Thinking politically about capital controls: a class perspective

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The recent global financial crisis sparked renewed debates, both within academia and policy-making circles, about regulating highly mobile cross-border money-capital flows. A particular type of policy tool has received considerable attention: capital controls (CC). Within mainstream economics and policy-oriented circles (including policy-makers in central banks, finance ministries, and international organisations such as the IMF and the G20) there has been a growing recognition that unregulated cross-border money-capital flows can considerably disrupt capital accumulation, and debates have accordingly focused on the potential role and effectiveness of temporary CC in limiting the destabilising potential of those flows, while maintaining a long-term commitment to an open capital-account and free capital mobility.[1] By contrast, the Left (including organised labour, progressive economists, and civil society organisations) has been largely critical of capital-account liberalisation, and has denounced its detrimental effects in terms of constraining policy options for development and long-term industrial development.[2]Read More »

Towards a Critical Pluralist Research Agenda in Development Economics: Some Bricks from Berlin to Build Upon

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By Svenja Flechtner, Jakob Hafele & Theresa Neef

Much has been said about what’s going wrong in development economics – on this blog (for example by Adel Daoud, Ingrid H. Kvangraven, or Jacob Assa) and elsewhere (for example by Angus Deaton, Dani Rodrik, and Benjamin Selwyn), as well as in newspapers. Much has been written, too, about alternative perspectives and approaches to economic development thinking (this recent compilation by Reinert, Ghosh and Kattel gives an overview of many of them). But is it possible to build a coherent pluralist and critical framework out of these approaches? If so, what could a critical and pluralist research agenda for development economics look like?Read More »

Toward an Economic Theory of Imperialism?

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“Our role is to widen the field of discussion, not to set limits in accord with the prevailing authority.” Edward Said, Orientalism (1978)

This blog post aims to introduce Patnaik’s theory of imperialism – as developed in The Value of Money (2009) – and its relation to economic theory. According to Patnaik a cogent economic theory that seeks to understand the laws of capitalism necessarily stems from a coherent theory of money due to the central place money plays in a capitalist mode of production. Hence, the purpose of his scientific endeavor is to examine the underlying social arrangement behind the determination of the value of money. Consequently, the conceptual framework Patnaik establishes starts with the following question: what does determine the value of money?

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e-Book Launch: Can Dependency Theory Explain Our World Today?

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Is it time for dependency theory to make a comeback? Its central idea is that developed (”core”) countries benefit from the global system at the expense of developing (”periphery”) countries—which face structural barriers that make it difficult, if not impossible, for them to develop in the same way that the already developed countries did. As neo-classical economics came to dominate the field in the 1980s, the theory lost prominence and traction. Given the vast imbalances that persist within and among nations in the global economy today, it’s an opportune time to revisit the framework.

To that end, INET’s Young Scholars Initiative (YSI) has released a new e-book, Conversations on Dependency Theory. The volume, released by YSI’s Economic Development Working Group, comprises interviews with 13 scholars from around the world who express a variety of viewpoints on the meaning and relevance of dependency theory in today’s context.

Is ‘Imperialism’ a Relevant Concept Today? A Debate Among Marxists

This month, four prominent Marxists met at The New School in New York to debate the relevance of imperialism. The debate was related to the publication of Prabhat Patnaik’s (Jawaharlal Nehru University) new book A Theory of Imperialism (written with Utsa Patnaik). With him in the panel were geographer David Harvey (CUNY), political scientist Nancy Fraser (The New School), and economist Duncan Foley (The New School). Economics Professor Sanjay Reddy (The New School) moderated the debate. The main question for the panelists was: Is ‘Imperialism’ a relevant concept today? A fruitful debate followed, suggesting that contemporary imperialism is crying out for analysis and critique.

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What Can We Learn from Alternative Theories of Economic Development?

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As people across the world are struggling to understand the rise of Trumpism, anti-establishment and anti-free trade movements, Erik Reinert (Tallinn University of Technology), Jayati Ghosh (Jawaharlal Nehru University) and Rainer Kattel (Tallinn University of Technology) have put together an impressive Handbook of Alternative Theories of Economic Development that can help make sense of what’s going on. As the field of Economics has become increasingly narrow since the 1970s, many important scholars and theories have been excluded from the field, and since forgotten. This Handbook presents rich historical accounts and ideas that can help explain economic and social development, and is a much needed attempt to correct for the existing biases in the field of Economics.Read More »

Beyond the Third Moment in Law and Development: New Insights from Legal Political Economy

This blog post provides insights from what I have come to call the legal political economy perspective to critique the World Bank and neoclassical economics more generally. At the heart of what has been called the World Bank’s Third Moment in Law and Development is the claim that government involvement is necessary to eliminate “market failures” and promote both business development and social justice.

In contrast to the mainstream Law and Economics (L & E) approach, which informs the Third Moment, my position, derived from the Critical Legal Studies (CLS) tradition (and its historical ancestor, Legal Realism), is:

  • Property is fundamentally a bundle of rights and thus property ownership at its core entails coercive power struggles between rivals and between owners and non-owners; coercion at its core.
  • The interrelatedness of law and power relations (“If the program of Realists was to lift the veil of legal Form to reveal living essences of power and need, the program of the Critics is to lift the veil of power and need to expose the legal elements in their composition” (Gordon 1984, 109)). These power struggles over economic outcomes occur within the context of background laws that determine property, contracts, and torts.
  • The notion of an economic seesaw in Hale’s framework with potential for instability in property and contractual relations.
  • If the goal is to understand how legal structures shape power struggles then the question becomes how are the laws themselves to be determined? Following the CLS perspective, I would emphasize the role of ideational factors determining the intellectual underpinnings of neoliberal policies—factors that have consciously been created by the financiers of the L & E tradition.

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