Why the same old state?

 

As our economic crisis intensifies with the closure of Wales, we should be reminded that economics and politics are joined at the hip, so to speak, and the present dominance of the economic is purely a consequence of the political world-view of the neoliberal order that has been in ascendance since the eighties. Their mantra (expounded in Guyana and practised as the “Washington Consensus”) that the state must simply be a “night-watchman”, practicing “politics as management”, inevitable produced the corollary of the primacy of the economic. The latter was equated, of course, with the market. That this depoliticization of the state led to many social groups losing both “corn and husk” – economic as well as political enfranchisement – could be papered over as a non-issue – and the social consequences dealt with by building more jails.

Many have forgotten that we have merely been swinging from one failed model of development pushed by the World Bank, et al, after 1945 to another. The “big push” led by “big government”, as exemplified by the PNC regime of 1968-1988 – to the present one which has failed just as ignominiously were all foisted by them on us. The solution to their own failure was to insist that not only should the state withdraw from the management of the economy (privatisation) but should regulate the market that was going to solve all allocation decisions with the “lightest of touch”. The focus was to be on stabilising the “macro-economic fundamentals”.

Further emphasis was to be placed on liberalising the financial sector as well as the trade regime and these “innovations” were supposed to automatically guarantee investment and growth in the manufacturing and other sectors of the real economy. We know to our cost (and hopefully, to the chagrin of the political directorate) that this has not happened here. Or anywhere else when the dogma was applied in wholesale fashion.

The success of China and India in the last few decades is touted by many as a proof of the success of the neo-liberal prescriptions. But the fact of the matter is that in neither of these countries, nor in the other successful “Eastern Tigers” before them, did the state roll over and play dead as far as intervening in the economy, as dictated by the neo-liberal script. Nor did they follow the move away from prudential rules in the financial sector nor in executing clearly articulated industrial policies.

Just as the fall of the communist bloc by 1990 led to a re-evaluation of the role of politics in the economy, we believe that the fall of the neo-liberal market-fundamentalism model demands a new re-evaluation of our political arrangements, as well as our economic ones, in Guyana. We have argued for two decades for the need for a “Catalytic Entrepreneurial Development State” that plays a more dirigeste role so we will not repeat arguments for, say, a more export directed strategy here. We simply want to highlight a very important political implication.

The reason for the failure of the massive state intervention during the 70s and 80s in Guyana was not necessarily state ownership of productive enterprises – note China’s performative refutation of that argument. Rather it lay in as much a failure to secure acceptance by the overwhelming mass of the population to accept that the inevitable belt tightening (“deferred gratification”) while working at full throttle necessary to generate the public savings that could be ploughed back into new endeavours. What we have suggested in the past, and do so once again, is that rather than sacrificing our democratic gains, as some of the Far Eastern Tigers did in their early stages, we ought to instead broaden it to garner the greatest possible legitimacy. The latter, after all, can only come when a state or government has the declared support of as many of its citizens as it can garner. We are talking about the need for shared governance that includes the government and the opposition in the near- and medium-term, until we climb to a more secure economic footing. This, if the experience of others is any guide, should also facilitate political stability.