In this brief video, a journalist gives his view as to why development in Africa has been so difficult. The answer apparently lies in the colonial legacy of (mis)dividing up the continent into states in a way that has failed to give rise to nation-building, both economically and politically. He also points a finger at self-serving elites, who have built great personal wealth but not, in general, the wealth of their own nations.
However, he does ignore the uneven record of growth on the continent since World War Two, which saw varying degrees of economic transformation. It is a tragedy that much good was undone during the ‘lost decades’ of the 1980s and 90s. A number of countries grew more rapidly in the 2000s, mainly due to the expansion of primary commodity exports, but a widespread problem is the failure of governments to diversify their economies into sectors which have more potential for growth in output and productivity, such as manufacturing.
Donald Trump came into office promising to ‘roll back’ the regulatory ‘burden’ on business as part of his economic strategy. The claim is that this will reduce business costs and create jobs by boosting economic growth. But will it work?
The right often complains of the ‘burden’ on business and, particularly in the US, equates the absence of regulation with freedom.
This is emotive stuff. Burden? It sounds bad. Freedom? What’s not to like? But this kind of rhetoric avoids a more nuanced discussion of the issue. Continue reading →
Continuing the occasional series of excerpts from Professor Michael Hudson’sJ is for Junk Economics (2017, p.178). See also my post quoting Ha-Joon Chang here on the same issue:
“Planned Economy: Every economy since the Neolithic has been planned in one way or another. That is why calendar keeping and seasonal rhythms based on the weather and the harvest became the foundation of economic accounting in the Neolithic and Bronze Age for fiscal and trade policy and for land tenure.
At issue in any epoch is who will do the planning and what its aims will be. The ostensible aim of democratic planning is to design tax and regulatory systems to promote economic growth and sustainability, preferably with a fair distribution of income and wealth. For the classical economists this involved taxing or discouraging rentier income, and subsidizing socially desirable investment and basic needs.
Today’s epoch is seeing financial managers replace rulers and elected government representatives as planners of economies. Financial planning is at least as centralized as government planning, but its aims are different: namely, to concentrate income growth and asset-price gains in the hands of the One Percent.
The financial time frame is short-term and extractive. And fiscally, financial planning seeks to shift taxes off unearned income and financial returns onto wages and profits. Most fatally, it favors debt leveraging, leading ultimately to debt deflation and austerity. The main issue in today’s planning debate is thus whether democratic politics can recover the classical public steering and regulatory mechanisms that have been relinquished to the financial sector.”
Zimbabwe is in political turmoil. Now that Robert Mugabe has gone, many are wondering what will come next. Given my interest in development economics and my own ignorance of the political economy of this troubled nation, beyond the reporting of the mainstream media, I thought it would be helpful to draw on some of the ‘literature’ to further my understanding and, hopefully, that of the readers of this blog. I can’t pretend to have expertise in this area, but one of the aims here is to share useful knowledge, so here goes.
I have included a brief summary of Zimbabwe’s economic performance since the War and follow that with some quotes from political economists who have studied the country, as well as the historical emergence of capitalism through what Marx called ‘primitive accumulation’. Continue reading →
In Trump’s world, the rich in the US obviously are not rich enough. So he has set out to lower the corporate tax rate to 20 percent and abolish the estate tax. The working and middle classes are, of course, überjoyed …
I am very much in favour of interdisciplinarity when it comes to economics and the richer insights it provides of the economy and society. Here is Mark Blyth on how it is misleading to separate the economic from the political. Doing so neglects a proper incorporation of such factors as distribution, power and vested interests:
Immigration can be a divisive but also a sensitive issue. Arguments surrounding last year’s referendum here in the UK on EU membership could not avoid it. Media hysteria, particularly from the right, has focused mainly on the negative impacts, and rational debate has been drowned out. The right seemed to shout loudest, and the left often ended up talking to itself.
The overall findings of the study suggest that, at least in the UK, the overall net economic and fiscal (tax and public spending) outcomes from large-scale immigration are small when compared with the effects of more rapid population growth. Rowthorn argues that considerations of the latter should play a more important role when deciding future government policy. Continue reading →