Monday, September 30, 2013

Unlearning Economics — A Question for Economists

Sincerely: do you believe your discipline has earned a status as a decider of policy? Which successes would you point to in order to highlight this? And how have non-economists fared in the policy arena compared to you?
A look at the record.

Unlearning Economics
A Question for Economists
An interesting throw-off: "And, as Ha-Joon Chang has pointed out, recently industrialised/industrialising countries such as South Korea, Japan and China have largely relied on bureaucrats and lawyers to form policy (and my sources tell me that the economists in China are inclined towards Sraffian economics)."
Also of interest from Unlearning recently:


Unlearning Economics


Unlearningecon said...

Heh, you're the third person to latch onto that comment and now I sort of regret putting it there.

The term "my sources" was light hearted, as I cannot offer anything particularly credible to back up what I was saying. All I was referring to was an economist I know who frequently visits China telling me that the economists he had spoken to were very interested in Sraffian economics.

Tom Hickey said...

I would expect Chinese economists to be interested not only Sraffa but also in Kalecki. Both integrated aspects of Marxism into modern Western economic thought, which is what China is having to do now. I would also expect them to be looking at Western Marxians and those influenced by Marx like Michael Hudson, who has already advised the Chinese on money & banking and finance. Many in the West expect China to become capitalist or think it is already capitalist, but that is not going to happen. They will develop the concept and application of a managed economy that uses markets but is not a market economy in the economically liberal sense much further than it has been in the West.

Ryan Harris said...

I'd hate to sound arrogant thinking that Chinese economists need to look toward the enlightened western english speaking economists to learn something new. The Chinese system of capital allocation, banking, mix of government owned, government directed and private industry, social welfare, local and national taxation and funding is more well thought out and works better in many ways than most, if not all, western economies in terms of providing stable growth, rising incomes, increasing productivity, really most if not all economic measurements of importance. Environment issues are being addressed now, which previously, was a rather sore point, in a novel systemic way that may prove to best their western counterparts as well. I sort of wonder which Chinese economists, legal scholar and political leaders western economists are studying in western universities to try and better understand why the Chinese system, their predicability and outcomes are so much better than those described by western educated counterparts. The westerners view it as good luck or have all sorts of dismissive lip service toward their economic, banking, capital and finance system design and reporting along with contemn of their leadership as being inferior because they are fascist or communist or authoritarian grows more tenuous daily.

Tom Hickey said...

The interesting thing is that Chinese leaders have to be more sensitive to the people than Western leaders, who can ignore the people and cater to the elite. That's not possible in China without risking a revolt. Conversely, Western elites feel secure against a popular backlash, let alone a revolt. In that sense, China is more "democratically" governed de facto than the West.

Ryan Harris said...

Almost paradoxical that a democractic republic with a capitalist-socialist system is unresponsive while an Authoritarian government with a socialist market system is.

I'm most interested in the process of how the factions in the CCP (which is fractious and rough 'n' tumble like the Dem-Repub party(s)) came to agree and consensus in terms of the long range plans to make people better off. The long term plans, medium term plans, and short term plans each have milestones and measurements that if they don't meet, they re-evaluate and change tack, change leaders etc. In their system, Power and leadership shifts in struggles but the transition happens quite peacefully under pressure from the representatives and various factions of the party who are trying to garner support from the most people to stay in power and to perform on the broad social goals and plans.

Prior to this planning and consensus they were a mess of a country politically with destructive leaders in power struggles and on philosophical missions filed with party rhetoric much like our government is today with talking points and big utopian party ideals to cover for real, immediate leadership failures. But something happened along the way and changed all that following the cultural revolution when there was mass discontent over injustice and poverty among the population.

Tom Hickey said...

The Peoples Liberation Army plays a powerful background role in Chinese affairs, including the economy. The PLA is strongly committed to preserving the intent of the socialist state and it not going to permit the leadership to disrupt it. The PLA seems ok with a certain amount of liberalization to keep the peace and make China competitive in globalization through market socialism. But China is still on track to build a socialists state and recognizes that the capitalistic market state controlled by an acquisitive elite is the enemy. I am confident that this now sees this elite as transnational. To get up to speed requires trade and that involves interacting with the transnational ruling elite and the American Empire. But the Chinese leadership is very clear that the goal of both is regime change in China. This is going to be one of the chief dynamics of the 21st century. Will it another American-Western century or a Chinese-Asian century. Given the process of globalization underway this is really crucial since it involves global hegemony. The Great Game of geo-politics and geo-strategy continues, and the militaries of the US and China are key players in it.

Tom Hickey said...

I should add that a major complicating factor is that the living standard of China and most of the emerging world is rising while that of the US and rest of the developed world is falling. The Great Leveling is going to have social, political and economic consequences that are disruptive in the West but stabilizing elsewhere. People get upset when their living standard falls. China knows this and will take all steps necessary to prevent it. The transnational ruling elite, on the other hand, are imposing it to transfer a greater percentage of the wealth to them.