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Saturday, June 06, 2009

Gorbachev: The US Needs a Perestroika

Mikhail Gorbachev says change is coming, and that "Washington will have to play a special role in this new perestroika":

We Had Our Perestroika. It's High Time for Yours, by Mikhail Gorbachev, Commentary, Washington Post: ...In recent years,... during speaking tours in the United States..., I have often told listeners that I feel Americans need ... a perestroika, not like the one in my country, but an American perestroika... Halls filled with thousands of people have responded with applause. ...

In the West, the breakup of the Soviet Union was viewed as a total victory that proved that the West did not need to change. Western leaders were convinced that they were at the helm of the right system and of a well-functioning, almost perfect economic model. Scholars opined that history had ended. The "Washington Consensus," the dogma of free markets, deregulation and balanced budgets at any cost, was force-fed to the rest of the world.

But then came the economic crisis of 2008 and 2009, and it became clear that the new Western model was an illusion that benefited chiefly the very rich. ...The current global crisis demonstrates that the leaders of major powers, particularly the United States, had missed the signals that called for a perestroika. The result is a crisis that is not just financial and economic. It is political, too.

The model that emerged during the final decades of the 20th century has turned out to be unsustainable. It was based on a drive for super-profits and hyper-consumption for a few, on unrestrained exploitation of resources and on social and environmental irresponsibility.

But if all the proposed solutions and action now come down to a mere rebranding of the old system, we are bound to see another, perhaps even greater upheaval down the road. The current model does not need adjusting; it needs replacing. I have no ready-made prescriptions. But I am convinced that a new model will emerge, one that will emphasize public needs and public goods, such as a cleaner environment, well-functioning infrastructure and public transportation, sound education and health systems and affordable housing.

Elements of such a model already exist in some countries. Having rejected the tutorials of the International Monetary Fund, countries such as Malaysia and Brazil have achieved impressive rates of economic growth. China and India have pulled hundreds of millions of people out of poverty. By mobilizing state resources, France has built a system of high-speed railways, while Canada provides free health care. Among the new democracies, Slovenia and Slovakia have been able to mitigate the social consequences of market reforms.

The time has come for "creative construction," for striking the right balance between the government and the market, for integrating social and environmental factors and demilitarizing the economy.

Washington will have to play a special role in this new perestroika ... because America was the main architect, and America's elite the main beneficiary, of the current world economic model. That model is now cracking and will, sooner or later, be replaced. That will be a complex and painful process for everyone, including the United States. ...

In our time, we faced up to the main tasks of putting an end to the division of the world, winding down the nuclear arms race and defusing conflicts. We will cope with the new global challenges as well, but only if everyone understands the need for real, cardinal change -- for a global perestroika.

    Posted by on Saturday, June 6, 2009 at 10:18 AM in Economics | Permalink  TrackBack (0)  Comments (15)

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