58/YOUR MONEY OR YOUR LIFE!the past year should have put an end to them' (p. 225). Rather than
seeking to 'regulate these markets', there Is a need to 'maximise the
disciplinary power' wielded by the markets. The BIS feels there is no
need for governments and the population to know what is going on
in the markets in order to control them; rather, it proposes the exact
opposite:For the market [note that henceforward the market is endowed
with human attributes] to be able to make correct judgements of
government policy, with neither surprises nor brutal corrections,
it must have full information not only on current developments but
also on the ultimate objectives, mediating factors and economic
mechanisms of the policy being pursued, (p. 228)The report is filled with examples of where 'the market' got it
wrong, but in general duplicitous governments are held responsible.
True, the BIS does occasionally criticise 'the markets' for their poor
judgement.
Take the case of Mexico, for example. 'As for Mexico, over a long
period the markets did not take into account the deterioration of the
country's external position. Suddenly, however, they withdrew, to
disastrous effect not only for Mexico, but also for a number of
developing economies.' The BIS, like the World Bank and IMF, had
sung the praises of Mexican government policy; with respect to both
its supposed ability to resolve the external debt problem and its policy
of economic modernisation through privatisation and deregulation
of the labour market. To add insult to injury, the BIS shows not the
slightest self-criticism and, as if it were some kind of revelation, points
out what any serious observer could have said before the crisis: 'If
Mexico was finally confronted with a number of difficulties, it was
because of rising external debt and decreased international competi
tiveness' (p. 226).
I had pointed this out in no uncertain terms before the crisis broke.
I had shown that debt was increasing in spite of the fact that over ten
years Mexico had paid back much more than its original debt; and
that capital had begun to leave the country beginning in March 1994,
at a time when most commentators were still waxing eloquent about
the 'Mexican miracle' (Toussaint, 1994; see also Husson, 1994).
When the financial crisis hit in 1997, comments from leaders of
the main industrialised countries and the multilateral institutions