Thomas P.M. Barnett :: Weblog

■"Economic Rally For Argentines Defies Forecasts: After Record '01 Default; Ignoring Orthodox Advice Results in 8% Growth for 2 Years Running," by Larry Rohter, New York Times, 26 December 2004, p. A1.

People who hate PNM often like to describe the IMF and World Bank as agents of great evil, thus my praise for and reliance on them regarding the spread of rule sets within the global economy is described as a sort of economic "empire" by which the Core plots to keep the Gap poor and deny New Core powers a fair playing field.

This is what I wrote in PNM on page 131:

Of course, always trying to play by globalization's evolving rule set does not guarantee success, it just makes success more likely—on average. But when states do follow the rule sets adequately and their economies still end up being abused in the global marketplace, as in Argentina or Brazil in recent years, then it is incumbent upon those international organizations and the largest economic powers that dominate them to adjust the rule sets accordingly. That is simply the squeaky wheel asking for grease, and that has to be allowed.

When Argentina comes out of it's '01 bankruptcy by following some IMF advice and outright countermanding large chunks of it, it is simply helping us refine and redefine the range of the A-to-Z system for processing economically bankrupt states. That rule set is logically under constant revision, as we build up experience over time. Since the data pool is very small, each new experience moves the pile of our understanding considerably.

Does this prove the IMF is bad and wrong? No, it simply proves it's not omniscient and learns like everybody else. The IMF is nothing more than an enforcer of conventional wisdom, which is nothing more than past experiences codified into coherent understanding. That understanding is subject to constant revision, and—not surprisingly—the main sources for that revision process will be New Core states, because in their successful transition from Gap to Core, they literally rewrite the book, adding new chapters of understanding.

So expect New Core states to "defy forecasts" and conventional wisdom regularly. This isn't a sign of the Core's stupidity or ignorance, but a mechanism by which the Core economic rule set improves systematically over time.

The entire Core benefits from Argentina's experience, and its willingness to forge new rules. America is hardly the only source of new rules, and over time, it will be only one of many such forces within the Core.