Seeing Like an Economist

Brad DeLong (a huge fan of Savage Minds) has posted a review of James Scott’s Seeing Like a State, in which he castigates Scott for not more openly acknowledging his intellectual debt to the Austrian economists Friedrich Hayek and Ludwig von Mises. Crooked Timber’s Henry Farrell has replied by pointing out that markets require real trade-offs and “we should acknowledge the costs of markets” even as we tout their benefits. While I applaud Henry for cautiously pointing out the costs of markets, I think that both he and Brad both underestimate the extent to which Scott is correct when he states:

the conclusions that can be drawn from the failures of modern projects of social engineering are as applicable to market-driven standardization as they are to bureaucratic homogeneity

A good example is the recent failed attempt by aid organizations to employ markets to distribute much-needed mosquito nets:

In doing so, Dr. Kochi turned his back on an alternative long favored by the Clinton and Bush administrations — distribution by so-called social marketing, in which mosquito nets are sold through local shops at low, subsidized prices — $1 or so for an insecticide-impregnated net that costs $5 to $7 from the maker — with donors underwriting the losses and paying consultants to come up with brand names and advertise the nets.

When Kenya started giving nets away for free instead of charging for them coverage increased dramatically and the “deaths of children dropped 44 percent.”

Both David Harvey’s book, A Brief History of Neoliberism, and Naomi Klein’s new book The Shock Doctrine discuss numerous cases where the (often forced) imposition of markets have had disastrous consequences. Perhaps not as disastrous as some of the famines discussed in Scott, but still pretty bad. Like the examples in Scott’s book, these free-market ideologues like to make use of political instability in order to conduct their social experiments. Case in point, Iraq, where the first order of business by Paul Bremer was to privatize Iraqi business and lift trade barriers. (As well as dismantling the trade unions, one of the more important pillars of Iraqi civil society.)

Below is a video for Naomi Klein’s book made by Children of Men director, Alfonso Cuarón. While I haven’t read her book yet, it seems as if it popularizes many of the arguments found in similar books by Harvey, Stiglitz and others. For a more thorough filmic treatment of these themes, I highly recommend Stephanie Black’s Life and Debt.

2 thoughts on “Seeing Like an Economist

  1. I was _just_ thinking that Klein’s Shock Doctrine would be interesting to read with Scott’s Seeing Like a State. As you note, Scott does explicitly suggest that high modernist ‘fundamentalism’ could take a ‘market’ form, yet it is easy to miss this point since most of his example chapters seem like they are about ways that governments implement reforms that appear anti-market, and therefore anti-organic (socially and historically embedded and specific). Of course, I have not yet read Klein’s book since it just came out. There is an interesting comment on the Klein book at by J A C Corbett that I noticed when I went to order the book. From Corbett’s “comment”: :

    bq. The target for most of her ire is Milton Friedman and the so-called Chicago School of economists, that have influenced the policy of every world leader from Augusto Pinochet to Margaret Thatcher to George W Bush. Alas, Klein gives the Chicago School far too much importance. She doesn’t recognize them for what they are: academics, whose work is only ever taken and modified to suit the needs of the country it is applied to. The Chicago School has never changed the fate of a single country – only those that have employed their strategies have done that.

    bq. To support this theory Klein twists and turns global historical events to fit her narrative. The context of the Cold War is ignored completely with regards events in the 1960s 70s and 80s (of course all US foreign policy was pretty much dictated by the Chicago School, wasn’t it?). Mrs Thatcher launches the Falklands War not to defend British sovereign territory, but to allow her to privatize British state utilities. (That the Argentine defeat led to the overthrow of the hated military junta, a target of Klein in an earlier chapter is conveniently overlooked). The necessary reforms to bring the rotten and bankrupt former Communist countries up to date are lambasted at every turn. Poland, which underwent a particularly harsh form `shock therapy’, and Russia, which was undermined by the corruption of the Yeltsin era, are the only examples given; not the Baltic states, Hungary, Slovenia, the Czech Republic or Slovakia whose transitions were all smoother and are wealthy and well-integrated members of the EU 25 (an inconceivable notion in 1989). None of this would be extreme enough to fit her narrative.

    bq. Ignored also are the unquestioned success stories of those countries that have brought in liberal economic reforms, some modeled on the Chicago school. What of Ireland, once the sick man of Europe and now its richest country after oil rich Norway? Why not give some context on the reforms in Britain, where, pre-Thatcher, it was a strike ridden, ineffective country on an inexorable downward spiral? Why no mention of the colorlessness, economic pallor and corruption of the communist world?

  2. I haven’t read Klein, but the statement: “The Chicago School has never changed the fate of a single country – only those that have employed their strategies have done that.” would not be a fair critique of Harvey’s book. He is very careful to state that

    It was not the US, furthermore, that forced Margaret Thatcher to take the pioneering neoliberal path she took in 1979. Nor was it the US that forced China in 1978 to set out on a path of liberalization.

    However he does provide many examples, such as Mexico and John Perkins’s book Confessions of an Economic Hit Man to show that in many cases these policies were imposed and not a matter of “choice.” The film “Life and Debt” also makes this case for Jamaica. And, at least in the case of Chile, there are clear examples where Chicago School economists were directly involved in the decision making.

    I would also add that there are a number of very good links in the “resources” section of Klein’s website.

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