Public Values

IMF, international banks beg for state intervention

Unfettered financial model bounces reality checks off market fundamentalists.

John Lipsky leans left...by Ulrich Beck, The Guardian, April 10, 2008

World Risk Society — The Play. Act one: Chernobyl. Act two: The threat of climate change. Act Three: 9/11. Now the curtain is rising on act four: Global financial crises. For a backdrop, see yesterday's headlines: IMF slashes world growth forecast; Credit crisis could cost $1 trillion. Dramatis personae are the Hardcore Neoliberals, who in the face of danger have overnight converted from the market faith to the state faith. Now they're praying, begging, pleading for the mercy of the state interventions and multibillion-pound handouts of taxpayers' money — the sort of thing they condemned for as long as the profits were pouring in. What a priceless convert's comedy is being performed on the world stage. If only it weren't tinged with the bitter taste of reality.

Here's John Lipsky, a senior official and economist of the International Monetary Fund and longstanding market fundamentalist, who in a dramatic appeal is suddenly urging the governments of the fund's member states to sign up to the antithesis of everything he has previously preached: prevent a world economic crash with massive rescue spending. When even John Lipsky is urging politicians to "think the unthinkable", the gravity of the crisis is plain.

The spectre of the "unthinkable", which is now being raised everywhere, is of course supposed to awaken memories of the world economic crises of the last century - and save the banks from disasterÂ…

Ulrich Beck is professor of sociology at Munich's Ludwig-Maximilians University and the London School of Economics, and author of World Risk Society.

Links and sources
  "This free-market farce shows how badly we need the state", by Ulrich Beck in The Guardian, Thursday April 10, 2008.

Posted: April 13, 2008

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