I’m an Economist: How Much Coding Should I know?

Whether you’re looking for a job in economics, exploring a new hypothesis, or working to publish your first paper, you might wonder: can you do this in excel? And if not, how much coding should you learn, and how will you learn it? By Kurt Semm

Five years ago, I was studying Romantic literature, and writing my sonnets. Now, I’m a Junior Economist, a Ph.D. Candidate, and comfortable coding in LaTex, Python, R, & Stata. Looking back, there were plenty of pitfalls along the way, and many of them could have been avoided with a little extra guidance.

In an attempt to spare others the struggle, I set out to determine the best rules of thumb in a recent episode of YSI’s Early Career Time

I called in the help of three experts:
  • Thomas Herndon, professor of economics at John Jay CUNY in New York. During his grad school years, he famously caught a simple excel mistake in “Growth in the Time of Debt” by Reinhart and Rogoff. 
  • Pier-André Bouchard St-Amant, a mathematician with a Ph.D. in economics who ­specializes in the analysis and optimization of public policy reforms and business practices. He teaches quantitative methods and data science at ÉNAP.
  • Tim Fong, a data scientist whose Silicon Valley experience has ranged from computer vision to net worth data. He has an M.S. in statistics from Baruch College and a JD from the USF School of Law. His economic interest are in post-Keynesian price theory.
Listen to the whole conversation here, or keep reading for their 10 biggest tips. 
  1. Don’t be intimidated. Coding just means telling computers what you want them to do. It comes down to making calculations, opening files, opening or closing loops, and creating tables or graphs.

  2. Don’t use excel. Government organizations might do this, but it can lead to a lot of errors. And imagine scrolling over 1,000,000 observations in a single spreadsheet.

  3. Choose one language to start with. Master it, and only then branch out to others. Academic economists tend to prefer Stata because it’s best for running regressions. R is helpful with cleaning Data & makes beautiful plots/graphics (ggplot2). Python is popular in the private sector.

  4. Stay organized. Remember to create a solid file system before you start coding, and make sure to write notes to yourself about what your code is doing. This will help your future self to replicate your work.

  5. Go deep. See if your school, University, or Program teaches a Computer Science Class. These often give you a more in-depth understanding than online certification courses. And the certificates don’t tend to matter that much.

  6. Say bye to Microsoft Word. If you’d like to get published, you’ll need to learn LaTex. It helps create nice-looking summary statistics and saves you a lot of time in the formatting stage of your research.

  7. Expect frustration. There will be times you’ll want to throw your laptop against the wall. Coding is frustrating because errors are inevitable. It never works the first time. Keep at it, and you’ll get through.

  8. Think carefully about your research question first
    If you want to get through the frustration, you need to care about your research question. Don’t study a question if you don’t care about the answer. Look for something that scares you a bit. 
  1. Remember that it’s just a tool
    Any coding should be in service of your ideas, which are probably nuanced, complex, subjective, and evolving. Don’t reduce your ideas to the level of your coding skills. Improve your code to serve your ideas.

  2. Enjoy the journey. There is a lot to learn, and many resources out there to help you. Here’s a small selection:

Listen to the full conversation here.

About the Author: 
Kurt Semm is a Junior Economist at the Institute of New Economic Thinking. Simultaneously, he is a Ph.D. Student at the New School for Social Research. He received his BA at St. John’s University in Literature and Economics and an MS from the New School for Social Research. His main areas of research are Ecology, Political Economy, and Water Resources. His research deals with water management and allocation, regional development, and equity, with a particular interest in the Southwest United States.

Thought this was interesting?
Keep an eye out for more episodes of YSI’s Early Career Time. Each one explores a challenge in publishing, teaching, the job market, work-life balance, and the various institutional barriers young researchers face. If there’s a topic you’d like us to take up, let us know in the comments below.

Dissecting Capitalism Season I: A Recap

By Shyam Soundararajan | Dissecting Capitalism is a recurring webinar series in the South Asia Working Group that aims to organize a webinar series on the dominant ideology/economic system – capitalism. It aims to explore the tenets of capitalism over the fabric of time and examine its influence on the economy and social classes.

Over the course of 8 webinar sessions in November and December 2021, this project has brought together scholars from various fields of academia such as economics, philosophy, social policy, and law to dissect capitalism through their unique theoretical and empirical lenses. This webinar series was organized by Sattwick Dey Biswas, Aneesha Chitgupi, and Shyam Soundararajan. 

Before YSI South Asia hosts Season II of Dissecting Capitalism: Its past, present and future, here is a snapshot of the topics covered under Season I

Illustration by Aneesha Chitgupi

1. Globalization as a Threat to Democracy

The introductory session of the Webinar Series featured Professor Daniel W. Bromley, a Professor of Applied Economics at the University of Wisconsin-Madison. This session was centered on globalization, international trade and democracy and was based on the book, “Possessive Individualism: A Crisis of Capitalism”. 

Through this session, Professor Bromley was able to provide an interactive lecture on why globalization is a threat to democratic coherence. Through this lecture, Professor Bromley was able to unveil and demonstrate the hidden reality that globalization weakens the ability of national governments to confront economic crises. 

Overall, this session displayed the problems that capitalism has imposed upon national governments, namely the inability to confront economic problems due to the issue of losing “global competitiveness”. View here

2. Multidimensional Poverty around the world: Unmasking Disparities

This session featured Dr. Sabina Alkire, the Director of the Oxford Poverty and Human Development Initiative at the University of Oxford. This session was centered around the Multidimensional Poverty Index (MPI), which measures poverty using a variety of factors. 

Through this webinar, Dr. Alkire was able to explain more about the MPI by explaining its methodology. After this, Dr. Alkire presented the findings of the October 2021 global MPI report. In addition to this, Dr. Alkire discussed and dissected various disparities across ethnic groups and populations. 

Overall, this webinar presented the impact of capitalism and its various endemic traits on poverty around the world. By discussing the MPI, Dr. Alkire was able to demonstrate how capitalism actively contributes to major poverty trends around the world. View here

3. Compressed Capitalism and Late Development in India

This session featured Professor Dr. Anthony P. D’Costa, an Eminent Scholar in Global Studies and Professor of Economics at the University of Alabama in Huntsville. This session was centered around the changes faced by the Indian economy and the population following the 1991 economic reforms. 

Through this session, Professor D’Costa presented an alternative approach to understanding the development dynamic of India. Through the use of capitalist dynamics in developing countries and compressed capitalism, Professor D’Costa showed that wealth inequality present in India is an inherent trait of late capitalist societies.

Overall, this session explained how some of the defining flaws of a capitalist society in a developing country are not an anomaly but rather a key tenet of a late capitalist society. The findings discussed in this session led to a broader understanding of some key tenets of capitalism. View here.

4. Designing a Pro-Market Social Protection System: A Literature Review

This session featured Professor Dr. Einar Øverbye, a Professor in International Social Welfare and Health Policy at Oslo Metropolitan University. This session was centered around the common argument that the welfare state is detrimental to the economy as it disincentivizes work. 

Through this session, Professor Øverbye was able to explain and deconstruct the arguments surrounding the idea of welfare states disincentivizing work and reducing efficiency. By deconstructing the disincentive argument, Professor Øverbye was able to put forward his argument in support of designing a pro-market social protection system. Moreover, Professor Øverbye was able to demonstrate the importance of good design in a social system, thus unraveling the challenge surrounding the construction of a pro-market social protection system. 

Overall, this session explained how good design in social structures can overcome some fundamental flaws associated with a system. This session also covered the role of a welfare state in a capitalist society and was able to discuss the contribution of key tenets of capitalism to a pro-market social protection system.  View here.

5. The Law is an Anagram of Wealth

This session featured Professor Dr. Benjamin Davy, a visiting professor at the Faculty of Law, University of Johannesburg, and the School of Architecture and Spatial Planning, TU Wien University. Based on the book, “Land Policy”, this session addressed the relationship between land uses, land value, and land law.

Professor Davy was able to explain and demonstrate how the concept of material wealth depends heavily on the legal system present in a country. By using land laws and values, Professor Davy was able to explain how the economic structure of a society is affected by the law, thus leading back to the title of the session

Overall, this session showed attendees how material wealth, a key component of capitalism, depends on the legal system of a country. This inter-disciplinary session was also able to display the link between two seemingly unrelated fields of the social sciences, namely economics and law. View here.

6. John Stuart Mill’s Imperialism, Protestant Work Ethic, & Global South

This session featured Professor Dr. Elizabeth Anderson, the John Dewey Distinguished University Professor of Philosophy and Women’s & Gender Studies at the University of Michigan, Ann Arbor. This session was co-organized with Diana Soeiro, an organizer at the Philosophy of Economics Working Group. This session was based on the core ideas of Professor Anderson’s upcoming book, which is focused on the history of the Protestant work ethic through the history of economics. 

Through this session, Professor Anderson was able to show how John Stuart Mill’s economic theories on workers and his liberal ideas were contradictory to his stance on Imperialism. Professor Anderson was able to trace Mill’s contradictions to tensions innate to the Protestant work ethic. By doing this, Professor Anderson was able to transition to a more global discussion of the Protestant work ethic, which would be able to address the challenges faced by workers in the Global South in today’s economy.

Overall, this session presented yet another interdisciplinary focus on capitalism through philosophy and work ethic. By linking Mill’s contrarian positions to tensions in the Protestant work ethic and by globalizing the topic to factor in worker challenges in the Global South, Professor Anderson was able to provide some key insights on the often-ignored role of work ethic and philosophy in capitalism and globalization. View here.

7. Why Poverty is More Than a Lack of Income: Thoughts from China

This session featured Professor Dr. Robert Walker MBE, Professor at the Institute of Social Management/School of Sociology, Beijing Normal University under China’s ‘High-Level Foreign Talents’ program. This session was centred around the contemporary understanding of poverty beyond income and the case of China, which attempted to eradicate poverty in the 2010s. 

Through this session, Professor Walker was able to highlight the disparity between policy and political reality when it comes to the concept of poverty.

By including the case of China, which eliminated absolute poverty to discover the presence of relative poverty, Professor Walker was able to shift the argument of poverty beyond the idea of low income and was able to provide psychological insights on poverty. 

Overall, this session presented the need to rethink the mainstream understanding of poverty. Discussions surrounding China’s attempts to eradicate poverty presented an undocumented side of China affected by the country’s shift towards a semi-capitalist society. This session also provided an interdisciplinary outlook on poverty in China, which allowed attendees from the South Asia Working Group to be cognizant of poverty conditions in other Asian regions.  View here

8. Beyond False Dilemmas in Economic Policy

The final session of the first season featured Dr. Sanjay G. Reddy, Associate Professor of Economics at The New School for Social Research. This session was centred around the discussion of false dilemmas in economic policy.

Through this session, Dr. Reddy was able to present his economic argument for dissolving and dismissing false dilemmas rather than resolving them. By using the false dilemmas of “for or against growth” and “domestic markets or globalization”, Dr. Reddy proved the logical fallacy in such dilemmas and presented alternative questions that were worth pursuing.

Overall, this session provided closure for the first season of “Dissecting Capitalism” by discussing false dilemma, a prominent element found in the discourse and dialogue surrounding capitalism and the need to rethink it. By discussing the “for or against growth” dilemma, Dr. Reddy was able to discuss a core argument presented by people opposing the need to rethink capitalism. Ultimately, this session allowed the attendees to dissect capitalism through the notion of false dilemmas present in today’s economic world. View here


Over the course of 8 webinar series held across 2 months, the South Asia Working Group was able to embark on a journey of exploration, learning and profound thinking. Moreover, the attendees were able to actively discuss core ideas of capitalism and dissect capitalist structures and norms, which enhanced discussion within the working group. 

While this season did cover mainstream ideas of capitalism and other economic factors that are affected by capitalism, it did not cover the link between capitalism and heterodox fields such as climate economics and agricultural economics. This is something that Season II aims to cover. With a wide range of topics from economic thought to climate change to legal theory, Season II aims to build upon the foundations of the first season and further continue to explore the tenets of capitalism.

Season II will feature Jayati Ghosh, Barbara Harris-White, Shailaja Fennell, Katharina Pistor, and K V Subramanian. Join us live!

Register now


The YSI South Asia Working Group provides a platform for young scholars from South Asia -or those interested in the region- to select an issue they wish to work on, collaborate and discuss for better conceptualization of the problem and, debate, critique and improve upon solutions. We also invite scholars to suggest the most pressing problems and challenges to better guide the path for this working group. Join us!

About the organizers:

Sattwick Dey Biswas is an affiliated Research Fellow at the Institute of Public Policy, Bangalore, India. In 2019, he has earned Doctor rerum politicarum at the School of Spatial Planning, TU Dortmund University, Germany. He has published his doctoral thesis as a book titled, “Land acquisition and compensation in India: Mysteries of valuation” (2020) with Palgrave Macmillan. He is interested in the areas of Land Policy, Social Policy, and Political Economy. 

Shyam Soundararajan is a high school student from Dubai, UAE. His research interests include economic development, poverty and wealth inequality. He has published articles in the Harvard International Review and has contributed vastly to his school’s social science curriculum. Shyam aspires to major in Mathematical Economics with a minor in South Asian Studies.

Aneesha Chitgupi is a research fellow at the XKDR-Forum -Chennai Mathematical Institute. She received her PhD in 2020 from Institute for Social and Economic Change affiliated to University of Mysore. Her thesis analysed the economic determinants of India’s external stabilisation under the balance of payments framework.  Her current research interests are public finance, government debt and liabilities management.

Recap of ‘The Rise of Neo-Liberalism and the Decline of Freedom’

In her book fellow YSI member Birsen Filip makes an important and timely contribution by telling the story of neoliberalism and its dramatic rise over the past four decades. She traces its impact on our contemporary way of living, thinking, and being and in so doing demonstrates its elevation to a near law of nature that permeates nearly every aspect of our society. Many of us will be familiar with many aspects she touches upon, but it is galvanizing to see how deeply neo-liberal thinking has penetrated and reshaped our way of being. 

Birsen starts by expounding the pillar upon which neo-liberal thinking rests: negative freedom (chapters 2 and 3). Friedrich Hayek and Friedman developed the idea of negative freedom by defining it as ‘freedom from coercion’ – the liberty to consume, produce and exchange voluntarily –  which stands in contrast to positive freedom (i.e. improving individual self-determination by investing in individuals, communities, environments by the government). It purports that economic freedom in the marketplace (‘freedom to choose’) is a precondition for political and civic freedom (‘right to assembly, freedom of speech, freedom of religion’ etc). A threat or coercion on economic freedom would mean an infringement on political freedom as well. This expresses itself in the primacy of the marketplace, free individual choice, free fluctuation of prices and not allowing the government or any central entity to infringe on this economic freedom for an apparent collective good (freedom from coercion). 

How this concept of freedom limits the scope of government is treated in chapter 4. Chapter 5 treats the rise of transnational corporations which have been able to take advantage of an ever-increasing scope of the market. In chapters 6 and 7 we vividly see the effect of mass consumption culture on the environment. How private interest stands over public interest in innovation policies is described in chapter 8. Chapter 9 and 10 illustrate the decline of unions and organized labor and the rise of inequality, and chapter 11 the decline of moral and ethical values.  In chapter 12, Birsen returns to the realm of ideas to show how neo-liberal thinking has become entrenched with the academy. 

At the core of the book’s message, Birsen demonstrates a disastrous paradox: the supposed freedom which neo-liberalism promotes is indeed a trap. What Birsen describes is a vortex in which more and more spheres of our lives become caught in. ‘Freedom from’ indeed is not indeed liberating. On the contrary, it is contributing to the decline of freedom; it imprisons and destroys our capacity for imagining alternative pathways and collective action and in doing so it destroys our ability as individuals and societies to confront our problems. We can all sense the writing on that wall, namely the steady decline and destruction of societies and our environment, and yes, of individual freedom. 

What the book offers is how deeply neo-liberal ideas have taken hold of our thinking and penetrated how we perceive ourselves as individuals, how we relate with others. Moreso, it offers a glimpse of how we are eroding our social fabric and destroying our environment by extending the sphere of the market to nearly anything and exploiting the resources of our environment. More deeply it also sheds light on the current malaise and inability to address our global challenges since neo-liberal thinking discounts the ability of collective action (state and unions). 

Birsen offers a hopeful plea that recognizing these entrappings which we all intuitively sense may help lead to a change in mindset and an affirmation vision of our global society and the environment in which we live: Positive freedom.


Birsen Filip holds a Ph.D. in philosophy and master’s degrees in economics and philosophy. She has published numerous articles and chapters on a range of topics, including political philosophy, geopolitics, and the history of economic thought, with a focus on the Austrian School of Economics and the German Historical School of Economics. 

BUY THE BOOK


Jay Pocklington is the Manager of the Institute for New Economic Thinking’s Young Scholars Initiative (YSI). He received B.Sc. and M.Sc degrees in economics from Freie Universität Berlin.

Women’s Work in South Asia: trends and challenges

Although gender equality in employment is among the Sustainable Development Goals for South Asia, progress is hard to observe. Determined to explore why female employment levels remain low and stagnant, Varsha Gupta and Arun Balachandran of YSI’s South Asia Working Group organized a webinar series. Featuring eminent speakers such as Prof. Jayati Ghosh, Prof. Sonalde Desai, Prof. Jeemol Unni, Prof. Ashwini Deshpande, Dr. Dipa Sinha and Dr. Ramani Gunatilaka, the resulting conversations shed much-needed light on the topic.

Illustration by Aneesha Chitgupi, Coordinator of the South Asia Working Group

Employment is a subset of work

The series began on May Day, with an inaugural session by Professor Jayati Ghosh. Highlighting the low female employment figures in India, she explained the difference between employment and work, the former being a subset of the latter. A major proportion of women are involved in work, though it is not paid and hence does not get counted as employment. The 2019 Time Use Survey in India reaffirms that women in India spend 2.5 times more time than men in unpaid activities. The gender wage gap exists and is high in private casual work. The Covid-19 pandemic has made things worse, furthering the case for gender-sensitive economic policies. View here

The impact of COVID-19

The second talk by Prof. Sonalde Desai focussed on employment trends during the Covid-19 pandemic. She presented the latest research with the use of Delhi Metropolitan Area survey (March 2019-20). The decline in employment occurred majorly in wage employment. With the use of econometric techniques, the research finds that in absolute terms, job loss for men was severe in the first wave of Covid-19, while the second surge hit women harder in the Delhi NCR region, India. The closure of schools and the consequent child rearing duties was one of the reasons that women’s wage work fell. Highly educated women were more affected than men. Rural areas absorbed the impact of the pandemic better than urban areas. The gender difference in impact was found to be highly dependent on the sector of employment and region. View here.

Informal workers bear the brunt

Jeemol Unni’s session concentrated on the impact of the Covid crisis on women and domestic violence among members of the informal workforce. Globally, pandemics harshly affect women more, due to the sectors and the kind of work women are involved in. The majority of the women form the bottom of the labor hierarchy. With the use of CMIE and NSS data, it is seen that the second wave of Covid-19 and lockdown affected women’s employment more vis-à-vis men. Discouraged worker effect is also visible among women.  View here.

Prof. Ashwini Deshpande’s talk focussed on the gendered patterns in employment in India during first wave of the pandemic. The world over, the subsequent economic recession led to more unemployment among women than men, a pattern different from previous recessions. This is visible in India as well, in the 2020 CMIE data. The already gendered labor market in India, with fewer women employed, worsened further for females. Though the absolute figures for job loss are higher for men, the impact has been higher on women due to the pre-existing gaps. There has been exacerbating of women’s position in the domestic division of labor during August-December 2020. View here.

The potential of public employment

The penultimate session was featured Dr. Dipa Sinha highlighting the relevance of public employment in generating opportunities for female labor force in India. Nations with higher female LFPR are the ones which also have higher proportion of women in the public sector. In India, the NSS data shows that government is a significant employer for women. There is also sectoral concentration of women in health and education, where they are engaged as contractual or honorary workers (ASHA’s, Anganwadi Workers). Creating regular permanent positions in these sectors could encourage female employment. View here.

Education is not enough

Various facets of female employment in Sri Lanka were brought in by Dr. Ramani Gunatilaka from International Centre for Ethnic Studies, Colombo. While Srilankan women are better educated than their counterparts in other South Asian countries, they still remain disadvantaged in the labour market. As seen from a study led by Dr. Ramani on women’s activity preferences and time use, unpaid care and household work in Srilanka are mediated by social norms, and unequal division of unpaid work makes it difficult for women to take up paid work. View here.

Altogether, the webinars now form a virtual knowledge base on YSI’s YouTube Channel, making the insights available to young scholars all over the world.


About the organizers:

Arun Balachandran has a PhD in Economics from the University of Groningen, the Netherlands, in collaboration with the Institute for Social and Economic Change, Bengaluru. He is currently a Post-doctoral fellow at the University of Maryland, and serves as Coordinator of the YSI South Asia Working Group.

Varsha Gupta is a PhD student in Economics at Jawaharlal Nehru University, New Delhi. She using NSS data to assess issues of labor and gender, and serves as organizer for the YSI South Asia Working Group.

The YSI South Asia Working Group provides a platform for young scholars from South Asia -or those interested in the region- to select an issue they wish to work on, collaborate and discuss for better conceptualization of the problem and, debate, critique and improve upon solutions. We also invite scholars to suggest the most pressing problems and challenges to better guide the path for this working group. Join us!

Minsky is more than a moment

After the Great Financial Crisis, Minsky rose to fame. But few people grasp the breadth and depth of his work beyond the “Minsky Moment”.  If that’s you, Daniel Neilson’s recent book is a worthy read. By Ayoze Alfageme.

A decade after the Great Financial Crisis, Minsky presents a meticulous reconstruction of Hyman Minsky‘s lifework that goes well beyond the mere explanation of financial bubble bursts. Indeed, Neilson devotes only a few pages to what Minsky is best known for—his Financial Instability Hypothesis. The reason is not for its lack of relevance within Minsky’s theory, but because the author places it as one piece of an overall financial theory of capitalism that he painstakingly elaborates in a mere 150 pages. Presenting Minsky’s ideas in a comprehensive and exhaustive way is not an easy task, given that he worked out his thinking by sketching his theory piecemeal in various places as he witnessed history pass by. Thus, the author elaborates three different threads through which he deconstructs Minsky’s work into elements to be then reconstructed and presented as a thorough vision of capitalism. 

A financial theory of capitalism

The first thread comprises four out of eight chapters of the book and deals with Minsky’s financial theory. In modern societies, a matrix of balance sheets connects all agents via debt and credit commitments—assets and liabilities—that have arisen from past payment decisions. Minsky shows that payment structure, intrinsic to capitalist societies, is prone to recurrent crises due to the imperative requirement to repay debts. This requirement, or ‘survival constraint’ as Minsky termed it, forces everyone to generate greater monetary inflows than outflows. When debts come due, debtors search for a liquid position that allows them to redeem their debts using money or, as Minsky said, whatever the lender will accept to write off the debt. Position making is the action through which assets and/or liabilities are sold if a unit is illiquid and in need of cash. The famous hedge, speculative, and Ponzi positions are nothing more than a form of position making—a search for liquidity. A crisis might be triggered by the effect upon other units of a unit’s inability to pay i.e. to find liquidity. A widespread financial crisis unfolds when the market for position making for liquidity comes to a halt. At this point, the role of the central bank is to step in as a lender of last resort—the market maker of last resort—that can blow liquidity into the system as its only initiative. 

The making of a maverick economist

The second thread, interwoven with the first, narrates Minsky’s path to becoming the economist he was. For example, we learn from Henry Simons, his professor in Chicago, how Minsky adopted a practical outlook view of Simon’s view on the requirement to pay debts and how he added the theoretical and institutional issues of liquidity to Schumpeter and Keynes’ monetary theory of production. In Neilson’s account, liquidity is at the core of Minsky’s financial theory. Minsky’s considerations about liquidity, uncertainty, and time, stand as the main divergences between his approach and that of the mainstream.

The third and final thread of the book deals with the position Minsky took towards the rest of the economist profession, disentangling the contradictions between the two. In need of a new language through which he could express the knowledge he wanted to convey, Minsky found himself at the margins of the profession and in conscious opposition to the mainstream. Interestingly, the book also reveals how even interpretations by those who, as post-Keynesians of different strands claiming to Minsky’s insights, sometimes fail to understand his core contributions. 

Throughout the book, Neilson successfully presents Minsky’s theory and policy and the intellectual challenges he faced during his career as an economist. The book also encompasses his Ph.D. thesis, the writing of his two books—John Maynard Keynes and Stabilizing an Unstable Economy—his collaborations with the financial sector, his financial analyses for the public sector, as well as the economic and financial crises he witnessed and eagerly strove to analyze. Overall, the author conveys, with a dash of critical insights of his own, what he and his professor, Perry Mehrling, consider to be the most important thing we can learn from Minsky: his vision of how financial capitalism works


Buy the book: Minsky. By Daniel H. Neilson. Polity Press: Cambridge, 2019. 224 pages, £16.99.

About the Author: Ayoze is teaching assistant and PhD candidate at the University of Geneva. Twitter: @_Ayoze_

Want to review a book you read? YSI will reimburse you for the price of the book, and will consider your piece for publication on Economic Questions. Reach out to contact@economicquestions.org to get started.

This article was originally posted in Economic Issues, Vol. 25, Part 1, 2020.
Access here.

Globalisation 3.0

By Diego Castañeda Garza

Some scholars would argue that the world was first globalised as far as five centuries in the past when the European conquests of the new world brought its sinews to the old. When silver began to circulate the globe as the first truly global commodity (Flynn & Giráldez 2004). However, for most economists, the world was first globalised as close as two centuries ago, after the end of the Napoleonic wars, with the rising industrial power of the British nation and the peak of its imperial power (O’Rourke & Williamson 2002).

In any case, five or two centuries ago, globalisation has always implied distributional effects, winners and losers in each corner of the world it has reached. First, the enrichment of political and economic elites in the colonial powers and its colonised countries and then again at the time of the great divergence when countries started to industrialise, but most of their populations at either time did not. Today’s globalisation is not different; we have designed it that way.

Since the beginnings of trade theory with David Ricardo’s Principles of Political Economy and Taxation and the introduction of the idea of comparative advantage, the existence of distributional effects was a distinct aspect of international trade. Trade specialisation following national comparative advantages strongly favoured some sectors and industries and hurt others. The gains for trade were never distributed equally among all sectors; the distribution of wages, benefits and rents entailed by necessity winners and losers. Nevertheless, for a long time, economists, when engaging the public about international trade and its benefits, when speaking and teaching about Ricardo’s ideas (and their extensions through the Hecksher-Ohlin model, i.e equalising international prices and wages entails winners and losers) obviated this basic result:often not all benefit from trade.

As Polanyi (1944|2017) argued, the attempt to disembed politics from the economy entails risks. In the past, the negligence encouraged by not recognising the distributional consequences of globalisation and the failure to address them have been a source of social and political instability. Ignoring the people propelled backlashes against globalisation more than a century ago. At the end of the 19th century and the beginning of the 20th, one of those backlashes occurred. The consequence of the backlash was that several countries (i.e. Germany, France, Sweden) that previously had been moving towards trade liberalisation halted their movement. They started to look backwards to protectionist policies. In time, the outbreak of the Great War finally ended the so-called first globalisation (O’Rourke & Williamson 1999). 

From this historical experience, we should have learned an essential lesson in our times, but we failed to do so. The lesson is that there is nothing natural nor granted in the process of achieving a sustainable global economic integration. Similarly, there is no linear path of development that necessarily arrives at a hiper-globalised world. Globalisation today, or in the 19th century, is an international political construct supported by the equilibrium of power and interests between existent states. The inequality embedded in our economic systems, in the same way, exists largely due to political economy reasons.

After the 1970s, the end of the trente glorieuses, a new policy framework characterised by deregulation, liberalisation and the capture of the state by private interests took root around the world. It propelled the new second globalisation. Over the last four decades, we have been living in an increasingly interconnected world. For decades, the rate of growth of international trade surpassed the growth rate of the world economy, a phenomenon often called hyper-globalisation. Underlying this era, we have witnessed high-speed economic growth in some regions, but also growing inequalities and accelerated environmental degradation. Now, at the end of this period, there is a trend break in which the costs of the politics of previous years are manifesting themselves. We are witnessing a reversal of fortune in which China is returning to a prominent role in the global economy. Meanwhile, the advanced countries that defined the rules of the world economy are riddled again with backlashes, political instability, and economic stagnation.

These already turbulent times got compounded with the pandemic and the economic fallout it unleashed. However, this bleak scenario also presents us with opportunities. The current sense of crisis around the world, especially in the advanced countries, provides the imperative to solve the “twin problems” of the 21st century: rising national inequalities and climate change. It is a unique opportunity to redesign globalisation under new principles. It represents a chance to redesign it around principles that privilege equality, sustainability, and the existence of global public goods, like global public health and our environment. 

The Great Lockdown, a necessary response due to the Sars-CoV-2 pandemic, has served as a mirror for nations to look at themselves, it has made their problems even more evident. The global nature of the current crisis and the way it interacts and exacerbates within-country economic inequalities exhibits economic weaknesses, intensifies geopolitical conflicts, and highlights the need for global solutions. History has yielded us with a perfect context to change globalisation. It is an opportunity to work towards the solution of the twin crisis and, in the process, create a new globalisation 3.0. 

Globalisation 3.0 should be constructed as a more sensible process of economic integration. It should be embedded with different rules and norms of good behaviour, that privileges the needs and preferences of the world population and not the preferences of global elites. Instead of focusing on capital flows and finance, it should focus on public health, climate change, labour rights. It should do a better job of representing the priorities of developing countries. Historical experiences either in the times of the gold standard, Bretton Woods or the current one, shows to us that the rules give the shape of globalisation. The rules we agree to uphold, the priorities we set.

The construction of globalisation 3.0 should ensure countries have enough policy space to guarantee economic, political, and social stability. In that sense, instead of reaching from the global to the national in what constitutes a politically fragile architecture, the new rules should reach from the national to the global. It should ensure the states liberty to pursue pragmatic policies that enhance their development capabilities. Room to do active industrial policy, to correct economic inequalities through adequate taxation. That space implies the need to accept the embeddedness of politics in economic matters, to accept that economic policy is unsustainable without addressing mass politics.

To fix our problems, the existence of tax havens, climatic disaster, the surge in inequalities, and their feedback loop towards political life is a necessity of our time. But it will not be possible if we choose to preserve globalisation in its current form. There is no need for a tradeoff between national policies and true global imperatives. Both can be aligned, but they require that we finally learn the lessons of history and redesign our global economy in such a way to leave room for both. In the end, it is only the harmony between national and global interests that will allow us the capacity to respond to our challenges. Redesign the functionings of the world economy is the path to preserve social stability, develop our countries and respond to the crises of our times.


About the author: Diego Castañeda Garza is an economist and economic historian; he is the head of the economic cluster at Agenda for International Development (A-ID) and a coordinator of the Economic History Working Group at the INET’s Young Scholar Initiative.

This article is a runner up in an essay competition held by the UNCTAD YSI Summer School on Globalization and Development Strategies. Participants of the school worked with senior scholars to fine-tune their drafts, and the top-5 articles were published here. For other articles in the series, please click here.

About UNCTAD UNCTAD is a permanent intergovernmental body established by the United Nations General Assembly in 1964. Its headquarters are located in Geneva, Switzerland, with offices in New York and Addis Ababa. UNCTAD is part of the UN Secretariat, reports to the UN General Assembly and the Economic and Social Council, and are also part of the United Nations Development Group.


Global economic justice: from aspirations to transformative action

By Sergio Chaparro Hernández

The unfulfilled promise of a just global order

The Universal Declaration of Human Rights states that everyone is entitled to a social and international order in which her rights can be fully realized. However, the functioning of the global economy today is far from aligned with the kind of order the Declaration prescribes.

Before the COVID-19 pandemic, inequalities between and within countries were already alarming. But confronted with disturbances such as pandemics, the world seems to move towards a greater concentration of power and wealth in the hands of the few, while disadvantaged populations are left behind. Lower-income countries face severe restrictions on their policy space in trade, fiscal, industrial, digital and monetary matters, and the global financial architecture exposes these countries to increasing systemic risks. International cooperation, which is highly necessary to address pressing global challenges, is replaced by competition between States against a background of increasing corporate power. The global order is not enabling the full realization of rights, but rather restricting human flourishing for the many while reinforcing privileges for the most powerful.

Neoliberalism and (the lack of) global democracy

Neoliberalism, understood as the project of creating a world tailored to the needs of capital, faces a serious crisis but has proven its ability to reinvent itself. It is true that some of the entrenched policy myths that its advocates had turned into ‘conventional wisdom’, such as the benefits of fiscal austerity or free trade for all, have been called into question in the context of the pandemic. But they might be revived under more friendly packaging. It is worth remembering how corporate attempts to capture the 2030 Agenda and the Paris Agreement are well advanced. In fact, international financial institutions (IFIs) are prioritizing private finance mechanisms -such as public-private partnerships- over domestic resource mobilization through progressive taxation or through development banks to achieve the Sustainable Development Goals (SDGs) and building ‘green’ infrastructure. Then, it would not be surprising that, in the absence of orderly and massive debt relief and restructuring, a new wave of austerity will be presented sooner than later as the only way to restore trust in domestic economies and let the private sector play the role of ‘Building Back Better’.

In this context, the lack of democratic governance on economic matters goes without saying. Currently, key decisions to address the unparalleled risks and instability that hyper globalization has created are being taken on an ad hoc basis in spaces such as the G-20, when not in opaque instances in which corporate interests prevail. These spaces lack any grounds in international law to operate as the captains of the global economy. International financial institutions continue to function under a plutocratic model that assigns decision-making prerogatives based on the outdated balance of power of the post war economy. In other fields, such as in global tax matters, the OECD controls the agenda and works as the de facto standard-setting global institution, in the absence of a multilateral body in which all countries can participate on an equal footing. On the investment side, there is a semi-private justice system in which investors can sue States before arbitration tribunals for exercising regulatory power to protect people’s rights, arguing that their expected profits will be reduced as a consequence. On the monetary front, while central banks in high-income countries absorbed the economic shock of COVID-19 by expanding their balance sheets in unprecedented ways and without meaningful democratic accountability, lower income countries struggled to overcome harsh liquidity constraints awaiting for global responses that haven’t occurred.

This democratic deficit and the consequent asymmetries of power in the global economy may seem, in principle, disconnected from the daily struggles of ordinary people or social movements. But they have everything to do with the unmet demands for better health care systems, adequate budgets to combat gender violence, or achieving substantive racial equality. Indeed, they are an important factor undermining the capacity of domestic institutions to deliver as well as a driving force behind the way opportunities for human flourishing are unevenly distributed. Among the interests neglected by the way the global economy works are not only those of marginalized communities in the Global South. As it is the case with the dollar hegemony in the international monetary system, hierarchical arrangements do not necessarily benefit the working class neither in the US nor in other rich countries. 

Expanding human capabilities in our shared world

Prior to the pandemic, there was an influential narrative that despite widespread pessimism and malaise the world was going through impressive progress, and things were essentially changing for the good. Champions of these views argued that world poverty had been declining and poor countries were progressively catching up with the richest, without explaining that the so-called ‘convergence’ is driven almost entirely by China and East Asian countries. Furthermore, any criticism of the global order calling for structural transformations used to be rejected under the idea that it could end up throwing the baby out (all the supposed benefits and successes achieved by the global order) with the bathwater (the sources of indignation or rage against this order). 

This line of thinking falls within the old way of economic reasoning that we must overcome. Countries have gone through paths of poverty reduction and improvements on basic indicators of well-being (not for everyone, and not evenly distributed), while putting more pressure on planetary boundaries and exacerbating inequalities and power asymmetries. Now we are seeing how decades of progress in the fight against poverty in several countries are being erased by factors that cannot be considered merely incidental to the way the global economic works. As scientific evidence has shown, pandemics are not exogenous shocks to economic systems: zoonotic diseases such as COVID-19 arise from the accelerated intervention and degradation of ecosystems by unfettered human activity. Likewise, preventing the catastrophic consequences of climate change depends on our determination to make major shifts in the way we produce, distribute, consume and value in order to adequately address the greatest collective action problem we have ever faced.  Even if States were to adopt pro-growth policies that lead to poverty reduction (such as carbon-intensive strategies of development) they could end up reinforcing power arrangements to preserve the status quo and precluding the emergence of the kind of coalitions that are needed to successfully address the risk of extinction and other systemic threats.

Therefore, we need an alternative framework for action – one that enables us to find solutions to our collective challenges in a world with ecological ceilings, while expanding the capabilities of communities and individuals to live according to their own values. Under such a framework, it should not be enough to make progress in basic indicators of well-being regardless of the path chosen, but also to build more equal relationships among States, communities and individuals and create the material conditions for cooperation. To that end, not only institutions and rules matter, but also the distribution of resources, voice, and power. 

Global economic governance and a new set of policies

The quest for global justice has focused on the institutional global arrangements that would enable individual States, and particularly low- and middle- income countries, to choose and implement a set of policies that allow them to catch up with the ‘developed’ nations of the world. Such a linear and monolithic view of progress ignores how far the world can go if resources, power and voice were given to communities to seek their own development paths under fairer global rules. 

Rather, global justice must be geared towards creating the power arrangements and the material conditions to allow the expansion of human capabilities in our common and interdependent world, leaving no one behind.

This means at least three key shifts in priorities as part of a broader effort to move towards a rights-based economy

First, expanding lower-income States’ policy space and supporting them for providing comprehensive social protection and implement an audacious set of policies to manage increasingly disruptive risks that could throw millions to poverty and unemployment in a matter of days. Public institutions must be in a position to fulfil basic rights that people can be deprived of due to the intricate network of interdependent connections the global economy has become, including through quality care services and the right to benefit from a compensated general reduction in working hours.  

Second, move towards a multi layered global governance system aiming to correct power asymmetries, and give voice and decision power to multiple actors in truly democratic global forums (including social movements, civil society organizations, grassroots, small-scale business and emerging actors). Such a multi layered system should prioritize ambitious targets in terms of carbon pricing, climate change adaptation, free access to public goods, debt restructuring, combating tax evasion and avoidance through taxing multinationals as units (not as separate entities) and the definition of a minimum effective corporate tax rate.

Third, creating the institutional, legal and material conditions for every person in the world regardless of their nationality, gender, race or socio-economic status to use the best available knowledge, technology, data, and a basic capital endowment to pursue their own goals, as well as to benefit from scientific progress and its applications (including free and timely access to COVID-19 treatment and vaccines as public goods). 

Geopolitics and collective action for justice

It would be naive to think that these changes can be achieved in a top-down direction and outside of geopolitical dynamics, but it wouldn’t be accurate either to ignore the contradictions of the current global order, and the increasing demands for systemic change. These changes require going beyond the narrow logic of nation-states as the main channels through which human interests in the global order are represented and negotiated. The gap between the possibilities that technological and productive advances have opened up and the inability to put them at the service of fundamental human needs reflects, in turn, the magnitude of what alternative schemes of social cooperation could achieve. For example, the same technological tools used for State surveillance, can also be used for emancipatory purposes if those tools were reappropriated by social movements and democratic forces, as  the spread of climate justice, anti-racist or feminist mobilizations beyond borders have shown. Amid the crude exploitation of fear and despair in times of Covid-19, it is worth pushing for transformative joint action and remember Thomas Fuller’s words: ‘the darkest hour is just before the dawn’.


About the author: Sergio Chaparro Hernández is an Economist and M.A in Law from the National University of Colombia. He serves as Program Officer at the Center for Economic and Social Rights (CESR). Twitter: @SergioChaparo8. Email address: schaparro@cesr.org

This article is a runner up in an essay competition held by the UNCTAD YSI Summer School on Globalization and Development Strategies. Participants of the school worked with senior scholars to fine-tune their drafts, and the top-5 articles were published here. For other articles in the series, please click here.

About UNCTAD UNCTAD is a permanent intergovernmental body established by the United Nations General Assembly in 1964. Its headquarters are located in Geneva, Switzerland, with offices in New York and Addis Ababa. UNCTAD is part of the UN Secretariat, reports to the UN General Assembly and the Economic and Social Council, and are also part of the United Nations Development Group.


Highway to hell: How neoliberalism is driving “advanced” economies towards a Latin American-style accumulation pattern

By Baptiste Albertone

The weight of the past has sometimes been more present than the present itself. And a repetition of the past has sometimes seemed to be the only foreseeable future. 

Enrique Krauze

The history of independence in Latin America is a history of reproduction of the same, but different. The Napoleonic wars that weakened the Crown provided the opportunity for Latin American landlords to finally claim the full possession and administration of the fertile soil and abundant cheap labour at their disposal. As the first nations proclaimed their right to self-determination, the new states engaged in the consolidation of a new institutional framework, independent of the Crown, but reconfigured to fit the taste and interests of landed-elites and the colonial bourgeoisie. As it is common in the revolutionary processes of nations under colonial rule, despite the adhesion and (indispensable) active participation of the popular sectors, only a segment of the elite benefited from the structural reconfiguration of what the Marxist literature calls: a Bourgeois revolution.

The political rupture translated into economic continuity: The regime of accumulation inherited from the colonial period remained unaltered to reproduce a rentier-style capitalism. Indeed, the material reason for independence was not the transformation of the economic structure but the conquest of a larger share of its benefits by one class.  In addition to internal interests, a parallel international driving force supported the maintenance of this rentier regime: the centro-peripheral dynamics of the world economy, which placed Latin American nations in a subordinate and “dependent”  condition of natural resource providers for “core” economies. 

The role of economic ideas has certainly been decisive in the ability of the rentier regime to reproduce itself despite its deleterious effects. First, in the post-independence period, the neoclassical theory of comparative advantage offered a strong argument against developing a manufacturing sector through industrial policy. Later, in the early post-war years, the US administration-backed modernization theoryacted as a strong counter-discourse to classical development theorists’ arguments in favour of a structural transformation. Finally, from the late 1970’s onward, the infamous Washington Consensus came to provide an intellectual rationale to the political and historical project of capital and power concentration with de-industrialisation in the Latin American continent.

The socio-economic consequences of the rentier developmental mode are profound. As the Latin American structuralist school has vastly discussed, the rent-seeking style of development has favoured the persistence of 1) a large pre-capitalist sector, and 2) a highly heterogeneous intersectoral productivity. These structural determinants have major consequences on both pre-tax and post-tax income inequality dynamics. First, the economic dualism of the productive structure, a feature of rentier capitalism, implies that the share of labour in national income is very low In fact, land concentration and the scarcity of productive employment produce structurally unequal labour markets, with a very high number of informal workers acting as a reserve army. Second, the absence of a meaningful social contract between the governing elites and the popular sector gives rise to a regressive and fragile fiscal state, reluctant to influence the structural level of inequalities and to finance public goods. 

Therefore, the Latin American state was designed in such a way to guarantee the reproduction and the capture of the benefits of economic development by a wealthy minority, echoing Smith’s view that “[c]ivil government (…) is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all”.

The so-called era of democratisation in Latin America did not alter these power asymmetries. The structural configuration of extreme wealth and income inequalities as well as an almost unlimited ability to match economic power with political power gave rise to a form of quintessential Neoliberal state where, in José Gabriel Palma’s words the “new ‘democratic’ agenda of capital ensures that the state will fulfill its sole function of reproducing the new capitalist system”. The consequence is a unique level of inequality characterised by an unrestricted capacity of the elites to perpetuate themselves despite political changes.

But if the recipe for Latin American success once appeared to be a well-kept secret – only shared with some South African nations – it may no longer be the case. The neoliberal revolution that successfully altered labour markets and fiscal structures of most OECD countries is producing what Palma describes as a form of “reverse catching up”, with some advanced economies moving towards a Latin American style of accumulation. 

The graphs below illustrate the evolution of pre-tax inequalities in Germany, the United States, and the United Kingdom, three of the countries most affected by Neoliberal — or Ordoliberal in the German case — reforms.

Since the 1980s, these countries have experienced a dramatic rise in the share of the national income going to the individuals in the top 10% of the income distribution, mirrored by an almost identical, but opposite, trend affecting the share held by the bottom 40%. These tendencies are certainly not independent of the political and economic context that characterised the period.

From the mainstream viewpoint, the justification given for the tragic evolution of inequality is that of an growing capital-output ratio driven by entrepreneurial investment leading to an elevation in the share of profits in national income. 

Nonetheless, when looking at real investments’ figures, the picture turns out to be dramatically different from the expected dynamic. In the US, the gross private investment share of GDP has fallen by 3 percentage points since the late 1970s. On the contrary, what we see is a growing capacity from corporate elites to capture the benefits of economic growth with the help of both globalisation and financialization dynamics. Consequently, between the mid-1970’s and 2017, while real US GDP did more than triple, the real hourly wage of most Americans stagnated. 

What is at stake is a reconfiguration of the political space in the image of the Latin American oligarchical institutional style, where hierarchical economic principles subordinate the democratic and representative principles of politics embodied in the figure of the State. According to Branko Milanovic, the neoliberal restructuring while “it maintained the pretence of equality (one-person one-vote), (…) eroded it through the ability of the rich to select, fund, and make elect the politicians friendly to their interests”. In other words, neoliberalism should be understood as an active project that, as Quinn Slobodian notes it, “rather than ‘freeing’ or ‘disembodying’ ‘the’ market, [attempt] an ‘encasement’ of economic structures, isolating them from popular democratic demands”. 

By weakening the power of labour with more flexible workers’ protection, unravelling the Welfare State where it existed, engaging in a privatisation of public goods — the capital of those who don’t have any —, by adopting tax reforms that enhance regressive taxation and tax evasion, and by globally consolidating what Slobodian calls “the human right of capital flight”, neoliberalism demonstrated its striking effectiveness as a “technology of power” to rewrite the rules of the game in favour of capital accumulation. In the same way as Latin-American elites structured the newly born nation for the benefits of their interests, the recent success of Northern capitalist elites to create an environment suitable for the flourishing of their rent-extraction ambitions.

The structural reconfiguration that has been taking place since the mid-1970s is simultaneously endangering social and ecological balances, as well as putting societies at risk of implosion under authoritarian governments eager to establish Neoliberalism in a single country. We might be heading towards a dark horizon sketched by Slobodian as one of “brute competition in a zero-sum world where all that matters is the enrichment of an ethnically defined, territorially bounded national population”, where the protection of the environment – a common good by definition – is relegated to the tenebrous depths of national political agenda.

From this frightening observation arises an unsurpassable necessity to engage in a struggle for the transformation of economics — which today serves under its technocratic authority as the core instrument of the corporate elites’ political project — so that it becomes a democratic instrument for a fair and ecological economic transformation.


About the author: Baptiste Albertone is an MPhil candidate in Development Studies at the University of Cambridge and holds an MA and BA from the Institut d’Etudes Politiques de Paris. His research focuses on industrial policy and sustainable development in the Latin American context. Twitter: @BaptAlbertone 

This article is a runner up in an essay competition held by the UNCTAD YSI Summer School on Globalization and Development Strategies. Participants of the school worked with senior scholars to fine-tune their drafts, and the top-5 articles were published here. For other articles in the series, please click here.

About UNCTAD UNCTAD is a permanent intergovernmental body established by the United Nations General Assembly in 1964. Its headquarters are located in Geneva, Switzerland, with offices in New York and Addis Ababa. UNCTAD is part of the UN Secretariat, reports to the UN General Assembly and the Economic and Social Council, and are also part of the United Nations Development Group.