The ideologues of neoliberalism vs. the facts. posted by Richard Seymour

The Ideology

To those who complain that increased openness to trade during the 1980s and 1990s has failed to deliver faster growth, Wolf points to the contrary experiences of China and India. Both countries witnessed significant jumps in their growth rates as they opened up their economies to international trade and foreign investment. As Wolf points out, "Never before have so many people-or so large a proportion of the world's population-enjoyed such large rises in their standards of living."

The Reality

The experience of China and India - along with Japan, South Korea and Taiwan in earlier times - shows that countries do not have to adopt, first and foremost, liberal trade and/or capital policies in order to benefit from enhanced trade, to grow faster, and to develop an industrial infrastructure able to produce an increasing proportion of national consumption. All these countries, as Robert Wade has recently argued, have experienced relatively fast growth behind protective barriers, growth which fuelled rapid trade expansion focused on capital and intermediate goods. As each of these countries have become richer, it has tended to liberalise its trade policy ... these countries developed relatively quickly behind protective barriers, before they liberalised their trade. (David Held, Global Covenant: The Social Democratic Alternative to the Washington Consensus, Polity Press, 2004, pp. 49-51).