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Category: governments & markets

Is There Sufficient Room for Local Communities in a Globalized Economy?

In a recent dialogue economists Raghuram Rajan and Paul Collier both defended their view that local communities should be re-empowered again. Yet Collier called it ‘dumb’ to reverse globalization. But can we have our cake and eat it, Ilse Oosterlaken wonders. Would it not be necessary to make economies more local before local communities can thrive again?

How the Welfare State Became the Neoliberal Order

“Amy C. Offner’s Sorting Out the Mixed Economy remakes a popular understanding of how today’s neoliberalism was built. Offner shows that neoliberalism, rather than having been imposed by the Washington Consensus, was in fact first developed at a local level. The book shows American entrepreneurs, trained in big government as Lilienthal was, working together with Latin American businesses, banks, and landlords. It was when these new kinds of partnerships returned to the US—when private companies, treated as public concerns and sustained by government funds, began to take shape in the “developed” world—that neoliberalism truly began.”

Is a Job Guarantee the Answer?

“It’s no wonder that people like the idea of a job guarantee, with the government as the employer of last resort, promising a job to anyone who wants one. It would avoid the catastrophic and well-documented social, economic, political and cultural costs of long-term unemployment on families, health, life expectancy and communities. And economists love that it’s an ‘automatic fiscal stabiliser’: it increases government spending when the economy is weak by funding the guaranteed jobs, and reduces it as the economy recovers. So, if the benefits of a job guarantee are so big, what’s the problem?”

Bailouts Pose an Economic, and Moral, Threat

“Suddenly in these times of the COVID-19 crisis, everything is ‘free’: stimulus checks, benefits, paycheck loans, and medical care. The government can spend with reckless abandon. Trillions of dollars of debt are rubber-stamped with little fanfare. […] The result of a government-rescue culture is not the flowering of capitalism but very much the opposite. As Ruchir Sharma writes in the Wall Street Journal, ‘the irony is that the rising culture of government dependence is, in fact, a form of socialism – for the rich and powerful‘.”

A Protestant Perspective on Privatization and Subsidiarity

“There are diverse theories and accounts of subsidiarity, and they can often (although not always) be understood as complementary. In what follows, I will sketch a brief biblical and historical account of subsidiarity, with special attention to Protestant sources, before concluding with some thoughts about the significance of this teaching for political philosophy and public policy, particularly as it relates to the legitimate scope of government authority and action in areas including the provision of public goods, (de)regulation, and privatization.”

Can We Create All the Money We Need?

“Many mainstream economists have backed away from the view that deficit-financed public spending is necessarily risky or counterproductive. Space has also opened in public debate for non-mainstream thinkers who argue full-throatedly for a bigger, more active public sector, freed from imaginary financial constraints. The most visible of these today is the school called Modern Money Theory or Modern Monetary Theory (both terms are used), or MMT. […] Stephanie Kelton is among the most prominent of the dozen or so economists associated with MMT. Her new book The Deficit Myth is intended to bring MMT to a broader audience. […] The policy conclusions are mostly convincing; the route by which they’re arrived at is less so.”

Big Pharma Wants to Pocket the Profits From a COVID Treatment You Already Paid For

“Our data suggests that Gilead’s considerable accomplishment in securing authorization for use of remdesivir in treating COVID-19 represents only the culminating step in a cumulative process of innovation that involved the collective action of public, as well as private, enterprise. While Gilead will likely invest several billion dollars in bringing remdesivir to market, our data suggests that the public sector, in aggregate, has already invested much more. Patent law and the USPTO recognize the role played by Gilead in the discovery and development of remdesivir. There is, however, no mechanism for similarly recognizing the decades of foundational, basic research that made this discovery possible.”

The Market Is Not Our Master — Only State-Led Business Cooperation Will Drive Real Economic Recovery

“Market-shaping still preserves the beauty of markets as mechanisms that enable the generation of wealth like no other, and which reward entrepreneurship and innovation. And as long as they are shaped to deliver positive outcomes, markets can avoid the blunt instrument of over-regulation. By extension, market-shaping is best achieved by multiple actors coming together and collaborating to achieve a shared goal. Much as multi-lateral international cooperation will defeat COVID-19 more effectively than countries going it alone, economic recovery will happen faster with collective action.”

No More Free-Lunch Bailouts

“Far from a step toward state control of the economy, conditional bailouts have proven to be an effective tool for steering productive forces in the interest of strategic, broadly shared goals. When designed or implemented incorrectly, or avoided altogether, they can limit productive capacity and allow speculators and insiders to extract wealth for themselves. But when done right, they can align corporate behavior with the needs of society, ensuring sustainable growth and a better relationship between workers and firms. If the crisis is not to go to waste, this must be part of the post-COVID-19 legacy.”

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