Information Landmine

"The Americans keep telling us how successful their system is. Then they remind us not to stray too far from our hotel at night." - An un-named EU trade representative quoted during international trade talks in Denver, Colorado, 1997.

Wednesday, September 17, 2008

Disaster Keynesianism?

I think now may be a good time to revisit my whole beef with Naomi Klein's Disaster Capitalism thesis. As deregulated finance collapses around us, any number of lefty people are coming out of the woodwork with the perfectly sensible point that now might be a good time to re-think our whole approach to government and finance, start having some more regulation of banks and directing public money towards more environmentally sustainable development. And this is a good thing - if people use the current financial crisis to implement strategies to rebuild infrastructure and stop us from fucking up the planet, then some good will have come of it, and I suspect Naomi Klein agrees. But, as I said last year:

Seems to me that political opportunists have always used disasters to push through their reforms - of late it's been the rabid free-marketeers, but it wasn't always thus. As she points out: "John Maynard Keynes proposed [a] mixed, regulated economy after the Great Depression. It was that system of compromises, checks and balances that Friedman's counter-revolution was launched to dismantle in country after country." If I'm not mistaken, that's two examples of people imposing their economic visions after a disaster. The Keynesian one may be preferable for those of us who aren't holding Halliburton stock, but lets be fair here, it's not like Milton Friedman (or, for that matter John Maynard Keynes) was the first guy to come up with the idea of reshuffling the pieces after they've been messed up.

So to be really consistent with her whole "shock" thesis, she'd have to be talking about how evil environmentalists and Keynsians know that their policies won't fly in times of stability, and so spend their time stockpiling policies, ready to spring them on the world as soon as crisis hits and the poor, unsuspecting public is in a state of "shock." Hell, a conspiracy-minded person could probably come up with some half-assed theory of how those pesky government interventionists deliberately brought this upon us with their implicit backing of Fannie and Freddie and all the subsequent moral hazard problems that this was likely to lead to.

But I think that's a book that'll probably be left to the right-wing cranks.


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