The IMF led consortia (World Bank, WTO…), have represented the interests of the rich countries. Historically, they have advocated free market policies in developing countries. Whenever such weak economies got into economic trouble the consortia have insisted on harsh policy changes in return for their help. By such acts, are the rich countries really helping the growth of democracy in developing countries?
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Free market policies have brought more areas of our life under the ‘one rupee one vote’ rule of the market. Let us examine some of these policies:
The argument is framed thus, “politics opens the door for perversion of market rationality; inefficient firms or farmers by lobbying their politicians for subsidies will impose costs on the rest of society that has to buy expensive domestic products.” The current farmers’ agitation in India is being tarried with this brush.
The free marketer’s solution is to ‘depoliticize’ the economy. They argue that the very scope of government activity should be reduced to a minimal state through privatisation and liberalisation. This is necessary, they argue, because the politicians are less competent and more corrupt. Hence, it is important for developing countries to sign up to international agreements like the WTO, bilateral/free trade agreements like RCEP or TPP so that domestic politicians lose their ability to take democratic decisions.
The main problem with this argument for depoliticization is the assumption that we definitely know the limits where politics should end and where economics should begin. This is a fundamental fallacy.
Markets are political constructs; the recognition of private ownership of property and other rights that underpin them have political origins. This becomes evident when viewed historically. For example: certain tribes have lived in the woods for centuries until the point when this land is sold off by the government to a private landowner and then these tribespeople now become trespassers on the same land. Or the re-designation of slaves from capital to labour was also a political act. In other words the political origins of economic rights can be seen in the fact that many of these rights that seem natural today were once hotly contested in the past.
Thus when free marketers propose de-politicizing the economy they argue that everybody else accept their demarcation between economics and politics. I agree with Ha Joon Chang when he argues that ‘depoliticization of policy decisions in a democratic polity means – let’s not mince our words – weakening democracy.’
In other words, democracy is acceptable to free-marketers only if it does not contradict their free market doctrine. They want democracy only if it is largely powerless. Deep down they believe that giving political power to those who do not have a stake in the free market system will result in an ‘irrational’ modification of property and other economic rights. And the free-marketers spread their gospel by subtly discrediting democratic politics without openly criticising democracy.
The consequences have been damaging in developing countries, where the free-marketers have been able to push through anti-democratic actions well beyond what would be acceptable in rich countries.
Free market policies have brought more areas of our life under the ‘one rupee one vote’ rule of the market. Let us examine some of these policies:
The argument is framed thus, “politics opens the door for perversion of market rationality; inefficient firms or farmers by lobbying their politicians for subsidies will impose costs on the rest of society that has to buy expensive domestic products.” The current farmers’ agitation in India is being tarried with this brush.
The free marketer’s solution is to ‘depoliticize’ the economy. They argue that the very scope of government activity should be reduced to a minimal state through privatisation and liberalisation. This is necessary, they argue, because the politicians are less competent and more corrupt. Hence, it is important for developing countries to sign up to international agreements like the WTO, bilateral/free trade agreements like RCEP or TPP so that domestic politicians lose their ability to take democratic decisions.
The main problem with this argument for depoliticization is the assumption that we definitely know the limits where politics should end and where economics should begin. This is a fundamental fallacy.
Markets are political constructs; the recognition of private ownership of property and other rights that underpin them have political origins. This becomes evident when viewed historically. For example: certain tribes have lived in the woods for centuries until the point when this land is sold off by the government to a private landowner and then these tribespeople now become trespassers on the same land. Or the re-designation of slaves from capital to labour was also a political act. In other words the political origins of economic rights can be seen in the fact that many of these rights that seem natural today were once hotly contested in the past.
Thus when free marketers propose de-politicizing the economy they argue that everybody else accept their demarcation between economics and politics. I agree with Ha Joon Chang when he argues that ‘depoliticization of policy decisions in a democratic polity means – let’s not mince our words – weakening democracy.’
In other words, democracy is acceptable to free-marketers only if it does not contradict their free market doctrine. They want democracy only if it is largely powerless. Deep down they believe that giving political power to those who do not have a stake in the free market system will result in an ‘irrational’ modification of property and other economic rights. And the free-marketers spread their gospel by subtly discrediting democratic politics without openly criticising democracy.
The consequences have been damaging in developing countries, where the free-marketers have been able to push through anti-democratic actions well beyond what would be acceptable in rich countries.
* Adapted and simplified by the author from Ha Joon Chang's Bad Samaritans - The Guilty Secrets of Rich Nations & The Threat to Global Prosperity
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