When looking at the way contemporary global value chains/global production networks (GVCs/GPNs) and the articulations of globalised capital have been studied, it is clearly visible that the hegemonic power of Multinational Corporations (MNCs) has monopolised the empirical and theoretical analysis. Indeed, their ability to maintain control over the technological, financial and commercial flows through private-led governance has impacted most of the industrial development and underdevelopment of the Global South. Such footloose private operations have often caused undesired consequences such as eroded environmental standards, low wages and scrapped social protection rights. Governments have joined in a race to the bottom on fiscal and labour deregulations in order to attract foreign direct investment in exchange for low and semi-skilled jobs, resulting in very low fiscal revenue, low productivity, balance of payment imbalances and poor social outcomes.
The underpinning theory was that countries should follow their comparative advantages and let the market determine prices of labour (costs) and goods in order to be competitive in the world market and maximise returns. Yet, such losing game has been criticised since the start by heterodox development economists who widely denounced how theories and policies of development forgot the role of the state in history and in the present. In other words, public institutions have always played a key role not only in the quantitative making of capitalist accumulation, but also in its qualitative distributional and developmental outcomes.
Building upon the heritage of such scholarship, and in view of multiple and overwhelming ‘market failures’ in the global South and beyond, a new wave of Marxist-institutionalist inter-disciplinary literature spanning from Geography to International Economics and Finance has been trying to untangle the potential synergies between the public and the private domains by connecting the GVCs/GPNs and Developmental State approach.
In this debate, it has been emphasised that the state should be seen as a facilitator (i.e. assisting firms in smoothing market transactions); a regulator (combined with distributor to mitigate inequality and negative market externalities); a buyer (i.e. public procurement); a producer (i.e. state-owned enterprises) and a financer as a result of state-capital reconfigurations through sovereign wealth funds and development banks. Therefore, such functions should be foregrounded in analyses of development, because they are key to understanding developmental sources and processes within GVCs. Read More »
Back to work!
As the COVID-19 health crisis deepens, it looks increasingly clear that the short-term collapse in global output is likely to exceed that of any recession in the last 150 years – that is, in the entire history of capitalism. The ILO estimates that the crisis will lead to the destruction of 195 million jobs. Hence, after discussing at length the epidemiology of the COVID-19 pandemic, media attention is now increasingly focused on how to restart the global economic engine. We may still be mourning our dead, but time seems to have come to discuss how we guarantee economic survival that, under capitalism, is based on production and work. Here in the UK, from where I am writing this piece, getting ‘Britain back to work’ is becoming the new mantra for the government, even if its own leader is still recovering from the virus. Similar concerns are debated across the world, as the pandemic has by now clearly turned from a planetary health threat into a planetary economic threat. Yet, getting the world ‘back to work’ ain’t no easy endeavour, whilst maintaining social distancing. Global capitalism is based on social interactions. In fact, its global phase has aimed at erasing social distancing, not just between working people but also between countries, markets, commodities and consumers. But at present, the way in which we are used to regenerate life under capitalism would literally kill us, and this is no small print in explaining the impasse of the COVID-19 crisis. It should be the starting point to analyse it. Ultimately, before turning into a crisis of production, the current pandemic has created a systemic crisis of social reproduction. As argued by Tithi Bhattacharya, the pandemic has shown the centrality of life-making activities for the working of capitalism. Moreover, it has also shown the value of care, as well as the stark ‘care inequalities’ experienced by different communities and individuals across the globe. By all means, this is a reproductive crisis like no other before. Read More »
From a prison cell in 1930, Antonio Gramsci wrote “The crisis consists precisely in the fact that the old world is dying and the new cannot yet be born; in the interregnum a great variety of morbid symptoms appear.” The political economic and biological relevance of Gramsci’s words and the conditions under which they were written extend well beyond historical parallel and literary metaphor. A crisis has metastasized from the micro-biological to the political economic. Now, neoliberalism is dying. In the interregnum, a great variety of morbid symptoms have appeared: social distancing, crisis policing, death camps, and pandemic labor. Of what disease are these symptoms? Not coronavirus. Carceral capitalism. Read More »
Most economists are greatly underestimating the economic challenges posed by the Covid19 pandemic. Without a correct understanding of those challenges, the aggressive monetary and fiscal measures many government are now pursuing will fall well short of their goals. They will go down in history as economic Marginot Lines—scaled up versions of tools designed to fight past crises.
The pandemic poses new and unique economic challenges. It compromises our ability to engage in productive and commercial activities requiring close contact between groups of people—that includes most of the things sustaining a modern economy. Epidemiologists tell us this is needed for several months. Responding in a way that minimises the loss of life and safeguards our long-term productive capacities requires two things: Temporarily shutting down large swaths of the economy, and focusing society’s productive resources on the kinds of work needed to fight the pandemic.
Most economists have not yet understood this partly because the scale and scope of what is needed pushes beyond the boundaries conventional economic thinking, and beyond what they generally consider to be legitimate “economic questions”.
The pandemic requires an unprecedented mobilisation of what feminist economists call care labour: work to care for ourselves, our families, and our communities. Over the next few weeks or months most people need to be focused on a vital job: caring for our collective health and helping save thousands or even millions of lives by staying at home. Many families will have to do this while simultaneously caring for millions of children now out of school, for other loved ones who cannot fully care for themselves, and for those who fall ill but do not require hospitalisation.
We need to allocate resources to enable people to perform this work.Read More »
In this article I remind readers about the existence of “sacrificial generations” within global capitalist history. By sacrificial generation I mean a group of people at a point in time that experiences suffering with the immanent or intentional effect of changing economic, political or social conditions, which are in turn disproportionately enjoyed by another group of people at a later period in time. I identify four areas in which there systematically exists sacrificial generations: three stages of capitalist development (state formation, capitalist property rights transition and early industrialization) and a cyclical aspect of capitalism (Polanyian-Marxian cycles). It could also be argued that the future generations which would disproportionately experience the environmental costs of past and present generations’ consumption are “climatic sacrificial generations”, but this will not be explored. Read More »
The rise of a new global ‘robot reserve army’ will have profound effects on developing countries but will it mean people will be working hard or hardly working?Read More »
Uber’s usual tricks — to provoke price wars in an attempt to increase their share of markets, evade taxes, and undermine workers’ rights — are alive and well in Africa.
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In two previous posts on this blog, I’ve discussed the issue of premature deindustrialization and some of its possible consequences. In a recent paper, I, along with co-author Bret Anderson of Southern Oregon University, explored the potential consequences of premature deindustrialization further by examining the possible connections between premature deindustrialization and the defeminization of industrial employment. Premature deindustrialization is a situation in which the shares of manufacturing value added and employment begin to shrink at per-capita income levels much lower than those of the early industrializers, along with manufacturing employment peaking at lower levels. The scarce manufacturing jobs that do remain, however, are likely to be relatively high paying jobs that countries and workers compete for. In our work, we assessed whether premature deindustrialization is a feminizing or defeminizing force in industrial employment. By examining 62 countries from 1990 to 2013, we find that premature deindustrialization is likely to amplify the male bias of industrial upgrading.Read More »