from David Ruccio
Readers will remember the China syndrome: the fear of a nuclear meltdown in the West, in which reactor components melt through their containment structures and into the underlying earth, “all the way to China.” Now, to judge by Paul Krugman’s latest, the fear seems to be running in the opposite direction: the fear is that an economic meltdown in China will make its way “all the way to the West.”
The fact is, mainstream economists in the West have a particularly difficult time making sense of the Chinese economy, based on the fear that the West has failed in its mission to show China and the rest of the world its future. Last year, it was Daron Acemoglu who worried that the development of capitalism in China was based not on a “happy connection between prosperity and democracy” but, instead, on a system in which “rulers have been able to deliver strong economic growth without surrendering political and social control.” Krugman’s fear is a bit different: that the period of massive investment based on low wages is coming to an end and what China needs, but is failing to engineer, is an increase in private consumption. Read more…
from Dean Baker
Very nice column from one of my favorite Nobel prize winning economists. Stiglitz explains some of the ways in which patent protection impedes growth and increases inequality.
It’s great to see Stiglitz raising alternatives to patents for financing research, but I would disagree with the prize for patent buyouts that he proposes as being the best alternative. I have always preferred a system of direct upfront funding, which could be done through private firms operating on long-term contracts. In response to a number of requests, here is the argument in brief. (Here‘s a little longer discussion.) Read more…
from Deniz Kellecioglu
“We were only tolerated simply because our cheap labour is needed.” (Steve Biko)
The killings of 34 demonstrating mine workers in South Africa last month has several background factors, but two of them stand out: police brutality and the exploitation of workers. And they are interlinked.
The aggressiveness of the security forces’ represent the conditioning produced by the governmentality of national and international elites. Thus, the assault in Marikana, South Africa is not an isolated event, it’s a global phenomenon. One major difference is the explicitness of this event – workers usually perish in silence due to, for instance, poor health or social violence, away from the cameras.
The economics behind this governmentality propose that the labour market has to be “flexible” to the demands of “the market”. In other words, Read more…
from Mark Weisbrot
One of the great myths about the Argentine economy that is repeated nearly every day is that the rapid growth of the Argentine economy during the past decade has been a “commodity export boom.” For example, The New York Times reported last week:
“Riding an export boom for commodities like soybeans, Argentina’s economy grew at an average rate of 7.7 percent from 2004 to 2010, almost twice the average annual growth of 4.3 percent in Chile, a country often cited as a model for economic policies, over the same period.”
Michael Shifter, the President of the Inter-American Dialogue and probably the most-quoted source on Latin America in the U.S. press, wrote in a disparaging article about Argentina this week that
“If the sales and price of soybean, Argentina’s principal export (mainly to China), remain high, then the country may be able to continue its path of economic growth. “
I haven’t seen any economists make the claim that Argentina’s remarkable economic growth over the past nine years – which has brought record levels of employment and a two-thirds reduction in poverty – has been driven by soybeans or a commodities export boom. Maybe that’s because it’s not true. Read more…
from Ali Kadri