Free Trade Meets Populism at the IMF

Photo by Daniel Lobo | CC BY 2.0

Photo by Daniel Lobo | CC BY 2.0

I was taken by surprise by the headline of the Latin American Herald TribuneGlobal Elites Insist on Greater Trade Openness to Halt Populism. The article reports on the IMF general assembly held in Washington over the weekend and it shows just how disconcerted the “global elites” are by the rising tide of disenchantment with the neoliberal gospel not only in the Global South, but in the Center (Europe and the United States) as well. But why all the worry? I thought history ended in 1989, the progressive cycle is now ending in Latin America, and globalization was the fulfillment of the World Spirit.

The headline suggestions that the “global elites” are grappling with what appears to be a contradiction. If “populism” (a term that is probably being used here in a pejorative way) itself is anti-free trade, how can more free trade cure the disease that provokes anti-neoliberal populism?

The article quotes IMF head, Christine Lagarde about her prescription for the “mediocre” world economy that is causing the populist disaffection:

“The first priority for inclusive growth is to escape the ‘new mediocre’ of low growth, low employment, and low wages. That means using all policy tools – monetary, fiscal, and structural: to maximize the synergies within countries – and amplify the impact though coordination across countries.”

Of course, “all policy tools” likely refers here to those tools acceptable to the IMF,…

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