International Monetary Fund economists question austerity

A recent article by economists with the International Monetary Fund (IMF) shows that even those who are ideologically committed to austerity are starting to question it.

In an article entitled, Neoliberalism: Oversold? three IMF economists concluded that austerity is causing serious problems. They pointed to evidence that the increase in income inequality caused by austerity is harming economic growth.

IMF questioning even part of the neoliberal agenda is a huge turnaround

The IMF has been pushing the full neoliberal agenda, including austerity, on countries for decades. Even before the term austerity was widely used, the IMF was forcing countries to adopt it. For IMF economists to question even part of that agenda is akin to Stephen Harper saying unions aren’t powerful enough.

Even as they acknowledge the problems with austerity, the IMF economist still show how blindly committed they are to the neoliberal ideology. Chile is mentioned as an early adopter of neoliberal policies, but there is no reference to the fact those policies were imposed by a dictatorship that overthrew a democratically elected government and tortured and murdered thousands of political opponents.

That IMF economists would consider the overthrow of an elected government and human rights abuses in Chile as not worth mentioning is hardly surprising given the IMF’s record. But it makes their comments about the issues with neoliberalism all the more damning.  

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