In this post we show that an increase in aggregate demand first generates an increase in the use of productive equipment and then an increase in productive capacity. This suggests we do not need to worry about inflation after a fiscal or monetary stimulus to boost aggregate demand, but can rather expect higher investment in the long term along with utilisation returning to its pre-shock levels.
A stylised fact that characterises modern economies is that part of the installed productive capacity is persistently idle. By productive capacity I mean the productive equipment (mostly fixed capital goods) in existence, together with that part of the workforce which is required to operate it. As we can see in Figure 1, in countries as diverse as Belgium, Finland or Lithuania, the effective utilisation of installed capacity often gravitates below 100%, and around 80% on average worldwide.
Figure 1. Installed capacity utilisation by country (1998Q1-2017Q4).
Source: see Appendix I.
The academic consensus is that there are large margins of idle capacity planned by entrepreneurs. The reasons why entrepreneurs plan to operate with idle capacity vary according to the school of thought considered. At the risk of making a drastic simplification, we can say that while some authors think that entrepreneurs do so in order not to lose market share in the face of changes in demand, others tend to think that there is a rate of utilisation of installed capacity that does not accelerate inflation (Non-accelerating inflation rate of capacity utilisation, NAICU).
The Women and Development StudyGroup of the Development Studies Association (DSA) recently revisited Sally Brown and Anne Marie Goetz’s 1997 Feminist Reviewarticle ‘Who Needs (Sex) When You Can Have Gender? Conflicting Discourses on Gender at Beijing?’. The article examines challenges to the concept of ‘gender’ at the UN Fourth World Conference on Women in 1995, including debates on its institutionalization and depoliticization, the tendency for it to be used as a synonym for ‘women’, and the conservative backlash against the very use of the concept itself. The retrospective value of doing this showed just how relevant these questions continue to be for Gender and Development policy, practice, research and teaching today.
For example, when teaching sex and gender, critical feminist theorising can sometimes lead students to feel that Gender and Development (GAD) approaches are too instrumentalized, too much like an industry and disconnected from reality. Moreover, the positionality of working as ‘the gender person’ in larger projects, where the gender component is often seen to stand alone with little connection to other intersectional dynamics, remains an ongoing challenge. The increasing and worrying trend of an anti-woke ‘backlash’ against feminist analysis and gender equality across the globe was also a recurring theme.
We also considered how ‘gender’ as a concept is mobilised and used in food and agricultural studies specifically. In this blog, therefore, we examine what happens to the concept in food research, policy and practice, mapping out four broad trends. Firstly, the centring of the connection between gender, nutrition and mothering remains pervasive. Secondly, ‘gender equality’ is often instrumentalized as a tool to increase marketized forms of agricultural productivity. Thirdly, while a focus on gender is obviously welcome, it can in fact obscure other important axes of oppression, such as race, class, sexuality, disability and nationality. Finally, it is consequently crucial to ground research, policy and practice in historical specificity and context in order to take into account multiple underlying oppressions and structural inequalities that influence the ability of a range of different actors in the food system to participate both socially and economically.
One of the most astonishing books that Walter Rodney – the Guyanese revolutionary and historian – ever wrote was published several years after he was assassinated on 13 June 1980. The story of this book and how it came to be published is almost as remarkable as the life of the revolutionary himself. In 1978, Rodney was working as a full-time activist of the Working People’s Alliance (WPA) in Georgetown, the capital of Guyana. The WPA was a revolutionary organisation seeking to unite the African and Indian working class in the highly divided country, then run by the brutal Forbes Burnham. Rodney was the group’s principal organiser and intellectual, and to support himself and his family, and to fundraise for the WPA, he travelled overseas to teach and work.
One trip to Germany in 1978 shows us how his last book came to be. Rodney travelled from Guyana to Hamburg in April of that year. He was already the celebrated and outspoken author of How Europe Underdeveloped Africa, and his arrival was eagerly anticipated. He had been invited by the radical German scholar, Rainer Tetzlaff, to teach a course on the history of African development at the University of Hamburg.
The lecture course Rodney was employed to teach was titled, ‘African Development, 1878-1978’, and comprised, according to the one-page programme, ‘(i) a brief introduction to development concepts; (ii) a survey of African colonial economies with special reference to East and West Africa; and (iii) an examination of post-colonial developments in Kenya and Tanzania.’ According to the brief programme there were going to be twelve lectures, comprising, ‘The debate on development concepts in Africa’ and ‘Post-colonial development strategies’.1
This post is adapted from the preface for the newly published Turkish edition of The Struggle for Development, first published in 2017. The original edition aimed to root development thinking and practice in the analysis of class relations, and intellectual and political support for labouring class struggles. Turkey is experiencing numerous social struggles that illuminate the relevance of the arguments in this book. It is my hope that this book contributes to illuminating the social, developmental, value of these struggles.
Collective struggles by labouring class communities – in and beyond the workplace – have the capacity to generate real human developmental gains for these communities. Consequently, these struggles and the labouring classes that pursue them, should be considered as developmental.
The majority of development thinking across the political spectrum – whether theoretically or policy focussed – tends to downplay labouring classes, their struggles and the gains they generate. Rather, such struggles are usually ignored or are portrayed as obstacles to development, because they do not adhere to dominant capitalist notions of development.
Capitalist notions and strategies of development take many forms, and can be thought of as existing along a spectrum – from more market-led/neoliberal, to more state-directed forms. In this book I argue that, despite notable differences, these forms of development represent varieties of capital-centred development. Here capital accumulation is prioritised as the basis of economic and human development. As I show in this book, both market led and state led forms of development are based upon the assumption that labouring classes represent an objective input into the development process, rather than a subjective agent of development. This assumption legitimates labour exploitation and repression for the greater ‘good’ of capital accumulation.
Since the Brazilian Regulatory Agency for Supplementary Health’s (ANS) creation in 2000, health insurance inflation has grown at a much greater pace than general inflation. Indeed, after eighteen years the private health insurance price index was close to double the official inflation index, with its 382% (see here).
The upward course of prices can be interpreted as a response to the problems arising from the escalating costs. Baumol (2012) calls this phenomenon “cost disease”, designating that labor relates differently to production: in the case of the goods, work would be incorporated into the product; in the case of services, labor would be the product being exchanged, making difficult to substitute factors.
In “decolonial” discourse, the African leadership landscape is flattened to the point of becoming a caricature. In an earlier variation of this caricature, Kwame Nkrumah’s injunction of “seek ye first the political kingdom” was presented by political scientist Ali Mazrui as a deficient obsession with political power to the neglect of the economic. In the current variation, the neglect of epistemic “decoloniality” is characterized as the deficient underbelly of the “nationalist” movement.
Kwame Nkrumah, Sédar Senghor, and Julius Nyerere are not only three of the most cerebral figures of Africa’s “nationalist” movement, but unlike Amilcar Cabral they lived to lead their countries in the aftermath of formal colonial rule.
Contrary declarations notwithstanding, Senghor, Nkrumah, and Nyerere were acutely aware of the colonial epistemological project and the need to transcend it. Indeed, philosopher Souleymane Bachir Diagne’s re-reading of Negritude as epistemology argued that its salience lies in the dissolution of the binary opposition of subject and object in the logic of René Descartes. Whatever one’s take on the specificity of Senghor’s claims of Africa’s modes of knowing—by insisting on the interconnectedness of subject and object—he deliberately sought to mark out what is deficient in modern European epistemology and valorize African systems of knowledge. This epistemological project is built on a distinct African ontological premise.
The COVID-19 crisis has highlighted the stark reality of Africa’s extreme dependence on imports to feed our populations. In West Africa, 40% of the rice consumed is imported; African countries do not produce enough processed agricultural products to sustain their populations, with the three highest agricultural imports being wheat, rice, and vegetable oil; and local agriculture across the continent is dependent on imported inputs for production and therefore dependent on foreign exchange.
For Africans to chart a course away from extreme dependence on food imports prevalent now, the policies and thinking of early post-independence Africa—countries like Ghana and Tanzania —and international peasant movements, like La Via Campesina—offer a wealth of lessons.
As key countries adopted restrictive measures in their attempts to manage the spread of COVID-19—including the closure of air, land, and sea borders, and agricultural export restrictions—Africa is seeing a significant disruption of the supply chain due to the resulting decrease in the volume of imports. If exporters of cereals and staple foods, also affected by the pandemic, were to suddenly cease production, the many African countries dependent on these imports would be unable to feed their populations.
In the classical works of dependency theory, such as the Dialectics of Dependency (Marini 2011 ); Socialism orFascism (Dos Santos 2018 ); Dependency and Development in Latin America (Cardoso and Faletto 1979) and Latin American Dependent Capitalism (Bambirra 2012 ), 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 Vânia 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 Vânia Bambirra’s forgotten writings about peripheral women’s 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 Vânia Bambirra have ‘intersectional’ (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’s concept of the ‘super-exploitation’ of labour and Bambirra’s definition of Latin American ruling classes as ‘dominated–dominant’.