Meghnad Desai

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Global Governance and Financial Crises by Meghnad Desai, Yahia Said

Asian financial crisis, bank run, banking crisis, Bretton Woods, business cycle, capital controls, central bank independence, corporate governance, creative destruction, credit crunch, crony capitalism, currency peg, deglobalization, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, financial repression, floating exchange rates, frictionless, frictionless market, German hyperinflation, information asymmetry, Japanese asset price bubble, knowledge economy, liberal capitalism, liberal world order, Long Term Capital Management, low interest rates, market bubble, Meghnad Desai, Mexican peso crisis / tequila crisis, moral hazard, Nick Leeson, Nixon triggered the end of the Bretton Woods system, oil shock, open economy, Post-Keynesian economics, price mechanism, price stability, Real Time Gross Settlement, rent-seeking, short selling, special drawing rights, structural adjustment programs, Tobin tax, transaction costs, Washington Consensus

Das The Economics and Management of Technological Diversification Edited by John Cantwell, Alfonso Gambardella and Ove Granstrand Before and Beyond EMU Historical lessons and future prospects Edited by Patrick Crowley Fiscal Decentralization Ehtisham Ahmad and Vito Tanzi The Regionalization of Internationalized Innovation Locations for advanced industrial development and disparities in participation Edited by Ulrich Hilpert Gold and the Modern World Economy Edited by MoonJoong Tcha Global Economic Institutions Willem Molle Global Governance and Financial Crises Edited by Meghnad Desai and Yahia Said Global Governance and Financial Crises Edited by Meghnad Desai and Yahia Said First published 2004 by Routledge 11 New Fetter Lane, London EC4P 4EE Simultaneously published in the USA and Canada by Routledge 29 West 35th Street, New York, NY 10001 Routledge is an imprint of the Taylor & Francis Group This edition published in the Taylor & Francis e-Library, 2004. © 2004 Meghnad Desai and Yahia Said for selection and editorial matter; individual contributors for their chapters All rights reserved.

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Series. HC59.7.D368 2003 338.542-dc21 ISBN 0-203-71321-4 Master e-book ISBN ISBN 0-203-34284-4 (Adobe eReader Format) ISBN 0–415–30529–2 (Print Edition) 2003046537 Contents List of figures List of tables List of contributors 1 Introduction viii x xi 1 MEGHNAD DESAI AND YAHIA SAID 2 Financial crises and global governance 6 MEGHNAD DESAI 3 Asset price bubbles and monetary policy 19 FRANKLIN ALLEN AND DOUGLAS GALE 4 The International Monetary Fund: past and future 43 MICHEL AGLIETTA 5 Regulating global finance: rival conceptions of world order 70 ANDREW GAMBLE 6 Crises, recovery and reforms in East Asia 83 JOMO KWAME SUNDARAM 7 Mexico, Korea and Brazil: three paths to financial crises 120 GABRIEL PALMA Index 159 Figures 3.1 3.2 3.3 3.4 4.1 4.2 4.3 Credit and asset prices Optimal risk sharing Consumption without central bank intervention Asset pricing without central bank intervention Reserve positions in the Fund and international reserves IMF quotas and world exports Total liabilities of beneficiary countries in percentage of IMF quotas 4.4 Credit outstandings by type of facilities 6.1 East Asian 4: monthly interest rates, January 1997–May 2000 6.2 East Asian 4: monthly foreign exchange rates, January 1996–June 2000 6.3 (a) Indonesia, Korea, Thailand and Malaysia: annual budget balances, 1996–99; (b) Korea, Thailand and Malaysia: quarterly budget balances, 1997Q1–99Q4 6.A1 (a) Thailand: quarterly merchandise trade balance and reserves, 1997Q1–2000Q1; (b) Indonesia: quarterly merchandise trade balance and reserves, 1997Q1–99Q4; (c) Malaysia: quarterly merchandise trade balance and reserves, 1997Q1–99Q4; (d) Korea: quarterly merchandise trade balance and reserves, 1997Q1–2000Q1 6.A2 (a) Thailand: GDP growth, foreign exchange and interest rate, 1997Q1–2000Q1; (b) Indonesia: GDP growth, foreign exchange and interest rate, 1997Q1–2000Q1; (c) Malaysia: GDP growth, foreign exchange and interest rate, 1997Q1–2000Q1; (d) Korea: GDP growth, foreign exchange and interest rate, 1997Q1–2000Q1 7.1 Latin America and East Asia: aggregate net capital flows before financial liberalisation, and between financial liberalisation and financial crisis 7.2 G7: assets of institutional investors 7.3 Derivatives markets: notional values of outstanding ‘over-thecounter’ interest rate, currency and exchange-traded derivative contracts 27 34 37 38 51 51 54 55 95 96 98 110 111 123 123 124 Figures ix 7.4 7.5 7.6 7.7 7.8 7.9 7.10 7.11 7.12 7.13 7.14 7.15 7.16 7.17 7.18 7.19 7.20 7.21 7.22 7.23 7.24 7.25 7.26 7.27 7.28 East Asia and Latin America: credit to private sector between the beginning of financial liberalisation and respective financial crises Latin America and East Asia: domestic real lending rates between the beginning of financial liberalisation and respective financial crisis Latin America and East Asia: imports of consumer goods between the beginning of financial liberalisation and respective financial crises Latin America and East Asia: annual stock market indices between the beginning of financial liberalisation and respective financial crisis Latin America, East Asia, USA and Europe: stock market indices Latin America and East Asia: real estate price indices between the beginning of financial liberalisation and respective financial crisis Mexico: investment in residential construction, infrastructure and machinery and equipment South Korea: sectoral surpluses of the corporate, household, public and foreign sectors Mexico: composition of net private capital inflows Korea: composition of net private capital inflows Latin America and East Asia: ratio of short-term debt to total debt between the beginning of financial liberalisation and respective financial crisis Latin America and East Asia: ratio of foreign exchange reserves to short-term debt between the beginning of financial liberalisation and respective financial crisis Latin America and East Asia: ratio of foreign exchange reserves to M2 between the beginning of financial liberalisation and respective financial crisis Chile: composition of net private capital inflows Chile: net equity securities and other investment Chile: real effective exchange rate and foreign exchange reserves Chile versus Brazil and Thailand: short-term foreign debt Chile: quarterly stock market index Chile: quarterly real estate index Chile: credit to the private sector and real interest rates Malaysia: net private capital inflows Malaysia: composition of net private capital inflows Malaysia: net ‘other’, portfolio investment and ‘errors’ Malaysia: quarterly stock market index Malaysia: quarterly real estate index 125 127 128 129 130 131 132 133 134 134 135 135 136 141 142 142 144 145 145 146 147 148 149 150 151 Tables 3.1 3.2 3.3 3.4 4.1 4.2 6.1 6.2 6.3 6.4 6.5 6.6 6.A1 6.A2(a) 6.A2(b) 6.A2(c) 6.A2(d) 6.A3(a) 6.A3(b) 6.A3(c) 6.A3(d) Details of the two assets A mean-preserving spread of risky asset returns Credit, risky asset prices and interest rates A mean-preserving spread of financial risk Synopsis of the Fund’s mandate Types of international prudential organization East Asia four: macroeconomic indicators East Asian four: lending by BIS reporting banks by sector Exposure of BIS reporting banks to non-BIS borrowers Maturity distribution of lending by BIS reporting banks to selected Asian economies East Asian four: debt service and short-term debt East Asian four: exchange rates and depreciation against US dollar East Asian four: macroeconomic indicators Thailand: foreign debt indicators Indonesia: foreign debt indicators Malaysia: foreign debt indicators Korea: foreign debt indicators Thailand: loans and advances by commercial banks Indonesia: loans and advances by commercial banks Malaysia: loans and advances by commercial banks Korea: loans and advances by commercial banks 23 24 28 28 58 60 86 87 88 88 90 96 112 114 115 116 117 118 118 119 119 Contributors Michel Aglietta is a senior member of l’Institut Universitaire de France.

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He also worked as a project coordinator with the Helsinki Citizens’ Assembly in Prague. Yahia Said specialises in issues of economic transition and security in post-totalitarian societies. His publications include with Meghnad Desai ‘Money and the global civil society: the new anti-capitalist movement’, in Anheier, Glasius and Kaldor (eds), Global Civil Society 2001 (OUP 2001), and with Yash Ghai and Mark Lattimer, Building Democracy in Iraq (Minority Rights Group 2003). 1 Introduction Meghnad Desai and Yahia Said The new century is barely three years old and many of the certainties of the last century are being re-examined. During the last decade of the last century, there was an overwhelming confidence about the economy.

Hubris: Why Economists Failed to Predict the Crisis and How to Avoid the Next One by Meghnad Desai

3D printing, Alan Greenspan, bank run, banking crisis, Bear Stearns, Berlin Wall, Big bang: deregulation of the City of London, Bretton Woods, BRICs, British Empire, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, correlation coefficient, correlation does not imply causation, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, demographic dividend, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, Fall of the Berlin Wall, financial innovation, Financial Instability Hypothesis, floating exchange rates, full employment, German hyperinflation, Glass-Steagall Act, Gunnar Myrdal, Home mortgage interest deduction, imperial preference, income inequality, inflation targeting, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, laissez-faire capitalism, liquidity trap, Long Term Capital Management, low interest rates, market bubble, market clearing, means of production, Meghnad Desai, Mexican peso crisis / tequila crisis, mortgage debt, Myron Scholes, negative equity, Northern Rock, oil shale / tar sands, oil shock, open economy, Paul Samuelson, Phillips curve, Post-Keynesian economics, price stability, purchasing power parity, pushing on a string, quantitative easing, reserve currency, rising living standards, risk/return, Robert Shiller, Robert Solow, Ronald Reagan, savings glut, secular stagnation, seigniorage, Silicon Valley, Simon Kuznets, subprime mortgage crisis, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Wealth of Nations by Adam Smith, Tobin tax, too big to fail, women in the workforce

Feinstein, ed., Capitalism, Socialism and Economic Development: Essays in Honour of Maurice Dobb (Cambridge University Press, Cambridge, 1967). See also Meghnad Desai, “Growth Cycles and Inflation in a Model of the Class Struggle,” Journal of Economic Theory (Dec. 1973), republished in The Selected Essays of Meghnad Desai, vol. 1: Macroeconomics and Monetary Theory (Edward Elgar, Cheltenham, 1995). 4.For a comparison of Hayek and Marx, see Meghnad Desai, “Hayek and Marx,” in E. Feser, ed., The Cambridge Companion to Hayek (Cambridge University Press, Cambridge, 2006). 5.Robert Lucas, “Econometric Testing of the Natural Rate Hypothesis,” in O.

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See also Alan Greenspan, The Age of Turbulence, with a new epilogue (Penguin, New York, 2008). 7.Financial Services Authority, The Turner Review: A Regulatory Response to the Global Banking Crisis (Financial Services Authority, London, 2009), p. 39. 8.The case for the Keynesians is argued by Robert Skidelsky, Keynes: The Return of the Master (Penguin, London, 2009). 9.Milton Friedman and Anna Schwartz, A Monetary History of the United States 1867–1960 (Princeton University Press, Princeton, NJ, 1963). 10.For the background to the euro, see David Marsh, The Euro: The Battle for the New Global Currency (Yale University Press, New Haven, CT, 2009). 7 The Search for an Answer 1.Thomas Piketty, Capital in the Twenty-First Century (Belknap Press, Cambridge, MA, 2014), see figure 6.1, p. 200; figure 6.2, p. 201; figure 8.5, p. 291. 2.Meghnad Desai, “An Econometric Model of the Share of Wages in National Income: UK 1855–1965” (1984), republished in The Selected Essays of Meghnad Desai, vol. 1: Macroeconomics and Monetary Theory (Edward Elgar, Cheltenham, 1995). 3.Andrew Glyn and Robert Sutcliffe, “The Collapse of UK Profits,” New Left Review, 66 (Mar.–Apr. 1971). 4.Gerard Duménil and Dominique Lévy, “The Crisis of the Early 21st Century: Marxian Perspectives,” in R.

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Copyright © 2015 Meghnad Desai All rights reserved. This book may not be reproduced in whole or in part, in any form (beyond that copying permitted by Sections 107 and 108 of the U.S. Copyright Law and except by reviewers for the public press) without written permission from the publishers. For information about this and other Yale University Press publications, please contact: U.S. Office: sales.press@yale.edu www.yalebooks.com Europe Office: sales@yaleup.co.uk www.yalebooks.co.uk Typeset in Arno Pro by IDSUK (DataConnection) Ltd Printed in Great Britain by TJ International Ltd, Padstow, Cornwall Library of Congress Control Number: 2015933801 ISBN 978-0-300-21354-6 A catalogue record for this book is available from the British Library. 10 9 8 7 6 5 4 3 2 1 CONTENTS List of Figures Preface Acknowledgements Introduction: Unraveling the Threads Part I 1 The Building Blocks 2 Cycles for the Curious 3 New Tools for a New Profession Part II 4 Causing a Stir 5 Declining Fortunes Part III 6 The New Globalization 7 The Search for an Answer Notes Bibliography Index FIGURES 1Marshall’s Cross 2Keynes’s aggregate demand and aggregate supply curves 3Hicks’s version of Keynes 4The Phillips curve 5Friedman’s version of the Phillips curve 6The Goodwin cycle 7Lucas’s version of the Phillips curve 8New classical aggregate demand and aggregate supply PREFACE In July 2007, I was invited by the Ministry of External Affairs, Government of India to give a talk to a group of Foreign Services Officers on the prospects for the global economy.

Rethinking Islamism: The Ideology of the New Terror by Meghnad Desai

Ayatollah Khomeini, battle of ideas, Berlin Wall, Dr. Strangelove, full employment, global village, illegal immigration, income per capita, invisible hand, liberal capitalism, liberation theology, Mahatma Gandhi, Martin Wolf, means of production, Meghnad Desai, Nelson Mandela, oil shock, purchasing power parity, Ronald Reagan, structural adjustment programs, The Wealth of Nations by Adam Smith, Timothy McVeigh, Yom Kippur War

R E T H I N K I NG ฀ I SL A M I S M ‘Meghnad฀Desai฀has฀given฀us฀a฀much฀needed฀guide฀to฀the฀ complex฀role฀of฀Islam฀in฀current฀geopolitical฀conflicts.฀Bringing฀ together฀a฀wealth฀of฀historical฀knowledge฀with฀powerful฀insights฀ into฀globalisation,฀he฀shows฀that฀Global฀Islam฀is฀a฀revolutionary฀ movement฀in฀many฀ways฀like฀those฀of฀the฀twentieth฀century.฀ This฀is฀a฀book฀that฀deserves฀to฀be฀very฀widely฀read.’ J฀G,฀Professor฀of฀European฀Thought฀ ฀at฀the฀London฀School฀of฀Economics฀and฀author฀of฀ ฀Al฀Qaeda฀and฀What฀It฀Means฀To฀Be฀Modern฀(Faber) ‘Like฀Maynard฀Keynes,฀Meghnad฀Desai฀is฀so฀much฀more฀than฀ an฀economist.

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R฀ S,฀Professor฀of฀Political฀Economy฀฀ at฀the฀University฀of฀Warwick฀and฀author฀of฀฀ The฀World฀After฀Communism:฀A฀Polemic฀for฀Our฀Times RETHINK ING฀ ISLAMISM The฀Ideology฀of฀the฀New฀Terror  ฀   Published฀in฀฀by฀฀ I.B.Tauris฀&฀Co.฀Ltd฀ ฀Salem฀Rd,฀London฀฀฀ ฀Fifth฀Avenue,฀New฀York฀฀฀ www.ibtauris.com In฀the฀United฀States฀and฀Canada฀distributed฀by฀Palgrave฀Macmillan,฀ a฀division฀of฀St.฀Martin’s฀Press,฀฀Fifth฀Avenue,฀New฀York,฀฀ Copyright฀©฀Meghnad฀Desai฀ The฀right฀of฀Meghnad฀Desai฀to฀be฀identified฀as฀the฀author฀of฀this฀work฀฀ has฀been฀asserted฀by฀him฀in฀accordance฀with฀the฀Copyright,฀฀ Designs฀and฀Patents฀Act,฀ All฀rights฀reserved.฀Except฀for฀brief฀quotations฀in฀a฀review,฀this฀book,฀or฀any฀ part฀thereof,฀may฀not฀be฀reproduced,฀stored฀in฀or฀introduced฀into฀a฀retrieval฀ system,฀or฀transmitted,฀in฀any฀form฀or฀by฀any฀means,฀electronic,฀mechanical,฀ photocopying,฀recording฀or฀otherwise,฀without฀the฀prior฀written฀permission฀of฀ the฀publisher. ฀ ฀฀฀฀ A฀full฀CIP฀record฀for฀this฀book฀is฀available฀from฀the฀British฀Library฀ A฀full฀CIP฀record฀for฀this฀book฀is฀available฀from฀the฀Library฀of฀Congress฀ Library฀of฀Congress฀catalog฀card:฀available Typeset฀in฀Van฀Dijck฀by฀illuminati,฀Grosmont,฀฀ www.illuminatibooks.co.uk฀ Printed฀and฀bound฀in฀Great฀Britain฀by฀฀ T.J.

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.฀ the฀ message฀ was฀ repeated฀ on฀ another฀Arab-Sassanian฀dirham฀struck฀at฀the฀same฀place,฀this฀time฀ by฀a฀supporter฀of฀the฀Umayyads.’฀Patricia฀Crone฀and฀Martin฀Hinds,฀ God’s฀Caliph,฀Cambridge฀University฀Press,฀Cambridge,฀,฀p.฀. ฀ .฀ There฀is฀a฀vast฀literature฀on฀the฀Russian฀Revolution.฀See฀Meghnad฀ Desai,฀ Marx’s฀ Revenge:฀ The฀ Resurgence฀ of฀ Capitalism฀ and฀ the฀ Death฀ of฀ Statist฀Socialism,฀Verso,฀London,฀.฀ ฀ .฀ There฀ are฀ many฀ references.฀ See฀ among฀ others฀ François฀ Furet,฀ The฀ Passing฀of฀an฀Illusion,฀University฀of฀Chicago฀Press,฀Chicago,฀;฀Jung฀ Chang฀ and฀ Jon฀ Halliday,฀ Mao:฀ The฀ Unknown฀ Story,฀ Jonathan฀ Cape,฀ London,฀;฀Stephane฀Courtois฀et฀al.

GDP: The World’s Most Powerful Formula and Why It Must Now Change by Ehsan Masood

Alan Greenspan, anti-communist, bank run, banking crisis, biodiversity loss, Bob Geldof, Bretton Woods, centre right, clean water, colonial rule, coronavirus, COVID-19, Credit Default Swap, decarbonisation, deindustrialization, Diane Coyle, energy security, European colonialism, financial engineering, government statistician, happiness index / gross national happiness, income inequality, indoor plumbing, Intergovernmental Panel on Climate Change (IPCC), Isaac Newton, job satisfaction, Kickstarter, Mahbub ul Haq, mass immigration, means of production, Meghnad Desai, Mohammed Bouazizi, Robert Solow, Ronald Reagan, Sheryl Sandberg, Silicon Valley, Simon Kuznets, Skype, statistical model, the scientific method, The Spirit Level, Washington Consensus, wealth creators, zoonotic diseases

—Gustav Papanek, “The Development Miracle” (1965) Elite universities are usually spoiled for choice when it comes to selecting whom to feature in their alumni magazines. But there’s one University of Cambridge class in particular that would have left any editor of its alumni magazine CAM spoilt for choice. The economics class of 1953 had Meghnad Desai, now Labour member of the UK House of Lords. It had Nobel Prize-winning economist Amartya Sen, and last but not least, there was Pakistan’s Mahbub ul Haq, who would become his country’s chief economist and later its finance minister. I know a tiny bit of this generation, as it is the generation of my own parents: children of the partition of India and participants in what is still the world’s largest mass migration.

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All but 3 of the 135 countries for which HDI is measured have a higher level compared with 1990. Crucially for the project team’s thesis, those countries recording the biggest gains in life expectancy and education are not necessarily those with the biggest increases in economic growth rates. Meghnad Desai and Richard Jolly both say that few if any members of the project team, with the exception of Haq, anticipated the level of attention the HDI has received; nor could they foresee the effect it would have on countries and how the reports would influence development planning in both good and more questionable ways.

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In particular, they are: Bob Costanza whose 1997 Nature paper, “The Value of the World’s Ecosystem Services and Natural Capital,” planted a seed for this book, and Herman Daly, who walked me through the birth pangs of ecological economics. I am also grateful to the late Maurice Strong who helped me to reconstruct the 1972 Stockholm environment conference and to Roberto Peccei who spoke movingly about his late father Aurelio. Lord Meghnad Desai, Bill Draper, Sir Richard Jolly and Frances Stewart illuminated the early years of the Human Development Index and Richard especially provided detailed comments on an early draft of the manuscript. Many thanks also go to Dasho Karma Ura who described the making of Gross National Happiness; to Gustav Papanek for his memories as an economic development consultant in 1950s Karachi; and to Lord Nicholas Stern for re-living both the Commission for Africa and the Stern review on the economics of climate change.

How Much Is Enough?: Money and the Good Life by Robert Skidelsky, Edward Skidelsky

banking crisis, basic income, Bertrand Russell: In Praise of Idleness, Bonfire of the Vanities, call centre, carbon credits, creative destruction, critique of consumerism, David Ricardo: comparative advantage, death of newspapers, Dr. Strangelove, financial innovation, Francis Fukuyama: the end of history, full employment, Great Leap Forward, guns versus butter model, happiness index / gross national happiness, Herbert Marcuse, income inequality, income per capita, informal economy, Intergovernmental Panel on Climate Change (IPCC), invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, market clearing, market fundamentalism, Meghnad Desai, Paul Samuelson, Philippa Foot, planned obsolescence, precautionary principle, profit motive, purchasing power parity, Ralph Waldo Emerson, retail therapy, Robert Solow, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, Tobin tax, union organizing, University of East Anglia, Veblen good, wage slave, wealth creators, World Values Survey, zero-sum game

They all encouraged us to break academic cover and come out clearly with our own views. Our warmest thanks go to the following for reading the whole or part of drafts of How Much Is Enough? and, by their comments and criticisms, helping to improve its arguments: Perry Anderson, Tony Bicat, Carmen Callil, Meghnad Desai, Robin Douglass, Pavel Erochkine, Richard Fynes, Peter Pagan, Pranay Sanklecha, Richard Seaford, Augusta Skidelsky, Will Skidelsky and Wu Junqing. We thank Pete Mills and Christian Westerlind Wigstrom of Robert’s Centre for Global Studies for their unstinting help with research and criticism.

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Whereas Lenin saw poor countries as a reservoir for the further exploitation of labor, Luxemburg saw them—together with armaments production—as a vent for extra markets to absorb the surplus of capitalist production over consumption. Whatever one might think about the validity of either explanation, neither points to the collapse of capitalism, rather to its ability to rescue itself from internal crises, notably through globalization. As Marx’s modern commentator Meghnad Desai writes, “Marx fails to come up with a single story about the dynamics of capitalism that in any way predicts—even with various conditions attached—its eventual downfall.”38 Realization that his economics failed to establish the apocalyptic moment is probably why Marx never finished the last two volumes of Das Kapital.

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Karl Marx and Friedrich Engels, The Communist Manifesto, Project Gutenberg (http://gutenberg.org/ebooks/61; accessed January 12, 2012), p. 9. 31. Ibid., p. 9. 32. Ibid., p. 8. 33. Ibid., p. 13. 34. Ibid., p. 9. 35. Karl Marx, “Capital,” in Marx: Collected Writings (London: Lawrence and Wishart, 1974), pp. 714–15. 36. Marx and Engels, The Communist Manifesto, p. 10. 37. Quoted in Meghnad Desai, Marx’s Revenge: The Resurgence of Capitalism and the Death of Statist Socialism (London: Verso, 2004), p. 95. 38. Ibid., p. 79. 39. Quoted ibid., p. 44. 40. Karl Marx, “The German Ideology,” in Karl Marx: Selected Writings ed. David McLellan (Oxford: Oxford University Press, 1977; first pub. 1846), p. 169. 41.

Meghnad Desai Marxian economic theory by Unknown

book value, business cycle, commoditize, Corn Laws, full employment, land bank, land reform, means of production, Meghnad Desai, p-value, price mechanism, profit motive, technological determinism

LECTURES IN ECO~GMfCS - Marxian Economic Theory Meghnad Desai LO/ldO/l School of Ecollomics a/ld Political Scie/lce GRAY-MILLS PUBLISHING LTL IQ Jucr Strcct London S .W. I I © Mr.~/I/I/JJ Drsai First Editi(l" t974 ISBN 0 85641 013 6 (papa) ISBN 0 85641 Oil 8 (dot/,) Printed In Great Britain by Lowe /le Brydone (Printers) Ltd, Haverhill, Suffolk CONTENTS Preface List of algebraic symbols Chapter I IntFoduction II The Role of Value TheoFY in Classical, Neoclassical and MaFxian Economics III UndiffeFentiated and AbstFact LabOUF: An AbstFaction and an HistoFical Process IV CFeation of SUFplus Value as a Social Process V The ThFee CiFcuits of Capital VI Simple RepFoduction and Expanded RepFoduction.

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Many students have advanced my understanding of Marx and taught me to rethink old ideas. I am grateful to E. Akat, Dada Yaffe, Stephen Lord, Peter Nore and Nat Levy among others. Mark Blaug and Gail \-;ilson read the earlier versions and improved it in several ways. I am also grateful to Geraldine Preece, Carol Martin and Arule de Sayrah for typing the earlier versions. Meghnad Desai LondOn SchooZ of Economics, Z97J ii IC} Sale of labour power and p,Jrchase of wage aood. by labourers I} ,i. MP: i {CI W W ;r·_· - - - - - _._._. - - _.- - _.- ./. :: C ~ :C'~M' L . , M --+ : ,,: =p i1 1 , C L_____ - - - - - - - --~-- - ~- -- - - - --~ ---• C+c "~SAo~·t~ , . -----------:--------- ------------ -1-·- _. ------------ } "- /' cClllDDdities for : - p ---+C' ::' --+

The Classical School by Callum Williams

"Friedman doctrine" OR "shareholder theory", bank run, banking crisis, basic income, Brexit referendum, British Empire, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Charles Babbage, complexity theory, Corn Laws, David Ricardo: comparative advantage, death from overwork, deindustrialization, Donald Trump, double entry bookkeeping, falling living standards, Fellow of the Royal Society, full employment, Gini coefficient, Gordon Gekko, greed is good, helicopter parent, income inequality, invisible hand, Jevons paradox, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, land reform, low skilled workers, Mahatma Gandhi, Martin Wolf, means of production, Meghnad Desai, minimum wage unemployment, Modern Monetary Theory, new economy, New Journalism, non-tariff barriers, Paul Samuelson, Post-Keynesian economics, purchasing power parity, Ronald Coase, secular stagnation, Silicon Valley, spinning jenny, The Wealth of Nations by Adam Smith, Thomas Malthus, universal basic income

As Angus Maddison, an economist, points out, India also paid for the salaries of colonial administrators. Many of these were extremely high: “the Viceroy received £25,000 a year, and governors £10,000. The starting salary in the engineering service was £420 a year or about sixty times the average income of the Indian labour force.” Meghnad Desai, another economist, reckons that during Naoroji’s time, roughly half of the financial transfers from India to Britain could be considered “unrequited”. Why was that bad for India? According to the Millian–Humean logic, it implied that Indians had to consume fewer imports, resulting in a lower standard of living.

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Though as we will see later in this chapter, that changed. 4. It is also interesting that in the course of coming up with the theory Naoroji embarked on a statistical project the likes of which Sir William Petty would have been proud of. He was the first person, in 1867, to estimate India’s GDP. I am grateful to Meghnad Desai for the insight that the drain could be put instead towards investment. 5. Desai laments the “the nationalist logic [which] saw all foreign trade and not just the classic Home Charges as a ‘drain’ of resources”. Following independence India was to embrace an autarkic style of economic management. 6.

When China Rules the World: The End of the Western World and the Rise of the Middle Kingdom by Martin Jacques

Admiral Zheng, An Inconvenient Truth, Asian financial crisis, Bear Stearns, Berlin Wall, Bob Geldof, Bretton Woods, BRICs, British Empire, classic study, credit crunch, Dava Sobel, deindustrialization, Deng Xiaoping, deskilling, discovery of the americas, Doha Development Round, energy security, European colonialism, failed state, Fall of the Berlin Wall, flying shuttle, Francis Fukuyama: the end of history, global reserve currency, global supply chain, Great Leap Forward, illegal immigration, income per capita, invention of gunpowder, James Watt: steam engine, joint-stock company, Kenneth Rogoff, land reform, land tenure, lateral thinking, Malacca Straits, Martin Wolf, Meghnad Desai, Naomi Klein, Nelson Mandela, new economy, New Urbanism, one-China policy, open economy, Pearl River Delta, pension reform, price stability, purchasing power parity, reserve currency, rising living standards, Ronald Reagan, Scramble for Africa, Silicon Valley, South China Sea, sovereign wealth fund, special drawing rights, special economic zone, spinning jenny, Spread Networks laid a new fibre optics cable between New York and Chicago, the scientific method, Thomas L Friedman, trade liberalization, urban planning, Washington Consensus, Westphalian system, Xiaogang Anhui farmers, zero-sum game

Chen Kuan-Hsing read Chapter 8 and has discussed many of the ideas in it with me over the last few years. I, of course, remain solely responsible for the book as it now appears, warts and all. I would like to express my gratitude to Tony Giddens, former director of the London School of Economics, and Meghnad Desai, then chairman of the Asia Research Centre, who arranged for me to become a visiting research fellow at the Centre in 2004, a connection which has continued to this day. I am also now a senior visiting fellow at the LSE’s IDEAS, an association for which I would like to thank Michael Cox and Odd Arne Westad.

…

Sun Shuyun, The Long March (London: HarperPress, 2006), for an account of this remarkable episode. 78 . Iris Chang, The Rape of Nanking (London: Penguin, 1998), Chapter 2, and pp. 215-25. 79 . Bin Wong, China Transformed, pp. 164, 170-73. 80 . Cohen, Discovering History in China, p. 135. 81 . Ibid., p. 132. 82 . Meghnad Desai, ‘India and China: An Essay in Comparative Political Economy’, seminar paper, Asia Research Centre, London School of Economics, 2003, p. 5; revised version available to download from www.imf.org. 83 . Cohen, Discovering History in China, p. 132; Bin Wong, China Transformed, p. 200; Lovell, The Great Wall, pp. 219, 242. 84 .

…

Geoff Dyer, ‘Russia Fails to Secure Regional Backing’, Financial Times, 28 August 2008; Geoff Dyer, ‘Russia Could Push China Closer to the West’, Financial Times, 27 August 2008; Bobo Lo, ‘Russia, China and the Georgia Dimension’, Centre for European Reform Bulletin, 62 (October/November 2008). 83 . Meghnad Desai, ‘India and China: An Essay in Comparative Political Economy’, seminar paper, Asia Research Centre, London School of Economics, 2003, p. 3; revised version available to download from www.imf.org. 84 . Amartya Sen, The Argumentative Indian: Writings on Indian History, Culture and Identity (London: Allen Lane, 2005), pp. 161-90, especially p. 164. 85 .

The New Silk Roads: The Present and Future of the World by Peter Frankopan

"World Economic Forum" Davos, active measures, Berlin Wall, Big Tech, bitcoin, blockchain, Boris Johnson, cashless society, clean water, cryptocurrency, Deng Xiaoping, don't be evil, Donald Trump, Ethereum, ethereum blockchain, F. W. de Klerk, failed state, fake news, Fall of the Berlin Wall, global supply chain, high-speed rail, illegal immigration, income inequality, invisible hand, land reform, Londongrad, low interest rates, Mark Zuckerberg, mass incarceration, Meghnad Desai, Nelson Mandela, Paris climate accords, purchasing power parity, ransomware, Rubik’s Cube, smart cities, South China Sea, sovereign wealth fund, Steve Bannon, trade route, trickle-down economics, UNCLOS, urban planning, WikiLeaks, zero-sum game

.), ‘The potential socio-economic impact of China Pakistan Economic Corridor’, Asian Development Policy Review 5.4 (2017), pp. 191–8. 142Ankit Panda, ‘Geography’s Curse: India’s Vulnerable “Chicken’s Neck”’, The Diplomat, 8 November 2013. 143India Today, ‘Full-scale India–China war likely soon, Washington will back New Delhi: Meghnad Desai’, 5 August 2017. 144The Hindu, ‘Army prepared for a two and a half front war: General Rawat’, 8 June 2017. 145See Frankopan, Silk Roads, pp. 294ff and above all Christopher Clark, The Sleepwalkers: How Europe Went to War in 1914 (London, 2012). 146First Post, ‘Pakistan seals $5 billion deal to buy eight Chinese attack submarines’, 31 August 2016. 147Christopher Clary and Ankit Panda, ‘Safer at Sea?

Big Three in Economics: Adam Smith, Karl Marx, and John Maynard Keynes by Mark Skousen

Albert Einstein, banking crisis, behavioural economics, Berlin Wall, Bretton Woods, business climate, business cycle, creative destruction, David Ricardo: comparative advantage, delayed gratification, experimental economics, financial independence, Financial Instability Hypothesis, foreign exchange controls, full employment, Hernando de Soto, housing crisis, Hyman Minsky, inflation targeting, invisible hand, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kenneth Arrow, laissez-faire capitalism, liberation theology, liquidity trap, low interest rates, means of production, Meghnad Desai, microcredit, minimum wage unemployment, money market fund, open economy, paradox of thrift, Pareto efficiency, Paul Samuelson, Phillips curve, Post-Keynesian economics, price stability, pushing on a string, rent control, Richard Thaler, rising living standards, road to serfdom, Robert Shiller, Robert Solow, rolodex, Ronald Coase, Ronald Reagan, school choice, secular stagnation, Simon Kuznets, The Chicago School, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, Tobin tax, Tragedy of the Commons, unorthodox policies, Vilfredo Pareto, zero-sum game

Marx and his followers have traditionally taken a dim view of the future of capitalism. In the twentieth century, Marxists frequently wrote of the "twilight of capitalism," a favorite book title (William Z. Foster in 1949, Michael Harrington in 1977, and Boris Kagarlitsky in 2000). They all predicted the imminent collapse of the capitalist system. However, Lord Meghnad Desai, an economist at the London School of Economics, recently proposed the startling thesis that Marx would have supported the resurgence of capitalism around the world. The Communist Manifesto spoke eloquently about the "ever growing ... constantly expanding ... rapid" advance of vigorous and vital capitalist forces, reaching beyond natural borders to a world market (1964 [1848], 4).

The Socialist Manifesto: The Case for Radical Politics in an Era of Extreme Inequality by Bhaskar Sunkara

Affordable Care Act / Obamacare, agricultural Revolution, Bernie Sanders, British Empire, business climate, business cycle, capital controls, centre right, Charles Lindbergh, collective bargaining, Deng Xiaoping, deskilling, Donald Trump, equal pay for equal work, fake news, false flag, feminist movement, Ferguson, Missouri, Francis Fukuyama: the end of history, full employment, gig economy, Great Leap Forward, Gunnar Myrdal, happiness index / gross national happiness, high-speed rail, Honoré de Balzac, income inequality, inventory management, Jeremy Corbyn, labor-force participation, land reform, land value tax, Mark Zuckerberg, means of production, Meghnad Desai, Mikhail Gorbachev, Neil Kinnock, new economy, Occupy movement, postindustrial economy, precariat, race to the bottom, Ralph Waldo Emerson, self-driving car, Silicon Valley, SimCity, single-payer health, Steve Bannon, telemarketer, The Wealth of Nations by Adam Smith, too big to fail, union organizing, Upton Sinclair, urban renewal, We are all Keynesians now, We are the 99%

“Hillary Clinton’s 10 Biggest Corporate Donors in the S&P 500,” Forbes, 2016, forbes.com/pictures/emdk45ehhgg/hillary-clintons-10-big/#110cb0c13629. 20. Dana Milbank, “How Schumer and the Democrats Are Preparing to Fight,” Washington Post, December 9, 2016. 21. “Is There a Russian Coup Underway in America? | The Resistance with Keith Olbermann | GQ” (video), December 12, 2016, youtube.com/watch?v=IAFxPXGDH4E. 22. Meghnad Desai, Marx’s Revenge: The Resurgence of Capitalism and the Death of Statist Socialism (London: Verso, 2002), 251. 23. Julian Glover, “The Party Is Over—This Phrase Has a History,” Guardian, September 29, 2008; Tony Benn, Against the Tide. Diaries 1973–76 (London: Hutchinson, 1989), 301. 24. Eric Hobsbawm, “The Forward March of Labour Halted?”

Losing Control: The Emerging Threats to Western Prosperity by Stephen D. King

"World Economic Forum" Davos, Admiral Zheng, Alan Greenspan, asset-backed security, barriers to entry, Berlin Wall, Bernie Madoff, Bretton Woods, BRICs, British Empire, business cycle, capital controls, Celtic Tiger, central bank independence, collateralized debt obligation, corporate governance, credit crunch, crony capitalism, currency manipulation / currency intervention, currency peg, David Ricardo: comparative advantage, demographic dividend, demographic transition, Deng Xiaoping, Diane Coyle, Fall of the Berlin Wall, financial deregulation, financial innovation, fixed income, foreign exchange controls, Francis Fukuyama: the end of history, full employment, G4S, George Akerlof, German hyperinflation, Gini coefficient, Great Leap Forward, guns versus butter model, hiring and firing, income inequality, income per capita, inflation targeting, invisible hand, Isaac Newton, junk bonds, knowledge economy, labour market flexibility, labour mobility, liberal capitalism, low interest rates, low skilled workers, market clearing, Martin Wolf, mass immigration, Meghnad Desai, Mexican peso crisis / tequila crisis, Naomi Klein, new economy, old age dependency ratio, Paul Samuelson, Ponzi scheme, price mechanism, price stability, purchasing power parity, rent-seeking, reserve currency, rising living standards, Ronald Reagan, Savings and loan crisis, savings glut, Silicon Valley, Simon Kuznets, sovereign wealth fund, spice trade, statistical model, technology bubble, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Market for Lemons, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, transaction costs, Washington Consensus, We are all Keynesians now, women in the workforce, working-age population, Y2K, Yom Kippur War

Gilbert), An Essay on the Principle of Population (Oxford University Press, Oxford, 1993), p. 18. 12. For an attempt to rehabilitate Thomas Malthus, read Gregory Clark’s A Farewell to Alms: A Brief Economic History of the World (Princeton University Press, Princeton, 2007). 13. From The Communist Manifesto, by Karl Marx and Friedrich Engels. For an update on Marx and globalization, see Meghnad Desai’s Marx’s Revenge: The Resurgence of Capitalism and the Death of Statist Socialism (Verso, London, 2002). 14. Smith is justly famous for his Wealth of Nations, but his earlier Theory of Moral Sentiments (1759) provides the moral and legal foundations for all that followed. 15. Booms and busts were also a common feature of late nineteenth-century economic progress. 16.

The Weightless World: Strategies for Managing the Digital Economy by Diane Coyle

Alan Greenspan, barriers to entry, Berlin Wall, Big bang: deregulation of the City of London, blue-collar work, Bretton Woods, business cycle, clean water, company town, computer age, Corn Laws, creative destruction, cross-subsidies, David Ricardo: comparative advantage, dematerialisation, Diane Coyle, Edward Glaeser, everywhere but in the productivity statistics, financial deregulation, flying shuttle, full employment, George Santayana, global village, Great Leap Forward, hiring and firing, Howard Rheingold, income inequality, informal economy, invention of the sewing machine, invisible hand, Jane Jacobs, Joseph Schumpeter, Kickstarter, knowledge economy, labour market flexibility, laissez-faire capitalism, lump of labour, Mahbub ul Haq, Marshall McLuhan, mass immigration, McJob, Meghnad Desai, microcredit, moral panic, Neal Stephenson, Network effects, new economy, Nick Leeson, night-watchman state, North Sea oil, offshore financial centre, pension reform, pension time bomb, pensions crisis, Robert Solow, Ronald Reagan, Silicon Valley, Snow Crash, spinning jenny, The Death and Life of Great American Cities, the market place, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, Tobin tax, Tragedy of the Commons, two tier labour market, very high income, War on Poverty, winner-take-all economy, working-age population

The reason was that the government, under pressure from business, had rushed through legislation that started to chip away at the long-term deal between the corporations and their workers. The pressure of competition meant the companies felt they could no longer afford the literally cradle-to-grave welfare — the housing, health care, schooling and secure employment — they had so far provided to their employees. As the economist and Labour peer Meghnad Desai expressed it in a comment on the Korean unrest: ‘These circus tigers have to get out into the jungle and face some rivalry’.1 Like the welfare states of the industrialised West, these mini-welfare organisations wanted to pass the risks onto the men and women they had so far sheltered. To understand how weightlessness has led to this pass-the-parcel of risk, it is helpful to think about what happened in the last Industrial Revolution, when the building of the railways and introduction of steam-driven travel and telegraphy transformed the geography of production and sales.

The Problem With Work: Feminism, Marxism, Antiwork Politics, and Postwork Imaginaries by Kathi Weeks

antiwork, basic income, call centre, cognitive dissonance, collective bargaining, conceptual framework, deskilling, feminist movement, financial independence, Ford paid five dollars a day, Francis Fukuyama: the end of history, glass ceiling, Kim Stanley Robinson, late capitalism, low-wage service sector, means of production, Meghnad Desai, moral panic, new economy, New Urbanism, occupational segregation, pink-collar, post-Fordism, post-work, postindustrial economy, profit maximization, Shoshana Zuboff, social intelligence, two tier labour market, union organizing, universal basic income, W. E. B. Du Bois, wages for housework, women in the workforce, work culture , zero-sum game

In Social Theory at Work, edited by Marek Korczynski, Randy Hodson, and Paul Edwards, 424–63. Oxford: Oxford University Press. Leigh, Carol. 1997. “Inventing Sex Work.” In Whores and Other Feminists, edited by Jill Nagle, 225–31. New York: Routledge. Lenin, V. I. 1989. “The Immediate Tasks of the Soviet Government.” In V. I. Lenin, Lenin’s Economic Writings, edited by Meghnad Desai, 221–59. Atlantic Highlands, N.J.: Humanities Press International. Levitas, Ruth. 1990. The Concept of Utopia. London: Philip Allan. ———. 1997. “Educated Hope: Ernst Bloch on Abstract and Concrete Utopia.” In Not Yet: Reconsidering Ernst Bloch, edited by Jamie Owen Daniel and Tom Moylan, 65–79.

Railways & the Raj: How the Age of Steam Transformed India by Christian Wolmar

Beeching cuts, British Empire, collective bargaining, colonial rule, James Dyson, John Snow's cholera map, joint-stock company, Khyber Pass, Kickstarter, low cost airline, Mahatma Gandhi, Meghnad Desai, Ponzi scheme, railway mania, strikebreaker, Suez canal 1869, trade route, women in the workforce

Kerr, ‘Railway Workshops and Their Labour’, in 27 Down: New Departures in Indian Railway Studies, Orient Longman, 2007, p. 249. 17 Indian Industrial Commission, 1916–18, Inspection Notes, quoted in Kerr, ‘Railway Workshops and Their Labour’, p. 237. 18 Kipling, Among the Railway Folk. 19 Ibid. 20 Quoted in Kerr, Engines of Change, p. 53. 21 Ian Derbyshire, ‘The Building of India’s Railways’, in Ian J. Kerr, Railways in Modern India, Oxford University Press, 2001, p. 301. 22 Ibid., p. 301. 23 Mark Tully, ‘A View of the History of Indian Railways’, in Srinivasan, Tiwari and Silas (eds.), p. 235. 24 John Hurd in Dharma Kumar and Meghnad Desai (eds.), The Cambridge Economic History of India, vol. 2, c.1751–c.1970, Cambridge University Press, 1983, p. 751. 25 J. N. Sahni, Indian Railways: One Hundred Years, 1853–1953, Ministry of Railways, 1953, p. 102. 26 Bear, Lines of the Nation, p. 82. 27 Ibid. 28 Kerr, ‘Railway Workshops and Their Labour’, p. 261. 29 Bear, Lines of the Nation, p. 94. 30 Derbyshire, ‘Private and State Enterprise’, p. 303. 31 Bear, Lines of the Nation, p. 96. 7.

The Billionaire Raj: A Journey Through India's New Gilded Age by James Crabtree

"World Economic Forum" Davos, accounting loophole / creative accounting, Asian financial crisis, behavioural economics, Big bang: deregulation of the City of London, Branko Milanovic, business climate, call centre, Capital in the Twenty-First Century by Thomas Piketty, centre right, colonial rule, commodity super cycle, Cornelius Vanderbilt, corporate raider, creative destruction, crony capitalism, Daniel Kahneman / Amos Tversky, Deng Xiaoping, Donald Trump, facts on the ground, failed state, fake news, Francis Fukuyama: the end of history, global supply chain, Gunnar Myrdal, income inequality, informal economy, Joseph Schumpeter, land bank, liberal capitalism, Mahatma Gandhi, McMansion, megacity, Meghnad Desai, middle-income trap, New Urbanism, offshore financial centre, open economy, Parag Khanna, Pearl River Delta, plutocrats, Ponzi scheme, post-truth, public intellectual, quantitative easing, rent-seeking, Rubik’s Cube, Shenzhen special economic zone , Silicon Valley, Simon Kuznets, smart cities, special economic zone, spectrum auction, tech billionaire, The Great Moderation, Thomas L Friedman, transaction costs, trickle-down economics, vertical integration, Washington Consensus, WikiLeaks, yellow journalism, young professional

“In India, business still depends on the government. So you need the goodwill of the rulers to make friends with them.” For a time this system worked beautifully for the Andhrapreneurs, underpinning years of breakneck expansion, the results of which are clear to see at almost every major Indian airport. As recently as 2008, Meghnad Desai, an economist at the London School of Economics, wrote: “When you go to China you see new airports and empty highways and the Shanghai maglev. In India, the airports are slums.”42 Yet later that same year GMR opened Hyderabad’s new terminal, delivered under a PPP contract, before unveiling an even grander international terminal in New Delhi in 2010.

Oil: Money, Politics, and Power in the 21st Century by Tom Bower

"World Economic Forum" Davos, addicted to oil, Alan Greenspan, An Inconvenient Truth, Ayatollah Khomeini, banking crisis, bonus culture, California energy crisis, corporate governance, credit crunch, energy security, Exxon Valdez, falling living standards, fear of failure, financial engineering, forensic accounting, Global Witness, index fund, interest rate swap, John Deuss, Korean Air Lines Flight 007, kremlinology, land bank, LNG terminal, Long Term Capital Management, margin call, megaproject, Meghnad Desai, Mikhail Gorbachev, millennium bug, MITM: man-in-the-middle, Nelson Mandela, new economy, North Sea oil, offshore financial centre, oil shale / tar sands, oil shock, Oscar Wyatt, passive investing, peak oil, Piper Alpha, price mechanism, price stability, Ronald Reagan, shareholder value, short selling, Silicon Valley, sovereign wealth fund, transaction costs, transfer pricing, zero-sum game, éminence grise

Shares fell, gold hit a record $915 an ounce and reports mentioned “fear in Wall Street and Washington.” The world, sages warned apocalyptically, was on the edge of a new oil shock. Shell, Marathon, ConocoPhillips and Lukoil locked themselves into trading short at prices between $120 and $140. Lord Meghnad Desai, a British economist, noting that $260 billion was invested in commodity markets, mostly in oil, compared with $13 billion five years earlier, wrote that not only speculation was driving up prices. Influenced by the testimony to the Senate on May 20, 2008, of Michael Masters, a former Goldman Sachs fund manager, Desai was convinced the problem was caused by a shortage of crude oil, which would continue unchanged for another 12 months.

Money and Government: The Past and Future of Economics by Robert Skidelsky

"Friedman doctrine" OR "shareholder theory", Alan Greenspan, anti-globalists, Asian financial crisis, asset-backed security, bank run, banking crisis, banks create money, barriers to entry, Basel III, basic income, Bear Stearns, behavioural economics, Ben Bernanke: helicopter money, Big bang: deregulation of the City of London, book value, Bretton Woods, British Empire, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, collective bargaining, constrained optimization, Corn Laws, correlation does not imply causation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, David Graeber, David Ricardo: comparative advantage, debt deflation, Deng Xiaoping, Donald Trump, Eugene Fama: efficient market hypothesis, eurozone crisis, fake news, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, forward guidance, Fractional reserve banking, full employment, Gini coefficient, Glass-Steagall Act, Goodhart's law, Growth in a Time of Debt, guns versus butter model, Hyman Minsky, income inequality, incomplete markets, inflation targeting, invisible hand, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kenneth Rogoff, Kondratiev cycle, labour market flexibility, labour mobility, land bank, law of one price, liberal capitalism, light touch regulation, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, long and variable lags, low interest rates, market clearing, market friction, Martin Wolf, means of production, Meghnad Desai, Mexican peso crisis / tequila crisis, mobile money, Modern Monetary Theory, Money creation, Mont Pelerin Society, moral hazard, mortgage debt, new economy, Nick Leeson, North Sea oil, Northern Rock, nudge theory, offshore financial centre, oil shock, open economy, paradox of thrift, Pareto efficiency, Paul Samuelson, Phillips curve, placebo effect, post-war consensus, price stability, profit maximization, proprietary trading, public intellectual, quantitative easing, random walk, regulatory arbitrage, rent-seeking, reserve currency, Richard Thaler, rising living standards, risk/return, road to serfdom, Robert Shiller, Ronald Reagan, savings glut, secular stagnation, shareholder value, short selling, Simon Kuznets, structural adjustment programs, technological determinism, The Chicago School, The Great Moderation, the payments system, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, tontine, too big to fail, trade liberalization, value at risk, Washington Consensus, yield curve, zero-sum game

However, as the book progressed I became increasingly drawn to the insights of Karl Polanyi, with his insistence that, to be viable, a market order has to be ‘embedded’ in a framework of rules, policies and institutions. This insight has been somewhat neglected by the dominant school of Anglo-American economics. My debts have accumulated. I would in particular like to thank Spencer Boxer, Gordon Brown, Oliver Bush, Andrea Califano, Tim Congdon, Paul Davidson, Michael Davies, Meghnad Desai, Tommaso Gabellini, Jamie Galbraith, Simone Gasperin, Andy Haldane, Geoffrey Harcourt, Michael Kennedy, David Laidler, Laurie Laybourn Langton, Toby Lewis, Felix Martin, Vladimir Masch, Marcus Miller, George Peden, Atanos Pekanov, Philip Pilkington, Edward Skidelsky, Leanne Stickland, David Sturrock, Thomas Tozer, Christopher Tugendhat, Paul Westbrook and Christian Westerlind Wigstrom.

The Long Twentieth Century: Money, Power, and the Origins of Our Times by Giovanni Arrighi

anti-communist, Asian financial crisis, barriers to entry, Bretton Woods, British Empire, business climate, business logic, business process, classic study, colonial rule, commoditize, Corn Laws, creative destruction, cuban missile crisis, David Ricardo: comparative advantage, declining real wages, deindustrialization, double entry bookkeeping, European colonialism, Fairchild Semiconductor, financial independence, financial intermediation, floating exchange rates, gentrification, Glass-Steagall Act, Great Leap Forward, income inequality, informal economy, invisible hand, joint-stock company, Joseph Schumpeter, Kōnosuke Matsushita, late capitalism, London Interbank Offered Rate, means of production, Meghnad Desai, military-industrial complex, Money creation, money: store of value / unit of account / medium of exchange, new economy, offshore financial centre, oil shock, Peace of Westphalia, post-Fordism, profit maximization, Project for a New American Century, RAND corporation, reserve currency, scientific management, spice trade, Strategic Defense Initiative, Suez canal 1869, the market place, The Nature of the Firm, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade liberalization, trade route, transaction costs, transatlantic slave trade, transcontinental railway, upwardly mobile, vertical integration, Yom Kippur War

Arri hi, Giovanni, Takeshi Hamashita and Mark Selden (editors), The Resurgence ofg East Asia: 500, 150, and 50 Year Perspectives, London: Routledge 2003. Arrighi, Giovanni and Beverly Silver, Chaos and Governance in the Modern I%rld System, Minneapolis: University of Minnesota Press 1999. Auerbach, Paul, Meghnad Desai, and Ali Shamsavari, “The Transition from Actually Existing Capitalism,” New Lefi Review, 170, 1988, pp. 61-78. Bagchi, Amiya Kumar, 771e Political Economy of Underdevelopment, Cambridge: Cambridge University Press 1982. Bairoch, Paul, Commerce exte’rieur et de’veloppement e’conomique de l ’Europe au XIXe siecle, Paris and The Hague: Mouton 1976a.