Stitch,
The quote on wage labor brought back vivid memories of bland multilateral bureaucrats praising Ferdinand Marcos for his "courage" in following a policy of "wage restraint". With a strong implication that authoritarian governments were necessary to take the "tough steps" needed to attract foreign investment. Implicit benefits to Marcos and friends not stated, of course.
Ferdinand, being no fool, kept the masses somewhat placated by subsidizing utilities, basic commodities, and especially food. Farmers were forced to sell rice to the government at below market prices, and placated by subsidies on key agricultural inputs.
Out goes Marcos, along comes the IMF to survey the wreckage, first thing they say is "you gotta get rid of all those subsidies".
Always good to remember, during the macro conversations, the effects these trends have on those who are totally unaware of them. Sometimes the IMF seems like one who would approach a tightrope walker, survey the situation, announce crisply that the rope is too tight - and alleviate the situation by cutting the rope.
Steve |
