Money mavericks: economic thinkers who've dared to challenge the dominant view

New Internationalist, Jan-Feb, 2000

JOHN MAYNARD KEYNES

LIFE AND TIMES Cambridge-educated economist and member of London's snooty Bloomsbury group in the 1920s and 1930s. Known for an astringent wit and biting intellect. His General Theory of Employment, Interest and Prices (1936) is probably the single most-influential work on economics this century. Widely-published academic and key figure behind the postwar international financial system hammered together at Bretton Woods, New Hampshire in June 1944.

MAIN IDEAS Admired and feared the power of the market system. Argued that capitalism would founder on its own greed and self-destruct. Instead he suggested that the state rein in market excesses and the capitalist system's tendency to increase economic inequality. Also advocated government spending to stimulate the economy, increase employment and `prime the pump' of consumer demand. His original Bretton Woods plan called for fixed exchange rates, tight controls on investment capital and relatively open trade in goods. The IMF was to be a true `lender of last resort', managing a global system where capital flows were minimal and currencies easily convertible.

LEGACY Keynesian economics dominated the postwar era until 1973 when the US sabotaged the fixed-rate exchange system by allowing the dollar to float. Since then the volume of unregulated investment capital has exploded -- bringing instability and financial collapse in its wake.

JEFFREY SACHS

LIFE AND TIMES Not yet 50, Sachs's resume runs to a dozen pages. The agency that books his speeches calls him `one of the most influential economists of his generation'. Director of the Center for International Development at Harvard. Top-level consultant to governments in Latin America, Eastern Europe and, infamously, the former Soviet Union. Has also worked for the IMF, the World Bank, the OECD and the UN Development Programme.

MAIN IDEAS `Global capitalism is the most promising institutional arrangement for worldwide prosperity the world has ever seen.' Chief advocate of economic `shock therapy' -- a disastrous plan to remake Russia's moribund, Soviet-style `command economy' into free-market system based on the American model. Recent about-face as trenchant critic of IMF solution for economic recovery in the Third World. Says the IMF is `deeply flawed', `secretive', `arrogant' and `not technically up to the task'.

LEGACY Spectacular failure of Russia's economic `transition' -- one of the greatest social and economic disasters in history (70 per cent of Russians now live below the poverty line). Has hardened his critique of the IMF and unregulated investment since Asian financial crisis -- blaming rich-world governments for most of the mess. Says it defies logic that `1,000 economists in Washington control the economic conditions of 1.4 billion people in 75 developing countries'. Advises poor countries `not to wait for a new financial architecture' but to limit short-term borrowing by immediately adopting controls on capital inflows.

GEORGE SOROS

LIFE AND TIMES Patrician financier, philanthropist and one of world's richest men (estimated wealth $5 billion). Born 1930 in Budapest, later emigrated to Britain. Studied at the London School of Economics and came under influence of the humanist philosopher Karl Popper. Moved to US in 1956 where he developed the `hedge fund'. Launched Quantum Fund in 1969 in tax-free island of Curacao. Made a billion dollars betting against the British pound in 1992; six years later lost $2 billion in Russia. His Open Society Institute donates millions of dollars to foster democratic political and social reforms.

MAIN IDEAS Knows capitalism intimately and is not optimistic about what he sees. Blames `market fundamentalists' for reducing human and social relations to the common denominator of money. Argues that unregulated markets, left alone, ignore common interest in favour of individual self-interest. Says this is recipe for social disintegration and political collapse `which may sweep away the global capitalist system itself'. Instead advocates `global system of political decision-making to stabilize and regulate a truly global economy'.

LEGACY Success as a capitalist has added weight to critique of economic globalization. Particularly agitated about the `inherent instability' of financial markets. Calls for national controls to dampen speculation, yet his own fortune has been built on speculation in those same markets. Surprisingly also calls for tough regulations on hedge funds and bank lending, insisting that creditors `take the hit' rather than be bailed out by public funds. Biggest legacy may be the millions he channels towards progressive causes.

WALDEN BELLO

LIFE AND TIMES Soft-spoken Filipino economist. Spent years in exile in the US as a critic of autocratic Marcos regime. Worked as researcher, activist and journalist documenting dark side of much-heralded Asian `tiger economies'. Eventually served as Director of the Institute for Food and Development Policy in San Francisco before resettling in Asia as Professor of sociology and public administration at the University of the Philippines and Co-director of the Bangkok-based policy think tank, Focus on the Global South.