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Michael Hardt And Antonio Negri — Empire, Twenty Years On

The latest issue of New Left Review is out. Has an interesting article by Michael Hardt and Antonio Negri on how globalisation isn’t dying but just shifting to a path where global powers want to change it to their advantage. Again!

Twenty years ago, when our book Empire first appeared, the economic and cultural processes of globalization occupied centre stage: all could see that some kind of new world order was emerging. Today globalization is once again a central issue, but now commentators across the political spectrum are conducting its postmortem. Establishment political analysts, especially in Europe and North America, lament the decline of the liberal international order and the death of the Pax Americana. Newly dominant reactionary forces call for the return of national sovereignty, undermining trade pacts and presaging trade wars, denouncing supranational institutions and cosmopolitan elites, while stoking the flames of racism and violence against migrants. Even on the left, some herald a renewed national sovereignty to serve as a defensive weapon against the predations of neoliberalism, multinational corporations and global elites.

Despite such prognostications, both wishful and anguished, globalization is not dead or even in decline, but simply less easily legible. It is true that the global order and the accompanying structures of global command are everywhere in crisis, but today’s various crises do not, paradoxically, prevent the continuing rule of the global structures. The emerging world order, like capital itself, functions through crisis and even feeds on it. It works, in many respects, by breaking down. The fact that the processes of globalization are less legible today makes it all the more important to investigate the trends of the past twenty years in both the variegated constitution of global governance, which includes the powers of nation-states but extends well beyond them, and the global structures of capitalist production and reproduction.

Interpreting the primary structures of rule and exploitation in a global context is the key to recognizing and furthering the potential forces of revolt and liberation. The emerging global order and networks of capital undoubtedly constitute an offensive operation, against which we should support resistance efforts; but they should also be recognized as responses to the threats and demands forwarded by the long history of revolutionary internationalisms and liberation struggles. Just as today’s Empire was formed in response to the insurgencies of the multitudes from below, so too, potentially, it could fall to them, as long as those multitudes can compose their forces into effective counter-powers, and chart the path towards an alternative form of social organization. Today’s social and political movements are, in many respects, already pointing in this direction.

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Most important at this aristocratic level of Empire is the extent to which, despite appearances, its general contours remain unchanged. From this perspective, the much-heralded return of the nation-state—along with nationalist rhetoric, threatened trade wars and protectionist policies—should be understood not as a fracturing of the global system, but rather as so many tactical manoeuvres in the competition among aristocratic powers. America first!, Prima l’Italia! and Brexit! are the plaintive cries of those who fear being displaced from their positions of privilege in the global system.

Like the conservative French peasants whom Marx portrayed as being mobilized by memories of lost Napoleonic glory (and who yearned to make France great again), today’s reactionary nationalists aim not so much at separation from the global order as moving back up the rungs of the global hierarchy to their rightful position. In similar fashion, the conflicts between dominant nation-states and the supranational infrastructure—think of Trump railing against ‘globalism’ in his 2018 UN General Assembly address—entail a ploy for a more dominant position within, rather than an attack upon, the global system. The elites leading the dominant nation-states and supranational institutions are all driven by the dictates of a neoliberal ideology irrevocably dedicated to constructing and maintaining the capitalist global order.

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… We need today an international cycle of struggles with the intelligence to investigate the structures of the ruling global order. Sometimes, after all, the theoretical work done in social movements teaches us more than that written in libraries. Reversing their invisibility is the first step toward being able to challenge and eventually overthrow the structures of Empire.

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New UK Flow Of Funds

The UK Office Of National Statistics (ONS) is planning to publish new flow of funds statistics in the future. Till now, the ONS had just the SNA tables. Although the SNA has lots of details on stocks and flows, flow of funds gives more details.

ONS summary:

See our first combined set of experimental flow of funds statistics using new data sources providing improved breakdowns of how money moves around the UK economy

The article also has a discussion on sectoral balances which has the chart on top of this post.

The 2008 SNA explains this:

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Lance Taylor — Not So Modern Monetary Theory

Lance Taylor has a new working paper Synthetic MMT: Old Line Keynesianism With An Expansionary Twist with a summary blog post at INET.

Paper linked in that post.

He talks of the reluctance of Neochartalists to talk of increases in tax rates. Politicians such as Bernie Sanders and Elizabeth Warren running for the President of the United States as a Democrat have proposed plans to raise government spending. There is also a proposed legislation, Green New Deal. These programs may take the US economy to full capacity and hence it is important to take of increases in tax rates. Sanders and Warren have put forward some plans to raise taxes, especially on the highly wealthy. Of course, full capacity or not, tax laws affect the distribution of the national income, so need to be discussed and debated independently.

Thomas Palley has critiqued the neochartalists for ignoring these issues.

Taylor also talks of sustainability of deficits and debts because of external imbalance. This in my opinion is highly important.

Taylor calls neochartalism V.F.T., or Vintage Fiscal Theory.

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Omission And Commission In The Development Economics Of Daron Acemoglu And Esther Duflo

There’s a new paper by Robert Chernomas and Ian Hudson which critiques the economics of Daron Acemoglu and Esther Duflo. The paper was written earlier but it’s publication coincides with the recent award of the Nobel Prize, of which Duflo was one of the recipients.

Abstract:

This article is a critical review of the work of Esther Duflo, recently awarded the 2019 Nobel Prize for economics, and of Daron Acemoglu, who like Duflo has received the John Bates Clark Medal in recognition of research in development economics. Aside from the differences in the two scholars’ approaches, we argue that both downplay the role of the state and of international economic structures that influence national development, thereby obscuring the actual existing causes of contemporary underdevelopment.

From the conclusion:

It would be difficult to argue that the power of contemporary MNCs, the IMF and foreign governments did not have a significant, if not determining, influence on the development of many poor countries. Yet it would be difficult to find any mention of these recent external actors in either Duflo or Acemoglu’s work.

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Citations Needed — Episode 92: The Responsibility-Erasing Catch-All Of ‘Automation’

The latest episode of the podcast Citations Needed has a great discussion of the political economy around “automation”. It features Mark Weisbrot of CEPR and Peter Frase of Jacobin.

The episode talks of the misleading discourse and and post-truths in mainstream economics and media. For example Weisbrot points out how the US trade imbalance has a lot to contribute to reduction in manufacturing employment.

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Fantastic Critique Of Liberalism By Perry Anderson

Perry Anderson in Situationism À L’envers? in New Left Review, Issue 119, Sep-Oct 2019:

Liberalism has always contained different shades, and its dominant version has varied across countries and periods. In the capitalist world, going back to the eighties, the line of division separating a liberal politics from a politics of the left is their respective attitudes to the existing order of things: does it require structural change or situational adjustment? The degree envisaged of each defines relative locations on either side of the dividing-line. To see where Tooze’s position might lie requires a sense of the dominant liberalism of the period. That comes in two inter-related packages. Between states, the ‘liberal international order’ has for thirty years been the touchstone of geopolitical reason: free markets, free trade, free movement of capital and other human rights, policed by the most powerful nation on earth with help from its allies, in accordance with its rules and its sanctions, its rewards and its retributions. Within states, ‘neoliberalism’: privatization of goods and services, deregulation of industries and of finance, fiscal retrenchment, de-unionization, weakening of labour, strengthening of capital—compensated by recognition of gender and multicultural claims.

The first has reigned far more unchallenged than the second. Very few liberals have seriously contested the principles of free trade, the primacy of the United States, or the rule of international law as enshrined in a United Nations whose decisions the us has for the most part been able to determine at will. The liberal international order remains a precious icon. Many, on the other hand, have questioned or resisted the full application of neoliberal measures within their own societies, nowhere implemented in their entirety. The extent to which the first shapes the intellectual universe of contemporary liberalism can be judged by the adaptation of leading minds once on liberalism’s left to its requirements: thinkers like Rawls, Habermas and Bobbio all furnishing apologetic glosses on us wars of intervention against states declared outlaws by Washington, with or without the affidavit of the Security Council. Tooze has never compromised himself in this way. But the language of ‘global economic governance’, cleansed of any reference to its most prominent innovation, the proliferation of sanctions to strangle or bludgeon recalcitrant countries into line—‘war by other means’, as Ambassador Blackwill candidly describes it—offers a route to much the same.

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Anthony Thirlwall — Thoughts On Balance-Of-Payments-Constrained Growth After 40 Years

ROKE (Review Of Keynesian Economics) has a special issue, Thirlwall’s Law At 40, celebrating Thirlwall’s law which Anthony Thirlwall discovered in 1979.

Thirlwall himself has an article in the issue.

Interesting, from the conclusion:

Structural change almost certainly requires a country to design an industrial policy embracing a national innovation system to facilitate the flow of technological knowledge across all sectors of the economy. The market mechanism itself is unlikely to bring about the required structural changes needed. I am attracted to the concepts of growth diagnostics (Hausmann et al. 2008) and self-discovery (Hausmann and Rodrik 2003). Growth diagnostics involves locating the binding constraints on a country’s economic performance and to target these directly, giving the most favourable outcome from the resources available compared to the ‘spray gun’ approach to economic policy-making which may not hit hard enough the binding constraints on growth that really matter. In the case of the BoP, it would involve targeting exports with growth potential, and identifying imports where there is import substitution potential. Government expenditure on R&D to enhance export quality could reap high returns. Self-discovery involves seeking out new areas of comparative advantage and then implementing the most appropriate policies to foster them. Hausmann and Rodrik point out that there is much randomness in the process of a country discovering what it is best at producing, and a lack of protection reduces the incentive to invest in discovering what goods and services they are. Governments need to encourage entrepreneurship and invest in new activities, but the first best policy is not by the traditional means of tariffs and quotas, but public sector credit and guarantees which reward the innovator (and not the copy-cats), and can be withdrawn if firms do not perform well after a certain period of time.

Anthony Thirlwall, via Wikipedia