Developmentalism

You know, this idea that a country can and should develop by doing the picking winners behind high tariff barriers thing? As recommended by Christian Aid, War on Want, Action Aid, the Green Party, the BNP and just about every other fuckwit known to man?

\"\"Sure worked well for Argentina, didn\’t it?

From 1890 to 1939, the country\’s per capita income was similar to that of France, Germany and Canada, but then President Juan Perón took over and instituted a suite of progressive reforms: increased unionization, nationalization of major industries, more generous social welfare, increased public works investments, high tariffs and import restrictions. The big idea then was called developmentism, which is a national-socialist-fascist model that attempts to ameliorate the deficiencies of \’the market\’. The result you can see below, as their income relative to other countries steadily declined from about 1946 onward (the center of the graph is 1946ish).

Progressive economics, doncha just love it?

12 thoughts on “Developmentalism”

  1. Juan Perón took a Labour party line – give power to the Unions, nationalise stuff, and talk sentimental tosh about the workers.

  2. But, Tim, following on from LE, what about all those countries that have — appparently –developed successful industries behind often selective tariff walls…Japan, S Korea, India…

    Or have the low-valuations of their currencies (at the relevant time) acted in effect as a tariff barrier, as so few residents could afford the imports?

    Thoughts, please…

  3. I second Luis. You’re an “idiot.”

    I add Taiwan to Luis’s two examples and offer the German’s states cartelisation of industry as a further example of activist states working.

    You’re also using the example of globalisation and integration causing the serious deterioration of a country’s economic wellbeing. The more isolationist Brazil did better through the 1930s than Argentina.

    Also… As Brad DeLong and Eichengreen emphasise, post war Europe used the state to redistribute consumption and prices to organise production. The Argentines used the state to direct production and prices to redistribute consumption from rural areas to urban areas. Its not “developmentalism”, it was just bad policy.

    We can learn from past policy errors through comparative economic history, or do what you like, and reason from A level economics first principles….

  4. “oh for Christ’s sake, you might as well use Somali to demonstrate laissez faire economics doesn’t work.

    Why didn’t you choose South Korea or Japan?”

    Or
    – Venezuela (oil anyone?)
    – Sweden (think large ships sunk in Norwegian fjords in the 70s)
    – Italy (Fiat before Marchionne or the Italian Post maybe?)
    – Obama (“green” jobs)
    – Brunei (Western tourism in a country where you can’t even get a beer at the airport)
    – Cuba (well more or less everything )
    – Thailand (mobile applications was I believe one of the most recent bright ideas in a country that hasn’t even been capable of selling 3G licences yet)
    – the Singapore media industry (how many Singaporean movies have you heard of?)

    Truth is that there are more government picked winners that lose then there are that win…

  5. and notes his fact-free argument…despite the fact that Menem’s repeat of developmentalism in the 90s led to equally poor results. Suspects that Left outside will fail his exams… points him i the direction of Left Behind by Sebastian Edwards.

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