Whose Anger? A Review of Angrynomics

January 25, 2021January 22, 2021 Liam KennedyLeave a comment

The recent ‘insurrection’ on Capitol Hill should put an end to any liberal illusions that 2021 would usher in, in Biden’s words, a return to decency. Surreal images of the QAnon Shaman roaming the US Senate may yet become one of the defining photographs of the Trump presidency. In many ways it is symbolic of the President himself – inchoate and unashamedly atavistic yet, emboldened by law and order, obstructive and corrosive.

Many of these themes are touched upon in Eric Lonergan and Mark Blyth’s short book Angrynomics. In many senses it is a timely book, published just weeks after the murder of George Floyd and in the midst of the largest global recession since the Second World War, these are fertile grounds for anger. Certainly there is very little to dispute about Lonergan and Blyth’s premise:

“We have an abject failure of policy. Rather than presenting a major programme of economic reform, the global political elite has offered nothing substantive, instead choosing either to jump on the bandwagon of nationalism or insist that nothing fundamental is wrong… The political classes, bereft of ideas, are now desperately peddling old ideologies and instincts, or pursuing bizarre distractions like Brexit.”

As a result of this abject failure, people are angry. They are either publicly anger or privately angry. That public anger either manifests itself in moral outrage (think, for instance, of an Extinction Rebellion protest) or tribal rage (for example, and this is used in the book, fans at a football match). Private anger, meanwhile, gives us an insight into the daily micro-stresses of people’s lives. This is the Lonergan and Blyth typology of anger.

Whose Anger?

While the authors are clear that “we need to draw a clear distinction between legitimate public anger and cynical manipulation of tribal anger for political ends” (22), their analysis often fails to live up to the task. Through the centrality of “legitimate moral grievances in the Rust Belt” in explaining the election of Trump (25) and the “real stressors” of immigration driving the Brexit vote (111-112), Angrynomics ends up sidestepping important discussions of race for an overly simplistic explanation of class.

The Strategic Logics of State Investment Funds: Beyond Financialization

January 19, 2021January 11, 2021 Adam Dixon3 Comments

State capital has increasingly taken on marketized forms. From state enterprises to sovereign wealth funds, it is increasingly difficult to find much difference at the operational level with cognate organizations in the private sector. Manager cadres have become professionalized, with many having spent significant time honing their skills in the private sector before taking up their positions in state entities. Business practices and corporate governance standards typical of private capital and the syllabi of elite business schools have become the norm. This includes, as to be expected, an embrace of a shareholder value logic. State entities in doing so are becoming increasingly financialized, not dissimilarly to their peers in the private sector.

Reflections on aid and regime change in Ethiopia: a response to Cheeseman

January 18, 2021 Andrew M. Fischer1 Comment

By Jimi O. Adesina, Andrew M. Fischer and Nimi Hoffmann

In a piece, published on 22 December 2020, that he describes as the most important thing he wrote in 2020, Nic Cheeseman penned a strong criticism of what he calls the ‘model of authoritarian development’ in Africa. This phrase refers specifically to Ethiopia and Rwanda, the only two countries that fit the model, which is otherwise not generalisable to the rest of the continent. His argument, in a nutshell, is that donors have been increasingly enamoured with these two countries because they are seen as producing results. Yet the recent conflict in the Tigray region of Ethiopia shows that this argument needs to be questioned and discarded. He calls for supporting democracy in Africa, which he claims performs better in the long run than authoritarian regimes, especially in light of the conflicts and repression that inevitably emerge under authoritarianism. His argument could also be read as an implicit call for regime change, stoking donors to intensify political conditionalities on these countries before things get even worse.

Cheeseman’s argument rests on a number of misleading empirical assertions which have important implications for the conclusions that he draws. In clarifying these, our point is not to defend authoritarianism. Instead, we hope to inject a measure of interpretative caution and to guard against opportunistically using crises to fan the disciplinary zeal of donors, particularly in a context of increasingly militarised aid regimes that have been associated with disastrous ventures into regime change.

We make two points. First, his story of aid dynamics in Ethiopia is not supported by the data he cites, which instead reflect the rise of economic ‘reform’ programmes pushed by the World Bank and IMF. The country’s current economic difficulties also need to be placed in the context of the systemic financial crisis currently slamming the continent, in which both authoritarian and (nominally) democratic regimes are faring poorly.

Second, we reflect on Cheeseman’s vision of aid as a lever of regime change. Within already stringent economic adjustment programmes, his call for intensifying political conditionalities amounts to a Good Governance Agenda 2.0. It ignores the legacy of the structural adjustment programmes in subverting deliberative governance on the continent during the 1980s and 1990s.

The Socialist Market Economy in China, Vietnam and Laos: A development model to embrace?

January 11, 2021January 8, 2021 Arve Hansen2 Comments

By Jo Inge Bekkevold, Arve Hansen and Kristen Nordhaug

China, Vietnam and Laos have for three decades been among the fastest growing economies in the world. In other words, three of the best growth performers in global capitalism are authoritarian states led by communist parties with socialism as the official development goal. This fact has received surprisingly little attention, especially when considering their strong performance on a wide range of development indicators. Many claim China and Vietnam indeed represent some of the most impressive “development success stories” the world has seen in recent decades. The three countries claim to have found their own model of development combining a market economy with socialism – ‘the socialist market economy’. According to official definitions, this is not capitalism, but a more sustainable and socially just way of making a market economy work for national development and the improvement of living standards. In “The Socialist Market Economy in Asia: Development in China, Vietnam and Laos”, an edited volume newly published by Palgrave Macmillan, we engage with the coherence, achievements and failures of this particular development model.

The New “Passive” Wall Street Counterparts for States in the Global South

January 5, 2021January 3, 2021 jpetry13 Comments

By Jan Fichtner and Johannes Petry

In the past, during the time of the “Washington Consensus” developing countries from the Global South faced the IMF and the World Bank as their main counterparts in important matters of global finance. Based on our recently published research paper “Steering Capital” we argue that due to an ongoing paradigm shift in financial markets this constellation is changing profoundly. A new breed of Wall Street firms is emerging that occupies a pivotal position in the relationship between (developing) countries and financial markets – index providers.

This rise of index providers is grounded in the global shift towards passive investment. Formerly, investors gave their money to funds where a well-paid fund manager was picking stocks (or bonds) with the aim to produce above average returns – to “beat” the market in finance parlance. But now more and more investors invest in cheap passive funds (which comprise both exchange traded funds and index mutual funds) that merely track financial indices. Unlike actively managed funds, however, the passive index funds industry is characterised by enormous economies of scale – in terms of technology it is not a big difference if a passive fund has ten million or ten billion US$ assets under management. In addition, there is a strong first mover advantage. As a result, BlackRock, Vanguard and State Street dominate passive funds as the “Big Three”. Excellent recent work has since focused on how this “new money trust” is shaping the emergent ”American Asset Manager Capitalism”.

Sino State Capital and the Strengthening of Serbian Stabilitocracy

December 21, 2020December 31, 2020 imogenliu2 Comments

Chinese labour workers and their team manager laying the tracks on the Belgrade-Stara Pazova section of the Belgrade-Budapest railway. Source: author’s own.

The Belgrade-Budapest Railway has been lauded as the flagship Belt and Road project of the wider Central and Eastern European (CEE) region, and as such is promoted by Beijing as a successful template for Sino-CEE cooperation concluded via the 17+1 initiative, established in 2012 to foster relations between China and 17 CEE countries. In its host context of Hungary and Serbia, the investment has been politicised from the get-go, wherein criticism has largely focused on the project’s violation of EU public procurement rules, which require competitive dialogue and open-tender processes for projects of substantial size.

We would expect the Belgrade-Budapest Railway to be subject to greater scrutiny in both Hungary, as an EU member state, and Serbia, where external legitimacy of the EU is an important cornerstone of regime legitimacy, stemming from broad-based support for EU integration and cooperation. While this has played out in Hungary where there have been protests and where the EU launched infringement proceedings against the construction for non-compliance, the Serbian section has proceeded relatively unhindered.

Ecological breakdown: What are externalities external to?

December 17, 2020April 9, 2023 Güney Işıkara1 Comment

The 2018 Bank of Sweden Prize (falsely known as the Economics Nobel Prize) winner William Nordhaus opens the revised version of his Prize lecture as follows: “I begin with the fundamental problem posed by climate change – that is a public good or externality. Such activities are ones whose costs or benefits will spill outside the market and are not captured in market prices.”

The concept of externalities is a catch-all term, or, an empty box to capture the so-called spillover effects. Under the presumption that the market mechanism brings about the efficient allocation of resources, mainstream economic theory as well as many of its heterodox critiques argue for internalizing these spillovers by determining their costs (or benefits) and including it in the price of the commodity. In other words, the spillover effect itself must be turned into a commodity so that the market can efficiently handle it through the price mechanism.

Insofar as human-induced global warming has not been priced, so the story goes, it is an externality. In fact, it is today “the most significant of all environmental externalities” even in Nordhaus’ wisdom. Make no mistake – Nordhaus fiercely advocated inaction for over three decades, and portrayed projected levels of global warming, which are defined as devastating, or even catastrophic by scientists, as optimal.

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