Karl Polanyi and social justice

In the introductory note to the book Trade and Market, Polanyi invites the readers to re-examine the notion of the “economy” since many people think that the only way of organizing the livelihoods of men is the market economy. In his own words:

‘What is to be done, though, when it appears that some economies have operated on altogether different principles, showing a widespread use of money, and far-flung trading activities, yet no evidence of markets or gain made on buying or selling? It is then that we must re-examine our notions of the economy.’ (Polanyi et al, 1957: xvii).

In order to develop an alternative notion of the “economy”, Polanyi proposed a new theoretical approach to explain the place and role of human beings in social and economic systems. He addressed that men value those material goods that serve the end to promote protection and social standing. As a result, in his approach, social matters  turn out to be anthropological ones and the role of history is highly relevant. As  Polanyi wrote:

“But a purposeful use of the past may help us to meet our present over concern with economic matters and to achieve a level of human integration, that comprises the economy, without being absorbed in it” (Polanyi et al., 1957: xviii). 

Indeed, while considering different historical references, Polanyi provided a guide to examine the non-market economies and claimed that empirical observations reveal economic life in archaic and primitive economies to be entirely different from that assumed by formal economic analysis (Polanyi et al, 1975: 243-44). Against the methodological approach to economics based on assumptions, premisses and deductive reasoning, Polanyi proposed the method of economic anthropology that depends upon principles of economic behavior that are induced from empirical observation.

From the empirical evidence of economic life in ancient times and primitive economies, Polanyi explained the concepts of reciprocity and redistribution. The reciprocity principle implied that there was an unspoken agreement in society and on its behalf people produced goods and services that could be redistributed according to their needs among all who contributed according to their abilities to the common welfare. Their motivation to produce and share was not the economic motive, but the fear of losing the social status and prestige.

Although Polanyi addressed that ancient and primitive economies had market places, they were not market economies. In this scenario, daily local markets were merely exchange places operating within the broad system of reciprocity. Local craft and provision markets were isolated by the local authorities from the long distance ones (ports of trade) that only sold items which could not be provided within the local system of reciprocity (Polanyi et al., 1957).

In the nineteenth century, however, Polanyi noted that the emergence of a market economy pushed to the side the old economic and social systems based on reciprocity and redistribution.  Since then, the new market economy has been characterized as an economic system controlled by prices that determine what, how and how much is produced and how is distributed.  As Polanyi explained, the decisions about production and distribution are guided by the economic motive and they do not aim at achieving common welfare. Indeed, as he highlighted in The Great Transformation, the process of social change created by the market economy might lead to the emergence of poverty on a large scale.

Karl Polanyi described the desolation, dehumanization and degradation of human lives as necessary steps for the emergence and expansion of the labor market in a market economy:

 “Before the process had advanced very far, the labor­ing people had been crowded together in new places of desolation, the so-called industrial towns of England; the country folk had been de­humanized into slum dwellers; the family was on the road to perdition; and large parts of the country were rapidly disappearing under the slack and scrap heaps vomited forth from the “satanic mills.” Writers of all views and parties, conservatives and liberals, capitalists and social­ists invariably referred to social conditions under the Industrial Revo­lution as a veritable abyss of human degradation” (Polanyi, 1944: 41).

Polanyi’s analysis also enhanced a critique of some well-known economists and public men such as Townsend, Malthus, Ricardo, Bentham and Burke who considered that the provision of extensive relief to the poor by the government (such as the Poor Laws in England) would negatively affect the rate of economic growth.

Polanyi decisively condemned the hunger of workers as the only way to increase the levels of production in a market economy. In fact, Polanyi addressed that the “iron” laws governing a competitive market economy are not human laws.  It is worth recalling his own words:

“The true significance of the tormenting problem of poverty now stood revealed: economic society was subjected to laws which were not human laws.” (Polanyi, 1944: 131).

 

References

POLANYI, K. (1944) The Great Transformation: The Political and Economic Origins of Our Time, New York: Rinehart.

 

POLANYI, K. (1977) The Livelihood of Man, New York: Academic Press

 

POLANYI, K., ARENSBERG,. H. and PEARSON, H. W. (eds.) (1957) Trade and Market in the Early Empires: Economies in History and Theory, Glencoe, Illinois: The Free Press.

 

POLANYI-LEVITT, K. (ed.) (1990) The Life and Work of Karl Polanyi, Montreal: Black Rose Books.

 

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Pension funds and the search for alternative assets

A decade after the 2008 global crisis, some key trends can be highlighted: a) There has been a shift to defined contribution (DC) pension plans, b) The increasing role of alternative assets, such as private equity, among pension assets.

Many governments in OCDE countries have been committed to structural reforms in labour markets and pension plans. As a result, the current era of austerity has deep impacts on the diversification of types of pension plans. According to a 2018 OCDE  report, in a mandatory pension plan, a) employers setup a plan for their employees, b) employees contribute to a state funded pension scheme or c) employees contribute a private pension fund of their choice.  In a quasi-mandatory, employers need to setup a pension plan as a result of labour agreements. In some OCDE countries, there are automatic enrolment programs at the national level where employees have the option to opt out of the plan under certain conditions.

In this setting, a recent PwC report warned that government-incentivized or government-mandated retirement plans turns out to privilege the use of defined contribution (DC) pension plans -such as the United States. In a defined contribution (DC) pension plan the employer, the employee or both make contributions on a regular basis in individual accounts. As  matter of fact, after the global crisis, the traditional occupational defined benefit (DB) pension plans have been losing ground in many countries, such as Australia, Iceland, Israel, the Netherlands, Mexico, New Zealand, Sweden and the United States. Besides, the increase in life expectancy result in longer periods of benefit payments to retirees for DB pension funds for a given retirement age (OECD, 2017).

The shift to occupational defined contribution (DC) plans seemed to be associated with pension underfunding. In this setting, lower discount rates used to value liabilities (as a result of quantitative easing policies) have been important factors to rethink the financial sustainability of pension funds. Indeed, the continuity of liquidity-driven monetary policies and a decline in the long-term interest rates have affected not only the expectations on profitability of pension funds, particularly in those portfolios where income-fixed assets predominate, but also the valuation of liabilities. In this scenario, the portfolio performance has been stimulating the search for alternative assets.

Table 1 shows the evolution of contributions and benefits in DB plans as of 2017. Many factors drove the evolution the funding ration and the asset- liability management of DB pension plans: a) low interest rates, b) composition of assets, c) number of members and wages, d) benefits paid, e) age structure of members, f) aggregate price level.

 

Table 1.  DB pension plans: contributions and benefits in OECD selected countries, 2017, in %

OECD Countries	Contributions	Benefits
New Zealand	18.3	-23.3
Iceland	9.6	-13.0
Norway	8.4	-3.6
Switzerland	8.3	-5.0
Germany	7.7	-5.0
Spain	5.6	-7.9
Canada	5.2	-5.4
Portugal	4.6	-3.3
Indonesia	4.6	-8.3
Belgium	4.0	-2.8
Netherlands	3.9	-3.3
Namibia	3.8	-3.0
Guyana	3.3	-2.6
Finland	2.5	-3.5
Denmark	1.6	-3.5
Costa Rica	0.5	-7.4

Source: OECD

Ten years after the global crisis, the funding ratio of occupation defined benefit (DB) pension plans was below their pre-financial crisis levels in most of the OECD reporting countries. However, in Iceland, Indonesia, Mexico, the United Kingdom and the United State the funding ratio had already been below 100% for several years. Therefore, one of the main issue at stake is the path of evolution of benefits and contributions in different types of pension plans and how this evolution may affect the financial sustainability of pension funds.

Considering this background, pension funds´ managers have been searching for alternative investments outside of traditional stocks and bonds. The 2017 Preqin Alternative Assets Performance Monitor also highlights that pension funds (public 30%, private 15%) are increasingly allocating more of their assets to PE today. In truth, between 2008 and 2017, most of pension funds (public and private of all sizes) in developed markets had expanded their allocations to alternative asset classes from 7.2% of assets under management in 2008 to 11.8% in 2017. In emerging markets, on average, pension funds increased their alternative investments from 0.97% in 2008 to 6.6% in 2017. In the past 10 years, pension funds reported median net returns in their private equity allocations ranging between 7.5% and 11.5%. These returns have been above those obtained for fixed income, listed equity, hedge funds and even real estate assets.

Alternative investments like private equity assets might prove to be controversial choices for pension funds because of the PE governance historically focused on the extraction of short-term returns in private companies. At the heart of our argument is that the capital accumulation process involves social relations driven by profit and competition. As the private equity investors´ motive is not growth per se, but value extraction, the social losses in terms of unemployment, working conditions, workers´ rights and income distribution could be relevant.

 

 

 

 

 

 

Climate change: threats and challenges

Global warming and global CO2 emissions are interconnected. In 2018, heatwaves were observed in Europe, Asia, North America and northern Africa, while the extent of Arctic sea ice has been continuously dropping. According to the World Meteorological Organization (WMO), the last four years (2015-2018) have been the warmest years on record. In particular, between January and October 2018, global average temperature increased 0.98 degrees Celsius above the levels of 1850-1900. If this trend continues, temperatures may rise by 3-5 degrees Celsius by 2100.

Global CO2 emissions have also been increasing in the last years. China and the US together account for more than 40% of the global total CO2 emissions, according to 2017 data from the European Commission’s Joint Research Centre and the PBL Netherlands Environmental Assessment Agency. After the withdrawal from the Paris climate change agreement, the US’s environmental policy shifted to a pro-fossil fuels agenda on behalf of the need to overcome the disadvantage of American businesses and workers. Trump called climate change a “very, very expensive form of tax”. Fossil fuel lobbies in Saudi Arabia, Russia and Canada are powerful forces against government climate policies. Besides,  it cna be hoghlighted that Aistralia is still  dependent on coal exports.

In this global setting, where there has been noted a  rise in investments in coal, the challenges and possibilities of effective global agreements have turned out to be more complex. The scenario of the COP 24 certainly reveals these tensions. The current Conference of the Parties (COP) in Katowice has been announced as the most critical on climate change since the 2015 Paris Agreement that pledged to keep temperatures well below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius. In 2017, global emissions were 53.5 billion tons of carbon dioxide while the promises made in 2015 amounted 53 billion tons up to 2030.

The United Nations 2018 report warned that, in 2030, global greenhouse gas emissions could be between 13 billion and 15 billion tonnes higher than the level required to keep global warming within 2 degrees Celsius. Indeed, policy makers are currently at pressure to make progress since the Intergovernmental Panel on Climate Change (IPCC) 2018 report also highlighted that it is urgent to limit the global temperature increase to 1.5 degrees Celsius. In this attempt, governments should have to reduce emissions of greenhouse gases by around 25 percent and 55 percent lower than 2017 to limit global warming to 2 degrees and 1.5 degrees Celsius respectively.

Considering this background, climate finance can be a tool to accelerate effective de-carbonization of the economy by means of a) progress on energy efficiency, b) decarbonisation, c) electrification carbon capture and storage, d) afforestation and reforestation. Overall, global and local investments in electricity continue to fall far short of what is needed to close the energy access gap. In Africa and Asia, while international private finance more than doubled from the 2013-14 level to amount USD 2.9 billion in 2015-16, international public finance declined from USD 10.5 billion in 2013-14 to USD 8.8 billion in 2015-16.

In terms of technologies, more than half of total amount of finance committed to electricity in 2015-16 was related to renewable projects, mainly on-shore wind and solar PV. Although there has been a huge amount of investment in renewable energy technologies, the scaling up global investment requires declining prices for renewables. However, in the same period, investments in coal plants increased in Africa and Asia, from USD 2.8 billion in 2013-14 to USD 6.8 billion in 2015-16. Philippines, India, Bangladesh and Kenia have received a large part of the financing commitments in 2015-16.

As a matter of fact the recent trends call for a reflection on climate change and the deleterious effects of the main features of contemporary capitalism. First, the commodification of natural resources is a feature of the long-run process of financial expansion characterized as the financialization of the capitalist economy where social vulnerabilities have increased – mainly in developing countries. Second, market deregulation opened up new energy investment patterns in a context where institutional investors have assumed an active role in the selection of high profit potential projects. Under the expansion of monopoly-capital, energy investments and policies could pass down social and environmental safeguards.

Today, restructuring energy policies to face climate change require comprehensive solutions in order to include issues related to regulation and finance, technology and innovation, governance and politics, besides environment and social inclusion. There is the need to overcome the lack of articulation between governments and the private sector in order to promote changes in investment patterns and to face education challenges towards a green economy.

Despite the threats and challenges, climate change has still little impact on today’s economics education. However, an understanding of modern economies cannot be arrived at without an understanding on of how climate change touches on development theories. Taking into account the relevance of these issues, some contemporary discussions should be included in the economics curriculum, such as: Which are the main features of a green economy? Which alternative energy technologies and policies can be implemented in the short-run to de-carbon the global economy? How can green policies be articulated to job creation policies? Which are the sources of finance of low-carbon innovations? Can be a green economy competitive in the global trade system? Which should be the foundations of a low-carbon international political economy?

Sources/Websites

https://www.ipcc.ch/

https://www.bbc.com/news/science-environment-46384067

https://www.debatingeurope.eu/2018/11/26/are-green-policies-hurting-our-economies/#.XAVG29tKiG4

https://www.seforall.org/energizingfinance

https://www.theguardian.com/environment/2018/nov/16/climate-change-champions-still-pursuing-devastating-policies-new-study-reveals

An Introduction to the Light Board Pedagogy

Some weeks ago, Will Doherty sent to me an interesting introduction to the  Light Board pedadogy that I will share with you today. The Light Boad  is a teaching device that can be used in order to create dynamic digital lectures.

by Will Doherty,  The “Light Board” is a  Teaching Device for On Line Lectures

1. Presenting the new teaching device

Student attention, learning retention is the key to teaching. The moment you turn your back and write on the white board or flip chart you disengage with the audience. Imagine a method where you can avoid this by writing on glass, facing the audience with the message being seen and read at the same time on both sides. This is the Light Board.

Professors Matt Anderson and Michael Peshkin are the founders of the Light Board concept. Together these experts developed a new approach that allows freedom to free script as well as show and annotate Power Point images. Their research and experience has confirmed how the Light Board can benefit STEM related subjects.

In the UK,  a smaller version: Mini Light Board (MLB) by Will Doherty.. Designed for the low budget market, it lends itself to High Education tutors and teachers. Ideal for coaching and tutoring students in on line courses or classes, the Light Board and Skype can make learning interactive and adaptable to any subject. The MLB can be built for under £100.

This device can also be used in on line teaching and interaction with students in remote areas. An example includes teaching “real time” from a base in Edinburgh or Glasgow reaching out to the Outer Hebrides, Shetland, Orkney Islands or Scandinavia. If the students and the teachers have a Light Board both can show and tell, demonstrate and see. Free scripting can take place allowing scribbles, drawing and demonstration.

2. Why  is significant?

Light board and similiar tools such as the MBL offer a way to create videos that complement flipped classrooms and other online or hybrid learning models. These videos can provide highly effective assistance for problem explanations, homework explication, and course review. Those who frequently explain or lecture using a board may find these tools a natural fit for presentation.

As such, it can help overcome the reservations of instructors who are uneasy about video production. In addition, the technology presents new opportunities for creative use as presenters annotate images or video. These simple and elegant tools enable lecturers to face the camera while illustrating and annotating their talk, making the content both easier for the viewer to follow and more interesting to watch.

Although the technology is meant to enable quick video production, some recordings might still require some postproduction video editing and encoding. Therefore, it is  desirable for videos to be completed in a single take, obliging those using this technology to carefully plan their presentations.

3. Implications for teaching and learning

Light board and similar tools like the MLB meet the student’s need for clear and informative lecture capture while offering the instructor a quick and effective method of video production that includes visual aids. The technology is especially valuable for instructors in  economics, who often work through formulae or explain complex processes using  diagrams and illustrations.

The resulting lectures are easy to watch and the lecturer’s face remains a natural part of the presentation.

4. Workshops on the MLB

The MLB project  has been launched and trialled at Manchester and Strathclyde University in order to support on line learning and creativity by moving away from bullet point slides to interactive free hand scripting.

In 2017 a workshop was held at Manchester University, Turing Institute. Here senior lecturers identified how the mini light board will help with on line Maths tutorials both UK and overseas. Several of the lecturers carry out voluntary work teaching Maths to students across Africa and this will help with the delivery and learning.

Some months ago, in 2018, Strathclyde University hosted the first Mini Light Board workshop. Lecturers and senior managers attended the workshop to learn and see how the MLB concept could augment their on line lecturing strategy as well as build a proto type mini version. The day was succesful, the team developed their own new prototype which is now being tested throughout Scotland. During the plenary discussion  students identified new applications and enhancements for the MLB  also in the primary school market.

As the Light Board teaching concept has provenance from the USA market, more evidence is certainly need on how we can use and apply it to augment existing teaching pedagogies in the UK and other countries.

For more details check https://www.youtube.com/watch?v=N1I4Afti6XE and https://www.youtube.com/watch?v=AVwREldUvtc

 

About Will Doherty: Lecturer and University Staff Governor Blackburn College, Programme Leader BA (Hons) Business & HRM Lancaster University Programme, Author and Business Consultant. Among his articles and publicatoons:  Introduction to Light Board Pedagogy , Copyright theft, Why Training Doesn’t Work!,  Why Have an L&D Dept?, Development Needs Analysis, Global Businesses Need global standards.

The neoliberal policies of resilience

Economic conditions are constantly changing. Today, our generation is confronted with the outcomes of contemporary globalization that is a broader, complex, and multifaceted process characterized by new markets, new actors and new rules. Indeed, globalization has produced many changes in our economy, society, culture, and politics. As a result, deep pressures to conform to new standards of behavior, such as efficiency and competitive performance, have forced individuals and communities not only to rethink values and practices but also to rebalance tradition and change.

In the scenario of globalized markets, individuals and communities face many challenges to be resilient because of the changes in markets, wealth and power. Throughout the last forty years, most governments around the world supported the long-run process of neo-liberal reforms that turned out to be characterized by the financialisation of the capitalist economy. By negatively influencing labor and working conditions, it rendered increasingly difficult to reach (or even approach) the level of full employment. In this setting, changes in corporate ownership, through waves of mergers and acquisitions, created new business models where companies, while highly powerful and concentrated, turned out to be simply bundles of financial assets and liabilities to be traded (Madi, 2017).

Considering the labour markets, employability seems to be shaped by private strategies that aim cost reductions, labour flexibility and efficiency targets. Longer working hours, job destruction, turnover, outsourcing, workforce displacement and loss of rights have also been part of the spectrum of management alternatives aimed at cost reduction. Indeed, the current dynamics of labour markets favoured the vulnerability of workers, mainly young people, and precarious jobs. Therefore, job instability and fragile conditions of social protection turned out to put pressure on the redefinition of survival strategies. As a result workers turned out to redefine their skills, become informal entrepreneurs or migrate, among other examples of the current worldwide changes in their livelihoods.

In this setting, current neoliberal policies of resilience have been increasingly prevalent in current economic thinking and policies. The policy recommendations seek to foster the capacity of individuals and communities to cope with market uncertainties. BRASSET and HOLMES (2016) present a literature review on the neoliberal (and managerial) policies of resilience, characterized as a set of governance techniques aimed to manage uncertainty and achieve the adaptation of individuals and communities to global changes.  Considering the labour markets, for example, the neoliberal policies of resilience have turned out to enhance the workers´ adaptation to the “market discipline” and, therefore, there has been a re-distribution of the responsibilities for social adjustment among the state, business men, investors and workers. As a consequence, the evolution of unemployment results from the “unsuitable” or “inappropriate” behavior of workers to face a changing real-world.

As a matter of fact, in the frame of the neoliberal policies of resilience, human life turns out to be focused on the attempt to face exogenous uncertainties and risks in order to foster adaptive strategies. In short, the sole purpose of resilient individuals and communities seems to be survivability.

Indeed, in the light of current  global social and political challenges.  the spread of the  discourse of resilience calls for a critical thinking on the failures of economic thinking and economic policies.

References

BRASSET, J and HOLMES, C. (2016)  “Building Resilient Finance? Uncertainty, complexity, and resistance”, The British Journal of Politics and International Relations, 18(2): 370–388.

MADI, M.A.C. (2017) Pluralist Readings in Economics: key-concepts and policy-tools for the 21^st century, Book Series: Economics: Current and Future Developments.Volume 2.  Bentham Publishers

Complexity in Economics

Traditional epistemological theories have fostered an endless debate on dichotomies characterized by forms of objectivism, on the one hand, and forms of relativism/skepticism on the other. Currently, among the deep global social and cultural challenges, the crisis in epistemology is characterized by a radical questioning of the whole matrix within which such dichotomies have been drawn.

Taking into account the evolution of Economics as a science, the need for a deep epistemological has already been pointed out by outstanding economists.  Joseph Schumpeter, for example,  rejected the kind of economic thought that mainly favours deductive methods of inquiry – based on mathematical reasoning- because this  habit  generates analytical unrealistic results that are irrelevant to solve the real-world economic problems. Also John Maynard Keynes warned that the understanding of the economic phenomena demands not only purely deductive reasoning, but also other methods of inquiry along with the  study of other fields of knowledge- such as History and Philosophy. Today, Schumpeter’s and Keynes’s criticism could be certainly addressed to those economists whose beliefs ultimately privilege the adoption of a nominalist bias because the dialogue between the economic theories and the economic reality turns out to be abandoned not only in academic research but also in the policy making process.

Considering this background, the shift to Complexity in economic thinking can contribute to substantive epistemological insights in order both to face the contemporary theoretical and methodological challenges and to reject the Cartesian theorization of knowledge under an anthropocentric foundational model of rationality, complete order and truth.  Descartes reinforced the analytical-synthetic process of reasoning. Following the deductive method of pure inquiry, human knowledge grows throughout a rigorous chain of ideas. As a consequence, new thoughts arise while the human subject applies deductive reasoning so as to create a chain of ideas that links the most simple to the most complex ones. In this attempt, true knowledge can be obtained. The Cartesian method represents an attempt to extend the mathematical method of inquiry to all of human knowledge in the form of the mathesis universalis.  Indeed, this extension is at the center of the a priori foundations of scientific knowledge in Neoclassical Economics.

Edward Fullbrook, in his  book Narrative Fixation in Economics, also highlights that the Cartesian view of human reality has deeply shaped the way Neoclassical Economics theorizes about the economic and social existence (2016, p. 45). Indeed, while emphasizing the relevance of the pure thought of a disembedded human subject, Neoclassical Economics has reinforced the relevance of the Cartesian method of inquiry that moved the so called scientific (true) knowledge out of the general flux of experience.

Indeed, the dialogue between the economic theories and the economic reality is complex and a dialogical approach should be considered in any attempt to build realistic economic theories, as Keynes warned.

The changing environment of real-world markets through time -that is irreversible- refers to a certain degree of ontological indeterminacy that should be considered in realistic economic theories.  In thruth, a shift to Complexity in economic thinking can favor the adoption of a realist standpoint that relates to

• A non-anthropocentric approach
• A social ontology that is rooted in actual experience
• A new approach to rationality
• An evolutionary approach based on the coexistence of laws and change
• Ontological indeterminism
• Epistemological fallibilism
• An endogenous approach to norms and ethics

Considering the relevance of this topic in economics education, students should be aware of the consequences of different epistemological approaches. Complexity in Economics is not  just a new label, but represents a  way of rethinking economics as a science.  

 

 

On global capitalism and the survival of democracy

In the new millennium, the proliferation of financial assets, with  unstable economic growth, has given way to widespread to precarious jobs, income gaps and weaker welfare programs. The same policies that have obliterated social services and kept labour cheap have supported the expansion of short-termism and new global business models in the context of deregulated capitalism.

Besides, the onset of the 21st century represents a new political age  overwhelmed by the violation of democratic ideals of political equality and social peace. Indeed,  democracy has been allowing for election to office but not to power (Madi, 2015). And, as a consequence, policy makers might give priority to their sponsors instead of the needs of citizens – decent work and income equality.

In truth, the current trends in  global capital accumulation and production have shaped a scenario where unemployment, job instability and fragile conditions of social protection increased (Stiglitz, 2011). First, labour-saving technologies have reduced the demand for many middle-class, blue-collar jobs. Second, globalization has created a global marketplace, confronting expensive unskilled workers with cheap unskilled workers overseas and favouring outsourcing practices. Third, social changes have also played a role in the labor market changes, such as the decline of unions. Four, political decisions are influenced by the top 1% who favor policies that increase income inequality.

All these trends do reveal issues of current power, politics and economics in a social context where democratic institutions are being threatened.

Taking into account the overall  economic, social and political evidence in Western countries, Robert Kuttner, in his recent book Can Democracy Survive Global Capitalism?  (2018, WW Norton), highlights that since the 1970s the globalization of capital has affected the very foundation of a healthy democracy. While analysing the consequences of this trend, he warns:

“If democracy cannot harness capitalism, it runs the risk of subverting itself and giving way to neo-fascist regimes that will pretend to manage the market but more often ally themselves with corporations and substitute ultra-nationalist symbols and scapegoats for reform.”

Indeed, this book calls for a deep examination of current power, politics and economics in a social context where democratic institutions are being threatened:

Do current trends of social inequality and economic instability stimulate disillusioned voters to support populism? Is the alliance of global finance and far-right parties inevitable?  Is it possible to build new conventions to make capitalism serve democracy?

Answering these questions  not only involves critical thinking on the failures of economic policies in the light of current  political challenges  but also  calls for a reflection on the alternatives to the reversal of the decline of democracy in the West.

 

 

References

Robert Kuttner, Can Democracy Survive Global Capitalism?,   WW Norton, 2018.

Lima, G. & Madi, M.A. , Capital and Justice, WEA Books, 2016.

Madi, M. A.,  “2016: Promises and Problems”, WEA Pedagogy Blog, December 29, 2015
https://weapedagogy.wordpress.com/2015/12/29/2016-promises-and-problems

Stiglitz, J.,  “Of the 1%, by the 1%, for the 1%”. Vanity Fair Magazine, April 30, 2011.
http://www.vanityfair.com/news/2011/05/top-one-percent-201105.