Monday, September 8, 2014

Dialogus de Beijing Consensus -- Pessimo Clarification and Response to Optimo re: Ramo's Second Theorem


Optimo was right to question my circularity argument.  That was not a strong thesis, and it detracted from my argument.  Optimo is also correct to note that the mere fact that mainland China has not actually conformed to the Beijing consensus does not by itself refute the power of that so-called 'consensus' as a developmental model (like I noted earlier, it probably would have been more effectively presented if it had been termed the 'Taipei Consensus').  However, I would assert that the fact that China has not conformed is significant in that it suggests that we actually have real evidence that the 'Consensus' actually works as a developmental model.

The principle focus of my critique is indeed with regards to the sustainability of the second theorem, and consistent with Optimo's observation, by sustainability I mean policy sustainability.  Simply put, I would argue that developing countries do not have the wealth necessary to sustain the kinds of regulatory technologies that Ramo advances in the first theorem.  And this makes the Beijing Consensus unsustainable as a developmental model.

And while I do indeed agree with Ramo's focus on quality of life rather than simply on GDP, I don't believe that that by itself a model makes.  As I will elaborate more later, to me a model is more than just an abstract goal, it is a guide to action.  I don't see anything in this second theorem that suggest a guide to action.  Chaos management, crisis management, and sociology at best simply address some of the problems of development, but they are ancillary to the ultimate project of development.  Ramo's second theorem is like Gertrude Stein's Oakland -- there is no 'there' there.

Finally, in response to Optimo's query to me:
China seems to be a great example of a country in which millions of people have been lifted out of poverty and have had their lives improved in the last decades. If nothing else, we could perhaps say that at the very least the country has effectively adopt strategies to reduce "the brutality of material poverty", to use Pessimo's expression. So, if we do not want to ask China to behave like a developed countries before becoming one, isn’t this enough to show that they have some sort of promising strategy in place? 
 Yes, China has lifted millions of people out of poverty.  But that by itself does not necessarily make it a 'great example'.'.  One could argue that China's developmental strategy, at least to date, has consisted simply of a gradualist removal of a set of failed command-and-control and isolationists policies that had drastically suppressed China's wealth generation for over a generation -- policies that we have already long known to be dysfunctional.  In other words, the real lesson of China's growth might ultimately be trivial -- command economies don't work and it is good to have your economy open to international trade.  There may be a good lesson in all this insofar as North Korea is concerned, but its not really of much relevance to the rest of the developing world.  

In other words, China's is simply the success of simple common sense, its is not that of some great advance in developmental thinking.  Along these lines, one might also note that despite its rapid development, China's level of development (measured either by GDP standards or HDI standards) is still only generally the same as that of Indonesia and the Philippines, and is significantly less than that of Vietnam or Brazil.  So here is my question to Optimo: Given that Brazil has even significantly less poverty per capita than China, shouldn't we be exploring instead for a São Paulo Consensus?  

N.B.  Actually, we will be -- in November.


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  2. I am not 100% certain about any of my disagreements with Pessimo, except for this one: the date is early December for the São Paulo consensus and some caipirinhas, stay tunned!