‘Financialisation’ In Lanka Is A Myth
By Kumar David -October 13, 2013 |
Prof Kumar David
Lanka and the demise of neo-liberalism
People are not usually concerned about the more arcane aspects of theory, but of recent there has been discussion of whether the Lankan regime’s economic strategy can be termed neo-liberal and whether finance-capital has become a crucial element in this process. This is argued by some left party leaders and Marxist intellectuals. Ad hominem remarks will not help my case; therefore I will deal with concepts, not name protagonists. I argue in this essay that neo-liberal economics, in its known (and much hated) embodiment is dead and the agenda of Twenty-first Century global capitalism is no longer the same. My second point is that visions of Lanka as a financial centre are hallucinations. Leftist who see ‘financialisation’ looming and blooming are plain Quixotic. The regime’s economic agenda is a disaster, but let’s identify the real disorder, not tilt at windmills.
Neo-liberalism is a term identified with the phase of global capitalism commencing circa mid-1970s (Regan-Thatcher era) and in the West it signalled the end of the welfare state and an attack on unions and the working class. Its central tenants were curbing welfare and social outlay (education, health), privatisation of state assets including public goods (railways, water supply, electricity, post-office), and labour market reforms (pseudonym for wage cuts, slashed employment security, reduced health and retirement benefits). That awful Thatcher woman’s slash and burn crusade is remembered with a shudder; that is neo-liberalism in practice, Hayek its prophet.
Neo-liberalism also inherited from traditional liberalism, a deep faith in free trade. This resonated with the character of the post WW2 age; global expansion of production, trade, investment and finance. Globalisation battered down barriers to goods and services trade and obstacles to the free movement of capital. Protection of nascent industries in developing countries was anathema, subsidies were eliminated. Remember the ‘Structural Adjustment Programmes’? The IMF and World Bank constituted the task force leading the charge to conqueror the developing world; the Washington Consensus provided the programmatic muscle, the charter.
