Monthly Archive for September, 2010

China and India: Those Two Big Outliers

Published on September 24, 2010 in News and Newsletter. 0 Comments

kumarfig1From Jesus Felipe, Ustav Kumar, and Arnelyn Abdon, in Vox

The emergence of China and India on the world stage has aroused much interest. As in many other areas of (policy) economics, just how these countries “did it” and the lessons for other countries is something economists either do not know, do not agree on, or both.

In the case of China, the literature seems to agree that capital accumulation, industrialisation, and export-led growth were key factors after 1979. Economists like Gregory Chow (1993) or World Bank chief economist Justin Lin, argue that, before 1979, Chinese central planning was a failure, economic performance was poor, and “haste made waste” (Lin 2010).i

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Busted: Stories of the Financial Crisis

Published on September 22, 2010 in News. 0 Comments

black-fridayFrom Joshua Clover, in The Nation

For all the fame surrounding Milton Friedman, Ayn Rand and Alan Greenspan, their contributions to a political economy of modern capitalism are minor in relation to those of Friedrich von Hayek, a founder of the Mont Pelerin Society and prophet of the “price signal.” A striking and original intellect, Hayek argued that something’s market price is not simply what it would cost you but a kind of information used to allocate goods and services most efficiently within the social matrix. Because centrally planned economies lack a mechanism to price commodities correctly, they are unable to put things where they need to go. Individuals wouldn’t get what they desired; the larger economy would be unable to balance production and consumption, supply and demand. Shortages would appear cheek by jowl with surpluses. This would have disastrous and eventually fatal consequences, not only for the market but for the lives of its subjects.

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The Enigma of Capital, and the Cries of Capitalism, By David Harvey

Published on September 20, 2010 in News and Newsletter. 0 Comments

4962512_363007tBook Review by Andrew Gamble, in The Independent

Andrew Mellon, the US Treasury Secretary during the Great Crash of 1929 and one of America’s richest men, observed that in a crisis assets return to their rightful owners. Nothing much has changed. As the present crisis has mutated from a banking crisis to a fiscal crisis and a sovereign debt crisis, bonuses continue to be paid, while the people of Greece and Iceland suffer huge cuts in jobs and services.

As the head of Citibank helpfully pointed out, “Countries cannot disappear. You always know where to find them.” Once the bubbles are burst, expectations about asset values are dashed, optimism gives way to despair, and wealth is ruthlessly redistributed.

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Contesting the Origins of European Liberty

Published on September 18, 2010 in News. 0 Comments

auer_468wFrom Stefan Auer, in Eurozine

Despite western Europe’s initially lukewarm response to the people’s revolutions of ’89, twenty years on the EU claims them as a cornerstone of “European identity”. Yet historical gaffes have exposed the pitfalls in attempting to create an all too tidy narrative of Europe’s twentieth century, writes Stefan Auer.

The European Union loves anniversaries. To the extent that the EU seeks to foster European identity, it is not surprising that it is increasingly deploying tools and methods that states used to create nations: commemoration of key moments in the nation’s history served as rallying points for national attachments, creating or strengthening a sense of national identity.

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The Slump Goes On: Why

Published on September 16, 2010 in News and Newsletter. 0 Comments

roubini_nouriel-093010_jpg_230x867_q85From Paul Krugman and Robin Wells, in The New York Review of Books

In the winter of 2008–2009, the world economy was on the brink. Stock markets plunged, credit markets froze, and banks failed in a mass contagion that spread from the US to Europe and threatened to engulf the rest of the world. During the darkest days of crisis, the United States was losing 700,000 jobs a month, and world trade was shrinking faster than it did during the first year of the Great Depression.

By the summer of 2009, however, as the world economy stabilized, it became clear that there would not be a full replay of the Great Depression. Since around June 2009 many indicators have been pointing up: GDP has been rising in all major economies, world industrial production has been rising, and US corporate profits have recovered to pre-crisis levels.

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