“The implicit distrust in market forces played a key role in economic strategies adopted after 1945 and for several decades afterwards. Faith in markets has gradually been restored since the early 1970s, when a search for new policies was prompted by the breakdown of the Bretton Woods system of fixed exchange rates, an abrupt economic slowdown, rising unemployment and surging inflation.” (OECD Observer No 230, January 2002).
Clearly, the collapsing confidence in “Washington consensus” capitalism hadn’t been evident when the article was written before the Enron crisis, though the “distrust” has good reason to continue.
Moreover, politics in the US can reinforce distrust in the market: I read that 39 chief executives wrote an open letter to the US president to complain about national politics hurting their defence companies by ignoring the realities of the global market.
It seems that a credible market can’t survive in the long term alongside national politics; a global bank with an independent monetary policy might be part of the answer.
—Ian Jenkins, Hamilton, Scotland
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©OECD Observer No 236, March 2003