The new model is . . . capitalism
We keep reading pundits opine that neoliberalism is passé, and that we need a new model for the 21st century. So what is the new model being adopted in Ethiopia? Here’s the FT:
Ethiopia aims to complete a multibillion-dollar privatisation of its telecoms sector by the end of this year, followed by a sell-off of stakes in state energy, shipping and sugar companies, according to the new prime minister Abiy Ahmed.
The government also plans to launch a domestic stock exchange in 2020, part of a gradual but decisive shift towards economic liberalisation in the fast-growing east African country of 105m people.
“My economic model is capitalism,” Mr Abiy said in an interview with the Financial Times, conducted in his refurbished headquarters in Addis Ababa. “If you give me $100bn now, I can’t use it. There is not only money, there is talent and experience. That’s why we need the private sector.”
Don’t worry socialists, Marx assured us that capitalism is just an unfortunate phase that Ethiopia must pass through before they achieve the glories of North Korea, Cuba and Venezuela.
PS: Off topic, I have a new piece in The Hill defending my Fed accountability and transparency proposal.
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24. February 2019 at 09:52
The only problem with capitalism is that it needs to further evolve to fit the growing needs of a knowledge based economy. We need valid markets for diverse forms of time value (in other words not just limited sets of skills) so that human capital can finally be utilized in ways that create good deflation for services, and expand the marketplace for time based product.
24. February 2019 at 16:38
Scott,
Thought the article in “The Hill” was good. I would have been tempted to point out more vehemently how bad policy is when you get 10% unemployment and 0% inflation, but overall I thought it was a very well crafted article.
24. February 2019 at 16:40
Scott,
And BTW… why are writing articles in The Hill if your interest in monetary policy is purely academic. 🙂
24. February 2019 at 17:43
The only problem with capitalism is the Land Question. You’d probably disagree with me on this Scott, but I’m convinced that amassing a large amount of physical space should be considered monopolistic and can be suppressed without devastating the economy.
24. February 2019 at 18:30
About new model: in eg Asia it seems that everyone who can afford a welfare state eventually votes for one. And that’s of course mostly the countries made rich by markets.
Let’s just hope that by and large they pick the more sensible parts. (Even though Hong Kong’s minimum wage doesn’t portend well.)
24. February 2019 at 20:54
Regarding Fed oversight, the real legislative problem is that what you’d want is nowhere in the radar of the public. The typical voter that wants more oversight is instead a conspiracy theorist that says that they are naturally distrustful of “international banks”, and thinks that the Fed is covertly funding wars. Yes, I’ve had people tell me said things: They also call certain people “urban”.
As long as such cuckoo ideas are popular, the best case of the fed is for the public eye to ignore it.
24. February 2019 at 20:56
The only problem with capitalism is that it’s not obvious how or why it works and it is less intuitively appealing to most young people than socialism and always will be.
2. March 2019 at 16:25
And what will happen if telecoms are privatised?