This commentary was originally published in Pambazuka News [http://pambazuka.org/en/category/comment/55785]

Many aspects of today�s global economic crisis are yet to be understood and therefore require research and debate.

Among serious people, however, a few critical other aspects are clear enough to permit vital intervention. In particular, two tentative conclusions must be spared fruitless debate that will wreck, if not snuff out, lives in places like Africa by delaying much needed action.

The first conclusion is that this economic tsunami is very dangerous - big, damaging, and worsening fast.

The other is that it is manmade - a failure born of consequential human errors. What just failed is a very specific ideology; a slim bundle of certain precise notions and recommendations for running countries politically, economically and therefore socially. After flying high for at least 40 years, that ideology�s crash became undeniable in the US in September 2008 just as Senators McCain and Obama turned into the presidential race�s home stretch. In its rise and sudden fall, the ideology mimicked the subprime loans that triggered the fall: wildly popular for awhile then unmasked as toxic. Rooted in political economy, the ideas tap into legitimate public frustration with bureaucracy and politicians; the result is that the ideology�s intense hostility toward the state, ie toward government, is unmistakable. In the UK and the US these notions took off thanks to two eloquent and gifted politicians, Margaret Thatcher and Ronald Reagan. What made the dogma especially popular was Thatcher�s and Reagan�s pithy, bumper-sticker phrasing: �Government is the problem. Keep it small, out of our lives and out of the market. Give private enterprise a free hand. End all deficits. Deregulate. Privatize. Cut taxes. Cut spending.�

This ideas package has many names. Neoliberalism, the Washington consensus and laissez faire capitalism are three. With their views colored by the ancient but still consequential Paris-London hyper-rivalry, the French and other skeptical Western Europeans love calling it the Anglo-Saxon model of capitalism.

If it has many names, neoliberalism has even more critics. Recently, the critics� diagnosis of the crisis� causality was explained, quite brilliantly, by Mikhail Gorbachev. The critics� take on laissez faire? Snake oil. Fraudulent dogma.

Whether snake oil, Anglo-Saxon conspiracy or something altogether wonderful, laissez faire roared out London and Washington (especially after the Soviet Union disappeared in 1989 and socialism was sent reeling) to dominate most of the globe: China, Africa, Southeast Asia, Latin America and the Caribbean, Eastern Europe, Russia.

In China, the Deng Xiaoping�s government, in 1978, made a deliberate, voluntary, sovereign decision to embrace neoliberalism.

Africa�s embrace, in contrast, has been anything but voluntary or sovereign. Rather, the Washington consensus has been has been forcefully rammed down screaming African throats by the continent�s self-described �development partners.� The force-feeding and protests reached a crescendo in the 1980�s once Reagan arrived in the White House.

In this African ramming, the head of the ram-rod has been none other than the IMF [International Monetary Fund]. It, among Africa�s development partners, has been the most relentless in demanding the adoption of laissez faire. (Has peddled the snake oil most heavy-handedly, if you like).

Exhibit A is the Fund�s ruthless war on budgets for free education, an unambiguous investment, across Africa. One predictable result? The street children swarming African cities today. Consider Ghana. For just under 20 years starting in 1981, Jerry Rawlings ruled Ghana with an iron hand. After initial fruitless flirtation with Cuba and the Soviets, he turned hard to the West. The asking price was that he swallow neoliberalism, hook, line, and sinker. Education in particular was devastated. When University of Ghana students protested, troops and police assaulted them and closed the campus, and Blaine Harden, a Washington Post reporter lambasted the students. The IMF�s reaction? It dubbed Rawling�s Ghana its �star pupil.� Today, the African city most overrun by street children may well be Accra, Ghana�s capitol.

Exhibit B would be the Fund�s pitiless imposition of massive retrenchment (translation, firing) of civil servants. Exhibit C? The many IMF-riots that erupted across Africa and the responding, brutal crack-downs by IMF-backed dictators. The Fund�s zealotry in privatizing every state enterprise it could find in Africa is Exhibit D.

One could produce many more exhibits showcasing policies (on water, health care, investment regimes, free trade, imports, exports, currency devaluation, debt, taxes, etc) that the IMF dictated across Africa and the protests they unleashed, but you get the picture. And that picture is crystal clear: The IMF has been the most ardent true believer in (and the most uncompromising imposer of) laissez faire, the dogma whose catastrophic failure is roiling Africa and the globe right now.

Since today�s crisis resulted from human mistakes, the solution must lie in learning�acknowledging, re-thinking and swiftly correcting the errors.

Commendably, major global role-players have started down this road and are publicly recognizing failure. While attending the 2nd April London G20 summit, French President Sarkozy observed, �Since Bretton Woods, the world has been living on a financial model, the Anglo-Saxon model . . . Clearly, today, a page has been turned.� Two weeks earlier, his host, PM Gordon Brown had made the same point: �Laissez-faire has had its day. People on the centre-left and the progressive agenda should be confident enough to say that the old idea that the markets were efficient and could work things out by themselves are gone.�

And serious American leaders have kept pace with the Europeans and others. In his most authoritative speech, the 20th January inaugural address, President Obama announced a new ideological era, �The question we ask today is not whether our government is too big or too small, but whether it works. . .�

Nor is it just politicians. In October 2008, Alan Greenspan, arguably America�s most celebrated central banker, confessed publicly to Congress, �Yes, I�ve found a flaw [in laissez faire dogma] . . . I�ve been very distressed by that fact.� On his part, staunch conservative economist, Professor Gary Becker, the 1992 Nobel economics laureate, wrote in March 2009, �The failure of financial innovations such as securities backed by subprime mortgages, problems caused by risk models that ignored the potential for steep falls in house prices and the overload of systemic risk represent clear market failures . . .� And British business titan, Martin Sorrell, showed on 9th April 2009 that he is clear-eyed: �Anglo-Saxon liberal market economics is dead and globalisation discredited. Even capitalism itself, it seems, is on life support under the watchful eye of the prison hospital staff.� Finally, with the 7th April speech in Washington DC by Lloyd Blankfein, the head of Goldman Sachs, even Wall Street financial gurus have begun inching toward contrition and confession.

What about corrective measures in the US? The $750 billion TARP was the first step in what seems a long open-ended American retreat from laissez faire dogma. With TARP, the US administration decisively violated the laissez faire taboos of �no government economic role� and �no deficit spending� and began rescuing distressed financial corporations. The rationale is compelling. Saving the financial system prevents the collapse of America�s economy, and with it, the entire socio-political system. The president who committed this giant heresy? None other than Mr. Dead Certain, George Bush 43, the self-described �ideological son of Reagan.� Barack Obama 44 has not only continued Bush�s TARP, he has added on three other humongous market interventions of his own: stimulus, bank bailout and financial re-regulation. Here is the most astonishing aspect of Washington�s decisive rejection of neoliberalism: The American people approve. As a result, Reagan�s disciples and heirs have not convincingly argued against, much less blocked, these swift federal government interventions. And intervening has increased President Obama�s popularity.

To my mind, the words and actions of all these global political and economic leaders combine to deliver one simple lesson: in finding solutions to the crisis, change of heart, discarding of stale ideology and fresh thinking are what is required.

This point is vital so I will rephrase for emphasis: If one is serious about weathering our man-made economic tsunami, one must start in the mind, by recanting and discarding those discredited economic dogmas that got us in trouble.

Has the IMF done such recanting? Has the enforcer of failed laissez faire dogma across Africa acknowledged, re-thought and began swiftly correcting its errors? The public evidence says it has not. Specifically, the Fund has not admitted mistakes and has not done any soul searching in public. It most certainly has not publicly rejected toxic neoliberal ideology.

This failure to recant publicly is why the April 2 decision by the G20 to triple the IMF�s finances is so dangerous. Especially for Africa.

�When in a bad hole, stop digging.� This aphorism, beloved in Washington, is appropriate here. Africa is in a terrible neoliberal hole dug for decades by the IMF. Yet the G20 seems to be asking the Fund to dig three times more furiously. Why not stop digging?

There is a second way to visualize the danger Africa faces. Think of the Fund as a vehicle loaded with a vital cargo of, among others, African economies and therefore lives. The G20 has just decided to triple the vehicle�s engine power. However, the Fund is still headed down the same wrong laissez faire path. This is a boulder-strewn path ending at the bottom of a steep ravine. And it is the very path that Bush, Obama and Congress have all scrambled to turn the US economic vehicle away from. Question: What prevents the IMF from doing three times the damage that decades of its force-fed policies have already done to Africa?

Some might answer thus, �Last month, March 2009, in Washington, the Fund adopted important changes.� My response: True enough. But though welcome, those reforms were confined to governance and marginal easing of harsh loan conditionalities. As the Fund�s own 24th March report noted, �Governance reforms are necessary but not sufficient to enhance the Fund�s legitimacy, effectiveness and accountability.�

It is therefore astounding that the three extra sets of reforms that the report called for (quota adjustments, financial resources increase, and enhanced expertise) made no mention of re-thinking the Washington consensus. Clearly, the changes already made, as well as the new ones requested, do not approach the deep IMF philosophy change that we need.

A second answer might claim that the Fund abandoned laissez faire before last month�s governance reforms. If so, other questions gush out: Precisely when and where did the IMF discard the Washington consensus? Why? What reasons were adduced? What economic philosophy has replaced neoliberalism within the IMF? How, by whom and through what process was this new ideology arrived at? And what input did the street children and other poor Africans have?

These questions are matters of life and death for Accra�s street children, especially the pubescent girls, and for a billion poor Africans. I am convinced they would have demanded straight answers, had they had a voice in London on 2nd April. But they did not. So the G20 did not get them the needed answers.

Consequently, they must now look to Washington DC where three opportunities are coming up. First, Africa�s friends must use the the IMF�s spring meetings to get the Fund to declare whether it still believes in the Washington Consensus.

The next opportunity will be on Capitol Hill. That is where Congress will hold hearings on giving the IMF America�s share: a $100 billion line of credit. This places special responsibility on New York Congressman Gregory Meeks, who will chair the initial subcommittee hearings. He and a few other colleagues (John Boehner, Steny Hoyer, and Barney Frank) have an unprecedented opportunity to help Africa by extracting straight, unambiguous answers from the IMF.

Should Congress too fail, President Obama would become Africa�s last hope in making the IMF talk straight.

So Mr. President, respectfully, before handing over the $100 billion line of credit to the IMF, please consider saying to the Fund: �I do believe in capitalism. And I did call Reagan consequential. Even so, I have turned away from Reagan-initiated laissez faire neoliberal capitalism. Witness my stimulus, my bank rescue plan and my re-regulation of the financial system. As I said in Denver and elsewhere, those stale dogmas have landed America and the world in a very bad place. Why then are you still wedded to laissez faire? You are not? Great, what have you replaced it with? What economic philosophy do you believe in now?�

Those few words of yours, Mr. President, would become strong rope ladders, sooner rather than later. And I guarantee you many, many street kids now languishing in Kibera, in Accra, and elsewhere would use them to climb out their African slums. They (and I who very narrowly missed becoming a street kid) would be eternally grateful. Many thanks.

BlackCommentator.com Guest Commentator Nii Akuetteh is the former Executive Director of Africa Action and before that of OSIWA, Nii Akuetteh currently analyzes Africa issues from Washington DC. Click here to contact Mr. Akuetteh.