Beyond PNP-JLP debates

In other words, he was saying, let's move the politics beyond cass-cass, suss, promises and charges and counter-charges, and let's have a rational and civil discourse on our options. I was gratified that the People's National Party (PNP) did not equivocate, but heartily embraced the call and said the PNP was ready.

The PNP has already greatly facilitated the dialogue by releasing its Progressive Agenda framework of ideas for governance. I have already put forward my view, that an assessment of this document will reveal that it represents no fundamental alternative to that of the Jamaica Labour Party (JLP), and that no sensible Labourite could, in principle, and, philosophically, disagree with any of its 62-page document.

If anyone had judged the meaning of 'progressive' from both its political science context, as well as the context of the history of the PNP, he cannot but come to the conclusion that 'progressive', as used by the PNP to describe document, is a misnomer. The PNP and the JLP have been moving closer and closer together, and today, ideologically, there is very little difference between them. Notice, I said ideologically. There will be difference in practice (or praxis) and approaches but you study that Progressive Agenda document for yourself and identify what you know, in principle, the JLP would reject.

Media play crucial role

Media practitioners have a crucial role to play as we come up to the election, especially interviewers and moderators of talk shows. It will be critical that we ask the hard, piercing, searching questions of the politicians. We must not allow them to get away with glib, polemical, playing-to-the-gallery comments. We must call them out. We ourselves must be informed and on top of the research so that we can't be bamboozled or hoodwinked. Politicians are clever with rhetoric (at least some of them), but we must never be outgunned (pardon my expression).

It's easy when you don't hold state power to espouse all kinds of fanciful, unworkable, grandiose ideas. And they will find traction with the uninformed and gullible. Our job in media must be to help the people sort sense from nonsense.

But we must do more than just get the PNP and JLP politicians together and let them set the terms of the debate. We must widen the debate beyond them. That is, we must not detain ourselves with their narrow agenda. Nor with the narrow agenda of private-sector interests. This is where our own cosmopolitanism and intellectual sophistication as journalists and commentators will be demanded.

For example, there is a view that the State should essentially provide security and pick up garbage. The minimalist view of the State is the one accepted by both the PNP and JLP, essentially. Any differences are just variations on the theme. I find it interesting that even Comrades, some of whom used to be ideological progressives (not 'progressives' as now defined by the PNP) are saying to me this idea of the activist, developmental state is out-of-date, stale, of a bygone era, irrelevant to this "dynamic phase of globalisation". I challenge this notion as both historical amnesia and a current flight from reason - and a retreat from a "data-driven, evidence-based" approach.

Two important books just rolled off the press, one by Harvard-trained economist Vito Tanzi, who served for 20 years as director of the Fiscal Affairs Department of the International Monetary Fund (IMF) and who has served as consultant to the World Bank, the United Nations, the European Commission, the European Central Bank and the Inter-American Development Bank as well as Stanford Research Institute. His book is titled Government Versus Markets: The Changing Role of the State (2011).

The other is by Jeff Madrick, editor of the economics journal Challenge and senior fellow of the Roosevelt Institute and the Schwartz Centre for Economic Policy Analysis. His book is titled Age of Greed: The Triumph of Finance and the Decline of America, 1970 to the Present (2011). Tanzi is conservative and Madrick is progressive (in the classic sense, not in the PNP's revisionist sense.)

Tanzi's is an empirically rich survey of Governments and markets from the 19th century. Madrick tracks events from 1970 and shows how the intellectual and cultural currents have influenced the state-versus-market debate. Tanzi makes an important philosophical point in his book, unmasking the fallacy of ideological neutrality in neoliberal thinking.

"In spite of strong claims to the contrary, economics is not a pure science. Those who, for whatever reasons, give more weight to equity and poverty reductions and thus favour policies of the welfare states, tend to focus on the positive outcomes of those policies and minimise the costs. Those who give weight to efficiency and economic freedom of individuals, and less to equity, tend to focus more on the costs."

Following dead ideas

But that is not usually acknowledged. It is usually seen that those who downplay state action and maximise the market are the 'realists' - the hard-nosed, fact-based, empirically driven, avant-garde people who are untainted by that dreaded monster called 'ideology' or, worse, 'socialism'. These 'realists' are not usually self-reflective enough to know that they are actually also following the ideas of some economists, some long dead.

First, I need to make some disclaimers. When I talk about a developmental state, I am not talking about Marxism or about controlling the "commanding heights of the economy". I am not not talking about state control. I am not talking about taking over private businesses and expropriating property. I am not talking about abolishing the market and bringing in central planning. I believe Marxian socialist economics is unworkable and has proven to be unsustainable and an economic disaster. China has been growing phenomenally because it has thrown off orthodox Marxist practice and the Societ Union and Eastern Europe crashed under the weight of the impracticability of Marxist economics.

So when I talk about an activist state, I am talking more Keynes than Marx. But I am saying, if you look at the "data-driven, evidence-based" research, you will see that this neoliberal model favoured by both the JLP and PNP is ahistorical. That's not how countries have developed. It is the neoliberals and the Washington Consensus fellows who are clashing with reality and empirical history, not me.

Britain, the first industrialised country, was one of the most protectionist until it converted to free trade in the 19th century. In his eye-opening book Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism, Ha-Joon Chang says, "The history of the first globalisation in the 19th and early 20th centuries has been rewritten in order for it to fit the current neoliberal orthodoxy." Britain abandoned free trade and reintroduced tariffs in 1932. In his latest book, 23 Things They Don't Tell you About Capitalism (2010), Ha-Joon points out that virtually all today's rich countries used protectionism and subsidies to promote infant industries.

Activist state

Japan used its state to actively guide economic development. Business was heavily facilitated by the state. When I talk about an activist state, I am not talking about a state in competition with the private sector or a state that is eviscerating the role of the market. I am talking about a state that actively promotes, facilitates and develops private business. A state which creates and facilitates industrial champions. I believe in an interventionist state that would actively give the private sector the tools to grow and expand,P and which skews economic and fiscal policy towards private-sector growth and market demand. I believe in picking winners.

I am talking about a mixed-economy, social democratic, Scandinavian model. I am rejecting the laissez-faire model of capitalism practised in America, which has brought it to the crisis it is now experiencing. You need to get Madrick's 450-page book, Age of Greed, to see the colossal waste of American capitalism.

The kind of state I am talking about is the kind of state whose absence Claude Clarke has been weeping over in article after article. All the East Asian countries which have been models of rapid industrialisation used the activist state model, as the World Bank itself demonstrated in a book it published in the early 1990s on the East Asian economic miracle. Now I grant you that many of the policies carried out in East Asia cannot be done today because of World Trade Organization rules. But I make the point that if we are talking about how countries have grown, we cannot sustain the myth that it has been through unfettered market mechanisms, with a minimalist state.

There is nothing in the PNP's Progressive Agenda which shows its appreciation of the kind of state needed to move economic growth in Jamaica. It's not just a matter of voting out a group of 'corrupt', and 'incompetent' state actors - the same approach taken by the JLP in 2007.

China, India, Chile, Brazil - as East Asia before - have been growing handsomely not by following minimalist state action. Brazil and India have strong development banks. The Progressive Agenda does not call for this, apparently satisfied with what passes for development banking in Jamaica. (We don't have the kind of venture-capital mechanisms which other countries make available to entrepreneurs).

For those who say the activist state is a thing of the past, I ask, what world are you living in? It was the federal government - the state - which saved American capitalism in its worst crisis in nearly 80 years in America! It was state action all over the world - including China, which pumped multiple billions to stimulate demand - which rescued global capitalism from collapse. State capitalism has returned, in case you have not heard.

There are more state regulations today, and even institutions like the IMF are preaching countercyclical action and stimulus spending. Says Tanzi in Governments Versus Markets: "There is no more fundamental question in economics today than what role the state or the government should play in a country's economy."

Ian Boyne is a veteran journalist. Email feedback to columns@gleanerjm.com and ianboyne1@yahoo.com.