Yves Smith – Naked Capitalism
The US nominee to lead the World Bank, Jim Yong Kim, has come under attack for editing a book called ?Dying for Growth.? It apparently performs the cardinal sins of questioning whether a relentless pursuit of growth produces necessarily produces good outcomes and taking issue with neoliberalism. From the Financial Times:
Some economists are arguing that Dying for Growth, jointly edited by Dr Kim and published in 2000, puts too great a focus on health policy over broader economic growth.
?Dr Kim would be the first World Bank president ever who seems to be anti-growth,? said William Easterly, professor of economics at New York University. ?Even the severest of World Bank critics like me think that economic growth is what we want.?
Dr Kim, who is president of Dartmouth College and a former head of the HIV/Aids programme at the World Health Organisation, was a surprise pick for the top job at the World Bank, which traditionally goes to a US citizen.
Little is known about his views on economic policy because his background is in health. But if he cannot set out a strong vision for how the World Bank will fuel growth, it may boost the campaigns of heavyweight rivals such as Ngozi Okonjo-Iweala, the Nigerian finance minister and former World Bank managing director.
Dr Kim?s book contains several inflammatory lines. For example, the introduction, which he and two other academics co-authored, says: ?The studies in this book present evidence that the quest for growth in GDP and corporate profits has in fact worsened the lives of millions of women and men.?
But colleagues of Dr Kim and officials at the US Treasury said that when taken in context he was simply arguing that the distribution of gains from economic growth decides whether it makes life better for the poorest. They pointed out that such criticisms were widespread in the late 1990s and the World Bank had since changed its practices to take account of them.
It isn?t hard to see how self serving these attacks are. Notice who is making them: economists! When I was at the Atlantic Summit the week before last, Larry Summers made a remarkably transparent ?why you need economists? pitch: all the problems the US was facing (big military commitments, need for more healthcare spending, perceived need to reduce the deficit as a percent of GDP) could all be solved with one magic bullet: growth!
Summers failed to acknowledge two inconvenient facts. First is that the world is running into serious resource constraints, with potable water the most pressing. Second is that economists haven?t done so well with their prescriptions. Advanced and quite a few developing economies have been redesigned along the lines recommended by orthodox economists, and the result has been greater income disparity, lower growth in the US as it abandoned giving wage growth policy priority, and more frequent and severe financial crises. In keeping, France is funding an effort led by Joe Stiglitz, Amartya Sen, and Jean-Paul Fitoussi to come up with a better measure of economic performance than GDP, since it focuses simply on output and misses other important considerations, such as social stability and environmental impact.
But Kim may indeed have demonstrated himself to be unsuited for a top bureaucratic post. Saying the emperor has no clothes will not make you popular with the emperor?s tailors. March 26, 2012