Q: You criticized "The Washington Consensus." From reading
your book, I see that you summarize that set of doctrines as "1)
Fiscal Austerity, 2) Privatization, and 3) Market Liberalization." What
are, in your view, the central weaknesses of the policies that flow from
JES: It didn't work. I mean, the weaknesses are not that these are necessarily
bad in their own right, but it's the balance. Fiscal prudence is a good
thing. But they pushed it beyond where it ought to have been. Market
Liberalization is a good thing, but not if it's done too fast.
Q: Would you say, then, that there is a structural flaw in the market
JES: There are many limitations. We all know that there are lots of
examples where markets fail, and you need a role for government. So where
the structural problem is, it's their belief that there's not a role
for government to play. And that markets can solve every problem. That's
the structural failure: "Markets are perfect, and can solve every
Q: For this interview, I also read George Soros' book, On Globalization,
which I know you reviewed in the New York Review of Books. In it he states, "It
is market fundamentalism, which holds that the social good is best served
by allowing people to pursue their self-interest without any thought
for the social good — the two being identical — that is a
perversion of human nature" (p.179).
JES: Yes, George and I are very similar in our views.
Q: Don't you think we need to go deeper and look at the rules that govern
the unequal bargaining power between the rich and the poor? Isn't that
what really has to be attacked?
JES: Yes, that's what I'm saying in the book. The underlying problem
is the way the rules are made. If the rules are bad, you need
to ask the question, "how did those rules get established?" And
it's the processes by which the rules get made that is the underlying
of the problem. ... read the entire interview