Heterodox Economics – Page 2

Want to understand industrialisation in resource-rich countries such as Uzbekistan? Read Marx (and I帽igo Carrera)

October 21, 2022October 15, 2022 fgaldini1 Comment

The commodity supercycle of the 2000s and 2010s gave rise to a rich debate in the academic literature about the possibility for resource-rich countries to muster the primary commodity price bonanza for development. As in past debates on the rise of Asia as the 鈥榳orld鈥檚 factory鈥�, industrial policy was once again at the forefront of discussion.

On the one hand, orthodox scholars insisted that the use of market distortions to channel resources towards industrialisation would be a risky gamble with little guarantee of success. Instead, as the Asian 鈥榯igers鈥� and China before them, developing countries would do well to make good use of the market to identify their comparative advantages. In this view, industrial policy continues to be inefficient and wasteful, especially as it creates plenty of opportunities for corruption rather than development. On the other hand, heterodox researchers argued that state intervention was crucial to divert resource rents to specific nascent industries that would never be able to withstand international competition without sustained support. As both the Asian 鈥榯igers鈥� and China more recently used robust industrial policy to develop globally competitive industries, developing countries should also use targeted policy intervention to 鈥榰pgrade鈥� to higher value-added manufacturing for export.

Still, one question that eludes both orthodox and heterodox literature concerns why, for decades, multinational corporations would consistently invest in manufacturing in resource-rich countries such as, for instance, Argentina, Brazil, and Egypt. This has been the case despite the small scale and high costs of production in these markets (making them inefficient, per orthodox scholars), whose output is mostly sold domestically rather than exported (pace heterodox scholars).

In a in Competition & Change, I applied Argentinian scholar 鈥檚 on Marx to the under-researched case study of the car industry in Uzbekistan to answer precisely this question. I found this same orthodox-heterodox binary to dominate the literature on 鈥榯ransition鈥� from the command to the market economy in Uzbekistan, too. Orthodox researchers averred that state-owned auto company UzAvtoSanoat failed to develop due to inefficiency and corruption, in particular due to the distortions of the government鈥檚 industrial policy. Heterodox scholars instead found industrial policy to be the very reason behind the creation of a successful export-oriented car industry, in particular during the commodity supercycle when part of total output was exported mostly to Russia. Neither, however, could explain why Korean Daewoo Motor Company (DMC) and American General Motors (GM) entered into a joint-venture with UzAvtoSanoat, despite the small domestic scale (hence high costs) of automobile production in the country, which is mostly purchased domestically.

Marx and Colonialism

October 13, 2022October 7, 2022 luguangmingLeave a comment

It is widely believed that Marx did not systematically consider the role of colonialism within the process of capital accumulation. According to聽, Marx concentrated on a self-closed national economy in his main work. Although he did mention colonialism in Part 8 of聽Capital聽Volume 1 on the so-called primitive accumulation, this would only belong to a pre-history of capital, not to its everyday development. Based on a similar assumption, some postcolonial scholars criticise Marx for being Eurocentric, even a complicit supporter of Western imperialism, who ignored the agency of non-Western people.

If we read some we could think that they are right. How can we explain otherwise Marx and Engels praising the role of the bourgeoisie drawing even the most barbarian nations into civilisation or the view that the liberation of colonised peoples depended on the victory of the revolution in Europe?

Before I start, let me make a short premise. In my first book I read Marx鈥檚 Capital in the light of his writings and articles on Ireland, China, India, Russia, and the American Civil War. At the time I believed that Marx only published a significant, but still limited amount of writings on the colonial question, those available in the Collected Works and in collections like Marx & Colonialism. But then in 2007 I worked at the Berlin-Brandenburg Academy of Sciences and Humanities, contributing to the complete edition of Marx鈥檚 and Engels鈥檚 writings. I thus 鈥渄iscovered鈥� some of Marx鈥檚 20,000 print page long notebooks (just to give you an idea, the printed notebooks alone would look like a new Collected Works). These writings show that Marx was interested in colonialism all his life, including when he wrote the Manifesto.

What came out of my reading? Let me start with the question of Marx鈥檚 field of analysis in聽Capital聽Volume 1. To analyse capital reproduction 鈥榠n its integrity, free from all disturbing subsidiary circumstances鈥�, Marx treats the world of commerce as one nation (1976: 727) and presupposes the full worldwide imposition of the capitalist mode of production. Does this mean that Marx analysed a 鈥渟elf-enclosed national economy鈥� as Harvey and others believe? In my view, this abstraction means exactly the opposite. Marx鈥檚 positing a coincidence between the national and global levels is a premise for conceptualising the world market, which includes both internal and foreign markets of all nations participating in it. This abstraction makes it possible to include expansionism into the analysis of capital accumulation. In this framework, a country鈥檚 economic system is not confined within its national borders but consists of all production branches where capital is freely transferable, including the colonies and dependent economies.

A value perspective of price and currency stability in Zimbabwe

September 14, 2022September 13, 2022 Valentine GuruuswaLeave a comment

In his , Zimbabwe鈥檚 Finance and Economic Development Minister, Hon. Prof. Mthuli Ncube identified rising inflation and currency depreciation as the major challenges requiring 鈥渢he support of all stakeholders and citizens鈥�. Zimbabwe is failing to ward off persistent inflation. According to Ncube鈥檚 mid-term budget report, headline inflation increased from 60.7% in January to 191.6% in June 2022.

In this post, I will argue that whilst price and the exchange rate have some importance, preoccupation with them can constrain economic development. I start off by giving a brief background of inflation in Zimbabwe as well as inflation targeting policies, before arguing that sheepishly pursuing currency and price stability equates to commodity fetishism. I then look at the real beneficiaries of price and currency stabilisation policies. Finally, I attempt to demystify value and price in Zimbabwe鈥檚 context.

Hierarchies of Development podcast

May 4, 2022May 4, 2022 黑料社区Leave a comment

In collaboration with EADI and King’s College, London, 黑料社区 has launched a new podcast on Hierarchies of Development. The podcast offers long format interviews focusing on enduring global inequalities. Conversations focus on contemporary research projects by critical scholars and help us understand how and why structural hierarchies persist. Join hosts Ingrid Kvangraven (KCL/DE) and Basile Boulay (EADI) for this series of discussions on pressing issues in the social sciences.

The first episodes was on environmental hierarchies, with the brilliant guests and :

This podcast was developed with editing support from Jonas Bauhof. Subscribe to get updates on new episodes (you can choose your preferred platform).

Can Joan Robinson鈥檚 ideas cast some light on today’s profound economic challenges?

November 21, 2021November 19, 2021 Carolina AlvesLeave a comment

By Carolina Alves and Jan Toporowski

Cambridge Journal of Economics Special Issue / Deadline for submitting papers via CJE refereeing process: 30th April 2022.

2023 marks the fortieth year since the passing of Joan Robinson and her one-hundred-and-twentieth anniversary. This special issue of the Cambridge Journal of Economics aims at presenting a collection of papers that reflect the extraordinary breadth of Robinson鈥檚 career and examine what insights these might offer the economics profession and policy makers to address our seemingly most intractable problems of inadequate demand, rising margins with falling competition, and widespread and seemingly intransigent inequality and its consequences. For Robinson the purpose of our discipline is in understanding the real world to enable all global citizens to enjoy life to the full. It is therefore fitting that we follow her lead and demand that we ask of ourselves whether we have done enough to address her challenges to economic theory.

Despite making her international reputation in the Marshallian tradition of economics, she came to regard her generalisation of John Maynard Keynes鈥檚 theories and their integration with Kaleckian and Marxian insights as her more substantial contribution, along with a vigorous defence of rigorous evidence-based thought over inductive mathematical modelling. Among an impressive body of work, three books by Robinson mark key moments in the evolution of her ideas: The Economics of Imperfect Competition (1933), An Essay on Marxian Economics (1942), and The Accumulation of Capital (1956) (Marcuzzo, 2003).

In 1933, she made her international reputation with brilliant work within the orthodoxy on imperfect competition, offering an internal critique of the marginalist theory of distribution. Only a decade later, her reflections on reading Karl Marx persuaded Robinson to question the Marshallian methodology, in particular its polite theory of income distribution which became so incongruous during and after the depression (Marcuzzo, 2003).1 Finally, in 1956, she had the courage to follow the logic of her argument to examine the whole neoclassical theory of income distribution and its predominant method, facing the might of the now dominant American economics profession in the [in]famous capital controversy. She had to accept the pyrrhic victory of her interlocutors accepting she was right, yet the profession moving on regardless.

The聽Geopolitics of聽Financialisation聽and Development: Interview with Ilias Alami

October 19, 2021October 13, 2021 Ilias ALAMI3 Comments

This聽interview聽was originally聽published in German in the special issue on聽financialisation聽and development policies of the journal聽Peripherie, September 2021, No. 162/163. Frauke Banse and Anil Shah聽(both based at Kassel University)聽spoke with political聽economist聽Ilias Alami聽(Maastricht聽University)聽about聽some of his recent work聽on the relationship between geopolitics, financial flows for development and emerging forms of聽鈥榮tate capitalism,鈥櫬燼s well as related new imperialist formations. The聽interview was conducted via email in May 2021.聽聽

The interview covers a聽series聽of聽International Political Economy聽topics.聽Ilias聽first locates the emergence of the聽Wall Street Consensus in the long and turbulent histories of the relation between finance and development聽as well as in聽secular聽capitalist transformations. He then聽outlines聽some of the conceptual tools he鈥檚 developed聽in his work聽in order to make sense of the聽contemporary聽interconnections聽of money and finance聽and the reproduction of聽imperialism and race/coloniality.聽Next,聽he situates these interconnections within broader scholarly debates about聽financialisation聽and聽highlights聽the similarities and differences between ongoing sovereign debt crises in the global South and the so-called 1980s 鈥楾hird World debt crisis.鈥� Finally,聽Ilias聽discusses the聽recent聽emergence of new forms of聽鈥榮tate capitalism鈥櫬燼nd their聽complex relation聽to the extension聽and deepening聽of market-based finance.聽

Dependency, gender,聽and race

September 12, 2021September 12, 2021 Felipe Antunes de OliveiraLeave a comment

In the classical works of dependency theory, such as the Dialectics of Dependency (Marini 2011 [1973]); Socialism or Fascism (Dos Santos 2018 [1978]); Dependency and Development in Latin America (Cardoso and Faletto 1979) and Latin American Dependent Capitalism (Bambirra 2012 [1978]), race and gender are absent. This absence is at odds with both the evident reality of racial and patriarchal oppression in Latin America and the concomitant rise of feminist and anti-colonial literature in the social sciences. In fact, in the exciting intellectual and political environment of the 1960s and 1970s, it would not be difficult to imagine productive dialogues between Ruy Mauro Marini and Margaret Benston, and V芒nia Bambirra and Amilcar Cabral. Sadly, these dialogues never took place. Instead, the first generation of dependency scholarship privileged debates with white, male scholars engaged in modernisation sociology, structuralist economics and Marxist orthodoxy. With the sole exception of V芒nia Bambirra鈥檚 forgotten writings about peripheral women鈥檚 liberation, gender and race remain to this day ignored by the dependency tradition.

Although the absence of race and gender does indeed represent a major blind spot in the work of dependency writers, the most seminal concepts coined by some of the early dependency writers such as Ruy Mauro Marini and V芒nia Bambirra have 鈥榠ntersectional鈥� (Crenshaw 1989; 1991) potential. By that, I mean that they can be understood as referring to more than simply class-based dynamics of domination. Let us consider two examples: Marini鈥檚 concept of the 鈥榮uper-exploitation鈥� of labour and Bambirra鈥檚 definition of Latin American ruling classes as 鈥榙ominated鈥揹ominant鈥�.

Review of Macroeconomics by Alex M. Thomas

August 22, 2021July 18, 2021 mohitarora18Leave a comment

by Alex M. Thomas, Cambridge University Press, 2021.

This recently published introductory Macroeconomics textbook written by Alex M. Thomas provides a refreshingly novel approach to teaching Macroeconomics to undergraduate students. As the author points out in the Preface, this textbook offers a 鈥�problem-setting approach rather than a problem-solving one, as is the case with most economics textbooks鈥� (Page xvi, emphasis mine). The textbook has nine chapters, and the chapters have enough material to whet the appetite of a broad audience 鈥� Chapters 1,2,6 and 9 deal with the history and philosophy of Macroeconomics, Chapters 3-5 deal with the core economic theory of money and interest rates, output and employment levels and economic growth and Chapters 7 and 8 talk about the macroeconomic policy of achieving full employment and tackling inflation. In this review, I would focus on four issues 鈥� the commitment of the book towards enhancing pluralism in Macroeconomics, the importance given to studying macroeconomic theory, the idea of relating macroeconomic concepts to the context which is being studied and an explicit concern to make Macroeconomics accessible to an undergraduate audience residing in underdeveloped parts of the world.

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