Reviving the Invisible Hand
The Case for Classical Liberalism in the Twenty-first Century
1st Edition
Published on 16. December 2010
336 pages
978-1-4008-3744-1 (ISBN)
Description
Reviving the Invisible Hand is an uncompromising call for a global return to a classical liberal economic order, free of interference from governments and international organizations. Arguing for a revival of the invisible hand of free international trade and global capital, eminent economist Deepak Lal vigorously defends the view that statist attempts to ameliorate the impact of markets threaten global economic progress and stability. And in an unusual move, he not only defends globalization economically, but also answers the cultural and moral objections of antiglobalizers.
Taking a broad cross-cultural and interdisciplinary approach, Lal argues that there are two groups opposed to globalization: cultural nationalists who oppose not capitalism but Westernization, and "new dirigistes" who oppose not Westernization but capitalism. In response, Lal contends that capitalism doesn't have to lead to Westernization, as the examples of Japan, China, and India show, and that "new dirigiste" complaints have more to do with the demoralization of their societies than with the capitalist instruments of prosperity.
Lal bases his case on a historical account of the rise of capitalism and globalization in the first two liberal international economic orders: the nineteenth-century British, and the post-World War II American.
Arguing that the "new dirigisme" is the thin edge of a wedge that could return the world to excessive economic intervention by states and international organizations, Lal does not shrink from controversial stands such as advocating the abolishment of these organizations and defending the existence of child labor in the Third World.
Taking a broad cross-cultural and interdisciplinary approach, Lal argues that there are two groups opposed to globalization: cultural nationalists who oppose not capitalism but Westernization, and "new dirigistes" who oppose not Westernization but capitalism. In response, Lal contends that capitalism doesn't have to lead to Westernization, as the examples of Japan, China, and India show, and that "new dirigiste" complaints have more to do with the demoralization of their societies than with the capitalist instruments of prosperity.
Lal bases his case on a historical account of the rise of capitalism and globalization in the first two liberal international economic orders: the nineteenth-century British, and the post-World War II American.
Arguing that the "new dirigisme" is the thin edge of a wedge that could return the world to excessive economic intervention by states and international organizations, Lal does not shrink from controversial stands such as advocating the abolishment of these organizations and defending the existence of child labor in the Third World.
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Deepak Lal is James S. Coleman Professor of International Development Studies at the University of California, Los Angeles, professor emeritus of political economy at University College London, and former Research Administrator at the World Bank. He has advised many governments and international agencies and is the author of numerous books on economic development and public policy, including In Praise of Empires (Palgrave Macmillan), The Poverty of Development Economics, and Unintended Consequences. In 2007, he received the International Freedom Award for Economy from the Società Liberia.
Content
PREFACE ix
Introduction: The Origins of "Capitalism" 1
Globalization 9
Chapter 1: Liberal International Economic Orders 17
Mercantilism 20
The Nineteenth-Century LIEO 22
Pax Britannica and Economic Development 32
The End of the First LIEO 36
Recreating a New LIEO 40
Chapter 2: From Laissez Faire to the Dirigiste Dogma 48
Classical Liberalism and Laissez Faire 48
Poverty and Industrialization in Nineteenth-Century Britain 52
"Manna from Heaven" Distributivism 53
Competition and Monopoly 56
The Rise of "Embedded Liberalism" in the United States 59
Chapter 3: The Changing Fortunes of Free Trade 62
The Rise, Fall, and Rise of Free Trade 62
U.S. Economic Policy 65
The New Protectionism 68
The Rise of Preferential Trading Arrangements 71
Another Globalization Backlash? 80
Adjustment Assistance? 85
Whither the WTO? 86
APPENDIX: FREE TRADE AND LAISSEZ FAIRE IN THEORY 91
Chapter 4: Money and Finance 95
International Monetary Regimes 97
International Capital Flows 105
The Global Financial Infrastructure 122
Chapter 5: Poverty and Inequality 127
Poverty Head Counts 128
Income Gaps 135
Foreign Aid 139
Chapter 6: Morality and Capitalism 150
Introduction 150
Analytical Framework 151
Changing Material and Cosmological Beliefs 154
Communalism versus Individualism 157
From Victorian Virtues to Modern Values 160
Modernization and Westernization 165
Conclusions 180
Chapter 7: "Capitalism with a Human Face" 182
Introduction 182
Justice and Freedom 183
Rights 185
Social Paternalism and Dirigisme 187
Moral Paternalism and the New Victorians 189
Capitalism and Happiness 192
The Corporation under Attack 195
Conclusions 203
Chapter 8: The Greens and Global Disorder 205
Introduction 205
The Rise of the NGOs 205
Sustainable Development 211
The Greens and Ecological Imperialism 214
Toward World Disorder 227
Chapter 9: Conclusions 231
Notes 237
Bibliography 279
Index 307
Introduction: The Origins of "Capitalism" 1
Globalization 9
Chapter 1: Liberal International Economic Orders 17
Mercantilism 20
The Nineteenth-Century LIEO 22
Pax Britannica and Economic Development 32
The End of the First LIEO 36
Recreating a New LIEO 40
Chapter 2: From Laissez Faire to the Dirigiste Dogma 48
Classical Liberalism and Laissez Faire 48
Poverty and Industrialization in Nineteenth-Century Britain 52
"Manna from Heaven" Distributivism 53
Competition and Monopoly 56
The Rise of "Embedded Liberalism" in the United States 59
Chapter 3: The Changing Fortunes of Free Trade 62
The Rise, Fall, and Rise of Free Trade 62
U.S. Economic Policy 65
The New Protectionism 68
The Rise of Preferential Trading Arrangements 71
Another Globalization Backlash? 80
Adjustment Assistance? 85
Whither the WTO? 86
APPENDIX: FREE TRADE AND LAISSEZ FAIRE IN THEORY 91
Chapter 4: Money and Finance 95
International Monetary Regimes 97
International Capital Flows 105
The Global Financial Infrastructure 122
Chapter 5: Poverty and Inequality 127
Poverty Head Counts 128
Income Gaps 135
Foreign Aid 139
Chapter 6: Morality and Capitalism 150
Introduction 150
Analytical Framework 151
Changing Material and Cosmological Beliefs 154
Communalism versus Individualism 157
From Victorian Virtues to Modern Values 160
Modernization and Westernization 165
Conclusions 180
Chapter 7: "Capitalism with a Human Face" 182
Introduction 182
Justice and Freedom 183
Rights 185
Social Paternalism and Dirigisme 187
Moral Paternalism and the New Victorians 189
Capitalism and Happiness 192
The Corporation under Attack 195
Conclusions 203
Chapter 8: The Greens and Global Disorder 205
Introduction 205
The Rise of the NGOs 205
Sustainable Development 211
The Greens and Ecological Imperialism 214
Toward World Disorder 227
Chapter 9: Conclusions 231
Notes 237
Bibliography 279
Index 307
