Created 11/24/1998
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Questions: Alternatives for the Americas

J. Bradford DeLong
U.C. Berkeley


U.C. Berkeley's Center for Latin American Studies--directed by Harley Shaiken, who was one of the bad guys in the NAFTA debate--sponsored a conference on December 4, 1998: "Alternatives for the Americas."

I went. It was... not a very good conference. It was strange. It's kinda weird to have a conference about the U.S.-Latin American economic relationship and to have no economists speak. And the organization of the conference was much more restrictive than is usual in Berkeley: no questions from the floor (save for the striking graduate students who put on a good demonstration at the beginning). Thus a whole bunch of issues that should have been raised weren't. And the dialogue was very narrow because the position many people were implicitly arguing against--the so-called "neoliberalism" of the "Washington consensus"--was never set out.

However, I found myself wanting to ask three questions (had it been possible to ask questions from the floor):

Question #1: Back in 1993 Harley Shaiken was a leading critic of the North American Free Trade Agreement, claiming:

NAFTA is now five years old. And whatever else you say about NAFTA, it is next to impossible to see any large "exodus" of jobs or "strong downward pressure" on U.S. wages. Job losses in garments, furniture, and some parts of agriculture, yes (and job gains in industries that export more to Mexico); but any effect on aggregate U.S. employment, no.

So my question for Professor Shaiken: how has your view of the consequences of reduced barriers to trade been changed as a result of how NAFTA has turned out? And because the consequences of Mexican accession have not been as you had predicted, would you look more favorably on the accession of Chile and Argentina to NAFTA?

Question #2: Let me quote--very, very briefly--from the beginning of a speech, given at the National Press Club on October 9, 1997, by one of our panelists, the Honorable David Bonior. The speech begins:

David Bonior; National Press Club; October 9, 1997--Last spring, a little girl from Michigan named Lindsay Doneth was rushed to the hospital with a fever of 103, bleeding lips, nausea and sharp pains. As Lindsay screamed in agony, her mom and dad sat by her hospital bed, unsure whether their 10-year-old would live or die.

Doctors said Lindsay had contracted hepatitis, a potentially deadly blood disorder. And she wasn't alone.... 179 of them had eaten contaminated Mexican strawberries in the school cafeteria....

And it's not just tainted food that's slipping into the country. According to the Drug Enforcement Agency, 70 percent of the cocaine entering the United States now rolls across the Mexican border. One former DEA official called NAFTA "a deal made in narco-heaven."

That's the end of the quote.

Now I don't think that the left wing of America's political spectrum should be trying to raise these demons. I think that in the end raising them will be to the advantage of no one save the friends of Pat Buchanan.

But they are trying to raise these demons.

And so my question--to the panelists who are not U.S. citizens--is: how does the fact that the left in the U.S. is trying to play this particular card affect you, change the environment you work in as you try to construct a progressive alternative for Latin America?

Question #3: It seems to me that this conference has had an absent center. It has revolved around--but never looked into--"neoliberalism": the institutionally- conservative social democracy that guides much economic policy today. So let me ask a question from this point of view, as one of those whom, say, Professor Unger condemns as having "prostituted themselves to fate" and "betrayed their country" (let me note that I do not think such betrayal-talk and prostitute-talk has any place in a dialogue about the twenty-first century).

At the end of World War II we did not speak of "North Atlantic" economies. When we talked about "fully-industrialized" economies we spoke of the "Anglo-Saxon economies"--Canada, Britain, Australia, and the United States--and we spoke of Germany, following its disastrous Sonderweg. That we now speak of "North Atlantic" and even of "OECD" economies as sharing common structural characteristics is the result of two post-WWII economic miracles: the rapid convergence of the economies of continental western Europe to the levels and structure of the U.S., Canada, and Britain; and the extraordinary economic miracle of Northeast Asia.

Now according to the neoliberal point of view, we don't know enough to replicate Northeast Asian success elsewhere. But we can try to replicate western European success: governments committed to macroeconomic stabilization and progressive redistribution, a strong private sector free to follow market incentives in making resource allocation decisions, high levels of government support for infrastructure and human capital, imports of capital and technology from the industrial core, and a "politics of productivity" to shift struggles over distribution off of the shop floor and onto the parliamentary floor. That's the neoliberal program: attempting to replicate the post-WWII economic success of Scandinavia, France, Benelux, Italy, and later Spain.

Now, what is there in human history to suggest that this neoliberal strategy is a bad bet? Isn't attempting to replicate western Europe's post-WWII economic success in other developing economies--for make no mistake, continental western Europe in the immediate aftermath of World War II was still in considerable part a set of developing economies--the best bet today's developing economies can make?

Professor of Economics J. Bradford DeLong, 601 Evans Hall, #3880
University of California at Berkeley
Berkeley, CA 94720-3880
(510) 643-4027 phone (510) 642-6615 fax

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