investor state dispute settlement

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pages: 443 words: 98,113

The Corruption of Capitalism: Why Rentiers Thrive and Work Does Not Pay by Guy Standing

3D printing, Airbnb, Albert Einstein, Amazon Mechanical Turk, Asian financial crisis, asset-backed security, bank run, banking crisis, basic income, Ben Bernanke: helicopter money, Bernie Sanders, Big bang: deregulation of the City of London, bilateral investment treaty, Bonfire of the Vanities, Boris Johnson, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, carried interest, cashless society, central bank independence, centre right, Clayton Christensen, collapse of Lehman Brothers, collective bargaining, credit crunch, crony capitalism, crowdsourcing, debt deflation, declining real wages, deindustrialization, disruptive innovation, Doha Development Round, Donald Trump, Double Irish / Dutch Sandwich, ending welfare as we know it, eurozone crisis, falling living standards, financial deregulation, financial innovation, Firefox, first-past-the-post, future of work, gig economy, Goldman Sachs: Vampire Squid, Growth in a Time of Debt, housing crisis, income inequality, information retrieval, intangible asset, invention of the steam engine, investor state dispute settlement, James Watt: steam engine, job automation, John Maynard Keynes: technological unemployment, labour market flexibility, light touch regulation, Long Term Capital Management, lump of labour, Lyft, manufacturing employment, Mark Zuckerberg, market clearing, Martin Wolf, means of production, mini-job, Mont Pelerin Society, moral hazard, mortgage debt, mortgage tax deduction, Neil Kinnock, non-tariff barriers, North Sea oil, Northern Rock, nudge unit, Occupy movement, offshore financial centre, oil shale / tar sands, open economy, openstreetmap, patent troll, payday loans, peer-to-peer lending, plutocrats, Plutocrats, Ponzi scheme, precariat, quantitative easing, remote working, rent control, rent-seeking, ride hailing / ride sharing, Right to Buy, Robert Gordon, Ronald Coase, Ronald Reagan, Sam Altman, savings glut, Second Machine Age, secular stagnation, sharing economy, Silicon Valley, Silicon Valley startup, Simon Kuznets, sovereign wealth fund, Stephen Hawking, Steve Ballmer, structural adjustment programs, TaskRabbit, The Chicago School, The Future of Employment, the payments system, The Rise and Fall of American Growth, Thomas Malthus, Thorstein Veblen, too big to fail, Travis Kalanick, Uber and Lyft, Uber for X, uber lyft, Y Combinator, zero-sum game, Zipcar

CONTENTS Title Page Glossary of Acronyms Preface Chapter 1: The Origins of Our Times Chapter 2: The Shaping of Rentier Capitalism Chapter 3: The Plague of Subsidies Chapter 4: The Scourge of Debt Chapter 5: Plunder of the Commons Chapter 6: Labour Brokers: The Precariat Bears the Strain Chapter 7: The Corruption of Democracy Chapter 8: Rent Asunder: The Precariat’s Revolt Index Copyright GLOSSARY OF ACRONYMS CETA Comprehensive Economic and Trade Agreement ECB European Central Bank EU European Union GDP Gross Domestic Product G20 Group of nineteen major economies and the European Union ILO International Labour Organization IMF International Monetary Fund ISDS Investor–State Dispute Settlement MGI McKinsey Global Institute MPS Mont Pelerin Society NHS National Health Service (UK) OECD Organisation for Economic Cooperation and Development (thirty-four mainly industrialised member countries) ONS Office for National Statistics (UK) PAC Parliamentary Accounts Committee (UK) PFI Private Finance Initiative (UK) QE Quantitative Easing TPP Trans-Pacific Partnership TTIP Transatlantic Trade and Investment Partnership TUC Trades Union Congress (UK) UK United Kingdom UN United Nations USA United States of America WIPO World Intellectual Property Organization WTO World Trade Organization PREFACE This book is about something worse than corruption by individuals or companies.

Some countries agreed to allow foreign companies to provide public services and utilities, while existing privatisation in many areas is locked in. The trade pact is effectively a charter for multinational, particularly US, capital. Furthermore, the TPP underwrites a contested international dispute settlement process that enables foreign corporations to sue governments for loss of profits and thereby override national environmental, public health, labour and workplace safety regulations (see next section). Investor–state dispute settlement (ISDS) in the TPP will increase rental income by protecting US corporations against policy changes in TPP member countries that might threaten their prospective profits. The fact that the TPP allows tobacco companies to be excluded from ISDS, a carve-out inserted into the accord to win Australia’s assent to an ISDS mechanism, is less a point in its favour than an illustration of how multinationals have been using ISDS to undermine decisions of democratic governments.

The benefits of trade and investment agreements do not accrue to workers through jobs or higher wages. It is the owners of rent-providing assets who have done very nicely. WHY GLOBAL CAPITAL LOVES DISPUTES Any economic activity involves risk, which represents a cost against income. The main argument for patents is that they are a reward for risk. But, quietly, the global rules have been changed to minimise risk for multinationals. The investor–state dispute settlement (ISDS) process, incorporated into over 3,000 trade and investment accords, enables them to sue governments for compensation for any policy changes or action deemed to threaten their profits. Risk reduction raises net income for this select group, amounting to a form of rental income. The policy originated in the late 1950s in Germany, where a business group came up with the idea of an arbitration system to protect their investments in developing countries.


pages: 606 words: 87,358

The Great Convergence: Information Technology and the New Globalization by Richard Baldwin

"Robert Solow", 3D printing, additive manufacturing, Admiral Zheng, agricultural Revolution, air freight, Amazon Mechanical Turk, Berlin Wall, bilateral investment treaty, Branko Milanovic, buy low sell high, call centre, Columbian Exchange, commoditize, Commodity Super-Cycle, David Ricardo: comparative advantage, deindustrialization, domestication of the camel, Edward Glaeser, endogenous growth, Erik Brynjolfsson, financial intermediation, George Gilder, global supply chain, global value chain, Henri Poincaré, imperial preference, industrial cluster, industrial robot, intangible asset, invention of agriculture, invention of the telegraph, investor state dispute settlement, Isaac Newton, Islamic Golden Age, James Dyson, Kickstarter, knowledge economy, knowledge worker, Lao Tzu, low skilled workers, market fragmentation, mass immigration, Metcalfe’s law, New Economic Geography, out of africa, paper trading, Paul Samuelson, Pax Mongolica, profit motive, rent-seeking, reshoring, Richard Florida, rising living standards, Robert Metcalfe, Second Machine Age, Simon Kuznets, Skype, Snapchat, Stephen Hawking, telepresence, telerobotics, The Wealth of Nations by Adam Smith, trade liberalization, trade route, Washington Consensus

For the most part, the provisions in these agreements constrain the developing nation’s sovereignty. For example, most BITs limit the developing nation’s ability to impose controls on capital flows so investing firms can get money in or out of the nation freely. They also give foreign investors the right to submit disputes to international arbitration rather than local courts. These are the so-called Investor State Dispute Settlement provisions that have recently become controversial in the United States and Europe in the context of the Trans-Pacific Partnership agreement and the Trans-Atlantic Trade and Investment Partnership. The main arbitrator used is the International Centre for Settlement of Investment Disputes, which is located in Washington, D.C. The remarkable thing about the signing of BITs lies in the synchronicity and suddenness with which developing nations changed their minds.

See also A7/global South/developing nations Eichengreen, Barry, 65 1177 BC: The Year Civilization Collapsed (Cline), 27 The End of Globalization (James), 64 endogenous growth theory, 179, 191–196, 193–196, 194f energy, 19 Enlightenment, 38–39, 46 epidemics, 41f. See also Columbian Exchange Estevadeordal, Antoni, 49 Eurasia, 40 Eurasian Integration, 25, 32–35, 45 Europe: Age of Discovery and, 38, 46; cities over 100,000 and, 31f; free trade (1846-1879) and, 54; incomes, 43f, 44f, 117–118f; industrialization and, 55–57, 59, 60f; innovation and, 118f; Investor State Dispute Settlement provisions and, 103; migrations to New World, 62t; Old Globalization (first unbundling) and, 128, 138; per capita industrialization (1750-1913), 58f, 59; population/output shares 1500 CE, 37f; protectionism and, 64, 66; rise of, 25, 35–44, 45–46; tariffs and, 56t, 72; trade and, 30–35, 39, 55, 57; urbanization and, 62–63t. See also Britain and other countries; European Union (EU); World Wars I and II European Union (EU) , 72, 75, 240 exchange rates, 65 exports, 138–139, 150, 151, 157, 183–184f, 237.

See A7; agglomeration; comparative (competitive) advantage; development strategies; G7; globalization, industrialization and trade; global value chains; New Economic Geography; production/consumption clusters; smile curve; steam revolution; workers and jobs Industrial Revolution, 4, 19, 40–42, 46, 59–60, 61 information storage, 82 innovation: agglomeration and, 128f, 129; cities and, 26–27; Europe and, 118f; falling cost of, 191–192; industrial clustering and, 123–124f; industrialization and, 59; New Globalization (second unbundling) and, 193–196, 194f; North-South differences and, 55, 211–212; Old Globalization (first unbundling) and, 78, 193–196, 194f; pre-globalized world and, 116, 116–117f; South and, 210–211; transportation and, 77. See also spillovers Innovation and Growth in the Global Economy (Grossman and Helpman), 193 International Monetary Fund (IMF), 99 Internet, 83–84, 84f, 130. See also ICT (information and communication technology) In the Wake of the Plague (Cantor), 35 intra-industry trade (IIT), 96, 97 Investor State Dispute Settlement provisions, 103 Iron Age, 27, 28f–29f, 29, 31 Irwin, Doug, 119 Islam, Golden Age of, 33, 34, 37f Islamic World, 35, 38, 43. See also Silk Road IT (information technology), 79; future and, 287–288, 291; polarization of jobs and, 294–295 Italy, 29, 43, 180–182, 208. See also Europe; G7 Italy/Greece. See also A7 ITC (information and communication technology): speed and, 12 IT (information technology) .


pages: 322 words: 87,181

Straight Talk on Trade: Ideas for a Sane World Economy by Dani Rodrik

3D printing, airline deregulation, Asian financial crisis, bank run, barriers to entry, Berlin Wall, Bernie Sanders, blue-collar work, Bretton Woods, BRICs, business cycle, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, carried interest, central bank independence, centre right, collective bargaining, conceptual framework, continuous integration, corporate governance, corporate social responsibility, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, Donald Trump, endogenous growth, Eugene Fama: efficient market hypothesis, eurozone crisis, failed state, financial deregulation, financial innovation, financial intermediation, financial repression, floating exchange rates, full employment, future of work, George Akerlof, global value chain, income inequality, inflation targeting, information asymmetry, investor state dispute settlement, invisible hand, Jean Tirole, Kenneth Rogoff, low skilled workers, manufacturing employment, market clearing, market fundamentalism, meta analysis, meta-analysis, moral hazard, Nelson Mandela, new economy, offshore financial centre, open borders, open economy, Pareto efficiency, postindustrial economy, price stability, pushing on a string, race to the bottom, randomized controlled trial, regulatory arbitrage, rent control, rent-seeking, Richard Thaler, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, Sam Peltzman, Silicon Valley, special economic zone, spectrum auction, Steven Pinker, The Rise and Fall of American Growth, the scientific method, The Wealth of Nations by Adam Smith, Thomas L Friedman, too big to fail, total factor productivity, trade liberalization, transaction costs, unorthodox policies, Washington Consensus, World Values Survey, zero-sum game, éminence grise

See International Monetary Fund immigration, 268 imports, 2; versus free trade, 120; to the United States, 205 India: democracy in, 87–88; developing economy in, 8; economic development in, 173–174, 251–252; economic growth slowdown in, 79–80, 81; growth acceleration in, 56–57 industrialization: in developing countries, 89–91, 102–103; economic growth slowdown and, 82–83; inequality and, 150–151; in Japan, 185; labor and, 84–85; peak levels of, 90; premature, 246; rapid economic growth and, 89–90 industrial policies: government support for, 257; green, 257–260 Industrial Revolution, 83 Initiative on Global Markets, 139 Inman, Robert, 188 institutions: competition and, 42–44; coordinated market economies, 32; diversity of, 26–27; economic, 93–95; European Union’s reforms of, 64, 66; hyperglobalization and, 27–28; imposing on others, 224–225; liberal market economies, 32; market-supporting, 30–33; political, 93–95; protection of rights of, 224; recognition of institutional diversity, 224; reform, 94; of representation, 264; of restraint, 264; trade arrangements with, 230–231 International Food Policy Research Institute, 244 International Monetary Fund (IMF), 4, 68, 149, 213; Articles of Agreement, 213; capital controls of, 215; cost of fiscal austerity and, 52; nation-state and, 23–24; protectionism and, 11; recognition of insulation in countries, 214–215 Internet, 262; effect on international trade, 39–40 Investor-State Dispute Settlement (ISDS), 211–212, 223 ISDS. See Investor State Dispute Settlement (ISDS) “isomorphic mimicry,” 198 Italy: populist parties in, 7 Izurieta, Alex, 124 James II, 99 Japan: exports from, 3–4; industrialization in, 185; voluntary export restrictions on, 10 Jasmine revolution, 108 Jews, 100 Johnson, Simon, 175, 270 Kant, Immanuel, 33 Keller, Matthew, 255 Keynes, John Maynard, 49, 57, 162–163, 213 King, Mervyn, 23, 178 Korea, 199 Kranton, Rachel, 169 Krugman, Paul, 146 Kwak, James, 175 Kwame, Jomo, 124 labor: industrialization and, 84–85; minimum wages, 88; productivity and, 92; protection of workers, 87; working conditions, 91 Langone, Kenneth, 177 Latin America: democracy in, 268–269; economic growth in, 251–252; economic growth slowdown in, 80; economic reform in, 188–189; inequality in, 150–151; labor force in, 153; productivity in, 154–155; structural reform in, 53 Latvia: structural reform in, 71–72 Lau, Lawrence, 187 Leamer, Ed, 41 Lebanon: government of, 111 legislation: American Recovery and Reinvestment Act of 2009, 139 Leighton, Wayne, 189, 194 Leitzel, James, 195–196 Le Pen, Marine, 7 Lerner, Josh, 255 liberalism: classical, 101; versus mercantilism, 133–136 Libya, 190–191 Lind, Michael, 254–255 López, Edward, 189, 194 Lucas, Robert, 146 macroeconomics: expanded trade and, 126; finance and, 117–118; open-economy, 117 Macron, Emmanuel: economic plans for France, 73–75; presidential elections in 2017, 72–73; stimulus plan proposal, 74 Maduro, Nicolás, 150 Main Street, 175 Mandela, Nelson, 188 Mankiw, Greg, 140 manufacturing, 80; in developing countries, 89; in Latin America, 153 Marshall, T.

In the TTIP, the reduction of so-called nontariff barriers to trade between the United States and Europe would have almost certainly restricted the space for domestic regulatory action. Even if regulatory harmonization wouldn’t have created a race to the bottom, the interests of investors and exporters would have cast a longer shadow than ever before over social and environmental goals. Perhaps most worrisome were the Investor-State Dispute Settlement (ISDS) provisions of the agreements. These provisions establish a separate judicial track, outside a country’s own legal system, that allows firms to sue governments for apparent rights violations under trade treaties. Proponents defended ISDS by saying that it wouldn’t have had much consequence for countries, such as the United States, where there is good rule of law and would have promoted investment in countries, such as Vietnam, where there isn’t.

Too often we waste international cooperation on overly ambitious goals, ultimately producing weak results that go little beyond the lowest common denominator among major states. When international cooperation does “succeed,” it typically codifies the preferences of the more powerful states or, even more frequently, of international corporations and banks in those states. The Basle rules on capital requirements; the WTO’s rules on subsidies, intellectual property, and investment measures; and investor-state dispute settlement (ISDS) arrangements typify this kind of overreaching. We can enhance both the efficiency and the legitimacy of globalization if we empower rather than cripple democratic procedures at home. 3. There is no “one way” to prosperity. Once we acknowledge that the core institutional infrastructure of the global economy must be built at the national level, it frees up countries to develop the institutions that suit them best.


pages: 334 words: 82,041

How Did We Get Into This Mess?: Politics, Equality, Nature by George Monbiot

Affordable Care Act / Obamacare, Alfred Russel Wallace, bank run, bilateral investment treaty, Branko Milanovic, Capital in the Twenty-First Century by Thomas Piketty, collective bargaining, Corn Laws, creative destruction, credit crunch, David Attenborough, dematerialisation, demographic transition, drone strike, en.wikipedia.org, first-past-the-post, full employment, Gini coefficient, hedonic treadmill, income inequality, Intergovernmental Panel on Climate Change (IPCC), investor state dispute settlement, invisible hand, land reform, land value tax, market fundamentalism, meta analysis, meta-analysis, Mont Pelerin Society, moral panic, Naomi Klein, Northern Rock, obamacare, oil shale / tar sands, old-boy network, peak oil, place-making, plutocrats, Plutocrats, profit motive, rent-seeking, The Wealth of Nations by Adam Smith, Thomas Malthus, transaction costs, urban sprawl, wealth creators, World Values Survey

I mentioned it in an opinion piece on the Guardian website in October 2013.2 But I left out the most important issue: the remarkable ability it would grant big business to sue the living daylights out of governments which try to defend their citizens. It would allow a secretive panel of corporate lawyers to overrule the will of Parliament and destroy our legal protections. Yet the defenders of our sovereignty say nothing. The mechanism is called investor–state dispute settlement. It’s already being used in many parts of the world to kill regulations protecting people and the living planet. The Australian government, after massive debates in and out of Parliament, decided that cigarettes should be sold in plain packets, marked only with shocking health warnings. The decision was validated by the Australian Supreme Court. But, using a trade agreement Australia struck with Hong Kong, the tobacco company Philip Morris has asked an offshore tribunal to award it a vast sum in compensation for the loss of what it calls its intellectual property.3 During its financial crisis, and in response to public anger over rocketing charges, Argentina imposed a freeze on people’s energy and water bills.

See soil subsidies for, 121, 122, 124, 125, 127, 128, 133, 276 in Turkey, 140, 142 in Wales, 121 yields from, 140–1 in Zimbabwe, 139 The Farming Forum, 126 Farming Regulation Task Force, 127 Farrar, Frederick, 234 Ffos-y-fran (South Wales), 147, 148 finance, jobs in, 48, 49 financial sector, and the illusion of skill, 189 Financial Times, 20, 223 Fiorina, Carly, 186 Fire Brigades Union (FBU), 267 flood defence, 130, 132–8 Food and Agriculture Organisation (UN), 142 food security, 139 Food Summit (2008), 139, 142 Forest Industries, 177 Forsyth, Michael, 215 Forty-Two Reasons to Support Scottish Independence (Ramsay), 273 fossil fuels absence of official recognition of role of in causing climate change, 155 economic growth as artefact of use of, 175 exploration and extraction of, 153, 157 impact of unchecked consumption of, 87 lack of talk about constraining production of, 153 leaving them in the ground, 147–51 silence about, 154–6, 158 Four Lions (film), 238 Fox News, 212 Fraser, Stuart, 192 freedom acting as if we don’t enjoy greater freedom than preceding generations, 23 as championed by neoliberals, 4 deprivation of, 26 market freedom, 45, 198, 218 negative freedom, 4 political freedom, 5 surrender of, 12 think tank freedoms, 24 as use it or lose it, 26 Free Enterprise Group, 215 free market, 3, 198, 199–200, 213, 224 free-range production, 114 Friedman, Milton, 220 Friel, Howard, 200 Fritzon, Katarina, 189 Frum, David, 213 Fukushima nuclear catastrophe, 164, 168, 169–70 G Galton, Francis, 234 General, Municipal, Boilermakers and Allied Trade Union (GMB), 264, 266 genocide, 227–31 ghost psyche, 89, 111 Gillis, John, 59, 60, 61 Gini coefficient, 191 global agreements, 102 global consumption, 177 global economy, 177 global food market, 143 global growth rate, 178 global warming, 86, 101, 104, 105–6, 155, 159 global wealth, 12, 176 Glooskap, 90 Gloucester, 132 Godhaven, Merrick, 261 godly household, 59 Goldsmith, James, 213, 214 Google, 205 Grantham, Jeremy, 175 Great Leap Backwards, 141 green consumerism, 288 green energy production, 167 greenhouse gases attention paid to, 153 emissions of, 87, 104, 159 grazing animals as increasing production of, 86 impact of wildlife protection on, 87 as topic of official interest in global meetings, 154 Greenpeace, 169, 171, 260 Green Revolution, 140 Greenwald, Glenn, 56 Griffiths, Jay, 43 grouse estates, subsidies for, 137, 275 Guantanamo Bay, detainees in, 256 Guardian, 33, 62, 68, 224, 230, 250 guiding intelligence, belief in, 19 Guttmacher Institute, 74 H Harbin, particulate concentrations in, 171 Harbour, Peter, 258, 260 hard work, outcomes as based on (or not based on), 16, 188 Hare, Robert, 190 Harvey, David, 218, 220 Hastings, Max, 222, 235 The Haves and the Have-Nots (Milanovic), 191 Hayek, Friedrich von, 218, 220 Health and Environment Alliance, 171 heating fuel, 165, 167 Heritage Foundation, 219 heroin use, 33, 34–5 Hewlett-Packard, 186 Heywood, Colin, 60 hill farming, 121, 122, 131, 133, 134 Hispaniola, 228 A History of Childhood (Heywood), 60 Hitler, Adolph, 234 Hobbes, Thomas, 9, 13 Holder, Eric, 255 Holocaust, 230, 233 homosexuality, 59 Hoover Institute, 219 Household, Geoffrey, 211 housing estates, play spaces for children in, 44–5 HSBC, 238 Human Plant (BBC series), 90 humans ability of to compartmentalise, 91, 92, 93, 94 hunting/gathering of early humans, 91 impact of development of farming on, 92 as wired to respond to nature, 89 Humphreys, Margaret, 64 Hunger Games (film), 90 Hunter’s Pride, 110 hunting/gathering, of early humans, 91 I I=CAT, 104 I=PAT, 104 imperialism, 233, 235 Imperial University, 50 income inequality, 191, 205, 209–10 incomes, rise and fall of, 191 Independent, 282 Independent Age, 10 individual effort, 16 individualism, 10 Infrastructure Act, 155 infrastructure of persuasion, 1, 2 Injunctions to Prevent Nuisance and Annoyance (IPNAs), 29–30 Innospec, 163 Institute of Economic Affairs, 214 Institute for Public Policy Research, 281 Intergovernmental Panel on Climate Change, 148 International Assessment of Agriculture Knowledge, 142 international conferences, 154, 158. See also specific conferences International Energy Agency, 149, 172 International Family Planning Perspectives, 73 International Institute for Environment and Development, 104 International Monetary Fund, 220 investor-state dispute settlement, 250, 251, 252, 253 Ishiguro, Kazuo, 63 ISIS, 242, 243 Islamic State, 241 J Jabhat al-Nusra, 243 Japan Tobacco International, 223 Jefferson, Thomas, 230 Jesus, 58–9 Joint Congressional Inquiry into 9/11, 244 Jones, Digby, 263 Jones, Griff Rhys, 278 Joseph, Keith, 220 journals/journalists, 2, 6, 194–6, 214, 222–4 Judson, Jeff, 214 junk, festival of, 205 Justices of the Peace Act (1361), 276 JWT, 287 K Kahneman, Daniel, 188–9 Kenny, Paul, 266 Kensington Palace Gardens, 282 Keynes, John Maynard, 219 Kidd, Benjamin, 234 Kikuyu, 232, 233, 235 killer whales, change of diet of, 84 King’s College London, 39 Kingsnorth climate camp, 260 Kith (Griffiths), 43 Klein, Joe, 56 knowledge monopoly, 197 Knox, Robert, 233 Koch, Charles, 211, 212, 214 Koch, David, 211, 212, 214 Koch Industries, 211 L Labour Party, 23, 129, 183, 263, 264, 266, 267, 281, 283, 289 Lac Long Quân, 90 laissez-faire economics, 3, 182 Lake District, 135 Lancet, 73, 75 land-clearing grants, 133 land reform programmes in China, 141 in Scotland, 275, 277–9 in South Korea, Taiwan and Japan, 141 landscape pornographers, 109 The Land magazine, 277 land value taxation, 278, 282, 283 Latin America, abortion rate, 75–6 law enforcement, in schools in Texas, 62, 66 Lawson-Cruttenden, Timothy, 269 lead poisoning, and crime rates, 161–2 lead pollution, 161, 163 Leahy, Terry, 216 Leonard, Annie, 203 Leopold, Aldo, 88 Liberal Democrats, 280 Liberty, 29, 30 Lilley, Peter, 215 limited liability, 5 Lindqvist, Sven, 233 linearity, 91, 92, 98 livestock production, 113, 114 living systems, impacts of, 80 Lloyd George, David, 277 Lomborg, Bjorn, 200 The Lomborg Deception (Friel), 200 London Business School, 49, 50 London School of Economics (LSE), 49, 50 loneliness, 10, 11, 16 Longannet (Scotland), 172 Lord of the Rings, the Two Towers (film), 90 L’Osservatore Romano, 231 Lovelock, James, 103, 106, 107 Lucan, Lord, 213 lung cancer, as caused by air pollution, 171 lynx, return of to former ranges, 97 M Macdonald, Lord, 30 Main Kampf (Hitler), 234 maize cultivation, impact of, 124–5 Major, John, 215, 275 Malthus, Thomas, 180, 181, 182 management consultancy, jobs in, 48, 49, 187 Mandelson, Lord, 105 Manilow, Barry, 69 mansion tax, 278, 282 manure production, 114 Marcus Crassus, 191 marine faecal plumes, 79, 82 marine parks, 98 market economy, 5, 16 market freedom, 45, 198, 218 market fundamentalism, 3, 15, 16, 17 Marlowe, Christopher, 120 marriage same-sex marriage, 58 sex outside of, 60 Marshall, George, 158 mass mobilisation, 6 Mau Mau rebellion, 233 Maxwell, Robert, 196, 195195 meat production, 113, 114 media accountability of journalists, 222, 224 as bullying, 23 on drone strikes, 56 fascination with power politics, 287 as instrument of corporate power, 212 payola scandals, 223 role of as promoter of neoliberal programme, 220–1 think tanks and, 214–16 Men in Sheds, 13 mental health crises, 21–2 mercury pollution, 170 merit, 15, 16 meritocracy, 186 mesopredators, 80–1 methylmercury, 171 micro-hydropower, 166 migratory fish, 167 Milanovic, Branko, 191 Miliband, Ed, 278, 289 military intervention, vs. political solutions, 244 Millennium Ecosystem Assessment, 201 millionaires as funders, 23 media as owned by, 220 political parties as in the clutches of, 26 Shaun Woodward, 266 tax rate, 285 as on top of scala natura, 1–2 in US Congress, 24 mineral exhaustion, 150 money transfers, 236–9 monsters, human encounters with, 90, 91, 98 Mont Pelerin Society, 218, 220 Montreal Protocol, 100 moose, return of to former ranges, 97 Moral Maze (BBC programme), 206 Morgan, Rhodri, 148 Morris, Chris, 238 Mosquito youth dispersal device, 67, 68, 69, 71 Mother Jones, 160 MSNBC, 56 Mugabe, Robert, 139, 142 multilateralism, 101 Murdoch, Rupert, 193, 194, 212, 267 Murphy, Guy, 287, 288 Murphy-O’Connor, Cormac (Cardinal), 72–3 Muslim world, bombing of, 241, 243, 244–5 N National Council for Educational Excellence, 264 National Ecosystem Assessment (UK), 121 National Extremism Tactical Co-ordination Unit (NETCU), 260, 261, 262 National Farmers’ Union (NFU), 124, 127, 128, 129 National Institutes of Health (US), 196 National Union of Rail, Maritime and Transport Workers (RMT), 267 Natural Resources Wales, 132 natural gas, impacts of, 167 natural world creating refuges for, 102 deterioration of, 19, 24 Nature, 106 nature programmes, popularity of, 92 negative freedom, 4 neoliberalism, 3, 4, 5, 15, 16, 17, 190, 191, 213, 215, 216, 218, 219, 220, 221 Netherlands, abortion rate, 75 Never Let Me Go (Ishiguro), 63–4 New Labour, 288 New Testament, pastoral tradition as depicted in, 120 Newtown, Connecticut, 53, 55, 56 New York Times, 231 New York University, 54 Nexus 7, 205 NFU (National Farmers’ Union), 124, 127, 128, 129 Ngena detention camp, 232 NHS, 72, 253 Nigeria, greenhouse gas emissions in, 87 1950s, as golden age, 61 Nixon, Richard, 219 North American Free Trade Agreement, 252 North American roc (Aiolornis incredibilis), 85 Northern Rock, 198–9, 201 North Sea, 149, 156 Northumberland County Council, 149 Norway, climate change policies, 157 No Turning Back (Pirie), 215, 216 No Turning Back group, 215 nuclear family, 58, 59, 60 nuclear power, 150, 164–72 nursery consultant, 20 O Obama, Barack, 53, 54, 55, 56, 157, 209, 210, 243, 255, 256 O’Brien, Mike, 148 Observer, 210, 260, 261 occupations, pointless and destructive jobs, 48 Occupy London, 192 Odone, Cristina, 61 OECD, 142 Office of the Comptroller of the Currency (US), 235, 240 Ofsted, 40 oil and gas prospecting/drilling, 149, 151, 156, 157, 159, 176–7 Oil and Gas UK, 156 Oldham, Taki, 211 Old Poor Law (England), 179 oligarchs, 2, 3, 15, 121, 219, 275, 279 Olin, John M., 16, 219 One Hyde Park, 282 opencast coal mines, 147, 149, 155 opiate use, 34–5 Optimum Population Trust (OPT), 106 Osborne, George, 181, 182, 281 outdoor learning, 39–42 Oxfam, 187 Oxford Farming Conference, 133 Oxford University, 49, 50, 51 P particulates, 171 pastoral tradition, impact of, 120–1 Paterson, Owen, 133, 134, 135, 136, 137 pathological consumption, 204 pay gap, 187 Peak District National Park, 137 peak oil, 150 Pearl, Steve, 260 performance anxiety, 17 Perrara, Peter, 223 personality disorders, 17, 189 Petroamazonas, 176 Pew, Joseph N., Jr., 16, 219 Philadelphia General Hospital, 34 Philip Morris, 250 Philo, Greg, 281 pig farming, 114 Piketty, Thomas, 1 Pinochet, Augusto, 3 Pirie, Madsen, 214, 215 Pitt Review, 136 planet-eating machine, 102 plant plankton, 82, 83, 85, 86, 87 play, in children, 43–7 playdate coaches, 20–1 plutocratic power, 2, 6, 24, 213 Podhoretz, John, 230 pointless consumption, 205 political constraint, 24 political elite, 100 political freedom, 5 politics, as bankrolled by big oil and big coal, 157 poll tax, 215 pollution air pollution, 169, 171 from coal, 167, 170 lead pollution, 161, 163 mercury pollution, 170 radioactive pollution, 164 pollution permits, 158 Pontbren, 131, 132 poor blaming of for excesses of the rich, 107 characterised as unthinking beasts, 180 cutting essential services for, 275 effect of raising taxes on, 209 freedom of the rich to exploit the poor, 274 misery inflicted on, 75 as new deviants, 16 power over, 24 punishment of for errors of the rich, 285 shutting of out of healthcare, 287 as trapped in culture of dependency, 179 ultra-rich as deciding very poor are trashing the planet, 106 Poor Law Amendment Act (1834), 181 poor relief, 180, 181, 182 poor-rich men, 22 Pope Benedict XVI, 73, 74, 76 population growth, 103–4, 106 Porritt, Jonathan, 106 Portillo, Michael, 215 possessions, 175 poverty, 179–83 The Power of Market Fundamentalism (Block and Somers), 180 predators, 80–1, 89 pregnancy premarital pregnancy, 60 relationship between sex education and falling rates of unintended pregnancy, 74–5 pre-marital sex, 75 Prentis, Dave, 266 Press Complaints Commission, 224 Private Eye, 244 Proceedings of the National Academy of Sciences, 171 Progressives, 286, 289 property taxes, 278, 281 Protection from Harassment Act (1997), 269 protests injunctions against, 269 as muted, 24 suppression of, 3, 4, 28, 257, 259, 260, 262, 276 proxy life, 24 psychology, applications of advances in, 285–7, 289 Psychology, Crime and Law (journal), 189 public advocacy, 223 Public Library of Science, 196 public places, keeping children and teenagers out of, 67–71 public services, 4, 15, 24, 215, 218, 219, 220, 264, 272, 274, 280 Public Space Protection Orders, 29 public spending, 15, 130 Q Quantock Hills, 107, 109 R The Races of Man (Knox), 234 racism, 163, 234, 239 radioactive pollution, 164 Ramsay, Adam, 273 The Rational Optimist (Ridley), 199, 200 Ratzel, Friedrich, 234 Reader, W.

., 16, 219 Philadelphia General Hospital, 34 Philip Morris, 250 Philo, Greg, 281 pig farming, 114 Piketty, Thomas, 1 Pinochet, Augusto, 3 Pirie, Madsen, 214, 215 Pitt Review, 136 planet-eating machine, 102 plant plankton, 82, 83, 85, 86, 87 play, in children, 43–7 playdate coaches, 20–1 plutocratic power, 2, 6, 24, 213 Podhoretz, John, 230 pointless consumption, 205 political constraint, 24 political elite, 100 political freedom, 5 politics, as bankrolled by big oil and big coal, 157 poll tax, 215 pollution air pollution, 169, 171 from coal, 167, 170 lead pollution, 161, 163 mercury pollution, 170 radioactive pollution, 164 pollution permits, 158 Pontbren, 131, 132 poor blaming of for excesses of the rich, 107 characterised as unthinking beasts, 180 cutting essential services for, 275 effect of raising taxes on, 209 freedom of the rich to exploit the poor, 274 misery inflicted on, 75 as new deviants, 16 power over, 24 punishment of for errors of the rich, 285 shutting of out of healthcare, 287 as trapped in culture of dependency, 179 ultra-rich as deciding very poor are trashing the planet, 106 Poor Law Amendment Act (1834), 181 poor relief, 180, 181, 182 poor-rich men, 22 Pope Benedict XVI, 73, 74, 76 population growth, 103–4, 106 Porritt, Jonathan, 106 Portillo, Michael, 215 possessions, 175 poverty, 179–83 The Power of Market Fundamentalism (Block and Somers), 180 predators, 80–1, 89 pregnancy premarital pregnancy, 60 relationship between sex education and falling rates of unintended pregnancy, 74–5 pre-marital sex, 75 Prentis, Dave, 266 Press Complaints Commission, 224 Private Eye, 244 Proceedings of the National Academy of Sciences, 171 Progressives, 286, 289 property taxes, 278, 281 Protection from Harassment Act (1997), 269 protests injunctions against, 269 as muted, 24 suppression of, 3, 4, 28, 257, 259, 260, 262, 276 proxy life, 24 psychology, applications of advances in, 285–7, 289 Psychology, Crime and Law (journal), 189 public advocacy, 223 Public Library of Science, 196 public places, keeping children and teenagers out of, 67–71 public services, 4, 15, 24, 215, 218, 219, 220, 264, 272, 274, 280 Public Space Protection Orders, 29 public spending, 15, 130 Q Quantock Hills, 107, 109 R The Races of Man (Knox), 234 racism, 163, 234, 239 radioactive pollution, 164 Ramsay, Adam, 273 The Rational Optimist (Ridley), 199, 200 Ratzel, Friedrich, 234 Reader, W. Winwood, 234 Reagan, Ronald, 15, 100, 191 Rebel Clown Army, 260 Red Tape Challenge on Agriculture, 127 reforestation, 132, 133, 134 Reformation, 59–60 regulation and Deepwater Horizon disaster, 201 elite as released from, 21 failure of in Northern Rock issue, 199 failure of in soil issues, 125 groups fighting regulation of tobacco, 223 investor-state dispute settlement and, 250 Koch brothers lobbying against, 211 legalisation and regulation of drugs, 33–4 promotion of less regulation for business, 216 and Red Tape Challenge on Agriculture, 127 as restraint on market freedom, 198 unregulated lending, 217 religion, primary purpose of, 73 religious conviction, impact of on abortion rate, 74 remittance system, 237, 239 renewable energy, 158, 165, 166 Republicans, in US, 186, 210, 219, 220 Research Councils UK, 196 Resolution Foundation, 185 reward, inverse relationship of utility with, 184 rewilding, 97, 98, 102, 135 Ricardo, David, 181, 182 rich.


pages: 316 words: 117,228

The Code of Capital: How the Law Creates Wealth and Inequality by Katharina Pistor

"Robert Solow", Andrei Shleifer, Asian financial crisis, asset-backed security, barriers to entry, Bernie Madoff, bilateral investment treaty, bitcoin, blockchain, Bretton Woods, business cycle, business process, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, collateralized debt obligation, colonial rule, conceptual framework, Corn Laws, corporate governance, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, cryptocurrency, Donald Trump, double helix, Edward Glaeser, Ethereum, ethereum blockchain, facts on the ground, financial innovation, financial intermediation, fixed income, Francis Fukuyama: the end of history, full employment, global reserve currency, Hernando de Soto, income inequality, intangible asset, investor state dispute settlement, invisible hand, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, Kenneth Rogoff, land reform, land tenure, London Interbank Offered Rate, Long Term Capital Management, means of production, money market fund, moral hazard, offshore financial centre, phenotype, Ponzi scheme, price mechanism, price stability, profit maximization, railway mania, regulatory arbitrage, reserve currency, Ronald Coase, Satoshi Nakamoto, secular stagnation, self-driving car, shareholder value, Silicon Valley, smart contracts, software patent, sovereign wealth fund, The Nature of the Firm, The Wealth of Nations by Adam Smith, Thorstein Veblen, time value of money, too big to fail, trade route, transaction costs, Wolfgang Streeck

Note that the Maya obtained a hearing at the IACHR without having done so, because the domestic courts refused to grant them a hearing at all and the IACHR deemed this a denial of justice. The IACHR decision on the case the Maya brought against the Toledo district of Belize is available online at http://www.cidh.oas.org/annualrep/2004eng/Belize .12053eng.htm. 22. For the latest statistics on investor-state-dispute-settlement (ISDS), see UNCTAD, “Special Update on Investor-State Dispute Settlement: Facts and Figures,” November 2017, available online at www.unctad.org. 23. See Art. 60 of the Canadian Patent Act, available online at http://laws-lois .justice.gc.ca/. 24. Metalclad Corporation v. United States, CASE No. ARB(AF)/97/1, 30 August 2000, available online at https://www.italaw.com/cases/671. 25. See Eli Lilly v. Canada, recital 223. 26.

These treaties rarely talk about property rights and instead focus on the investments made by foreign investors and their protection in the host state. Investments can take any form, from entering into contracts, licenses, concessions, all the way to ownership of shares or real property. The Trojan horse in these treaties is a dispute settlement mechanism that goes by the acronym ISDS (investor-state dispute settlement). It allows a foreign investor to bring a case for damages against the host state in an arbitral tribunal outside its territory. The language of the treaties is sufficiently open-ended to give arbitrators the power to grant damages for “unfair and inequitable treatment” that are on par with damages for a co d e fo r th e g Lo B e 137 expropriation.9 In doing so, they effectively confer property rights status on contractual commitments and curtail the powers of states to determine the claims they wish to recognize as property rights.

See common law entitlements, 44–46, 212, 217, 219, 222–24, 260n8 entrepreneurs, 7, 59–60, 93, 114, 163, 179, 206–7 equity rule, 31–32 Ethereum, 195–97, 201, 272n29 European Central Bank, 79, 260n12 European Commission, 79, 148 European Court of Justice, 70, 156 European Union (EU), 224; bilateral investment treaties (BITs) and, 264n67; capital adequacy and, 73–74; Comprehensive Economic and Trade Agreement (CETA) and, 156–57, 264n69; corporations and, 72, 249n51; debt and, 106; global code and, 134, 137, 140, 156, 263n48, 264n67; International Swaps and Derivatives Association (ISDA) and, 148 eviction, 41, 233 exclusive use rights, 35, 209 exogenous shocks, 118, 188 Facebook, 130 Fannie Mae, 84–85, 94 Federal Home Bank of Chicago, 85 feudal calculus, 5–6, 129, 223 feudalism: capital rule and, 5–6, 205, 211, 223, 276n24; France and, 276n24; legal code and, 5–6, 10, 30, 36, 128–29, 158, 205, 211, 218, 223, 276n24; property and, 30, 36, 128–29, 158, 218 indeX fidelity, 85 Fifth Amendment, 241n9 Financial Stability Board (FSB), 150–51 Financial Times journal, 223 First Amendment, 87 Flemish Weavers, 118 Florence, Italy, 56–58 FMC Corporation, 124 Ford, 247n17 foreclosure, 39, 95–98, 253n44 Fourteenth Amendment, 25 France: Banque de France and, 104; bills of exchange and, 252n31; civil law and, 168, 171–72; Code de Commerce and, 252n31; D’Estaing and, 240n64; exporting law and, 133; feudalism and, 276n24; International Swaps and Derivatives Association (ISDA) and, 151; lawyers and, 170–71, 178; legal profession requirements and, 170–72; minting debt and, 85, 93, 102–4; Napoleon and, 133, 242n27; Péreire brothers and, 102–3; property rights and, 218, 242n27; skyrocketing lawyer fees and, 173; Société General and, 85; top global law firms and, 178–79 Freddie Mac, 94 Frederick the Great, 3 free market, 4, 19, 106–7, 128–29 free trade, 38, 121, 123–24, 138 Fuld, Richard, 62–63 General Agreement on Tariffs and Trade (GATT), 123 General Electric, 124 General Estates of the Netherlands, 65–66, 276n24 General Motors, 124, 247n17 genetics: BRCA and, 111–14, 116, 127, 130, 214; cease and desist orders and, 113; courts and, 109–16, 127, 211, 214; Crick and, 108–10; enclosure and, 109–12, 115; Human Genome Project and, 109–10; inheritance and, 109; intellectual property and, 107–16, 127–29, 214; legal code and, 108, 110, 114, 116; Mendel and, 108; monopolies and, 109–12, 115; Myriad Genetics and, 112–16, 127–29, 214; National Institutes of Health (NIH) and, 109, 112; nature’s code and, 109–12, 115; patents and, 109–16, 230; privatizing, 111–12; risk and, 111–14, 116, 127, 130, 214; sequencing and, 109–13, 127–28; US Supreme Court and, 109–13, 287 116, 127, 211, 214; Watson and, 108–10; Wilkins and, 109 Germany, 13, 209, 246n7; Bayerische Landesbank and, 85; bills of exchange and, 252n31; civil law and, 168, 238n48; Constitution of, 241n10; credit cooperatives and, 93–94; exporting law and, 133; frustration of contracts and, 271n13; Herstatt bank and, 137; International Swaps and Derivatives Association (ISDA) and, 151; Law on Judges and, 268n42; lawyers and, 172–73, 178–79; Lehman Brothers and, 49; Loan Market Association (LMA) and, 262n32; private money and, 101; seat theory and, 70; state power and, 107; subjective rights and, 275n10; top global law firms and, 178; unification of, 267n38 Getzler, Joshua, 40 Gilson, Ronald, 163 Ginnie Mae, 92 global code: arbitration and, 136, 139–43, 146, 152, 154–57, 261n27; assets and, 132, 135–38, 142–50, 154; autonomy and, 134– 35; Bank for International Settlement (BIS) and, 149–50; bankruptcy and, 137, 144–53, 262n42; Belize and, 261n21; bilateral trade and, 122, 132, 136, 140, 154–56, 256n23; Canada and, 138–43, 156–57, 261n17, 261n18, 263n57, 264n69; capitalism and, 132–33; capital rule and, 152–57; central banks and, 151; coercive power and, 132, 154; collateral and, 144, 148, 263n48; common law and, 133, 264n65; Comprehensive Economic and Trade Agreement (CETA) and, 156–57; conflict of law and, 134–35; contracts and, 135–37, 139, 145–53; corporate law and, 135–36, 155; courts and, 133, 136, 138–46, 150, 152–56, 261n18, 261n21, 262n45; creditors and, 144, 147–50, 262n41, 262n45; debt and, 144, 147, 149–50, 262n41; derivatives and, 143–53, 262n36, 263n49; elitism and, 133; enforcement and, 134, 139–40, 147, 152, 154; expanding private choice and, 134–37; exporting law and, 132–34; intellectual property and, 136, 138, 140, 143; International Center for Settlement of Investment Disputes (ICSID) and, 154–55; International Swaps and Derivatives Association (ISDA) and, 145–53, 261n31, 271n18; investment and, 288 indeX global code (continued) 132, 134–42, 154–57; lawyers and, 135–36, 142–45, 154, 176–79, 261n27; legal code and, 132–33, 143; legal structures and, 134; Lehman Brothers and, 135, 149; Marxism and, 154; NC2 and, 135; New York Arbitration Convention and, 154; patents and, 122, 136–43, 152; priority rights and, 149, 156; private law and, 133, 136, 154; property and, 135–40, 143, 262n45; regulation and, 132, 135, 137, 141, 143, 145, 148, 151–54, 264n58, 264n67; risk and, 146, 262n45; shareholders and, 135; sovereignty and, 135–44, 148, 152, 155, 157, 277n51; state money and, 147; state power and, 138, 141, 154; treaty law and, 136–42, 154–57; United Kingdom and, 151 globalization: capital rule and, 219–23, 277n51; code masters and, 176–79, 270n71; empire of law and, 2; nature’s code and, 121–22 global law, 8–9, 145, 166–67, 176, 178–79 gold coins, 254n55 Goldman Sachs, 49, 100, 175, 203, 248, 255n70, 271n19, 274n57 Google, 129–31, 259n80 government-sponsored entity (GSE), 84, 94, 253n39 Great Depression, 49, 106 Great Financial Crisis, ix–x; bailouts and, 55, 62, 64, 104–5, 151, 226, 247n17; car manufacturers and, 55; Lehman Brothers and, 48–58, 61–65, 70–75, 80, 85, 96, 101, 103–4, 106, 135, 149, 175, 190, 245n4, 246n6, 248n33; misleading information and, 161; put option and, 55; US Consumer Financial Protection Bureau and, 182 Greece, 255n66 Greenspan, Alan, 105 growth: capital rule and, 220; code masters and, 166, 175, 267n26, 270n71; elephant curve and, 1, 8; empire of law and, 1, 4, 8, 20, 235n10; minting debt and, 102, 106; nature’s code and, 117; property and, 4 guilds, 128–29, 170, 206, 258n61, 259n70 Guinness brewery, 38 Hague Conference on International Private Law, 136 Harvard Law School, 175, 268n47 Haskel, Jonathan, 115–16 hedge funds, 64, 102, 105–6, 151, 251n5 Herstatt bank, 137 Hewlett-Packard, 124 Hindu law, 177 Hirschman, Albert, 221, 248n42 Hodgson, Geoffrey, 10 homeowners, 59, 80–84, 86, 88, 94–98, 100, 106 House of Lords, 38, 158 housing market, 5, 61, 94 Human Genome Project, 109–10 human rights, 29, 139, 228, 261n21 Ibanez, Antonio, 95–97 IBM, 124 immortality, 50, 55, 65–67 immutable ledgers, 188–90 imperialism, 17, 133 incorporation theory, 69–70, 74, 136, 246n10 India, 122 Indian Removal Act, 34 industrial policy, 118–21 inequality: capital rule and, 223; code masters and, 167; coding land and, 46; empire of law and, 1–3, 6, 21–22, 235n9, 240n69, 240n70 inflation, 15, 101, 106–7, 254n56 inheritance law, 238n48 initial coin offerings (ICOs), 195–96 Inns of Court, 32, 169, 242n29 insurance, 3, 100, 157, 178, 190–91, 271n17 intangible capital, 8; capital rule and, 212, 216; empire of law and, 13; enclosure and, 117; intellectual property and, 13, 24, 115–18, 120–21, 143, 212, 216; patents and, 143, 212 (see also patents); shareholders and, 117 intellectual property: abstract ideas and, 110; Austro-Hungarian Empire and, 120; big data and, 126–31; Canada and, 138–43, 152–55, 261n17, 261n19; capital rule and, 212–13; coding land and, 24, 241n10; copyright and, 11, 115, 256n23; digital code and, 186, 203–4; empire of law and, 3, 5, 11, 19; genetics and, 107–16, 127–29, 214; global code and, 136, 138, 140, 143; intangible capital and, 13, 24, 115–18, 120–21, 143, 212, 216; monopolies and, 109, 115, 120–24; Myriad and, 112–16, 127, 129, 214; nature’s code and, 108–9, 115, 120–30; Netherlands and, 120; patents and, 11, 109–23, 126–30, 136–43, 152, 203–4, 211–15, 230, 256n3, 256n18, 257n24, 257n42, 274n54, 274n57; pharmaceutical industry and, 121–22, indeX 124, 129, 138–42, 152–55, 261n17, 261n19; shareholders and, 114–15; Trade Act and, 121; trademarks and, 11, 115–16, 215; trade secrets and, 126–31; tragedy of the commons and, 109; TRIPS and, 123–25, 136, 138; United Kingdom and, 117–21; United States and, 109, 112, 115, 121–24, 256n23; US Constitution and, 241n10 Intellectual Property Committee (IPC), 123–24 Interamerican Commission on Human Rights (IACHR), 29, 261n21 interest rates, 80, 90, 190 International Capital Market Association, 262n32 International Center for Settlement of Investment Disputes (ICSID), 154–55 International Court of Justice, 125, 146 International Monetary Fund (IMF), 64, 79 international private law, 68–69, 136 International Swaps and Derivatives Association (ISDA), 145–53, 261n31, 271n18 International Trade Organization, 123 investment: capital rule and, 225–26; cloning legal persons and, 48–53, 60–65, 67, 72, 75, 248n39; code masters and, 160–61, 165, 167–68; coding land and, 25, 37, 45, 241n13; digital code and, 195–97, 200–2, 272n33; empire of law and, 12, 14, 16, 112; entrepreneurs and, 7, 59–60, 93, 114, 163, 179, 206–7; global code and, 132, 134–42, 154–57; intangible capital and, 116–17; minting debt and, 77–86, 91–107, 251n12; nature’s code and, 114; rate of return and, 4–5, 147 invisible hand, 6–9, 225, 236n18 Ireland, 72, 104, 233, 250n57 ISDS (investor-state-dispute-settlement), 136–38, 140, 155–56, 261n22 Islamic law, 177 Japan, 51, 124, 133, 260n3 jingle rule, 247n24 Johnson & Johnson, 124 Johnson v. M’Intosh, 34 Jolie, Angelina, 111 JP Morgan, 62, 64, 83–84, 248n32 Justinian, 170 Kapital, Das (Marx), 9 Kempe, John, 118 King’s Council, 27, 31 289 Kleros Real Estate CDO III Ltd., 79, 86, 98–100, 107, 135, 165 knowledge: capital rule and, 229; digital code and, 183; enclosure of, 35, 108–9, 115, 117, 131, 183; expert legal, 162 (see also lawyers); genetics and, 108–9, 113, 115–16; global commons and, 126; industrial policy and, 118, 121; intangible capital and, 116–18; intellectual property and, 110 (see also intellectual property); lawyers and, 162, 165; monopolizing, 117, 257n29; trade secrets and, 126–31; utopists and, 184–86, 197, 200; wealth and, 40, 108–9, 118, 131, 165 labor: capitalism and, 2, 9–11, 116, 160, 169, 217, 219, 237n37; cloning legal persons and, 49; code masters and, 160, 169; coding land and, 34; empire of law and, 2, 9–11, 237n37; minting debt and, 94; property and, 120; rights of, 217; trade secrets and, 128–29; unions and, 219 land law, 95, 158, 177, 244n58 landlords: coding land and, 29–32, 35, 244n64; commoners and, 30–31, 112–13, 192, 206, 214; corporations and, 59; creditors and, 206–7; digital code and, 192; gold coins and, 254n55; intellectual property and, 112–13, 192; mining debt and, 93; priority rights and, 30, 158–59, 206; titles and, 206 landowners: coding land and, 24, 34–39, 42–45; corporations and, 56; lawyers and, 158–59, 166; minting debt and, 78, 128; trust law and, 42–45 Langdell, Christopher Columbus, 175 law merchants, 90–91 law schools, 25, 162–63, 168, 174–76, 228, 240n6, 243n43, 268n47, 270n4 lawyers: arbitration and, 161–62, 178, 180– 82; attorneys, 21, 32, 143, 160–62, 171–74, 181–82, 217, 269n54; autonomy and, 171–73; barristers, 169–70; capital rule and, 206–16, 221, 224, 227–29, 234; civil law and, 42–43, 133, 168–73, 178, 249n48; cloning legal persons and, 48, 52, 70; as code masters, 3 (see also code masters); coding land and, 24, 31–32, 35, 37–38, 40, 43–45, 164, 240n6, 242n29; common law and, 168–73, 176–78; competition and, 174, 176; courts and, 15 (see also courts); cross-country analysis of, 168–82; digital code and, 183–86, 188, 204; economic 290 indeX lawyers (continued) growth and, 166; elitism and, 158, 162, 164, 175–77; empire of law and, 3–4, 6, 8, 15, 19–20, 22, 165, 236n26; exploitation of plurality of laws by, 177–78; firstmover advantage and, 214–15; freelance, 170; global code and, 135–36, 142–45, 154, 261n27; global law and, 8–9, 145, 166–67, 176, 178–79; global profession for, 176–79; income of, 163, 178, 265n3; indictment of, 162; Inns of Court and, 32, 169, 242n29; landlords and, 32; law schools and, 25, 162–63, 168, 174–76, 228, 240n6, 243n43, 268n47, 270n4; law’s inherent incompleteness and, 210–13; legal knowledge of, 162, 165; as legal service providers, 159; Magee on, 165– 66; making new laws and, 160; market for young, 228–29; minting debt and, 79–80, 82, 86, 252n24; mobility of law and, 167–68; plaintiffs and, 32, 58, 69, 113, 142, 214, 265n5, 275n17; poison pill and, 163– 64, 266n15, 266n17; priority rights and, 158, 161; pro bono operations and, 163; regulation and, 160–63, 168, 171–77, 182, 267n37, 268n42; rules of property and, 160; specialization and, 162; trade secrets and, 129–30; transactions and, 161, 163– 65, 169, 176–81; US demographics on, 162–63; wealth protection and, 166–67; women as, 174–75, 268n47, 269n54 legal code: acquired rights and, 45–46; ad hoc privileges and, 119, 218, 223, 228; assets and, 2–8, 11–12, 15, 19–24, 40, 52, 87, 92, 107–8, 116, 118, 132, 143, 168, 177, 180, 205, 208, 211–12, 215–18, 222–27, 233; autonomy and, 33, 50, 134–35, 171, 173, 194–97, 209, 212–13, 215, 218–20, 232, 272n29; blockchain and, 184, 187–90, 192, 195, 197–98, 203–4, 270n2; capital rule and, 205, 211–13, 216, 218–20, 225, 227, 230; centrality of, 8; “code is law” and, 183, 196; code masters and, 158–59, 167, 177, 180; coding land and, 24, 39–40, 43; complexity of, 19; conflict of law and, 9, 68–69, 134–35, 212, 225, 249n48, 276n37; decoding the trust and, 42–45; digital code and, 183–90, 194, 197, 203–4; discovery doctrine and, 34–35; empire of law and, 2–15, 19–22; exclusive use rights and, 35, 209; exporting law and, 132–34; feudalism and, 5–6, 10, 30, 36, 128–29, 158, 205, 211, 218, 223, 276n24; global code and, 132–33, 143; governing, 222–29; harmonization and, 123, 134–42, 179, 227, 250n58, 276n37; imperialism and, 17, 133; incorporation theory and, 69–70, 74, 136, 246n10; intangible capital and, 116–18; law’s guiding hand and, 6–9; minting debt and, 79, 88, 92, 98; modules of, 3–7, 12–13, 17–21, 24, 29, 42–44, 52, 78, 86–87, 92, 101, 108, 116, 143, 159–61, 165, 168, 177, 180, 184, 203–15, 222–26, 229; nature’s code and, 108, 110, 114, 116; New York State law and, 8, 76, 80, 132–33, 135, 143, 146, 150, 168, 178; power of, 8; PRIMA and, 136; private code and, 209–19; RASCAL and, 73–75, 250n60, 250n62; as social ordering technology, 17; trust law and, ix–x, 42–45; wealth and, 3 legal entities: asset partitioning and, 53; corporations and, 14, 51–53, 55, 57, 65, 69–71, 249n46, 253n41; digital code and, 195; empire of law and, 3, 14, 20, 22; minting debt and, 100; priority rights and, 14; property and, 24, 44–47, 136, 159, 217, 224; risk and, 100; tax rates and, 71–73 Legal Foundations of Capital, The (Commons), 12 legal structures, 266n15; capital rule and, 225; corporations and, 48–51, 54, 58, 70–71, 76, 80; empire of law and, 4, 6, 9, 18, 21; global code and, 134 legal title, 24–29, 31, 33–34, 45–46 Lehman Brothers: American Express and, 50; code masters and, 175; creditors and, 61, 63–64, 71, 73, 103; derivatives and, 63; digital code and, 190; early underwritings of, 49; elitism and, 175; founding of, 49; Fuld and, 62–63; global code and, 135, 149; Great Depression and, 49; Great Financial Crisis and, 48–58, 61–65, 70–75, 80, 85, 96, 101, 103–4, 106, 135, 149, 175, 190, 245n4, 246n6, 248n33; growth of, 49–50; Ibanez loan and, 96; immortality and, 65; incorporation of, 50; institutional autopsy of, 48; LBHI parent company and, 51, 53, 61–63, 71, 73, 250n59; legal structure of, 48–51, 54, 58, 70–71, 76; limited liability and, 51, 53, 63; loss shifting and, 61–64; Medici empire and, 58–59; minting debt and, 80, 85, 96, 101, 103–4, 106; New York Cotton Exchange and, 49; partnership of, 50; public offering of, 50; RASCAL indeX and, 73–75, 250n60, 250n62; regulatory arbitrage and, 73–76; special-purpose vehicles (SPVs) and, 51; subsidiaries and, 50–53, 58–59, 61–64, 70–76, 135, 149, 250n59; United Kingdom and, 50, 71, 73, 149, 250n59; use of corporate form and, 50–51; World War II and, 49 Lehman Brothers International Europe (LBIE), 73–75, 149, 250n59, 250n62 Lehman Brothers Switzerland (LBF), 73–75, 250n62, 250n65 Lessig, Lawrence, 183 Levy, Jonathan, 12 licenses, 44, 102, 113, 119, 122, 129, 136, 141 limited liability, 51, 53–54, 60–61, 63, 81–82, 99, 254n49 liquidity, 36, 57, 64, 90, 92, 104, 151, 199, 262n33 lobbying, 102, 148–50, 153, 211, 217 lock-in, 15, 47, 65–67, 77, 81, 117, 196 London Interbank Official Rate (LIBOR), 190 Long Term Capital Management (LTCM), 64, 102, 104–6 loss shifting, 55, 59–64, 67 Maastricht Treaty, 249n51 Madoff, Bernard, 103 Magee, Stephen, 165–66 Mansfield, Belle Babb, 268n47 Mansfield, Lord, 89 Marshall, Thurgood, 34 Marxism: capital rule and, 207–8, 216, 234; Crédit Mobilier and, 104; digital code and, 185; empire of law and, 2, 9–11, 22; global code and, 154; intangible capital and, 116; minting debt and, 104–6; withering of state and, 185 Master Agreement (MA), 146–47, 150–51, 153 MasterCard, 203 Maya people, 23–29, 230, 261n21 May Department Stores, 49 Medici empire, 57–58, 247n21 medicine, 109, 170, 189, 277n42 Meiji Restoration, 133 Mendel, Gregor, 108 Menger, Carl, 273n41 Menke, Christoph, 209, 217, 231–33 merchant banks, 8, 89–90, 199 Merchant of Venice, The (Shakespeare), 35–36, 198–99 Merck, 124 meritocracies, 186 Merrill Lynch, 100, 255n70 291 MERS, 254n49 Merton, Robert, 102, 104 Metalclad, 141 Mexico: Metalclad case and, 141; NAFTA and, 124, 138–42, 155, 261n20; USMCA and, 139, 261n20 Middle Ages, 128–29, 170, 206, 221, 258n61, 259n70 mining, 25–27, 29, 37, 103, 200–201 Minsky, Hyman P., 252n26, 254n60, 273n46 minting debt: arbitration and, 90–91; bankruptcy and, 78–80, 83–84, 87, 107, 255n71; capitalism and, 77, 107; central banks and, 77–78, 89, 102–6, 255n72; claims to future pay and, 78, 84, 88; coercive power and, 90; collateral and, 78, 81, 86–87, 92, 97, 99, 103, 107; contracts and, 78–81, 86, 88–89, 107; convertibility and, 77–78, 87–91; corporate law and, 78, 80, 86, 91, 98–102, 107, 252n22, 253n41; courts and, 87, 90–91, 96–98, 104, 252n31; credit cooperatives and, 93–95; Crédit Mobilier and, 102–6; creditors and, 77–79, 88–89, 92–93, 95, 103–5, 107; derivatives and, 78, 81, 86, 91; durability and, 78; elitism and, 85, 254n55; enforcement and, 88; FCIC and, 79–80, 83; France and, 104; gold coins and, 254n55; growth and, 102, 106; investment and, 77–86, 91–107, 251n12; Kleros clones and, 79, 86, 98–100, 107, 135, 165; labor and, 94; lawyers and, 79–80, 82, 86, 252n24; legal code and, 79, 88, 92, 98; legal entities and, 100; Lehman Brothers and, 80, 85, 96, 101, 103–4, 106; Marxism and, 104–6; monopolies and, 91; mortgages and, 80–88, 92–98, 251n13, 253n41, 254n53; NC2 and, 79–87, 94, 98–100, 106–7, 135, 251n4, 251n19; negotiability and, 89; notes and, 78, 88–92, 98, 108, 198–200, 202; Péreire brothers and, 102–3; priority rights and, 97, 107; private law and, 107; private money and, 86, 89, 92, 101–7, 147, 202; property and, 78, 86, 95–97, 107; reform and, 101, 106, 255n73; regulation and, 85, 90–91, 99–100, 103–7, 251n6; risk and, 78–87, 90–95, 98–100, 104–5, 251n6, 251n19; securitization and, 78–86, 91–101, 251n11, 251n13, 253n41; shareholders and, 99, 103–4; shielding and, 78, 84, 86, 99, 107; sovereignty and, 79, 84–85, 105; state money and, 77–78, 292 indeX minting debt (continued) 88–93, 106; state power and, 107; titles and, 96–97; United Kingdom and, 106; United States and, 84, 87, 92–93, 95, 99, 106; wealth and, 77–79, 84–85, 106, 251n15 mobility, 18, 68, 70, 167–68, 225 monopolies: assets and, 17, 41, 66, 91, 109, 111, 114–26, 257n29; cloning legal persons and, 66; coding land and, 41; empire of law and, 17; genetics and, 109–12, 115; intangible capital and, 117; intellectual property and, 109, 115, 120–24; of knowledge, 117, 257n29; minting debt and, 91; nature’s code and, 109, 111, 115; property and, 119–21; Statute of Monopolies and, 119, 258n43; temporal, 121; trade secrets and, 126 Monsanto, 124 mortgage-backed securities (MBS), 82–83, 86–87, 94–95, 97, 99, 101, 103, 108 Mortgage Electronic Registration System (MERS), 98 mortgages: capital rule and, 206–7, 211; coding land and, 35–38, 43; collateral law and, 13–14; empire of law and, 13–15; Ibanez case and, 95–97; minting debt and, 80–88, 92–98, 251n13, 253n41, 254n53; NC2 and, 79–87, 94, 98–100, 106–7, 135, 251n4, 251n19; subprime, 83, 251n13 Myriad Genetics, 112–16, 127–29, 214 Nakamoto, Satoshi, 198–99 National Institutes of Health (NIH), 109, 112 Native Americans, 34, 192–93 nature’s code: capitalism and, 112; common law and, 119; contracts and, 129; corporate law and, 108, 115, 122, 125; courts and, 110–16; enclosure and, 109–12, 115; genetics and, 109–16, 127–28; globalization and, 121–22; growth and, 117; intellectual property and, 108–9, 115, 120–30; investment and, 112, 114; legal code and, 108, 110, 114, 116; monopolies and, 109–12, 115; priority rights and, 110; property and, 108–9, 114–30; risk and, 111; wealth and, 109 NC2: ancestry of, 80; basic structure of, 79–84; China Investment Corporation (CIC) and, 85; as Citigroup Mortgage Loan Trust 2006–New Century 2 (CMLTI 2006–NC2), 80; Citigroup Mortgage Realty Corporation (CMRC) and, 80–85; complexity of, 86; conflict of law and, 135; convertibility and, 87; debt instrument of, 79–87, 94, 98–100, 106–7, 135, 251n4, 251n19; foreign investment in, 84–85; global code and, 135; homeowners and, 80, 83–84; JPMorgan Chase and, 84–85; minting debt and, 106–7; prospectus of, 80–83, 251n4, 251n19; shadow banking and, 79; tranches of, 83–87, 94, 98, 101, 251n19; trust law and, 43, 81–85, 95, 253n41 negotiability, 89 Netherlands, 65–66, 120 New Century, 80, 82–83 new comparative economics, 168, 266n24 New York Arbitration Convention, 154 New York Cotton Exchange, 49 New York State laws, 8, 76, 80, 132–33, 135, 143, 146, 150, 168, 178 New York Stock Exchange, 49, 137 New York University, 113 New Zealand, 29, 33–34 Nigeria, 27 Nobel Prize, 64, 102, 104–6, 109 Norman conquest, 30 North American Free Trade Agreement (NAFTA), 124, 138–42, 155, 261n20 notes, 78, 88–92, 98, 108, 198–200, 202 Obama, Barack, 156 Olson, Mancur, 219–20 Option One Mortgage Corporation, 96–97 Option Pricing Theory, 102 ownership: Bitcoin and, 199; coding land and, 30, 34–35, 136; corporations and, 59, 67, 92, 118, 136; ownership and, 59, 67, 92, 118, 136; separation of control and, 272n31; transfer of, 262n45 Pagano, Ugo, 118 PageRank, 129–30 Panel of Recognized International Market Experts in Finance (PRIME), 146 parliamentary systems, 19–20, 29, 38, 61, 119–20, 158, 207, 222, 263n48 partnerships: capital rule and, 228; code masters and, 162–63, 166, 175–78; Goldman Sachs and, 248n39; immortality and, 65; Lehman Brothers and, 50; Medici empire and, 57–58, 247n21; Roman law and, 54, 56–57; shielding and, 54, 56, 58–59; United Kingdom and, 60, 247n24; United States and, 247n24 indeX Parvest ABS Euribor, 85 patents: artisans and, 118–19; Canadian Patent Act and, 140; capital rule and, 211–15, 230; cease and desist orders and, 113; copyright and, 11, 115, 256n23; core features of invention and, 126–27; courts and, 120; data-generating, 127–28; digital code and, 203–4; duration of, 118, 123, 139; Eli Lilly and, 138–43, 152–55, 261n17, 261n19; empire of law and, 11; England and, 118–19; genetics and, 109–16, 230; global code and, 122, 136–43, 152; Google and, 129–31, 259n80; industrial policy and, 118–21; intangible capital and, 116– 18; intellectual property and, 11, 109–23, 126–30, 136–43, 152, 203–4, 211–15, 230, 256n3, 256n18, 257n24, 257n42, 274n54, 274n57; monetary value of, 114, 127; Netherlands and, 120; novelty and, 126; pharmaceutical industry and, 121–22, 124, 138–42, 152–55, 261n17, 261n19; property and, 118–22; trademarks and, 11, 115–16, 215; trade secrets and, 126–30; United States and, 110, 113, 256n18; US Constitution and, 114–15; utility and, 126 Peabody & Co., 49 Pennsylvania University, 113 pensions, 63, 75, 83, 106, 255n71 Péreire brothers, 102–3 Pfizer Pharmaceuticals, 121–22, 124 pharmaceutical industry: Eli Lilly and, 138– 42, 152–55, 261n17, 261n19; intellectual property and, 129; Pfizer and, 121–22, 124; sovereignty and, 138; trade secrets and, 129 Piketty, Thomas, 4–5 plaintiffs, 32, 58, 69, 113, 142, 214, 265n5, 275n17 poison pills, 163–64, 266n15, 266n17 Poland, 133 Polanyi, Karl von, 11, 19, 128, 133, 220, 228, 276n29 Ponzi schemes, 103, 254n60, 254n62 Portugal, 133, 255n66 Posner, Eric A., 230, 232 power structures, 185, 206 Pratt, Ed, 121–22 PRIMA (place of the relevant intermediary approach), 136 priority rights: capital rule and, 206–7, 215; cloning legal persons and, 55–56, 63; code masters and, 158, 161; coding land and, 24–25, 29, 37, 39, 46; digital code 293 and, 193; durability and, 14; empire of law and, 13–14, 16, 18; enforcement of, 16; global code and, 149, 156; landlords and, 206; lawyers and, 158, 161; legal entities and, 14; minting debt and, 97, 107; Native Americans and, 34, 192–93; nature’s code and, 110; shielding and, 54–56, 107, 215; trade secrets and, 126 private law, ix; capital rule and, 20, 209–19; cloning legal persons and, 68; code masters and, 169–73, 182; contracts and, 2 (see also contracts); crytocurrency and, 198; digital code and, 198; empire of law and, 20–21; first-mover advantage and, 214–15; global code and, 133, 136, 154; international, 68, 136; law’s inherent incompleteness and, 210–13; minting debt and, 107; public power and, 216–19; trust law and, 3, 5, 44, 78, 211, 219, 226 private money: code masters and, 175; Crédit Mobilier and, 102–6; crytocurrency and, 198–99, 202; digital code and, 198–99, 202; future growth and, 102; Germany and, 101; minting debt and, 86, 89, 92, 101–7, 147, 202; Péreire brothers and, 102–3; risk and, 187, 198– 99; state money and, 15, 238n52 Privy Council, 27–29, 126 productivity, 39, 79, 117, 244n64 property: absolute, 30, 33; acquired rights and, ix–x, 42–45; capital rule and, 206, 209, 212–20, 222, 224, 230, 276n24; cloning legal persons and, 47, 68; code masters and, 158–60, 164, 172, 177; coding land and, 23–39, 42–46, 240n2, 241n10, 241n13, 242n27, 242n36, 243n41, 245n75; Cohen on, 137–38; Conveyance Act and, 38–39; courts and, 17, 23–28, 30, 38–39, 43–44, 96–97, 126, 136, 140, 143, 159–60, 172, 214–15, 218, 262; Debt Recovery Act and, 39–40; digital code and, 184–86, 191–94, 198, 203–4, 272n28; discovery doctrine and, 34–35; as dominium, 138; emerging land market and, 32; empire of law and, 1–5, 11–14, 17, 19, 21, 238n44, 238n48, 238n50, 239n56, 240n68; enclosure and, 29–35, 39, 229, 256n14; Enclosure Acts and, 29–30; eviction and, 41, 233; exclusive use rights and, 35, 209; feudalism and, 30, 36, 128–29, 158, 218; foreclosure and, 39, 95–98, 253n44; France and, 218, 242n27; general, 30; global code and, 135–40, 143, 262n45; 294 indeX property (continued) growth and, 4; industrial policy and, 118– 22; intangible capital and, 13, 24, 115–21, 143, 212, 216; intellectual, 3, 138 (see also intellectual property); ISDS and, 136–38, 140, 155–56, 261n22; labor and, 120; landlords and, 29–32, 35, 59, 93, 112–13, 158–59, 192, 206, 214, 244n64; landowners and, 24, 34–39, 42, 45, 56, 78, 128, 158–59, 166; legal entities and, 24, 44–47, 136, 159, 217, 224; legal title and, 24–29, 31, 33–34, 45–46; Maya people and, 23–29, 230, 261n21; minting debt and, 78, 86, 95–97, 107; monopolies and, 119–21 (see also monopolies); Native Americans and, 34, 192–93; nature’s code and, 108–9, 114–30; Norman conquest and, 30; numerus clausus and, 160; occupancy and, 31; ownership and, 30; patents and, 118–22; residual rights and, 191–92; rise of West and, 4; securitization and, 43, 78; Settled Land Acts and, 38–39; settlers and, 33–35, 42, 125, 192–93; sovereignty and, 26–27, 33, 120–21, 135–43, 160; squatters and, 34; Statute of Enrollments and, 44; Statute of Uses and, 44; Szabo on, 192–93, 198; titles and, 13, 25–27, 30–35, 37, 43, 46, 75, 96–97, 110, 125, 194, 206; treaty law and, 120; trust law and, 42–45; turning land into private, 29–35; US Constitution and, 25; wealth and, 4–5, 12, 14, 19, 21, 24, 36, 42–43, 46, 108, 130, 209, 217, 222, 224, 237n38, 240n68 Prussia, 93–95, 172–73, 242n27 public power, 216–19 put option, 55, 64, 226 Qatar, 84 Quarterly Journal of Economics, 94 radical markets, 230–33 rate of return, 4–5, 147 rating agencies, 80, 86–87, 98–100, 251n6, 251n19 rational choice theorists, 208, 216 real estate mortgage investment conduits (REMIC), 95, 253n41 reform: capital rule and, 218, 231; code masters and, 158–59, 171; coding land and, 38–41, 244n58, 244n64; digital code and, 273n46; empire of law and, 1; English land law and, 158, 244n58; minting debt and, 101, 106, 255n73; TRIPS and, 124–25 regulation: arbitrage and, 48, 56, 73–76, 90–91, 226; capital rule and, 211, 213, 216–17, 221, 224–27, 274n1; code masters and, 160–63, 168, 171–77, 182, 267n37, 268n42; coding land and, 44; convertibility and, 226–27; corporations and, 47–48, 50, 56, 68, 73–75, 249n46; digital code and, 185–86, 190, 271n17, 272n30; empire of law and, 7; global code and, 132, 135, 137, 141, 143, 145, 148, 151–54, 264n58, 264n67; insurance, 271n17; lawyers and, 160–63, 168, 171–77, 182, 267n37, 268n42; minting debt and, 85, 90–91, 99–100, 103–7, 251n6, 255n73; private, 264n58; REMIC and, 253n41; US Securities and Exchange Commission (SEC) and, 103, 195 Regulation and Administration of Safe Custody and Global Settlement (RASCAL), 73–75, 250n60, 250n62 regulatory arbitrage, 48, 73–76, 90–91, 226 religion, 90, 236n26 repurchase agreements (Repos), 74, 76, 145, 148, 211, 262n45 residential mortgage-backed securities (RMBS), 87, 94, 103, 108 residual rights, 191–92 retirement, 65 R.


pages: 408 words: 108,985

Rewriting the Rules of the European Economy: An Agenda for Growth and Shared Prosperity by Joseph E. Stiglitz

Airbnb, balance sheet recession, bank run, banking crisis, barriers to entry, Basel III, basic income, Berlin Wall, bilateral investment treaty, business cycle, business process, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, collapse of Lehman Brothers, collective bargaining, corporate governance, corporate raider, corporate social responsibility, creative destruction, credit crunch, deindustrialization, discovery of DNA, diversified portfolio, Donald Trump, eurozone crisis, Fall of the Berlin Wall, financial intermediation, Francis Fukuyama: the end of history, full employment, gender pay gap, George Akerlof, gig economy, Gini coefficient, hiring and firing, housing crisis, Hyman Minsky, income inequality, inflation targeting, informal economy, information asymmetry, intangible asset, investor state dispute settlement, invisible hand, Isaac Newton, labor-force participation, liberal capitalism, low skilled workers, market fundamentalism, mini-job, moral hazard, non-tariff barriers, offshore financial centre, open economy, patent troll, pension reform, price mechanism, price stability, purchasing power parity, quantitative easing, race to the bottom, regulatory arbitrage, rent-seeking, Robert Shiller, Robert Shiller, Ronald Reagan, selection bias, shareholder value, Silicon Valley, sovereign wealth fund, TaskRabbit, too big to fail, trade liberalization, transaction costs, transfer pricing, trickle-down economics, tulip mania, universal basic income, unorthodox policies, zero-sum game

See also investment agreements; investment problems; investment solutions in education, 100 for the future, 96–97 future strategies for, 118–19 myths, 99–100 private vs. public, 98–100 productivity resulting from, 100–101 returns on, 101 Stability and Growth Pact impacting, 97–98 investment agreements as problematic, 291, 320–22 revising, 322–23 Investment Plan for Europe, 112 investment problems private investment, reduced, 106–8 public investment, austerity impacting, 101–6 underinvestment in research and development, 108–10, 109 investment solutions capital budgeting, 111 European Fund for Strategic Investments (EFSI), 112–14 Lighthouse Initiative, 115–16 public development banks, supporting, 116–17 public investment, encouraging, 110–11 revising agreements, 291 investor-state dispute settlement (ISDS), 320–23 Ireland debt ratio issue of, 79 ECB pressure on, 77 tax competition and, 193, 195, 197–98 2008 crisis and, 35–36, 38 ISDS. See investor-state dispute settlement Italy. See also Draghi, Mario future concerns for, 67–68 sentiment against euro, 63 2008 crisis and, 35–36 wage reduction in, 39 joblessness. See unemployment job(s). See also employment, achieving; labor markets benefitting pension programs, 246 creating, 246, 274–80 flexibility, 272–73 long-term care creating, 251 in manufacturing, 293–94 regulating insecure, 268–70 security and opportunity (see employment programs) technology losses, and globalization, 288 Juncker plan, 112.

These provisions give foreign companies a privileged position by allowing them to sue a European country in which they have located whenever a newly passed regulation compromises profitability, something domestic companies can’t do. Similarly, it strengthens the property rights of European firms when they invest abroad, creating an incentive to move oversees, at the expense of jobs in Europe. It also weakens European workers’ bargaining power, as the threat of moving out becomes more credible. Making these provisions even worse is the way such claims by corporations are adjudicated. The investor-state dispute settlement procedure (ISDS) entails disputes being heard by special tribunals, with the adjudicators appointed by the contestants. These erstwhile judges are usually lawyers, many of whom have multiple conflicts of interest, and are typically beholden to corporate interests. The costly proceedings favor large multinationals.†† Because tribunal members are paid by the day, they have perverse incentives to draw out proceedings, which can be prohibitively expensive for small businesses and developing countries.


pages: 555 words: 80,635

Open: The Progressive Case for Free Trade, Immigration, and Global Capital by Kimberly Clausing

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, active measures, Affordable Care Act / Obamacare, agricultural Revolution, battle of ideas, Bernie Sanders, business climate, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, corporate social responsibility, creative destruction, currency manipulation / currency intervention, David Ricardo: comparative advantage, Donald Trump, floating exchange rates, full employment, gig economy, global supply chain, global value chain, guest worker program, illegal immigration, immigration reform, income inequality, index fund, investor state dispute settlement, knowledge worker, labor-force participation, low skilled workers, Lyft, manufacturing employment, Mark Zuckerberg, meta analysis, meta-analysis, offshore financial centre, open economy, Paul Samuelson, profit motive, purchasing power parity, race to the bottom, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, secular stagnation, Silicon Valley, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transfer pricing, uber lyft, winner-take-all economy, working-age population, zero-sum game

Some provisions of existing agreements have caused a great deal of controversy, including those that protect intellectual property rights. When the interests of highly profitable pharmaceutical companies are pitted against people in poor countries seeking affordable medication, many question if it is right to use a trade agreement to benefit the companies. Even larger controversy focuses on mechanisms for investor-state dispute settlement, which allows companies to sue governments through ad hoc arbitration proceedings; many argue these should be replaced by a reliance on domestic laws. In these two areas, current trade agreements strike many as too broad. Yet despite these important examples, there are also ways in which broader agreements may make good sense. For example, if countries are concerned about tax or regulatory competition, international agreements offer a means to avoid a “race to the bottom.”

While issues such as climate change and tax competition are not central to international trade, there is no reason why trade agreements can’t be flexible enough to support an international response to these problems. In the past, trade agreements have often included non-trade issues. Despite legitimate concern about prioritizing some non-trade inclusions (intellectual property rights, investor-state dispute settlement), trade agreements can and should be about more than trade. Countries can cooperate to avoid the harmful aspects of tax and regulatory competition, and trade agreements provide a natural forum for such cooperation. Indeed, it is odd that trade policy has been traditionally dealt with multilaterally, but tax policy has not.1 COP21: A Pale Blue Dot in the Balance The Paris Climate Conference (officially known as the Twenty-First Conference of the Parties, or COP21) has a serious goal: to save the planet from catastrophe.


pages: 332 words: 106,197

The Divide: A Brief Guide to Global Inequality and Its Solutions by Jason Hickel

Andrei Shleifer, Asian financial crisis, Atahualpa, Bartolomé de las Casas, Bernie Sanders, Bob Geldof, Bretton Woods, British Empire, Cape to Cairo, capital controls, carbon footprint, clean water, collective bargaining, colonial rule, David Attenborough, David Graeber, David Ricardo: comparative advantage, declining real wages, dematerialisation, Doha Development Round, Elon Musk, European colonialism, falling living standards, financial deregulation, Fractional reserve banking, Francisco Pizarro, full employment, Hans Rosling, happiness index / gross national happiness, Howard Zinn, income inequality, Intergovernmental Panel on Climate Change (IPCC), investor state dispute settlement, James Watt: steam engine, laissez-faire capitalism, land reform, land value tax, liberal capitalism, Live Aid, Mahatma Gandhi, Monroe Doctrine, Mont Pelerin Society, moral hazard, Naomi Klein, Nelson Mandela, offshore financial centre, oil shale / tar sands, out of africa, plutocrats, Plutocrats, purchasing power parity, race to the bottom, rent control, road to serfdom, Ronald Reagan, Scramble for Africa, shareholder value, sharing economy, Silicon Valley, Simon Kuznets, structural adjustment programs, The Chicago School, The Spirit Level, trade route, transatlantic slave trade, transfer pricing, trickle-down economics, Washington Consensus, WikiLeaks, women in the workforce, Works Progress Administration

In 2012 there were fifty-nine, up from fifty-one the previous year. The highest award so far has been $2.3 billion, which Ecuador was forced to pay to the American oil company Occidental Petroleum after (apparently lawfully) annulling the company’s oil concession when it violated the terms of its contract.28 Fortunately, this system is finally coming under attack at high levels. Alfred de Zayas, a UN special rapporteur, recently slammed investor–state dispute settlement provisions as a threat to human rights and a violation of international law.29 In the United States, more than 100 law professors have signed a letter to Congress pointing out that such provisions pose a threat to national sovereignty and the rule of law. * The chorus of critique is growing, but it is an uphill battle. As this book goes to press, there are two new FTAs under negotiation: the Transatlantic Trade and Investment Partnership (TTIP), which will govern trade between the US and the European Union, and the Trans-Pacific Partnership (TPP), which will extend NAFTA down into South America and out across the Pacific Ocean.

We shouldn’t have to rely on WikiLeaks to provide this information in a partial and ad hoc way. Having full access to the draft proposals would allow vulnerable groups and advocacy organisations in rich and poor countries alike to push back against clauses that are harmful to people and the environment. Indeed, ideally all existing agreements should be suspended and renegotiated under more transparent and democratic conditions. There has been a growing uproar about the investor-state dispute settlement mechanisms that are included in most FTAs, which allow foreign corporations to sue sovereign states for regulations that compromise their profits. As these mechanisms have such little legitimacy, it would make sense to place a moratorium on all future cases and require plaintiffs to pursue their concerns through national court systems, which are transparent, public and accountable.


pages: 515 words: 142,354

The Euro: How a Common Currency Threatens the Future of Europe by Joseph E. Stiglitz, Alex Hyde-White

bank run, banking crisis, barriers to entry, battle of ideas, Berlin Wall, Bretton Woods, business cycle, buy and hold, capital controls, Carmen Reinhart, cashless society, central bank independence, centre right, cognitive dissonance, collapse of Lehman Brothers, collective bargaining, corporate governance, correlation does not imply causation, credit crunch, Credit Default Swap, currency peg, dark matter, David Ricardo: comparative advantage, disintermediation, diversified portfolio, eurozone crisis, Fall of the Berlin Wall, fiat currency, financial innovation, full employment, George Akerlof, Gini coefficient, global supply chain, Growth in a Time of Debt, housing crisis, income inequality, incomplete markets, inflation targeting, information asymmetry, investor state dispute settlement, invisible hand, Kenneth Arrow, Kenneth Rogoff, knowledge economy, light touch regulation, manufacturing employment, market bubble, market friction, market fundamentalism, Martin Wolf, Mexican peso crisis / tequila crisis, money market fund, moral hazard, mortgage debt, neoliberal agenda, new economy, open economy, paradox of thrift, pension reform, pensions crisis, price stability, profit maximization, purchasing power parity, quantitative easing, race to the bottom, risk-adjusted returns, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, secular stagnation, Silicon Valley, sovereign wealth fund, the payments system, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, transfer pricing, trickle-down economics, Washington Consensus, working-age population

But an “economic migrant” who sees as the alternative to migration watching his family starve sees things through a very different lens. 15 In this sense, the monetary union is different from trade integration. There, most economists believe that earlier trade agreements have generated small overall gains, though the distributive effects often overwhelm these gains, so that large proportions of the population are worse off. (As we will note, the newer proposed trade agreements, like the monetary union, may not even generate overall benefits.) 16 The so-called ISDS (investor state dispute settlement) allows corporations to sue governments for the passage of any regulation that lowers their expected profits—no matter the extent to which those profits originate by imposing harms on others. See my column with Adam Hersh, “The Trans-Pacific Free-Trade Charade,” Project Syndicate, October 2, 2015, available at https://www.project-syndicate.org/commentary/trans-pacific-partnership-charade-by-joseph-e--stiglitz-and-adam-s--hersh-2015-10. 17 See chapter 8. 18 See the discussion in chapter 1.

., 51–57 single currency and, 45–46 economic rents, 226, 280 economics, politics and, 308–18 economic security, 68 economies of scale, 12, 39, 55, 138 economists, poor forecasting by, 307 education, 20, 76, 344 investment in, 40, 69, 137, 186, 211, 217, 251, 255, 300 electricity, 217 electronic currency, 298–99, 389 electronics payment mechanism, 274–76, 283–84 emigration, 4, 68–69 see also migration employment: central banks and, 8, 94, 97 structural reforms and, 257–60 see also unemployment Employment Act (1946), 148 energy subsidies, 197 Enlightenment, 3, 318–19 environment, 41, 257, 260, 323 equality, 225–26 equilibrium, xviii–xix Erasmus program, 45 Estonia, 90, 331, 346 euro, xiv, 325 adjustments impeded by, 13–14 case for, 35–39 creation of, xii, 5–6, 7, 10, 333 creation of institutions required by, 10–11 divergence and, see divergence divorce of, 272–95, 307 economic integration and, 46–47, 268 as entailing fixed exchange rate, 8, 42–43, 46–47, 86–87, 92, 93, 94, 102, 105, 143, 193, 215–16, 240, 244, 249, 252, 254, 286, 297 as entailing single interest rate, 8, 85–88, 92, 93, 94, 105, 129, 152, 240, 244, 249 and European identification, 38–39 financial instability caused by, 131–32 growth promised by, 235 growth slowed by, 73 hopes for, 34 inequality increased by, xviii interest rates lowered by, 235 internal devaluation of, see internal devaluation literature on, 327–28 as means to end, xix peace and, 38 proponents of, 13 referenda on, 58, 339–40 reforms needed for, xii–xiii, 28–31 risk of, 49–50 weakness of, 224 see also flexible euro Eurobond, 356 euro crisis, xiii, 3, 4, 9 catastrophic consequences of, 11–12 euro-euphoria, 116–17 Europe, 151 free trade area in, 44–45 growth rates in, 63–64, 69, 73–74, 74, 75, 163 military conflicts in, 196 social models of, 21 European Central Bank (ECB), 7, 17, 80, 112–13, 117, 144, 145–73, 274, 313, 362, 368, 380 capture of, 158–59 confidence in, 200–201 corporate bonds bought by, 141 creation of, 8, 85 democratic deficit and, 26, 27 excessive expansion controlled by, 250 flexibility of, 269 funds to Greece cut off by, 59 German challenges to, 117, 164 governance and, 157–63 inequality created by, 154–55 inflation controlled by, 8, 25, 97, 106, 115, 145, 146–50, 151, 163, 165, 169–70, 172, 250, 256, 266 interest rates set by, 85–86, 152, 249, 302, 348 Ireland forced to socialize losses by, 134, 156, 165 new mandate needed by, 256 as political institution, 160–62 political nature of, 153–56 quantitative easing opposed by, 151 quantitative easing undertaken by, 164, 165–66, 170, 171 regulations by, 249, 250 unemployment and, 163 as unrepresentative, 163 European Commission, 17, 58, 161, 313, 332 European Court of Human Rights, 45 European Economic Community (EEC), 6 European Exchange Rate Mechanism (ERM), 30, 335 European Exchange Rate Mechanism II (ERM II), 336 European Free Trade Association, 44 European Free Trade Association Court, 44 European Investment Bank (EIB), 137, 247, 255, 301 European Regional Development Fund, 243 European Stability Mechanism, 23, 246, 357 European Union: budget of, 8, 45, 91 creation of, 4 debt and deficit limits in, 87–88 democratic deficit in, 26–27 economic growth in, 215 GDP of, xiii and lower rates of war, 196 migration in, 90 proposed exit of UK from, 4 stereotypes in, 12 subsidiarity in, 8, 41–42, 263 taxes in, 8, 261 Euro Summit Statement, 373 eurozone: austerity in, see austerity banking union in, see banking union counterfactual in, 235–36 double-dip recessions in, 234–35 Draghi’s speech and, 145 economic integration and, xiv–xx, 23, 39–50, 51–57 as flawed at birth, 7–9 framework for stability of, 244–52 German departure from, 32, 292–93 Greece’s possible exit from, 124 hours worked in, 71–72 lack of fiscal policy in, 152 and move to political integration, xvi, 34, 35, 51–57 Mundell’s work on dangers of, 87 policies of, 15–17 possible breakup of, 29–30 privatization avoided in, 194 saving, 323–26 stagnant GDP in, 12, 65–68, 66, 67 structure of, 8–9 surpluses in, 120–22 theory of, 95–97 unemployment in, 71, 135, 163, 177–78, 181, 331 working-age population of, 70 eurozone, proposed structural reforms for, 239–71 common financial system, see banking union excessive fiscal responsibility, 163 exchange-rate risks, 13, 47, 48, 49–50, 125, 235 exchange rates, 80, 85, 288, 300, 338, 382, 389 of China, 251, 254, 350–51 and competitive devaluation, 105–6 after departure of northern countries, 292–93 of euro, 8, 42–43, 46–47, 86–87, 92, 93, 94, 102, 105, 215–16, 240, 244, 249, 252, 254, 286, 297 flexible, 50, 248, 349 and full employment, 94 of Germany, 254–55, 351 gold and, 344–45 imports and, 86 interest rates and, 86 quantitative easing’s lowering of, 151 real, 105–6 and single currencies, 8, 42–43, 46–47, 86–87, 92, 93, 94, 97–98 stabilizing, 299–301 and trade deficits, 107, 118 expansionary contractions, 95–96, 208–9 exports, 86, 88, 97–99, 98 disappointing performance of, 103–5 external imbalances, 97–98, 101, 109 externalities, 42–43, 121, 153, 301–2 surpluses as, 253 extremism, xx, 4 Fannie Mae, 91 farmers, US, in deflation, xii Federal Deposit Insurance Corporation (FDIC), 91 Federal Reserve, US, 349 alleged independence of, 157 interest rates lowered by, 150 mandate of, 8, 147, 172 money pumped into economy by, 278 quantitative easing used by, 151, 170 reform of, 146 fiat currency, 148, 275 and taxes, 284 financial markets: lobbyists from, 132 reform of, 214, 228–29 short-sighted, 112–13 financial systems: necessity of, xix real economy of, 149 reform of, 257–58 regulations needed by, xix financial transaction system, 275–76 Finland, 16, 81, 122, 126, 292, 296, 331, 343 growth in, 296–97 growth rate of, 75, 76, 234–35 fire departments, 41 firms, 138, 186–87, 245, 248 fiscal balance: and cutting spending, 196–98 tax revenue and, 190–96 Fiscal Compact, 141, 357 fiscal consolidation, 310 fiscal deficits, see deficits, fiscal fiscal policy, 148, 245, 264 in center of macro-stabilization, 251 countercyclical, 244 in EU, 8 expansionary, 254–55 stabilization of, 250–52 fiscal prudence, 15 fiscal responsibility, 163 flexibility, 262–63, 269 flexible euro, 30–31, 272, 296–305, 307 cooperation needed for, 304–5 food prices, 169 forbearance, 130–31 forecasts, 307 foreclosure proposal, 180 foreign ownership, privatization and, 195 forestry, 81 France, 6, 14, 16, 114, 120, 141, 181–82, 331, 339–40, 343 banks of, 202, 203, 231, 373 corporate income tax in, 189–90 euro creation regretted in, 340 European Constitution referendum of, 58 extreme right in, xi growth in, 247 Freddie Mac, 91 Freefall (Stiglitz), 264, 335 free mobility of labor, xiv, 26, 40, 125, 134–36, 142–44, 242 Friedman, Milton, 151, 152–53, 167, 339 full employment, 94–97, 379 G-20, 121 gas: import of, 230 from Russia, 37, 81, 93 Gates Foundation, 276 GDP-indexed bonds, 267 German bonds, 114, 323 German Council of Economic Experts, 179, 365 Germany, xxi, 14, 30, 65, 108, 114, 141, 181–82, 207, 220, 286, 307, 331, 343, 346, 374 austerity pushed by, 186, 232 banks of, 202, 203, 231–32, 373 costs to taxpayers of, 184 as creditor, 140, 187, 267 debt collection by, 117 debt in, 105 and debt restructuring, 205, 311 in departure from eurozone, 32, 292–93 as dependent on Russian gas, 37 desire to leave eurozone, 314 ECB criticized by, 164 EU economic practices controlled by, 17 euro creation regretted in, 340 exchange rate of, 254–55, 351 failure of, 13, 78–79 flexible exchange of, 304 GDP of, xviii, 92 in Great Depression, 187 growing poverty in, 79 growth of, 78, 106, 247 hours worked per worker in, 72 inequality in, 79, 333 inflation in, 42, 338, 358 internal solidarity of, 334 lack of alternative to euro seen by, 11 migrants to, 320–21, 334–35, 393 minimum wage in, 42, 120, 254 neoliberalism in, 10 and place-based debt, 136 productivity in, 71 programs designed by, 53, 60, 61, 202, 336, 338 reparations paid by, 187 reunification of, 6 rules as important to, 57, 241–42, 262 share of global employment in, 224 shrinking working-age population of, 70, 78–79 and Stability and Growth Pact, 245 and structural reforms, 19–20 “there is no alternative” and, 306, 311–12 trade surplus of, 117, 118–19, 120, 139, 253, 293, 299, 350–52, 381–82, 391 “transfer union” rejected by, 22 US loans to, 187 victims blamed by, 9, 15–17, 177–78, 309 wages constrained by, 41, 42–43 wages lowered in, 105, 333 global financial crisis, xi, xiii–xiv, 3, 12, 17, 24, 67, 73, 75, 114, 124, 146, 148, 274, 364, 387 and central bank independence, 157–58 and confidence, 280 and cost of failure of financial institutions, 131 lessons of, 249 monetary policy in, 151 and need for structural reform, 214 originating in US, 65, 68, 79–80, 112, 128, 296, 302 globalization, 51, 321–23 and diminishing share of employment in advanced countries, 224 economic vs. political, xvii failures of, xvii Globalization and Its Discontents (Stig-litz), 234, 335, 369 global savings glut, 257 global secular stagnation, 120 global warming, 229–30, 251, 282, 319 gold, 257, 275, 277, 345 Goldman Sachs, 158, 366 gold standard, 148, 291, 347, 358 in Great Depression, xii, 100 goods: free movement of, 40, 143, 260–61 nontraded, 102, 103, 169, 213, 217, 359 traded, 102, 103, 216 Gordon, Robert, 251 governance, 157–63, 258–59 government spending, trade deficits and, 107–8 gravity principle, 124, 127–28 Great Depression, 42, 67, 105, 148, 149, 168, 313 Friedman on causes of, 151 gold standard in, xii, 100 Great Malaise, 264 Greece, 14, 30, 41, 64, 81, 100, 117, 123, 142, 160, 177, 265–66, 278, 307, 331, 343, 366, 367–68, 374–75, 386 austerity opposed by, 59, 60–62, 69–70, 207–8, 392 balance of payments, 219 banks in, 200–201, 228–29, 231, 270, 276, 367, 368 blaming of, 16, 17 bread in, 218, 230 capital controls in, 390 consumption tax and, 193–94 counterfactual scenario of, 80 current account surplus of, 287–88 and debt restructuring, 205–7 debt-to-GDP ratio of, 231 debt write-offs in, 291 decline in labor costs in, 56, 103 ECB’s cutting of funds to, 59 economic growth in, 215, 247 emigration from, 68–69 fiscal deficits in, 16, 186, 215, 233, 285–86, 289 GDP of, xviii, 183, 309 hours worked per worker in, 72 inequality in, 72 inherited debt in, 134 lack of faith in democracy in, 312–13 living standards in, 216 loans in, 127 loans to, 310 migrants and, 320–21 milk in, 218, 223, 230 new currency in, 291, 300 oligarchs in, 16, 227 output per working-age person in, 70–71 past downturns in, 235–36 pensions in, 16, 78, 188, 197–98, 226 pharmacies in, 218–20 population decline in, 69, 89 possible exit from eurozone of, 124, 197, 273, 274, 275 poverty in, 226, 261, 376 primary surplus of, 187–88, 312 privatization in, 55, 195–96 productivity in, 71, 342 programs imposed on, xv, 21, 27, 60–62, 140, 155–56, 179–80, 181, 182–83, 184–85, 187–88, 190–93, 195–96, 197–98, 202–3, 205, 206, 214–16, 218–23, 225–28, 229, 230, 231, 233–34, 273, 278, 308, 309–11, 312, 315–16, 336, 338 renewable energy in, 193, 229 social capital destroyed in, 78 sovereign spread of, 200 spread in, 332 and structural reforms, 20, 70, 188, 191 tax revenue in, 16, 142, 192, 227, 367–368 tools lacking for recovery of, 246 tourism in, 192, 286 trade deficits in, 81, 194, 216–17, 222, 285–86 unemployment in, xi, 71, 236, 267, 332, 338, 342 urgency in, 214–15 victim-blaming of, 309–11 wages in, 216–17 youth unemployment in, xi, 332 Greek bonds, 116, 126 interest rates on, 4, 114, 181–82, 201–2, 323 restructuring of, 206–7 green investments, 260 Greenspan, Alan, 251, 359, 363 Grexit, see Greece, possible exit from eurozone of grocery stores, 219 gross domestic product (GDP), xvii decline in, 3 measurement of, 341 Growth and Stability Pact, 87 hedge funds, 282, 363 highways, 41 Hitler, Adolf, 338, 358 Hochtief, 367–68 Hoover, Herbert, 18, 95 human capital, 78, 137 human rights, 44–45, 319 Hungary, 46, 331, 338 hysteresis, 270 Iceland, 44, 111, 307, 354–55 banks in, 91 capital controls in, 390 ideology, 308–9, 315–18 imports, 86, 88, 97–99, 98, 107 incentives, 158–59 inclusive capitalism, 317 income, unemployment and, 77 income tax, 45 Independent Commission for the Reform of International Corporate Taxation, 376–377 Indonesia, 113, 230–31, 314, 350, 364, 378 industrial policies, 138–39, 301 and restructuring, 217, 221, 223–25 Industrial Revolution, 3, 224 industry, 89 inequality, 45, 72–73, 333 aggregate demand lowered by, 212 created by central banks, 154 ECB’s creation of, 154–55 economic performance affected by, xvii euro’s increasing of, xviii growth’s lowering of, 212 hurt by collective action, 338 increased by neoliberalism, xviii increase in, 64, 154–55 inequality in, 72, 212 as moral issue, xviii in Spain, 72, 212, 225–26 and tax harmonization, 260–61 and tax system, 191 inflation, 277, 290, 314, 388 in aftermath of tech bubble, 251 bonds and, 161 central banks and, 153, 166–67 consequences of fixation on, 149–50, 151 costs of, 270 and debt monetization, 42 ECB and, 8, 25, 97, 106, 115, 145, 146–50, 151, 163, 165, 169–70, 172, 255, 256, 266 and food prices, 169 in Germany, 42, 338, 358 interest rates and, 43–44 in late 1970s, 168 and natural rate hypothesis, 172–73 political decisions and, 146 inflation targeting, 157, 168–70, 364 information, 335 informational capital, 77 infrastructure, xvi–xvii, 47, 137, 186, 211, 255, 258, 265, 268, 300 inheritance tax, 368 inherited debt, 134 innovation, 138 innovation economy, 317–18 inputs, 217 instability, xix institutions, 93, 247 poorly designed, 163–64 insurance, 355–356 deposit, see deposit insurance mutual, 247 unemployment, 91, 186, 246, 247–48 integration, 322 interest rates, 43–44, 86, 282, 345, 354 in aftermath of tech bubble, 251 ECB’s determination of, 85–86, 152, 249, 302, 348 and employment, 94 euro’s lowering of, 235 Fed’s lowering of, 150 on German bonds, 114 on Greek bonds, 4, 114, 181–82 on Italian bonds, 114 in late 1970s, 168 long-term, 151, 200 negative, 316, 348–49 quantitative easing and, 151, 170 short-term, 249 single, eurozone’s entailing of, 8, 85–88, 92, 93, 94, 105, 129, 152, 240, 244, 249 on Spanish bonds, 114, 199 spread in, 332 stock prices increased by, 264 at zero lower bound, 106 intermediation, 258 internal devaluation, 98–109, 122, 126, 220, 255, 388 supply-side effects of, 99, 103–4 International Commission on the Measurement of Economic Performance and Social Progress, 79, 341 International Labor Organization, 56 International Monetary Fund (IMF), xv, xvii, 10, 17, 18, 55, 61, 65–66, 96, 111, 112–13, 115–16, 119, 154, 234, 289, 309, 316, 337, 349, 350, 370, 371, 381 and Argentine debt, 206 conditions of, 201 creation of, 105 danger of high taxation warnings of, 190 debt reduction pushed by, 95 and debt restructuring, 205, 311 and failure to restore credit, 201 global imbalances discussed by, 252 and Greek debts, 205, 206, 310–11 on Greek surplus, 188 and Indonesian crisis, 230–31, 364 on inequality’s lowering of growth, 212–13 Ireland’s socialization of losses opposed by, 156–57 mistakes admitted by, 262, 312 on New Mediocre, 264 Portuguese bailout of, 178–79 tax measures of, 185 investment, 76–77, 111, 189, 217, 251, 264, 278, 367 confidence and, 94 divergence in, 136–38 in education, 137, 186, 211, 217, 251, 255, 300 infrastructure in, xvi–xvii, 47, 137, 186, 211, 255, 258, 265, 268, 300 lowered by disintermediation, 258 public, 99 real estate, 199 in renewable energy, 229–30 return on, 186, 245 stimulation of, 94 in technology, 137, 138–39, 186, 211, 217, 251, 258, 265, 300 investor state dispute settlement (ISDS), 393–94 invisible hand, xviii Iraq, refugees from, 320 Iraq War, 36, 37 Ireland, 14, 16, 44, 113, 114–15, 122, 178, 234, 296, 312, 331, 339–40, 343, 362 austerity opposed in, 207 debt of, 196 emigrants from, 68–69 GDP of, 18, 231 growth in, 64, 231, 247, 340 inherited debt in, 134 losses socialized in, 134, 156–57, 165 low debt in, 88 real estate bubble in, 108, 114–15, 126 surplus in, 17, 88 taxes in, 142–43, 376 trade deficits in, 119 unemployment in, 178 irrational exuberance, 14, 114, 116–17, 149, 334, 359 ISIS, 319 Italian bonds, 114, 165, 323 Italy, 6, 14, 16, 120, 125, 331, 343 austerity opposed in, 59 GDP per capita in, 352 growth in, 247 sovereign spread of, 200 Japan, 151, 333, 342 bubble in, 359 debt of, 202 growth in, 78 quantitative easing used by, 151, 359 shrinking working-age population of, 70 Java, unemployment on, 230 jobs gap, 120 Juncker, Jean-Claude, 228 Keynes, John Maynard, 118, 120, 172, 187, 351 convergence policy suggested by, 254 Keynesian economics, 64, 95, 108, 153, 253 King, Mervyn, 390 knowledge, 137, 138–39, 337–38 Kohl, Helmut, 6–7, 337 krona, 287 labor, marginal product of, 356 labor laws, 75 labor markets, 9, 74 friction in, 336 reforms of, 214, 221 labor movement, 26, 40, 125, 134–36, 320 austerity and, 140 capital flows and, 135 see also migration labor rights, 56 Lamers, Karl, 314 Lancaster, Kelvin, 27 land tax, 191 Latin America, 10, 55, 95, 112, 202 lost decade in, 168 Latvia, 331, 346 GDP of, 92 law of diminishing returns, 40 learning by doing, 77 Lehman Brothers, 182 lender of last resort, 85, 362, 368 lending, 280, 380 discriminatory, 283 predatory, 274, 310 lending rates, 278 leverage, 102 Lichtenstein, 44 Lipsey, Richard, 27 liquidity, 201, 264, 278, 354 ECB’s expansion of, 256 lira, 14 Lithuania, 331 living standards, 68–70 loans: contraction of, 126–27, 246 nonperforming, 241 for small and medium-size businesses, 246–47 lobbyists, from financial sector, 132 location, 76 London interbank lending rate (LIBOR), 131, 355 Long-Term Refinancing Operation, 360–361 Lucas, Robert, xi Luxembourg, 6, 94, 142–43, 331, 343 as tax avoidance center, 228, 261 luxury cars, 265 Maastricht Treaty, xiii, 6, 87, 115, 146, 244, 298, 339, 340 macro-prudential regulations, 249 Malta, 331, 340 manufacturing, 89, 223–24 market failures, 48–49, 86, 148, 149, 335 rigidities, 101 tax policy’s correction of, 193 market fundamentalism, see neoliberalism market irrationality, 110, 125–26, 149 markets, limitations of, 10 Meade, James, 27 Medicaid, 91 medical care, 196 Medicare, 90, 91 Mellon, Andrew, 95 Memorandum of Agreement, 233–34 Merkel, Angela, 186 Mexico, 202, 369 bailout of, 113 in NAFTA, xiv Middle East, 321 migrant crisis, 44 migration, 26, 40, 68–69, 90, 125, 320–21, 334–35, 342, 356, 393 unemployment and, 69, 90, 135, 140 see also labor movement military power, 36–37 milk, 218, 223, 230 minimum wage, 42, 120, 254, 255, 351 mining, 257 Mississippi, GDP of, 92 Mitsotakis, Constantine, 377–78 Mitsotakis, Kyriakos, 377–78 Mitterrand, François, 6–7 monetarism, 167–68, 169, 364 monetary policy, 24, 85–86, 148, 264, 325, 345, 364 as allegedly technocratic, 146, 161–62 conservative theory of, 151, 153 in early 1980s US, 168, 210 flexibility of, 244 in global financial crisis, 151 political nature of, 146, 153–54 recent developments in theory of, 166–73 see also interest rates monetary union, see single currencies money laundering, 354 monopolists, privatization and, 194 moral hazard, 202, 203 mortgage rates, 170 mortgages, 302 multinational chains, 219 multinational development banks, 137 multinationals, 127, 223, 376 multipliers, 211–12, 248 balanced-budget, 188–90, 265 Mundell, Robert, 87 mutual insurance, 247 mutualization of debt, 242–43, 263 national development banks, 137–38 natural monopolies, 55 natural rate hypothesis, 172 negative shocks, 248 neoliberalism, xvi, 24–26, 33, 34, 98–99, 109, 257, 265, 332–33, 335, 354 on bubbles, 381 and capital flows, 28 and central bank independence, 162–63 in Germany, 10 inequality increased by, xviii low inflation desired by, 147 recent scholarship against, 24 Netherlands, 6, 44, 292, 331, 339–40, 343 European Constitution referendum of, 58 New Democracy Party, Greek, 61, 185, 377–78 New Mediocre, 264 New World, 148 New Zealand, 364 Nokia, 81, 234, 297 nonaccelerating inflation rate of unemployment (NAIRU), 379–80 nonaccelerating wage rate of unemployment (NAWRU), 379–80 nongovernmental organizations (NGOs), 276 nonperforming loans, 241 nontraded goods sector, 102, 103, 169, 213, 217, 359 North American Free Trade Agreement (NAFTA), xiv North Atlantic Treaty Organization (NATO), 196 Norway, 12, 44, 307 referendum on joining EU, 58 nuclear deterrence, 38 Obama, Barack, 319 oil, import of, 230 oil firms, 36 oil prices, 89, 168, 259, 359 oligarchs: in Greece, 16, 227 in Russia, 280 optimal currency area, 345 output, 70–71, 111 after recessions, 76 Outright Monetary Transactions program, 361 overregulate, 132 Oxfam, 72 panic of 1907, 147 Papandreou, Andreas, 366 Papandreou, George, xiv, 60–61, 184, 185, 220, 221, 226–27, 309, 312, 366, 373 reform of banks suggested by, 229 paradox of thrift, 120 peace, 34 pensions, 9, 16, 78, 177, 188, 197–98, 226, 276, 370 People’s Party, Portugal, 392 periphery, 14, 32, 171, 200, 296, 301, 318 see also specific countries peseta, 14 pharmacies, 218–20 Phishing for Phools (Akerlof and Shiller), 132 physical capital, 77–78 Pinochet, Augusto, 152–53 place-based debt, 134, 242 Pleios, George, 377 Poland, 46, 333, 339 assistance to, 243 in Iraq War, 37 police, 41 political integration, xvi, 34, 35 economic integration vs., 51–57 politics, economics and, 308–18 pollution, 260 populism, xx Portugal, 14, 16, 64, 177, 178, 331, 343, 346 austerity opposed by, 59, 207–8, 315, 332, 392 GDP of, 92 IMF bailout of, 178–79 loans in, 127 poverty in, 261 sovereign spread of, 200 Portuguese bonds, 179 POSCO, 55 pound, 287, 335, 346 poverty, 72 in Greece, 226, 261 in Portugal, 261 in Spain, 261 predatory lending, 274, 310 present discount value, 343 Price of Inequality, The (Stiglitz), 154 prices, 19, 24 adjustment of, 48, 338, 361 price stability, 161 primary deficit, 188, 389 primary surpluses, 187–88 private austerity, 126–27, 241–42 private sector involvement, 113 privatization, 55, 194–96, 369 production costs, 39, 43, 50 production function, 343 productivity, 71, 332, 348 in manufacturing, 223–24 after recessions, 76–77 programs, 17–18 Germany’s design of, 53, 60, 61, 187–88, 205, 336, 338 imposed on Greece, xv, 21, 27, 60–62, 140, 155–56, 179–80, 181, 182–83, 184–85, 187–88, 190–93, 195–96, 197–98, 202–3, 205, 206, 214–16, 218–23, 225–28, 229, 230, 231, 233–34, 273, 278, 308, 309–11, 312, 315–16, 336, 338 of Troika, 17–18, 21, 155–57, 179–80, 181, 182–83, 184–85, 187–93, 196, 202, 205, 207, 208, 214–16, 217, 218–23, 225–28, 229, 231, 233–34, 273, 278, 308, 309–11, 312, 313, 314, 315–16, 323–24, 346, 366, 379, 392 progressive automatic stabilizers, 244 progressive taxes, 248 property rights, 24 property taxes, 192–93, 227 public entities, 195 public goods, 40, 337–38 quantitative easing (QE), 151, 164, 165–66, 170–72, 264, 359, 361, 386 railroads, 55 Reagan, Ronald, 168, 209 real estate bubble, 25, 108, 109, 111, 114–15, 126, 148, 172, 250, 301, 302 cause of, 198 real estate investment, 199 real exchange rate, 105–6, 215–16 recessions, recovery from, 94–95 recovery, 76 reform, 75 theories of, 27–28 regulations, 24, 149, 152, 162, 250, 354, 355–356, 378 and Bush administration, 250–51 common, 241 corporate opposition to, xvi difficulties in, 132–33 of finance, xix forbearance on, 130–31 importance of, 152–53 macro-prudential, 249 in race to bottom, 131–34 Reinhardt, Carmen, 210 renewable energy, 193, 229–30 Republican Party, US, 319 research and development (R&D), 77, 138, 217, 251, 317–18 Ricardo, David, 40, 41 risk, 104, 153, 285 excessive, 250 risk markets, 27 Rogoff, Kenneth, 210 Romania, 46, 331, 338 Royal Bank of Scotland, 355 rules, 57, 241–42, 262, 296 Russia, 36, 264, 296 containment of, 318 economic rents in, 280 gas from, 37, 81, 93, 378 safety nets, 99, 141, 223 Samaras, Antonis, 61, 309, 377 savings, 120 global, 257 savings and loan crisis, 360 Schäuble, Wolfgang, 57, 220, 314, 317 Schengen area, 44 schools, 41, 196 Schröeder, Gerhard, 254 self-regulation, 131, 159 service sector, 224 shadow banking system, 133 shareholder capitalism, 21 Shiller, Rob, 132, 359 shipping taxes, 227, 228 short-termism, 77, 258–59 Silicon Valley, 224 silver, 275, 277 single currencies: conflicts and, 38 as entailing fixed exchange rates, 8, 42–43, 46–47, 86–87, 92, 93, 94, 97–98 external imbalances and, 97–98 and financial crises, 110–18 integration and, 45–46, 50 interest rates and, 8, 86, 87–88, 92, 93, 94 Mundell’s work on, 87 requirements for, 5, 52–53, 88–89, 92–94, 97–98 and similarities among countries, 15 trade integration vs., 393 in US, 35, 36, 88, 89–92 see also euro single-market principle, 125–26, 231 skilled workers, 134–35 skills, 77 Slovakia, 331 Slovenia, 331 small and medium-sized enterprises (SMEs), 127, 138, 171, 229 small and medium-size lending facility, 246–47, 300, 301, 382 Small Business Administration, 246 small businesses, 153 Smith, Adam, xviii, 24, 39–40, 41 social cohesion, 22 Social Democratic Party, Portugal, 392 social program, 196 Social Security, 90, 91 social solidarity, xix societal capital, 77–78 solar energy, 193, 229 solidarity fund, 373 solidarity fund for stabilization, 244, 254, 264, 301 Soros, George, 390 South Dakota, 90, 346 South Korea, 55 bailout of, 113 sovereign risk, 14, 353 sovereign spreads, 200 sovereign wealth funds, 258 Soviet Union, 10 Spain, 14, 16, 114, 177, 178, 278, 331, 335, 343 austerity opposed by, 59, 207–8, 315 bank bailout of, 179, 199–200, 206 banks in, 23, 186, 199, 200, 242, 270, 354 debt of, 196 debt-to-GDP ratio of, 231 deficits of, 109 economic growth in, 215, 231, 247 gold supply in, 277 independence movement in, xi inequality in, 72, 212, 225–26 inherited debt in, 134 labor reforms proposed for, 155 loans in, 127 low debt in, 87 poverty in, 261 real estate bubble in, 25, 108, 109, 114–15, 126, 198, 301, 302 regional independence demanded in, 307 renewable energy in, 229 sovereign spread of, 200 spread in, 332 structural reform in, 70 surplus in, 17, 88 threat of breakup of, 270 trade deficits in, 81, 119 unemployment in, 63, 161, 231, 235, 332, 338 Spanish bonds, 114, 199, 200 spending, cutting, 196–98 spread, 332 stability, 147, 172, 261, 301, 364 automatic, 244 bubble and, 264 central banks and, 8 as collective action problem, 246 solidarity fund for, 54, 244, 264 Stability and Growth Pact, 245 standard models, 211–13 state development banks, 138 steel companies, 55 stock market, 151 stock market bubble, 200–201 stock market crash (1929), 18, 95 stock options, 259, 359 structural deficit, 245 Structural Funds, 243 structural impediments, 215 structural realignment, 252–56 structural reforms, 9, 18, 19–20, 26–27, 214–36, 239–71, 307 from austerity to growth, 263–65 banking union, 241–44 and climate change, 229–30 common framework for stability, 244–52 counterproductive, 222–23 debt restructuring and, 265–67 of finance, 228–29 full employment and growth, 256–57 in Greece, 20, 70, 188, 191, 214–36 growth and, 232–35 shared prosperity and, 260–61 and structural realignment, 252–56 of trade deficits, 216–17 trauma of, 224 as trivial, 214–15, 217–20, 233 subsidiarity, 8, 41–42, 263 subsidies: agricultural, 45, 197 energy, 197 sudden stops, 111 Suharto, 314 suicide, 82, 344 Supplemental Nutrition Assistance Program (SNAP), 91 supply-side effects: in Greece, 191, 215–16 of investments, 367 surpluses, fiscal, 17, 96, 312, 379 primary, 187–88 surpluses, trade, see trade surpluses “Swabian housewife,” 186, 245 Sweden, 12, 46, 307, 313, 331, 335, 339 euro referendum of, 58 refugees into, 320 Switzerland, 44, 307 Syria, 321, 342 Syriza party, 309, 311, 312–13, 315, 377 Taiwan, 55 tariffs, 40 tax avoiders, 74, 142–43, 227–28, 261 taxes, 142, 290, 315 in Canada, 191 on capital, 356 on carbon, 230, 260, 265, 368 consumption, 193–94 corporate, 189–90, 227, 251 cross-border, 319, 384 and distortions, 191 in EU, 8, 261 and fiat currency, 284 and free mobility of goods and capital, 260–61 in Greece, 16, 142, 192, 193–94, 227, 367–68 ideal system for, 191 IMF’s warning about high, 190 income, 45 increase in, 190–94 inequality and, 191 inheritance, 368 land, 191 on luxury cars, 265 progressive, 248 property, 192–93, 227 Reagan cuts to, 168, 210 shipping, 227, 228 as stimulative, 368 on trade surpluses, 254 value-added, 190, 192 tax evasion, in Greece, 190–91 tax laws, 75 tax revenue, 190–96 Taylor, John, 169 Taylor rule, 169 tech bubble, 250 technology, 137, 138–39, 186, 211, 217, 251, 258, 265, 300 and new financial system, 274–76, 283–84 telecoms, 55 Telmex, 369 terrorism, 319 Thailand, 113 theory of the second best, 27–28, 48 “there is no alternative” (TINA), 306, 311–12 Tocqueville, Alexis de, xiii too-big-to-fail banks, 360 tourism, 192, 286 trade: and contractionary expansion, 209 US push for, 323 trade agreements, xiv–xvi, 357 trade balance, 81, 93, 100, 109 as allegedly self-correcting, 98–99, 101–3 and wage flexibility, 104–5 trade barriers, 40 trade deficits, 89, 139 aggregate demand weakened by, 111 chit solution to, 287–88, 290, 299–300, 387, 388–89 control of, 109–10, 122 with currency pegs, 110 and fixed exchange rates, 107–8, 118 and government spending, 107–8, 108 of Greece, 81, 194, 215–16, 222, 285–86 structural reform of, 216–17 traded goods, 102, 103, 216 trade integration, 393 trade surpluses, 88, 118–21, 139–40, 350–52 discouragement of, 282–84, 299–300 of Germany, 118–19, 120, 139, 253, 293, 299, 350–52, 381–82, 391 tax on, 254, 351, 381–82 Transatlantic Trade and Investment Partnership, xv, 323 transfer price system, 376 Trans-Pacific Partnership, xv, 323 Treasury bills, US, 204 Trichet, Jean-Claude, 100–101, 155, 156, 164–65, 251 trickle-down economics, 362 Troika, 19, 20, 26, 55, 56, 58, 60, 69, 99, 101–3, 117, 119, 135, 140–42, 178, 179, 184, 195, 274, 294, 317, 362, 370–71, 373, 376, 377, 386 banks weakened by, 229 conditions of, 201 discretion of, 262 failure to learn, 312 Greek incomes lowered by, 80 Greek loan set up by, 202 inequality created by, 225–26 poor forecasting of, 307 predictions by, 249 primary surpluses and, 187–88 privatization avoided by, 194 programs of, 17–18, 21, 155–57, 179–80, 181, 182–83, 184–85, 187–93, 196, 197–98, 202, 204, 205, 207, 208, 214–16, 217, 218–23, 225–28, 229, 231, 233–34, 273, 278, 308, 309–11, 312, 313, 314, 315–16, 323–24, 348, 366, 379, 392 social contract torn up by, 78 structural reforms imposed by, 214–16, 217, 218–23, 225–38 tax demand of, 192 and tax evasion, 367 see also European Central Bank (ECB); European Commission; International Monetary Fund (IMF) trust, xix, 280 Tsipras, Alexis, 61–62, 221, 273, 314 Turkey, 321 UBS, 355 Ukraine, 36 unemployment, 3, 64, 68, 71–72, 110, 111, 122, 323, 336, 342 as allegedly self-correcting, 98–101 in Argentina, 267 austerity and, 209 central banks and, 8, 94, 97, 106, 147 ECB and, 163 in eurozone, 71, 135, 163, 177–78, 181, 331 and financing investments, 186 in Finland, 296 and future income, 77 in Greece, xi, 71, 236, 267, 331, 338, 342 increased by capital, 264 interest rates and, 43–44 and internal devaluation, 98–101, 104–6 migration and, 69, 90, 135, 140 natural rate of, 172–73 present-day, in Europe, 210 and rise of Hitler, 338, 358 and single currency, 88 in Spain, 63, 161, 231, 235, 332, 338 and structural reforms, 19 and trade deficits, 108 in US, 3 youth, 3, 64, 71 unemployment insurance, 91, 186, 246, 247–48 UNICEF, 72–73 unions, 101, 254, 335 United Kingdom, 14, 44, 46, 131, 307, 331, 332, 340 colonies of, 36 debt of, 202 inflation target set in, 157 in Iraq War, 37 light regulations in, 131 proposed exit from EU by, 4, 270 United Nations, 337, 350, 384–85 creation of, 38 and lower rates of war, 196 United States: banking system in, 91 budget of, 8, 45 and Canada’s 1990 expansion, 209 Canada’s free trade with, 45–46, 47 central bank governance in, 161 debt-to-GDP of, 202, 210–11 financial crisis originating in, 65, 68, 79–80, 128, 296, 302 financial system in, 228 founding of, 319 GDP of, xiii Germany’s borrowing from, 187 growing working-age population of, 70 growth in, 68 housing bubble in, 108 immigration into, 320 migration in, 90, 136, 346 monetary policy in financial crisis of, 151 in NAFTA, xiv 1980–1981 recessions in, 76 predatory lending in, 310 productivity in, 71 recovery of, xiii, 12 rising inequality in, xvii, 333 shareholder capitalism of, 21 Small Business Administration in, 246 structural reforms needed in, 20 surpluses in, 96, 187 trade agenda of, 323 unemployment in, 3, 178 united currency in, 35, 36, 88, 89–92 United States bonds, 350 unskilled workers, 134–35 value-added tax, 190, 192 values, 57–58 Varoufakis, Yanis, 61, 221, 309 velocity of circulation, 167 Venezuela, 371 Versaille, Treaty of, 187 victim blaming, 9, 15–17, 177–78, 309–11 volatility: and capital market integration, 28 in exchange rates, 48–49 Volcker, Paul, 157, 168 wage adjustments, 100–101, 103, 104–5, 155, 216–17, 220–22, 338, 361 wages, 19, 348 expansionary policies on, 284–85 Germany’s constraining of, 41, 42–43 lowered in Germany, 105, 333 wage stagnation, in Germany, 13 war, change in attitude to, 38, 196 Washington Consensus, xvi Washington Mutual, 91 wealth, divergence in, 139–40 Weil, Jonathan, 360 welfare, 196 West Germany, 6 Whitney, Meredith, 360 wind energy, 193, 229 Wolf, Martin, 385 worker protection, 56 workers’ bargaining rights, 19, 221, 255 World Bank, xv, xvii, 10, 61, 337, 357, 371 World Trade Organization, xiv youth: future of, xx–xxi unemployment of, 3, 64, 71 Zapatero, José Luis Rodríguez, xiv, 155, 362 zero lower bound, 106 ALSO BY JOSEPH E.


pages: 370 words: 102,823

Rethinking Capitalism: Economics and Policy for Sustainable and Inclusive Growth by Michael Jacobs, Mariana Mazzucato

balance sheet recession, banking crisis, basic income, Bernie Sanders, Bretton Woods, business climate, business cycle, Carmen Reinhart, central bank independence, collaborative economy, complexity theory, conceptual framework, corporate governance, corporate social responsibility, creative destruction, credit crunch, Credit Default Swap, crony capitalism, David Ricardo: comparative advantage, decarbonisation, deindustrialization, dematerialisation, Detroit bankruptcy, double entry bookkeeping, Elon Musk, endogenous growth, energy security, eurozone crisis, factory automation, facts on the ground, fiat currency, Financial Instability Hypothesis, financial intermediation, forward guidance, full employment, G4S, Gini coefficient, Growth in a Time of Debt, Hyman Minsky, income inequality, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), Internet of things, investor state dispute settlement, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, knowledge economy, labour market flexibility, low skilled workers, Martin Wolf, mass incarceration, Mont Pelerin Society, neoliberal agenda, Network effects, new economy, non-tariff barriers, paradox of thrift, Paul Samuelson, price stability, private sector deleveraging, quantitative easing, QWERTY keyboard, railway mania, rent-seeking, road to serfdom, savings glut, Second Machine Age, secular stagnation, shareholder value, sharing economy, Silicon Valley, Steve Jobs, the built environment, The Great Moderation, The Spirit Level, Thorstein Veblen, too big to fail, total factor productivity, transaction costs, trickle-down economics, universal basic income, very high income

Assume that a neoliberal government declared its health service to be tradable within TTIP, only to be followed by a social democratic one that wanted to keep health provision public. TTIP would give overseas health firms grounds to sue the government because that policy change had damaged their investments. The proposal in TTIP that such claims for redress would be heard not through normal law courts with established judges, but through arbitration panels composed solely of corporate lawyers (a procedure called Investor–State Dispute Settlement (ISDS)), makes this particularly controversial. It reinforces the sense that corporate power is effectively challenging the authority of governments to decide how public services should be provided.17 Conclusion: capitalism and democracy We have already seen how the reality of corporate neoliberalism presents a challenge to the theoretical idea of an efficiently functioning market economy, especially the idea that such an economy is free from entanglements between firms and governments.


pages: 338 words: 104,684

The Deficit Myth: Modern Monetary Theory and the Birth of the People's Economy by Stephanie Kelton

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Affordable Care Act / Obamacare, American Society of Civil Engineers: Report Card, Asian financial crisis, bank run, Bernie Madoff, Bernie Sanders, blockchain, Bretton Woods, business cycle, capital controls, central bank independence, collective bargaining, COVID-19, Covid-19, currency manipulation / currency intervention, currency peg, David Graeber, David Ricardo: comparative advantage, decarbonisation, deindustrialization, discrete time, Donald Trump, eurozone crisis, fiat currency, floating exchange rates, Food sovereignty, full employment, Gini coefficient, global reserve currency, global supply chain, Hyman Minsky, income inequality, inflation targeting, Intergovernmental Panel on Climate Change (IPCC), investor state dispute settlement, Isaac Newton, Jeff Bezos, liquidity trap, Mahatma Gandhi, manufacturing employment, market bubble, Mason jar, mortgage debt, Naomi Klein, new economy, New Urbanism, Nixon shock, obamacare, open economy, Paul Samuelson, Ponzi scheme, price anchoring, price stability, pushing on a string, quantitative easing, race to the bottom, reserve currency, Richard Florida, Ronald Reagan, shareholder value, Silicon Valley, trade liberalization, urban planning, working-age population, Works Progress Administration, yield curve, zero-sum game

Although many US companies picked up their manufacturing jobs and took them south of the border, the influx of US farm products into Mexico, especially corn, displaced millions of rural Mexican workers. And that drove many of them to cross the border for jobs in the United States.38 This brings us to the question of so-called free-trade agreements, which will need to be rethought from the ground up. Right now, those agreements favor wealthy investors around the world, while leaving workers—not to mention the environment—behind. Many current trade deals include investor-state dispute settlement (ISDS) mechanisms, for example. These mechanisms provide corporations with a parallel system of justice that allows them to sue democratically elected governments for adopting policies—restrictions, regulations, or other protections—that the corporation views as a threat to its bottom line. Instead of handling these disputes in domestic courts, ISDS relies on private arbitration before an international body that is seen as more favorable to corporate interests.


pages: 388 words: 125,472

The Establishment: And How They Get Away With It by Owen Jones

anti-communist, Asian financial crisis, bank run, battle of ideas, Big bang: deregulation of the City of London, bonus culture, Boris Johnson, Bretton Woods, British Empire, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, centre right, citizen journalism, collapse of Lehman Brothers, collective bargaining, don't be evil, Edward Snowden, Etonian, eurozone crisis, falling living standards, Francis Fukuyama: the end of history, full employment, G4S, glass ceiling, hiring and firing, housing crisis, inflation targeting, Intergovernmental Panel on Climate Change (IPCC), investor state dispute settlement, James Dyson, laissez-faire capitalism, light touch regulation, market fundamentalism, mass immigration, Monroe Doctrine, Mont Pelerin Society, moral hazard, Neil Kinnock, night-watchman state, Northern Rock, Occupy movement, offshore financial centre, old-boy network, open borders, plutocrats, Plutocrats, popular capitalism, profit motive, quantitative easing, race to the bottom, rent control, road to serfdom, Ronald Reagan, shareholder value, short selling, sovereign wealth fund, stakhanovite, statistical model, The Wealth of Nations by Adam Smith, transfer pricing, union organizing, unpaid internship, Washington Consensus, wealth creators, Winter of Discontent

They are constraints on what elected British governments can do, which help reinforce Establishment mantras. A very unsexy, technical-sounding treaty is a case in point. At the end of 2013 the proposed Transatlantic Trade and Investment Partnership (TTIP) between the European Union and the US received virtually no media attention, and certainly no political condemnation. It included a so-called ‘investor-state dispute settlement’, a device that could allow multinationals to sue elected governments to get their own way in a process administered by corporate lawyers and bypassing local judicial systems. According to the Democracy Centre, this device ‘effectively operates as a privatized justice system for global corporations’. Where it had been in force elsewhere, dozens of legal actions ‘have been taken by corporations against governments on issues ranging from mining to water to nuclear power’.11 ‘It is a very grave threat indeed,’ says campaigning journalist George Monbiot, one of the few media voices to try and raise an alarm.


pages: 497 words: 123,778

The People vs. Democracy: Why Our Freedom Is in Danger and How to Save It by Yascha Mounk

affirmative action, Affordable Care Act / Obamacare, Andrew Keen, basic income, battle of ideas, Boris Johnson, Branko Milanovic, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, carried interest, Cass Sunstein, central bank independence, centre right, clean water, cognitive bias, conceptual framework, David Brooks, deindustrialization, demographic transition, desegregation, Donald Trump, en.wikipedia.org, Francis Fukuyama: the end of history, German hyperinflation, gig economy, Gini coefficient, Home mortgage interest deduction, housing crisis, income inequality, invention of the printing press, invention of the steam engine, investor state dispute settlement, job automation, Joseph Schumpeter, land value tax, low skilled workers, Lyft, manufacturing employment, Mark Zuckerberg, mass immigration, mortgage tax deduction, Naomi Klein, new economy, offshore financial centre, open borders, Parag Khanna, plutocrats, Plutocrats, post-materialism, price stability, ride hailing / ride sharing, rising living standards, Ronald Reagan, Rosa Parks, secular stagnation, sharing economy, Thomas L Friedman, Tyler Cowen: Great Stagnation, Uber and Lyft, uber lyft, universal basic income, upwardly mobile, World Values Survey, zero-sum game

The attempt to eliminate hidden barriers to trade, including diverging regulatory and technical standards, makes it more difficult for national governments to pass new environmental protections. More ambitious agreements, like the North American Free Trade Agreement (NAFTA), also include provisions for short-term work visas, lessening a country’s control over the inflow of immigrants.76 Finally, the rise of “investor-state dispute settlements” gives corporations far-reaching powers to demand compensation for local regulations that might dampen their profits in front of international tribunals.77 Many of these effects are most pronounced in the European Union. To create a truly “single market,” the EU has introduced far-reaching limitations on the autonomy of its member states.78 For example, their ability to tax different forms of alcohol at differential rates is limited because of fears that, say, Belgium, which produces a lot of beer, might choose to impose a heavy tax on wine while Italy, which produces a lot of wine, might impose a heavy tax on beer.79 Technical and environmental standards are frequently set by Brussels rather than by national capitals, putting significant powers in the hands of the European Commission.80 And finally, the free movement of people gives European citizens far-reaching rights to access the territory of other member states81—but limits the ability of member states to decide who should get to live in their territory.82 Free trade treaties constitute only a small subset of the international agreements and organizations that now structure the international system.


pages: 501 words: 134,867

A Line in the Tar Sands: Struggles for Environmental Justice by Tony Weis, Joshua Kahn Russell

addicted to oil, Bakken shale, bilateral investment treaty, call centre, carbon footprint, clean water, colonial exploitation, conceptual framework, corporate social responsibility, decarbonisation, Deep Water Horizon, en.wikipedia.org, energy security, energy transition, Exxon Valdez, failed state, global village, guest worker program, happiness index / gross national happiness, hydraulic fracturing, immigration reform, Intergovernmental Panel on Climate Change (IPCC), investor state dispute settlement, invisible hand, liberal capitalism, LNG terminal, market fundamentalism, means of production, Naomi Klein, new economy, Occupy movement, oil shale / tar sands, peak oil, profit maximization, race to the bottom, smart grid, special economic zone, WikiLeaks, working poor

The details of CETA have long been hidden (and remain unclear at the time of writing), but it seems certain that these negotiations and the ultimate agreement delayed the implementation of the EU Fuel Quality Directive. It also seems certain that the implementation of CETA will pave the way for deeper involvement by European companies in the tar sands industry, and it is probable that the investor-state dispute settlement mechanism will give the likes of BP, Shell, TOTAL, and Statoil a corporate-friendly mechanism to appeal against existing and future environmental regulations. We know we are part of an epic battle with one of the most powerful industries in the world, and that as a movement, we need to up our game and grow our numbers. In this, we can take heart from the words of Canadian High Commissioner Gordon Campbell during a recent high-level meeting with British diplomats, in which he complained that the tar sands have become “a totemic issue, hitting directly on Brand Canada.”20 This is testament to the hard work, passion, and commitment of all those who are part of the global anti–tar sands movement.


pages: 504 words: 143,303

Why We Can't Afford the Rich by Andrew Sayer

accounting loophole / creative accounting, Albert Einstein, anti-globalists, asset-backed security, banking crisis, banks create money, basic income, Boris Johnson, Bretton Woods, British Empire, business cycle, call centre, capital controls, carbon footprint, collective bargaining, corporate raider, corporate social responsibility, creative destruction, credit crunch, Credit Default Swap, crony capitalism, David Graeber, David Ricardo: comparative advantage, debt deflation, decarbonisation, declining real wages, deglobalization, deindustrialization, delayed gratification, demand response, don't be evil, Double Irish / Dutch Sandwich, en.wikipedia.org, Etonian, financial innovation, financial intermediation, Fractional reserve banking, full employment, G4S, Goldman Sachs: Vampire Squid, high net worth, income inequality, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), investor state dispute settlement, Isaac Newton, James Dyson, job automation, Julian Assange, Kickstarter, labour market flexibility, laissez-faire capitalism, land value tax, low skilled workers, Mark Zuckerberg, market fundamentalism, Martin Wolf, mass immigration, means of production, moral hazard, mortgage debt, negative equity, neoliberal agenda, new economy, New Urbanism, Northern Rock, Occupy movement, offshore financial centre, oil shale / tar sands, patent troll, payday loans, Philip Mirowski, plutocrats, Plutocrats, popular capitalism, predatory finance, price stability, pushing on a string, quantitative easing, race to the bottom, rent-seeking, Ronald Reagan, shareholder value, short selling, sovereign wealth fund, Steve Jobs, The Nature of the Firm, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transfer pricing, trickle-down economics, universal basic income, unpaid internship, upwardly mobile, Washington Consensus, wealth creators, WikiLeaks, Winter of Discontent, working poor, Yom Kippur War, zero-sum game

Julian Assange of Wikileaks comments: If instituted, the TPP’s intellectual property regime would trample over individual rights and free expression, as well as ride roughshod over the intellectual and creative commons. If you read, write, publish, think, listen, dance, sing or invent; if you farm or consume food; if you’re ill now or might one day be ill, the TPP has you in its crosshairs.123 Most alarming of all are the ‘investor–state dispute settlement’ mechanisms: these allow big corporations to sue governments before secretive arbitration panels composed of corporate lawyers, bypassing domestic courts and overriding the will of parliaments!124 These mechanisms are already being used by a Swedish nuclear company contesting the German decision, following the Fukushima disaster, to end its reliance on nuclear power. In Australia the Philip Morris tobacco company is suing the government for attempting to make plain packaging compulsory.