RE: [Fwd: CAGE: Interesting Article by Joseph Stiglitz]

Surely an equally important problem is that the economics of global
liberalism is simply wrong.  Stiglitz points this out in certain respects,
and one could go much further.

Peter 

-----Original Message-----
From: Jeffrey L. Beatty
To: WORLD SYSTEMS NETWORK
Sent: 4/12/00 10:45 AM
Subject: Re: [Fwd: CAGE: Interesting Article by Joseph Stiglitz]

If there was a method to the madness, I'm skeptical of whether or not
its purpose was to "foster instability" all over the globe.  I think
there may have been a predisposition on the part of the free marketeers
in the IMF, the Treasury and elsewhere, to liberalize the developing
countries and the transition economies as quickly as possible.  The
logic of such a plan would have been reminiscent of what I have heard
referred to as the "bicycle theory" of trade liberalization (cf. Aho and
Aronson 1985).  According to this "theory" (actually, an intuition),
much as a bicycle will fall over unless it keeps moving, trade
liberalization (and, by extension, financial liberalization and
transition from socialism) can proceed only if momentum in its favor is
sustained. 

Thus, if there was a "method to the madness", it was the desire on the
part of the free marketeers to create a truly global liberal economic
order as quickly as possible.  I don't think there was any big secret
about these intentions.  Note Jeffrey Sachs' confident declaration of
the attainability of such a goal in his 1995 _Foreign Policy_ article. 

The problem with this agenda is that the bankers and economists who
favored the free-market agenda, whatever their credentials in the
economic and financial world might be, have been naive in the field of
international relations.  I think there has been a tendency, certainly
on the part of the US Treasury, to ignore Russia's very real
geopolitical and security interests, not to mention its national pride,
and to try to use U.S. financial support in a clumsy way as leverage
(Never send a bunch of economists and bankers to do a political
scientist's job, right? : ) ).   

In 1997, I had the privilege of hearing Dr. Stiglitz speak at the
Eastern Economic Association annual meeting, and, from what he said at
that time, I believe he was aware even then of the naivete of the idea
that the post-Cold War world was automatically going to take the U.S.
path.  As I recall them, his arguments were reminiscent of Samuel
Huntington's argument from his 1999 article, "The Lonely Superpower" and
his 1996 piece "The West:  Unique, Not Universal."  That is, the
argument of both men oppose aggressive, unilateralist U.S. demands and
the notion of convergence of global culture toward the West. 


REFERENCES 

Aho, C. Michael, and Jonathan David Aronson.  Trade talks : America
better listen! New York, N.Y.: Council on Foreign Relations, 1985. 

Huntington, Samuel P. The lonely superpower.  Foreign Affairs 78, no. 2
(Mar/Apr 1999): 35-49. 

Huntington, Samuel P.  "The West: Unique, not universal." Foreign
Affairs. 75, no. 6 Nov/Dec 1996: 28-46. 
  
Sachs, Jeffrey D.  Consolidating capitalism.  Foreign Policy 98 (Spring
1995) 50-64. 
-- 
Jeffrey L. Beatty 
Doctoral Student 
Department of Political Science 
The Ohio State University 
2140 Derby Hall 
154 North Oval Mall 
Columbus, Ohio 43210 

(o) 614/292-2880 
(h) 614/688-0567 

Email:  Beatty.4@osu.edu 
______________________________________________________    
'_Sapere aude_'--'have courage to use your own reason' 
--this is the motto of Enlightenment--Immanuel Kant, 
"What Is Enlightenment?"