What Really are “Economic Reforms”?
[These are some comments I sent out to friends along with the Reuters article “Analysis—Slowing growth exposes Asia’s half-hearted reforms”, by Alan Wheatley, the Reuters Asian Economics Correspondent, from Jan. 31, 2001. —Scott H.]
January 31, 2001
If you’ve been following international economic trends in recent years you’ve probably noticed the constant stream of demands by Western commentators, economists and politicians, for “economic reform” in Asian countries and elsewhere. But one of the “curious” things is that these commentators seldom spell out just exactly what they mean by these “reforms”. Could it be that spelling it out might seem a self-exposure?
The following report [Not included in this posting. —S.H.] is a rare exception, where the journalist actually lets the cat out of the bag (or part way out, anyway). I draw your attention, in particular, to the following sentence: “Structural reform is jargon for making market forces work better in myriad ways: easier hire-and-fire rules, swifter debt workout and bankruptcy procedures, letting deadbeat banks go bust and selling off assets to new, possibly, foreign managers.”
In short, it becomes rather clear that by “reform” what these people are talking about is making it easier for foreign capital to invest and export profits, to take over local companies, to fire workers with impunity, to cut whatever pitiful benefits that may exist as they see fit, and to operate in these countries without any “interference” whatsoever from local governments. “Reform” really means allowing imperialist corporations to operate without restriction.
Obviously such a thing is not in the interests of the people of these countries. And, not only that, the really ironic thing is that such “reforms” do not make the economies of these countries stronger and better able to resist problems like the 1997-98 Asian financial crisis. On the contrary, that crisis was partly a result of previous, partial “reforms” along the same lines. Further free market “reforms” will only aggravate the situation, and make crises all the more severe and uncontrollable.
Pushing more “reforms” down the throats of other countries with shaky economies is like a doctor treating poison victims by forceing more poison down their throats.
I don’t want to suggest that capitalist economic crises could be eliminated by simply restricting “free” markets. Crises are inherent in any form of capitalism, even planned state capitalism of the Soviet variety. But it is true that some government policies can help ward off crises for a time, and ameliorate the negative results that ensue when crises do break out—to a degree. And it is also true that other policies can aggravate the situation, cause what would otherwise be minor disturbances to spin out of control, and generally cause fragile economic houses of cards to fall even quicker and harder than they otherwise would.
Bourgeois economics is such an absurd form of witch-doctoring that their prescriptions not only do not help stabilize inherently unstable situations, they actually make them more unstable. (Of course they still pick one of their number for a “Nobel Prize” every year, despite this!)
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