Quoting Anders Schneiderman <[EMAIL PROTECTED]>: > Maybe I'm not reading carefully enough, but did you answered Doug's > question about what your alternative would be? You say what you > would not advise them to do, but that's really not an answer. I'm > sure they could come up all by themselves lots of reasons why what > their approach has serious problems, but if you can't tell them what > they might do instead, they aren't any better off. > > Thanks, > Anders
Well ...I did not interpret Doug’s question as asking me for a complete alternative economic program. Perhaps I was wrong in this interpretation. I thought he was posing a more modest question. I had said that export led growth was a strategy that we on the left should not be endorsing, and to connect to my earlier posts, I was troubled by the way that many on the left had joined in the celebration of China which seems to be on the basis of its success as an export led economy. I thought Doug was saying that since there were no simple or clear alternatives why bother mounting such a major critique on export led growth. Related to that he asked what advice would you give workers or policy makers. In my answer I tried to suggest that the shift to export led growth was ongoing. There are real policies designed to promote this strategy that are being proposed and implemented. I gave the example of Korea. But the same could be said of China and other countries. I think these policies are not good, even for the workers of the countries involved, much less for the overall stability of the global system and the cause of working class solidarity. Thus, I would argue against those policies designed to move economies ever more along the lines of export- led growth. In short, my advice would be not to move in that direction and I would try and support that advice by showing the destructive nature and short-lived gains from export-led growth. So, my answer is that there are things to say because we are not in a static situation. As to a more positive position I already tried to offer a basic outline of my thinking using the example of Cuba. I think that the ideal system of production is one that starts with popular needs and has mechanisms for translating those needs into effective demand. And at the same time also has mechanisms for ensuring that the demand is structured mobilize domestic resources, including workers, to produce the goods and services that the population desires. Right now popular needs are not being translated into effective demand in most cases. It is the middle and elite classes whose needs are being promoted and demand satisfied. And with each move to export led growth that problem tends to become worse. Moreover, in the case of most export-led countries, the domestic production is not mobilized to meet domestic demand, even of the elite, but rather global demand. Thus there is not a self-generated process of growth that takes place. Of course export led countries can grow for a time. As their resources are mobilized to meet foreign needs the country earns money which allows the import of the goods and services the middle class and elites want. But one critical problem for this strategy is that the benefits to this strategy are being greatly reduced as more and more countries seek to enter the process and often compete for a position in the transnational production network on the basis of labor and environmental repression and exploitation. Even UNCTAD has shown that there is very little manufacturing value added being created in this process. So, how does one actualize the dynamic I promote. As I mentioned before, one must start with the resources and history of the country in question. In the case of Cuba I mentioned health care. More generally, one has to identify, as much as possible, poles of growth based on the state of unfilled domestic needs and the resource histories of the country in question (which includes the skills of the population from past production and natural resources as well). For example, there are many ways to ensure health care or housing or clothing. A country would choose an approach that fits with its history. You then try to figure out what are effective ways in translating those needs into demand. And how to build as complete a domestically rooted production chain as possible based on resource possibilities. That way as you are meeting basic needs with national resources you are upgrading and innovating. Obviously no country has the resources or skills to fully deliver all the goods and services that people would demand. So, a country has to choose those that it can reasonably support. And then using techniques that involve credit controls and trade and investment controls it needs to start channeling resources into those growth poles to built them up. In each case, say health care, it is unlikely that a country can establish a fully functioning health care system without imports or even foreign investment. At the same time, the creating of such a health care system should also generate new and more diverse exports. Again health care is many things, from construction, to record keeping, to doctor training, to medicines. The more integrated and responsive the system is to popular needs the more possibilities the country will have to enter trade because more and more innovation and development would have taken place within the country. Doug noted that Cuba greatly benefited from Soviet support. No doubt, but that does not mean the process is wrong, just that it went faster because of that support. To be clear, this strategy does not mean that a country maintains all production lines or produces all products. In a way that is what the Cubans tried to do by relying on soviet aid. Rather, it means focusing on those goods and services that have the greatest chance of completion given domestic resources and also which have the greatest chance of generating exports. And these exports do not have to all go to advanced capitalist countries. And again to be clear, this strategy does not mean dropping certain export activities if they can be used to fund domestic activities. But it does mean that the purpose and logic of the strategy is not export oriented growth but rather growth that while meeting basic popular needs also transforms the country in ways that open up new opportunities for trade and exchange. This model obviously also becomes more likely to success as other countries adopt similar policies based on their own historical conditions. So, policies should be judged on the basis of whether they better help to translate popular needs into effective demand and that demand into effective domestic resource mobilization in satisfaction of those demands. This requires active use of trade and industrial policies. The end result is an economy that will no doubt offer fewer choices to the wealthy but more choices to working people. The end result is also an economy that will be actively participating in the international arena, importing and exporting. I cannot make this strategy more specific unless we get into an actual discussion of a real country and its choices. And perhaps the level of generality in the discussion above makes the entire strategy sound too utopian. I hope not. I do not advance this strategy with the belief that it would somehow produce rapid growth or that it would be easy. But I think it offers some criteria which if followed would be more likely to lead to an economy that would be stable and response to working people. I hope that is a more helpful answer. Marty
