World Without Torture: The Responsibilities Of The West
Nilantha Ilangamuwa / Paul Craig Roberts
Paul Craig Roberts was interviewed by Nilantha Ilangamuwa, editor of Torture, a print and online magazine published by the Asian Human Rights Commission based in Hong Kong and the Rehabilitation and Research Centre for Torture Victims in Denmark. Torture: Asian and Global Perspectives is a new initiative which focuses on torture and its related issues globally. Writers interested in having their research on this subject published, may submit their articles to torturemag@ahrc.asia
NI: You worked at the US treasury as Assistant Secretary during the Reagan administration, when the world economy changed towards neo-liberalism, and you are famous for being a co-founder of Reaganomics. How did this happen? What was your contribution to changing the model of world economy?
PCR: Reaganomics is a term the media attached to an innovation in economic theory and policy known as supply-side economics. Supply-side economics is not an ideology and it is not neo-liberalism.
I do not think that the Reagan administration changed the model of the world economy or that the administration thought of itself as neoliberal. What the Reagan administration did was to change the macroeconomic policy that had prevailed in the post-war English speaking world. That policy, known as Keynesian demand management, relied on government fiscal policy and monetary policy in order to maintain full employment and low inflation. If unemployment was the problem, government would enact a budget deficit and the central bank would expand money and credit. The monetary and fiscal stimulus would boost aggregate demand, and the increased spending would raise the level of employment. If inflation was the problem, the government would enact a budget surplus and the central bank would reduce the growth rate of money and credit.