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By Ben Cohen
With the financial meltdown in full swing, western governments are swinging into action to revive their economies with massive stimulus bills and spending programs. Financial institutions too big to fail are receiving bucket loads of cash, while a multitude of industries wait for their piece of the pie. Obama is proposing huge investments in infrastructure and green jobs, while Gordon Brown and the EU promise much the same.
The West responds to economic crises with swift government intervention, while it tells Third World Nations to do the opposite. ‘Structural Adjustment’ was the phrase coined by the IMF and World Bank – a technocratic word to describe the gutting of public institutions in the countries they were supposed to help. Third World countries were ordered to cut government spending, allow private companies to take over state functions (like providing water, electricity and education), and borrow at extremely high interest rates. The results were catastrophic, and countries like Brazil, Chile, and Nicaragua were plunged into economic hell. Hyperinflation, mass unemployment, poverty and food insecurity soared while deficits multiplied exponentially.
The West insisted this was the best road to economic prosperity, ignoring the inconvenient truth – that they had not taken their own advice.
Central planning, protectionism and corporate welfare created the societies we live in today – the power of capitalism to create wealth by itself was nothing more than a myth, a weapon the rich would use to lecture the poor. You live in the jungle of savage capitalism while we use the state to build our businesses and solidify our wealth.
The ideologues insisted that neo liberalism worked, ramming it down the throats of their own countries with the same religious fervor. Wealth was created, but only at the top, while the rest of the country crumbled. The financial tsunami that wrecked Latin America in the 1980’s had finally landed in the North, culminating in the spectacular meltdown of giant institutions deemed invincible 6 months before.
And our response? To use the same measures we always have in creating wealth and stability. We used the power of the government to regulate, protect and subsidize.
We may pull out of this awful mess in the coming months if our governments react to the will of the people. Wall Street must pay, jobs must be created, and the wealth must be spread around. We know this, and our governments know it too.
Yet the Third World is trapped in a spiral of debt, privatization and deep, persistent poverty. They exist in a precarious state of neo colonial dependency and cannot follow our path out of economic disaster because we insist they don’t. We may believe colonialism is dead, but our treatment of the Third World reveals otherwise. We may not govern their countries directly, but the results are tragically similar. It is only the methods that differ.
Perhaps the almighty shock we have received will sway power back towards the disenfranchised, and perhaps we will have more sympathy for their plight. We can mourn the death of capitalism, but know that it never really existed – not here at least.
Ben Cohen is the editor and founder of The Daily Banter. He lives in Washington DC where he does podcasts, teaches Martial Arts, and tries to be a good father. He would be extremely disturbed if you took him too seriously.