I've never actually seen an economic model crumble before -- not up close.
There was the old Soviet command thing, but that was there and then, and that had a slow-motion aspect to it. This is here and now, and there's no cinematic slow-mo in the swift collapse of neoliberal ideology. In its way, it is quite as dramatic as the fall of the World Trade Center -- without the tragedy, of course.
I have already suggested in a previous column that the terrorist attacks on New York and Washington earlier this month marked the end of the post-Cold War era. It's now clear that among the thousands of dreadful casualties is one that is not to be mourned: the economic commandments Americans wielded like blunt instruments in their decade of boisterous triumphalism.
Let the market rule all, shrink government to ineffectiveness, deregulate all industries, privatize public functions, turn civic life into a limitless series of transactions, eliminate all social considerations from the realization of shareholder value: This is some of what we talk about when we talk about neoliberalism. The covenants were borne abroad by way of the process sanctified as globalization.
It gave us a world of sin and virtue. And it has vanished, evaporated as quickly as cheap after-shave. To put it another way, the era of "the era of big government is over" is over (I know a graceful sentence when I see one).
Asians (and the rest of the world, for that matter) should watch this extraordinary transformation intently. It is of fundamental importance. The merchant bankers and bureaucrats who brought the "Washington consensus" forcefully across the Pacific will either have to change their story or outperform even themselves in the (hotly competitive) hypocrisy sweepstakes. Hard to say at this early moment which way they will fall.
Watch as against listen. Nobody is going to come out and tell you that Americans under their most conservative administration in two decades are abandoning what they like other people to think of as their principles. But there is plenty to see.
You didn't need Tarot cards to know that Attorney General John Ashcroft, a frightening fundamentalist in his own right, would take the present occasion to mount an attack on civil liberties. Big government as Big Brother may be back, but let's put that aside and look at the economic issues.
The Securities Exchange Commission has already relaxed rules to allow listed corporations to buy back more of their stock (This in a nation with a financial sector deficit equal to roughly 6 percent of gross national product). You could cast this as free-market extremism and get away with it, but given the timing, it looks more like official manipulation to me.
Now here come the budget deficits, the fiscal and monetary stimulus policies, and a general effort to "raise Keynes," in the memorable phrase of a
On the plus side, Business Week also calls for the strengthening of the nation's tattered social safety net. Then again, the corporate welfare check known as the defense budget is already predicted to reach -- I simply can't get over this -- US$350 billion this year.
Last week, while the Bush administration announced its bailout plan for the airline industry, New York Comptroller Alan Hevesi announced that the city's US$80 billion pension fund planned to buy US$800 million in US stocks. Public retirement funds elsewhere around the country are doing the same thing -- "to show confidence," as a Hevesi spokesman put it.
Now I ask you: Is there something about all this that is familiar and odd at the same time? Manipulating the share market with public funds, throwing money at companies without restructuring plans (and possibly taking a government stake in them), letting debt-ridden corporations accumulate stock to keep the market up: All this time I thought I was an American and it turns out I'm Japanese.
The irrefutable reality is that Washington is adopting -- re-adopting, actually -- many of same polices it has asserted for years would be Asia's doom. Suddenly, it finds strength where it once saw weakness.
Don't you know there's a war on, as they used to ask. Well, no, I don't. Washington has yet to define its war on terrorism in anything like politically neutral terms. So far, it seems to mean that everyone is to join in as the US goes after its enemies.
The concern in all this is not war -- not on the economic side. The dramatic turn in policy is intended to counter the abrupt arrival of a severe recession in a society that carries vastly too much private-sector debt on both the household and corporate sides.
Equally, we can't talk usefully about lasting principles because there were so few of them. Open markets and globalism in the US version have never meant much more than the advance of US corporate interests abroad -- with government assistance when needed, of course.
That way of approaching the world may not end. But the ideological cover more or less has to. Globalism as we've known it, like unilateralism, is passing into history. The US model, never what it claimed to be, now stands discredited.
The international implications -- again, in Asia and elsewhere -- are substantial. The moment has arrived to begin redefining the globalist enterprise in an image other than the US' -- let's say, just arbitrarily, in a global image.
We can finally contemplate a global era in which diversity of policy and practice is not merely allowed but assumed to be a starting point.
Asians are ready for this. At every level -- from bureaucrats, politicians, and corporate executives on down -- many have for some time sought to articulate an alternative to the one size fits all prescriptions emanating from Washington and Wall Street. Now's the time. In future columns, we will look at what another way forward might look like.
Patrick Smith is a former correspondent in Asia and the author of Japan: A Reinterpretation. The opinions expressed are his own.
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