, with surging oil prices and Chinese demand allowing Chávez to rely on energy exports and ignore other industries, leaving the economy vulnerable to price fluctuations. The country now resembles Iran prior to the overthrow of the Shah: oil wealth, inequality, and disenfranchisement, a classic prerevolutionary situation.

Rogue States by Noam Chomsky

"there is no alternative" (TINA), Alan Greenspan, anti-communist, Asian financial crisis, Berlin Wall, Branko Milanovic, Bretton Woods, business cycle, capital controls, classic study, collective bargaining, colonial rule, creative destruction, cuban missile crisis, declining real wages, deskilling, digital capitalism, Edward Snowden, experimental subject, Fall of the Berlin Wall, floating exchange rates, land reform, liberation theology, Mahbub ul Haq, Mikhail Gorbachev, Monroe Doctrine, new economy, Nixon triggered the end of the Bretton Woods system, no-fly zone, oil shock, precautionary principle, public intellectual, RAND corporation, Silicon Valley, strikebreaker, structural adjustment programs, Tobin tax, union organizing, Washington Consensus

A week later, farmers blockaded a highway near the capital city of La Paz to protest the eradication of coca leaf, the only mode of survival left to them under the “reforms,” as actually implemented. Reporting on the protests over water prices and the eradication programs, the Financial Times observes that “the World Bank and the IMF saw Bolivia as something of a model,” one of the great success stories of the “Washington consensus,” but the April protests reveal that “the success of eradication programs in Peru and Bolivia has carried a high social cost.” The journal quotes a European diplomat in Bolivia who says that “until a couple of weeks ago, Bolivia was regarded as a success story”—by those who “regard” a country while disregarding its people.

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The high-minded rhetoric at and about the Vienna conference was not besmirched by inquiry into the observance of the UD by its leading defenders.25 These matters were, however, raised in Vienna in a Public Hearing organized by NGOs. The contributions by activists, scholars, lawyers, and others from many countries reviewed “alarming evidence of massive human rights violations in every part of the world as a result of the policies of the international financial institutions,” the “Washington Consensus” among the leaders of the free world. This “neoliberal” consensus disguises what might be called “really existing free market doctrine”: market discipline is of great benefit to the weak and defenseless, though the rich and powerful must shelter under the wings of the nanny state. They must also be allowed to persist in “the sustained assault on [free trade] principle” that is deplored in a scholarly review of the post-1970 (“neoliberal”) period by GATT secretariat economist Patrick Low (now director of economic research for the World Trade Organization), who estimates the restrictive effects of Reaganite measures at about three times those of other leading industrial countries, as they “presided over the greatest swing toward protectionism since the 1930s,” shifting the US from “being the world’s champion of multilateral free trade to one of its leading challengers,” the journal of the Council on Foreign Relations commented in a review of the decade.26 It should be added that such analyses omit the major forms of market interference for the benefit of the rich: the transfer of public funds to advanced industry that underlies virtually every dynamic sector of the US economy, often under the guise of “defense.”

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The International Confederation of Free Trade Unions reports that “unions are being repressed across the world in more countries than ever before,” while “poverty and inequality have increased in the developing countries, which globalization has drawn into a downward spiral of ever-lower labor standards to attract investment and meet the demands of enterprises seeking a fast profit” as governments “bow to pressure from the financial markets rather than from their own electorates,” in accord with the “Washington consensus.”60 These are not the consequences of “economic laws” or what “the free market has decided, in its infinite but mysterious wisdom,”61 as commonly alleged. Rather, they are the results of deliberate policy choices under really existing free market doctrine, undertaken during a period of “capital’s clear subjugation of labor,” in the words of the business press.62 Contempt for the socioeconomic provisions of the UD is so deeply engrained that no departure from objectivity is sensed when a front-page story lauds Britain’s incoming Labor government for shifting the tax burden from “large businesses” to working people and the “middle class,” steps that “set Britain further apart from countries like Germany and France that are still struggling with pugnacious unions, restrictive investment climates, and expensive welfare benefits.”63 Industrial “countries” never struggle with starving children, huge profits, or rapid increases in CEO pay (under Thatcher, double that of second-place US);64 a reasonable stand under the “general tacit agreement” that the “country” equals “large businesses,” along with doctrinal conventions about the health of the economy—the latter a technical concept, only weakly correlated with the health of the population (economic, social, or even medical).

MegaThreats: Ten Dangerous Trends That Imperil Our Future, and How to Survive Them by Nouriel Roubini

"World Economic Forum" Davos, 2021 United States Capitol attack, 3D printing, 9 dash line, AI winter, AlphaGo, artificial general intelligence, asset allocation, assortative mating, autonomous vehicles, bank run, banking crisis, basic income, Bear Stearns, Big Tech, bitcoin, Bletchley Park, blockchain, Boston Dynamics, Bretton Woods, British Empire, business cycle, business process, call centre, carbon tax, Carmen Reinhart, cashless society, central bank independence, collateralized debt obligation, Computing Machinery and Intelligence, coronavirus, COVID-19, creative destruction, credit crunch, crony capitalism, cryptocurrency, currency manipulation / currency intervention, currency peg, data is the new oil, David Ricardo: comparative advantage, debt deflation, decarbonisation, deep learning, DeepMind, deglobalization, Demis Hassabis, democratizing finance, Deng Xiaoping, disintermediation, Dogecoin, Donald Trump, Elon Musk, en.wikipedia.org, energy security, energy transition, Erik Brynjolfsson, Ethereum, ethereum blockchain, eurozone crisis, failed state, fake news, family office, fiat currency, financial deregulation, financial innovation, financial repression, fixed income, floating exchange rates, forward guidance, Fractional reserve banking, Francis Fukuyama: the end of history, friendshoring, full employment, future of work, game design, geopolitical risk, George Santayana, Gini coefficient, global pandemic, global reserve currency, global supply chain, GPS: selective availability, green transition, Greensill Capital, Greenspan put, Herbert Marcuse, high-speed rail, Hyman Minsky, income inequality, inflation targeting, initial coin offering, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invention of movable type, Isaac Newton, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, junk bonds, Kenneth Rogoff, knowledge worker, Long Term Capital Management, low interest rates, low skilled workers, low-wage service sector, M-Pesa, margin call, market bubble, Martin Wolf, mass immigration, means of production, meme stock, Michael Milken, middle-income trap, Mikhail Gorbachev, Minsky moment, Modern Monetary Theory, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, Mustafa Suleyman, Nash equilibrium, natural language processing, negative equity, Nick Bostrom, non-fungible token, non-tariff barriers, ocean acidification, oil shale / tar sands, oil shock, paradox of thrift, pets.com, Phillips curve, planetary scale, Ponzi scheme, precariat, price mechanism, price stability, public intellectual, purchasing power parity, quantitative easing, race to the bottom, Ralph Waldo Emerson, ransomware, Ray Kurzweil, regulatory arbitrage, reserve currency, reshoring, Robert Shiller, Ronald Reagan, Salesforce, Satoshi Nakamoto, Savings and loan crisis, Second Machine Age, short selling, Silicon Valley, smart contracts, South China Sea, sovereign wealth fund, Stephen Hawking, TED Talk, The Great Moderation, the payments system, Thomas L Friedman, TikTok, too big to fail, Turing test, universal basic income, War on Poverty, warehouse robotics, Washington Consensus, Watson beat the top human players on Jeopardy!, working-age population, Yogi Berra, Yom Kippur War, zero-sum game, zoonotic diseases

“Income inequality has worsened significantly in some EMEs and, probably more importantly, this deterioration is positively correlated with globalization,” authors Yavuz Arslan, Juan Contreras, Nikhil Patel and Chang Shu wrote in “How Has Globalization Affected Emerging Market Economies?”—a paper published by the Bank for International Settlements.8 Some fingers point at the so-called Washington Consensus, a doctrine from the late 1980s that had the support of the IMF, the World Bank, and the US Treasury Department (all based in Washington) as a recipe for emerging markets in Latin America. Success hinged on easing capital restraints and import restrictions, privatizing state-owned businesses, liberalizing local economies, and enforcing fiscal discipline and monetary policy aimed at low inflation.

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A 2013 poll commissioned by King’s College London asked more than six thousand people worldwide the same question: “Which country or countries, if any, do you think have the right ideas about the economy and jobs that your country’s leaders should copy?”9 The United States won handily. “More than a third of Brazilians… and over two fifths of Indians and Mexicans said their countries should copy the US,” the Financial Times reported. “Many South Koreans and South Africans think similarly.” But the policies of the Washington Consensus didn’t work out neatly in practice. Unfettered capital mobility caused dizzying economic and financial boom-and-bust cycles. In good times money flowed into the EMEs. In bumpy times it flowed out, and severe financial crises and recessions erupted. Globalization is a mixed blessing at best.

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There were frictions over human rights and intellectual property rights, but none looked insurmountable compared to the potential for commercial gain. The United States and China entered the twenty-first century still far from rivals. Democratic free markets generated unmatched wealth. Developing nations with the notable exception of China signed on to the Washington Consensus, a term for macroeconomic policy that emulates American-style free markets and governance. Then the West stumbled into a global financial crisis. Western institutions looked weak and vulnerable while their political systems became increasingly polarized and partisan. Real estate prices collapsed.

Kicking Awaythe Ladder by Ha-Joon Chang

Asian financial crisis, business cycle, central bank independence, classic study, clean water, colonial rule, Corn Laws, corporate governance, creative destruction, David Ricardo: comparative advantage, fear of failure, income inequality, income per capita, joint-stock company, joint-stock limited liability company, land bank, land reform, liberal world order, moral hazard, open economy, purchasing power parity, rent-seeking, scientific management, short selling, Simon Kuznets, tacit knowledge, The Wealth of Nations by Adam Smith, trade liberalization, Washington Consensus

Introduction There is currently great pressure on developing countries from the developed world, and the international development policy establishment that it controls, to adopt a set of 'good policies' and 'good institutions' to foster their economic development.1 According to this agenda, 'good policies' are broadly those prescribed by the so-called Washington Consensus. They include restrictive macroeconomic policy, liberalization of international trade and investment, privatization and deregulation.2 The 'good institutions' are essentially those that are to be found in developed countries, especially the Anglo-American onesl The key institutions include: democracy; 'good' bureaucracy; an independent judiciary; strongly protected private property rights (including intellectual property rights); and transparent and market-oriented corporate governance and financial institutions (including a politically independent central bank).

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Also, as will become clearer further on, the few references to these historical experiences tend to be full of myths that support the orthodox version of the history of economic policy in the NDCs, which emphasize the benefits of free trade and laissez-faire industrial policy. The story, which underlies virtually all recommendations for "Washington Consensus-type policies, goes something like the following.1 From the eighteenth century onward, the industrial success of laissezfaire Britain proved the superiority of free-market and free-trade policies. Through such policies, which unleashed the entrepreneurial energy of the nation, it overtook interventionist France, its main competitor at the time, establishing itself as the supreme world economic power.

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In this context, there were really only nine developing countries where there was a growth acceleration that can in theory be attributed to a shift to 'good policies'. Of course, even then, we should not forget that improved performance in the two biggest of these nine economies, that is, China (from 2.7 per cent p.a. to 8.2 per cent p.a.) and India (from 0.7 per cent p.a. to 3.7 per cent p.a.) cannot be attributed to 'good policies' as defined by the Washington Consensus. 8. Stiglitz 2001b. In the ascending order in terms of growth rate (or rather the rate of contraction, in all cases but Poland), they are Georgia, Azerbaijan, Moldova, Ukraine, Latvia, Kazakhstan, Russia, Kyrgyzstan, Bulgaria, Lithuania, Belarus, Estonia, Albania, Romania, Uzbekistan, Czech Republic, Hungary, Slovakia, and Poland. 9.

Losing Control: The Emerging Threats to Western Prosperity by Stephen D. King

"World Economic Forum" Davos, Admiral Zheng, Alan Greenspan, asset-backed security, barriers to entry, Berlin Wall, Bernie Madoff, Bretton Woods, BRICs, British Empire, business cycle, capital controls, Celtic Tiger, central bank independence, collateralized debt obligation, corporate governance, credit crunch, crony capitalism, currency manipulation / currency intervention, currency peg, David Ricardo: comparative advantage, demographic dividend, demographic transition, Deng Xiaoping, Diane Coyle, Fall of the Berlin Wall, financial deregulation, financial innovation, fixed income, foreign exchange controls, Francis Fukuyama: the end of history, full employment, G4S, George Akerlof, German hyperinflation, Gini coefficient, Great Leap Forward, guns versus butter model, hiring and firing, income inequality, income per capita, inflation targeting, invisible hand, Isaac Newton, junk bonds, knowledge economy, labour market flexibility, labour mobility, liberal capitalism, low interest rates, low skilled workers, market clearing, Martin Wolf, mass immigration, Meghnad Desai, Mexican peso crisis / tequila crisis, Naomi Klein, new economy, old age dependency ratio, Paul Samuelson, Ponzi scheme, price mechanism, price stability, purchasing power parity, rent-seeking, reserve currency, rising living standards, Ronald Reagan, Savings and loan crisis, savings glut, Silicon Valley, Simon Kuznets, sovereign wealth fund, spice trade, statistical model, technology bubble, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Market for Lemons, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, transaction costs, Washington Consensus, We are all Keynesians now, women in the workforce, working-age population, Y2K, Yom Kippur War

Levy and Temin argue that the primary reason behind the shift in income distribution is the demise of institutions created during the Great Depression that were designed to spread the benefits of prosperity more widely. These included unions, centralized bargaining frameworks for businesses, workers and government and a protected minimum wage, all of which were dismantled as the economic failures of the 1970s gave way to the laissez-faire Washington Consensus of the 1980s and beyond. Perhaps not surprisingly, others have disputed these claims. For example, Stephen N. Kaplan and Joshua Rauh suggest that institutional arrangements played only a minor role in the huge income gains for those in the top echelons of the earnings spectrum.7 They also dismiss so-called trade-based theories, which argue that higher incomes accrue to those who can exploit comparative advantage while lower incomes come to those in the wrong industries at the wrong time (‘it seems difficult for trade [theories] to explain the increase in the top end of venture capital investors, private equity investors and, particularly, lawyers and professional athletes’).

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Now it is the world’s biggest consumer of metals and the second-biggest consumer of oil, other countries have a strong incentive to strike bilateral deals with this new economic behemoth, an economy that finds itself at the epicentre of expanding emerging-market-to-emerging-market trade. Fourth, even if China did nothing to promote the renminbi as an alternative to the dollar as a reserve currency, the renminbi’s status could be elevated by default, merely as a result of growing disenchantment with the dollar. Fifth, many countries that tried but failed with the so-called Washington Consensus might now be content to build economic relationships with a country that at least offers an alternative to US economic hegemony.9 Sixth, and politically most interesting, China is now actively promoting the renminbi’s role as an alternative reserve currency to the dollar. Admittedly, it’s still early days.

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See http://georgewbush-whitehouse.archives.gov/news/releases/2001/09/20010916-2.html. 6. Argentina fell into this trap: it devalued and defaulted to its foreign creditors in 2001. 7. At the time of writing, Google was attempting to do exactly that. 8. Source: Office of the Russian Prime Minister. 9. The Washington Consensus was a view driven by the idea that ‘the market knows best’ and was often imposed by the IMF and others on unsuspecting economies that simply couldn’t cope with liberalized markets and small government. Most obviously, it demanded aggressive fiscal consolidation. Funnily enough, this particular stricture has now been forgotten in the light of the huge increases in budget deficits which followed the 2007/8 credit crunch. 10.

The Health Gap: The Challenge of an Unequal World by Michael Marmot

active measures, active transport: walking or cycling, Affordable Care Act / Obamacare, Atul Gawande, Bonfire of the Vanities, Broken windows theory, cakes and ale, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Celtic Tiger, centre right, clean water, cognitive load, congestion charging, correlation does not imply causation, Doha Development Round, epigenetics, financial independence, future of work, Gini coefficient, Growth in a Time of Debt, illegal immigration, income inequality, Indoor air pollution, Kenneth Rogoff, Kibera, labour market flexibility, longitudinal study, lump of labour, Mahatma Gandhi, Mahbub ul Haq, meta-analysis, microcredit, move 37, New Urbanism, obamacare, paradox of thrift, race to the bottom, Rana Plaza, RAND corporation, road to serfdom, Simon Kuznets, Socratic dialogue, structural adjustment programs, the built environment, The Spirit Level, trickle-down economics, twin studies, urban planning, Washington Consensus, Winter of Discontent, working poor

The HDR for 2013 expands the insights of Drèze and Sen and identifies what it calls: unwelcome types of growth: jobless growth, which does not increase employment opportunities; ruthless growth, which is accompanied by rising inequality; voiceless growth, which denies the participation of the most vulnerable communities; rootless growth, which uses inappropriate models transplanted from elsewhere; and futureless growth, which is based on unbridled exploitation of environmental resources.17 The HDR contrasts the Washington Consensus, which argues for getting the economic fundamentals right, with UNDP’s own approach, which puts human development first. I love it. Of course I do. This UN agency says that improvement in poor people’s lives – and hence, their health – cannot be postponed while the economic fundamentals start to work. It is actually stronger than that. The Washington Consensus, neoliberalism by another name, is likely to make inequalities wider in addition to neglecting the need to build people’s capabilities and ensure their meaningful freedoms.

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The second was a ‘resounding failure to harness the constructive role of the state for growth and development’.10 It could not be clearer: both markets and state institutions are vital. The critique of neoliberalism is correct. The idea that unbridled free markets in everything (the so-called Washington Consensus) is the way for countries to grow, develop and ensure better health and greater health equity is contradicted by the evidence. Equally, market dynamism is a route to greater productivity and economic growth. The question should no longer be capitalism or not, but what kind of capitalistic society do we want to have.

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In light of the experience in Europe with austerity we, the governance commission, went back to an older literature to look at the effect of IMF policies of structural adjustment in low-income countries. It does not make happy reading. In the 1980s the IMF made loans contingent on governments accepting IMF recommendations on how to manage the economy. It was mainstream Washington consensus: reduce public spending, markets as the default option for public services, economic deregulation, privatise public assets. We concluded: the effects of these programmes have been disastrous for public health . . . structural adjustment programmes undermined the health of poor people in sub-Saharan Africa through effects on employment, incomes, prices, public expenditure, taxation, and access to credit, which in turn translated into negative health outcomes through effects on food security, nutrition, living and working environments, access to health services, education.13 When discussing the battle between austerians and Keynesians I said that a key criterion should be impact on the lives people are able to lead.

Age of Ambition: Chasing Fortune, Truth, and Faith in the New China by Evan Osnos

conceptual framework, crony capitalism, currency manipulation / currency intervention, David Brooks, Deng Xiaoping, East Village, Evgeny Morozov, fake news, financial independence, Gini coefficient, Great Leap Forward, high-speed rail, income inequality, indoor plumbing, information asymmetry, land reform, Lao Tzu, low skilled workers, market fundamentalism, Mohammed Bouazizi, plutocrats, prosperity theology / prosperity gospel / gospel of success, rolodex, scientific worldview, Silicon Valley, South China Sea, sovereign wealth fund, special economic zone, Steve Jobs, transcontinental railway, Washington Consensus, Xiaogang Anhui farmers, young professional

He published The China Miracle, a book coauthored with Fang Cai and Zhou Li that zeroed in on the disarray produced by the collapse of the Soviet Union, and concluded, “The more radical the reform, the more violent will be the destructive social conflicts, and opposition to reform.” Lin promoted China’s “tinkering gradualist approach.” In a lecture at Cambridge University in the fall of 2007, he pointed to “the failure of the Washington Consensus reforms.” He joked that the shock therapy policies ordained by the IMF seemed more like “shock without therapy,” and were destined to lead to “economic chaos.” He reminded people that the proponents of the Washington Consensus had warned that China’s slow-reform approach would be, in his words, “the worst possible transition strategy,” doomed to “result in unavoidable economic collapse.” He had become China’s most prominent evangelist for its own story of prosperity.

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As an economic strategy, the approach put China at odds with the dominant economists in the West who recommended that the collapsing Soviet bloc undertake “shock therapy”: cut spending, privatize state-owned companies, and open borders to foreign trade and investment, a recipe that became known as the Washington Consensus. In 1994, in a small office borrowed from the geography department at Peking University, Lin and four other economists founded the China Center for Economic Research, a think tank designed to attract foreign-trained Chinese scholars. He worked like a man possessed, often hunched over his desk until 1:00 or 2:00 a.m., and back the next morning by 8:00.

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When World Bank officials visited Beijing to celebrate thirty years since China resumed its Bank membership, Zoellick praised China’s reductions in poverty and said, “We, and the world, have much to learn from this.” At the Bank, Lin churned out a series of papers intended to “revisit” the understanding of how poor countries get rich, much if it anathema to the Washington Consensus that prevailed in the 1990s. Writing with the Cameroonian economist Célestin Monga, he argued that governments must “regain center stage.” Industrial policy, in which governments seek to support certain sectors, known to critics as “picking winners,” has a bad name in the West, he said, and for good reason: it has failed far more often than it has succeeded.

Termites of the State: Why Complexity Leads to Inequality by Vito Tanzi

accounting loophole / creative accounting, Affordable Care Act / Obamacare, Alan Greenspan, Andrei Shleifer, Andrew Keen, Asian financial crisis, asset allocation, barriers to entry, basic income, behavioural economics, bitcoin, Black Swan, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Cass Sunstein, central bank independence, centre right, clean water, crony capitalism, David Graeber, David Ricardo: comparative advantage, deindustrialization, Donald Trump, Double Irish / Dutch Sandwich, experimental economics, financial engineering, financial repression, full employment, George Akerlof, Gini coefficient, Gunnar Myrdal, high net worth, hiring and firing, illegal immigration, income inequality, indoor plumbing, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jean Tirole, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Arrow, Kenneth Rogoff, knowledge economy, labor-force participation, libertarian paternalism, Long Term Capital Management, low interest rates, market fundamentalism, means of production, military-industrial complex, moral hazard, Naomi Klein, New Urbanism, obamacare, offshore financial centre, open economy, Pareto efficiency, Paul Samuelson, Phillips curve, price stability, principal–agent problem, profit maximization, pushing on a string, quantitative easing, rent control, rent-seeking, Richard Thaler, road to serfdom, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, Second Machine Age, secular stagnation, self-driving car, Silicon Valley, Simon Kuznets, synthetic biology, The Chicago School, The Great Moderation, The Market for Lemons, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, transfer pricing, Tyler Cowen: Great Stagnation, universal basic income, unorthodox policies, urban planning, very high income, Vilfredo Pareto, War on Poverty, Washington Consensus, women in the workforce

On the other hand, see Nordhaus (2015) for an economically based criticism of some of the pope’s views on how to deal with global warming. Influenced by the new economic thinking, several governments moved in the previously reported, more pro-market direction, especially in the 1990s, when a related movement, called “Washington Consensus,” mainly directed at developing countries, acquired some influence. Perhaps stretching a little, the Washington Consensus could be considered a stepchild of the supply-side revolution because it also stressed the importance of the supply side of the economy and of the market. That thinking influenced also developments then underway in the economies of countries that were 82 Termites of the State moving from central planning to markets, especially in Eastern Europe (see Tanzi, 2010a).

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Fiscal illusions are often easier to create with regulations than with taxes and spending. It can be concluded that, as the twentieth century came to an end, by and large, market forces had been allowed to play a larger role, in many, though not all, of the advanced countries, especially during the last decade of that century, the period of the Washington Consensus and of market fundamentalism, than they had played in earlier decades, in spite of the higher levels of taxes and of public spending in most countries, and in spite of various structural obstacles that continued to exist in the markets of many countries. At the same time the redistributive role that governments had played in the decades immediately after World War II was being reduced, in response to efficiency and incentive concerns that had led to important policy changes, especially in tax policy but also in spending policies such as the welfare reform of 1996 in the United States.

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The pro-market thinking attracted not only academic economists but also influential policymakers, including, prominently, Alan Greenspan, who, at that time, was the powerful head of the Federal Reserve system, as well as some members of the Clinton administration, including to some extent Robert Rubin and Larry Summers (see Greenspan, 2004; Rubin and Weisberg, 2003). During the second Bush administration, that thinking would influence the heads of regulatory commissions, such as the Securities and Exchange Commission (SEC) and others. It had generated the pro-market policies associated with the Washington Consensus. After twelve years of Republican administrations, the new Democratic president, Clinton, could declare that the “time of big government was over” and could get set to reform some welfare programs, reduce regulations, especially in the financial sector, and reduce some taxes by enacting more tax expenditures.

It's Better Than It Looks: Reasons for Optimism in an Age of Fear by Gregg Easterbrook

affirmative action, Affordable Care Act / Obamacare, air freight, Alan Greenspan, Apollo 11, autonomous vehicles, basic income, Bernie Madoff, Bernie Sanders, Black Lives Matter, Boeing 747, Branko Milanovic, Brexit referendum, business cycle, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, clean tech, clean water, coronavirus, Crossrail, David Brooks, David Ricardo: comparative advantage, deindustrialization, Dissolution of the Soviet Union, Donald Trump, driverless car, Elon Musk, Exxon Valdez, factory automation, failed state, fake news, full employment, Gini coefficient, Google Earth, Home mortgage interest deduction, hydraulic fracturing, Hyperloop, illegal immigration, impulse control, income inequality, independent contractor, Indoor air pollution, interchangeable parts, Intergovernmental Panel on Climate Change (IPCC), invisible hand, James Watt: steam engine, labor-force participation, liberal capitalism, longitudinal study, Lyft, mandatory minimum, manufacturing employment, Mikhail Gorbachev, minimum wage unemployment, Modern Monetary Theory, obamacare, oil shale / tar sands, Paul Samuelson, peak oil, plant based meat, plutocrats, Ponzi scheme, post scarcity, purchasing power parity, quantitative easing, reserve currency, rising living standards, Robert Gordon, Ronald Reagan, self-driving car, short selling, Silicon Valley, Simon Kuznets, Slavoj Žižek, South China Sea, Steve Wozniak, Steven Pinker, supervolcano, The Chicago School, The Rise and Fall of American Growth, the scientific method, There's no reason for any individual to have a computer in his home - Ken Olsen, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, transaction costs, Tyler Cowen, uber lyft, universal basic income, War on Poverty, Washington Consensus, We are all Keynesians now, WikiLeaks, working poor, Works Progress Administration

Starting with the same geography, resources, and people, the one using central control became an indigent nightmare, while the one letting the market decide eliminated poverty and achieved the world’s highest rate of postsecondary education. Gill further notes most developing nations that have followed the “Washington Consensus” policy prescription have raised living standards, increased education levels for girls and women, and held free elections, while most developing nations that cling to central economic control remain impoverished, backward, and under the thumbs of thugs and despots. Put together in the 1980s by an international team of economists, the Washington Consensus recommends that developing nations switch to free economies without central control, avoid debt, deregulate, create enforceable private property rights, liberalize trade going out and capital coming in, and have low marginal tax rates that they actually implement.

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Put together in the 1980s by an international team of economists, the Washington Consensus recommends that developing nations switch to free economies without central control, avoid debt, deregulate, create enforceable private property rights, liberalize trade going out and capital coming in, and have low marginal tax rates that they actually implement. (Troubled nations such as Greece post high tax rates, then allow the affluent to bribe their way out of taxes.) Some analysts scorn the Washington Consensus, which stands as the reverse of the prescription of absolute central planning—ministries and subsidies as far as the eye can see. That market-oriented economics usually (of course not always) helps the poor, while central planning usually harms the poor, does seem to settle the matter. Nobody-in-control economics improves living standards for almost everyone while encouraging social progress, since even Fortune 500 types observe that shaking up the system is good.

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., on, 67 coal mining and, 61, 76–77, 233 collapse anxiety and, 68 communism and, 174 comparative advantage and, 79–80 control and, 65–66 currency and, 69 democracy and, 167–168, 170, 173–174, 193 Dodd-Frank Act and, 92–93 education and, 169 fascism and, 66 Feldstein on, 91 globalization and, 82 golden age of, 69–70 Great Recession and, 64, 68, 97 inequality and, 84–85 inflation and, 87 infrastructure and, 93–95 Keynes on, 98–99 marriage and, 267, 268 media negativity and, 77, 79, 87–88 modern monetary theory and, 96 Panasonic and, 68–69 paper mills and, 78–79 Piketty on, 84–85 predictions and, 64 pretax income and, 84–85, 91 regulations of, 92–93 retirement economics, 31, 273–274 slow growth and, 90–92 Soviet and American, 167 state pension accounts and, 97–98 trade boosting, 79, 245–246 Trump and, 70–71 US domestic production and, 77–78 US GDP and, 84, 90–91 war and, 93, 132–134 Washington Consensus and, 66–67 Western living standards and, 88 See also market economy; middle class, US; national debt, US education, 280 book reading and, 271 in China, 170 college as, 269–271 democracy and, 169–170 disability and, 37 economy and, 169 immigrants and, 269–270 jobs and, 89–90 longevity and, 37–38 marriage and, 267 public school system and, 38, 269 skilled trades and, 270 wage and, 89–90 The Education of Henry Adams (Adams), 197, 198 Ehrlich, Paul, 5 elections.

The Great Transformation: The Political and Economic Origins of Our Time by Karl Polanyi

agricultural Revolution, Berlin Wall, borderless world, business cycle, central bank independence, Corn Laws, currency manipulation / currency intervention, David Ricardo: comparative advantage, Fall of the Berlin Wall, full employment, inflation targeting, joint-stock company, Kula ring, land reform, land tenure, liberal capitalism, manufacturing employment, new economy, Panopticon Jeremy Bentham, price mechanism, profit motive, Republic of Letters, road to serfdom, Ronald Reagan, scientific management, the market place, The Wealth of Nations by Adam Smith, trade liberalization, trade route, trickle-down economics, Washington Consensus, Wolfgang Streeck, working poor, Works Progress Administration

(There are even explanations for this, but this would draw me too far away from my main themes.) Rapid transformation destroys old coping mechanisms, old safety nets, while it creates a new set of demands, before new coping mechanisms are developed. This lesson from the nineteenth century has, unfortunately, all too often been forgotten by the advocates of the Washington consensus, the modern-day version of the liberal orthodoxy. The failure of these social coping mechanisms has, in turn, contributed to the erosion of what I referred to earlier as social capital. The last decade has seen two dramatic instances. I already referred to the disaster in Indonesia, part of the East Asia crisis.

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Now, albeit too late, the consequences of those mistaken policies are being realized; but it will be all but impossible to entice the capital that has fled back into the country, except by providing assurances that, regardless of how the wealth is acquired, it can be retained, and doing so would imply, indeed necessitate, the preservation of the oligarchy itself. Economic science and economic history have come to recognize the validity of Polanyi’s key contentions. But public policy—particularly as reflected in the Washington consensus doctrines concerning how the developing world and the economies in transition should make their great transformations—seems all too often not to have done so. As I have already noted, Polanyi exposes the myth of the free market: there never was a truly free, self-regulating market system. In their transformations, the governments of today’s industrialized countries took an active role, not only in protecting their industries through tariffs, but also in promoting new technologies.

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The American government protested loudly, saying that this was an abrogation of free market principles. Yet Hong Kong’s intervention paid off—it managed to stabilize both markets, warding off future threats on its currency, and making large amounts of money on the deals to boot. The advocates of the neoliberal Washington consensus emphasize that it is government interventions that are the source of the problem; the key to transformation is “getting prices right” and getting the government out of the economy through privatization and liberalization. In this view, development is little more than the accumulation of capital and improvements in the efficiency with which resources are allocated—purely technical matters.

Shutdown: How COVID Shook the World's Economy by Adam Tooze

2021 United States Capitol attack, air freight, algorithmic trading, Anthropocene, Asian financial crisis, asset-backed security, Ayatollah Khomeini, bank run, banking crisis, Basel III, basic income, Ben Bernanke: helicopter money, Benchmark Capital, Berlin Wall, Bernie Sanders, Big Tech, bitcoin, Black Lives Matter, Black Monday: stock market crash in 1987, blue-collar work, Bob Geldof, bond market vigilante , Boris Johnson, Bretton Woods, Brexit referendum, business cycle, business process, business process outsourcing, buy and hold, call centre, capital controls, central bank independence, centre right, clean water, cognitive dissonance, contact tracing, contact tracing app, coronavirus, COVID-19, credit crunch, Credit Default Swap, cryptocurrency, currency manipulation / currency intervention, currency peg, currency risk, decarbonisation, deindustrialization, Donald Trump, Elon Musk, energy transition, eurozone crisis, facts on the ground, failed state, fake news, Fall of the Berlin Wall, fear index, financial engineering, fixed income, floating exchange rates, friendly fire, George Floyd, gig economy, global pandemic, global supply chain, green new deal, high-speed rail, housing crisis, income inequality, inflation targeting, invisible hand, It's morning again in America, Jeremy Corbyn, junk bonds, light touch regulation, lockdown, low interest rates, margin call, Martin Wolf, mass immigration, mass incarceration, megacity, megaproject, middle-income trap, Mikhail Gorbachev, Modern Monetary Theory, moral hazard, oil shale / tar sands, Overton Window, Paris climate accords, Pearl River Delta, planetary scale, Potemkin village, price stability, Productivity paradox, purchasing power parity, QR code, quantitative easing, remote working, reserve currency, reshoring, Robinhood: mobile stock trading app, Ronald Reagan, secular stagnation, shareholder value, Silicon Valley, six sigma, social distancing, South China Sea, special drawing rights, stock buybacks, tail risk, TikTok, too big to fail, TSMC, universal basic income, Washington Consensus, women in the workforce, yield curve

14 What many Brexit and Trump voters wanted was “their” national economy back. Meanwhile, China’s spectacular ascent robbed the economy of its innocence in another sense. It was no longer clear that the great gods of growth were on the side of the West. That, it turned out, disturbed an important assumption underpinning the Washington consensus. Soon America would no longer be number one. In fact, it was increasingly clear that the gods, at least as represented by the nature goddess Gaia, were at odds with economic growth full stop.15 Climate change, which had once been a preoccupation of the environmental movement alone, became an emblem for a wider imbalance between nature and humanity.

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Even the highest risk low-income countries saw their hard currency debt triple over the five years to 2019 to more than $200 billion.4 Increasingly, the low- and middle-income economies joined the system of market-based finance, under the terms of what Daniela Gabor has called the “Wall Street consensus,” as distinct from the Washington consensus of the 1990s. In this new world of global finance, institutions like the IMF and the World Bank acted as auxiliaries not just to big banks, but also to asset managers and the operators of bond and derivative markets.5 Membership in this network was alluring, offering vast amounts of credit on seemingly easy terms.

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At the end of 2019, almost half of the lowest-income countries in the world were already in debt distress.7 Decades of experience showed the peril, but rather than simply accepting their fate, the emerging markets learned.8 From the 1990s, they developed a repertoire of policies with which to manage the risks arising from the global financial system. The toolkit was a compromise between key elements of the free-market Washington consensus and more interventionist policies.9 Hedging the risks of global integration was not without cost. Nor did the new policy toolkit offer a guarantee of complete autonomy. The emerging markets had not discovered a magic formula for “taking back control.” Nor was that the point. They had found ways to make the risks of globalization more manageable, and that, frankly, suited everyone.10 Vulture funds might prey on distressed debtors.

Globalists: The End of Empire and the Birth of Neoliberalism by Quinn Slobodian

"World Economic Forum" Davos, Alan Greenspan, Asian financial crisis, Berlin Wall, bilateral investment treaty, borderless world, Bretton Woods, British Empire, business cycle, capital controls, central bank independence, classic study, collective bargaining, David Ricardo: comparative advantage, Deng Xiaoping, desegregation, Dissolution of the Soviet Union, Doha Development Round, eurozone crisis, Fall of the Berlin Wall, floating exchange rates, full employment, Garrett Hardin, Greenspan put, Gunnar Myrdal, Hernando de Soto, invisible hand, liberal capitalism, liberal world order, Mahbub ul Haq, market fundamentalism, Martin Wolf, Mercator projection, Mont Pelerin Society, Norbert Wiener, offshore financial centre, oil shock, open economy, pattern recognition, Paul Samuelson, Pearl River Delta, Philip Mirowski, power law, price mechanism, public intellectual, quantitative easing, random walk, rent control, rent-seeking, road to serfdom, Ronald Reagan, special economic zone, statistical model, Suez crisis 1956, systems thinking, tacit knowledge, The Chicago School, the market place, The Wealth of Nations by Adam Smith, theory of mind, Thomas L Friedman, trade liberalization, urban renewal, Washington Consensus, Wolfgang Streeck, zero-sum game

By the early 1980s this manifested in renewed attention to modes of investment protection and third-­party arbitration alongside the rethinking of criteria for World Bank aid and IMF assistance that would become known as the Washington Consensus.25 Equally impor­tant was the rise of monetarism, culminating in the ­so-­called Volcker Shock in 1979, which dramatically raised U.S. interest rates—­ and thus debt ser­ vice payments for Global South nations—­ initiating the Third World debt crisis and dealing the “death blow to the NIEO movement.”26 Scholars have tracked the rise of the Washington Consensus and shifts in ideologies of monetary governance in the United States. Yet A W o r l d of S ig n als 223 they have overlooked the quiet counterrevolution that the NIEO challenge prompted in Geneva itself.27 In the 1970s and early 1980s a trio of experts at the GATT, Jan Tumlir, Frieder Roessler, and Ernst-­Ulrich ­Petersmann, explic­itly applied the ideas of Hayek to rethink the international economic order and became the standard-­bearers of Geneva School neoliberalism.

…

It focuses on the period from the early 1920s to the early 1980s, mostly ending before the breakthrough of neoliberal policies with the governments of Reagan and Thatcher. It does not explore the worthy topics of the conversion of the IMF and World Bank to the policies that became known as the “Washington Consensus.” Similarly absent are the transformations in international monetary governance, including the rise of monetarism, the end of the Bretton Woods system, the introduction of the euro, and changes in central bank policy. This means 24 GLOBALISTS leaving out the all-­important question of finance, which was perhaps the single most impor­tant transformation in global capitalism since the 1970s.

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The new brand was given another name when Pascal Lamy used the term “the Geneva Consensus” for the first time in 2005 during his successful campaign for director general of the WTO.55 He was working from his experience as the EU trade commissioner and, true to the spirit of ordoglobalism, contended that “the building of Eu­rope is in fact the most ambitious experiment in supranational governance ever attempted” and that, as “a laboratory,” “the Eu­ro­pean experience . . . ​offers in­ter­ est­ing ave­nues for the global level.”56 Lamy claimed that the Geneva Consensus, against the Washington Consensus that it putatively replaced, would be dedicated to “humanizing globalization and establishing further justice and equity.”57 Like the IMF, which began to pay lip ser­vice to poverty reduction while continuing to focus on the old key issues of cutting public bud­gets, the WTO sought to add new rhe­ toric without changing the basic structure of the organ­ization.58 Seattle was an existential crisis for ordoglobalism.

To Serve God and Wal-Mart: The Making of Christian Free Enterprise by Bethany Moreton

affirmative action, American Legislative Exchange Council, anti-communist, Berlin Wall, big-box store, Bretton Woods, Buckminster Fuller, collective bargaining, company town, corporate personhood, creative destruction, deindustrialization, desegregation, Donald Trump, emotional labour, estate planning, eternal september, Fall of the Berlin Wall, Frederick Winslow Taylor, George Gilder, global village, Great Leap Forward, informal economy, invisible hand, liberation theology, longitudinal study, market fundamentalism, Mont Pelerin Society, mortgage tax deduction, Naomi Klein, new economy, post-industrial society, postindustrial economy, prediction markets, price anchoring, prosperity theology / prosperity gospel / gospel of success, Ralph Nader, RFID, road to serfdom, Ronald Reagan, scientific management, Silicon Valley, Stewart Brand, strikebreaker, The Wealth of Nations by Adam Smith, union organizing, walkable city, Washington Consensus, white flight, Whole Earth Catalog, work culture , Works Progress Administration

Asked about the lasting impact of his years in Arkansas, Díaz recalled, “I met Sam Walton twice in person and quickly came to learn that fiÂ�nanÂ�cial success and Christianity were perfectly compatible: being successful and humble, being loving and demanding, being competitive and caring for others—all of these were compatible.”1 Díaz’s Christian testimony—his inspirational biography of salvation, success, and humility—is the quiet back story of free trade in the Americas. The ofÂ�fiÂ�cial story focuses on the hemisphere’s “Washington Consensus,” the term applied by a corporate think tank in 1989 to a suite of economic reforms that would encourage “the magic of the market” as the basis for hemispheric relations. Backed by the lending muscle of the World Bank and promoted by conservative economists like Milton Friedman, these recommendations included privatizing state enterprises, flattening tax rates, liberalizing trade, and relaxing government regulation.2 Though their consequences were uniquely devastating in much of Latin America, these policies were part of the overall economic transformation evident in the rise of the Sun Belt.

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In the United States as well as for its southern neighbors, the result was a new era of federal austerity in ev�ery realm but defense. Social programs were slashed, from education to infrastructure to public health, while military spending increased by almost 50 percent over the Reagan years. States like California and Texas with sig�nifi�cant defense industries received billions in contracts.3 The Washington Consensus, in other words, functioned as the hardware of economic restructuring in the Western hemisphere. At the same time, conservative Christians took up the cause of anticommunism in Central America with new fervor in the 1970s and 1980s. As the Reagan administration funded right-wing counterinsurgencies in El Salvador and Guatemala and sought to overturn the Sandinista victory in Nicaragua, it had no better stateside allies than religious conservatives.

…

The White House Office of Public Diplomacy, staffed by psychological warfare experts from the Army and the Central Intelligence Agency, coordinated a multimillion dollar PR campaign to “defin[e] the terms of public discussion on Central America policy.”4 Against this backdrop, the intersecting lives of a Nicaraguan student, an Oklahoma journalist, and an Arkansas merchant sketch a web of relationships between people and institutions that shadowed the Washington Consensus—a private-sector “Bentonville Consensus,” a software of globÂ�alÂ�iÂ�zaÂ�tion. Through a Walton Family Foundation program, this human network bridged the transition from the last Cold War proxy battles to the new frontier of hemispheric free trade in the 1990s. It was not part of the coordinated Christian and neoconservative campaign of direct aid to anticommunists, but rather a parallel incubator of promarket Christians.

How to Run the World: Charting a Course to the Next Renaissance by Parag Khanna

"World Economic Forum" Davos, Albert Einstein, Asian financial crisis, back-to-the-land, bank run, blood diamond, Bob Geldof, borderless world, BRICs, British Empire, call centre, carbon footprint, carbon tax, charter city, clean tech, clean water, cloud computing, commoditize, congestion pricing, continuation of politics by other means, corporate governance, corporate social responsibility, Deng Xiaoping, Doha Development Round, don't be evil, double entry bookkeeping, energy security, European colonialism, export processing zone, facts on the ground, failed state, financial engineering, friendly fire, global village, Global Witness, Google Earth, high net worth, high-speed rail, index fund, informal economy, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Kickstarter, Kiva Systems, laissez-faire capitalism, Live Aid, Masdar, mass immigration, megacity, Michael Shellenberger, microcredit, military-industrial complex, mutually assured destruction, Naomi Klein, Nelson Mandela, New Urbanism, no-fly zone, off grid, offshore financial centre, oil shock, One Laptop per Child (OLPC), open economy, out of africa, Parag Khanna, private military company, Productivity paradox, race to the bottom, RAND corporation, reserve currency, Salesforce, Silicon Valley, smart grid, South China Sea, sovereign wealth fund, special economic zone, sustainable-tourism, Ted Nordhaus, The Fortune at the Bottom of the Pyramid, The Wisdom of Crowds, too big to fail, trade liberalization, trickle-down economics, UNCLOS, uranium enrichment, Washington Consensus, X Prize

Economic diplomacy is now a dizzying game of musical tables—with the fate of globalization hanging in the balance. The first global economy took shape during the Middle Ages, but it was one in which different regions had their own anchors and rules. Similarly, today there is no more free-market “Washington Consensus” to which the world’s economies subscribe. Instead, each is searching for ways to manage globalization to its benefit. Yet all seem to agree with the mantra that the world coming out of the financial crisis must be different from the world going in. For that to happen, however, the public and private sectors need a new kind of partnership: one fast enough to manage risks and progressive enough to benefit the masses.

…

Who Has the Money Makes the Rules At the World Economic Forum’s 2009 Davos meeting, Chinese premier Wen Jiabao succinctly articulated what became the dominant narrative of the global financial crisis, claiming it had its roots in an “unsustainable model of development characterized by prolonged low savings and high consumption” and the “blind pursuit of profits.” What part of that do Washington and Wall Street not understand as they continue to demand higher consumption from Asians? Privatization and price liberalization—tenets of the Washington Consensus—have been steadily controlled by Asian governments ever since their late 1990s financial crisis. Indeed, the “global imbalances” that we constantly hear about are as much ideological as fiscal and monetary. The United States wants Asians to reverse an innate savings culture and more than a decade of insuring themselves against economic volatility by suddenly becoming voracious consumers.

…

Introduction to On the Manner of Negotiating with Princes: Classic Principles of Diplomacy and the Art of Negotiation by François de Callières. Boston: Houghton Mifflin, 2000. Hart, Stuart L. Capitalism at the Crossroads: Aligning Business, Earth, and Humanity. Upper Saddle River, N.J.: Wharton School Publishing, 2007. Held, David. The Global Covenant: The Social Democratic Alternative to the Washington Consensus. Cambridge, UK: Polity, 2004. Held, David, and Anthony McGrew, eds. Governing Globalization: Power, Authority, and Global Governance. Cambridge, UK: Polity, 2002. Henderson, David. Misguided Virtue: False Notions of Corporate Social Responsibility. London: Institute for Economic Affairs, 2001.

Radical Cities: Across Latin America in Search of a New Architecture by Justin McGuirk

A Pattern Language, agricultural Revolution, dark matter, Day of the Dead, digital divide, Donald Trump, Enrique Peñalosa, extreme commuting, facts on the ground, gentrification, Guggenheim Bilbao, Hernando de Soto, housing crisis, illegal immigration, income per capita, informal economy, it's over 9,000, Jane Jacobs, Kickstarter, lateral thinking, Leo Hollis, mass immigration, megaproject, microcredit, Milgram experiment, neoliberal agenda, New Urbanism, off-the-grid, place-making, Silicon Valley, starchitect, technoutopianism, unorthodox policies, urban decay, urban planning, urban renewal, urban sprawl, value engineering, Washington Consensus

Torre David is an anomaly, an accident of extreme circumstances, but it is precisely the kind of formal-informal hybrid that cities of the developing world need to explore if they are to start imagining a future that is different from the present. Learning from Latin America There was a time when, in the eyes of those exporting the policies of the Washington Consensus, Latin America was a byword for precariousness, corruption and illegal practices. Today, we are just as likely to think of Wall Street in the same terms. By contrast, Latin America’s economies are relatively stable, demonstrating the kind of growth that the US and Europe would die for, and its governments represent a bastion of progressive politics that has not yet had to dismantle its welfare systems in the name of austerity.

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The number of favelados rose by 50 per cent, leaving a third of the population living in poverty. Government self-help schemes were simply not geared up to handling the scale of informal growth. But just when policy-makers were throwing their hands up, they were offered a lifeline in the form of a new liberal economic ideology. From the late 1980s onwards, with the Washington Consensus spreading south through the arm-twisting of the World Bank and the International Monetary Fund, the neoliberal agenda took control. Government’s job was to cut spending, privatise, and let the housing market regulate itself. In effect, Turner’s argument for self-determination was turned on its head by politicians who, now relieved of housing obligations, no longer had to pick up the ruinous bill.

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If neoliberalism insists that utility companies are only fit to be sold off to the private sector, then many a municipal government, not to mention national ones, might look to Medellín and reconsider. The role that EPM played in the rehabilitation of Medellín is symptomatic of a political culture that has not yet bought into the Washington Consensus wholesale. This is ironic, because one of the critiques levelled at Medellín is that it embraced neoliberal development driven by profits from the narco-traffickers. Much has been made of the fact that cartel money was laundered through construction projects, that cartel gangs were involved in the ‘pacification’ of districts that were ripe for development and that, all in all, Medellín’s establishment was in bed with the mob.* All of which was true.

The Great Economists: How Their Ideas Can Help Us Today by Linda Yueh

3D printing, additive manufacturing, Asian financial crisis, augmented reality, bank run, banking crisis, basic income, Bear Stearns, Ben Bernanke: helicopter money, Berlin Wall, Bernie Sanders, Big bang: deregulation of the City of London, bike sharing, bitcoin, Branko Milanovic, Bretton Woods, BRICs, business cycle, Capital in the Twenty-First Century by Thomas Piketty, clean water, collective bargaining, computer age, Corn Laws, creative destruction, credit crunch, Credit Default Swap, cryptocurrency, currency peg, dark matter, David Ricardo: comparative advantage, debt deflation, declining real wages, deindustrialization, Deng Xiaoping, Doha Development Round, Donald Trump, endogenous growth, everywhere but in the productivity statistics, export processing zone, Fall of the Berlin Wall, fear of failure, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, fixed income, forward guidance, full employment, general purpose technology, Gini coefficient, Glass-Steagall Act, global supply chain, Great Leap Forward, Gunnar Myrdal, Hyman Minsky, income inequality, index card, indoor plumbing, industrial robot, information asymmetry, intangible asset, invisible hand, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, laissez-faire capitalism, land reform, lateral thinking, life extension, low interest rates, manufacturing employment, market bubble, means of production, middle-income trap, mittelstand, Money creation, Mont Pelerin Society, moral hazard, mortgage debt, negative equity, Nelson Mandela, non-tariff barriers, Northern Rock, Occupy movement, oil shale / tar sands, open economy, paradox of thrift, Paul Samuelson, price mechanism, price stability, Productivity paradox, purchasing power parity, quantitative easing, RAND corporation, rent control, rent-seeking, reserve currency, reshoring, road to serfdom, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, school vouchers, secular stagnation, Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, special economic zone, Steve Jobs, technological determinism, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, total factor productivity, trade liberalization, universal basic income, unorthodox policies, Washington Consensus, We are the 99%, women in the workforce, working-age population

This was avoided by China, which has led to talk of the so-called Beijing Consensus serving as an alternative model for newly marketizing nations. In vogue after the success of China’s growth and the critiques levelled at the Washington Consensus, could the Chinese model be a model for Myanmar as it embarks on a historical opening to the global economy? Of course, there may not even be a consensus about the Beijing Consensus, as the Chinese growth experience cannot be easily modelled. And there are many elements of China’s marketization process that are similar to the Washington version. The Washington Consensus was a model of economic development promulgated during the 1980s and 1990s that stemmed from the IMF and US Treasury, both located in Washington, DC.

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The model was premised on privatization and financial and trade liberalization. As a number of developing countries failed to benefit from following these prescriptions, which was seen both in the decade-long recession of the former Soviet Union during the 1990s and in the 1980s Latin American crisis, the Washington Consensus fell out of favour and developing countries sought an alternative. Some turned to China, whose market-oriented reforms proceeded at a more gradual pace and with sequencing of key reforms. For instance, state-owned enterprises were slowly reformed and were not subject to mass privatization until a couple of decades into the reform process.

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Although with a different stress, the end result is the same: industrialization supports economic development. That shift to industry could launch Myanmar into the rapid-growth phase experienced by other Asian countries. So, the Beijing Consensus perhaps offers a better set of guidelines for Myanmar than the Washington Consensus as it is derived from the experience of its East Asian neighbours. About 70 per cent of Myanmar’s population are employed in the agriculture and resources sector, which accounts for over half of the country’s economic output. It means that there is a lot of scope to industrialize, which can launch a country into fast growth as it ‘catches up’, as occurred in the East Asian ‘miracle’ economies of South Korea, Taiwan, Singapore and Hong Kong, which are among the few that have become rich in the post-war period.

When China Rules the World: The End of the Western World and the Rise of the Middle Kingdom by Martin Jacques

Admiral Zheng, An Inconvenient Truth, Asian financial crisis, Bear Stearns, Berlin Wall, Bob Geldof, Bretton Woods, BRICs, British Empire, classic study, credit crunch, Dava Sobel, deindustrialization, Deng Xiaoping, deskilling, discovery of the americas, Doha Development Round, energy security, European colonialism, failed state, Fall of the Berlin Wall, flying shuttle, Francis Fukuyama: the end of history, global reserve currency, global supply chain, Great Leap Forward, illegal immigration, income per capita, invention of gunpowder, James Watt: steam engine, joint-stock company, Kenneth Rogoff, land reform, land tenure, lateral thinking, Malacca Straits, Martin Wolf, Meghnad Desai, Naomi Klein, Nelson Mandela, new economy, New Urbanism, one-China policy, open economy, Pearl River Delta, pension reform, price stability, purchasing power parity, reserve currency, rising living standards, Ronald Reagan, Scramble for Africa, Silicon Valley, South China Sea, sovereign wealth fund, special drawing rights, special economic zone, spinning jenny, Spread Networks laid a new fibre optics cable between New York and Chicago, the scientific method, Thomas L Friedman, trade liberalization, urban planning, Washington Consensus, Westphalian system, Xiaogang Anhui farmers, zero-sum game

The Asian tigers have instead demonstrated that latecomers can enjoy major advantages: they can learn from the experience of others, draw on and apply existing technologies, leapfrog old technologies, use the latest know-how and play catch-up to great effect. Their economic approach, furthermore, has largely been homespun, owing relatively little to neo-liberalism or the Washington Consensus - the dominant Western ideology from the late seventies until the financial meltdown in 2008.6 Nor is their novelty confined to the economic sphere. The Asian tigers have given birth to a new kind of political governance, namely the developmental state, whose popular legitimacy rests not on democratic elections but the ability of the state to deliver continued economic growth.7 The rise of the Asian tigers, however, has an altogether more fundamental import.

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The contrasting approach of China and Western nations towards Africa, and developing countries in general, has led to a discussion amongst Africans about a distinctive Chinese model of development, characterized by large-scale, state-led investments in infrastructure and support services, and aid which is less tied to the donor’s economic interests and less overwhelmingly focused on the extraction of minerals as in the case of the West.40 China’s phenomenal growth, together with the huge reduction in poverty there, has also provoked enormous interest in what lessons it might offer for other developing nations.41 An important characteristic of the Chinese model has been the idea of strong government and the eschewing of the notion of democracy, an approach which has an obvious appeal amongst the more authoritarian African governments. In the light of the country’s economic success, the Chinese approach to governance seems destined to enjoy a much wider influence and resonance in the developing world. The Chinese academic Zhang Wei-Wei has argued that the Chinese model combines a number of features. In contrast to the Washington Consensus, it rejects shock therapy and the big bang in favour of a process of gradual reform based on working through existing institutions. It is predicated upon a strong developmental state capable of steering and leading the process of reform. It involves a process of selective learning, or cultural borrowing: China has drawn on foreign ideas, including the neo-liberal American model, as well as many that have been home-grown.

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Finally, it embraces sequencing and priorities, as evidenced, for example, by a commitment to economic reforms first and political ones later, or the priority given to reforms in the coastal provinces before those in the inland provinces.42 There has been considerable debate, in this context, about a Chinese model, sometimes described as the Beijing Consensus. There are certainly fundamental differences between the Chinese approach and the Washington Consensus, with the Chinese model both markedly less ideological and also distinctively pragmatic in the manner of the Asian tigers. It is still far too early to make any considered judgement about the likely long-term merits and demerits of China’s relationship with Africa.43 The experience has been brief and the literature remains thin.

The Wake-Up Call: Why the Pandemic Has Exposed the Weakness of the West, and How to Fix It by John Micklethwait, Adrian Wooldridge

Admiral Zheng, Affordable Care Act / Obamacare, air traffic controllers' union, Alan Greenspan, basic income, battle of ideas, Berlin Wall, Bernie Sanders, bike sharing, Black Lives Matter, Boris Johnson, carbon tax, carried interest, cashless society, central bank independence, contact tracing, contact tracing app, Corn Laws, coronavirus, COVID-19, creative destruction, David Ricardo: comparative advantage, defund the police, Deng Xiaoping, Dominic Cummings, Donald Trump, Etonian, failed state, Fall of the Berlin Wall, Future Shock, George Floyd, global pandemic, Internet of things, invisible hand, it's over 9,000, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", Jeremy Corbyn, Jones Act, knowledge economy, laissez-faire capitalism, Les Trente Glorieuses, lockdown, McMansion, military-industrial complex, night-watchman state, offshore financial centre, oil shock, Panopticon Jeremy Bentham, Parkinson's law, pensions crisis, QR code, rent control, Rishi Sunak, road to serfdom, Ronald Reagan, school vouchers, Shoshana Zuboff, Silicon Valley, smart cities, social distancing, Steve Bannon, surveillance capitalism, TED Talk, trade route, Tyler Cowen, universal basic income, Washington Consensus

Public spending there was chopped from 67 percent of GDP in 1993 to 49 percent of GDP, while the top marginal tax rate was cut by 27 percentage points. FAREWELL, WASHINGTON CONSENSUS So was this another revolution? Not really—or certainly not enough of one. At home, Thatcher and Reagan did more to change the debate about the state than they changed the state itself (possibly making reform more difficult). Abroad, the Washington consensus overreached. Privatization aside, neither Reagan nor Thatcher succeeded in reinventing the public sector for the global age they trumpeted. Reagan’s victory over the air traffic controllers did not change much: a study in 1996 found that air traffic controllers reported through sixteen layers of decision-makers (with the number rising to sixty layers when it came to policy and budget questions).10 In her eleven momentous years in office, Thatcher succeeded in reducing social spending from 22.9 percent of GDP in 1979 to 22.2 percent in 1990.

The Vanishing Middle Class: Prejudice and Power in a Dual Economy by Peter Temin

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, affirmative action, Affordable Care Act / Obamacare, air traffic controllers' union, American Legislative Exchange Council, American Society of Civil Engineers: Report Card, anti-communist, Bernie Sanders, Branko Milanovic, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carried interest, clean water, corporate raider, Corrections Corporation of America, crack epidemic, deindustrialization, desegregation, Donald Trump, driverless car, Edward Glaeser, Ferguson, Missouri, financial innovation, financial intermediation, floating exchange rates, full employment, income inequality, independent contractor, intangible asset, invisible hand, longitudinal study, low skilled workers, low-wage service sector, mandatory minimum, manufacturing employment, Mark Zuckerberg, mass immigration, mass incarceration, means of production, mortgage debt, Network effects, New Urbanism, Nixon shock, Nixon triggered the end of the Bretton Woods system, obamacare, offshore financial centre, oil shock, plutocrats, Powell Memorandum, price stability, race to the bottom, road to serfdom, Robert Solow, Ronald Reagan, Savings and loan crisis, secular stagnation, Silicon Valley, Simon Kuznets, the scientific method, War on Poverty, Washington Consensus, white flight, working poor

It is useful to see this new policy direction in terms of the New Federalism that Nixon proposed in 1969 and the Washington Consensus formulated for developing countries in the 1990s. The New Federalism proposed to counter federal control of Roosevelt’s New Deal by converting specific grants to states into block grants, that is, shifting control over federal money from federal to state governments where state officials could preserve racial discrimination. Among the recommendations in common with the Washington Consensus are the desire for fiscal discipline in place of Keynesian polices, low marginal tax rates, low tariffs, privatization of state enterprises, and deregulation of private markets.

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Holder and, 65, 89, 142, 159 slavery and, ix (see also Slavery) timing of elections and, 67–68 turnout rates and, 63–65 women and, 56, 58, 64–65, 67, 94 Voting Rights Act, 15, 58, 65, 67, 89, 94, 142, 159 Wages concepts of government and, 89–92 dual economy and, 3–13 FTE (finance, technology, and electronics) sector and, 16, 20–23, 25, 41–46 growth and, 3–4 Investment Theory of Politics and, 62, 65–70, 72, 75 low-wage sector and, 3, 27–41, 41–46 (see also Low-wage sector) race and, 49, 55, 60 real, 3–4, 21, 32–33 transition and, 41–46 very rich and, 79–81, 84 Walker, Scott, xv Wall Street, 24, 93 Walmart, 122 Walton family, 121 Warmth of Other Suns, The (Wilkerson), 20 War on Drugs, x, xv–xvi, 15, 27, 37–38, 53, 55, 104, 106, 110, 132 War on Poverty, 17, 27, 126, 168n2 Warren, Elizabeth, 53 Washington Consensus, 21 Water systems, 35–36, 129–130 Welfare Queens, 38, 171n27 Welfare state, 21, 80, 101, 104 Whistle blowers, 84 White flight, 34, 38, 117, 125, 179n7 White rage, 51, 101, 104 White supremacist organizations, 169n9 Wilkerson, Isabel, 20 Wilson, William J., 34–35, 39, 132 Witchcraft, 50 Within Our Reach (Schorr), 115, 124 Women, 12, 156 abortion and, 57–58, 72 bodily integrity and, 56–58 civic identity of, 56 college and, 57, 116 concepts of government and, 94 coverture and, 56 employment and, 59–60 English family law and, 56 equal protection clause and, 58, 67, 102 Fifteenth Amendment and, 15, 56 health care and, 56 inequality and, 12 Investment Theory of Politics and, 61, 64–65, 67 jury duty and, 59 mass incarceration and, 103, 106, 157 occupations available to, 59–60, 116 pregnancy and, 58 production and, 59 property rights of, 56–57 public education and, 115–116, 118, 120 rape and, 56–57, 108–109 suffrage and, 58, 64, 67 universities and, 57 voting rights and, 56, 58, 64–65, 67, 94 Worcester Polytechnic Institute, 57 Workers’ compensation, 4, 90–91 World War I era, ix, xi concepts of government and, 94 FTE (finance, technology, and electronics) sector and, 20–21 inequality and, 162 Investment Theory of Politics and low-wage sector and, 27 municipal water systems and, 129 production and, 20 public education and, 133 voting restrictions and, 67 World War II era, ix baby boomers and, 69, 104, 128 Bretton Woods and, 15 concepts of government and, 88, 92 conservative business movement and, 80–81 FTE (finance, technology, and electronics) sector and, 15, 21 GI Bill and, 34, 43, 52, 65 Investment Theory of Politics and, 69 low-wage sector and, 34 postwar prosperity and, 54, 88, 92, 162–164 production and, 3, 80–81 segregation and, 171n16 very rich and, 80–81 Zuckerberg, Mark, 122 Zucman, Gabriel, 82

The New Economics: A Bigger Picture by David Boyle, Andrew Simms

Abraham Maslow, Alan Greenspan, Alvin Toffler, Apollo 11, Asian financial crisis, back-to-the-land, banking crisis, behavioural economics, Bernie Madoff, Big bang: deregulation of the City of London, Bonfire of the Vanities, Bretton Woods, capital controls, carbon footprint, carbon tax, clean water, collateralized debt obligation, colonial rule, Community Supported Agriculture, congestion charging, corporate raider, corporate social responsibility, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, Crossrail, delayed gratification, deskilling, digital divide, en.wikipedia.org, energy transition, financial deregulation, financial exclusion, financial innovation, full employment, garden city movement, Glass-Steagall Act, green new deal, happiness index / gross national happiness, if you build it, they will come, income inequality, informal economy, Intergovernmental Panel on Climate Change (IPCC), Jane Jacobs, John Elkington, junk bonds, Kickstarter, land bank, land reform, light touch regulation, loss aversion, mega-rich, microcredit, Mikhail Gorbachev, Money creation, mortgage debt, neoliberal agenda, new economy, North Sea oil, Northern Rock, offshore financial centre, oil shock, peak oil, pension time bomb, pensions crisis, profit motive, purchasing power parity, quantitative easing, Ronald Reagan, seigniorage, Simon Kuznets, sovereign wealth fund, special drawing rights, systems thinking, the long tail, The Wealth of Nations by Adam Smith, Thomas L Friedman, too big to fail, trickle-down economics, Vilfredo Pareto, Washington Consensus, wealth creators, working-age population

It survives to this day in most of the assumptions of mainstream regeneration and economic development, though it is even more obvious now than it was to Carville that wealth doesn’t trickle down, it floods up. In fact, of course, the great days of trickle down economics were still to come. Every government conditioned by the so-called Washington Consensus, as well as the all-powerful International Monetary Fund (IMF) and World Bank, believed that cutting taxes would in the end stimulate the economy, and – to start with – it did. But in the constant failure of regeneration, redistribution and community revitalization, it was increasingly obvious to most people outside that consensus that trickle down simply did not work.

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It was more accurately an application of Darwin’s evolutionary theories to economics: a kind of survival of the economically fittest. But their interpretation of the ‘fit’ – the marketable, the profitable, the global – was not only a misreading of Darwin, but deeply inadequate. The financially ‘fit’ survived; those that did not fit into the shape of the new world, people, communities and nations, were bled dry. The Washington Consensus built a devastating machine that could bear no variation, and it assumed a kind of adolescent approach to morality by business, as if it were somehow exempt in the sacred duty of creating wealth. The corporate pioneer John D. Rockefeller once boasted that he was quite willing to pay someone a salary of a million dollars if he were brutal enough.

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(Ernst Friedrich, ‘Fritz’) 1, 18, 21–2, 27, 114, 117 SDRs (special drawing rights) 147–8 Seattle (Washington) 41 seeds 91, 117, 119, 140, 141 seigniorage 58–9 Sen, Amartya 12 SERs (special emission rights) 148 set prices 80 sharing 34, 44, 91, 119, 140 shopping 26, 80, 82–3, 104, 105, 125, 133 shops 20 local 75, 80, 82–3, 104, 105, 124, 124–5, 126, 151 see also out-of-town retailing; supermarkets short-termism 11, 13, 14–15 SIVs (structured investment vehicles) 1, 5–6, 6 skills 13, 60, 98, 100, 101, 105, 132 190 THE NEW ECONOMICS Slow Food 118, 119–20 Small is Beautiful (Schumacher, 1977) 1, 21 small islands 31–2, 33–4 small-scale banks 146 Smith, Adam 89 social auditing 26, 45, 153–4 social banks 144, 146 social capital 19, 33, 54–5, 86–7, 89, 126–7, 132 Wal-mart and 124–5 social credit 19, 58, 59, 90 social networks 36, 127, 132 social norms 67–8, 71 social relationships 34, 45 social return on investment (SROI) 45 Soros, George 51, 148 South Africa 136 South African New Economics (Sane) 58 South Shore Bank (Chicago) 144 sovereignty 55, 113 special drawing rights (SDRs) 147–8 special emission rights (SERs) 148 speculation 22, 53, 81, 82, 84, 146, 158 deterring 51–2, 60, 61 financial 7, 15, 50–1, 51–2, 61 spirituality 4–5, 18, 21–2, 75, 79, 81 SROI (social return on investment) 45 Stamp Out Poverty 61 Starkey, Richard 118 state 12–13, 28, 155 see also governments steady-state economy 43, 44 Stern Report (Stern, 2006) 155 Stiglitz, Joseph 61 stress 4, 35, 37, 83 structured investment vehicles see SIVs sub-prime loans 1, 5–7, 144 sub-Saharan Africa 82 ‘subsidiarity’ 117 subsidies 11, 82, 112, 113, 117, 119, 123–4 success 79–80, 89 measuring 2, 8, 10, 43, 44, 55, 154, 156, 158 suicides 83, 91, 140 super rich 120, 141, 142 supermarkets 80, 85, 90, 104, 105, 123–6, 129 sustainability 24, 73, 89, 113, 114, 116, 117 sustainable development 51–2, 61 Swann, Bob 120, 151 Sweden 102 Swift, Jonathan 18 Switzerland 52, 62 T-bills (Treasury bills) 49–50, 58 takeovers 84, 142, 143 talent system 58 targets 9, 41, 129 tariffs 113 tax havens 15, 52–3, 53, 61, 136, 157 Tax Justice Network 136–7 taxation 73, 92, 116 taxes 10, 15, 27, 32, 43, 62, 136–7 paid by corporations 52, 61, 137, 157 TB (tuberculosis) 130, 148 TEQs (tradeable energy quotas) 117–18 terra (currency) 56, 61, 120 Tesco 85, 116, 125 Thatcher, Margaret 21, 22, 23, 27 The Other Economic Summit see TOES Thoreau, Henry David 69 time 44, 45–6, 60, 103, 132 time banks 58, 59, 60, 89, 92, 123, 131, 132 Titmuss, Richard 65, 70 Tobin, James 51–2 Tobin Levy 51–2, 61 TOES (The Other Economic Summit) 23–5 Toffler, Alvin 88 trade 25, 81, 109–10, 111–15, 116, 148, 158 fair trade 26, 119, 145, 153 Trade-Related Aspects of Intellectual Property see TRIPS tradeable energy quotas (TEQs) 117–18 traffic speed 65–6, 74 transport 67, 74, 112, 115 see also public transport Treasury bills (T-bills) 49–50, 58 INDEX trickle down 27–8, 39–40, 138 ‘doesn’t work’ 27, 52, 104 TRIPS (Trade-Related Aspects of Intellectual Property) agreement (1995) 113, 117 tuberculosis (TB) 130, 148 Turning Point network 23 UK (United Kingdom) 4, 39, 55, 61, 70, 85, 119, 145 aid from 136 corporation tax gap 137 cultural enrichment 111 debt 83, 141 Ecological Debt Day 114 energy 102, 114 food production 96, 114 Happy Planet Index 32 ‘illth’ 4, 35 interest rates 144–5 local savings schemes 61 money deposits 136 orchard loss 111, 112, 115, 124 poverty 82 real costs of road transport 115 super-casinos 14 trade 112, 113 well-being 4, 35–6, 41, 68 working hours 68 young people in 35–6 see also house prices Ukraine 110 UN (United Nations) 39, 51–2, 60, 91, 110–11, 157 unemployment 44, 46, 55–6, 91–2, 157 unpaid work 87–9 Unto This Last (Ruskin, 1860) 18, 29 USA (United States) 39, 57, 61, 82, 113, 119, 127, 157 and Cuba 95 debt 49–50, 84, 141 Happy Planet Index 32 invasion of Iraq (2003) 49, 60 subsidies 11, 113 trade deficit 50 191 unemployment 55 well-being deteriorating 41, 68 usury 80, 81, 144–5 value 44, 98, 99 measuring 10, 15, 29, 53, 59, 115 values 11, 71, 115, 127 Vanuatu 31–2, 35, 42 Vaxjo (Sweden) 102 vegetable box schemes 104 ‘victory gardening movement’ 96 Virgil, Eclogues 110 voluntary sector 13, 87, 132, 145 voting 124–5, 127 Wal-mart 104, 123, 124–5 Wall Street Crash (1929) 1, 51, 90 Waring, Marilyn 38–9 Washington Consensus 27–8 waste 97, 100–1, 158 Waste Electrical and Electronic Equipment directive see WEEE directive wealth 18, 28, 38, 41–2, 52, 89, 141–2, 152 defining 18–19, 32, 34, 35, 38 and ‘illth’ 29, 35–6 local 14, 53–4 measuring 32, 36–40, 53–4, 143 money and 19, 32, 38, 78, 143 new economics and 3, 15, 35, 37 real 2, 32, 37–40 see also Happy Planet Index WEDGE project 23 WEEE (Waste Electrical and Electronic Equipment) directive 98, 100, 101 welfare 25, 28, 44, 127, 129, 153 Welfare State 19, 129 well-being 4–5, 25, 45–6, 99, 158 demand for 4–5, 11, 68–9 falls in 4, 37, 41, 68, 78 GDP and 4, 36, 37 measuring 4, 18, 32–3, 34, 43 money and 18, 21, 81 as motivation 4–5, 11, 68–9, 72 new economics and 41–7, 68–9 192 THE NEW ECONOMICS origins of 43 willingness to pay 99 Willington, Sally 23 Wir currency 62 Witt, Susan 151 Woking (Surrey) 102–3 women 38–9, 77–8, 79, 83, 144 work 24, 45, 81, 84–5, 86–7, 92 concept of 25, 83, 86, 87–9 to pay mortgages 46, 68, 73, 77–8, 79, 81, 83, 84, 89, 126–7, 140 of women 38–9, 77–8, 83 working hours 45–6, 78, 79, 83, 92 World Bank 27, 81, 82, 91, 137, 139, 143, 147 Yank Tanks (film, Schendel, 2002) 95 young people, UK 35–6 youth courts 129, 132 Yunus, Mohammed 143–4 Zimbabwe 32 Zurich (Switzerland) 66

The Long Boom: A Vision for the Coming Age of Prosperity by Peter Schwartz, Peter Leyden, Joel Hyatt

"World Economic Forum" Davos, Alan Greenspan, Alvin Toffler, American ideology, Asian financial crisis, Berlin Wall, business cycle, centre right, classic study, clean water, complexity theory, computer age, crony capitalism, cross-subsidies, Danny Hillis, dark matter, dematerialisation, Deng Xiaoping, Dissolution of the Soviet Union, double helix, edge city, Electric Kool-Aid Acid Test, European colonialism, Fall of the Berlin Wall, financial innovation, George Gilder, glass ceiling, global village, Gregor Mendel, Herman Kahn, hydrogen economy, industrial cluster, informal economy, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Isaac Newton, It's morning again in America, junk bonds, Just-in-time delivery, Kevin Kelly, knowledge economy, knowledge worker, life extension, market bubble, mass immigration, megacity, Mikhail Gorbachev, Neal Stephenson, Nelson Mandela, new economy, oil shock, open borders, out of africa, Productivity paradox, QR code, Richard Feynman, Ronald Reagan, Search for Extraterrestrial Intelligence, shareholder value, Silicon Valley, stem cell, Steve Jobs, Stewart Brand, The Hackers Conference, the scientific method, Thomas L Friedman, upwardly mobile, Washington Consensus, We are as Gods, Whole Earth Catalog, women in the workforce, Y2K, zero-sum game

The Latin American governments slashed much of the fat in their budgets and shifted to more austere economic policies, and the financial sectors began the long, hard road of reform toward the necessary standards of accounting. The approach, which was the developing world's version of what Reagan and Thatcher had begun in the United States and Britain just a few years before, became known as the Washington consensus, referring to the policies encouraged by global institutions like the World Bank and IMF (International Monetary Fund), which are based in Washington. The program called for privatization of state-run monopolies, deregulation of governmental control over business, lower trade barriers, lower barriers to foreign investment, reform of the tax systems, a focus on fiscal and monetary policies for fighting inflation, and the maintenance of a competitive foreign exchange rate.

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The program called for privatization of state-run monopolies, deregulation of governmental control over business, lower trade barriers, lower barriers to foreign investment, reform of the tax systems, a focus on fiscal and monetary policies for fighting inflation, and the maintenance of a competitive foreign exchange rate. The Latin Americans had bitten the bullet on this approach by the late 1980s, but following the Washington consensus was a very difficult process, so difficult, in fact, that the Latin Americans call the period the "lost decade." For example, the per capita income in Latin America in 1990 was less than that in 1980. However, despite the pain, in many countries the restructuring effort achieved its purpose. By the late 1990s, when Asia and much of the developing world was succumbing to a near financial meltdown, Latin America was able to hold back disaster indefinitely.

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See microprocessors Connections, See Networks Christian Democratic coalition, 94, Control vs. complexity, 263-265 113 Copernicus, 212 Chrysler, 60, 175 Corporations, 2, 42-45, 121 Citibank, 262 Climate change Corruption, 114-115, 126 COX2, 190 developing vs. developed worlds, 157-159 Crime, 285-286 floods, 150 Culture preservation, 234 forest fires, 150-151 Cuyahoga River, 156 global warming, 10, 152-154 Cyberspace libraries, 89 Hurricane Andrew, 149,150 Cystic fibrosis, 198 Hurricane Mitch, 150 overview, 148-154 Daimler-Benz, 60,171, 174 pollution in China, 158-159 D'Alema, Massimo, 94 regional weather problems, 151 Dark matter, 213 tornadoes, 151 Databases, 215-216 United Nation's Conference on Decentralization Climate Change, 157 personal computers and, 19, 26 Clinton, President Bill, 41, 52, 76, ragtag computer techies fostering, 92, 121 28-30 Cloning, 195-199 of telecommunications, 22,178 Club of Rome, 162 of utilities industry, 178-181 Coal, 158-159 Defense Advanced Research Projects Coca Cola, 112 Agency (DARPA), 50 Code of honor, 28-30 Delphi Energy & Engine Cold fusion, 219-220 Management Systems, 176 Cold War, 48, 49, 134-135, 22 Deming, W, Edwards, 119 Colorado, 267 Democracy Communism, 40, 116, 262 free markets and, 111-112, 115 Compassionate conservatism, 274 growth of middle class and, 235 Complexity theory, 263-265 media freedom in, 114 Computers rule of twos in, 112-114 economic decentralization and, in Singapore, 269 19, 26, 28-30 transparency rule, 114-115 impact of, 189-190 women in, 250 326 Democratic Party, 76-77 Democrats of the Left, 92 Deng, Xiaoping, 48, 116 Depression, 51-52 Deregulation of European businesses, 93 of U.S. businesses, 41 of utilities industry, 178,180-181 in Washington consensus, 96 Detroit Edison, 178 Digital technologies, 25-26 Diversity, 248, 273 DNA, 188-189, 197-198 Dolly, 195 Dow Jones Industrial Average, 47, 92 Downsizing, 42, 93 Drake, Frank, 220 Drake's equation, 220 Drexler, Eric, 203-204, 208 Dust Bowl, 149 Earth Day, 160 Earth Summit, 157 East vs. West.

The World in 2050: Four Forces Shaping Civilization's Northern Future by Laurence C. Smith

Boeing 747, Bretton Woods, BRICs, business cycle, clean water, climate change refugee, Climategate, colonial rule, data science, deglobalization, demographic transition, Deng Xiaoping, Easter island, electricity market, energy security, flex fuel, G4S, global supply chain, Google Earth, Great Leap Forward, guest worker program, Hans Island, hydrogen economy, ice-free Arctic, informal economy, Intergovernmental Panel on Climate Change (IPCC), invention of agriculture, invisible hand, land tenure, Martin Wolf, Medieval Warm Period, megacity, megaproject, Mikhail Gorbachev, New Urbanism, oil shale / tar sands, oil shock, peak oil, Pearl River Delta, purchasing power parity, Ronald Reagan, Ronald Reagan: Tear down this wall, side project, Silicon Valley, smart grid, sovereign wealth fund, special economic zone, standardized shipping container, The Wealth of Nations by Adam Smith, Thomas Malthus, trade liberalization, trade route, Tragedy of the Commons, UNCLOS, UNCLOS, urban planning, Washington Consensus, Y2K

Agnew, Hegemony: The New Shape of Global Power (Philadelphia: Temple University Press, 2005). 31 The Washington Consensus is attributed to John Williamson of the Peterson Institute for International Economics, a think tank in Washington, D.C. (www.iie.com). Its policies have now been adopted by (or forced onto, depending on one’s point of view) many developing countries. Neoliberals praise these reforms, citing new markets and jobs for struggling people. Critics point to two-dollar-a-day wages while multinational corporations grow rich. The Washington Consensus and similar policies remain highly controversial. If you have any antiglobalization friends, mention it to them sometime and watch their mouths foam. 32 “Expanding trade and investment has been one of the highest priorities of my administration. . . .

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Throughout the 1980s and 1990s the IMF, WTO, and World Bank aggressively pursued agendas of liberalizing (deregulating) trade markets around the world, vigorously urged on by the United States.30 A common tactic was to require developing countries to accept neoliberal reforms to qualify for IMF or World Bank loans. This practice was exemplified by the “Washington Consensus,” a controversial list of hard-nosed reforms including trade deregulation, opening to direct foreign investment, and privatization of state enterprises.31 In the United States, presidents from both political parties also worked to dismantle international trade barriers. Of particular importance to this book was the North American Free Trade Agreement (NAFTA), proposed in 1991 by President George Herbert Walker Bush to remove trade barriers between the United States, Mexico, and Canada.

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Geological Survey (USGS) U.S. Minerals and Management Service U.S. National Intelligence Council U.S. National Science Foundation Uzbekistan Vancouver, British Colombia Varlomov, Alexei Venezuela Verkhoyansk, Russia Vietnam Vikings volcanoes Volta River Vörösmarty, Charlie Walmart warfare Washington Consensus Water Follies (Glennon) water resources: and agriculture; aquifers; and climate change; crises related to; and drought; and energy consumption; export projects; and foreign policy; and global water stress; and groundwater pumping; and hydropower; importance of; and the Intertropical Convergence Zone; large water projects; measurement of; and population growth; and privatization; prospects for; and runoff; and sanitation; and snowpack and glaciers; and transboundary rivers; and urbanization; and virtual water trade WaterGAP Watt-Cloutier, Sheila weather patterns.

The Ascent of Money: A Financial History of the World by Niall Ferguson

Admiral Zheng, Alan Greenspan, An Inconvenient Truth, Andrei Shleifer, Asian financial crisis, asset allocation, asset-backed security, Atahualpa, bank run, banking crisis, banks create money, Bear Stearns, Black Monday: stock market crash in 1987, Black Swan, Black-Scholes formula, Bonfire of the Vanities, Bretton Woods, BRICs, British Empire, business cycle, capital asset pricing model, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, classic study, collateralized debt obligation, colonial exploitation, commoditize, Corn Laws, corporate governance, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, Daniel Kahneman / Amos Tversky, deglobalization, diversification, diversified portfolio, double entry bookkeeping, Edmond Halley, Edward Glaeser, Edward Lloyd's coffeehouse, equity risk premium, financial engineering, financial innovation, financial intermediation, fixed income, floating exchange rates, Fractional reserve banking, Francisco Pizarro, full employment, Future Shock, German hyperinflation, Greenspan put, Herman Kahn, Hernando de Soto, high net worth, hindsight bias, Home mortgage interest deduction, Hyman Minsky, income inequality, information asymmetry, interest rate swap, Intergovernmental Panel on Climate Change (IPCC), Isaac Newton, iterative process, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", John Meriwether, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, junk bonds, Kenneth Arrow, Kenneth Rogoff, knowledge economy, labour mobility, Landlord’s Game, liberal capitalism, London Interbank Offered Rate, Long Term Capital Management, low interest rates, market bubble, market fundamentalism, means of production, Mikhail Gorbachev, Modern Monetary Theory, Money creation, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, mortgage tax deduction, Myron Scholes, Naomi Klein, National Debt Clock, negative equity, Nelson Mandela, Nick Bostrom, Nick Leeson, Northern Rock, Parag Khanna, pension reform, price anchoring, price stability, principal–agent problem, probability theory / Blaise Pascal / Pierre de Fermat, profit motive, quantitative hedge fund, RAND corporation, random walk, rent control, rent-seeking, reserve currency, Richard Thaler, risk free rate, Robert Shiller, rolling blackouts, Ronald Reagan, Savings and loan crisis, savings glut, seigniorage, short selling, Silicon Valley, South Sea Bubble, sovereign wealth fund, spice trade, stocks for the long run, structural adjustment programs, subprime mortgage crisis, tail risk, technology bubble, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Bayes, Thomas Malthus, Thorstein Veblen, tontine, too big to fail, transaction costs, two and twenty, undersea cable, value at risk, W. E. B. Du Bois, Washington Consensus, Yom Kippur War

Now the role of financial policing had to be played by two unarmed bankers, the International Monetary Fund and the World Bank. Their new watch-word became ‘conditionality’: no reforms, no money. Their preferred mechanism was the structural adjustment programme. And the policies the debtor countries had to adopt became known as the Washington Consensus, a wish-list of ten economic policies that would have gladdened the heart of a British imperial administrator a hundred years before.bc Number one was to impose fiscal discipline to reduce or eliminate deficits. The tax base was to be broadened and tax rates lowered. The market was to set interest and exchange rates.

…

It was actually the Organization for Economic Cooperation and Development that blazed the liberalizing trail, followed (after the conversion of French socialists like Jacques Delors and Michel Camdessus) by the European Commission and European Council. Indeed, there was arguably a Paris Consensus before there was a Washington Consensus (though in many ways it was building on a much earlier Bonn Consensus in favour of free capital markets).64 In London, too, Margaret Thatcher’s government pressed ahead with unilateral capital account liberalization without any prompting from the United States. Rather, it was the Reagan administration that followed Thatcher’s lead.

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Jaime Roldós Aguilera of Ecuador . . . . . . and Omar Torrijos of Panama: Allegedly victims of the ‘economic hit men’ Stiglitz’s biggest complaint against the IMF is that it responded the wrong way to the Asian financial crisis of 1997, lending a total of $95 billion to countries in difficulty, but attaching Washington Consensus-style conditions (higher interest rates, smaller government deficits) that actually served to worsen the crisis. It is a view that has been partially echoed by, among others, the economist and columnist Paul Krugman.65 There is no doubting the severity of the 1997-8 crisis. In countries such as Indonesia, Malaysia, South Korea and Thailand there was a very severe recession in 1998.

China into Africa: trade, aid, and influence by Robert I. Rotberg

barriers to entry, BRICs, colonial rule, corporate governance, Deng Xiaoping, energy security, European colonialism, export processing zone, failed state, global supply chain, global value chain, income inequality, Khartoum Gordon, land reform, low interest rates, megacity, megaproject, microcredit, offshore financial centre, one-China policy, out of africa, Pearl River Delta, profit maximization, purchasing power parity, RAND corporation, Scramble for Africa, Shenzhen special economic zone , South China Sea, special economic zone, structural adjustment programs, subprime mortgage crisis, trade route, Washington Consensus, zero-sum game

Disillusionment induced by the collapse of the Soviet Union at the end of the Cold War and the seeming global triumph of the Washington Consensus led to a cessation of the debate in the 1990s. 13-7561-4 ch13.qxd 9/16/08 4:23 PM Page 288 288 ndubisi obiorah, darren kew, and yusuf tanko The ensuing period was characterized by structural adjustment, poverty reduction, and other economic reform programs imposed on African governments by Western donors and international finance institutions. Many Africans, including intellectuals and civil society actors, perceive that their governments’ adoption of the Washington Consensus has failed to deliver both bread and freedom. African rulers learned that they could successfully engage in a sleight of hand by adopting the barest minimum in political and economic reforms, which would permit bureaucracies to continue aid flows to their countries, while vigorously resisting substantive change.

…

This success, often attributed to China’s state-led development model, has rekindled the debate in Africa over appropriate paths to development and encouraged many Africans to look to East Asia for political and economic models. Many in Africa question the wisdom of remaining wedded to the Washington Consensus and ask if indeed bread does not count more than the vote, and if human rights and democracy are not really of secondary concern to attaining political stability and economic progress. The debate in Africa over the China model is not, however, based on a romantic vision. Admiration among the Nigerian media for China’s economic success is often balanced with acute recognition of its social costs and the lack of political freedoms.

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-China Economic and Security Family Planning Association, 205; Review Commission, 181, 218 16-7561-4 index.qxd 9/16/08 4:25 PM Page 338 338 Index Value-added products, 99, 106–07 West Kordofan, Sudan, 178 Venezuela, 163 Whelan, Theresa, 168 Vietnam, 26, 71; foreign aid and, 198; White Nile River, 171 network trade and, 107 Whites, 260, 263 Vines, Alex, 40 Wolfowitz, Paul, 218, 302 Wood Mackenzie (analysts firm), 120 Wade, Abdoulaye, 75, 242 World Bank, 261; aid coordination and, WAHUM Fabrics, 291 303, 308; on China as creditor, 302; Wang Dongming, 240 Chinese foreign aid and, 208, 210, Wang Jiarui, 240 218; Eximbank and, 198; high pay- Wang Qiming, 35 ments and, 123; tripartite coopera- Warri, Nigeria, 281 tion and, 205; vs. China model, 288 Washington Consensus, 287–88 World Health Organization (WHO), Van der Wath, Kobus, 52 301 Websites, 219, 240; concessional loans World Trade Organization (WTO), 2, and, 219–20, 223, 226 51, 68, 213; China’s entry into, 58, 68 Wei Jianguo, 34 Wu Bangguo, 241–42 WEMPCO (Western Metal Products Wu Guanzheng, 24 Company), 291 Wu Xueqian, 28 Wen Jiabao, 120; foreign aid and, 209; visits to Africa by, 3, 51, 53 Xiamen, China, 138–40 Wenran Jiang, 13 Xinjiang Uyghur Autonomous Region, West, 116–17, 213, 217–18, 243; African 12 resources and, 290; anticolonialism and, 231; arms transfers and, 163; Yangtze River Delta, 138 balance of power and, 273, 290; Yar’Adua, Umaru, 275 China as alternative to, 274, 287; on Youth militias, 261 China as creditor, 303; Chinese- African partnership and, 299; condi- Zaire (Democratic Republic of Congo), tional assistance and, 251; 27, 157–59; debt-equity swaps and, development model of, 287–88, 298; 205 human rights and, 263–64; image of, Zambia, 6, 11, 27–28, 56, 117; arms 305; imperialism and, 157; market transfers to, 163; China model and, reforms and, 234; military assistance 273; Copperbelt region, 143–44; crit- and, 159, 174; Nigeria and, 277; oil icism of China by, 301; development and, 109–11, 281, 305; oil strategy and, 146; elections in, 235; foreign and, 109–12; post-Cold War era and, aid and, 200; immigrant backlash in, 300; reforms and, 290–91; Sudan 272–73; infrastructure and, 74; and, 124–25; transparency and, 124; Kaunda and, 146; labor and, 122; Zimbabwe and, 261 military ties to, 155–56, 158, 161, West Africa, 100, 106; SEZs and, 148 173; mining in, 252; as recipient of Western Sahara: peacekeeping in, Chinese arms, 9–10; SEZs and, 6, 176–77 140; Tanzam Railway and, 147 16-7561-4 index.qxd 9/16/08 4:25 PM Page 339 Index 339 Zambia Privatization Agency, 147 culpability and, 252, 261–63, 264–66; Zanzibar, 158 conflict in, 308; Confucius Institutes Zhai Jun, 175, 306 in, 29, 78; corruption and, 301; dele- Zhao Ziyang, 28, 203–05; four princi- gations from, 242; human rights and, ples of, 26–27 14–15, 55, 251, 260–61; military Zhejiang Normal University, 29 assistance and, 159–61, 173–75; Zheng He, 116, 179–80 stability-building efforts in, 17; Zhong Xing Telecommunication Equip- trade with, 6, 55; visited by Chinese ment Company, 275 leaders, 28 Zhongyuan Petroleum Exploration Zimbabwe African National Union— Bureau, 179 Patriotic Front (ZANU-PF), 242, Zhou Enlai, 23, 146, 231; China’s oil 260–61 strategy and, 112; eight principles of, Zimbabwe African National Union 26–27; foreign aid and, 200 (ZANU), 156, 260 Zhu Di, 116 Zimbabwe African People’s Union Zhuhai, China, 138, 140 (ZAPU), 260 Zimbabwe, 3, 10, 69, 81, 156; antidemo- Zimbabwe Staff College, 175 cratic regimes in, 11–15, 37; arms Zoellick, Robert, 306–07 transfers and, 9–10, 163; Chinese ZTE Corporation, 167 16-7561-4 index.qxd 9/16/08 4:25 PM Page 340 Document Outline Table of Contents Preface Chapter 1: China's Quest for Resources, Opportunities, and Influence in Africa Chapter 2: China's New Policy toward Africa Chapter 3: China's Emerging Strategic Partnerships in Africa Chapter 4: Africa and China: Engaging Postcolonial Interdependencies Chapter 5: Chinese-African Trade and Investment Chapter 6: Searching for Oil Chapter 7: Special Economic Zones Chapter 8: Military and Security Relations Chapter 9: China's Foreign Aid in Africa Chapter 10: Chinese Concessional Loans Chapter 11: China's Political Outreach to Africa Chapter 12: China's Role in Human Rights Abuses in Africa Chapter 13: "Peaceful Rise" and Human Rights Chapter 14: China's Renewed Partnership with Africa Contributors Index Table of Contents Partnerships in Africa

The Great Convergence: Information Technology and the New Globalization by Richard Baldwin

"World Economic Forum" Davos, 3D printing, additive manufacturing, Admiral Zheng, agricultural Revolution, air freight, Amazon Mechanical Turk, Berlin Wall, bilateral investment treaty, Branko Milanovic, buy low sell high, call centre, Columbian Exchange, commoditize, commodity super cycle, David Ricardo: comparative advantage, deindustrialization, domestication of the camel, Edward Glaeser, endogenous growth, Erik Brynjolfsson, export processing zone, financial intermediation, George Gilder, global supply chain, global value chain, Henri Poincaré, imperial preference, industrial cluster, industrial robot, intangible asset, invention of agriculture, invention of the telegraph, investor state dispute settlement, Isaac Newton, Islamic Golden Age, James Dyson, Kickstarter, knowledge economy, knowledge worker, Lao Tzu, low skilled workers, market fragmentation, mass immigration, Metcalfe’s law, New Economic Geography, out of africa, paper trading, Paul Samuelson, Pax Mongolica, profit motive, rent-seeking, reshoring, Richard Florida, rising living standards, Robert Metcalfe, Robert Solow, Second Machine Age, Simon Kuznets, Skype, Snapchat, Stephen Hawking, tacit knowledge, telepresence, telerobotics, The Wealth of Nations by Adam Smith, trade liberalization, trade route, Washington Consensus

In the first wave of thinking, the standard way of implementing this “big push” was to reserve the local market to local productions by raising import tariffs sky-high. This was called the “import substitution industrialization” strategy. Its widespread failure was brought home by the 1980s debt crises. A second wave of theories, called the “Washington Consensus,” embraced the same virtuous cycle groundwork but relied more on free markets as the cycle starter. By the time Lindauer and Pritchett penned their piece, enthusiasm for the second wave had gone flat. Many tried it but few succeeded. Worse yet, the success stories seemed to defy the thinking.

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See also bilateral investment treaties (BTIs) The Foundations of Science (Poincaré), 281 fractionalization (fragmentation) of production, 137, 142, 168, 175–176, 196–206, 203f, 231, 232, 290, 291 France, 188. See also Europe; G7 Frantz, Brian, 49 free trade, 101, 125, 129, 161, 166, 190–191, 193–196, 194f, 209. See also GATT; liberal policies; Washington Consensus Friedman, Thomas, 142 Fujita, Masahisa, 127, 179 future (third unbundling), 8–10, 281–301 G7/global North/developed nations, 5–7; agglomeration and, 129, 188; BITs and, 104; communication and, 286–287; domestic value-added in export growth by sector 1994-2008, 94f, 95, 96; exports and, 151–154, 153f; GATT and, 101; global GDP share and, 48f, 81f, 89–, 92f, 93, 186; global income share of 1500-2020, 2f–3; Great Convergence and, 136; ICT/comparative advantage and, 139, 144; ideas and, 124; income divergence and, 57, 59; industrial clustering and, 124; industrialization and, 5, 55–56, 59–60, 60f, 61, 109; manufacturing and, 3f, 86–87, 88f, 89, 90f, 91, 133; national vs. corporate interest and, 169–170; New Globalization and, 12, 110, 143–144, 163f; New Globalization policies and, 225–241; Old Globalization (first unbundling) and, 78, 123; people-moving costs and, 7; servicification and, 155, 156–160; skilled workers and, 205; social policies and, 240; tariffs and, 72f, 100f, 101; trade with developing nations, 161; transfer of knowledge and, 175; urbanization and, 63; workers and, 13, 162, 165, 166, 168.

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See also global value chains (GVCs) Van Reenen, John, 200 Venables, Tony, 127, 179, 195, 208–211 Venezuela, 95. See also Latin America; R11 (Rising Eleven) Versailles Treaty, 64 Vietnamese case studies, 262, 270, 275–276 Vietnamese case study, 145–146 virtual presence, 98 visas, 239, 240 wages, 8, 12–13, 186–187, 201–202, 232, 290, 292 Wallerstien, Immanuel, 208 Washington Consensus, 244 water transport, inland, 49 The Wealth of Nations (Smith), 39, 40, 198–199 Weinberg, Gerhard, 66 “What’s the Big Idea? The Third Generation of Policies for Economic Growth” (Lindauer and Pritchett), 243, 244 “When Did Globalization Begin?” (O’Rourke and Williamson), 53 “Where Ricardo and Mill Rebut and Confirm Arguments of Mainstream Economists Supporting Globalization” (Samuelson), 147–148 Why the West Rules—For Now (Morris), 25 Williamson, Jeff, 5, 53 Wilson, Charles Erwin, 169–170 Wilson, Woodrow, 64 Winkler, Deborah, 272 wire harnesses examples, 79, 260, 261, 270 workers and jobs: cities and, 235; future and, 164–165, 284–285, 294–295; global value chains and, 230–231; manufacturing and, 232–234; New Globalization (second unbundling) and, 162, 164–170, 166f, 175, 176, 225, 236; Old/New Globalization compared, 166f–169; textile-mill, 236–237.

The Post-American World: Release 2.0 by Fareed Zakaria

"World Economic Forum" Davos, affirmative action, agricultural Revolution, airport security, Alan Greenspan, anti-communist, Asian financial crisis, battle of ideas, Bear Stearns, Berlin Wall, Bretton Woods, BRICs, British Empire, call centre, capital controls, central bank independence, centre right, collapse of Lehman Brothers, conceptual framework, Credit Default Swap, currency manipulation / currency intervention, delayed gratification, Deng Xiaoping, double entry bookkeeping, failed state, Fall of the Berlin Wall, financial innovation, global reserve currency, global supply chain, Great Leap Forward, illegal immigration, interest rate derivative, Intergovernmental Panel on Climate Change (IPCC), knowledge economy, low interest rates, Mahatma Gandhi, Martin Wolf, mutually assured destruction, National Debt Clock, new economy, no-fly zone, oil shock, open economy, out of africa, Parag Khanna, postindustrial economy, purchasing power parity, race to the bottom, reserve currency, Ronald Reagan, Silicon Valley, Silicon Valley startup, South China Sea, Steven Pinker, Suez crisis 1956, The future is already here, The Great Moderation, Thomas L Friedman, Thomas Malthus, three-masted sailing ship, trade route, Washington Consensus, working-age population, young professional, zero-sum game

As a result, it held hegemony not just in military power and diplomacy but in the realm of ideas. Central bankers and treasury ministers around the world studied the basics of their profession at American schools. Politicians developed their economies by following the advice prescribed by the Washington consensus. The innovations of Silicon Valley were the envy of the world. New York’s deep, lucrative capital markets were admired and imitated on every continent except Antarctica. As Brad Setser, a fellow at the Council on Foreign Relations, has noted, globalization after World War II was almost synonymous with Americanization.

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When I have put the same question to Indian or Latin American officials, they launch into complicated explanations of the need for rural welfare, subsidies for poor farmers, and other such programs, all designed to slow down market forces and retard the historical—and often painful—process of market-driven industrialization. But Beijing’s approach has also been different from that advocated by many free-market economists—a program of simultaneous reforms on all fronts that is sometimes called the “Washington consensus.” Most significantly, it is different from Russia’s shock therapy approach under Boris Yeltsin, which Chinese leaders studied carefully and often cite as a negative example, probably agreeing with Strobe Talbot’s pithy description when he served in the Clinton administration: “Too much shock, too little therapy.”

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Information Services, 271 Uttar Pradesh, 179 Uzbekistan, 54 Valentine’s Day, 88 Vedrine, Hubert, 246 Véliz, Claudio, 187 Venezuela, 6, 19, 31, 55, 190, 194n venture capital, 201–2 Vesalius, Andreas, 68 Victoria, Queen of England, 184–85 Vietnam, 20, 133–34, 143, 157, 199, 252, 281, 284 Vietnam War, 20, 199, 252, 284 Vijayanagar, 67 visas, travel, 280 Voice of America, 96 Volcker, Paul, 25 Voltaire, 123 wage levels, 67, 206, 207, 229, 282 Wahhabism, 12 Wall Street Journal, 209 Walmart, 104, 281 warfare, 69, 73, 76, 85–86 War of 1812, 194 war on terror, 29, 241, 264, 269, 272–73, 276–80 “Washington consensus,” 107 Washington Post, 30, 211 Watergate scandal, 284 water supplies, 33 wealth, 65–67, 70n, 75, 76, 93–94, 151–52, 215–16 weapons of mass destruction (WMDs), 17, 250 Weber, Steven, 38 WEF Competitiveness Index, 212–13 Welch, Jack, 228 Weller, Robert, 126 Wen Jiabao, 114, 119, 134, 135 Western culture, 1–5, 15, 38, 41, 62–99, 126–27 wheat prices, 21, 31, 67 Whelan, Theresa, 270 Wilhelm II, Emperor of Germany, 186n Wilson, Woodrow, 182 Wohlforth, William, 257 Wolf, Martin, 139, 232 women’s rights, 88–89, 93, 157–58, 160–61 working class, 216 World Bank, 24, 41, 55, 130 World Economic Forum, 146–47, 200, 212–13 World Economy, The: A Millennial Perspective, (Maddison), 66n World Trade Organization (WTO), 5, 27, 108, 137 World War I, 162, 190, 191, 195, 253 World War II, 20, 36–38, 40, 101, 134–35, 195–97, 253, 254, 256, 284 Wu Jianmin, 118, 128 Xinghai Fang, 118–19 Yalta Conference (1945), 196, 254 Yangtze River, 71, 111 Yeltsin, Boris, 107 yen, value of, 282 Youth (Conrad), 85 Yugoslavia, 10, 245 yutori kyoiku (relaxed education), 212 Yu Yongding, 49 Zambezi, 80 Zarqawi, Abu Mussab al-, 12 Zawahiri, Ayman, 13, 15 Zenawi, Meles, 130 Zheng Bijian, 119 Zheng He, 62–64, 70, 71, 77 Zimbabwe, 26, 130 * Even if an attack were to take place tomorrow, the fact that, for nine years, Al Qaeda Central has been unable to organize one explosion anywhere is surely worth noting

Unelected Power: The Quest for Legitimacy in Central Banking and the Regulatory State by Paul Tucker

"Friedman doctrine" OR "shareholder theory", Alan Greenspan, Andrei Shleifer, bank run, banking crisis, barriers to entry, Basel III, battle of ideas, Bear Stearns, Ben Bernanke: helicopter money, Berlin Wall, Bretton Woods, Brexit referendum, business cycle, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, centre right, conceptual framework, corporate governance, diversified portfolio, electricity market, Fall of the Berlin Wall, financial innovation, financial intermediation, financial repression, first-past-the-post, floating exchange rates, forensic accounting, forward guidance, Fractional reserve banking, Francis Fukuyama: the end of history, full employment, George Akerlof, Greenspan put, incomplete markets, inflation targeting, information asymmetry, invisible hand, iterative process, Jean Tirole, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, liberal capitalism, light touch regulation, Long Term Capital Management, low interest rates, means of production, Money creation, money market fund, Mont Pelerin Society, moral hazard, Northern Rock, operational security, Pareto efficiency, Paul Samuelson, price mechanism, price stability, principal–agent problem, profit maximization, public intellectual, quantitative easing, regulatory arbitrage, reserve currency, risk free rate, risk tolerance, risk-adjusted returns, road to serfdom, Robert Bork, Ronald Coase, seigniorage, short selling, Social Responsibility of Business Is to Increase Its Profits, stochastic process, subprime mortgage crisis, tail risk, The Chicago School, The Great Moderation, The Market for Lemons, the payments system, too big to fail, transaction costs, Vilfredo Pareto, Washington Consensus, yield curve, zero-coupon bond, zero-sum game

Administrative agencies now regulate the terms of trade (competitive conditions) in many industries, health and safety at work and in public spaces, the quality of goods and services sold to consumers, social discrimination, the quality of public services, and the integrity of the higher reaches of the state (public appointments, electoral practices, legislators’ expenses). Furthermore, since the 1990s international organizations have been promoting independent agencies as a “good thing.” Central bank independence was prominent in the 1990s’ “Washington Consensus” on global macroeconomic and financial management. The International Monetary Fund (IMF) advocates independence for financial regulators. The Organisation for Economic Co-operation and Development (OECD) promotes delegated governance across a wider terrain.1 There is something striking about an official consensus in favor of insulating policy from politics articulated by institutions that are themselves nonmajoritarian, as critics are not slow to point out.

…

As CBI spread, it became harder to buck the trend, via what some have termed mimesis.9 Eventually, this was institutionalized in canons of orthodoxy. In Europe, that came through the Delors Report’s strong recommendation that any monetary union be founded upon an independent central bank. In the wider world, it worked through IMF advocacy and, in specific cases, conditions attached to support packages, as part of the so-called Washington Consensus.10 Pristine and Parsimonious For a couple of decades, the monetary policy conducted under this global standard was fairly simple and straightforward. Compared with much of the administrative state, central banks did not rely on a plethora of “key performance indicators,” which are useful for managing projects and for delivery functions but not for facilitating public debate on achieving a public purpose.

…

Arguably, it is natural to read the first clause as an objective (albeit one that, in terms of the Principles, is hard to monitor) and the second as the purpose (Fisher, “Financial Stability,” and Tucker, “Monetary Policy”). 9 McNamara, “Rational Fictions.” 10 Williamson, “Washington”; and a retrospective, distinguishing between earlier and later versions of the package, in Fischer, “The Washington Consensus.” 11 O’Neill, A Question of Trust and “Perverting Trust.” 12 Woodford, “Principles and Public Policy,” makes similar points. As it happens, I do not share the enthusiasm for some of the specific substantive principles Woodford advances, which I think mix up practicable policy in a world of wobbly rationality with ideal metastandards for evaluating earthly economic life. 13 Hetzel and Leach, “Treasury-Fed Accord.” 14 Woodward, Maestro. 15 Volcker, “Triumph of Central Banking?”

What We Say Goes: Conversations on U.S. Power in a Changing World by Noam Chomsky, David Barsamian

banking crisis, British Empire, Doomsday Clock, failed state, feminist movement, Howard Zinn, informal economy, liberation theology, mass immigration, microcredit, Mikhail Gorbachev, Monroe Doctrine, oil shale / tar sands, operational security, peak oil, RAND corporation, Ronald Reagan, Seymour Hersh, Thomas L Friedman, union organizing, Upton Sinclair, uranium enrichment, Washington Consensus

If you take a look at the last twenty-five years, growth rates have sharply declined in countries that have adopted the policies he loves. The countries that have done very well—China, South Korea, Taiwan—have done so by violating the rules that Friedman advocates. These countries radically violated International Monetary Fund and World Bank rules—the Washington consensus, which he praises—and they grew. On the other hand, the countries that observed neoliberal rules rigorously had an extremely sharp decline in economic growth and just about every other macroeconomic measure. In fact, the United States doesn’t follow the rules that it imposes on others. During the last twenty-five years, to the extent that there has been a limited imposition of neoliberalism in the United States, it’s been the worst prolonged period in U.S. economic history.

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These figures are muddled in the pronouncements by the World Bank and by many economists who argue that growth has really improved greatly and poverty has been reduced by neoliberal rules. The way they get these results is by mixing together two quite different things: one is export orientation and the other is following the Washington consensus, the neoliberal rules. So China, which has a population of one billion people, has been dedicated to export promotion but has also violated the neoliberal rules. If you muddle all of this together, you can say, “Well, the neoliberal rules work because a billion Chinese had a high growth rate,” forgetting that they had a high growth rate by violating the neoliberal rules.

Rendezvous With Oblivion: Reports From a Sinking Society by Thomas Frank

Affordable Care Act / Obamacare, Alan Greenspan, behavioural economics, Bernie Sanders, big-box store, business climate, business cycle, call centre, crowdsourcing, David Brooks, deindustrialization, deskilling, Donald Trump, edge city, fake news, Frank Gehry, high net worth, income inequality, Jane Jacobs, Jeff Bezos, McMansion, military-industrial complex, new economy, New Urbanism, obamacare, offshore financial centre, plutocrats, Ponzi scheme, profit maximization, prosperity theology / prosperity gospel / gospel of success, Ralph Nader, Richard Florida, Ronald Reagan, Silicon Valley, single-payer health, Steve Bannon, The Death and Life of Great American Cities, too big to fail, urban planning, Washington Consensus, Works Progress Administration

This means winning a two-thirds majority in a lame-duck legislative body that is still filled with his opponents, and the bulk of the movie is a close study of the lobbying and persuading and self-censoring to which Lincoln and his team must descend in order to, well, free the slaves. These are the lessons for our time that Spielberg has plucked from Goodwin’s Lincoln saga. And upon beholding the film, the upholders of the Washington consensus saw the clouds part and the sun shine through. Yet another commonplace had been magnificently reaffirmed—and this time it was the emptiest D.C. cliché of all. “It’s compromise,” is how Goodwin summarized the film’s message for an interviewer. And the commentariat chimed in unison: Yes! We have learned from this movie, they sang, that politicians must Make Deals.

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We hear a lot these days about the dangers to speech posed by political correctness, about those insane left-wing college students who demand to be shielded from uncomfortable ideas. What I am describing here is something similar but far more consequential. It is the machinery by which the boundaries of the Washington consensus are enforced. You will recall how, after the Nevada unpleasantness, Eugene Robinson, who claimed to share Sanders’s philosophy, nonetheless condemned the candidate’s criticism of the Democratic Party’s nominating process as “reckless in the extreme.” Impugning the party, Robinson argued, might empower Donald Trump.

American Secession: The Looming Threat of a National Breakup by F. H. Buckley

Affordable Care Act / Obamacare, Andrei Shleifer, belling the cat, Bernie Sanders, British Empire, Cass Sunstein, colonial rule, crony capitalism, desegregation, diversified portfolio, Donald Trump, Francis Fukuyama: the end of history, guns versus butter model, hindsight bias, illegal immigration, immigration reform, income inequality, low interest rates, Michael Milken, military-industrial complex, old-boy network, Paris climate accords, race to the bottom, Republic of Letters, reserve currency, Ronald Coase, Stephen Fry, Suez crisis 1956, transaction costs, Washington Consensus, wealth creators

Individually, we enjoy a well-protected set of personal liberties, the freedom to speak our mind and practice our religion, as well as the economic freedom to hold property and start a business. We also enjoy a strong set of political rights that come with living in a democratic society where government officials must campaign for our votes. We used to think that personal and political freedoms went together, like horse and carriage. This was called the “Washington Consensus.” When a state liberalized its economy it would create a middle class that would demand political freedom. That seemed to be what had happened in Chile, when the freemarket Pinochet regime was followed by a liberal democracy. Insofar as this pattern was spreading around the globe, it represented what Francis Fukuyama called “the end of history,” the point where the big questions of politics have been settled.

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White Utah Uyghurs Venezuela Vermont Verneule, Adrian “Vices of the Political System of the United States” (Madison) Vietnam; war in Virginia; and Davis trial; and Peace Convention; on secession rights Virginia Plan (Madison) Virginia Resolutions (1798) Voting Rights Act (1965) Vriend v. Alberta Wag the Dog (film) Wall Street Journal Walpole, Horace War of 1812 Warren, Earl Washington (state) Washington, George; and Carlisle Commission; erasure of; on foreign entanglements; on representative ratio Washington Consensus Washington Monthly Washington Peace Convention (1861) Washington Post wealth (GDP); and population Webster, Daniel West, Kanye West Virginia White Citizens Councils Who Are We? (Huntington) Wilde, Oscar Will, George F. Wilson, Edmund Wilson, James Wilson, Woodrow; Fourteen Points; incorporation rules Wolfe, Alan Wood, Gordon World Happiness Report World War II Wyoming Yemen Yes California Yugoslavia Zenger, John Peter Zimbabwe

Multitude: War and Democracy in the Age of Empire by Michael Hardt, Antonio Negri

"World Economic Forum" Davos, affirmative action, air traffic controllers' union, Berlin Wall, Bretton Woods, British Empire, business cycle, classic study, conceptual framework, continuation of politics by other means, David Graeber, Defenestration of Prague, deskilling, disinformation, emotional labour, Fall of the Berlin Wall, feminist movement, Francis Fukuyama: the end of history, friendly fire, global village, Great Leap Forward, Howard Rheingold, Howard Zinn, illegal immigration, Joseph Schumpeter, land reform, land tenure, late capitalism, liberation theology, means of production, military-industrial complex, Naomi Klein, new economy, Paul Samuelson, Pier Paolo Pasolini, post-Fordism, post-work, private military company, race to the bottom, RAND corporation, reserve currency, Richard Stallman, Slavoj Žižek, the Cathedral and the Bazaar, The Chicago School, The Structural Transformation of the Public Sphere, Thomas Malthus, Thorstein Veblen, Tobin tax, transaction costs, union organizing, War on Poverty, Washington Consensus

It dictates for ailing and poor economies a neoliberal formula that includes minimal spending on public welfare, privatization of public industry and wealth, and the reduction of public debt. This formula, which has come to be known as the “Washington Consensus,” has always been criticized from outside and also from within the supranational economic institutions. 89 Some object on economic grounds, for example, to the way that the policies have been applied as an invariable model in different countries without regard for national specificity and without accounting for the relationship between monetary policies and social dynamics. Others object more generally to the political agenda of the Washington Consensus model: a monetary policeman is never neutral and always supports a specific political regime.

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On the functioning of law firms in international commerce, see Yves Dezalay, “Multinationales de l’expertise et “dépérissement de l’Etat,” Actes de la recherche en sciences sociales, no. 96-97 (March 1993): 3-20; Marchands de droit: La restructuration de l’ordre juridique international par les multinationales du droit (Paris: Fayard, 1992); and (with Bryant Garth), Dealing in Virtue: International Commercial Arbitration and Construction of a Transnational Legal Order (Chicago: University of Chicago Press, 1996). 86 On the concept of “complex sovereignty,” see Kanishka Jayasuriya, “Globalization, Law, and the Transformation of Sovereignty: The Emergence of Global Regulatory Governance,” Indiana Journal of Global Legal Studies 6, no. 2 (Spring 1999): 425-55. 87 For IMF voting power figures, see http://www.imf.org/external/np/sec/memdir/members.htm. 88 For an interesting view into the culture of the IMF from a sympathetic and well-informed journalist, see Paul Blustein, The Chastening: Inside the Crisis that Rocked the Global Financial System and Humbled the IMF (New York: Public Affairs, 2001). 89 For Joseph Stiglitz’s speeches about the Washington Consensus, see Ha-Joon Chang, ed., Joseph Stiglitz and the World Bank: The Rebel Within (London: Anthem, 2001); and, more generally, Stiglitz, Globalization and Its Discontents (New York: Norton, 2002). See also Yves Dezalay and Bryant Garth, “Le ‘Washington Consensus’: Contribution à une sociologie de l’hégémonie du neoliberisme,” Actes de la Recherches en Sciences Sociales, no. 121-22 (March 1998): 3-22. 90 For a detailed history of the World Bank, see Devesh Kapur, John Lewis, and Richard Webb, The World Bank: Its First Half Century, vol. 1: History (Washington, DC: Brookings Institution, 1997). 91 On scarcity and immaterial property, see Christopher May, A Global Political Economy of Intellectual Property Rights: The New Enclosures (London: Routledge, 2000), 45. 92 See Donna Haraway, Modest Witness @ Second Millennium (New York: Routledge, 1997), 79-85. 93Diamond v.

The Rise and Fall of the Neoliberal Order: America and the World in the Free Market Era by Gary Gerstle

2021 United States Capitol attack, A Declaration of the Independence of Cyberspace, affirmative action, Affordable Care Act / Obamacare, air traffic controllers' union, Airbnb, Alan Greenspan, Alvin Toffler, anti-communist, AOL-Time Warner, Bear Stearns, behavioural economics, Bernie Sanders, Big Tech, Black Lives Matter, blue-collar work, borderless world, Boris Johnson, Brexit referendum, British Empire, Broken windows theory, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, collective bargaining, Cornelius Vanderbilt, coronavirus, COVID-19, creative destruction, crony capitalism, cuban missile crisis, David Brooks, David Graeber, death from overwork, defund the police, deindustrialization, democratizing finance, Deng Xiaoping, desegregation, Dissolution of the Soviet Union, Donald Trump, Electric Kool-Aid Acid Test, European colonialism, Ferguson, Missouri, financial deregulation, financial engineering, Francis Fukuyama: the end of history, Frederick Winslow Taylor, full employment, future of work, Future Shock, George Floyd, George Gilder, gig economy, Glass-Steagall Act, global supply chain, green new deal, Greenspan put, guns versus butter model, Haight Ashbury, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, Ida Tarbell, immigration reform, informal economy, invention of the printing press, invisible hand, It's morning again in America, Jeff Bezos, John Perry Barlow, Kevin Kelly, Kitchen Debate, low interest rates, Lyft, manufacturing employment, market fundamentalism, Martin Wolf, mass incarceration, Menlo Park, microaggression, Mikhail Gorbachev, military-industrial complex, millennium bug, Modern Monetary Theory, money market fund, Mont Pelerin Society, mortgage debt, mutually assured destruction, Naomi Klein, neoliberal agenda, new economy, New Journalism, Northern Rock, obamacare, Occupy movement, oil shock, open borders, Peter Thiel, Philip Mirowski, Powell Memorandum, precariat, price stability, public intellectual, Ralph Nader, Robert Bork, Ronald Reagan, scientific management, Seymour Hersh, sharing economy, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, social distancing, Steve Bannon, Steve Jobs, Stewart Brand, Strategic Defense Initiative, super pumped, technoutopianism, Telecommunications Act of 1996, The Bell Curve by Richard Herrnstein and Charles Murray, The Chicago School, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas L Friedman, too big to fail, Uber and Lyft, uber lyft, union organizing, urban decay, urban renewal, War on Poverty, Washington Consensus, We are all Keynesians now, We are the 99%, white flight, Whole Earth Catalog, WikiLeaks, women in the workforce, Works Progress Administration, Y2K, Yom Kippur War

Quinn Slobodian has expertly examined the role of neoliberal policies in shaping relations between the Global North and the Global South in the post–World War II era, especially through organizations such as the International Monetary Fund and the World Bank. Amy Offner has dissected the impact of these policies on Latin America. And David Harvey was way ahead of everyone else in understanding the contributions of neoliberalism to the so-called Washington Consensus that structured US involvement with the world during neoliberalism’s 1990s heyday. Their work forms a critical backdrop to this study of the neoliberal order in America.10 Generally missing from studies of the international roots and reach of neoliberalism, however, is a reckoning with the Soviet Union and of communism more generally.

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The extent to which Clinton’s administration from 1994 forward implemented neoliberal principles is rather stunning. In 1993, in a sign of things to come, Clinton had already signed NAFTA, turning all of North America into a single common market. In 1994, he endorsed the World Trade Organization and its plan to implement neoliberal principles internationally, a project that became known as the “Washington Consensus.” In 1996, Clinton, working with Congress, deregulated the exploding telecommunication industry, now including not just phones and television but the cable and satellite sub-industries so important to the new information economy. Soon after, he did the same with the electrical generation industry that sustained (literally) the new economy.

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National governments would have to balance their budgets, and loans to member states would be limited to what they could reasonably hope to repay. These principles converged with those that Robert Rubin had laid down in the United States through his budget agreement of 1993 and later through the Washington Consensus as expressed through the policies of the World Trade Organization and the International Monetary Fund. The United States could plausibly claim to be carrying Europe along with its neoliberal revolution. Kohl contemplated aloud the day when a “United States of Europe” would emerge with a scheme for economic and political integration—and a wise blend of market freedom and market discipline—closely modeled on that of the 1990s American republic.82 And yet, neoliberal advances in Britain and the EU also threatened international US financial dominance.

Interventions by Noam Chomsky

Albert Einstein, Ayatollah Khomeini, cuban missile crisis, Dr. Strangelove, energy security, facts on the ground, failed state, Monroe Doctrine, no-fly zone, nuremberg principles, old-boy network, Ralph Nader, Thorstein Veblen, uranium enrichment, Washington Consensus, éminence grise

If a perfectly logical argument leads to a totally insane conclusion, then the problem must lie with the premises, in particular, the rejection of “moral reasons” or “social concerns.” Then follows another task, if Summers is right that such a move can be used against all World Bank proposals for “liberalization”—that is, implementation of the “Washington consensus.” The conclusion seems obvious without spelling it out. It is perhaps of some interest that this reasoning, hardly more than elementary logic, appears to have been ignored within mainstream opinion, neither refuted nor pursued. The modern standard for such questions is the Universal Declaration of Human Rights, adopted by the UN General Assembly in 1948.

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A persuasive explanation for the decline of faith in existing democratic institutions has been offered by Argentine political scientist Atilio Borón, who observed that the new wave of democratization in Latin America coincided with externally mandated economic “reforms” that undermine effective democracy: the neoliberal “Washington consensus,” virtually every element of which undermines democracy, and which has also led to economic disaster in Latin America, as in other regions that rigorously followed the rules. The concepts of democracy and development are closely related in many respects. One is that they have a common enemy: loss of sovereignty.

Capitalism, Alone: The Future of the System That Rules the World by Branko Milanovic

affirmative action, Asian financial crisis, assortative mating, barriers to entry, basic income, Berlin Wall, bilateral investment treaty, Black Swan, Branko Milanovic, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carried interest, colonial rule, corporate governance, creative destruction, crony capitalism, deindustrialization, dematerialisation, Deng Xiaoping, discovery of the americas, European colonialism, Fall of the Berlin Wall, financial deregulation, Francis Fukuyama: the end of history, full employment, ghettoisation, gig economy, Gini coefficient, global supply chain, global value chain, Great Leap Forward, high net worth, household responsibility system, income inequality, income per capita, invention of the wheel, invisible hand, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, labor-force participation, laissez-faire capitalism, land reform, liberal capitalism, low skilled workers, Lyft, means of production, new economy, offshore financial centre, Paul Samuelson, plutocrats, post-materialism, purchasing power parity, remote working, rent-seeking, ride hailing / ride sharing, Robert Solow, Silicon Valley, single-payer health, special economic zone, Tax Reform Act of 1986, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, uber lyft, universal basic income, Vilfredo Pareto, Washington Consensus, women in the workforce, working-age population, Xiaogang Anhui farmers

In two influential books (Economic Origins of Dictatorship and Democracy and especially Why Nations Fail), Daron Acemoglu and James Robinson provided a comprehensive theory that aimed to explain why democracies develop and fail and to demonstrate the close relationship between political and economic inequalities. Their view was very influential, especially in the period before the 2008 global financial crisis, because it unified two strands then dominant in liberal thought: the Washington Consensus (which promoted privatization internally and globalization externally) and the Fukuyama-style celebration of liberal democracy. Difficulty of dealing with communism is widespread One of Acemoglu and Robinson’s central concepts is that of “extractive” institutions: political and economic institutions that are controlled by an elite in order to extract economic resources and concentrate political power, with political and economic power occurring together and reinforcing each other.

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Even Chinese official statistics have difficulty dealing with the distinctions, so numerous are the forms of ownership and so many are the different rights of ownership, ranging from the ability to dispose and sell assets to usufruct only. This multitude of ownership and corporate structures was one of the main headaches for the unconditional partisans of the Washington Consensus, who insisted on the importance of clearly defined property rights for growth. It was impossible to fit China, with its scores of different property relationships, into the neoliberal straitjacket. Moreover, some of the most murky types of ownership, like township and village enterprises, registered the most spectacular rates of growth (see Weitzman and Xu 1993).

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See also Elite; Rich Urban inequality in China, 100–102, 103 Vanishing American Corporation, The (Davis), 25 Veblen, Thorstein, 17, 171 Vecchi, Michela, 152 Venturini, Francesco, 152 Vietnam: GDP per capita growth rate in, 86–87; growth rate in, 235; increase in economic growth in, 8; political capitalism in, 96, 97; social and national revolutions in, 79–80; support for globalization in, 9 Voltaire, 228 Vonyó, Tamas, 83–84 Vries, Peer, 115 Wage inequality: in China, 102–103; education and, 50 Wage labor outside the home, 189 Wallerstein, Immanuel, 116 Wang Fan-hsi, 81 Wang Hui, 116 Wang Ming, 81 War, global capitalism and, 205–207 War Communism, 69 Warren, Bill, 76, 78, 223 Washington Consensus, 73, 116–117 Wealth: hierarchy and, 177–178; inequality and concentration of, 30–31; inherited, 62–63; intergenerational transmission of, 158–159; liberal meritocratic capitalism and concentration of, 26–31; reduction of concentration of, 216, 217 Wealth and Poverty of Nations, The (Landes), 196 Wealth-income ratio, 27, 30 Wealth of Nations, The (Smith), 113, 114, 178, 253–254n4 Wealth tax to deconcentrate capital ownership, 48–50 Weber, Max: capitalism of, 176–180; definition of capitalism, 12, 225; on distinction between production and family spheres, 189; on irregular work, 192; on political capitalism, 91, 94; on Protestantism, 254n6 “Weightless” economy, 194–195 Weiss, Yoram, 39 Welfare state: globalization and, 50–55, 155–159; migration and, 52–55, 133 Welfare system, universal basic income and, 203–205 West: malaise about globalization in, 9–10; rise of Asia and end to military, political, and economic superiority of, 6 Western path of development (WPD), 222, 223–224; Third World and, 74, 76, 78–79 When China Rules the World (Jacques), 122 Whig view of history, 68 Wilson, Woodrow, 80, 112 Wolff, Edward, 26, 32 Wootton, David, 227, 253–254n4 Workers, division of net product between owners and, 14–16 World Bank, 127; World Development Report, 202; Worldwide Governance Indicators, 160 World War I, 71, 72, 205–206, 221, 256–257n31 World War II, 205 Worldwide corruption, 159–175; enablers of, 168–170; globalization and, 130–131; imitation of consumption patterns of rich countries and, 170–173; lack of attempts to control, 173–175; limits on, 163–168 Xia, Ming, 92 Xie, Yu, 103 Xi Jinping, 93, 95, 125, 248n41 Xu Caihou, 108–109 Xu Chenggang, 123 Yang, Li, 103–104, 105 Yitzhaki, Shlomo, 33 Zasulich, Vera, 74, 245n6 Zhao Ziyang, 92, 248n39 Zheng He, 122 Zhou, Xiang, 103 “Zone of lawlessness”: China and, 117; in political capitalism, 93 Zucman, Gabriel, 103–104, 161, 168, 169

Hunger: The Oldest Problem by Martin Caparros

"World Economic Forum" Davos, Berlin Wall, Bob Geldof, carbon credits, carbon footprint, classic study, commoditize, David Graeber, disinformation, European colonialism, Fall of the Berlin Wall, Food sovereignty, Gini coefficient, Great Leap Forward, income inequality, index fund, invention of agriculture, Jeff Bezos, Live Aid, Louis Pasteur, Mahatma Gandhi, Mohammed Bouazizi, Nelson Mandela, New Journalism, plutocrats, profit maximization, Slavoj Žižek, The Fortune at the Bottom of the Pyramid, the market place, Tobin tax, trade liberalization, trickle-down economics, Upton Sinclair, Washington Consensus, We are the 99%

When independence came, the Europeans took everything they could away with them. In most countries, the situation was difficult: weak infrastructure, few people with any training, lack of capital to invest in any of that—and, of course, political and social conflicts. But everything got worse in 1989 when the Washington Consensus and the World Bank and the International Monetary Fund (IMF) “convinced”—with threats regarding their foreign debt—most African governments to reduce the state’s involvement in certain sectors.3 One of these was agriculture, which continued to be the principal economic activity of a large part of the continent, and the one that fed most of its inhabitants.

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There is no light, no water, no streets, no police, no schools. Until the seventies, many governments in what was then the Third World, tried to replace slums with housing projects. Those were the policies before the British economist John Williamson proposed in 1989 what would become known as the Washington Consensus, ten policy points a country would need to follow in order to recover from economic decline. These included fiscal policy discipline, redirection of public spending toward infrastructure development, tax reform, market determined interest rates and deregulated entry, competitive exchange rates, the liberalization of trade, the liberalization of foreign investment, the privatization of state enterprises, oversight of financial institutions, and legal security for private property.

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In many countries the policies of the IMF and the World Bank also included the elimination of subsidized food and regulating mechanisms for internal pricing, which their states had implemented through the maintenance of reserves of grain and other food products. In cases such as Niger, the effect was straightforward: thousands of people died from hunger, plain and simple. * * * — The Washington Consensus. How horrible—for a man, for a city—to be inscribed in history with the name of a policy that screwed over so many millions of people. The capitalist offensive of the eighties and nineties also produced a more generalized and significant phenomenon: basic decisions about a country’s economy were made at IMF and World Bank headquarters—in Washington—wresting from national authority almost all their power.

Shadows of Empire: The Anglosphere in British Politics by Michael Kenny, Nick Pearce

battle of ideas, Berlin Wall, Boris Johnson, Bretton Woods, Brexit referendum, British Empire, colonial rule, corporate governance, Dominic Cummings, Donald Trump, eurozone crisis, Fall of the Berlin Wall, floating exchange rates, Francis Fukuyama: the end of history, full employment, global reserve currency, imperial preference, informal economy, invention of the telegraph, Khartoum Gordon, labour mobility, Les Trente Glorieuses, liberal capitalism, Mahatma Gandhi, mass immigration, Monroe Doctrine, Neal Stephenson, Nixon shock, public intellectual, quantitative easing, reserve currency, Ronald Reagan, Steve Bannon, Suez canal 1869, Suez crisis 1956, trade route, Washington Consensus

Its depth and range suggests a ‘structural multilateral relationship in the Anglosphere, rather than simply bilateral or ad hoc arrangements.’8 From the ‘End of History’ to Iraq In the immediate years after the collapse of Soviet communism, when Francis Fukuyama's contention that liberal-democratic capitalism represented the ‘end of history’, the global dominance of this Anglo-American, liberal economic and political order appeared assured. A long boom, fuelled by global financialisation, was under way. China and India were becoming integrated into the global economy. And some of the leading, disruptive ideologies of the twentieth century – fascism, communism and socialism – had apparently fallen away. The ‘Washington Consensus’ dominated decision-making in the world's economic institutions. American military supremacy was unrivalled. The liberal, free market institutional order appeared to contain no internal contradictions that could threaten it. The prospect of a serious challenge to the Anglo-American West was almost inconceivable.

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Trump, Donald Turkey Turnbull, Malcolm United Europe Movement United Kingdom Independence Party (UKIP) United Nations US Navy USA: Anglo-America concept; ANZUS Pact; Blair's relations with; Bretton Woods agreement (1944); and Brexit; British dominions’ relations with; British future relations with; British migration to; British nineteenth-century relations with; British relations with post Iraq; British twentieth-century relations with; and Europe; Eurosceptic attitude; French attitude; international ambitions; in late nineteenth century; Muslim attitude; and New Right Anglosphere; and nuclear weapons; under Obama; Open Door policy; Powell's attitude; railways; ‘special relationship’ with Britain; Thatcher's relations with; Trump's relations with Britain; in twenty-first century; War on Terror Venezuela Versailles, Treaty of (1919) Vucetic, Srdjan Wales War on Terror Washington Conference (1921–2) Washington Consensus welfare state Wells, H. G. the West: and interventionism; rise of concept West Africa West Germany; see also Germany Willetts, David Wilson, Harold Wootton, Barbara Zimbabwe (formerly Rhodesia) POLITY END USER LICENSE AGREEMENT Go to www.politybooks.com/eula to access Polity's ebook EULA.

An Extraordinary Time: The End of the Postwar Boom and the Return of the Ordinary Economy by Marc Levinson

affirmative action, airline deregulation, Alan Greenspan, banking crisis, Big bang: deregulation of the City of London, Boycotts of Israel, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, car-free, Carmen Reinhart, central bank independence, centre right, clean water, deindustrialization, endogenous growth, falling living standards, financial deregulation, flag carrier, floating exchange rates, full employment, George Gilder, Gini coefficient, global supply chain, Great Leap Forward, guns versus butter model, high-speed rail, income inequality, income per capita, indoor plumbing, informal economy, intermodal, inverted yield curve, invisible hand, It's morning again in America, Kenneth Rogoff, knowledge economy, late capitalism, Les Trente Glorieuses, linear programming, low interest rates, manufacturing employment, Multi Fibre Arrangement, new economy, Nixon shock, Nixon triggered the end of the Bretton Woods system, North Sea oil, oil shock, Paul Samuelson, pension reform, Phillips curve, price stability, purchasing power parity, refrigerator car, Right to Buy, rising living standards, Robert Gordon, rolodex, Ronald Coase, Ronald Reagan, Simon Kuznets, statistical model, strikebreaker, structural adjustment programs, The Rise and Fall of American Growth, Thomas Malthus, total factor productivity, unorthodox policies, upwardly mobile, War on Poverty, Washington Consensus, Winter of Discontent, Wolfgang Streeck, women in the workforce, working-age population, yield curve, Yom Kippur War, zero-sum game

The IMF and the World Bank spread the new wisdom that free-market policies would enable the debtor countries to grow at long last, sharply reversing their past positions favoring top-down planning and government-directed investment. Many people in the debtor countries came to the same conclusion, recognizing that state-managed industrialization backed up by import barriers, as advocated for so long by Raúl Prebisch, had failed to bring sustained prosperity. The new market-oriented thinking would become known as the Washington Consensus, a semi-official compendium of principles the experts said would help the developing countries outgrow their debts.22 The experts, their advice framed by the ideological battles over the role of government in Washington and London, failed to recognize that the economic problems of developing countries generally had less to do with high tax rates and Big Government than with large-scale tax avoidance and incompetent government.

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In countries where shockingly low literacy rates stood in the way of improving worker productivity, simply rolling back government could not improve the ability of education ministries to provide an adequate education to children for whom private-school tuition was beyond reach. Such shortcomings, ignored by advocates of the Washington Consensus, turned out to be serious drags on developing countries’ economic growth. When it came to surmounting the debt crisis, there was only one poster child: South Korea. The country’s foreign debts were nearly $47 billion at the end of 1985; relative to the size of its economy, it was more indebted than Mexico.

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See also Federal Reserve Venezuela, 250–251 Versailles Treaty, 86 Vietnam, 48; hardship in, 44 Vietnam War, 4, 163, 202 Volcker, Paul, 97; Carter and, 220–224; inflation and, 220–221, 223–224, 230; monetary policy of, 221–224; Reagan and, 232, 234; recession under, 224; Third World debt crisis and, 244–245; unemployment and, 224 Volcker shock, 221, 224, 232 Volpe, John, 88 wage controls, 53–54 The Wall Street Journal, 221 Wallich, Henry, 87 Walters, Alan, 176 Washington Consensus, 254 The Washington Post, 71, 96, 104, 223 Watergate scandal, 101, 110, 156 wealth: loss of, and income distribution, 138 Wealth and Poverty (Gilder), 225 welfare state, 133, 143–154, 224, 257; anti-tax movements and, 151–154; birth of, 17–18; budget deficit and, 150; conservative parties and, 24; entitlements and, 157–158; government budget deficits and, 150; growth in cost of, 147–151; income tax and, 145–147, 149–151; oil crisis of 1973, 148; role of government and, 143–145; ungovernability and, 157–158.

The Haves and the Have-Nots: A Brief and Idiosyncratic History of Global Inequality by Branko Milanovic

Berlin Wall, Branko Milanovic, colonial rule, crony capitalism, David Ricardo: comparative advantage, deglobalization, Deng Xiaoping, endogenous growth, Fall of the Berlin Wall, financial deregulation, full employment, Gini coefficient, high net worth, illegal immigration, income inequality, income per capita, Joseph Schumpeter, means of production, open borders, Pareto efficiency, plutocrats, purchasing power parity, Simon Kuznets, very high income, Vilfredo Pareto, Washington Consensus, zero-sum game

This Latin America, which reaped so few benefits from Globalization 2.0, is thus not surprisingly the only part of the world that is trying to experiment with alternative policies. By the standards of the past, these alternatives are rather meek, since the differences are not in the substance but in the details. But as the world has, in terms of economic policies followed by different countries, become much more homogeneous, even these small departures from the Washington consensus orthodoxy attract attention. Africa, of course, has remained the third world. But on account of its almost unrelieved misery and relative and often absolute decline during the last quarter of the twentieth century, we may be justified in giving it the unenviable title of the fourth world.

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China remains a world apart, with obviously a much higher income today than before but with equally opaque ambitions or rather the same inner ambivalence not only about the role it wants to play internationally but whether it wants a role at all. One of the striking features is that the incredible economic rise of China that was achieved by using a mixture of recipes never seen before, and indeed very different from the recipes (economic policies) advocated by the Washington consensus, has not produced any “codified” rules of economic conduct. There is no attempt to “package” these policies, explain how they might work elsewhere, in other words “sell” a specifically Chinese model of development or economic ideology. Contrast this with the fact that, already by 1776 when the Industrial Revolution was as old as the Chinese “takeoff ” is today, the world had in Adam Smith’s Wealth of Nations well-codified rules for economic success.

The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality by Brink Lindsey

Airbnb, Asian financial crisis, bank run, barriers to entry, Bernie Sanders, Build a better mousetrap, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Carmen Reinhart, Cass Sunstein, collective bargaining, creative destruction, Credit Default Swap, crony capitalism, Daniel Kahneman / Amos Tversky, David Brooks, diversified portfolio, Donald Trump, Edward Glaeser, endogenous growth, experimental economics, experimental subject, facts on the ground, financial engineering, financial innovation, financial intermediation, financial repression, hiring and firing, Home mortgage interest deduction, housing crisis, income inequality, informal economy, information asymmetry, intangible asset, inventory management, invisible hand, Jones Act, Joseph Schumpeter, Kenneth Rogoff, Kevin Kelly, knowledge worker, labor-force participation, Long Term Capital Management, low skilled workers, Lyft, Mark Zuckerberg, market fundamentalism, mass immigration, mass incarceration, medical malpractice, Menlo Park, moral hazard, mortgage debt, Network effects, patent troll, plutocrats, principal–agent problem, regulatory arbitrage, rent control, rent-seeking, ride hailing / ride sharing, Robert Metcalfe, Robert Solow, Ronald Reagan, Savings and loan crisis, Silicon Valley, Silicon Valley ideology, smart cities, software patent, subscription business, tail risk, tech bro, too big to fail, total factor productivity, trade liberalization, tragedy of the anticommons, Tragedy of the Commons, transaction costs, tulip mania, Tyler Cowen, Uber and Lyft, uber lyft, Washington Consensus, white picket fence, winner-take-all economy, women in the workforce

For instance, they have pointed to the decline in antitrust enforcement, financial regulation, legal encouragement of unionization, and taxation of high incomes as key explanations for the explosion of inequality. In one early and influential effort along these lines, Frank Levy and Peter Temin characterized these developments as a shift from the “Treaty of Detroit” to the “Washington Consensus.”17 What this approach misses is the role of government action itself, rather than the government’s mere failure to act, as a cause of inequality. Because of their attachment to the state as an instrument of social justice, those on the left have generally failed to recognize the egalitarian potential of constraints on government power.

…

See also redistribution of wealth homeownership and, 121–22 land-use and, 110 mortgage lending and, 39 urban areas, 114–15 VA. See Veterans Administration Vergara v. California, 158 Veterans Administration, 39, 41 Vox, 149 Wagner Act, 28 Walker, Jack, 155 Warren, Elizabeth, 135 “Washington Consensus”, 11 wealth inequality. See inequality welfare state, 150–52, 207n35 White House Office of Budget and Management, 164–65 Willig, Robert, 185n8 Winship, Scott, 122 women, 3, 6, 27, 125 Wood, Diane, 169 World War II, 35 Zingales, Luigi, 12 zoning. See also home ownership/housing; land-use concentrated benefits and, 130 economic growth and, 113–23 geographic inequality and, 115–23 property values and, 111 as rent-seeking, 113 restrictions on building and, 123 supply restriction and, 109–13 urban areas and, 114–15 Zuckerberg, Mark, 108

The End of the Free Market: Who Wins the War Between States and Corporations? by Ian Bremmer

"World Economic Forum" Davos, affirmative action, Asian financial crisis, banking crisis, Berlin Wall, BRICs, British Empire, centre right, collective bargaining, corporate governance, creative destruction, credit crunch, Credit Default Swap, cuban missile crisis, Deng Xiaoping, diversified portfolio, Doha Development Round, Exxon Valdez, failed state, Fall of the Berlin Wall, Francis Fukuyama: the end of history, Glass-Steagall Act, global reserve currency, global supply chain, household responsibility system, invisible hand, joint-stock company, Joseph Schumpeter, Kickstarter, laissez-faire capitalism, low skilled workers, mass immigration, means of production, megacity, Mikhail Gorbachev, military-industrial complex, mutually assured destruction, Naomi Klein, Nelson Mandela, new economy, offshore financial centre, open economy, race to the bottom, reserve currency, risk tolerance, Savings and loan crisis, shareholder value, Shenzhen special economic zone , South Sea Bubble, sovereign wealth fund, special economic zone, spice trade, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, trade route, tulip mania, uranium enrichment, Washington Consensus, Yom Kippur War, zero-sum game

In America, Reagan administration officials preached the gospel of limited government so successfully that by 1996, a Democratic president used his State of the Union address to declare, “The era of big government is over.”15 In the 1980s, Western European governments followed British Prime Minister Margaret Thatcher’s lead in profitably privatizing hugely inefficient state enterprises in energy and power generation (oil, gas, coal, and nuclear), transport (national airlines, railways, and bus companies), and telecommunications. In the 1990s, they preached the virtues of free-market capitalism to their newly liberated Eastern European neighbors and began to integrate them into a single market. Global financial institutions pressed them to embrace U.S.-endorsed liberal economic theories, known collectively as the Washington Consensus.a The results speak for themselves. Between 1980 and 2002, world trade more than tripled. The costs of doing business—especially in transportation and communications—fell sharply. Many protectionist barriers, like tariffs and import quotas, went the way of the Berlin Wall. Tariff rates (as a percentage of total import costs) were halved during this period in America, were more than halved in Europe, and fell by 80 percent in Canada.

…

Trotsky, Leon Troubled Asset Recovery Program (TARP) Troubled Asset Relief Program troubled assets Tuleyev, Aman Tunisia Turkey Twitter Tymoshenko, Yulia Ukraine Ukraine International Airlines Union Carbide United Arab Emirates United Malays National Organization (UMNO) United Nations United Nations Human Development Report United States Chinese trade with in financial crisis military of in oil embargo oil production in trade by Uzbekistan Vale Venezuela Vietnam von Mises, Ludwig Walmart Warsaw Pact Washington Mutual Wealth of Nations, The (Smith) Webb, Jim Welch, Jack Wen Jiabao Westinghouse Will, George World Bank World Economic Forum World Trade Organization (WTO) World War I World War II Yanukovych, Viktor Yeltsin, Boris Yom Kippur War yuan Yudhoyono, Susilo Bambang Yugoslavia Yukos Oil Company Yushchenko, Viktor Zakaria, Fareed Zhao Ziyang Zhu Rongji Zhu Xinli Zimbabwe Zubkov, Viktor Zuma, Jacob Zyuzin, Igor a The Washington Consensus comprises three major ideas: fiscal and budgetary discipline; a market economy, including property rights, competitive exchange rates, privatization, and deregulation; and openness to the global economy through liberalization of trade and foreign direct investment. b Even in Costa Rica, which has no armed forces, the government operates a Ministry of Public Security that oversees a Civil Force, a kind of special police force devoted to combating drug trafficking and other crimes.

The Looting Machine: Warlords, Oligarchs, Corporations, Smugglers, and the Theft of Africa's Wealth by Tom Burgis

Airbus A320, Berlin Wall, blood diamond, BRICs, British Empire, central bank independence, clean water, colonial rule, corporate social responsibility, crony capitalism, Deng Xiaoping, Donald Trump, F. W. de Klerk, financial engineering, flag carrier, Gini coefficient, Global Witness, Livingstone, I presume, McMansion, megacity, megaproject, Nelson Mandela, offshore financial centre, oil shock, open economy, purchasing power parity, rolodex, Ronald Reagan, Silicon Valley, South China Sea, sovereign wealth fund, structural adjustment programs, trade route, transfer pricing, upwardly mobile, urban planning, Washington Consensus, WikiLeaks, zero-sum game

Inherent in the praise that is heaped on Ghana is a troubling undertone that mitigated penury is the best that Africans can aim for. Like the rest of Africa’s resource states, Ghana bowed to the orthodoxy that the World Bank and the IMF imposed from the early 1980s in the form of ‘structural adjustment programmes’. Based on a set of neoliberal economic policies known as the Washington Consensus, these programmes made loans to poor countries dependent on their adherence to strict conditions, including deep cuts to public spending, privatizing state-owned assets, and lifting controls on trade. Foreign investment was deemed essential to economic growth. African and other poor countries were exhorted to bend over backward with tax breaks and other incentives in order to attract multinational corporations.

…

It was not just the World Bank that found its influence in Africa’s resource states diminished. The IMF, its sister institution charged with maintaining the stability of the world financial system, already had a bad reputation in Africa, with reformers and kleptocrats alike, for imposing the strictures of the Washington Consensus, under which African states had become test tubes for the unfettered free-market philosophy that would also beget the subprime crisis and subsequent near-collapse of the Western banking system. Emil Salim’s review of the World Bank’s record in the oil and mining industries reported that, in the cases it had studied, ‘the IMF’s approach to the extractive sectors was mainly one that promoted aggressive privatization of significant mining and hydrocarbon assets for short-term financing of the [government’s budget] deficit.

…

See Diakité, Aboubacar Touré, Mamadie with Cilins in Florida, 103–105, 109, 125–126, 127 Guinea’s minerals and, 103–105, 109, 110, 124, 125–126, 127 Transfer pricing, 166 Transparency International, 17 Trendfield company, 140–141, 144 Trump, Donald, 246 Tsvangirai, Morgan, 219, 223, 237 Turner, Bill, 39–40 Tutsi/Hutu conflict and aftermath, 30–31, 32, 40–41, 43–44, 45–46, 55, 56 Tutu, Desmond, Archbishop, 66 Uba, Andy, 77, 193 Ukraine, 147, 242 Umunna, Hillary, 64–65 Vale mining and Guinea, 104, 108, 123–124, 128, 129–130 Varma, Somit, 163–164 Vicente, Manuel background, 10–11, 19 business empire, 23, 99 China Sonangol/Queensway Group and, 26, 94, 95, 96–97, 98, 100, 114, 119 Futungo and, 10–11, 12, 97, 111 oil and, 11, 12, 14, 16, 17, 18–19, 25, 26, 94, 95, 96–97, 98, 100, 114, 119 poverty in Angola and, 20, 208 Vines, Alex, 100 ‘VIP’ (‘Vagabond in Power’/Nneka), 246–247 Voser, Peter, 194 ‘Vultures’ (Achebe), 208 Wang Xiangfei, 90–91, 92–93 Wase, Abdullahi, 182 Washington Consensus, 163, 171 Wolfensohn, James, 157, 171 Wolfowitz, Paul, 170 World Bank Africa/African countries and, 57–58, 65, 136, 151–152, 163–164 BRICS nations vs., 218 China credit vs., 137, 170, 171 criticism of, 3, 151–152, 157–159, 160, 161, 164, 170, 171 description/staff, 169–170 ‘extreme poverty’/poor countries, 4 IFC and, 153, 154, 156 Miga and, 158–161 reputation/influence, 169–170 role/methods, 144, 151, 153, 154, 157, 165, 170 Salim’s criticism/recommendations, 157–159, 160, 161, 164, 170, 171 structural adjustment programmes, 162–163, 171 See also International Finance Corporation (IFC) World Trade Organization (WTO), 81, 157, 239 Wu Yang, 93, 98, 101–102, 145, 193 Xi Jinping, 23 Xia Huang, 134–135, 148, 149 Xueming Li (pseudonym), 91 Yar’Adua, Umaru health problems/death, 72, 73, 77, 78, 79, 183–184, 189, 201, 202, 203 as Katsina governor, 68 presidential campaign/as president, 69, 72, 77–78, 179, 202 Zambia, 4, 34, 56, 163, 165, 225 Zeng Peiyan, 86–87, 94, 99 Zibi, Songezo, 217 Zimbabwe diamonds/effects, 220–223, 226, 235–236 ‘indigenization’ of mining industry/corruption, 230–232 Marange massacre/Operation No Return, 220–221, 222, 226, 235, 236 minerals (overview), 231 Mugabe’s security forces/CIO, 223, 226, 234–236, 237, 243 Pa/Queensway Group and, 223, 230, 234, 235–236, 237–238, 243 See also specific companies/organizations; specific individuals Ziv, Israel, 117 Zuks, Nik, 143–144 Zuma, Jacob, 217–218 About the Publisher Australia HarperCollins Publishers (Australia) Pty.

The WikiLeaks Files: The World According to US Empire by Wikileaks

affirmative action, anti-communist, banking crisis, battle of ideas, Boycotts of Israel, Bretton Woods, British Empire, capital controls, central bank independence, Chelsea Manning, colonial exploitation, colonial rule, corporate social responsibility, credit crunch, cuban missile crisis, Deng Xiaoping, drone strike, Edward Snowden, energy security, energy transition, European colonialism, eurozone crisis, experimental subject, F. W. de Klerk, facts on the ground, failed state, financial innovation, Food sovereignty, Francis Fukuyama: the end of history, full employment, future of journalism, high net worth, invisible hand, Julian Assange, Kickstarter, liberal world order, Mikhail Gorbachev, millennium bug, Mohammed Bouazizi, Monroe Doctrine, Nelson Mandela, no-fly zone, Northern Rock, nuclear ambiguity, Philip Mirowski, post-war consensus, RAND corporation, Ronald Reagan, Seymour Hersh, Silicon Valley, South China Sea, statistical model, Strategic Defense Initiative, structural adjustment programs, too big to fail, trade liberalization, trade route, UNCLOS, UNCLOS, uranium enrichment, vertical integration, Washington Consensus, WikiLeaks, zero-sum game, éminence grise

This is a testament to the extent of economic interpenetration that has already developed, and the extent to which the rest of the world depends upon the US economy. It is also a very good reason why, after the worst economic crisis since the 1930s, the US can still lead a wide coalition of states as it presses for further entrenchment of the “Washington Consensus.” The dominance of Wall Street is reminiscent of British domination of world trade in the nineteenth century, in that US interests have in a way become synonymous with those of the world. If it goes down, we all go down. This eBook is licensed to Edward Betts, edward@4angle.com on 04/01/2016 Part II This eBook is licensed to Edward Betts, edward@4angle.com on 04/01/2016 4.

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In September 2005, the new US ambassador to Ecuador, Linda Jewell, reiterated the embassy’s concerns about an unintended loss of US influence in Ecuador, in a cable titled: “Democracy Promotion Strategies for Ecuador.”48 As this cable illustrates, so-called “democracy promotion” is a strategy by which Western governments seek to influence and contain political and economic change in countries of strategic importance. In Ecuador, the US wanted to counteract the influence of Latin America’s burgeoning social movements. Demanding democratic reforms and an economic alternative to the Washington consensus, these movements had brought left-wing leaders to power in Venezuela, Bolivia, and Uruguay. The embassy feared that the “pink tide” would engulf Ecuador, damaging US business interests in the country and dashing any hopes of negotiating a free-trade agreement. Moreover, the Ecuadorians who had mobilized against Gutiérrez were calling for an end to US interference in Ecuador and closure of the US Forward Operating Base at Manta.

…

While soft US methods of intervention helped maintain right-wing, Washington-friendly political parties in power during the period of democratization of the 1990s, beginning in 1998 a tide of left-leaning candidates began winning elections, from the southern tip of South America to El Salvador. By 2009, the vast majority of Latin Americans—who had experienced an unprecedented economic growth failure for more than two decades6 under governments that adhered to the neoliberal “Washington Consensus”—were living under governments that explicitly rejected many of these policies. This chapter will examine the actions, recommendations, and observations of US diplomats in five countries, four of which saw left-wing political governments elected to power, and one of which experienced a US-backed coup that was followed by political violence and repression.

Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown by Philip Mirowski

"there is no alternative" (TINA), Adam Curtis, Alan Greenspan, Alvin Roth, An Inconvenient Truth, Andrei Shleifer, asset-backed security, bank run, barriers to entry, Basel III, Bear Stearns, behavioural economics, Berlin Wall, Bernie Madoff, Bernie Sanders, Black Swan, blue-collar work, bond market vigilante , bread and circuses, Bretton Woods, Brownian motion, business cycle, capital controls, carbon credits, Carmen Reinhart, Cass Sunstein, central bank independence, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, complexity theory, constrained optimization, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, dark matter, David Brooks, David Graeber, debt deflation, deindustrialization, democratizing finance, disinformation, do-ocracy, Edward Glaeser, Eugene Fama: efficient market hypothesis, experimental economics, facts on the ground, Fall of the Berlin Wall, financial deregulation, financial engineering, financial innovation, Flash crash, full employment, George Akerlof, Glass-Steagall Act, Goldman Sachs: Vampire Squid, Greenspan put, Hernando de Soto, housing crisis, Hyman Minsky, illegal immigration, income inequality, incomplete markets, information asymmetry, invisible hand, Jean Tirole, joint-stock company, junk bonds, Kenneth Arrow, Kenneth Rogoff, Kickstarter, knowledge economy, l'esprit de l'escalier, labor-force participation, liberal capitalism, liquidity trap, loose coupling, manufacturing employment, market clearing, market design, market fundamentalism, Martin Wolf, money market fund, Mont Pelerin Society, moral hazard, mortgage debt, Naomi Klein, Nash equilibrium, night-watchman state, Northern Rock, Occupy movement, offshore financial centre, oil shock, Pareto efficiency, Paul Samuelson, payday loans, Philip Mirowski, Phillips curve, Ponzi scheme, Post-Keynesian economics, precariat, prediction markets, price mechanism, profit motive, public intellectual, quantitative easing, race to the bottom, random walk, rent-seeking, Richard Thaler, road to serfdom, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, Savings and loan crisis, savings glut, school choice, sealed-bid auction, search costs, Silicon Valley, South Sea Bubble, Steven Levy, subprime mortgage crisis, tail risk, technoutopianism, The Chicago School, The Great Moderation, the map is not the territory, The Myth of the Rational Market, the scientific method, The Theory of the Leisure Class by Thorstein Veblen, The Wisdom of Crowds, theory of mind, Thomas Kuhn: the structure of scientific revolutions, Thorstein Veblen, Tobin tax, tontine, too big to fail, transaction costs, Tyler Cowen, vertical integration, Vilfredo Pareto, War on Poverty, Washington Consensus, We are the 99%, working poor

But an equal moiety of blame should be dished out to their opponents on the left, who often bandy about attributions of “neoliberalism” as a portmanteau term of abuse when discussing grand phenomena often lumped together under the terminology of “globalization” and “financialization” and “governmentality.” The Washington Consensus, the death of the welfare state, the risk society, the wars in Iraq and Afghanistan, European (dis)integration, the ascendancy of China, and the outsourcing of manufacturing all portend cosmic themes, mostly of interest to those who regard themselves of taking the broad view of power politics.4 But broad characterizations of contemporary political events should not be mistaken for the painstaking construction of political doctrines to motivate organization in the long run, however much they may be related.

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It was never supported by economic theory. Nor, it should now be clear, is it supported by historical experience. Learning this lesson may be the silver lining in the cloud now hanging over the global economy.15 In an interview with the Berliner Zeitung, Stiglitz was quoted as saying, “Neoliberalism like the Washington Consensus is dead in most western countries. See the debates in South America or other countries. The U.S. has lost its role as the model for others. Everyone only laughs when U.S. technocrats give lectures in other countries and say: ‘Do as we do, liberalize your financial markets!’”16 Stiglitz, as one of the few neoclassical economists who has periodically attempted to intellectually refute neoliberalism over the course of his career, should therefore be regarded as someone who had significant credibility tied up in expressing his conviction that the demise of neoliberalism was at hand.

…

The role of such transnational organizations was recast to exert “lock-in” of prior neoliberal policies, and therefore to restrict the range of political options of national governments. Sometimes they were also used to displace indigenous “crony capitalists” with a more cosmopolitan breed of cronyism. Thus it is correct to observe an organic connection between such phenomena as the Washington Consensus and the spread of neoliberal hegemony, as Dieter Plehwe argues.99 This also helps address the neoliberal conundrum of how to both hem in and at the same time obscure the strong state identified in point 4, above. The relevance of the rise of the neoliberal globalized financial regime to the crisis is a matter of great concern to the thought collective and to others (such as Ben Bernanke) who seek to offload responsibility for the crash onto someone else.

Money and Government: The Past and Future of Economics by Robert Skidelsky

"Friedman doctrine" OR "shareholder theory", Alan Greenspan, anti-globalists, Asian financial crisis, asset-backed security, bank run, banking crisis, banks create money, barriers to entry, Basel III, basic income, Bear Stearns, behavioural economics, Ben Bernanke: helicopter money, Big bang: deregulation of the City of London, book value, Bretton Woods, British Empire, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, collective bargaining, constrained optimization, Corn Laws, correlation does not imply causation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, David Graeber, David Ricardo: comparative advantage, debt deflation, Deng Xiaoping, Donald Trump, Eugene Fama: efficient market hypothesis, eurozone crisis, fake news, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, forward guidance, Fractional reserve banking, full employment, Gini coefficient, Glass-Steagall Act, Goodhart's law, Growth in a Time of Debt, guns versus butter model, Hyman Minsky, income inequality, incomplete markets, inflation targeting, invisible hand, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kenneth Rogoff, Kondratiev cycle, labour market flexibility, labour mobility, land bank, law of one price, liberal capitalism, light touch regulation, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, long and variable lags, low interest rates, market clearing, market friction, Martin Wolf, means of production, Meghnad Desai, Mexican peso crisis / tequila crisis, mobile money, Modern Monetary Theory, Money creation, Mont Pelerin Society, moral hazard, mortgage debt, new economy, Nick Leeson, North Sea oil, Northern Rock, nudge theory, offshore financial centre, oil shock, open economy, paradox of thrift, Pareto efficiency, Paul Samuelson, Phillips curve, placebo effect, post-war consensus, price stability, profit maximization, proprietary trading, public intellectual, quantitative easing, random walk, regulatory arbitrage, rent-seeking, reserve currency, Richard Thaler, rising living standards, risk/return, road to serfdom, Robert Shiller, Ronald Reagan, savings glut, secular stagnation, shareholder value, short selling, Simon Kuznets, structural adjustment programs, technological determinism, The Chicago School, The Great Moderation, the payments system, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, tontine, too big to fail, trade liberalization, value at risk, Washington Consensus, yield curve, zero-sum game

As Stedman Jones notes for Britain: The major differences, and the real departure in economic terms, between the Callaghan government and the Conservatives lay in [the latter’s] radicalization of microeconomic policy through various market-based supply-side reforms and their importation of market mechanisms into public service provision, something the Labour Party continued and deepened after 1997. 56 197 T h e R i s e , T r i u m p h a n d Fa l l of K e y n e s The new orthodoxy’s structural reform ideas spread across the world in the form of the ‘Washington consensus’ that, through the IMF and the World Bank, made the receipt of financial support conditional on the deregulation of financial sectors, the privatization of state-owned enterprises, the liberalization of markets and fiscal discipline. The revolution in theory initiated by Friedman and Lucas ran in parallel with another theoretical enterprise particularly relevant to policy, known as the ‘economics of politics’.

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., 179 Erie Canal, 90 Eshag, Eprime, 71 European Central Bank, 139, 188, 198, 217, 242–3, 253, 254, 361 institutional constraints on, 50, 234, 242, 249, 274–5 misreading of Eurozone crisis, 275 quantitative easing (QE) by, 273–4 on ‘stress testing’, 364 taxing of ‘excess’ reserves, 266 use of LTROs, 257 European Commission, 139, 3612, 365 European Exchange Rate Mechanism, 188 European Investment Bank, 354 European Union (EU, formerly EEC), 153, 318, 379, 383 Financial Stability Board (FSB), 363 ‘Four Freedoms’, 375 lack of state, 376 Single Resolution Board, 365 Eurozone current account imbalances, 333, 334, 335, 336–7, 341–2 Juncker investment programme, 274 proposed European Monetary Fund, 376, 382 structural flaw in, 341, 375–7 two original sins of, 274, 376–5 Eurozone debt crisis (2010–12), 50, 223, 377, 382 and double-dip recession, 241, 242–3, 274 ECB’s misreading of, 275 and financial crowding-out theory, 234 and Greece, 32, 224, 224–5, 226, 233, 235, 242–3, 243, 365 and ‘troika’, 32, 139, 243 469 i n de x exchange-rate policy, 127–8, 139 and Congdon’s ‘real balance effect’, 285 and domestic interest rates, 251 fixed rates under Bretton Woods, 16, 159, 161, 162, 168 floating rates from 1970s, 16–17, 184 and Friedman, 182 IMF ‘scarce currency’ clause, 380–81 Nixon’s dollar devaluation (1971), 153, 154, 165 and quantitative easing, 267, 267 sterling crisis (1951), 145 sterling devaluation (November 1967), 152 sterling-dollar peg (from 1949), 148, 150, 152 sterling/franc/deutschmark devaluations (1949), 152 ‘Triffin paradox’, 161, 165 ‘expansionary fiscal consolidation’, 192, 225, 231 Fabian socialism, 96 Fama, Eugene, 208, 311–12, 313 Fanny Mae, 217, 256, 309, 320 fascism, 13, 98, 131, 175 Federal Reserve, US and 2008 crash, 50, 217, 254, 256 AIG bail-out (2008), 325 Federal Open Market Committee (FOMC), 185–6 and Great Depression, 104–6 inflation targeting, 188 and monetarism, 185–6, 188 monetary policy in 1950s, 146 ‘Operation Twist’, 268 quantitative easing (QE) by, 256–7, 273–4 ‘Reserve Position Doctrine’ (1920s), 103–4 and under-consumption theory, 298 Ferguson, Niall, 73, 79, 80, 91 financial collapse (2007–8) acute phase, 218–20, 223 ‘Austrian’ explanation, 104, 303 banks as proximate cause, 343, 361, 365 Bear Stearns rescue, 217 British analogies with Greece, 235 British debate after, 225–8 causes of, 3–4, 343–4, 365, 366, 368 central bank responses, 3, 217, 219, 234–5, 253–4, 254, 256–8, 359 comparative recovery patterns, 241–4, 242, 273, 273–4 compared to 1929 crash, 218 Conservative narrative, 226–8, 229–31, 233, 234–5, 237–9 and crisis of conservative economics, 17 and embedded leverage, 318, 322, 325 five distinct stages of crisis, 216–19 ‘global imbalances’ explanation, 11, 331, 333, 336–43, 337 government responses, 3, 217–18, 219–20, 221–36, 237–47 Hayekian view of cause, 303 hysteresis after, 239–41, 240, 241, 370 inequality as deeper cause of, 299–306, 368 Lehman Brothers bankruptcy, 3, 50, 217, 365 leverage (debt to equity) ratios on eve of, 317–18 liquidity-solvency confusion, 317 outbreaks of populism following, 13, 371–3, 376, 383 post-crash deficit, 226–33, 229, 237–8 private debt as proximate cause, 3–4 470 i n de x stagnation of real earnings as deep cause, 4, 303, 367 standard account of origins of, 3–4 as test of two theories, 2–3, 76 theoretical and policy responses, 10, 129, 219–20, 223–36, 237–47 see also austerity policy and under-consumption theory, 303–6 US sub-prime mortgage market, 3, 216, 304–5, 309, 323, 328, 341 see also Great Recession (2008–9) Financial Services Authority, U K, 321–2, 330 financial system and causes of 2008 collapse, 3, 4–5, 253, 307–9, 361 and crisis of conservative economics, 17 deregulation, 307–9, 310–16, 318–22, 328, 332–3, 384 East Asian financial crisis (1997–8), 202, 339, 371, 382 ‘Efficient Market Hypothesis’ (EMH), 311–13, 321–2, 328, 388 ‘financialization’ of the economy, 5, 305, 307–9, 366–7 fraud and criminality, 3, 4, 5, 7, 328, 350, 365–6, 367 and free-market orthodoxy, 5, 308–16 loosening of moral restraints, 319 mark-to-market (M2M) framework, 314 offshore euro-dollar market, 308, 332 privatised gain and socialised loss, 319–20 released from national regulation (1980s/90s), 131, 318–22 structural power of finance, 6–7, 14, 309 systemic under-estimation of risk, 314–16, 316*, 320–22, 323, 329–30 Thatcher’s Big Bang (1980s), 319 tradable public debt instruments, 43, 80–81 Turner’s ‘financial intensity’ concept, 366 unrealism of assumptions, 310–16 value at risk (VaR) framework, 314–15, 315, 330 ‘Washington consensus’ deregulation, 198, 200 see also banks FinTech, 356 First World War, 86, 95, 106–7, 374, 375 ‘fiscal consolidation’, 10–11, 129, 225 Darling’s plan (2009), 225–6 ‘expansionary’, 192, 225, 231 and Osborne, 227–8, 229–30, 231, 233, 237–9, 243–4, 244, 245 fiscal policy and 2008 collapse, 10, 217–18, 219–20, 223–36, 265–6, 273–4, 286 ‘Barber boom’, 167, 168 during Blair-Brown years, 221–4, 223, 225–6, 227 British experience (1692–2012), 77 Congdon’s total rejection of, 280, 285–6 ‘crowding out’ argument, 83–4, 109–11, 226, 233–5 current and capital spending, 107–8, 114, 142, 155–6, 193, 221–3, 237–8, 355–7 directing flow of new spending, 286–7 fiscal multiplier, 110–11, 125–6, 133–6, 138, 230–31, 233, 235, 244–5 471 i n de x fiscal policy – (cont.) in inter-war Britain, 106–17 and Keynesian economics, 2–3, 109, 111, 114–17, 125–7, 129–31, 133–4, 137–8, 173, 278 Keynesian full employment phase (1945–60), 141–8 Krugman’s ‘confidence fairy’, 117 Lawson counterrevolution, 185, 192–3, 222, 358 legacy of monetarism, 190–93 May Committee (1931), 112 national income accounts, 138 New Classical view of, 200 in new macroeconomic constitution, 351–2, 355–7, 360–61 nineteenth-century theory of, 9, 29 post-Keynesian disablement of, 193, 221, 258, 304, 328 pre-crash orthodoxy, 221–2, 223–4, 230–31 Public Sector Borrowing Requirement (PSBR), 155–6 see also balanced budget theory; public investment; taxation Fisher, Irving, 9, 52, 61, 99, 280 ‘compensated dollar’ scheme, 66 equation of exchange, 62–4, 71–2, 258, 278–9, 283, 284, 287 QTM formulation, 62–7, 71–2 and quantitative easing, 258, 278–9 Santa Claus money, 62–4, 258, 278–9 Fitch (CR A), 329 France assignats in 1790s, 64–5 and gold standard, 50, 102, 104, 127 ‘indicative planning’ system, 150 ‘physiocrats’in, 81 protectionism in late nineteenthcentury, 59 state holding companies, 356 statism in, 140, 144 university campus revolts (1968), 164 Freddie Mac, 217, 256, 309, 320 free trade, xviii, 9, 58–9, 76, 79, 81–2 abandoned in Britain (1932), 113 general presumption in favour of, 377 and Hume’s ‘price-specie-flow’ mechanism, 37–8, 53, 54, 104, 332 and Irish potato famine, 15 List’s ‘infant industry’ argument, 88–9, 90, 378–7 and nationalist–globalist split, 371–3 and post-war liberalization, 16, 374 and presumption of peace, 379 repeal of Corn Laws (1846), 15, 85 Ricardo’s doctrine of comparative advantage, 88, 378, 379, 379 US conversion to (1940s), 90 Freiburg School, 140 Friedman, Milton adaptive expectations theory, 180–81, 183, 194, 206–11 and Cartesian distinction, 22 as Fisher’s heir, 278 The Great Contraction (with Schwartz; 1865), 105 idea of ‘helicopter money’, 63 and monetary base, 185, 280 and Mont Pelerin Society, 176–7 and ‘natural’ rate of unemployment, 163, 177, 181, 195, 206, 208 onslaught on Keynesianism, 170, 174, 177–83, 261 ‘permanent income hypothesis’ (1957), 178, 183 and Phillips Curve, 38, 180–81, 194, 206–8, 207 472 i n de x policy implications of work of, 182–3 political motives of, 177, 183–4 and quantity theory, 61, 70, 177–9, 182, 183, 194 ‘stable demand function for money’, 179 view of Great Depression, 104–6, 179, 183, 256, 276, 278 weaknesses in arguments of, 183 Frydman, Roman, 389 Fullarton, John, 49 Funding for Lending programme, 265–6 G20 Financial Stability Board, 363 summits (2009/10), 219–20, 223, 225 G7 finance ministers meeting (February 2010), 224–5 Galbraith, James, 303, 361 game theorists, 389 Gasperin, Simone, 357* Geddes, Sir Eric, 108 German Historical School, 88–9 Germany and 2008 crash, 217, 218, 243 current account surplus, 333, 334, 341, 342, 380, 381 employer–union bargains, 147, 167 and Eurozone crisis, 341, 365, 376, 377 and Great Depression, 97, 111, 129–30 growth Keynesianism (1960–70), 153–4 high growth rates in 1950/60s, 149, 156 Hitler’s reduction in unemployment, 111, 112, 129–30 hyperinflation of early 1920s, 275 as Keynesian in 1960s, 140 nineteenth-century expansion and unification, 89, 91 ‘ordo-liberalism’ in, 140 post-war modernization/catch-up, 156–7 protectionism in late nineteenthcentury, 59 return to gold standard (1924), 102 ‘Rhenish capitalism’ model, 154 Giffen, Robert, 51 Giles, Chris, 219, 302 Gini coefficient, 299, 300 Gladstone, William, 42–3, 86 Glass–Steagall Act (1933), 319, 361, 362 global imbalances basic theory of, 335–6 and capital account liberalization, 318–19 capital flight, 59, 334, 337, 341, 343 Eurozone see Eurozone: current account imbalances as explanation for 2007–8 crash, 11, 331, 333, 336–43, 337 and financial deregulation, 318–19, 332–3 and First World War, 95 increases in pre-crash years, 333, 333–4, 334, 335 problematic nature of, 333–4 reserve accumulation, 336, 337–41 ‘saving glut’ vs ‘money’ glut, 338–41, 342 structural causes still in place, 344 US dollar as main reserve currency, 338 global warming, 383 globalization, 17, 300, 334–5 absence of the state, 350, 373, 375–6 anti-globalist movements, 371–2, 373 first age of, 51, 55, 57, 59, 374, 375 473 i n de x globalization – (cont.) future of, 382–4 Geneva and Seattle protests (1998/99), 371 and inflation rate, 252–3 and lower wages in developed world, 252–3, 300, 379 nationalist-globalist split, 371–3 ‘neo-liberal’ agenda of IMF, 139, 181, 318–19 popular protest against, 351, 371–2 resurgence of after Cold War, 374 Rodrik’s ‘impossible trinity’, 375 gold, 23, 24, 25, 28, 35, 37 new gold production, 51, 52, 55, 62 gold standard, xviii, 1, 9, 27, 29, 338 and Britain, 9, 42, 43, 44, 45–50, 53, 57–9, 80, 101, 102, 113 collapse of US exchange standard (1971), 160, 165 commitment to convertibility, 55–6 and Cunliffe model, 54–5, 102 depressions in later nineteenthcentury, 51–2 dysfunctional after First World War, 95, 97 final suspension in Britain (1931), 113, 125 Fisher’s ‘compensated dollar’ scheme, 66 Hume’s ‘price-specie-flow’ mechanism, 37–8, 53, 54, 104, 285, 332 and international bond markets, 92 as international by 1880s, 50–52 Keynes on, 58, 101, 127 Kindleberger thesis, 58–9 move to ‘managed’ system, 71, 99–100 replaces silver standard (1690s), 42, 43 restored (1821), 48 return to in 1920s, 102, 104, 107 suspension during Napoleonic wars, 43, 45–7 suspension of convertibility (1919), 101–2 triumph of by mid-nineteenthcentury, 44, 50 working and design of, 52–9 as working in tandem with empire, 57, 58 Goldberg, Michael D., 389 Goldman Sachs, 315 Goodhart, Charles, 168, 187 Graeber, David, 28 Great Depression (1929–32), 9, 13, 96, 97–8, 110–13, 127 compared to 2008 crash, 218 Friedman-Schwartz view, 104–6, 179, 183, 256, 276, 278 impact on US policy-makers in 2008 period, 256, 275, 278 left-wing explanations of, 298 rise in inequality in lead-up to, 289 and second wave of collectivism, 15–16 Great Moderation (early 1990s–2007), 4, 53, 202, 278 economic problems during, 348 financial deregulation during, 318–22, 328 financial innovation during, 322–8 and independent central banks, 215 inflation during, 106, 215, 216, 252–3, 253, 348, 359, 360 international financial network, 309, 318–28 output growth during, 215, 253, 348 Great Recession (2008–9), xviii Congdon’s view of, 281–2, 287 co-ordinated global response, 219–20, 383 decline in productivity after, 305–6 474 i n de x initial signs of recovery (2009), 218–19, 225, 226 monetary interpretation of, 105, 106 ‘premature withdrawal’ of fiscal stimulus, 219–20, 223–36, 245, 352 reform agenda after, 361–8 rise in inequality in lead-up to, 289–90, 299–300 see also financial collapse (2007–8) Greece and Eurozone debt crisis, 32, 224, 224–5, 226, 233, 235, 242–3, 243, 337, 341, 365 in gold standard era, 59 Greenspan, Alan, 188, 313 Hamilton, Alexander, 88, 90, 92 Hammond, Philip, 236, 352 Hannover Re scandal, 329 Harrison, George, 105 Harrod, Roy, 123 Harvey, John, 333, 387 Hawtrey, Ralph, 109–10, 280 Hayek, Friedrich, 33, 46, 177, 195, 350, 367 founds Mont Pelerin Society, 176 ‘over-consumption’ theory, 296 The Road to Serfdom (1944), 16, 175–6 on Wall Street Crash, 104 Heath, Edward, 167–8 Heckscher, Eli, 37 Help to Buy programme, 265, 266 Henderson, Hubert, 109 Henderson, W.

…

., 171, 208 Napoleonic wars, 43, 45–8, 80, 81, 84 national debt and 2007–8 crash, 76, 217–18, 219–20, 223–4, 224, 225–36, 237 British experience (1692–2012), 77 British long-term securities, 43 ‘burden on future generations’ fallacy, 236 bust at end of Lawson boom, 193 in eighteenth-century Britain, 80–81 four big spikes (since 1815), 84 and ‘Geddes Axe’ (1920s), 108 Alexander Hamilton on, 92 international bond markets, 90–92, 235 in Keynesian era, 156, 159–60, 161 Merkel’s ‘Swabian housewife’, 236 and modern tax systems, 32 monetary financing of deficits, 246–7, 285 during Napoleonic wars, 45–8 nineteenth-century money lenders, 90–91, 332 ‘off-budget’ accounting, 108–9 and PFI, 222–3 post-crash deficit, 226–33, 229, 237–9, 328, 352 public sector net borrowing (PSNB), 185, 227–8, 237, 238 Reagan’s budget deficits, 186, 190–91 recession of early 1980s, 186–7, 191 sinking fund, 83, 84, 85, 106, 108, 112, 114, 355 Sinking Fund Act (1875), 114 Smith and Ricardo’s view, 81–2, 83–4, 109, 110 ‘structural’ or ‘cyclically-adjusted’ deficit, 237–41, 238 US in 1950s/60s, 159–60, 161 Victorian fiscal constitution, 85–8, 86 and warfare, 83 483 i n de x nationalism, 17, 92, 95, 351, 371–3, 375 nationalization, 15–16, 142, 158 during 2008 crisis, 217 Labour’s renationalization proposals, 356 naval power, 78, 79–80, 87 Navigation Acts, British, 78 neo-classical economics tradition, xviii and 2008 collapse, 310–16, 328 comparisons with Keynesian view, 204, 204 and deregulation of banking, 310–11 distribution in perfect markets of, 292 formula for multiplier, 134–6 and Friedman, 177–83 and growth in inequality, 245–6 in Hutchison’s continua, 349 and Keynes, 122–3, 128 Keynesian synthesis, 172, 173–4, 201–2 microeconomics of Walras, 10, 173, 181, 385 model of rationality, 120 ‘natural’ rate of unemployment, 2, 163, 195, 197, 208, 232–3 and New Consensus, 199 and ‘optimal’ rate of investment, 368 pivotal role of banks ignored, 311 Solow growth model, 293 theoretical abolition of Keynesianism, 201 wage-adjustment story, 107, 108, 115, 121–2, 123, 128, 130, 132, 172 see also classical economics tradition; New Classical economics neo-liberal ideology ‘anti-state’ deception of, 93 capture of politics by, 6, 16–17, 292 and Eurozone constitution, 274 and Eurozone design flaw, 376, 377 implosion of growth model, 305 need for jettisoning of, 351, 367 term coined by Rustow (1938), 175 totalitarianism as original target, 175–6 as unchallenged since Cold War, 374 Netherlands, 78 New Classical economics and 2008 collapse, 2–3, 5 DSGE modelling, 196, 211–12 and erroneous austerity arguments, 232–4 and growth in inequality, 4 inflation targeting, 2 and microeconomics of Walras, 10 ‘natural’ rate of unemployment, 2, 195, 197, 208, 232–3 New Classical economics – (c0nt.) and neo-liberal capture of politics, 6, 16–17 and policies of austerity, 3 pre-crash models/mindset of 2000s, 212–13, 221, 229–35, 310–16 REH as analytic core of, 194–7, 385–6 synthesis with New Keynesians, 195–7, 199–201, 202 and unimpeded financial markets, 5, 6–7 unrealism of assumptions, 200, 310–16, 321–2 victory of in 1970s, 16–17 New Consensus, 9, 196–8, 202 based on supply not demand, 200 Brown constitution, 221–3 main features of, 199–201 primacy of monetary policy, 200–201, 212 ‘Washington consensus’, 198 484 i n de x New Keynesianism, 195–7, 199, 200, 201, 202, 212, 358 Brown constitution, 221–3, 227 and inflation targeting, 196, 251 ‘new stagnation’ theorists, 151 New Zealand, 188 Newton, Isaac, 42, 43, 47–8 Nielsen, Robert, 389 Niemeyer, Sir Otto, 108 Nixon, Richard, 153, 162 Norman, George, 49 Norman, Montagu, 115 North, Douglass, 198–9 Northern Rock, 317, 319*, 362 Obama, Barack, 225, 241–2, 274 O’Brien, Denis, 78 Office for Budgetary Responsibility (OBR), 228, 229–30, 237 oil prices, 271, 272 oil price shock (1973–4), 166–7, 189, 190 price spike (1980–82), 189, 190 OPEC surpluses, 308, 332 Orbán, Viktor, 373 Osborne, George, 114, 227–8, 229, 231, 233 and cost of austerity, 243–4, 244, 245 crucial mistake in austerity policy, 229–30 ‘deficit’ obsession of, 237 and Reinhart-Rogoff work, 232 and ‘structural’ deficit, 237–9 output gaps, 144, 197, 212–13, 229, 235, 237, 258, 286 ‘over-consumption’ theory, Austrian, 296 Overstone, Lord, 49 Palley, Thomas, 302–3, 304, 305 Papandreou (Greek Prime Minister), 324 Pareto-efficiency, 290, 291 Paulson, Henry, 217 Peel, Robert, 47–8, 86 Péreire brothers, 91 Pettifor, Ann, 246, 309 Pettis, Michael, 339 Petty, William, 28 Phillips, A.

Private Island: Why Britain Now Belongs to Someone Else by James Meek

Affordable Care Act / Obamacare, Berlin Wall, business continuity plan, call centre, clean water, Deng Xiaoping, electricity market, Etonian, Ford Model T, gentrification, HESCO bastion, housing crisis, illegal immigration, land bank, Leo Hollis, Martin Wolf, medical bankruptcy, Mikhail Gorbachev, post-industrial society, pre–internet, price mechanism, Right to Buy, risk tolerance, road to serfdom, Ronald Reagan, Rubik’s Cube, Skype, sovereign wealth fund, vertical integration, Washington Consensus, working poor

Few doubted Saddam would be beaten, and he was. That November, as I drove off the ferry at Ostend, heading east, it seemed a racing, expanding tide of victorious free marketism flickered at my wheels, a tide that has gone by many names – consumer capitalism, Reaganism, Thatcherism, neoliberalism, the Washington Consensus. Though the watchtowers still stood at the old border between two Germanys, the border was gone. In eastern Germany, the narrow cobbled streets of medieval towns had jammed solid with second hand cars. I passed a field where an impatient western German DIY chain, unwilling to wait for steel and breeze blocks, had erected a vast, circular retail marquee, blazing with lights.

…

They seemed to believe, or talked, made speeches, wrote papers as if they believed, that the entire structure of their own wealthy modern societies – the roads, the electricity grids, the railways, the water and sewage systems, the universal postal services, the telecoms networks, housing, education and health care – had been brought into being by individual entrepreneurs driven by desire for gain, with the occasional lump of charity thrown in, and that a bloated, parasitical state had come shambling onto the scene, seizing assets and demanding free stuff for its shirker buddies. I don’t want to absolve the Russians or Ukrainians of responsibility for their handling of the aftermath of communism, but the template they were handed by the fraternity of the Washington Consensus was based on fake history. If this is what the triumphalists of Wall Street and the City of London told the Russians about the way of the capitalist world, I thought when I moved back to Britain in 1999, what have they been telling us? And what came of it? When Margaret Thatcher’s Conservatives came to power in Britain in 1979, much of the economy, and almost all its infrastructure, was in state hands.

Chomsky on Mis-Education by Noam Chomsky

Alan Greenspan, American ideology, classic study, deindustrialization, deskilling, disinformation, dual-use technology, Howard Zinn, invisible hand, Korean Air Lines Flight 007, means of production, military-industrial complex, public intellectual, Ronald Reagan, strikebreaker, union organizing, W. E. B. Du Bois, Washington Consensus

The point is elementary and applies to the self-designated “gatekeeper and model” as well. Latin America is the obvious testing ground, particularly the Central America–Caribbean region. Here Washington has faced few external challenges for almost a century, so the guiding principles of policy, and of today’s neoliberal “Washington consensus,” are revealed most clearly when we examine the state of the region and how that came about. It is of some interest that the exercise is rarely undertaken and, if proposed, castigated as extremist or worse. I leave it as an “exercise for the reader,” merely noting that the record teaches useful lessons about the political and economic principles that are to be “the wave of the future.”

…

The well-known economic historian Paul Bairoch points out that “there is no doubt that the Third World’s compulsory economic liberalism in the nineteenth century is a major element in explaining the delay in its industrialization,” or even “deindustrialization,” while Europe and the regions that managed to stay free of its control developed by radical violation of these principles.46 Referring to the more recent past, Arthur Schlesinger’s secret report on Kennedy’s Latin American mission realistically criticized “the baleful influence of the International Monetary Fund,” then pursuing the 1950s version of today’s “Washington Consensus” (“structural adjustment,” “neoliberalism”). Despite much confident rhetoric, not much is understood about economic development. But some lessons of history seem reasonably clear and not hard to understand. Let us return to the prevailing doctrine that “America’s victory in the Cold War” was a victory for democracy and the free market.

The Fair Trade Scandal: Marketing Poverty to Benefit the Rich by Ndongo Sylla

"there is no alternative" (TINA), British Empire, carbon footprint, corporate social responsibility, David Ricardo: comparative advantage, deglobalization, degrowth, Doha Development Round, Food sovereignty, global value chain, illegal immigration, income inequality, income per capita, invisible hand, Joseph Schumpeter, labour mobility, land reform, market fundamentalism, mass immigration, means of production, Mont Pelerin Society, Naomi Klein, non-tariff barriers, offshore financial centre, open economy, Philip Mirowski, plutocrats, price mechanism, purchasing power parity, Ronald Reagan, Scientific racism, selection bias, structural adjustment programs, The Wealth of Nations by Adam Smith, trade liberalization, transaction costs, transatlantic slave trade, trickle-down economics, vertical integration, Washington Consensus, zero-sum game

On the other hand, he argues, it is undeniable that the developing countries that most benefited from the gains of globalisation are those that introduced heterodox and gradualist economic policies in their approaches towards economic openness. Still, according to him, empirical data also showed that the vast majority of developing countries which, in recent history, followed the neoliberal orthodoxy, the notorious ‘Washington Consensus’, have had disastrous economic performances (see Box 3.2). In other words, neoliberal criticism of Fair Trade is rather weak from a logical point of view. On the one hand, it cannot attack consumer choices without contradicting its support of the sacred principle of individual freedom. On the other, it cannot argue that it represents a better economic 73 Sylla T02779 01 text 73 28/11/2013 13:04 the fair trade scandal alternative a priori than the model promoted by Fair Trade, because its economic and social results so far are certainly not persuasive.

…

., 132, 156(n4) Smithsonian Migratory Bird Center, Bird-friendly Coffee programme, 54 Social capital, 101, 117, 119 Solidaridad, 3, 38–9, 114; see also Roozen Solomon Islands, 135 Somalia, 135 SOS Wereldhandel; see Fair Trade Organisatie Spaghetti bowl, 27 South Africa, 136, 137, 159(n20), 162(n21) South South relations, 80, 149, 163(n2) Sri Lanka, 134 STABEX, see Export earnings stabilisation system Starbucks, 77, 78, 150; Coffee and farmer equity practices, 55 Stigler, Georges, 42 Stiglitz, Joseph E. and Charlton, Andrew, 31–3, 66 Structural adjustment policies, 17, 18, 42 Structuralist school, 37–8 Sudan, 135 Sugar, 16, 27, 30, 36, 60–2, 80, 85, 90 Sustainable Agriculture Network, 53 Sustainability, 4, 24, 34, 47, 50, 53, 55, 56, 57, 70, 79, 113, 138, 142, 149–50, 158(n5) Sustainable development, 4, 34, 47, 55, 70, 82, 83, 156(n2), 163(n1) Sustainable Fair Trade Management System, 45; see also World Fair Trade Organization Sweden, 63, 162(n29) Switzerland, 53, 127, 128 System for Minerals (Sysmin), 155(n2) Taiwan, 155(n1) Tanzania, United Republic of, 134, 135 Tariff escalation, 26–8, 30 Tariff peaks, 30 Tax havens, 157(n13) Tea, 40, 49, 52, 53, 54, 56, 80, 130, 133, 134, 136 Ten Thousand Villages, 35–6 Thailand, 155(n1) Thatcher, Margaret, 42 Third Worldism, 36–40, 120 Times (the), 160(n2) Timor Leste, 135 Togo, 134, 135, 155(n2) Torrens, Robert, 65 Trade not aid (slogan), 38, 40, 126 Trade structure, 9, 10, 133–8, 141, 154, 163(n2); see also Developing countries Traders, 20, 44, 49, 86, 106, 116–17, 140 Transfair USA, additional income transferred, 125, 128, 130–1, 153; 161(n9), 161(n11); budget and licensee fees, 127–8, 153; exit from Fairtrade, 161(n13); name change, 161(n9); sales, 161(n10) Tribune (La), 159(n18) Truman, Harry, 34, 35 Turkey, 155(n1) Tuvalu, 135 UCIRI (Union de Comunidades Indigenas de la Region del Istmo), 98, 157(n4) Uganda, 134, 135, 138 Un Comtrade, 20, 134 Underdevelopment, see development Unequal exchange, 1–2, 16–22, 25, 37, 62, 76, 120, 132, 133; unequal ecological exchange, 22–4 United Nations, 10, 144, 155(n4) United Nations Conference on Trade and Development (UNCTAD), 9, 10, 13, 14, 16, 20–1, 38, 133, 134, 135, 154, 162(n19), 162(n21), 163(n2) United Kingdom, 8, 25, 31, 32, 36, 46, 53, 56–7, 60–2, 64–9, 71, 127, 128, 132 United States, 16, 20, 22, 23, 25, 27, 29, 31, 32, 35, 36, 42, 46, 53, 54, 61, 63, 67, 71, 79, 90, 125, 127, 128, 130, 131, 132, 136, 156(n2), 158(n8), 158(n9); American System, 26, 67; United States Agency for International Development (USAID), 138; see also Transfair USA UTZ Certified, 54, 55, 56, 70 Van der Hoff, Frans, 3, 38–43, 87–9, 98, 139, 158(n4), 158(n5), 162(n26), 163(n1) 178 Sylla T02779 02 index 178 28/11/2013 13:04 index Vanuatu, 135 Vent for surplus theory, 65 Vertical integration, 19–21, 41 Vietnam, 74 Wage, 79, 80, 158(n7), 160(n26), 160(n27), 161(n5); minimum wage, 51, 95, 98; reservation wage, 94–5; wage employment, 19, 72, 94, 123–4, 128, 131, 133, 137, 142, 162(n22) Wal-Mart, 78, 79 Washington Consensus, 73 Wealth of Nations, see Smith, Adam West Indies, 60–2, Williams, Eric, 60–2 Williamson, Jeffrey G., 162(n27) World Bank, 17, 31, 42; development indicators, 9, 10–12, 15, 30, 89, 131, 137, 153, 161(n7, n14, n17) World Fair Trade Organization, 44–5, 46, 80, 151 World-system theory, 76 World Trade Organization, 26, 28, 29, 31–3, 74, 144, 155(n3) Yemen, 135 Zambia, 135 179 Sylla T02779 02 index 179 28/11/2013 13:04 Sylla T02779 02 index 180 28/11/2013 13:04

The Money Machine: How the City Works by Philip Coggan

activist fund / activist shareholder / activist investor, algorithmic trading, asset-backed security, Bear Stearns, Bernie Madoff, Big bang: deregulation of the City of London, Black Monday: stock market crash in 1987, bond market vigilante , bonus culture, Bretton Woods, call centre, capital controls, carried interest, central bank independence, collateralized debt obligation, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency risk, disintermediation, diversification, diversified portfolio, Edward Lloyd's coffeehouse, endowment effect, financial deregulation, financial independence, floating exchange rates, foreign exchange controls, Glass-Steagall Act, guns versus butter model, Hyman Minsky, index fund, intangible asset, interest rate swap, inverted yield curve, Isaac Newton, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", joint-stock company, junk bonds, labour market flexibility, large denomination, London Interbank Offered Rate, Long Term Capital Management, low interest rates, merger arbitrage, Michael Milken, money market fund, moral hazard, mortgage debt, negative equity, Nick Leeson, Northern Rock, pattern recognition, proprietary trading, purchasing power parity, quantitative easing, reserve currency, Right to Buy, Ronald Reagan, shareholder value, South Sea Bubble, sovereign wealth fund, technology bubble, time value of money, too big to fail, tulip mania, Washington Consensus, yield curve, zero-coupon bond

Free-market enthusiasts also pointed to the success of those Asian countries that had followed a broadly free-market view, such as Singapore, Hong Kong and Taiwan, and the failure of those countries, notably in Africa, that had followed a statist or socialist model. A so-called ‘Washington consensus’ argued that any economy which wanted to prosper should follow the free-market model: lower taxes, reduced government deficits and open capital markets. These policies were often made a condition for countries requiring aid from the International Monetary Fund, the Washington-based organization that underpins the global financial system. The period since 2000 has seen the Washington consensus come under attack. First, the US model looks not quite as attractive as it did in the late 1990s.

GDP: The World’s Most Powerful Formula and Why It Must Now Change by Ehsan Masood

Alan Greenspan, anti-communist, bank run, banking crisis, biodiversity loss, Bob Geldof, Bretton Woods, centre right, clean water, colonial rule, coronavirus, COVID-19, Credit Default Swap, decarbonisation, deindustrialization, Diane Coyle, energy security, European colonialism, financial engineering, government statistician, happiness index / gross national happiness, income inequality, indoor plumbing, Intergovernmental Panel on Climate Change (IPCC), Isaac Newton, job satisfaction, Kickstarter, Mahbub ul Haq, mass immigration, means of production, Meghnad Desai, Mohammed Bouazizi, Robert Solow, Ronald Reagan, Sheryl Sandberg, Silicon Valley, Simon Kuznets, Skype, statistical model, the scientific method, The Spirit Level, Washington Consensus, wealth creators, zoonotic diseases

Cuba’s lowly GDP ranking, said Haq “shows the price of socialism.”14 Draper has a different recollection and denies having any pressure put on him from the White House (or elsewhere). What is not in doubt, however, is that the Human Development Report and the Human Development Index were a direct challenge, not only to GDP, but to what is known as the Washington Consensus. We need to remember that the index was launched at a time of deep economic and debt crises, not unlike the time of this writing, except that the countries in the midst of austerity (then known as structural adjustment) were mostly in Africa, Asia, and Latin America. Export earnings were falling and debt was rising as these countries turned to the World Bank and the International Monetary Fund, the two Washington-based international financial institutions, for help.

…

Export earnings were falling and debt was rising as these countries turned to the World Bank and the International Monetary Fund, the two Washington-based international financial institutions, for help. In return, these institutions demanded a reduced role for the state, leading to lower spending on basic needs such as health and education. It is this consensus that the HDI stood against, as the 2010 report, the twentieth edition, makes clear: By the early 1990s the Washington Consensus had attained near hegemony, and mainstream development thinking held that the best payoffs would come from hewing to its key tenets of economic liberalization and deregulation. Many Western countries were also reducing the role of the public sector in the economy and lightening regulation.

The Euro: How a Common Currency Threatens the Future of Europe by Joseph E. Stiglitz, Alex Hyde-White

"there is no alternative" (TINA), "World Economic Forum" Davos, Alan Greenspan, bank run, banking crisis, barriers to entry, battle of ideas, behavioural economics, Berlin Wall, Bretton Woods, business cycle, buy and hold, capital controls, carbon tax, Carmen Reinhart, cashless society, central bank independence, centre right, cognitive dissonance, collapse of Lehman Brothers, collective bargaining, corporate governance, correlation does not imply causation, credit crunch, Credit Default Swap, currency peg, dark matter, David Ricardo: comparative advantage, disintermediation, diversified portfolio, eurozone crisis, Fall of the Berlin Wall, fiat currency, financial innovation, full employment, George Akerlof, Gini coefficient, global supply chain, Great Leap Forward, Growth in a Time of Debt, housing crisis, income inequality, incomplete markets, inflation targeting, information asymmetry, investor state dispute settlement, invisible hand, Kenneth Arrow, Kenneth Rogoff, knowledge economy, light touch regulation, low interest rates, manufacturing employment, market bubble, market friction, market fundamentalism, Martin Wolf, Mexican peso crisis / tequila crisis, money market fund, moral hazard, mortgage debt, neoliberal agenda, new economy, open economy, paradox of thrift, pension reform, pensions crisis, price stability, profit maximization, purchasing power parity, quantitative easing, race to the bottom, risk-adjusted returns, Robert Shiller, Ronald Reagan, Savings and loan crisis, savings glut, secular stagnation, Silicon Valley, sovereign wealth fund, the payments system, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, transfer pricing, trickle-down economics, Washington Consensus, working-age population