Abstract

Marx, Smith - or List?

The deepening global economic crisis-which has now spread from Asia to Russia and may hit Latin America next-has exposed the poverty of the laissez-faire economic approach that the United States has been urging on the rest of the world. Unfortunately, while the economic meltdown of the emerging markets has discredited laissez-faire, it has also exposed the bankruptcy of the conventional leftist and liberal alternatives. Until now, criticism of free-market orthodoxy from the left has been monopolized by democratic socialists and neoliberals. Neither school offers a convincing alternative model of a modem industrial economy. If democratic socialists are still too close to Karl Marx, neoliberals like Bill Clinton and Tony Blair have made too many concessions to Adam Smith. Like post-1945 Keynesians, they refuse to challenge the neoclassical economic orthodoxy that makes the state an umpire rather than a participant in a capitalist economy.