Shaun Rolph on Thu, 15 Aug 2002 07:53:54 +0200 (CEST)

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<nettime> Damascus via the newsroom of the FT ?

Suitably chastised - and having internalised ,i hope , the grammar of the
nettime language let's have another go at submitting this to the list. I
can't get enough of this new-found doubt among the financial elite.


When even the Priesthood begin to doubt the basic tenets of their faith
can a reformation be far behind ?

This from the Pink 'Un.

Anatol Lieven: The road to riches discredited
By Anatol Lieven            
Published: August 11 2002 19:38 | Last Updated: August 11 2002 19:38

            Latin America's economic crisis has intellectual implications
which extend far beyond that continent. It sounds the death-knell of
"transitionology", the belief that by following a simple set of universal
rules, countries all over the world can in a short space of time make the
transition to democracy and the free market. This mantra is now
intellectually dead, though it will doubtless live on in the mouths of
politicians, pundits and diplomats. What we are left with is history, with
its many winding paths and lack of final destinations.

            There was always something odd about the degree of belief
invested in such an ideological and teleological framework of analysis. In
its main outlines, transitionology has resembled the modernisation theory
of the 1950s and 1960s. Indeed, they were developed in similar
circumstances. Modernisation theory was meant to help the newly meant to
do the same for the former Soviet empire.  But by the time the Soviet
Union crumbled, the former European colonies had decades of experience to
show that there is nothing inevitable about such progress, and no
universal rules that can bring it about. Of the former European colonies,
many have experienced some development, but only a tiny handful have
joined the developed world. A considerable number in Africa have
experienced not progress but catastrophic decline, with steep falls in
living standards and services, and in some cases the complete collapse of
the state.

            Similarly, the former Communist dependencies in central Europe
and around the Baltic have achieved great progress (though this by no
means applies to their entire populations). Other states such as Russia
are experiencing uncertain recoveries from very steep declines, while
some, in the Caucasus and central Asia, have experienced what amounts to
radical demodernisation. None have sunk to African levels, but some are a
great deal further from the developed world than they were in the 1980s.
Even Russia and Ukraine stand no chance of real integration into the west
in the foreseeable future.

            Latin America is a particularly striking example of the
triumph of hope over experience. Several states have achieved very real
progress, and are of course vastly richer than they were a century ago.
But very few indeed have achieved western standards of living and levels
of democracy. Argentina was probably closer to such a breakthrough a
century ago than it is today. Millions of Mexicans continue to risk their
lives by illegal immigration to the US.  How many times in the course of
that century have we heard of one

            Latin American country or another instituting a bold economic
reform programme and experiencing an economic miracle? And how many times
have we seen that economy collapse into crisis again as a result of an
external economic shock, mass domestic unrest, or both? How many times
have we seen countries move from dictatorial rule to democracy and back
again? How many times has democracy proved only a facade for an
incompetent and greedy oligarchy? For that matter, how many of these
democracies have made a real difference when it comes to the brutish
treatment of the poor by the police, the courts and the bureaucracy?

            Despite all the works on this subject, a general theory of
capitalist development, valid across widely different cultures, remains a
distant dream. There is also no clear-cut or universal relationship
between democracy and development, or for that matter between dictatorship
and development. Arguments derived from central Europe forget that these
societies were already close to the west before being conquered by
Communism, and that after 1989 both democratic and free market reform
derived a unique extra political charge from the nationalist desire to
escape from the hated Russians and to join the west.

            In this context, the possibility of European Union and Nato
membership has provided an incentive which also cannot be replicated
elsewhere: a clear badge of having arrived in the west, and one which
could be gained only by genuine and successful reform. The EU accession
process has also led to comparatively large amounts of western aid to
central Europe and, more importantly, aid that has been strictly
controlled. We are however unlikely to be able to encourage reform in
Pakistan or Peru by telling them that this will lead to escape from the
Russian empire and to membership of the EU.  Objectively, the centres of
successful capitalism remain today what they were 100 years ago: western
Europe, its overseas white colonies and its immediate European periphery;
and Japan. Since 1945, to this group have been added two former Japanese
colonies already developed under Japanese rule - South Korea and Taiwan -
and a handful of international entrepots such as Singapore.

            Some of the south-east Asian states and parts of China may be
heading in the same direction, but they are very far indeed from arriving
at stable market prosperity, let alone stable democracy.  And thanks to
the cold war, at key moments parts of east Asia benefited from a uniquely
favourable attitude on the part of the US:  not just in terms of massive
flows of aid and military spending, but more importantly the openness of
America's markets to their exports.  This is not to suggest that the
free-market reforms of the past decade were mistaken, and that a swing
back to leftwing populism would produce better results in Latin America or
elsewhere. Of course, some of these reforms were monstrously inequitable
in their effects and should be modified; but the real lesson is bleaker
and more tragic.

            Latin America over the past century suggests rather the old
comparison of human polities to a sick man on a bed, continually changing
his position in an effort to find relief from his pain, and always finding
only a temporary respite. Nor should this be a matter for smug
self-congratulation on the part of the developed world. No economic or
political system is eternal and 100 years from now, this unhappy picture
may be true of the west as well.

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