Brad DeLong
Thu, 14 Sep 2000 20:31:07 -0700
>I have never seen as concise description of social democracy. I like Alice >Amsden's refutation of your perspective -- especially her praise of >getting prices >wrong. > >Brad De Long wrote: > >> >> in a mixed economy, the government >> should be used to redistribute income and the market used to allocate >> resources; to get things backward--as Peron did, using the government >> to allocate resources and regulating market prices to redistribute >> income--doesn't work. >> > >-- >Michael Perelman Since you have read Amsden, you know that the policies that she recommends are the complete opposite of those that Peron pursued. Amsden believes in subsidizing exports. Peron taxed them. Amsden believes in making it easy for export-oriented companies to acquire the hard currency they need to buy capital goods. Peron made it impossible for export-oriented companies to purchase foreign-made capital goods. Amsden believes in an undervalued exchange rate to promote exports and increase employment. Peron believed in using exchange controls to maintain an overvalued exchange rate to maximize terms of trade. In my view, there is a lot of truth in Amsden's "getting prices wrong" position. But as you know, her judgment of Peronist policies is much, much harsher and much, much more negative than mine. Brad DeLong