Global Economic Order — ‘Neo-Liberal’ or ‘Paleo-Progressive’?

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A long term colleague called my attention to this The Freeman piece by Aparicio Caicedo, “The New Deal of World Trade,” which shows the lie of the left’s branding of the international economic order as a “neo-liberal” product. Their use of the term ‘neo-liberal’ is used to assert that a classical liberal or free market strategy underlies the overall system. Ecuadorian Aparicio Caicedo shows the historical genesis of the system was definitely from an economic interventionist/Progressive stable.

These Progressive globalists didn’t get everything their own way, of course, and their plan for an International Trade Organization to buttress the World Bank and IMF had to wait some decades. As Lew Rockwell pointed out in this article, the ITO was a creature defeated by the Old Right.

The lobbying efforts of Phillip Courtney under the influence of Henry Hazlitt proved definitive. In his book, The Economic Munich, Courtney explained the dangers of turning over trade policy to an international body. “In the long run,” he said, “a centralized trade authority will globalize protectionism.” Courtney cited the charter of the International Trade Organization to make his point. It endorsed demand-side management and full-employment policies, which Courtney rightly regarded as code words for government planning. Thanks to such intellectual leaders and the Old Right in Congress, the ITO went down to defeat.

Of course, during the debates, the elites never missed a chance to smear the ITO opponents; and the language of trade was permanently subverted. Advocates of global bureaucracies began calling themselves free traders. The ITO, they said, would save free trade from itself just as the New Deal had saved capitalism from itself. The opponents of world bureaucracies, no matter how much they favored free trade, were called isolationists and protectionists  — words drawn from recent war propaganda. As true believers in trade, the Old Right would not accept the term isolationist. And as opponents of mercantilism, of course, they rejected the word protectionist.

10:14 am on May 31, 2012