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.
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