The great outdoors
If connectivity is a major engine of the grand neo-liberal project, it is also one of its greatest problems. The slippages in the European stock exchanges, followed by the ones in the Asian markets, are all the result of the major tumult that the US markets witnessed, which was, in turn, the result of some pretty reckless fiscal behaviour by the US government.
Are countries going to suffer now through no fault of their own or their governments? Are countries going to hold other countries down through their own lack of planning?
Consider two great mechanisms: the financial capital markets and the international food grains market. The idea was to shield governments, the public and investors from certain risks and to seek out different avenues from where investment and produce could be achieved. And that did happen, to a large measure; the capital markets have generated great wealth and the food markets might have lifted millions of people out of poverty. But what about the flipside of the equation? Though the idea was to diversify away risk over an international canvas, the resulting system is one where a significantly large problem in only one relatively large country can lead to a system-wide shock in the entire world. Control economies, all their flaws aside, shielded their citizens from much turbulence, the free market leaves them to brave the elements.
The utility of the international free markets cannot be denied. But it is clear that the unfettered adherence to the new structure comes with huge risks. This, more than ever, is a time for the nations of the world, specially the developing world, to work out how to get a better deal in international trade without putting their citizens at risk. Toxic stocks from the US glut the markets in the Far East. Shortage of grain in Central Asia causes huge market spikes in an otherwise overproducing Pakistan.
The roaring nineties, as Joseph Stiglitz calls them, are over. This party needs adult supervision.
