by Summary:
[Noah] Smith is keen to refute the ‘mixed economy’, anti free trade ideas that have been sneaking into mainstream economics since the Great Recession, namely that ‘neo-liberalism’ and free markets are bad for living standards. Instead, a little dose of protectionism on trade (Rodrik) and state intervention and regulation (Kwak) helps capitalism to work better. But no, says Smith. Neoliberalism works better. He cites China’s growth phenomenon as his main example! In China, “the shift from a rigid command-and-control economy to one that blended state and market approaches — and the liberalization of trade — was undoubtedly a neoliberal reform. Though Deng’s changes were mostly done in an ad-hoc, common sense manner, he did invite famed neoliberal economist Milton Friedman to give him
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Mike Norman considers the following as important: capitalism, mixed economy, Neoliberalism, Noah Smith, socialism
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[Noah] Smith is keen to refute the ‘mixed economy’, anti free trade ideas that have been sneaking into mainstream economics since the Great Recession, namely that ‘neo-liberalism’ and free markets are bad for living standards. Instead, a little dose of protectionism on trade (Rodrik) and state intervention and regulation (Kwak) helps capitalism to work better. But no, says Smith. Neoliberalism works better. He cites China’s growth phenomenon as his main example! In China, “the shift from a rigid command-and-control economy to one that blended state and market approaches — and the liberalization of trade — was undoubtedly a neoliberal reform. Though Deng’s changes were mostly done in an ad-hoc, common sense manner, he did invite famed neoliberal economist Milton Friedman to give him
Topics:
Mike Norman considers the following as important: capitalism, mixed economy, Neoliberalism, Noah Smith, socialism
This could be interesting, too:
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[Noah] Smith is keen to refute the ‘mixed economy’, anti free trade ideas that have been sneaking into mainstream economics since the Great Recession, namely that ‘neo-liberalism’ and free markets are bad for living standards. Instead, a little dose of protectionism on trade (Rodrik) and state intervention and regulation (Kwak) helps capitalism to work better.
But no, says Smith. Neoliberalism works better. He cites China’s growth phenomenon as his main example! In China, “the shift from a rigid command-and-control economy to one that blended state and market approaches — and the liberalization of trade — was undoubtedly a neoliberal reform. Though Deng’s changes were mostly done in an ad-hoc, common sense manner, he did invite famed neoliberal economist Milton Friedman to give him advice.”
He then adds India to this argument: “A decade after China began its experiment, India followed suit. In 1991, after a sharp recession, Prime Minister Narasimha Rao and Finance Minister Manmohan Singh scrapped a cumbersome system of business licensing, eased curbs on foreign investment, ended many state-sanctioned monopolies, lowered tariffs and did a bunch of other neoliberal things.”
Boy, does this take the biscuit. China’s economy is an example of successful neoliberal economic policy!? In several posts I have shown that China is not a free market economy by any stretch of the evidence and may not even be described as capitalist. It is state-owned and controlled with investment and production state-directed, with profit secondary to growth as the objective. Indeed, the IMF data on the size of public investment and stock globally put China in a different league compared to any other economy in the world.
As for India, the state sector also remains significant, something which continually upsets the World Bank and neoliberal economists. The policy measures of the 1990s can hardly be used as the explanation of the pick-up in economic growth in India. During the 1990s, productivity growth in all the major ‘emerging economies’ picked up – only to fall back again after the Great Recession. Globalisation and foreign capital were drivers then everywhere.
Anyway it is not really true that Indian government policy is ‘neo-liberal’ – on the contrary. In contrast, the clear shock switch to neoliberal capitalism by Russia’s post-Soviet governments and its oligarchs was a total disaster (Smith calls it a ‘mixed success’!). Growth, living standards and life expectancy collapsed. Indeed, the conclusion that might be drawn is not that ‘neo-liberal reforms’ have driven the relative economic success of China and India in the last 30 years but their resistance to such policies....
Michael Roberts Blog
Neoliberalism works for the world?Michael Roberts