Kuznet's Curve: A Typical example of Modernization's "Pseudo-Faustian" Development

A classical example of the problems that can result from modernism's tendency to downplay the present in expectations of a better promised future is the classic neo-liberal thoery of the kuznet's curve. The Kuznet's theory goes like this: when a country begins developing economically, its income inequality worsens. But after a few decades when the rich begin investing more in the economy and wealth begins to "trickle down," income equalizes and people are more wealthy then they would have otherwise been. The multilateral financial institutions which have adhered to this theory, namely the IMF, enforce structural adjustment progams (SAP's) on heavily indebted third world countries which drastically worsen socioeconomic inequalities. These SAP's, which aim to get the state out of the economy, impoverish the people through a number of measures; one, through price liberalization, or what is known as "shock therapy," in which government subsidies on goods are quickly lifted causing food prices to skyrocket; two, by cutting social programs like health care to reduce the government's budget so as to spend more of its revenues on dept repayments, amd three, through the privatization of state owned companies at bargain basement prices, all of which serve to further concentrate money into the hands of the few. Being that this is the case, the IMF uses the theory behind the Kuznet's curve to legitimize the present so as to quiet dissent. Yet, this promise of economic salvation often can't quiet dissent in and of itself, and so there is one government expenditure which isn't cut, but actually raised, and that is the military. The military's role then becomes to maintain the ever-important requirement for foreign investment--order and stability. This requirement of order and stability has entailed state terror and death squad brutality in order to protect and allow the economic reforms to evolve. In sum, the Kuznet's curve which promises economic salvation if the people are patient enought to wait thirty or so years, and the military which represses dissent to enable the restructuring to carry on unimpeded, illustrates a powerful, yet all too common reality of how modernization, or rather modernist developement and becoming, damages and impedes upon on one's being, which is what Heidegger sought to avoid. And considering that the trickle down effects of the Kuznet's curve have yet to come to many third world countries, especially those Latin American countries who grew rapidly in the 1960's, and considering all the armed oppression which the state carried out on the people to keep the economy stable (in Guatamala it was near genocide) then the kuznet's curve can be seen as what Marshall Bermann defines to be "pseudo-Faustian development." In his analysis of Goethe's Faust, Berman, rather admiredly defines the Faustian development model as one giving "top priority to gigantic energy and transportation projects on an international scale. It aims less for immediate profits than for long-range development of productive forces, which it believes will produce the best results for everyone" (Berman, 74). Although many would critique even the uncorrupted Faustian development as an over-destructive problem, Berman argues that it redeemed itself in a gloriful albeit tragic way by creating something legitimately better for humanity to help society progress. Pseudo-Faustian development, on the other hand, claims Berman, equals the destruction of Faustian development, but with one exception, "it doesn't work" and ends up being "less tragedy than theater of cruelty and absurdity" (Berman, 76). What Heidegger argues and what postmodernists after him will argue is that such modernist development hasn't worked and won't work, that modernization is bound to be a pseudo affair, one done not for the values and visions of the greater social good in the long term but to realize power and profit in the short term. The kuznet's curve, postmodernists would argue is thus another modernist meta-narrative, which subverts the contingency of being with the autonomous rationality of theory.