14 - The Policies of Market Fundamentalism

Summary

This chapter covers: a reduction in marginal tax rates and increase in tax competition among countries; sharp reductions in many regulations; generally, the role of the government in the economy is greatly reduced; countries become considerably more open; trade among countries increases; enterprises introduce “just in time” inventory systems because of globalization and the view that needed inputs would always be available when needed; the danger that uncertain events may lead to bottlenecks increases; global efficiency is given more importance than national autarky; some industrial workers lose their jobs, and they find it difficult to move to other jobs; libertarian governments are reluctant to help then with public policies; assumption that the free market will deal with the problem; monetary policy becomes progressively more important than Keynesian fiscal policy; and central banks become more important and public debt grows.