Lessons from the Great Floods

Martin Khor

The first half month of 2015 saw Malaysians pre-occupied with the big clean-up following the big floods that swamped many states, especially in the east coast.

It will take some time to get houses, schools, hospitals, offices, roads, drains, railway tracks, back into pre-flood shape.

The cost of doing so is staggering, with each the initial figure exceeded by new estimates.

The total will run into many billions of ringgit. The Government will foot the bill for repairing public facilities; and there is some government and spirited public help for flood victims’ personal losses.

But the affected people will still bear immense suffering and losses, for example, of lost business and livelihood income on top of the lost household belongings.

It is time to learn the lessons and prepare for the future.

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Equality, Solidarity, and Sustainability, Part 3

In this third part of a four-part interview, regular Triple Crisis contributor Jayati Ghosh summarizes some major themes in her work and thought, including the prospects for the transformation and revival of socialist movements, the transfiguration of the world capitalist economy and the reproduction of structures like the core-periphery division and landlord domination, new challenges of international labor solidarity and environmental sustainability, and the way forward towards egalitarian societies. (Parts 1 and 2 of the series are available here and here.)

Jayati Ghosh

Challenges of Solidarity and Sustainability

D&S: The ways that capitalism has linked together economies all over the world—trade in goods, international investment, international migration—directly pose the need for labor internationalism. Is it possible to develop the necessary kinds of labor solidarity when that means reaching across divides, say, between native and immigrant, or the workers of one country and with those of another country half a world away?

JG: It is obviously necessary for such bonds to be forged—it is even essential, because global forces cannot be fought only within nation states. But clearly such bonds are getting harder to forge. However, that is not only because of the material reality of physical differences and geographical distances. It is also—and possibly more crucially—because of changing perceptions of community, identity, oneness, and difference among various social groups. So workers from different countries see themselves as competing against one another in the struggle to keep their jobs and prevent their wages from falling.

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What We’re Writing, What We’re Reading

What We’re Writing

C.P. Chandrasekhar, Asian Banks in Trouble

Adem Y. Elveren and Sara Hsu, Military Expenditures and Profit Rate: Evidence from OECD Countries

Sunita Narain, Real Pride of Ancient Indian Science

Matías Vernengo, Sachs is Wrong on Krugman and the Recovery

 

What We’re Reading

Stephen A. Marglin and Peter M. Spiegler, Did the States Pocket the Stimulus Money?

Claudio Lara Cortés and Consuelo Silva Flores, eds., Democratic Renewal versus Neoliberalism

José Gabriel Palma, Has the Income Share of the Middle and Upper-Middle Been Stable Over Time … ?

Triple Crisis welcomes your comments. Please share your thoughts below.

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Can “Abenomics” Revive Japan’s Economy? Part 1

Junji Tokunaga, Guest Blogger

This is the first part of a two-part post on the economic policies of Japan’s prime minister, Shinzo Abe, and on alternatives to neoliberal “Abenomics.” Junji Tokunaga is an Associate Professor in the Department of Economics, Dokkyo Univeristy, Saitama, Japan. He is the co-author, with regular contributor Gerald Epstein, of a multi-part series for Triple Crisis on “Global Dollar-Based Financial Fragility in the 2000s” (Part 1, Part 2, Part 3, Part 4).

Japanese Prime Minister Shinzo Abe won a landslide victory in the snap election for the lower house of parliament on December 14, 2014. Abe’s Liberal Democratic Party (LDP), the leading conservative political party, and its partner party in the ruling coalition have won 326 of 475 seats, which enabled the coalition to secure a two-thirds supermajority in the lower house.

Why did Abe win the election? Since the end of 2012, the Abe government has carried out an economic revitalization program, called “Abenomics,” consisting of “three arrows”: more aggressively quantitative monetary easing, massive fiscal stimulus, and structural reforms. The main reason of his emphatic victory is that Abe  succeeded in persuading the electorate to stay the course, with slogans like “Abenomics is progressing” and“there is no other way to economic recovery,” while shifting the electorate’s attentions from more delicate political matters such as restarting Japan’s nuclear power plants and bolstering its military forces.

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The Invisible Hand of Alan Blinder

John Komlos, Guest Blogger

Guest blogger John Komlos, author of What Every Economics Student Needs to Know and Doesn’t Get In the Usual Principles Text, takes on economist and Princeton University professor Alan Blinder’s criticism of Jeffrey Madrick‘s recent book Seven Bad Ideas: How Mainstream Economists Have Damaged America and the World. A recent Triple Crisis post by Madrick summarizes some of the book’s central arguments.

Alan Blinder’s review of Jeffrey Madrick’s Seven Bad Ideas: How Mainstream Economists Have Damaged America and the World (Knopf, 2014)[1] is critical of Madrick’s characterization of the role of economists in the financial meltdown of 2008. Madrick suggests that their role was “central,” while Blinder claims that economists contributed merely a “bit” and even that bit was limited to “conservative economists.” I think that Madrick’s characterization is much closer to the truth and so does Joseph Stiglitz, who said in a lecture, “I have to blame my colleagues in the economics profession. Not all economists got it wrong; but a lot of them did and they provided arguments that politicians used, people in the industry used for stripping [regulation] away…. The basic argument was a very simple one, a variant of Adam Smith that markets, unfettered markets always lead to efficient outcomes…. they [regulators] were just doing what they said economic theory said you ought to be doing.”[2]

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Equality, Solidarity, and Sustainability, Part 2

In this second part of a four-part interview, regular Triple Crisis contributor Jayati Ghosh summarizes some major themes in her work and thought, including the prospects for the transformation and revival of socialist movements, the transfiguration of the world capitalist economy and the reproduction of structures like the core-periphery division and landlord domination, new challenges of international labor solidarity and environmental sustainability, and the way forward towards egalitarian societies. (Part 1 of the series is available here.)

Jayati Ghosh

Change and Reproduction of Core and Periphery

D&S: A half century ago, the most influential radical view of economic “underdevelopment” focused on the dominance of industrial-manufacturing “core” economies over raw-materials-producing “periphery.” Has that story changed in the current era of neoliberal globalization, with many developing countries moving out of mineral and agricultural exports and into export-oriented manufacturing (often “offshored”)?

JG: Geographical and locational changes in productive structures do not negate the idea of “core” and “periphery” operating within capitalism. Global capitalism has, throughout its history, experienced such shifts.

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What We’re Writing, What We’re Reading

What We’re Writing

Matías Vernengo, Growth forecasts and Latin American underperformance

Juan Antonio Montecino and Gerald Epstein, Have Large Scale Asset Purchases Increased Bank Profits?

Kevin Gallagher, Ruling Capital: Emerging Markets and the Reregulation of Cross-Border Finance

 

What We’re Reading

Gabriele Köhler, On the Cusp of a Genuinely Transformative Agenda?

Oakland Institute, The Corporate Takeover of Ukrainian Agriculture

Lynn Parramore, Welcome to the European Hunger Games, Brought to You by Mainstream Economics

Ian Morris, The Measure of Civilization: How Social Development Decides the Fate of Nations

Triple Crisis welcomes your comments. Please share your thoughts below.

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India’s Climate Strategy Needs Revision

Sunita Narain

Climate change negotiations are by now predictable. The already-industrialised come to each conference of the parties (COP) with a clear game plan, that is, to erase their contribution to the emissions already present in the atmosphere, thereby effectively remove the differentiation between their responsibility and that of the rest of the world to act. This would rewrite the 1992 convention on climate change and let them evade the obligation to provide funds and technology for action in the developing world. The problem is that developing countries do not come with an equally clear plan or proactive position. As a result, in each meeting, including the recently concluded COP20 at Lima, developing countries lose. The terms of the agreement change progressively and deliberately against the poor and the Planet.

Indian negotiators believe they can maintain the status quo and delay any new agreement, but as climate negotiations show, this tactic does not work. We block but the rich countries shove and the ground slips from under our feet. We need to revise our strategy.

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Equality, Solidarity, and Sustainability, Part 1

In this interview, forthcoming in Dollars & Sense magazine, regular Triple Crisis contributor Jayati Ghosh summarizes some major themes in her work and thought, including the prospects for the transformation and revival of socialist movements, the transfiguration of the world capitalist economy and the reproduction of structures like the core-periphery division and landlord domination, new challenges of international labor solidarity and environmental sustainability, and the way forward towards egalitarian societies. This is part one of a four-part series.

Jayati Ghosh

Prospects and Barriers for a New Socialism

D&S: We are scarcely two decades removed from the supposed global triumph of capitalism, the death of socialism, and (maximum hubris) proclamations of the “end of history.” And yet we’re seeing a revival of socialist movements—what you have called the “emerging left in the emerging world.” What are the key factors explaining this revival?

JG: I think it is now becoming more evident to most people across the world that global capitalism—especially in its current neoliberal manifestation—is not likely to deliver genuinely better material conditions, security, and justice. This is generally still a largely inchoate and diffuse sense of unhappiness with the state of things in many parts of the world. It is true that in some regions, like Latin America, there is a more developed sense of how neoliberal policies pushed the advance of aggressive and extremely unequal capitalist forces.

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Free Markets: Yellow Brick Road to War

John Weeks

Troglodyte – pronounced trog-luh-dahyt, 1) prehistoric cave dweller, 2) a person of degraded, primitive, or brutal character, 3) person living in seclusion, and 4) a person unacquainted with affairs of the world.

Troglonomics – pronounced trog-lo-nomics, the social institutions of production & exchange as viewed from a cave by a person degraded & corrupted intellect unacquainted with the affairs of the world; also known as “neoclassical” economics.

The troglodyte economics of the mainstream (a.k.a. neoclassical economics) functions as a virus of the mind. Like a computer virus, it corrupts the brain’s operating system, creating shot-circuits that by-pass both common sense and the brain’s analytical software. Once contracted through formal training in the classroom, troglonomics proves almost impossible to remove from the thought process. We find evidence of the difficulty of freeing the mind of the neoclassical virus in the writings of the few self-exiles from the mainstream who consider themselves progressive—and are so considered by the public.

Joseph Stiglitz represents an obvious example of a prominent mainstream-trained economist whose progressive views are not up to the task of purging his mind of the basic principle of troglodyte ideology, that resources are scarce and human wants unlimited (see the first chapter of his macroeconomics text with Carl Walsh, and the teeth-grinding “Thinking like an economist” boxes scattered through the book).

It is a mystery how an intelligent person (not withstanding his so-called Nobel Prize in economics, actually awarded by the Central Bank of Sweden, not the Nobel Committee) could live in a world of persistent unemployment and believe that resource scarcity is the central problem of a capitalist economy (my critique of resource scarcity is in Chapter 4 of my new book).

Krugman on War (yet again)

But few progressives are more virus-inflected than Paul Krugman. Despite his commendably progressive views on a range of social and political issues, Mr/Professor/Laureate Krugman remains a true believer in the virtues of international trade, his critique of which is limited to concerns about “market failure” (see his 1997 book Pop Internationalism, which to my knowledge he has not disavowed).

This loyalty to the mainstream ideology on trade goes far to explain his singularly bizarre view of the causes of war. In the August 17 edition of the New York Times he argued that since ancient times wars have been fought “for fun and profit” (his exact words in “Why We Fight Wars,” and see a critique in my Huffington Post blog).

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