8/12/2019 [1988] Andr Gunder Frank. A Modest Proposal (In: Economic and Political Weekly, Vol. 23, n 6, pp. 246-247)

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A Modest ProposalAuthor(s): Andre Gunder FrankSource: Economic and Political Weekly, Vol. 23, No. 6 (Feb. 6, 1988), pp. 246-247Published by: Economic and Political WeeklyStable URL: http://www.jstor.org/stable/4378074

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8/12/2019 [1988] Andr Gunder Frank. A Modest Proposal (In: Economic and Political Weekly, Vol. 23, n 6, pp. 246-247)

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wili be final. For there is no proviso thatthe report of the inquiry must be submit-ted for public discussion before an orderis promulgated.And today especially afterthe Supreme Court judgment on the

banned drug case, which has all butdisowned the court jurisdiction in mattersof policy regarding health and drugsissues, there appear to be no forumsavailable for citizens' appeal.

A Modest ProposalAndre Gunder FrankAccentuate the Positive, Eliminate the Negative, and Don't Messwith Mr Inbetween. We can apply the positive and negativemaxims of this American song to the world economy by followingthree simple practical rules.ACCENTUATE the Positive, Eliminatethe Negative, and Don't Mess with Mr In-between. The New International Econo-mic Orderthe third world clamoured forin the 1970shas proven to be a chimericalsnare and delusion. So why not be prac-tical visionaries and return to some triedand proven ways of the Old InternationalEconomic Order,which worked since thisAmericansong was popular at the end ofWorld War II. It had shortcomings, butmanyless than the (dis)order of the 1980sso far. If the Black Monday October 19,1987 stock market crash is a milestonesignpost to the brink, a bold step back-wardto the known in time could save ninein the abyss of total confusion worseconfounded.We can apply the song's positive andnegativemaxims to the world economy byfollowing three simple practical rules:(1) A Stop Loss/Least Worst Rule toeliminate the existing, and/or prevent thepossible, worst damage. (2) Permit stoploss payments from the most damaged tobribe those who benefit from the worstto (agree to) eliminate the damage or pre-vent the threatened. Domestically, bribeor even blackmail payments can be nego-tiated through American style log rollingand pork barrel politics to shift distri-butive(in)justices around.Internationally,we can use the favouriteAmerican foreignpolicy instrument of (3) linking stop lossbribe/blackmail -payments into a multi-lateral worldwide chain or system topermit the operation of rules (1) and (2)to eliminate negative damage and therebyto maximise positive benefits all aroundthe world.The result would be a worldwidepositive sum game to generate as yet in-calculable positive gains. We could stoploss/eliminate or contain huge negativeeconomic, social, and political damagesfrom all wasteful farmsubsidies and manyarmsexpenditures and positively expandexports and safeguard financial marketsin the industrial west. Burgeoning foreigndebts, economic depression, and some

hunger and political instability could becontained in the third world south. Dis-comforts from the still necessary econo-micperestroikarestructuringand politicalglasnost could be reduced in the socialisteast. The direct income benefits would bemore than large enough to finance aWorldBank type emergencyslush fund tocompensate (buy/bribe off) any possibletransitional, sectoral or local losers. Anyadministrative osts to run the game couldalso be paid out of the same fund, andbesidesexisting institutions ike the UnitedNations, World Bank, InternationalMonetary Fund, etc, could be recycledtooffer their servicesfor something as usefulas making this proposal work by pro-viding places to calculate and negotiatecost/benefit and bribe/blackmail pay-ments. Basically, however, once set inmotion, this game would be automaticallypowered by self (group) interest alone.The game works like this. Let's startwith any major negativedamages, liketheEuropean Common Agricultural Policy(CAP) or third world debt and ask whosuffersenough fromthese damages to paybribes to eliminate them. CAP and otheragricultural subsidy programmes in theUnited States and Japan impose enor-mous damages on westernconsumers, tax-payers, governments, the EEC (totteringon the brinkof bankruptcyand break-upfrom CAP costs), and competing agri-culturalproducersand their governmentsin the south. All cajoling and tinkeringwith CAP so far has failed to control, letalone eliminate, the damage.What to do? Simple. Let any of these,but particularly the most damaged inArgentina and elsewhere in the south,make stop loss bribepayments to affluentwestern (including Japanese) farmers toabandon price subsidies and accept in-come payments from the poor instead.Indeed, recently impoverished Americanfarmersshould also be permitted to bribeEuropean and Japanese ones. Stop losspaymentsby poor farmerswould substan-tially reduce their poverty by eliminating

the damage of unfair and crippling com-petition of heavily subsidisedrich farmerselsewhere.What to do about farmers and theirvotes? Simple. Encourage European andJapanese farmers financially and other-wise to protect the environment, providefor garden plots and/or domestic tourismon the land for urban yuppies, and in-crease the supply of land for residentialconstruction at lower prices especially inJapan. Let farmers receivetheir price: forGermans, four Mercedes for those withtwo, at least one Mercedes for those nowdeprived of any; for others similarappropriate/negotiated rewards,and forall entitlementcoupons for severalmonthsannual vacation in the sunny south, thelatter would thereby also get some of itsforeign exchange payments back. Rightwing political parties in the west could becompensated for possible losses of theirfarmvote and/or their ruraloverrepresen-tation by an automatic 5 per cent or otherequivalentaddition to their counted votes.Left parties dependent on labour voteswould be compensated through lowerfood prices and higher employment andunion membership in Mercedes factoriesand export industries (see below).What to do about the poor southernand American farmers that do not nowhave the mon,y to pay off westernfarmers?Simple.Letthe Japaneseadvanceit to them out of their surplus. Whyshould the Japanese wish to do so?Because Japanese industry s moredepen-dent than anyone on exports to the southand the US. Therefore, the Japanese (andothers) should be allowed to pay toeliminatedamages to theirexport marketsby permitting the south again to increaseits own foreign exchange earnings andimport capacity from farm and otherexports to the west and to stop the thirdworld and farm debt service drain. Tradeoffs can balance costs and benefits withinJapan and other countries.Elimination of farm subsidies in thewest would remove one major constrainton production,exportsand earnings n thesouth; and elimination of the third world(and perhapsAmericanfarm) debt servicewould remove the other. It would bewasteful to use Japanese surplus transfersto the third world, as oft proposed, onlyto permitthe latter to service theirforeigndebts. By invoking our multilateral rulewe can eliminate third world debt servicealtogether (instead of just financing itdifferently) and wa can eliminate thedamages from CAP and other farm sub-sidies to boot as we have seen at the sametime. Who then would service the interestpayments on the third world (and farm)debt to the western banks? Simple: Thosewho have the greatest interest in keepingthe banks from going belly up and the

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greatest fear of any negative threat ofpossible worldwide financial instability.Their respective governments and/orcentral banks would wish to do so,especially in the United States, whosebanks are the most exposed. Of course,government/central bank pay offs woulduse the magic of the market discountedrates on the banks' paper;and they wouldfinance them with part of their budgetarysavingsfrom the elimination of farmsub-sidies. That way,the westerngovernmentsand central banks will count doublepositive gains on payments for both farmand bank finance.Our positive sum game would benefithundredsof millions around the world byeliminating the millstone of third worlddebt and farm subsidies, and theirthreatsto the world financial system, the survivalof the EEC common marketand to liveli-hood in Japan to boot. Indeed, thejackpot opportunities in this game wouldbe so great that others may wish to playan active hand as well. For instance, dearMargaret Thatcher would give almostanything to get rid of British CAPpayments and import restrictions. In ourgame, she might well find advantage intrading her Falklands card to Argentinafor a Malvinas one, which would in turngive the latter additional capital, perhapsirrational but psychological, to pay offEurope's common market farmers. Theother European governments and theEEC Commission, of course, would alsowish to support Argentina's wishes thenext time around.

Our three rules to accentuate thepositive and eliminate the negative can beappliedeverfurtherto expandthe positivesum game. Existing westernmountains ofpowdered milk and butter, grains andother agricultural tocks can be sent gratiswithout spoiling the market to forcstallimmediate starvation in Asia and Africaand improve diets in eastern Europe andthe Soviet Union. Presentbeneficiaries ofstorage, processing, transport and otherexpenditures on surplus farm productscan be compensated by payments to shipthis stuff to the south and east instead.It should be possible to arrange othermultilateral payments to permit the realor potentially damaged to pay bribes tobeneficiaries to eliminate damages ordangers.The same principle can be extended tointernational politics and the eliminationof other damages and fears, rational orirrational. The Soviet Union fears SDIStarWars; et them pay to have it neutra-lised. The west fears Soviet nuclear andconventional military strength; let thempay to have the Soviet Union reduce it.The United States can share their SDIresearch and even deployment with itsallies and (they) with the Soviet Union.

Western Europe can send capital andtechnology to eastern Europe, which canuse it to produce cheap manufactures forthe Soviet Union, which can pay for thelot with increased thermal and reducedmilitaryenergy. The French. and others)are petrifiedby fear of a reunitedGermanyand/or a new Germano-Soviet RappalloRapprochement?So let the French pay tore-establish heir pre-WorldWarI favouredrelations with Russia and interwar rela-tions with Poland. The Balkan peoples aremost scared of the Russians and theBalkanisation of each other? Let themfiguratively resurrect poor ArchdukeFerdinand and functionally reconstitutethe old order of the Austro-HungarianEmpire (how many million lives would itssurvival have saved?). The Greeks andTurks eel most threatenedby each other?Let them make multilateral bargainsalsoinvolving ethnic Greeks and real Turks nCypress and nominal ones in Bulgaria,not to mention ties with Russians,Americans, Germans, Arabs and others.The more interest groups play thismultilateral game of barter/blackmail

payments, the better is the damage con-trol; because more interests are mobilisedand interrelated o stop loss eliminate thenegative. NIEO would remain as illusoryas ever.However, we would at least havetaken practical steps (back) toward an(old) economic (and political?) order,which we know from experience to work.We would have effected an enormouspositive increase in world real income(through oweragricultural, ood, defenceand other costs and increasedagriculturaland industrial production, employment,income and exports). Wecould positivelyincrease economic and political securityin the face of threatening internationaleconomic breakdowns,especiallysincetheBlack Monday stock market crashes.Thus,,by elimninatinghese new negativeswe would be accentuating he old (relative)positives, albeit without Pax Americana.Not even this modest proposal can offerheaven on earth or salvation for itspoorest inhabitants. Moreover, to imple-ment our modest proposal, we must ofcourse stop messing about as heretoforewith the half way houses of Mr Inbetween.

INSTITUTE F ECONOMICGROWTHannounces

DIPLOMA OURSEin

Development Planning nd PolicyIstAugust-15thDecember 1988(Sponsored by the PlanningCommission,Governmentof.lndia)

Eligibility Officers of the Central,State/UTgovernmentsand ofAutonomous public institutions,nationalised banks,NABARD, BI, ublicundertakings re eligible to apply.An applicantshould be a graduate; hould not be morethan 40 years of age on 1st August 1988; should haveat least2 years'experience of working ndevelopmentalor planningcapacity.

Sponsorship Governments nd eligiblepublic institutionsan directlysponsor their officers for the course.Seats Available 20 of which 10 are residential.CourseFee Rs. 4500/- inclusive of computer time use.Boarding Lodging Rs. 4000/- (approximate): ptional.ChargesNote that the lastdate for receivingapplication ncluding hat for thesponsoredcandidates is 31st March,1988.Prospectus of the Diploma Course available on request. Write to the CourseDirector,DiplomaProgramme,nstitute f EconomicGrowth,UniversityEnclave,Delhi-110 07.Address the application o the Director, nstitute f EconomicGrowth,UniversityEnclave,Delhi-110 07.

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