Oreiro and de Paula’s (2022) reply to my article (Palley, 2021) further convinces me that New Developmentalism (ND) substantially misconstrues the development challenge and ND’s policy recommendations lean in a Neoliberal direction. The critique of ND is not its emphasis of the importance of manufacturing. It is the regressive inclination, the narrowness of policy recommendations, neglect of the transformation dimension of development, and neglect of the implications of the shift to a post-industrial era.
More on the critique of New Developmentalism
April 11th, 2022Ukraine: what will be done and what should be done?
February 24th, 2022Preamble/Postscript:
While rightly condemning Russia for its invasion, the mainstream media continues to selectively report the history behind these events. In my view, its omissions are intentional and contribute to the tragedy. They inflame public understanding, render a diplomatic resolution more difficult, and lock us into a worse trajectory.
Let me make further clear my argument: (1) President Putin is head of the Russian state which is under slow-motion implacable attack by US-led NATO. (2) After failing to secure a satisfactory diplomatic resolution, he has taken action to head off that attack.
If you accept those two propositions, the Ukraine story is massively more complicated than simply claiming Putin is an aggressor and we (the US) are good. There will be no lasting peace until that complexity is fully engaged.
What will be done and what should be done?
The inevitable has happened. Russia has invaded Ukraine. It was inevitable because the US and its NATO partners had backed Russia into a corner from which it could only escape by military means.
In effect, Russia confronted a future in which the US would increasingly tighten the noose around its neck by further eastward expansion of NATO, combined with military upgrading by the US of its Eastern European NATO proxies.
Accompanying that militarization was the prospect of a ramped-up propaganda war in which western media fanned the flames of public animus against Russia. Side-by-side, US government financed entities (such as the National Endowment for Democracy and the German Marshall Fund) would seek to influence European and Russian politics with the goal of regime change.
At this stage, there are two questions. What will be done? And what should be done?
Read the rest of this entry »American Exceptionalism and the Liberal Menace: the US and Ukraine
February 13th, 2022American exceptionalism is the most dangerous doctrine in the world, and it has been on full display in the current Ukraine crisis. Worse yet, the loudest advocates have been America’s elite liberal class.
The doctrine of exceptionalism holds that the US is inherently different from and superior to other nations. That superiority means the US is subject to a different standard. Its actions are claimed to be benevolent and above international law, and the US is entitled to intervene at will around the world, including building a global network of military bases and garrisons that it would never permit another power to have.
The Liberal Menace
In today’s United States, liberals are the most extreme proponents of American exceptionalism. In contrast, Republicans and conservatives are inclined to justify foreign policy by appeal to raw power, with the US doing what it wants because it can.
For myself, I have long been leery of American liberals. I term them the “liberal menace”. That is because they have been a major obstruction to progress toward a social democratic society for the past forty years.
Read the rest of this entry »Theorizing varieties of capitalism: economics and the fallacy that “There is no alternative (TINA)”
February 2nd, 2022The VoCs approach to capitalism has the potential to transform economics. It tacitly emphasizes the plasticity of economies, whereby their character and outcomes are significantly a matter of choice. This paper augments VoCs theory to include a distinction between varieties and varietals of capitalism. Drawing on biology, varieties correspond to species and varietals correspond to sub-species. The paper proposes an analytical framework that unifies VoCs theory. It adds a mesoeconomics that links macroeconomics and microeconomics. That mesoeconomics concerns the institutions, behavioral norms, rules and regulations, and policies that characterize the economy and influence its performance. The mesoeconomic structure is described using the metaphor of a box, the six sides of which correspond to the major dimensions of capitalist economies. The design of the box is the product of societal and political choices, which places politics at the center of VoCs analysis. Policy space and policy lock-in are important concerns as they impact the choice set. The fact that economies inevitably involve choice means there is an inescapable normative question regarding what type of capitalism society will have.
2022 Godley – Tobin Memorial Lecture: Professor Paul Krugman, “The enduring relevance of Tobinomics”
January 21st, 2022The Review of Keynesian Economics is pleased to announce that Professor Paul Krugman will give the 2022 Godley – Tobin Lecture. Professor Krugman is Distinguished Professor of Economics at the Graduate Center of the City University of New York. He has also taught at MIT, Princeton University, and Yale University. Like James Tobin, Professor Krugman was awarded the Nobel Memorial Prize in Economics (2008) and the American Economics Association’s John Bates Clark Medal (1991).
Professor Krugman’s work has focused on international economics and macroeconomics. He is a prominent American public intellectual who is widely recognized for his regular column in The New York Times.
The title of Professor Krugman’s lecture is “The enduring relevance of Tobinomics”.
The lecture will be held at Bucknell University, Lewisburg, PA on April 20, 2022, at 5.00pm and it will also be live streamed.
A crisis made in the USA: why Russia will likely invade Ukraine
January 16th, 2022Preamble. Living in the US and writing honestly about US-Russia relations (and China too) is very difficult. That is because the US is the aggressor, but Russia is an authoritarian country. That split is used by the US establishment to shuffle discussion away from US aggression on to Russian authoritarianism. Side-by-side, anyone calling the US on its aggression is labelled pro-Russian. In that way, the US establishment cleverly inoculates itself against criticism and taints its critics.
President Vladimir Putin confronts a decisive historical moment. Talks with the US and its NATO partners have shown that the US has no intention of reversing its grinding long-running campaign against Russia. The US wants regime change in Russia. That does not mean democracy, talk of which is just camouflage for the true strategic objective of a permanently weakened Russia. All that matters is Russia be weakened, and the well-being of Russians is truly of no consequence in Washington.
That is the landscape Putin confronts. The implication is Russia’s position is unlikely to strengthen in years to come. Consequently, now may be the most favorable moment to take actions that both strategically strengthen Russia and achieve its own secondary long-term political goal of partial reunification of the historic European component of Russia (i.e., reabsorption of Belarus and Eastern Ukraine).
Implacable US antipathy
The baseline for the argument is recognition that the US has an implacable antipathy to Russia. That antipathy has a long history. In 1918 the US invaded Siberia, intervening in the Russian civil war between the Tsarist Whites and Reds. The invasion set the stage for pre-Cold War hatred of the Soviet Union.
Read the rest of this entry »Federal Reserve Insider Dealing? R.I.P. Central Bank Independence
January 11th, 2022Federal Reserve Vice-Chair Richard Clarida has shot himself in the foot with what appears to be insider trading. That comes on the heels of prior concerns about inappropriate trading by regional Federal Reserve Bank Presidents Robert Kaplan and Eric Rosengren. Albeit unintentionally, the good news is these indiscretions may have done working families a favor by helping disprove the notion of central bank independence.
For years, many of us have argued that central bank independence is a charade aimed at facilitating control over central banks by financial interests. Here is a link to an article of mine titled “Central Bank Independence: A Rigged Debate Based on False Politics and Economics”.
In that paper I wrote every central banker “inevitably brings her own preferences, views, and prejudices to the policy table (p.77)”. The implication is clear: appoint people with a Wall Street background and they will bring Wall Street policy preferences; appoint well-to-do financial economists with large stock portfolios and they will bring a personal concern with the stock market and asset prices.
Federal Reserve Presidents and Governors tend to be drawn from the banking community, Wall Street, and neoliberal academic economists. For decades, activists have requested that they be drawn from a broader political economic swathe of society to give working families better representation, but that request has been dismissed as lacking justification.
The Clarida-Kaplan-Rosengren affair argues otherwise. It is suggestive of how private interests are always in the room. It is also indicative of why handing the keys of the central bank to so-called independent bankers does not magically solve the problematic of monetary policy decision making, which is why analytical diversity is a matter of public import.
Messrs. Clarida, Kaplan, and Rosengren will survive and prosper. Wall Street will also continue to taint policymaking via its pre-pensation/post-pensation incentive model. The silver lining in the episode is the opportunity to bury the ideological doctrine of central bank independence and open the Federal Reserve to a broader set of ideas and personnel.
Economics vs QAnon: who’s crazy now?
December 29th, 2021I’m hoping this year we will make progress getting some of the crazier stuff out of the room.
Here’s a little YouTube teaser from Down Under (give it a minute to get to the punchline):
All the best in 2022,
Tom
The US and Russia: beware of Neocons and liberals preaching democracy promotion
December 8th, 2021Every week my e-mail box receives a steady stream of articles aimed at cultivating public animus to Russia. The articles are always wrapped in a narrative in which Russia is a threat to democracy in Ukraine, Eastern Europe, and elsewhere. The effect is to create public support for hardline action (economic and/or military) against Russia.
Read the rest of this entry »Anti-China Fever in the US: a lethal contagious disease
September 20th, 2021Much of the United States (especially Washington, DC) is in the grip of a contagious lethal anti-China fever which is spreading fast.
Even people I usually admire and respect have become infected. Reason and facts have lost all capacity to inoculate.
Fortunately, I was sent a vaccine (that takes one minute to administer) which I would like to share with you:
Three points in response to China (& Russia) hawks:
(1) A mirror is a very good thing to have in these situations (probably the most valuable & cost-effective piece of equipment the Pentagon could purchase right now). When wondering about China’s naval posture in the South China Sea or Russia’s response to eastward NATO expansion, use the mirror to reflect on the Monroe doctrine & how we would react if a Chinese flagged 7th fleet were cruising the Caribbean.
(2) Ukraine & Taiwan are both special unresolved historical situations. They should each be treated as such, carved out as best possible, and not allowed to poison the entire relationship. The mortal danger is the US war lobby exploits those situations to provoke Russia and China, hoping the resulting optic will favor their ugly ambitions.
(3) In his later years, George Kennan, architect of the containment doctrine, believed the best way to deal with the Russians is to leave them to themselves (i.e. they will sabotage themselves on their own). That continues to be good advice & also has relevance for China.