Monday, June 21, 2010

Five Second ... Expeditionary Economics

"Postconflict economic reconstruction... must become a core competence of the U.S. military. Call this 'expeditionary economics'" opines Carl Shramm in the latest Foreign Affairs.

"It is not enough merely to restore the ... pre-crisis status quo. The economy is often part of hte original problem.... Stabilizing a troubled country requires economic growth [and job security] more than economic stability. ... The U.S. military is well placed to play a leading role in bringing economic growth to devastated areas. It may have little resident economic expertise, but it has both an active presence and an active interest...."

He encourages policies to install US-style, entrepreneurial capitalism in ... areas where military personnel happen to be. While recognizing that India and China are "following a different model" from the US, "in both cases, entrepreneurs are playing an important role...."

He refers to the Washington Consensus as "grand central planning," that in practice helped internationals rather than local firms. "Successful development requires a strategy, not a plan." "The U.S. Army Stability Operations field manual, published in 2009, ...epitomizes the central-planning mindset that prevails in the international development community." The strategy appears to include "direct investment from the US military or other US government agencies" in start ups.

"Growth is not simply a mechanistic composite of statistical indicators. It is in a very real sense an expansion of the imagination. ... Strictly speaking, economies do not grow. It is individual firms within these economies that grow -- or shrink."

Hat tip: Marron

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