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Big white brother and little brown brother

By Owen Paine on Wednesday December 31, 2008 02:07 PM

Okay, so I'm convinced uncle Obama could pull us out of the dive, acting solo and using just the budgetary levers of taxes and expenditures -- so long as he's bold enough. And in consequence, if we wallow long in this coming jobless pit, I can rightfully lay the blame on the good emperor hisseff.

But what of, say, the leader of Cambodia operating with no limitless dollar mine to tap? Can he or she be blamed if the gathering depression lingers on past next year in that small and much-tasked country?

The privateering pattern is clear: in high times, the transnational free-range corporations fly in to places like Cambodia with their international credit and their cutting-edge technology and their first-rate organization, but when the great sucking sound begins, and the rip tide is in the offing -- they fly right on out, collapsing the local asset markets and taking much "domestic paper capital" back with them to the Manhattan metropole and its imperial dollar.

Moral: the tangled web in the end snares the threadwalking fly.

Here is the great and glorious Keynes, circa deep dark depression days:

"I sympathize, therefore, with those who would minimize, rather than with those who would maximize, economic entanglement among nations.... I have become doubtful whether the economic loss of national self-sufficiency is great enough to outweigh the other advantages of gradually bringing the product and the consumer within the ambit of the same national, economic, and financial organization. Experience accumulates to prove that most modern processes of mass production can be performed in most countries and climates with almost equal efficiency.... let goods be homespun whenever it is reasonably and conveniently possible, and, above all, let finance be primarily national..."
Mr K not a globalizer, eh?

Back to Cambodia. Now I have a history with this place and its brief essay into radical autarky back in the 70's, so I think of it often when the wild and wooly down side of "limited liability internationalism" raises its head, like it has recently. One has to wonder if Keynes meant this passage above to apply to the likes of today's descendent of Pol Pot's Democratc Kampuchea. More broadly, can we say the periphery of the earthwide Yankee empire is safe for practioners of Keynesianism?

Can little brown states run like big white ones do?

Let's begin by doubting it.

To be continued...

Comments (1)


OP - did you see Patrick Bond's article about Africa and your favorite Fed Chairman, Paul Volcker?

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