A Reversion to a Dickensian Variety of Capitalism

[marmar]

A Reversion to a Dickensian Variety of Capitalism

By Jayati Ghosh, Professor of economics at Jawaharlal Nehru University, New Delhi, and the executive secretary of International Development Economics Associates. Cross-posted from Triple Crisis.

Since her death, many eulogies of Thatcher have spoken of her as a revolutionary. Thatcherism (along with the associated Reaganomics) is seen as a radical transformative agenda that changed the face of economy and society. But seen from the developing world decades later, much of this agenda appears familiar, in the form of structural adjustment policies that have been forced upon different countries at different times by international institutions.

Given the broad contemporaneity of these strategies, it is a moot point who “inspired” whom, or just how original those ideas were. But it is certainly true that they contributed to shaping policy dialogue in fundamental ways, and thereby left a continuing (if unfortunate) legacy. Consider just five significant elements of this legacy, most features of which are now found across the world and especially in developing countries.

First, and possibly the most well-known: the attack on organised labour and the resulting drastic reduction in workers’ bargaining power. This occurred not just through the instrument of unemployment (or fear of it) used to discipline workers, but through regulation and legal changes as well as changing institutions. This is now an almost universal feature, except in societies such as in Latin America where recent political changes have generated some reversal.

Second, financial deregulation and significant increases in the lobbying and political power of financial agents. This has led to the massive expansion and then implosion of deregulated finance, with the crisis affecting the real economy in terrible ways. It has also contributed to deindustrialisation and the rentier economy. The UK today is clearly one, with its focus on the City of London as its most prominent “industry” – but this is increasingly the fate of countries that are much lower in the development and per capita income ladders. .....................(more)

Read more at http://www.nakedcapitalism.com/2013/05/a-reversion-to-a-dickensian-variety-of-capitalism.html#W6lfBiBu57JoklmV.99

[Puzzledtraveller]

1. Funny thing about regulation and deregulation

It seems deregulation only helps the largest corporations who lobby for regulations that are designed to hurt the small business person, self employed. I saw a piece about how a large taxi company was lobbying in DC if I recall correctly to require that all cab operator/owners have a special license that would be more expensive than most of the individually owned and operated cabs could afford thus forcing them out of business and into working for the major cab companies.