The 2008 World Financial Crisis and the Future of World Development
The 2008 World Financial Crisis and the Future of World Development
This chapter recounts how the global financial crisis revealed the double standards that for years had informed economic policy: Keynesianism for the rich and monetarism for the poor. Subsidies have been directed to capitalist enterprises and found their way into profits and individual bonuses. At the same time, structural adjustment and similar policies justified by macroeconomic prudence impoverished the public sector and forced cuts in services for the poor. The chapter then summarizes the difference between the policies that rich countries recommend to the poor today and those they themselves followed on the way to achieving their own development. In particular, it stresses the importance of protecting national industries to enable them to become success stories of economic development. Recalling the theories of Friedrich List, the chapter interprets the policies pressed by rich countries and the (World Trade Organization) WTO as efforts to “kick away the ladder” lest others follow them up.
Keywords: global financial crisis, economic policy, Keynesianism, monetarism, capitalist enterprises, rich, poor, Friedrich List
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