Washington Consensus

Eu não coloco eles tão importante.

Eu, eu-- é porque eu acho que o neoliberalismo brasileiro Novamente, é, é um neoliberalismo que não é necessariamente brasileiro, né? Ééé, hã, foi a imposição do Consenso de Washington no Brasil e de fato isso mantém-se em muitos níveis, mas a, a cultura política real brasileira, ela continua a ser uma cultura política patrimonialista.

E essa-- e veja bem, eu fa-falo isso sem ser crítico, tá? Eu não falo isso co-- de forma crítica.

Boa parte da direita critica a ideia patrimonialista.

We've got to attract foreign capital.

You know, the whole sort of, if you will, at that time, the idea of the Washington consensus was actually a formula that did tend to work.

Today, that formula will not work at all.

And so we need a new formula for growth.

The man overseeing all of this was Boris Yeltsin, the first president of the Russian Federation, after taking over from Mikhail Gorbachev, the last president of the Soviet Union.

Boris Yeltsin's plan of radical market reform became known as shock therapy for the transitioning economy, and was based off a set of policies outlined in the Washington Consensus.

The Washington Consensus is kind of like an instruction manual of how to get a terrible economy working again.

The reason it is called the Washington Consensus is because it was, well, a consensus of the right set of prescriptions agreed upon by major institutions based in Washington, D.C., most notably the International Monetary Fund, the World Bank, and the U.S. Treasury Department.

Now the prescriptions were as follows.

Fiscal policy discipline, e.g. stop the government buying everything and just giving it away.

And then we see a global debt crisis in the late 1970s and the decline of the Soviet Union by the 80s.

So the U.S. and the U.K. come together in what we know as the Washington Consensus moment and engage globally.

Our international institutions like the World Bank and the IMF to promote neoliberal economic policies in the 1980s basically will bail out nations in debt with the agreement they'll shift to neoliberal economic policies.

But those policies defunded public social services.

course, not

to say I don't want to say that non-Western nations don't play a role in the developing the system, right? The G77's demand for a more fair global economy plays a key role in the need to reorganize.

But these movements are often co-opted by powerful Western nations into agendas that best fit their interests, like we see with the Washington Consensus.

So in this

obviously it's caused uh millions to be killed wounded or displaced because of the war here in west uh asia but you kind of hint at it in the book isn't it good that finally it's out in the open that these uh decades of uh economic hitman strategy by the IMF and World Bank and other institutions is now so obviously out in the open.

This is what comes from Washington and the Washington Consensus.

Yes, that's my hope.

Well, it is out in the open.

We didn't have any problem with the idea of ... contact across borders, exchange of ideas, exchange of goods for that matter.

But what we objected to was this particular model of globalization, whatever you want to call it, neoliberalism, the Washington Consensus, this rigid template that was being imposed on people through mechanisms like the World Bank and the IMF and the World Trade Organization, and eliminating the room for national democracy or any kind of democracy, national or international, in terms of economic policy.

And so we were defending that line of argument against people who said, on the one hand, you're narrow-minded, you're, you're nationalists-

[laughs]

Um, because it is such a touchstone, I think, on, on the left, uh, but you know, we're now in, in a generational moment where some folks didn't live through it.

Absolutely.

So the critique at the time was based on the idea that through these institutions, particularly the World Bank and the IMF, uh, the US and its allies were imposing a very rigid economic template or a toolkit on countries in the Global South, and not just capitalism as such, but a very particular form of capitalism based on a set of principles that were summed up or codified as the Washington Consensus.

And it was pointed out by critical development economists, people like Ha-Joon Chang from Korea, that this was based on a false model of what the core capitalist economies like the US and Germany and Japan and Britain had actually done when they were in their industrial takeoff phase.

This caused an immediate rampant increase in prices.

Yeltsin's shock therapy program of radical market-oriented reform was based on the policies associated with the Washington Consensus, recommendations of the IMF, and a group of top American economists.

In 1994, they urged for the three ations, privatization, stabilization, and liberalization, to be completed as soon as possible.

Ations? They were just making up words? Oh, yes.