Economic Fundamentalism

Economic Fundamentalism : A World Model for Structural Adjustment

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In 1984 the New Zealand Labour government, previously respected for its social democratic system, became the first developed Western economy to make a systematic attempt at "structural adjustment". This volte face has had devastating consequences. An obsession with low inflation resulted in rampant unemployment, soaring interest rates and chronic economic instability. Labour market regulations forced workers onto individual contracts and removed any reference to unions in the law. State activities were privatized or subjected to market forces. Restrictions on foreign investment were abandoned, domestic industry was sacrificed to free trade, and the universal welfare state reduced to a wholly inadequate safety net. Despite its failure, this experiment is being hailed by the OECD, the World Bank and others as an exemplary prototype of structural adjustment for the developed and developing world. In 1992 New Zealand realized the need to extricate itself from this economic tangle but has, as yet, failed to undo much of the irreparable damage.
This book examines the profoundly anti-democratic process through which this experiment in structural adjustment took place; how the "fundamentals" of rigid monetary policy, labour market deregulation, limited government, free trade and fiscal restraint were cemented in law, and what this has meant for economic, political and cultural life in New Zealand today.
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Product details

  • Hardback | 408 pages
  • 165.1 x 241.3 x 25.4mm | 453.59g
  • London, United Kingdom
  • English
  • notes, bibliography, index
  • 0745310443
  • 9780745310442

About Jane Kelsey

Tom Behan (1957 - 2010) was Senior Lecturer in Italian Studies at the University of Kent. His books include Defiance: The Story of One Man Who Stood Up to the Sicilian Mafia (2008), See Naples & Die: The Camorra & Organised Crime (2009) and The Italian Resistance: Fascists, Guerrillas and The Allies (Pluto Press, 2009).
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Table of contents

Part 1 Defining "success": what was unique about New Zealand's structural adjustment?; an experiment in pure liberal economic theory implemented by a Labour government; the fundamentals, rigid monetary policy, deregulated labour market, free trade and investment programme, surplus driven fiscal programme. Part 2 Setting up the experiment: the laboratory and structural adjustment formula; empowering the technocrats; capturing the political machine; why New Zealand - the dependency of a colony; dependency on exports; positive embrace of external political patronage; shallow constitutional machinery; incorporation of movements of resistance into the state; weak national identity. Part 3 The fundamental ingredients: tight money; economic liberalization; labour market deregulation; a limited state; fiscal restraint. Part 4 Evaluating the results: the economic deficit; the social deficit; the political deficit; the cultural deficit. Part 5 The prognosis.
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