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Market Fundamentalism


NEW YORK – The world has not been kind to neo-liberalism, that grab-bag of ideas based on the fundamentalist notion that markets are self-correcting, allocate resources efficiently, and serve the public interest well. It was this market fundamentalism that underlay Thatcherism, Reaganomics, and the so-called “Washington Consensus” in favor of privatization, liberalization, and independent central banks focusing single-mindedly on inflation.


For a quarter-century, there has been a contest among developing countries, and the losers are clear: countries that pursued neo-liberal policies not only lost the growth sweepstakes; when they did grow, the benefits accrued disproportionately to those at the top.


Though neo-liberals do not want to admit it, their ideology also failed another test. No one can claim that financial markets did a stellar job in allocating resources in the late 1990’s, with 97% of investments in fiber optics taking years to see any light. But at least that mistake had an unintended benefit: as costs of communication were driven down, India and China became more integrated into the global economy.


But it is hard to see such benefits to the massive misallocation of resources to housing.  The newly constructed homes built for families that could not afford them get trashed and gutted as millions of families are forced out of their homes, in some communities, government has finally stepped in – to remove the remains. In others, the blight spreads. So even those who have been model citizens, borrowing prudently and maintaining their homes, now find that markets have driven down the value of their homes beyond their worst nightmares.


To be sure, there were some short-term benefits from the excess investment in real estate:  some Americans (perhaps only for a few months) enjoyed the pleasures of home ownership and living in a bigger home than they otherwise would have. But at what a cost to themselves and the world economy! Millions will lose their life savings as they lose their homes. And the housing foreclosures have precipitated a global slowdown. There is an increasing consensus on the prognosis: this downturn will be prolonged and widespread.


Nor did markets prepare us well for soaring oil and food prices. Of course, neither sector is an example of free-market economics, but that is partly the point: free-market rhetoric has been used selectively – embraced when it serves special interests and discarded when it does not.石油が上がり、食糧が高騰するなどと市場が教えたくれたわけでもない。そもそも、石油も食糧のいずれの市場も自由市場ではないが、自由市場というときには言葉を選別的に使っているのであって、特定の利権があるときには自由市場といい、都合の悪いときには自由市場といわないようだ。

Perhaps one of the few virtues of George W. Bush’s administration is that the gap between rhetoric and reality is narrower than it was under Ronald Reagan. For all Reagan’s free-trade rhetoric, he freely imposed trade restrictions, including the notorious “voluntary” export restraints on automobiles.ブッシュ政権にいいところがあるとすれば、レーガン政権の時ほど、現実とレトリックとが乖離していないことがもしれない。レーガンは自由貿易といいながら、貿易の制約を強制したし、悪名高い、自主的自動車の輸出規制がある。

Bush’s policies have been worse, but the extent to which he has openly served America’s military-industrial complex has been more naked. The only time that the Bush administration turned green was when it came to ethanol subsidies, whose environmental benefits are dubious. Distortions in the energy market (especially through the tax system) continue, and if Bush could have gotten away with it, matters would have been worse. ブッシュの政策はももっと悪いが、あからさまに、アメリカの産軍複合体を利したという点では、全く露骨なものである。環境問題に対する効果があるのかどうか疑わしいエタノールの補助金を出そうとしたブッシュ政権であるが、税制を使ってエネルギー市場はゆがめられ、その歪みは継続しているが、もし、エタノール問題すら提案しなければ、事態はもっと悪くなっていたに違いない。

This mixture of free-market rhetoric and government intervention has worked particularly badly for developing countries. They were told to stop intervening in agriculture, thereby exposing their farmers to devastating competition from the United States and Europe. Their farmers might have been able to compete with American and European farmers, but they could not compete with US and European Union subsidies. Not surprisingly, investments in agriculture in developing countries faded, and a food gap widened.開発途上国では、自由市場と政府の介入の仕方が本当にまずく作用した。農業を自由市場に任せろと強制されて、アメリカやヨーロッパからの農産物に席巻された。アメリカとヨーロッパの農業は補助されているのだから、勝ち目があるはずもない。

Those who promulgated this mistaken advice do not have to worry about carrying malpractice insurance. The costs will be borne by those in developing countries, especially the poor. This year will see a large rise in poverty, especially if we measure it correctly.こうした誤った政策を開発途上国でアドバイスしてきた連中は、反省の色もない。開発途上国の特に貧困層が、犠牲を払うのである。今年は、特に世界で貧困が増大している。

Simply put, in a world of plenty, millions in the developing world still cannot afford the minimum nutritional requirements. In many countries, increases in food and energy prices will have a particularly devastating effect on the poor, because these items constitute a larger share of their expenditures. 単純なことであるが、数百万人の人が最低の栄養を補給することが出来ないのである。食糧とエネルギー価格の増大は、破壊的な影響を特に貧困層に与える。貧困層の出費の大部分が食とエネルギーだからである。

The anger around the world is palpable. Speculators, not surprisingly, have borne more than a little of the wrath. The speculators argue: we are not the cause of the problem; we are simply engaged in “price discovery” – in other words, discovering – a little late to do much about the problem this year – that there is scarcity.世界で怒りの声が上がっても投機をしている連中は、我々のせいじゃない、今年は、資源が急迫しているから、打つ手が遅れただけだと言い訳をしているようである。 

But that answer is disingenuous. Expectations of rising and volatile prices encourage hundreds of millions of farmers to take precautions. They might make more money if they hoard a little of their grain today and sell it later; and if they do not, they won’t be able to afford it if next year’s crop is smaller than hoped. A little grain taken off the market by hundreds of millions of farmers around the world adds up. そうした回答の仕方は不順である。かっくが上がり、不安定にあるというのであれば、数百万の農家は対策を採ろうとする。しかし、そうした今年打つ手が遅れれば、農民は、生産した穀物を今売らないで、後で売ろうとするに違いないし、来年の収穫が減って収入が減ることを予想するのかもしれない。数億の農家が世界中でそうした少しずつの食糧が市場から引き上げられると一体どういうことがおきるかは想像に難くない。

Defenders of market fundamentalism want to shift the blame from market failure to government failure. One senior Chinese official was quoted as saying that the problem was that the US government should have done more to help low-income Americans with their housing. I agree. But that does not change the facts: US banks mismanaged risk on a colossal scale, with global consequences, while those running these institutions have walked away with billions of dollars in compensation.


Today, there is a mismatch between social and private returns. Unless they are closely aligned, the market system cannot work well


Neo-liberal market fundamentalism was always a political doctrine serving certain interests. It was never supported by economic theory. Nor, it should now be clear, is it supported by historical experience. Learning  this lesson may be the silver lining in the cloud now hanging over the global economy. 新自由主義的な市場原理主義は、ある一定の利権に奉仕する政治的なドクトリンでしかない。経済学の理論ではない。今では明白に証明されたと断定してもいいことであるが、歴史上の経験とも合致しない。混迷する世界経済の中で、市場原理主義がこうしたいかさまにしか過ぎないことを知ることで、また希望をつなげることとしたい。


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