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Globalisation: the rise and fall of an idea that swept the world | World news | The Guardian
Nikil Saval (2017), Globalisation: the rise and fall of an idea that swept the world. Guardian (Long Read), 14.7.2017

n the heyday of the globalisation consensus, few economists questioned its merits in public. But in 1997, the Harvard economist Dani Rodrik published a slim book that created a stir. Appearing just as the US was about to enter a historic economic boom, Rodrik’s book, Has Globalization Gone Too Far?, sounded an unusual note of alarm.
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Rodrik pointed to a series of dramatic recent events that challenged the idea that growing free trade would be peacefully accepted. In 1995, France had adopted a programme of fiscal austerity in order to prepare for entry into the eurozone; trade unions responded with the largest wave of strikes since 1968. In 1996, only five years after the end of the Soviet Union – with Russia’s once-protected markets having been forcibly opened, leading to a sudden decline in living standards – a communist won 40% of the vote in Russia’s presidential elections. That same year, two years after the passing of the North American Free Trade Agreement (Nafta), one of the most ambitious multinational deals ever accomplished, a white nationalist running on an “America first” programme of economic protectionism did surprisingly well in the presidential primaries of the Republican party.

What was the pathology of which all of these disturbing events were symptoms? For Rodrik, it was “the process that has come to be called ‘globalisation’”. Since the 1980s, and especially following the collapse of the Soviet Union, lowering barriers to international trade had become the axiom of countries everywhere. Tariffs had to be slashed and regulations spiked. Trade unions, which kept wages high and made it harder to fire people, had to be crushed. Governments vied with each other to make their country more hospitable – more “competitive” – for businesses. That meant making labour cheaper and regulations looser, often in countries that had once tried their hand at socialism, or had spent years protecting “homegrown” industries with tariffs.
Anti-globalisation protesters in Seattle, 1999
Anti-globalisation protesters in Seattle, 1999. Photograph: Eric Draper/AP

These moves were generally applauded by economists. After all, their profession had long embraced the principle of comparative advantage – simply put, the idea countries will trade with each other in order to gain what each lacks, thereby benefiting both. In theory, then, the globalisation of trade in goods and services would benefit consumers in rich countries by giving them access to inexpensive goods produced by cheaper labour in poorer countries, and this demand, in turn, would help grow the economies of those poorer countries.
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But the social cost, in Rodrik’s dissenting view, was high – and consistently underestimated by economists. He noted that since the 1970s, lower-skilled European and American workers had endured a major fall in the real value of their wages, which dropped by more than 20%. Workers were suffering more spells of unemployment, more volatility in the hours they were expected to work.
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While many economists attributed much of the insecurity to technological change – sophisticated new machines displacing low-skilled workers – Rodrik suggested that the process of globalisation should shoulder more of the blame. It was, in particular, the competition between workers in developing and developed countries that helped drive down wages and job security for workers in developed countries. Over and over, they would be held hostage to the possibility that their business would up and leave, in order to find cheap labour in other parts of the world; they had to accept restraints on their salaries – or else. Opinion polls registered their strong levels of anxiety and insecurity, and the political effects were becoming more visible. Rodrik foresaw that the cost of greater “economic integration” would be greater “social disintegration”. The inevitable result would be a huge political backlash.

Paul Krugman, who would win the Nobel prize in 2008 for his earlier work in trade theory and economic geography, privately warned Rodrik that his work would give “ammunition to the barbarians”.

“Liberals, social democrats and moderate conservatives are on the same side in the great battles against religious fanatics, obscurantists, extreme environmentalists, fascists, Marxists and, of course, contemporary anti-globalisers,” wrote the Financial Times columnist and former World Bank economist Martin Wolf in his book Why Globalization Works. Language like this lent the fight for globalisation the air of an epochal struggle. More common was the rhetoric of figures such as Friedman, who in his book The World is Flat mocked the “pampered American college kids” who, “wearing their branded clothing, began to get interested in sweatshops as a way of expiating their guilt”.

the idea that the ultimate benefits of a more open and integrated economy would outweigh the downsides. “Freer trade is associated with higher growth and … higher growth is associated with reduced poverty,” wrote the Columbia University economist Jagdish Bhagwati in his book In Defense of Globalization. “Hence, growth reduces poverty.” No matter how troubling some of the local effects, the implication went, globalisation promised a greater good.

Above all, there was a widespread perception that globalisation was working as it was supposed to. The local adverse effects that activists pointed to – sweatshop labour, starving farmers – were increasingly obscured by the staggering GDP numbers and fantastical images of gleaming skylines coming out of China. With some lonely exceptions – such as Rodrik and the former World Bank chief and Columbia University professor Joseph Stiglitz – the pursuit of freer trade became a consensus position for economists, commentators and the vast majority of mainstream politicians, to the point where the benefits of free trade seemed to command blind adherence.

n the wake of the financial crisis, the cracks began to show in the consensus on globalisation, to the point that, today, there may no longer be a consensus. Economists who were once ardent proponents of globalisation have become some of its most prominent critics. Erstwhile supporters now concede, at least in part, that it has produced inequality, unemployment and downward pressure on wages. Nuances and criticisms that economists only used to raise in private seminars are finally coming out in the open.
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A few months before the financial crisis hit, Krugman was already confessing to a “guilty conscience”. In the 1990s, he had been very influential in arguing that global trade with poor countries had only a small effect on workers’ wages in rich countries. By 2008, he was having doubts: the data seemed to suggest that the effect was much larger than he had suspected.

That month, Martin Wolf argued in a column that globalisation had “lost dynamism”, due to a slackening of the world economy, the “exhaustion” of new markets to exploit and a rise in protectionist policies around the world. In an interview earlier this year, Wolf suggested to me that, though he remained convinced globalisation had not been the decisive factor in rising inequality, he had nonetheless not fully foreseen when he was writing Why Globalization Works how “radical the implications” of worsening inequality “might be for the US, and therefore the world”. Among these implications appears to be a rising distrust of the establishment that is blamed for the inequality. “We have a very big political problem in many of our countries,” he said. “The elites – the policymaking business and financial elites – are increasingly disliked. You need to make policy which brings people to think again that their societies are run in a decent and civilised way.”

Perhaps the most surprising such transformation has been that of Larry Summers. Possessed of a panoply of elite titles – former chief economist of the World Bank, former Treasury secretary, president emeritus of Harvard, former economic adviser to President Barack Obama – Summers was renowned in the 1990s and 2000s for being a blustery proponent of globalisation. For Summers, it seemed, market logic was so inexorable that its dictates prevailed over every social concern. In an infamous World Bank memo from 1991, he held that the cheapest way to dispose of toxic waste in rich countries was to dump it in poor countries, since it was financially cheaper for them to manage it. “The laws of economics, it’s often forgotten, are like the laws of engineering,” he said in a speech that year at a World Bank-IMF meeting in Bangkok. “There’s only one set of laws and they work everywhere. One of the things I’ve learned in my short time at the World Bank is that whenever anybody says, ‘But economics works differently here,’ they’re about to say something dumb.”

Over the last two years, a different, in some ways unrecognizable Larry Summers has been appearing in newspaper editorial pages. More circumspect in tone, this humbler Summers has been arguing that economic opportunities in the developing world are slowing, and that the already rich economies are finding it hard to get out of the crisis. Barring some kind of breakthrough, Summers says, an era of slow growth is here to stay.

In Summers’s recent writings, this sombre conclusion has often been paired with a surprising political goal: advocating for a “responsible nationalism”. Now he argues that politicians must recognise that “the basic responsibility of government is to maximise the welfare of citizens, not to pursue some abstract concept of the global good”.

One curious thing about the pro-globalisation consensus of the … [more]
globalization  martin:oekonomik  keynes  neolib 
august 2017 by MicrowebOrg
Mögen Sie Abba Lerner? - Chaos as usual
Um 1943, Insbesondere die sogenannten „Neo-Chartalisten“ um den US Ökonomen L. Randall Wray rekurrieren gerne und häufig auf Lerners „Functional Finance“. Auch der im Zuge der Krise zu posthumer Berühmtheit gelangte Hyman Minsky war einer seiner Anhänger.

Das Prinzip, wirtschaftspolitische Methoden nur nach ihren Auswirkungen auf die Wirtschaft zu beurteilen, wollen wir „Functional Finance“ nennen.

Regierungen sollten ihre Haushaltsausgaben und ihre Steuereinnahmen der Höhe nach so planen, dass die aggregierten Ausgaben in der Volkswirtschaft gerade dafür ausreichen, den aggregierten Vollbeschäftigungs-Output zu aktuellen Preisen zu kaufen. Falls das ein Haushaltsdefizit bedeutet, höhere Schulden, Gelddrucken etc, dann sind diese Dinge per se weder gut noch schlecht, sondern sie sind schlicht die für ein gewünschtes Ergebnis von Vollbeschäftigung bei Preisstabilität erforderlichen Maßnahmen.“

Oder anders gesagt: Vernünftige Wirtschaftspolitik ist Vollbeschäftigungspolitik. Eine Regierung mag nach „ausgeglichenen Haushalten“ streben oder aber eine chronische Defizitpolitik betreiben – ob das im Einzelfall als „vernünftig“ zu beurteilen ist, richtet sich ausschließlich danach, ob es dem Ziel der Vollbeschäftigung (bei Preisstabilität) dient.

Der gute Herr Lerner schrieb das anno 1943, im Kielwasser von Keynes‘ General Theory, zu deren wichtigsten Interpreten er seinerzeit gerechnet wurde.

„Der moderne Staat kann alles, was er dafür geeignet hält, zum allgemeinen Geld erklären, und damit dessen Wert unabhängig von jeglicher Verbindung zu Gold oder anderen Formen der Deckung etablieren. ... Aber wenn der Staat das so deklarierte Geld auch als Mittel festlegt, in welchem Steuern und Abgaben zu entrichten sind, dann funktioniert dieser Trick. Jeder, der Schulden gegenüber dem Staat hat, wird das neue Geld akzeptieren, weil er mit seiner Hilfe seine Schulden tilgen kann; und alle anderen werden es ebenfalls annehmen, weil sie wissen, dass alle Steuerpflichtigen es akzeptieren werden, und sie bei diesen daher damit bezahlen können.“

Lerner schließt sich hier also ziemlich offensichtlich der chartalistischen Geldauffassung des Deutschen Georg Friedrich Knapp an, die der um 1900 als „Staatliche Theorie des Geldes“ veröffentlichte. Auf Knapps Gelddefinition rekurrierten in der Folge eine ganze Reihe bedeutender Theoretiker, Max Weber zum Beispiel oder auch John Maynard Keynes.

Wie aus vorstehendem Zitat ersichtlich, leitet Lerner den Wert des Geldes aus nichts anderem ab, als dessen staatliche Akzeptanz für Zwecke der Besteuerung und des Abgabenwesens. Es bedarf also keiner wie immer gearteten „Deckung“, sei es durch Gold, Devisenreserven oder was auch immer sonst, sondern bezieht seinen Wert direkt aus einer (künftigen) Steuerzahlung: Wenn auf einer Banknote „100 Euro“ aufgedruckt ist, und sie vom Finanzamt auch mit einem Wert von 100 Euro zur Begleichung von Steuerschulden akzeptiert wird, dann hat sie auch im allgemeinen Zahlungsverkehr einen Wert von 100 Euro.

Es bedarf wohl keiner weiteren Erwähnung, dass eine derartige Geldauffassung heute weder Mainstream ist, noch mit den Ansichten prominenter Offstream-Autoren übereinstimmt, wie etwa der von Gunnar Heinsohn, die man in seinem jüngsten FAZ-Artikel nachlesen kann. Heinsohn besteht darin auf einer strikten Eigentumsdeckung von Geld. Wenn man so will, dann kann man sich Lerner und Heinsohn als die zwei Gegenpole des geldtheoretischen Offstreams vorstellen, mit dem aktuellen Mainstream à la Bernanke, Weber und Trichet irgendwo dazwischen.

Wenn der Staat zwecks Erreichung des Vollbeschäftigungsziels Haushaltsdefizite vorsieht, dann muss er sich in dessen Höhe nicht extra verschulden: Er druckt dieses Geld einfach. Oder praktisch gesprochen: er lässt sich bei den Geschäftsbanken einen Kredit einräumen, drückt ihnen dafür im Gegenzug auch eigene Schuldverschreibungen in die Hand, welche von den Geschäftsbanken aber unmittelbar an die Zentralbank weitergereicht werden. Wenn diese nicht als „unabhängig“ tituliert wird, sondern schlicht als staatlicher Regiebetrieb agiert, dann bedeutet das für den Staat nichts anderes als einen Kredit bei sich selbst aufzunehmen. Und selbstverständlich käme es auf das exakt Gleiche raus, wenn der Staat sich den Kredit gleich von der Zentralbank direkt einräumen ließe.

Staatliche Verschuldung im herkömmlichen Sinn sieht Lerner zwar weiterhin auch vor, aber aus einem ganz anderen Grund: wenn zuviel Geld in Umlauf gelangt und Preisstabilität nicht mehr gewährleistet ist, dann muss der Staat dieses Zuviel an Kaufkraft irgendwie aus dem Verkehr ziehen. Das kann er entweder über Steuererhöhungen machen, oder aber über die Emission von Anleihen an das Publikum. Die staatliche Verschuldung im landläufigen Sinn wird damit also – so paradox das klingen mag – zu einer Maßnahme staatlicher Anti-Inflationspolitik.

Spiegelbildlich zu den öffentlichen Ausgaben – und natürlich erneut völlig konträr zur etablierten Fiskallogik – sieht Lerner in den Steuern kein Mittel staatlicher Finanzierung.

„Steuern sollten niemals für Zwecke der Haushaltsfinanzierung erhoben werden.“

Wozu auch, wenn die Regierung ohnehin alles mit Geld bezahlen kann, dass sie selbst druckt? Denn Zweck von Steuern sieht Lerner denn auch in allen möglichen anderen Zusammenhängen, insbesondere zur Steuerung der im Umlauf befindlichen Geldmenge zwecks Aufrechterhaltung von Preisstabilität. Daneben müssen aber Steuern in nennenswertem Umfang aber auch deshalb erhoben werden, um den oben beschriebenen Wertzusammenhang des Geldes sicherzustellen. Falls keine Steuern erhoben würden, könnte man ja schlecht davon ausgehen, dass das Publikum staatlichem Geld deswegen einen Wert

sieht Lerner in der Vollbeschäftigung das wichtigste Ziel staatlicher Wirtschaftspolitik. Und zwar nicht primär aus sozialen Erwägungen, sondern weil

1) die Vorteile technischer Neuerungen, die zu Produktivitätssteigerungen führen, nur bei Vollbeschäftigung voll zum Tragen kommen:

„Sobald Arbeitslosigkeit anliegt, ist es nicht wichtig oder gar nützlich, auf arbeitssparende, neue Technologien zu setzen. Die dadurch eingesparten Arbeitskräfte würden nämlich genauso wenig anderweitig beschäftigt werden, wie die, die bereits arbeitslos sind. Die Arbeitslosigkeit würde sich also nur vergrößern. Wo es Arbeitslosigkeit gibt, führen Effizienzsteigerungen in einem bestimmten, produktiven Prozess nicht automatisch zu einer Effizienzsteigerung in der Wirtschaft als Ganzes.“

2) ein Land ohne Vollbeschäftigungspolitik in der Gestaltung seiner Handelsbilanz Einschränkungen unterliegt, weil es nicht in dem Maße importieren kann, als es bei Vollbeschäftigung könnte.
keynes  economy2.0_star5  weissgarnix 
july 2017 by MicrowebOrg
Mainstream macro and Minsky the maverick | The Enlightened Economist
I was one of the many economists who had barely heard of Hyman Minsky, still less read any of his work, before the financial crisis. One of the many who, seeking to understand, quickly devoured his Stabilizing an Unstable Economy. And found it pretty sensible. Macro isn’t my field, but there didn’t seem to be anything in that book a sensible mainstream macro person should have objected to. Should being the operative word. Because of course everyday, mainstream DSGE models in use in 2008 ruled out the very possibility of a crisis, whereas Minsky believed in their inevitability in some shape.



This week I’ve been reading Randall Wray’s Why Minsky Matters, which is a useful and accessible overview of both what Minsky said and – as the title puts it – why it matters. I recommend the book (perhaps particularly to mainstream macro people!).



The first chapter gives an overview of Minsky’s arguments. The second chapter was to me the most interesting. It’s called ‘The Road Not taken’ and sets out the broad mainstream approach against which Minsky developed his arguments. This is the neoclassical synthesis, whose foundations were laid by John Hicks and Alvin ‘Secular Stagnation’ Hansen in the early years after Keynes’s death, then by both ‘Keynesians’ like Patinkin and Tobin and ‘Monetarists’ such as Friedman. Wray argues that these camps disagreed largely over parameter values, and that they essentially bowdlerised Keynes by ignoring his emphasis on investment, finance and uncertainty.

Debates about what Keynes ‘really’ meant in The General Theory are not all that interesting – and by the by a good reason for emphasising the importance of maths as well as words in economics. The mathematical notation is a way of enforcing logical consistency and expressing arguments with precision; the words can then explain more clearly, and introduce reality while keeping it rooted in logica and clarity. Anyway, what’s interesting about the chapter is its brief account of how finance vanished from macro, to our great cost.
minsky  keynes 
june 2016 by MicrowebOrg

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