With intensifying concerns regarding the soundness and stability of the international monetary and financial system, calls for reforming it have been on the rise. One recent call was made by the Bank of England Governor Mark Carney, in August 2019, in which he suggested a ‘synthetic hegemonic currency’ to replace the US dollar as the key reserve currency. Whether such calls will lead to an end of the key reserve currency status of the dollar remains to be seen.
My review of John Maynard Keynes’s The Economic Consequences of the Peace Macmillan (2019) appeared in Nature – the International Journal of Science – on 23 September, 2019.
“Ann Pettifor finds astonishing contemporary resonance in John Maynard Keynes’s critique of globalization and inequity.”
Keynes, then at the start of his career in economics, had attended the Paris Peace Conference, where the treaty was drafted, as an adviser to the British government. He left in protest. His hastily penned book was, and remains, a publishing phenomenon. Just a year later, The Economic Consequences of the Peace had been translated into 12 languages, and 100,000 copies sold worldwide. By the 1930s, Keynes had become one of the most influential economists in history. His book has never been out of print.
It’s good to see the latest (21 December) New York Review of Books give space to a review – by Robert Kuttner of American Prospect– of a biography of "Karl Polanyi: a Life on the Left" by Gareth Dale. For as we have been arguing for a long time, it was Polanyi who better than any other historian / analyst got to the heart of the contradictions of free market globalised liberalism, and saw that it was such economic liberalism, pushed too far, that is likely to lead to authoritarian, or even fascist, outcomes.
The major point I was trying to make in my article was that the real improvements in poverty reduction, as well as in life expectancy and many other fields, do not depend wholly on economic policies, but also on the role of fossil fuels, and on scientific, medical and other advances, which, other things being equal, should accelerate in impact across time and space. Hence the fact that the rate of improvement is in the form of a curve, not a purely linear effect. These improvements have taken place under different economic systems, and are not a function of neoliberalism or “global markets”.
Neoliberalism’s finance-driven model, beset by rising crises since the 1970s, properly derailed in the crash of 2007 – 08. Then, the greatest exponent, Alan Greenspan, chairman of the US Federal Reserve, had a brief moment of enlightenment and appeared to renounce his faith in the invisible hand of self-interest, saying he’d, ‘discovered a flaw in the model that I perceived is the critical functioning structure that defines how the world works.’ Private finance was revealed as a froth that sat on the foundations of public guarantee. I tell this story and the tale of alternatives in a new collaboration with the playwright, Sarah Woods, in Neoliberalism - the Break-Up Tour.
I was looking at my Tweetdeck this morning when I came across this tweet from the Brookings Institution: "In 2016, 6% of the federal budget went toward paying interest on debt"
Now it is clearly a Good Thing in principle for the US Federal government’s budget to be explained in clear and simple ways, but why – I asked myself – do Brookings choose to concentrate today on interest payments (which form just 6% of outlays) rather than the programs that President Trump wants to cut to shreds?
Over the last week, we have posted the autumn 1940 series of Karl Polanyi's lectures as individual posts. Since they were always intended to be taken together, we have also compiled them as a single set in the attached pdf, "The Present Age of Transformation."
This e-publication comes with introductions by PRIME's Jeremy Smith and Ann Pettifor, and also by the distinguished economist and daughter of Karl Polanyi, Professor Kari Polanyi-Levitt. These introductions draw attention to the strong contemporary relevance of Polanyi's lectures.
Within the last decade [this lecture was written and delivered, we recall, in 1940 - ed] free institutions have succumbed to the impact of sudden change in most of the countries where civilisation bore the imprint of the Industrial Revolution.
Must America go the same way? Or is there hope that she might be able to master her own future?
The failure of the international economic system was ultimately due to the same inherent weaknesses which characterized the national systems under a market economy. The view which makes autarchy responsible for the breakdown can hardly be upheld. On the contrary, it might be more justly argued that it was the failure of the international system which gave rise to autarchy.
The subject matter of these lectures is a vast and unique event: the passing of 19th century civilization in the short period that elapsed between the first and the second wars of the 20th century.
At the beginning of this period, 19th century ideals were paramount, indeed their influence had never been greater; by its close hardly anything was left of that system under which our type of society had risen to world leadership.
The recovery of five lectures under the title The Present Age of Transformation, delivered by Karl Polanyi in Bennington College in 1940, is indeed serendipitous. It invites a comparison of the collapse of the 19th century liberal economic order in the Great Depression and its transformative consequences, with the contemporary unraveling of its neoliberal reincarnation and the rise of right-wing populist politics in the Atlantic heartlands of capitalism.
This week PRIME is publishing (as individual posts) the set of five lectures given by Karl Polanyi in autumn 1940 at Bennington College, Vermont, and entitled "The Present Age of Transformation". The lectures, together with introductions from PRIME's Jeremy Smith and Ann Pettifor, and from Professor Kari Polanyi-Levitt, have also been put together for ease of reference into a pdf "publication". We begin with the PRIME editors' introduction.
This week is PRIME’s Polanyi week. We are re-publishing – because of their topical as well as historical significance – a set of five lectures given by Karl Polanyi in autumn 1940 at Bennington College, Vermont, and entitled “The Present Age of Transformation”. The first three essays briefly prefigure the main themes of his major work, “The Great Transformation”, published in 1944.
We are publishing each of the lectures as individual posts, and have also compiled them into a pdf “publication”, including introductions from Professor Kari Polanyi-Levitt and PRIME's Jeremy Smith and Ann Pettifor.
Yesterday Brad Delong told us “I have a strong disagreement with Ann Pettifor here. The BREXIT vote is not the result of a class- and social structure-based Polanyi process.”
Ann, in a widely-read article in the online journal ‘Globablizations’, had argued that “Brexit represented the collective, if (to my mind) often misguided, efforts of those ‘left behind’ in Britain to protect themselves from the predatory nature of market fundamentalism. In a Polanyian sense, it is a form of social self-protection from self-regulating markets in money, trade and labour.”
In a very valuable and important blog (‘mainstream macro and Minsky the maverick’), Diane Coyle challenges “political classes” over their unwillingness to “address the finance problem”, and likewise the mainstream of the economics profession. The challenge comes at the end of a discussion of Randall Wray’s new book about Hyman Minsky. My plea is that Coyle reconsiders her attitude to Keynes himself.
Since the economic crisis there has been a revival of interest in the nature and creation of money. The work restores a literature that developed significantly from the start of the twentieth century, though that extends back at least three centuries.
Correspondingly there is recognition that the dominant or mainstream school of economic thought has been based on erroneous theories of money for at least half a century.
While authors enjoy citing Keynes’s remarks, none even remotely do justice to the scale of his contribution. Indeed many are profoundly misleading, but Richard Werner’s latest (2015) paper in the International Review of Financial Analysis plumbs new depths.
For a century and a half after its defeat in the Napoleonic Wars Spain lay in the shadow of Britain’s Empire and its industrial revolution. Like many other parts of the world, notably East Asia and South America, it was never part of the formal Empire but like them, it was subject to Britain’s hegemonic domination of world trade, finance and investment.
In the attached paper [link] I argue that seeing Spain’s development in terms of informal empire and colonial domination helps to explain both its fitful path to industrialisation and the contested forms of nationalism that were to end in the bloody catastrophe of Civil War. We can also see many parallels with the relationships that have developed in the post-World War Two period between dependent nations and the ‘informal empires’ of the US and European Union.
2015 is the 500th anniversary of the completion of the stonework of King’s Chapel. As a part of a series of celebratory events held at the college, the King’s Politics Society is hosting two debates inside the chapel. The second of these commemorative debates, which in also is being held in memory of John Maynard Keynes, takes place on Monday 16th November, 2015 and is entitled “What are the economic possibilities for our grandchildren?”.
PRIME's Ann Pettifor was invited to make a presentation, alongside Lord Robert Skidelsky, Professor Andrew Gamble, Dr Catherine Hakim, Roberto Unger (via video-link) and Martin O’Neill.
Yesterday I was invited on to Woman’s Hour to talk about outstanding women in economics that have never properly been recognized and acclaimed for their contributions.
The context is the Virago/New Statesman women's prize for new, young writing on politics and economics. The prize was launched in late October to address the underrepresentation of women in non-fiction publishing“and most particularly in the vital, society-shaping fields of economics and politics”.
I was privileged to be invited by the St. Paul’s Institute to discuss (on the 3rd November, 2015) the thesis in Paul Mason's recent book PostCapitalism: A Guide to Our Future with a keynote speech from the author.
Mason’s book is both a riveting and intellectually exhilarating read. It challenged me at a range of levels, and has added considerably to my list of must-read books. However, I have strong disagreements with Mason, and these are outlined in my review, published here as a PRIME e-publication.