Miraculously,
a recent IMF paper
appeared to be challenging the dominant neoliberal doctrine. As
described by Yves Smith of nakedcapitalism
:
|
While the IMF’s research team has
for many years chipped away at mainstream economic thinking, a
short, accessible paper makes an even more frontal challenge. It’s
caused such a stir that the Financial Times featured it on its
front page.
[...]
The article cheekily flags the
infamous case of the Chicago Boys, Milton Friedman’s followers
in Pinochet’s Chile, as having been falsely touted as a success.
If anything, the authors are too polite in describing what a train
wreck resulted. A plutocratic land grab and speculation-fueled
bubble led quickly to a depression, forcing Pinochet to implement
Keynesian policies, as well as rolling back labor “reforms,”
to get the economy back on its feet.
|
Indeed, a
few IMF executives start to decline from the neoliberal orthodoxy and
some evidence can be found in the paper. For example, although they
refuse to abandon their faith to the neoliberal doctrine stating that
“There is much to cheer in the neoliberal agenda”, they
reach the conclusion that “there are aspects of the neoliberal
agenda that have not delivered as expected”.
Indeed,
they are very polite against the destruction that the IMF policies
brought to many economies, lately in Greece. However, it is
interesting that they start to question two fundamental aspects of
the neoliberal agenda: “removing
restrictions on the movement of capital across a country's borders
(so-called capital account liberalization); and fiscal consolidation,
sometimes called “austerity,” which is shorthand for policies to
reduce fiscal deficits and debt levels.”
Specifically,
in the paper it is mentioned that “Austerity policies not
only generate substantial welfare costs due to supply-side channels,
they also hurt demand—and thus worsen employment and unemployment.
[...] in practice, episodes of fiscal consolidation have been
followed, on average, by drops rather than by expansions in output.
On average, a consolidation of 1 percent of GDP increases the
long-term unemployment rate by 0.6 percentage point and raises by 1.5
percent within five years the Gini measure of income inequality ...”,
which is totally opposite from the positions of the neoliberal
doctrine gurus and from Berlin's "unexplained" sacred
devotion to fiscal discipline.
We
may have to consider this paper as another attempt by the IMF to
mitigate the cumulative negative criticism that it faces from the
public, due to its devastating policies all over the world. Greece
has been the latest victim, through a 6-year uninterrupted
destruction imposed by the IMF, ECB and European Commission - through
various, even undemocratic methods - based on the IMF neoliberal
agenda.
As
has been pointed already since 2013 through the article IMF
new tactics: It is better to appear unreliable than to let people
understand that you serve specific interests:
“... it was the turn of Olivier
Blanchard, chief economist at the Fund, to admit through a report
which was given to the public a few days ago, that the Fund, together
with all European leaders, finance ministers, European Commission and
ECB, made a serious mistake in their calculations, underestimating
the devastating consequences of austerity policies imposed on
indebted countries. [...] the admission that there was a mistake in
calculations with the reference to a specific factor known as the
"multiplier", is an IMF tactic to convince the public that
it is a purely calculation error, which is based on wrong estimates.
Through this tactic, IMF is trying to establish the false picture
that operates purely technocratic and that the catastrophic effects
are solely due to wrong calculations and estimates and not due to an
attempt to serve specific banking and speculative interests.”
Besides,
the IMF should have learned from its mistakes a long time ago, at
least since the 90s where its policies have brought absolute
destruction in Russia, SE Asia and elsewhere. If the IMF executives
had real intention to fix their totally problematic recipes, we would
have seen alternate policies in the Greek case.
Yet,
what's most impressive in this latest IMF paper, is that its authors
use the term "neoliberalism" and "neoliberal agenda"!
George
Monbiot started his article Neoliberalism
– the ideology at the root of all our problems
, two months ago, with the aspect of the anonymity of neoliberalism:
“Imagine if the people of the Soviet
Union had never heard of communism. The ideology that dominates our
lives has, for most of us, no name. Mention it in conversation and
you’ll be rewarded with a shrug. Even if your listeners have heard
the term before, they will struggle to define it. Neoliberalism: do
you know what it is? Its anonymity is both a symptom and cause of its
power. It has played a major role in a remarkable variety of crises:
the financial meltdown of 2007-8, the offshoring of wealth and power,
of which the Panama Papers offer us merely a glimpse, the slow
collapse of public health and education, resurgent child poverty, the
epidemic of loneliness, the collapse of ecosystems, the rise of
Donald Trump. But we respond to these crises as if they emerge in
isolation, apparently unaware that they have all been either
catalysed or exacerbated by the same coherent philosophy; a
philosophy that has – or had – a name. What greater power can
there be than to operate namelessly?”
The
IMF and other major carriers of the neoliberal doctrine avoided for
decades to call it by a name. IMF itself struggled for decades to
impose the neoliberal agenda away from publicity lights. But now,
because these policies have been imposed to a developed economic
area, called eurozone, the IMF didn't manage to avoid publicity. The
destruction of the Greek economy is beyond doubt. People's lives as
well as numbers reveal a total failure.
Is
it time for the IMF and the other mechanisms of the elites to abandon
neoliberalism? Probably yes, but that doesn't mean that they have
something better in mind for the majority. On the contrary, we are
already witnessing the transformation of Capitalism into a global
brutal Feudalism with neoliberalism as the intermediate stage. As
long as societies remain apathetic to this rapid transformation, no
"sincere" admissions by the IMF or other mechanisms would
prevent it.
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