![]() Over 50 years ago Polanyi made this amazingly prophetic and modern statement: "To allow the market mechanism to be sole director of the fate of human beings and their natural environment.would result in the demolition of society". The great scholar Karl Polanyi published his masterwork, The Great Transformation in 1944, a fierce critique of 19th century industrial, market-based society. On the whole, the world had signed on for an extremely progressive agenda. And it was at this time that the strong winds of decolonisation also began to blow, whether freedom was obtained by grant as in India or through armed struggle as in Kenya, Vietnam and other nations. The other major item on the agenda was to get world trade moving - this was accomplished through the Marshall Plan which established Europe once again as the major trading partner for the US, the most powerful economy in the world. ![]() ![]() The first order of business in the post-war world was to put them back in place. In the Western nations, the Welfare State and the New Deal had got underway in the 1930s but their spread had been interrupted by the war. They had no control over individual government's economic decisions nor did their mandate include a licence to intervene in national policy. When these institutions were created at Bretton Woods in 1944, their mandate was to help prevent future conflicts by lending for reconstruction and development and by smoothing out temporary balance of payments problems. They were sometimes called Keynes's twins because they were the brain-children of Keynes and Harry Dexter White, one of Franklin Roosevelt's closest advisors. However incredible it may sound today, particularly to the younger members of the audience, the IMF and the World Bank were seen as progressive institutions. Even if someone actually agreed with these ideas, he or she would have hesitated to take such a position in public and would have had a hard time finding an audience. The idea that the market should be allowed to make major social and political decisions the idea that the State should voluntarily reduce its role in the economy, or that corporations should be given total freedom, that trade unions should be curbed and citizens given much less rather than more social protection - such ideas were utterly foreign to the spirit of the time. At least in the Western countries, at that time, everyone was a Keynesian, a social democrat or a social-Christian democrat or some shade of Marxist. In 1945 or 1950, if you had seriously proposed any of the ideas and policies in today's standard neo-liberal toolkit, you would have been laughed off the stage at or sent off to the insane asylum. I'm sorry to tell you that in order to make any sense, I have to start even further back, some 50 years ago, just after the end of World War II. The Conference organisers have asked me for a brief history of neo-liberalism which they title "Twenty Years of Elite Economics". Meanwhile, interested readers may want to check out This piece has already been fairly widely circulated on the internet, though not, up to now, by me. A book of all the contributions will be published in 2000 and will be well worth purchasing. He has not yet seen the error of his ways and continues to organise subversive events like this one. Walden, a distinguished Filipino scholar, author and man of high political culture is known for once having donned a Kermit the Frog costume and hopped into an International Monetary Fund conference to present dumfounded officials with a demand that they stop supporting Ferdinand Marcos. This excellent conference in Bangkok was put together by, inter alia, Walden Bello, my TNI colleague who wears many prestigious hats, including that of Director of Focus on the Global South. Presented at the Conference on Economic Sovereignty in a Globalising World, Bangkok, 24-26 March 1999
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