Economics – breaking the mold – May 28

May 28, 2013

Click on the headline (link) for the full text.

Horror story

Staff, The Economist
Review of When the Money Runs Out: The End of Western Affluence. By Stephen King.

THE terrifying title of Stephen King’s latest book will tempt some people to dismiss it as an exercise in scaremongering to be filed alongside the efforts of his horror-writing namesake. But Mr King, the chief economist of HSBC, is not the kind of run-of-the-mill Jeremiah who calls for citizens to buy gold and shotguns and retreat to a mountain hideout; his book is well-written, thoughtful and highly convincing.

The title is, as the author quickly admits, “a turn of phrase, not the literal truth…paper money never actually runs out”. But Mr King does believe that the ability of the developed world to generate significant economic growth, and thus wealth, has declined. As he points out, in the first four decades of his own life real British incomes per head almost tripled; in his fifth decade, they rose just 4%…
(11 May 2013)

Gattopardo economics: The crisis and the mainstream response of change that keeps things the same

Thomas I. Palley, Macroeconomic Policy Institute

Gattopardo constitutes change that keeps things the same. Gattopardo is relevant for understanding the economics profession’s response to the financial crash of 2008. This paper explores gattopardo economics as it applies to the issues of the macroeconomics of income distribution; the global financial imbalances; and inflation policy. Gattopardo economics adopts ideas developed by critics of mainstream economics, but it does so in a way that ignores the thrust of the original critique and leaves mainstream analysis unchanged. Gattopardo economics makes change more difficult because it deceives people into thinking change has taken place. By masquerading as change, it crowds-out space for real change. That makes exposing gattopardo economics a matter of vital importance.
(January 2013)
Read full paper

The Wrath of Capital: Neoliberalism and Climate Change Politics

Allan Stoekl, Climate and Capitalism

Review of The Wrath of Capital: Neoliberalism and Climate Change Politics by Adrian Parr

This book is a welcome addition to the spate of recent books on the ecological and resource calamities currently facing the planet. Unlike so many others – one thinks in this context of authors as disparate as Bill McKibben and Richard Heinberg – Parr analyses the crisis in the context of global inequality and social injustice. Her analysis is firmly rooted in a Marxism that allows a more comprehensive grasp of why and how the current state of affairs has developed.

She makes it clear that the worsening state of the environment is the effect of global capitalism; the crisis therefore cannot be effectively addressed within the parameters of capital. She does not propose, as do so many, the mere importance of individual initiative, without any contestation of larger economic and social injustices that are inseparable from the workings of the neoliberal order.

Counting on individuals alone to solve the ‘environmental problem’ is itself a symptom of the overarching problem: the current ideological triumph of a relentless capitalist neoliberalism, grounded above all in the supposed wants and needs of the (consumerist) individual…
(16 May 2013)

“Twenty-Something” Entrepreneurs Return To Northern Michigan

Ken Winter, Dome Magazine
As Governor Rick Snyder wrestles with growing the economy and creating jobs, Northwest Michigan finds itself experiencing a “twenty-something” phenomena: Young adults are returning home, often to create their own opportunities. Most have left big city jobs to return home for the slower pace and old-fashioned values. They miss being by the water…and their families. In the sleepy, 1,200-people, posh resort community of Harbor Springs nestled alongside Lake Michigan, at least a dozen have returned in the last year to either set up shop or buy an existing business. The pattern is repeating itself throughout the region as young entrepreneurs exit Chicago, New York, San Francisco and Los Angeles.

While local Chambers of Commerce and Economic Development organizations focus on attracting larger businesses to provide jobs, entrepreneurs pursue their own opportunities to maintain control over their lives and destinies. They’ve chosen the slower place, time with family and great outdoors of “home” over the bright lights of the city that once lured them away.

Leelanau County Commissioners just voted to abolish their own economic development corporation and rejected a partnership with nearby Grand Traverse County designed to promote growth. Meeting in Suttons Bay on April 8, commissioners said that their Northwestern Lower Peninsula County is wealthy enough already and doesn’t need to grow. They said it’s up to people to find their own jobs or businesses and make their own plans…
(24 May 2013)

The Economy Of Tomorrow Project

Marc Saxer, Social Europe Journal
The near meltdown of the world economy in 2008 took most academics and decision-makers by surprise. Much of the early analyses concentrated on the “greed is good” incentive structures and “jenga leverage towers” of casino capitalism. However, the crisis was by no means an accident but rooted in the inherent instability of financial capitalism. Its failure to generate aggregate demand created global and domestic imbalances, which in turn are the turf for bursting bubbles. But the crisis goes well beyond the economy. It is increasingly understood as a multidimensional economic, ecological, political and metaphysical crisis[i]…

It is against this background that the Friedrich-Ebert-Stiftung (FES) launched the “Economy of Tomorrow” (EoT) project. National model workshops in China, India, Indonesia, South-Korea, Thailand and Vietnam are searching for alternative development models. Bringing together more than one hundred participants from Asia and Europe, the ‘EoT Dialogue‘ series has displayed an astonishing convergence in the challenges identified. Asian economic and political thinkers and decision-makers have realized that old models are no longer capable of tackling the ecological, economic and social crises. Asian thinkers have come to the conclusion that new models need to be developed that can help to move their societies onto a path of sustainable economic growth.

The Economy of Tomorrow development model
The EoT development model needs to describe a virtuous economic cycle capable of tackling the macro-economic, ecological, social and political crises. At the same time, the EoT model needs to be the platform on which discursive alliances can join forces for the struggle over the shift of the development path. Hence, the aim is not to build a unique model but, on the very contrary, to be compatible with existing models wherever it is possible…
(20 May 2013)

Ducks image via shutterstock. Reproduced at with permission.

Tags: climate change, end of growth, limits to growth