A group of economists, including many from the Triple Crisis blog, convened in São Paulo and crafted ten theses toward a “New Developmentalism” – the tenets of a new approach to economic theory and policy that nations could embark upon in the aftermath of the current economic crisis. View the “ten theses” and the list of initial signatories at Ten Theses on New Developmentalism.
By a more rational institution
Luiz Carlos Bresser-Pereira, Guest Blogger
The crisis as a whole shows a more general aspect: the governments of States are more rational than the private agents and their enterprises.
During the 30 Neoliberal Years we have learned that the State was the source of all evil; that the private sector was always balanced because it was coordinated by the market, whereas the State, governed by politics, was the object of economic populism and was a major obstacle to growing with stability. Apart from being antidemocratic, this idea was false, because the financial crises demonstrated throughout the years that the market has never been able to control the speculative behavior of private agents. And it was a half-truth in relation to the State, because there are populist politicians, but most of them are fiscally responsible, because they know that their survival depends on this responsibility.
Downward to Stagnation: Wage policies in times of crisis
The Triple Crisis Blog is pleased to welcome Janine Berg, Senior Labour Economist at the International Labour Office in Brasilia, Brazil, as a regular contributor.
Not surprisingly wages have fallen during the economic crisis. A new report produced by the ILO, Wage Policies in Times of Crisis, provides evidence on the decline in wage growth during the crisis, and highlights the particularly severe reductions that have occurred in industrialized countries.
The world’s salaried employees suffered a decline in real wage growth from 2.2 percent in 2007 to 0.8 percent in 2008 and 0.7 percent in 2009 (excluding China, due to difficulties with the data). Real wages fell in 12 of 28 industrialized countries in 2008, including Australia (-0.9%), Germany (-0.4%), Italy (-0.7%), Japan (1.9%), Mexico (-2.6%), S. Korea (-1.5%) and the U.S (-1.0%). And although some countries recovered in 2009 (in some cases due to the fall in inflation), real wage growth continued to be negative in Germany (-0.4%), Mexico (-5.0%), Japan (-1.9%), and S. Korea (-3.3%), whilst France (-0.8%), the U.K (-0.5%), and Russia (-3.5%), also entered into negative territory. Moreover, these figures likely over-represent real wage growth, as job losses have been more concentrated on low-wage workers, who by no longer working are no longer considered in the sample. By 2009, the ranks of the unemployed had reached 210 million, a global unemployment rate of 6.4 percent.
Academic Economists to Consider Ethics Code
As economists arrive in Denver, Colorado this week to participate in the annual meeting of the American Economics Association, they will be asked to consider an economist’s code of ethics. This effort is discussed in the following New York Times article by Sewell Chan, and highlights the work of Triple Crisis blogger Gerald Epstein as well as a new book by George F. DeMartino, who will author a guest blog on this subject in 2011.
Excerpt from “Academic Economists to Consider Ethics Code,” by Sewell Chan:
“When the Stanford business professor Darrell Duffie co-wrote a book on how to overhaul Wall Street regulations, he did not mention that he sits on the board of Moody’s, the credit rating agency.
As a commentator on the economy, Laura D’Andrea Tyson, a former adviser to President Bill Clinton who teaches in the business school at the University of California, Berkeley, does not usually say that she is a director of Morgan Stanley.
And the faculty Web page of Richard H. Clarida, a Columbia professor who was a Treasury official under President George W. Bush, omits that he is an executive vice president at Pimco, the giant bond fund manager.
Academic economists, particularly those active in policy debates in Washington and Wall Street, are facing greater scrutiny of their outside activities these days. Faced with a run of criticism, including a popular movie, leaders of the American Economic Association, the world’s largest professional society for economists, founded in 1885, are considering a step that most other professions took a long time ago — adopting a code of ethical standards.”
Academic Economists to Consider Ethics Code
As economists arrive in Denver, Colorado this week to participate in the annual meeting of the American Economics Association, they will be asked to consider an economist’s code of ethics. This effort is discussed in the following New York Times article by Sewell Chan, and highlights the work of Triple Crisis blogger Gerald Epstein as well as a new book by George F. DeMartino, who will author a guest blog on this subject in 2011.
Excerpt from “Academic Economists to Consider Ethics Code,” by Sewell Chan:
“When the Stanford business professor Darrell Duffie co-wrote a book on how to overhaul Wall Street regulations, he did not mention that he sits on the board of Moody’s, the credit rating agency.
As a commentator on the economy, Laura D’Andrea Tyson, a former adviser to President Bill Clinton who teaches in the business school at the University of California, Berkeley, does not usually say that she is a director of Morgan Stanley.
And the faculty Web page of Richard H. Clarida, a Columbia professor who was a Treasury official under President George W. Bush, omits that he is an executive vice president at Pimco, the giant bond fund manager.
Academic economists, particularly those active in policy debates in Washington and Wall Street, are facing greater scrutiny of their outside activities these days. Faced with a run of criticism, including a popular movie, leaders of the American Economic Association, the world’s largest professional society for economists, founded in 1885, are considering a step that most other professions took a long time ago — adopting a code of ethical standards.”
Best Books: Classics
The Triple Crisis Blog has given its regular bloggers a week off, but not before asking them for some recommendations on some of the best books of the last decade on finance, development, and the environment. Today we bring you our bloggers’ favorite classic works for the last post in the series. Please comment and suggest your own favorites.
Herman Daly. The Steady State Economy.
Peter Evans. Embedded Autonomy: States and Industrial Transformation.
John Kenneth Galbraith. The Affluent Society.
Nicholas Georgescu-Roegen. The Entropy Law and the Economic Process.
Albert Hirschman. The Passions and the Interests: Political Arguments for Capitalism Before Its Triumph.
Albert Hirschman. The Strategy of Economic Development.
John Maynard Keynes. The General Theory of Employment, Interest, Money.
Charles Kindleberger. Manias, Panics and Crashes: A History of Financial Crises.
Hyman Minsky. Stabilizing an Unstable Economy.
Karl Polanyi. The Great Transformation: The Political and Economic Origins of Our Times.
Charles Tilly. Coercion, Capital, and European States, AD 990-1990.
Best Books: Blogger recommendations on environment
Continuing our Best Books series, here are our bloggers’ picks for the best environment books of the last decade. Read the full entry to see why they chose their picks. Please comment and suggest your own favorites.
1491: New Revelations of the Americas before Columbus by Charles Mann
Reclaiming Nature: Environmental Justice and Ecological Restoration, edited by James K. Boyce, Sunita Narain, and Elizabeth Stanton
Best Books: Blogger recommendations on development
Continuing our Best Books series, here are our bloggers’ picks for the best books of the last decade on development. Read the full entry to see why they chose their picks. Please comment and suggest your own favorites.
One Economics, Many Recipes: Globalization, Institutions, and Economic Growth by Dani Rodrik
Kicking Away the Ladder: Development Strategy in Historical Perspective by Ha-Joon Chang
23 Things They Don’t Tell You About Capitalism by Ha-Joon Chang
Poverty Capital: Microfinance and the Making of Development by Ananya Roy
Why Microfinance Doesn’t Work: The Destructive Rise of Local Neoliberalism by Milford Bateman
One hundred years of Socialism: The West European Left in the Twentieth Century by Donald Sassoon
Best Books: Blogger recommendations on financial crisis
The Triple Crisis Blog has given its regular bloggers a week off, but not before asking them for some recommendations on some of the best books of the last decade on finance, development, and the environment. Here are some on the financial crisis. Read the full entry to see why they chose their picks. Please comment and suggest your own favorites.
The Big Short: Inside the Doomsday Machine by Michael Lewis
Zombie Economics: How Dead Ideas Still Walk Among Us by John Quiggin
Capital Market Liberalization and Development by Jose Antonio Ocampo and Joseph Stiglitz
States and the Reemergence of Global Finance: From Bretton Woods to the 1990s by Eric Helleiner
Capital Rules: The Construction of Global Finance by Rawi Abdelal
Trillion Dollar Meltdown: Easy Money, High Rollers, and the Great Credit Crash by Charles Morris
Free Fall: America, Free Markets, and the Sinking of the World Economy by Joseph Stiglitz
Lords of Finance: The Bankers Who Broke the World by Liaquat Ahamed
False Profits: Recovering from the Bubble Economy by Dean Baker
Beyond Rebalancing: The collapse of Chimerica
In 2006 Niall Ferguson and Moritz Schularick invented the term ‘Chimerica’ to illustrate the economic linkages that connected China and the United States. The new term summarized the fact that the world economic order was dominated by the combination of these two giants. Ferguson and Schularick also used the notion to explain the evolution of the asset price bubble in the US between 2002-2006. Their conclusion was that this new entity was an unsustainable chimera that should one day disappear. The time for this may be here.