Erinc Yeldan
They are referred to under different identifiers: generation-Y; millennium generation; globalization generation; Net-generation… roughly they are the cohort of post-1980 newborns, coming from distant geographies, different nations. Yet, they are claimed to share astonishingly common characteristics: narcissistic love of the self; the me, me, me approach to life; impatience; intolerance of all forms of hierarchy; a fetishistic loyalty to technology and brands; almost non-existing interest in social events; apolitical nihilism; non-reading, etc etc…
The peculiar characteristics of the post-1980 generation has been the subject matter of quite some research, but the subject gained popular interest recently through an editorial led by the popular Time Magazine, where most of the adjectives indicated above had been liberally adopted. The Time approach to the generation-Y consisted mostly of a superfluous description of the peculiarities of the young and the hot-blooded consumers. There was not much mention of the surrounding dictates of the neoliberal global assault on the young citizens, nor on the conditions of the political-economy embedded within today’s bubble capitalism.
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Cornel Ban
In the aftermath of the economic crisis that began in 2008 it has become fashionable to say that the BRICS buried the Washington Consensus with their state-led economic models. This rhetoric has been supported by BRICS countries themselves and has made ripples in the international financial press. But is there solid evidence for such assertions? A closer look at the empirical reality suggests a more mixed picture. As Marion Fourcade put it, in the BRICS the Washington Consensus is in fact “more invisible than irrelevant.”
The life of BRICS has had interesting turns. First, they were known as a group via Goldman Sachs investment product more than a decade ago, responding to the insatiable demands for accountability, and profit, that emanates from the financial nebulae. Then, BRICS became one of the few beacons of the global economy during the Great Recession and they did so unmoored from the institutional enforcers of the Washington Consensus. In a demonstration of the performative effects of financial marketing, the BRICS governments picked on the new acronym and formed an inter-governmental alliance of South-South cooperation with an ambitious agenda in international economic institutions. A decade after the term BRICS was coined by investment bankers, Robert Wade noted that the economic map of the world had the United States, the European Union and the BRICs as the three poles of the emerging economic multipolarity. In all the BRICs, the liberal economic drive of the Washington Consensus dramatically altered their ideational and institutional landscape but that the commands of this development paradigm were only selectively institutionalized. The most important pattern the role of the state as a critical actor in development has been rediscovered in ways that go beyond the modest institutionalist turn experienced by the Consensus after the East Asian crisis but without crafting a consummate counter-hegemonic “state capitalist” economic model.
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Cornel Ban
The most recent high profile form of target practice for the expansionary austerity thesis uses a great deal of IMF research as ammunition. A senior IMF level official who managed the Fund’s involvement during the Irish crisis blasted Europe’s policy of austerity and issued dire warnings about a gloomy future if the current course of action is maintained.Has the crisis really changed the International Monetary Fund’s policy advice? The main finding of an international workshop that took place recently at Boston University was that while some remarkable changes did in fact occur in IMF policy advice, they were too modest to suggest that an economic paradigm change is imminent.
The contributors noted that this international organization took a half-step on capital account regulation, became more open to the preferences of developing countries, relaxed its erstwhile strict commitment to austerity and has become a lot more reserved towards cross-border banking and the involvement of private sector consultants in its financial surveillance teams. At the same time, they found that the Fund has narrowed the scope of its programs to a predominantly orthodox economic policy agenda, continued to make counter-cyclical policies conditional on bond market sentiment and contributed to the weakening of recovery via its continued discrimination in favor of foreign creditors.
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Ilene Grabel
There’s a political cartoon that I’ve had in mind these days when I think about recent changes in the international political economy of capital controls. Picture a sailboat in stiff winds on rough seas. The wind in the sails is labeled something like “Cyprus, Iceland, Brazil, China, or the Global South.” The boat is labeled “S.S. Capital Controls.” The International Monetary Fund’s (IMF) Managing Director Christine Lagarde is at the tiller, and she barks at her worry-stricken shipmate—“No, don’t trim the sails!” But we also see that the ship is trailing its anchor, which is labeled “Neoliberalism.”
I begin with this image because I think it captures well the conflicted processes surrounding capital controls during the current global financial crisis. Many extraordinary things have happened during the crisis. One is that we’ve come to learn an awful lot about countries like Iceland and Cyprus, countries that we could safely say weren’t even at the periphery of any discussions of the global financial system until 2008. Another is that capital controls (so long anathema to neo-liberals) have been successfully “re-branded” as a tool of prudential financial management, even within the corridors of the IMF. In a recent paper, I examine the myriad factors that have enabled this re-branding. As with most rebranding exercises there is uncertainty about whether the framing will prove sufficiently sticky, especially in the context of tensions and countervailing impulses at the IMF and elsewhere.
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Alejandro Nadal
It must hurt when you show your hand without anybody calling your final bet. After all, why do you have to give free information to your opponents? This is what the infamous troika must feel right now after revealing its “rescue” plan for Cyprus. The parliament in Nicosia has flatly rejected the strategy, but the troika’s game plan has been unveiled at great political (and possibly financial) costs.
The little island in the eastern Mediterranean is responsible for only 0.2 per cent of the European Union’s GDP. But the architecture of the rescue plan has resuscitated primal fears about the future of the euro. Why is this so?
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Thomas Palley, Guest Blogger
Many countries are now debating the causes of the global economic crisis and what should be done. That debate is critical for how we explain the crisis will influence what we do.
Broadly speaking, there exist three different perspectives. Perspective # 1 is the hardcore neoliberal position, which can be labeled the “government failure hypothesis”. In the U.S. it is identified with the Republican Party and Chicago school economics. Perspective # 2 is the softcore neoliberal position, which can be labeled the “market failure hypothesis”. It is identified with the Obama administration and MIT economics.
Perspective # 3 is the progressive position which can be labeled the “destruction of shared prosperity hypothesis”. It is identified with the New Deal wing of the Democratic Party and labor movement, but it has no standing within major economics departments, owing to their suppression of alternatives to orthodox theory.
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Thomas I. Palley, Louis-Phillipe Rochon and Matías Vernengo
It is widely recognized that economic crises can trigger enormous change, with regard to both economic theory and the politics of governance. Today, the global economy is struggling with the fall-out from the financial crash of 2008 and the Great Recession of 2007–2009. The economic crisis that these events have generated, combined with the failure of the mainstream economics profession, has again put the question of change on the table. Reasonable people do not expect economists to predict the daily movements of the stock market, but they do expect them to anticipate and explain major imminent economic developments. On that score, the profession failed catastrophically, revealing fundamental theoretical inadequacies.
This intellectual failure has prompted us to launch the Review of Keynesian Economics (ROKE), the first issue of which is fully available here. At a time of journal proliferation, some may wonder about the need for another journal. We would respond there is a proliferation of journals, but that proliferation is essentially within one intellectual paradigm. As such, it obscures the fact that the range of theoretical inquiry is actually very narrow. A journal devoted to Keynesian economics is therefore needed, both to correct this narrowness and because events have once again confirmed the profound relevance of Keynesian theory. As noted by Robert Solow, a member of the board of ROKE, our project is “counter-cultural, and god knows the current culture needs to be countered.”
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Vamsi Vakulabharanam, Guest Blogger.
The 2007-9 crisis in global capitalism brought a new energy and focus to the heterodox economists, and more broadly to the critics of neoliberalism from different arenas of society. It seemed clear at that time that neoliberalism had run its course when it met its structural contradiction – with the burst of the US housing bubble and the concomitant financial crises across the world, it looked like the avenues through which demand was being generated were closed and the system was poised for structural change. Three years later, Southern Europe is witnessing an intense so-called sovereign debt crisis with the working people bearing the brunt of it, and real economies in the developed world are continuing to witness slow growth. The US seems to be under the threat of the so-called fiscal cliff (which seems more like a political event rather than an economic one). The economies that grew quickly during the neo-liberal period, like China and India, have slowed down considerably. Across the globe, we seem to be going through a period of uncertainty without a clear path ahead. Yet, neoliberalism persists. Why?
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