>In my own way I wish to second Fred Guy. Brad DeLong has no
>doubt overplayed the no-argument argument, which most be quite
>irritating to someone like Keaney who has put forth serious, well
>researched responses...
Back in the late 1970s I would have agreed with Keaney that the IMF's
advice to Britain was counterproductive. But the fact that Mitterand
and Carter both tried a "Keynesian" expansionary approach, and that
their policies crashed and burned, has to make you think again. In
retrospect, the IMF's fear--and not just the IMF's fear, the U.S.
Treasury's fear, and the fear of strong currents of thought both
outside and inside the British Labour Party--that an aggressive
policy of expansion would bring much higher inflation with little or
no reduction in unemployment--seems well founded.
Callaghan's problems in the mid-1970s seem (to me at least) to have
been caused not by the IMF (which did give him resources to quell
balance-of-payments crises) but by the state of the world. You can
bet that by 1982 Mitterand wished that their had been an IMF to rein
him in on expansionary policy when he took office.
And after this point the quality of Keaney's arguments went rapidly
downhill as--not coincidentally--the rhetorical garbage pile grew to
the sky:
--the assertion of an identity between the IMF and Arthur Burns on
the one hand and the nutboys of MI5 on the other, which is definitely
not the case.
--the claim that without the IMF in the middle of the 1970s Thatcher
would not have come to power at the end of the 1970s, which seems to
me extremely unlikely.
--the claim that conditions on budget deficits and monetary growth
rates represented "mission creep" is totally wrong: the IMF's
attempts to advise Korea on the proper form that bank-company
relationships should have is "mission creep," IMF advice on basic
indicators of macroeconomic policy is not.
I didn't count any more arguments. Perhaps the rhetorical garbage in
which they were wrapped led me to underestimate their force, but I
don't think so.
Brad DeLong
