Top US economist calls for shift from market fundamentalism

President Barack Obama's economic adviser Lawrence Summers yesterday said called for a move away from market fundamentalism.  ''The world needs to move away from market fundamentalism, '' Summers speaking at FICCI event in New Delhi.
 
Summers, a former president of Harvard University,  added, ''The markets alone can't educate all our children, the markets alone would have been unable to discover quantum physics.''
 
He said while markets do self-equilibrate, there was a fundamental problem in that when the equilibrium was most critical they were least likely to do so. As president Obama's top economic adviser, Summers has been instrumental in steering the US economy's comeback from the devastating financial crisis of 2008, that led to the collapse of big banks sending panic waves through the system.
 
Summers is to step down as the chairman of the National Economic Council at the end of the year and return to Harvard University closing yet another phase in his career studded with distinction and controversy.
 
He told the small audience of CEOs, economists and the media that authoritarian government and authoritarian capitalism would both get increasingly problematic.
 
Speaking about the difficulties involved in regulating markets, Summers elaborated on the ''fundamental difference in the nature of the market system where knowledge is involved and where goods are involved''. He added that defining property rights while dealing with knowledge was altogether more complicated than goods, citing the intellectual property regime that is critical to industries such as pharma, IT and entertainment.
 
According to Summers, the most important phenomena of this year were the striking changes taking place in Asia, particularly China and India.
 
In an upbeat observation about the evolving US-India relations ahead of president Obama's visit later this year, he said that this was going to be president Obama's longest foreign visit. He said when Obama became president, Dr Manmohan Singh was the first head of government he invited on a state visit.''
 
He said work was under way on a programme that would allow more American students to study in India. Replying to a question whether there was a strong impression in certain quarters in the US that the India-US relationship was a one-sided affair in India's favour, Summers said there was no internal conflict within the administration about the US' commitment to the partnership.
 
He said the US saw India as an important partner.
 
Though the dates for Obama's visit have yet to be finalised, he is expected to be in India from 5 November to 9 November, marking it his longest overseas stay in a country as president of the US.
 
Accompanied by first lady, Michelle Obama, this would be his first visit to India.
 
Summers added, the level of cooperation and alliance between the US and India would not necessarily be built solely on interaction of the heads of states but would be more on the basis of engagement of the two nations' societies, companies, youth and non-government organisations.
 
"Both the nations have a lot in common. We have a natural affinity of language, rule of law, domestic-led growth, importance on education, profound tradition of scientific education and innovation. There is a mature understanding in the US that this relationship rests on understanding of two societies," Summers added.