Latvia’s Economic Disaster as a Neoliberal Success Story: A Model for Europe and the US?
By Jeffrey Sommers and Michael Hudson. Michael Hudson was Professor of Economics and Director of Research at the Riga Graduate School of Law. He is a research professor of Economics at University of Missouri, Kansas City. His latest book is Finance Capitalism and Its Discontents. Jeffrey Sommers is visiting faculty at the Stockholm School of Economics in Riga. He is an Associate Professor of Political Economy & Public Policy at the University of Wisconsin – Milwaukee. The authors have advised Latvian politicians and government officials up to the Prime Minister level. Both have published extensively in the Latvian press.
A generation ago the Chicago Boys and their financial supporters applauded General Pinochet’s anti-labor Chile as a success story, thanks mainly to its transformation of their Social Security into Employee Stock Ownership Plans (ESOPs) that almost universally were looted by the employer grupos by the end of the 1970s.
Today’s most highly celebrated anti-labor success story is Latvia. Latvia is portrayed as the country where labor did not fight back, but simply emigrated politely and quietly. Can this really be a model for the United States or Europe’s remaining social democracies? Or is it simply a cruel experiment that cannot readily be emulated in larger countries un-traumatized by Soviet era memories of occupation?
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