Tuesday, May 20, 2008
Earthquake protection demands growth
Will Hutton, writing in his regular Observer column on Sunday, was quick to blame corruption for the devastation caused by the recent Chinese earthquake. He associated this in turn with rapid economic growth:
“Corruption is ubiquitous, which is why so many buildings were deathtraps. Another woman drew attention to the government and party buildings that remained standing, plainly built to the right specifications. The Politburo could anticipate what was going to be said; fast, open and effective action was its best riposte.
“The government has announced an investigation into why so many classrooms collapsed, but the answer is already known. People want the government to maintain the pace of development but increasingly do not accept that the price has to be corruption. The government agrees and launches unsuccessful anti-corruption drives.”
What Hutton fails to even acknowledge is that building earthquake resistant buildings is expensive. That is why rich countries generally suffer less damage in earthquakes then poorer ones. In that sense rapid economic growth is a precondition for China being able to afford them. Hutton is so hostile to growth and so suspicious of the Chinese he does not even appear to recognise this basic fact.
“Corruption is ubiquitous, which is why so many buildings were deathtraps. Another woman drew attention to the government and party buildings that remained standing, plainly built to the right specifications. The Politburo could anticipate what was going to be said; fast, open and effective action was its best riposte.
“The government has announced an investigation into why so many classrooms collapsed, but the answer is already known. People want the government to maintain the pace of development but increasingly do not accept that the price has to be corruption. The government agrees and launches unsuccessful anti-corruption drives.”
What Hutton fails to even acknowledge is that building earthquake resistant buildings is expensive. That is why rich countries generally suffer less damage in earthquakes then poorer ones. In that sense rapid economic growth is a precondition for China being able to afford them. Hutton is so hostile to growth and so suspicious of the Chinese he does not even appear to recognise this basic fact.
Labels: china, corruption, development
Sunday, November 11, 2007
Demystifying African corruption
A new documentary from Worldwrite, an education charity, examines the question of corruption from an African perspective. In Corruptababble two young South Africans, Brendon and Yolanda, travel around London and Edinburgh to gauge perceptions of corruption. Virtually everyone they speak to sees corruption as a big problem in Africa but few come even close to being able to back up their arguments. Most simply assert that corruption must be largely to blame for Africa’s difficulties while many others argue it is a more extreme form of corruption in the West.
The people shown to have the most coherent explanation for corruption are free marketers speaking at a conference on development. They argue in detail that Africa is poor because predatory African elites have siphoned off money for their own benefit. But such arguments have a strongly apologetic character. Blaming Africans for the continent’s lack of development is a way of diverting responsibility from the West or the weaknesses of the market system.
Corruptababble is a step towards challenging one of the most enduring myths about Africa. Anyone who supports African development needs to be able to challenge the unhealthy obsession with corruption.
The people shown to have the most coherent explanation for corruption are free marketers speaking at a conference on development. They argue in detail that Africa is poor because predatory African elites have siphoned off money for their own benefit. But such arguments have a strongly apologetic character. Blaming Africans for the continent’s lack of development is a way of diverting responsibility from the West or the weaknesses of the market system.
Corruptababble is a step towards challenging one of the most enduring myths about Africa. Anyone who supports African development needs to be able to challenge the unhealthy obsession with corruption.
Labels: Africa, corruption, film, Worldwrite
Wednesday, November 07, 2007
Wolf on the undeserving rich
Martin Wolf has a characteristically astute piece on global inequality in today’s Financial Times. He makes a distinction between a capitalism where wealth is generated on the back of political connections combined with resistance to competition and the normal operation of the market. Carlos Slim, a Mexican who is the richest man in the world according to Fortune, is for Wolf an example of the former. Slim made his fortune from buying a controlling stake in Telmex, the national telephone company, from the government in 1990. Since then it has enjoyed protected status as an extremely profitable quasi-monopoly.
I am sceptical that the distinction between deserving and undeserving capitalists is as straightforward as Wolf makes out. But no doubt it could prove popular with defenders of the free market.
I am sceptical that the distinction between deserving and undeserving capitalists is as straightforward as Wolf makes out. But no doubt it could prove popular with defenders of the free market.
Labels: corruption, inequality, Latin America
Sunday, November 04, 2007
On Krugman and Reich
It is frustrating that two recent key books in the growth sceptic genre are not yet available in Britain. From what I can gather Paul Krugman’s The Conscience of a Liberal focuses more on politics than economics. Krugman, a New York Times columnist and professor of economics at Princeton, apparently blames fundamentalist Republicanism for widening inequality in American society. It is hard to be sure but I strongly suspect he somehow links inequality to economic growth. I hope to receive the book soon. In the meantime there is a useful review in the New York Sun and a piece in the New York Review of Books.
Robert Reich, a professor of public policy at the University of California at Berkeley and former Clinton labor secretary, is more clearly a growth sceptic. In a Q&A on Supercapitalism, his new book, he argues that contemporary capitalism has a dynamic side but then refers to the familiar growth sceptic litany:
“Inequality hasn’t been this wide in 80 years. Jobs are far less stable, and the median wage is below where it was in 1980, adjusted for inflation. Main Streets are disappearing. And our planet’s environment is endangered.”
To him the solution is to put curbs on corporations. For him it appears corporations are the force that gives capitalism both its dynamic and destructive side:
“We have to end the corporate arm’s race. That means strict limits on corporate lobbying, on corporate spending for public relations intended to influence legislation, on legislators and public officials turning to lobbying when they leave office, and on corporate money otherwise flowing in politics.”
In reality the problem is not that capitalism is too dynamic. On the contrary, it is not dynamic enough. Rather than putting curbs on corporations the emphasis should be on promoting even more growth.
The first chapter of Supercapitalism is available on the New York Times website. More information can also be found on Reich’s website.
Robert Reich, a professor of public policy at the University of California at Berkeley and former Clinton labor secretary, is more clearly a growth sceptic. In a Q&A on Supercapitalism, his new book, he argues that contemporary capitalism has a dynamic side but then refers to the familiar growth sceptic litany:
“Inequality hasn’t been this wide in 80 years. Jobs are far less stable, and the median wage is below where it was in 1980, adjusted for inflation. Main Streets are disappearing. And our planet’s environment is endangered.”
To him the solution is to put curbs on corporations. For him it appears corporations are the force that gives capitalism both its dynamic and destructive side:
“We have to end the corporate arm’s race. That means strict limits on corporate lobbying, on corporate spending for public relations intended to influence legislation, on legislators and public officials turning to lobbying when they leave office, and on corporate money otherwise flowing in politics.”
In reality the problem is not that capitalism is too dynamic. On the contrary, it is not dynamic enough. Rather than putting curbs on corporations the emphasis should be on promoting even more growth.
The first chapter of Supercapitalism is available on the New York Times website. More information can also be found on Reich’s website.
Labels: America, book, corporations, corruption, inequality
Wednesday, July 04, 2007
Radical posturing on Africa
An article published today on the Guardian’s comment is free site shows how apparently radical views on inequality and corruption can lead to conservative conclusions. Salim Lone, a columnist for Kenya’s Daily Nation and former spokesman for the UN mission in Iraq, starts by bemoaning Africa’s poor record on development. He goes on to argue that:
“In truth there was never any real prospect that western governments, which have gleefully presided over the creation of new classes of the super-super-rich, would use their considerable influence to push African leaders to pursue policies which would shift resources away from the rapacious national elites towards the poor.
“Nor was it likely the west would permit Africa to stray from the neoliberal orthodoxies prescribed for the continent by the World Bank and the IMF. These policies have generated wealth for elites and created economic growth in a few countries, but have proved over two decades singularly unable to reduce the human misery afflicting hundreds of millions.”
While Western intervention is certainly open to criticism it would be easy to draw the conclusion from Lone’s argument that real development is not welcome. From his perspective any economic growth could simply benefit the rich and encourage corruption. His view is also compatible with the current emphasis on alleviating the worst excesses of poverty rather than transforming poor economies into wealthy ones. And given his former job at the UN he clearly has no principled objection to Western intervention in he developing world.
“In truth there was never any real prospect that western governments, which have gleefully presided over the creation of new classes of the super-super-rich, would use their considerable influence to push African leaders to pursue policies which would shift resources away from the rapacious national elites towards the poor.
“Nor was it likely the west would permit Africa to stray from the neoliberal orthodoxies prescribed for the continent by the World Bank and the IMF. These policies have generated wealth for elites and created economic growth in a few countries, but have proved over two decades singularly unable to reduce the human misery afflicting hundreds of millions.”
While Western intervention is certainly open to criticism it would be easy to draw the conclusion from Lone’s argument that real development is not welcome. From his perspective any economic growth could simply benefit the rich and encourage corruption. His view is also compatible with the current emphasis on alleviating the worst excesses of poverty rather than transforming poor economies into wealthy ones. And given his former job at the UN he clearly has no principled objection to Western intervention in he developing world.
Labels: Africa, corruption, development, inequality
Wednesday, June 06, 2007
Explanations for African poverty
This month’s Prospect magazine includes an essay by Paul Collier, director of Centre for the Study of African economies at Oxford university, on why African countries are poor (the first paragraph of the article is available here). He examines several competing explanations including the naturalistic (it’s the environment or geography) and the moralistic (it’s corruption or institutions).
Collier puts the blame on crooked and misguided opponents of reform within African governments. His preferred solution is a return to empire (see 14 May 2007 post).
Many of Collier’s recent papers can be downloaded from his university homepage. His book, The Bottom Billion (Oxford University Press), is endorsed by the likes of George Soros, Sir Nicholas Stern and Larry Summers.
Collier puts the blame on crooked and misguided opponents of reform within African governments. His preferred solution is a return to empire (see 14 May 2007 post).
Many of Collier’s recent papers can be downloaded from his university homepage. His book, The Bottom Billion (Oxford University Press), is endorsed by the likes of George Soros, Sir Nicholas Stern and Larry Summers.
Labels: Africa, corruption, development, environment
Sunday, June 03, 2007
Deutsche Bank on happiness
Deutsche Bank has published a substantial report on happiness. Stefan Bergheim, one of the bank’s economists, uses a statistical “cluster analysis” to identify what he says are 10 “indicators for a happy society”:
1)High degree of trust in fellow citizens
2)Low amount of corruption
3)Low unemployment
4)High level of education
5)High income
6)High employment rate of older people
7)Small shadow economy
8)Extensive economic freedom
9)Low employment protection
10)High birth rate
Strangely, America and Britain are classified by Deutsche Bank as happy societies. This is in contrast to much of the internal debate within these countries which sees them as unhappy.
It is also notable that the paper argues that happiness and life satisfaction should be explicit policy objectives. So now we have a bank saying that governments should concern themselves with making us happy – presumably whether we like it or not.
1)High degree of trust in fellow citizens
2)Low amount of corruption
3)Low unemployment
4)High level of education
5)High income
6)High employment rate of older people
7)Small shadow economy
8)Extensive economic freedom
9)Low employment protection
10)High birth rate
Strangely, America and Britain are classified by Deutsche Bank as happy societies. This is in contrast to much of the internal debate within these countries which sees them as unhappy.
It is also notable that the paper argues that happiness and life satisfaction should be explicit policy objectives. So now we have a bank saying that governments should concern themselves with making us happy – presumably whether we like it or not.
Labels: corruption, Europe, happiness
Wednesday, May 23, 2007
The dangers of crying Wolfowitz
Spiked has published an article by me on the campaign to oust Paul Wolfowitz as president of the World Bank. It argues that it is the poorest people of the world who suffer most as a result of the campaign against corruption.
Labels: Africa, America, corruption, spiked
Sunday, May 20, 2007
Blair and the World Bank
There is some speculation that Tony Blair, Britain’s outgoing prime minister, could take over from the ousted Paul Wolfowitz as head of the World Bank. Although this would go against the tradition that the World Bank is headed by an American in many ways Blair would be the perfect choice. Who better than the smiley autocrat to run such an interfering and undemocratic institution? The British prime minister has a long track record of making pious remarks about “healing” Africa. The problem is who will save Africa from Blair?
Labels: Africa, corruption, development
Sunday, April 15, 2007
Anti-corruption hurts poor countries
Developing countries will suffer as a result of the corruption allegations around Paul Wolfowitz. The World Bank president (and former US defence secretary) is accused of helping his partner win promotion and a pay rise. Critics accuse Wolfowitz of hypocrisy because he has led an anti-corruption drive against third world nations (following on from his predecessor, James Wolfensohn). But such charges only strengthen the pernicious hand of anti-corruption.
There are several reasons to object to anti-corruption. It strengthens Western interference in the affairs of poorer countries. It distracts from the need to find ways to promote economic development. And it encourages a corrosive climate of distrust.
There are several reasons to object to anti-corruption. It strengthens Western interference in the affairs of poorer countries. It distracts from the need to find ways to promote economic development. And it encourages a corrosive climate of distrust.
Labels: corruption, development
Sunday, March 18, 2007
The Trap fails to address inequality
This week’s episode of The Trap, part two of the three part documentary by Adam Curtis, failed to convincingly link paranoid man with rising inequality (see posts of 11 and 12 March). The first 45 minutes of the hour-long programme elaborated on the last week’s theme of how the idea of rational selfish individuals arose during the Cold War (including John Nash, James Buchanan and Tom Peters). It also showed how institutions such as the National Health Service were reformed to incorporate these ideas in the 1990s. Only then, three quarters of the way through the programme, did it make a tenuous link with inequality through the mechanism of school league tables. Rich individuals, it pointed out, could afford to buy houses in areas with top-performing schools. As soon as it made this point it quickly moved on to inequality in America and then onto the idea of corruption. It ended by questioning the science of the “selfish gene” and describing how behavioural economics is gaining in popularity. So literally only a few minutes of an hour-long programme even attempted to demonstrate the link between “rational economic man” and inequality.
Labels: corruption, economics, inequality, television
Sunday, November 26, 2006
Me in New York on corruption
If you want to watch a video of me being interviewed about corruption immediately before the New York Salon meeting on 21 June this year click here.
Labels: corruption, speeches
Sunday, July 16, 2006
Me and Spiked
Much of my writing on growth scepticism has appeared on Spiked-online; an independent online publication which describes itself as having the modest ambition of making history as well as reporting it. My recent articles include a contribution to its Enlightening the future 2024 project and a piece on the extradition of the “NatWest three” to Texas from Britain. The latter is a first attempt at dealing with what could be called the “paradox of inequality”: those who have the least suffer the most as a result of contemporary attacks on affluence. I also sometimes write on other topics, such as my essay on Steven Spielberg’s film Munich , but these articles will not generally appear on this site.
Labels: corruption, film, inequality, review, spiked
