Larry,
I would agree that the Marshall plan contributed a slice of debt, but what was the alternative? The massive industrial overcapacity in the US, combined with a desperate need for reconstruction in the rest of the world and a total lack of ability to pay for it, could have easily led, without intervention, to a deadly deflationary spiral and a return to depression. One can only imagine the results; the cold war was not pleasant, but it might easily have been worse.
I don't like to be too hard on FDR, who provided leadership when it was desperately needed. It is easy to argue, with benefit of hindsight, that he led in the wrong direction, but I am not sure that anyone else would have done better, given the information and knowledge available at the time.
Asian economies would be better off allowing the free flow of capital and permitting free minds and free markets to determine wages.
That would be ideal. But it should be noted that manipulation of wage levels can work in both directions. There have been concerted efforts in a number of Asian countries, often with external encouragement, to keep wages depressed, ostensibly to boost exports. The combination of declining real wages, physical repression directed at efforts to organize labor, and rising prices is a major contributing factor to social instability in countries like the Philippines and Indonesia.
Steve |
