In Price Wars: How the Commodities Markets Made Our Chaotic World, sociologist and filmmaker Rupert Russell travelled to some of the world’s most chaotic places: war zones in Ukraine, Iraq, and Somalia, the climate wars in Kenya and Guatemala, and Venezuela’s economic catastrophe. Told as gonzo investigation into what made the 2010s so tumultuous, Russell links each of these eruptions to swings in commodity prices, and the financial speculators whose bets set their prices.Read More »
The structure of anti-trust laws is generally and neatly divided into ex-post enforcement and ex-ante regulation of market conduct and its participants. It is a matter of social and economic policy choice as to whether any regulation should precede ‘harm’ or follow it, as is the construction of ‘harm’ across statutes. For example, the requirement of a merger notification is an ex ante means to understand and assess the market impact of a merger. On the other hand, abuse of dominant position is an ex-post assessment once the dominance has set in, which may be in the long run. The determination of abuse is subject to a rule of reason and analysis by the competition authorities. Against this background, the question is what happens in the intervening period when an undertaking is slowly and surely inching towards domination, engaging in conduct which would be punished only once it becomes dominant ? What happens to the process of concentration of markets, along with the practices in concentrated markets? These questions are not borne out of academic interest alone and are not completely answered by a simple focus on anti-competitive agreements, as will be seen below. The analysis will zoom in on the Indian market conditions to make a case for questioning the timing of regulatory intervention and proceed to show that new economic methods may be required in this task.Read More »
We’ve witnessed a revival of debates about the Washington Consensus and the future of neoliberalism in recent months. Recent increases in public spending have led several commentators to conclude, or lament, that decades of neoliberal consensus have been shattered. Much of this debate is misguided, rooted in a mistaken dichotomy between ‘states’ and ‘markets’, and a corresponding conception of neoliberalism as primarily involving a reduction in the role of the former. Efforts to rehabilitate the Washington Consensus, meanwhile, rely on flimsy and heavily ideological counterfactuals.
In this post, I want to take up another angle on this question, asking: what is ‘the market’ in practice? In particular, I take a closer look at the emergence of the idea that ‘interest rates should be market-determined’. This was a core tenet of the ‘Washington Consensus’ in John Williamson’s original formulation. It was also, historically, a key argument of neoliberal economists. From the early 1970s, several influential pieces (e.g. McKinnon 1973; Shaw 1973) urged the deregulation of interest rates, arguing that while usury caps were intended to assist small farmers, they wound up forcing banks to concentrate on relatively low-risk loans to government or large-scale industry.
In practice, though, the relatively simple proposition that ‘interest rates should be left to the market’ invited a whole range of difficult questions and political challenges.
In a recent article in New Political Economy tracing the history of World Bank agricultural credit programmes (Bernards 2021), I show how neoliberal approaches to development have never really involved ‘shrinking the state’ and unleashing markets so much as fraught and failure-prone efforts to figure out who and what should be governed by, and how to construct, markets.Read More »
In 1959, the Ford and Rockefeller Foundations pledged seven million US$ to establish the International Rice Research Institute (IRRI) at Los Baños in the Philippines. They planted technologies originating in the US into the Philippines landscape, along with new institutions, infrastructures, and attitudes. Yet this intervention was far from unique, nor was it spectacular relative to other philanthropic ‘missions’ from the 20th century.
How did philanthropic foundations come to wield such influence over how we think about and do development, despite being so far removed from the poor and their poverty in the Global South?
In a recent paper published in the journal Economy and Society, we suggest that metaphors – bridge, leapfrog, platform, satellite, interdigitate – are useful for thinking about the machinations of philanthropic foundations. In the Philippines, for example, the Ford and Rockefeller foundations were trying to bridge what they saw as a developmental lag. In endowing new scientific institutions such as IRRI that juxtaposed spaces of modernity and underdevelopment, they saw themselves bringing so-called third world countries into present–day modernity from elsewhere by leapfrogging historical time. In so doing, they purposively bypassed actors that might otherwise have been central: such as post–colonial governments, trade unions, and peasantry, along with their respective interests and demands, while providing platforms for other – preferred – ideas, institutions, and interests to dominate.Read More »
A flawed understanding of the concept of “public good” hampers the fight for equitable access to the upcoming COVID-19 vaccine
The term “global public good” has been used in very different ways by policy makers, economists and others. The term “global” is not particularly controversial, and in this context is generally understood to involve cases where the benefits of the service or good impact residents of more than one country, even if not necessarily the whole world. The term “public good” is subject to more diverse uses, often depending upon one’s educational or professional training.
For many people, perhaps most, the term “public good” is loosely defined to include cases where governments are willing to undertake measures to expand access, with universal access at least an aspirational goal. However, among the other influential definitions of “public good” is one that is exceptionally restrictive. A proposal by Paul Samuelson first published in 1954, meant at the time as an extreme and polar case, has found its way into countless articles, textbooks and academic courses, and has parameters that are rarely met in practice. At times, Samuelson’s 66-year-old paper is actually an obstacle to collective efforts to supply and distribute goods that have considerable impact on society.
The COVID-19 pandemic presents an astonishing global challenge regarding the control of the pandemic and the reduction of harm. The health impacts are large, particularly for older patients, and growing unpredictably, and the pandemic has had an enormous social and economic impact on everyone, with no obvious end in sight.Read More »
By Jack Copley and Alexis Moraitis
The coronavirus pandemic has required states to take unprecedented steps to backstop the world capitalist economy. This has included enormous liquidity injections into financial markets, guaranteeing the wages of furloughed workers, and temporarily requisitioning and coordinating parts of the private sector. Yet last year a different threat – not epidemiological but proletarian – similarly forced states to adopt redistributive policies against their wills, albeit on a smaller scale.
From the vantage point of the current uprisings against racist police violence, the empty streets of the early 2020 lockdown appear as a brief exception to the broader trend of mass unrest. In 2019, streets, avenues, and squares in different parts of the world flooded with protestors decrying the pro-rich policies of their respective governments. The scale, endurance, and spectacular disruptiveness of these popular explosions pressed governments from Western Asia to Europe to Latin America to abandon so-called neoliberal fiscal rectitude and reluctantly embrace Keynesian stimulus policies.
In Chile, on the eve of the autumn 2019 revolt, billionaire austerian president Sebastián Piñera invoked a classic metaphor of neoliberal stoicism to explain how he would resist popular opposition to his painful reform programme: ‘Ulysses tied himself to a ship’s mast and put pieces of wax in his ears to avoid falling for the … siren calls’. Less than one month later, this modern Ulysses had broken free from his tethers, announcing increases in the minimum wage, healthcare benefits, pensions, electricity subsidies, and the reform of Chile’s very constitution. There are clear parallels with France’s Emmanuel Macron, a former investment banker who assumed power in 2017 on a platform of market discipline, only to buckle under the weight of the relentless Gilet Jaunes movement and announce a €17 billion package of concessions.
How are we to grasp the jarring Keynesian U-turns of such cartoonish neoliberal governments in the face of mass protest and pandemic? It is commonly assumed that the neoliberal project represented the shrinking of the state sphere and its replacement by the cold logic of the marketplace. The 2008 bank bailouts appeared to buck this trend, as states were called upon to undertake drastic interventions. But this turned out to be a hiccup in neoliberalism’s larger narrative arc, as austerity quickly took hold. Yet perhaps this latest accumulation of crises will at last force states to reclaim the territory they had ceded to the market. After its ‘strange non-death’, is neoliberalism finally dying?Read More »
The global pandemic and associated developing global recession are calling into question a whole range of economic truths and demanding novel solutions to various interlinked societal problems. In this blog post, I want to connect what we’re currently seeing in the retail sector during this pandemic to deep-seated narratives about the nature of economic exchange, in particular to the notion of “the market”.
The market is one of the most dominant concepts for making sense of the social world, primarily because of the prestige of the economics discipline and the elevation of the market concept by the discipline (albeit in a highly abstract manner). At its most basic, it paints the economic sphere as akin to a marketplace, where there is a level playing field and rivals compete for custom primarily through having the keenest of prices. Other, more complex, ideas often get laid over this concept, such as the market pricing mechanism allowing supply and demand to equilibrate, price signals communicating complex information to market participants, and, as such, the market allowing for decentralised decision making led by consumer demands. (For a much (much) fuller account of the market concept, see here.)
However, as a result of the coronavirus pandemic increased demand for basic goods – such as toilet roll, hand sanitiser and flour – has put a strain on the distribution of these goods and has engendered a response quite dissimilar to the narrative of the economic system as a competitive, decentralised, profit-maximising market. What we have seen, instead, is retailers working as sites of governance in order to ensure a degree of equity in the distribution of resources. Read More »
Economic imagery pervades societal discourse. Part of this imagery projects markets as existing everywhere; the common societal parlance sees talk of the car market, the grocery market, the computer market, or, simply, the market. Yet, excepting traditional marketplaces or medinas, these markets have no physical manifestation. Unlike with other major social institutions there is no where to visit; there is no headquarters. Instead, markets are said to exist when there are competitors in the provision of services or goods and where each competitor has a fair and equal chance of succeeding. The market, then, exists in a metaphorical, rather than physical, sense – it implies that the capitalist system operates diffusely like a marketplace, rather than there being an actual marketplace in which economic transactions take place.
The further extension of economic imagery has seen the market metaphor applied to the provision of political and economic ideas, with the notion being that there exists a level-playing field on which ideas are free to compete and that this competition will weed out weaker ideas. Hence, “no platforming” of racist or homophobic speakers should be staunchly opposed as it will impede the competitive destruction of abhorrent ideas. An important ancillary notion is that any idea that has come to be orthodox received wisdom has justly achieved this status through free and fair competition in the marketplace of ideas.
The problems with this account of the ideational development of society are legion, but I’ll limit myself to explaining just three, namely 1) product heterogeneity, 2) distribution of ideas, and 3) production of ideas.Read More »