PhD Program Preparatory Workshop Series – Political Economy and Historical Methods Ramallah, 6 January 2014

Presented to the

the political economy and political ecology of development

Patrick Bond, University of KwaZulu-Natal, Durban, South Africa

apartheid South Africa and apartheid Israel: ten parallels Jonathan Nitzan and Shimshon Bichler (1999), ‘Going global: Differential accumulation and the great U-turn in South Africa and Israel,’ RRPE

• white minorities; • planned colonization; • strategic assets for the British empire; • pro-US foreign policy; • elites self-perceived as islands of Western culture within backward, hostile environment;

• similar economic institutions: concentrated market structures, heavy state involvement, and labour market segmentation along racial/ethnic lines; • economic development of both countries unfolded within framework of 'war economy' - recurring armed conflicts, large military and internal security budgets and major weapon development programmes • [add: dominance of relatively patriotic bourgeoisies] • [add: ‘superexploitative’ historical basis for race/nation-class-gender-geographical configuration, including border industrial zones] • [add: turn to neoliberal globalisation]

•socio-economic rights narrative • social policy (‘indigency’ and tokenistic welfarism) • decentralisation, fragmentation • neoliberal microdevelopmental policies and practices (pricing, service levels, disciplining) • Public-Private Partnerships, privatisation, ‘commodification of everything’ • environmental management through ‘ecological modernisation’ (pollution, water, energy, climate and carbon trading)

Post-apartheid (1994) SA (and restructuring Palestine?)

• neoliberal macroeconomic policy and relations with world economy (free trade, high interest rates, liberalised exchange controls and finance, foreign direct investment deregulation, tightening fiscal policy) • ‘homegrown’ but donor-massaged (WB, US, Canada, EU) • relative strength of finance, trade, telecommunications, construction • rising unemployment, inequality

Immanuel Wallerstein and the Gulbenkian Commission on the Restructuring of the Social Sciences (1993-96): • social science was historically

constructed as a form of knowledge

• it was divided into a specific set of relatively standard disciplines in a process that went on between the late eighteenth century and 1945

• world developments since 1945 have raised questions about this intellectual division of labor

… warning: it is the very obvious appeal of interdisciplinarity that makes it dangerous to weaker, critical disciplines since it can become the Trojan horse for the dissolution of particular disciplines by bringing them into a hierarchical relation with more powerful disciplines. It can become the basis for a narrowing rather than widening of perspectives, especially when the university is in crisis and restructuring is on the agenda.

Michael Burawoy: three criticisms of the social sciences • universalism, which hides domination of Western

thought; • positivism, which searches for universal and

deterministic laws; and • disciplinarity, according to which the social sciences

should be divided by their objects of study

CONTENTS The Dual Gaps: An Overview of Theory and Research—M.A. Seligson. IS THERE A GAP BETWEEN RICH AND POOR COUNTRIES? Characteristics of the Income Gap Between Countries: 1960-2010—J.T Passé-Smith. The Rising Inequality of World Income Distribution—R.H. Wade. Empirics of World Income Inequality—G. Firebaugh. Assessing Contending Measures of the Gap—J.T Passé-Smith. The Economic Lives of the Poor—A. Banerjee and E. Duflo. THE HISTORICAL ORIGINS OF THE GAP. The World Economy: A Millennial Perspective—A. Maddison. Why Did Human History Unfold Differently on Different Continents?—J. Diamond. Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development—D. Rodrik, A. Subramarian, and F. Trebbi. The Colonial Origins of Comparative Development—D. Acemoglu, S. Johnson, and J. Robinson. Macroeconomic Narratives from Africa and the Diaspora: Institutions versus Policies: A Tale of Two Islands—P.B. Henry and C. Miller. THE OTHER GAP: DOMESTIC INCOME INEQUALITY. Economic Growth and Income Inequality—S. Kuznets. Inequality and Insurgency—E.N. Muller and M.A. Seligson. Global Inequality: Beyond the Bottom Billion—I. Ortiz and M. Cummins. Equality and Efficiency: Is There a Tradeoff Between the Two or Do They Go Hand in Hand?—A. Berg and J.D. Ostry. Do Poorer Countries Have Less Capacity for Redistribution?—M. Ravillion. THE CLASSICAL THESIS: CONVERGENCE OR DIVERGENCE? The Five Stages of Growth—W.W. Rostow. Productivity Growth, Convergence, and Welfare: What the Long-Run Data Show—W.J. Baumol. Productivity Growth, Convergence, and Welfare: Comment—J.B. DeLong.

CULTURE AND UNDERDEVELOPMENT. The Achievement Motive in Economic Growth—D.C. McClelland. Underdevelopment Is a State of Mind—L.E. Harrison. The Effect of Cultural Values on Economic Development: Theory, Hypotheses, and Some Empirical Tests—J. Granato, R. Inglehart, and D. Leblang. DEPENDENCY AND WORLD SYSTEMS THEORY: STILL RELEVANT? The Development of Underdevelopment—A.G. Frank. American Penetration and Canadian Development: A Case Study of Mature Dependency—H. Hammer and J.W. Gartrell. New Paths: Globalization in a Historical Perspective—F.H. Cardoso. THE ROLE OF INSTITUTIONS. Big Bills Left on the Sidewalk: Why Some Nations Are Rich and Others Poor—M. Olson, Jr. Urban Bias and Inequality—M. Lipton. Political Regimes and Economic Growth—A. Przeworski and F. Limongi. Inequality As a Constraint on Growth in Latin America—N. Birdsall and R. Sabot. What Makes Countries Rich or Poor?—J. Diamond. NATURAL RESOURCES, CLIMATE CHANGE, AND THE GAP. Commodity Prices, Growth, and the Natural Resource Curse—P. Collier and B. Goderis. Parasite Prevalence and the Worldwide Distribution of Cognitive Ability—C. Eppig, C. Fincher, and R. Thornhill. Climate Change and Economic Growth: Evidence from the Last Half Century—M. Dell, B.F. Jones, and B.A. Olken. CONCLUSION. Inequality in a Global Perspective: Directions for Further Research—M.A. Seligson. Appendix: Basic Indicators of the Gaps Between Rich and Poor Countries.

Philip McMichael Cornell University Development Sociologist 1. Development: Theory and Reality Part I. The Development Project (Late 1940s to Early 1970s) 2. Instituting the Development Project 3. The Development Project: International Framework 4. Globalizing Developments Part II. The Globalization Project (1980s to 2000s) 5. Instituting the Globalization Project 6. The Globalization Project in Practice 7. Global Countermovements Part III. Millennial Reckonings (2000s-Present) 8. The Globalization Project in Crisis 9. The Sustainability Project 10. Rethinking Development

Macro-

economics

Heterodox

authors

Neoclassical

school

Marxists Cambridge

Keynesians

Old

Keynesians Monetarists

New

Keynesians

New

Classicals

Radicals

French

Regulation

School

Post-

Keynesians

KEYNES

political economy versus neoclassical economics

political economy: follow the flows of capital

CRISIS

Source: David Harvey, The Urbanization of Capital (1985)

consumer credit boom,mutual aid systems, ‘site and

service’, etc

gendered reproduction

of labour power,

outsourced work, immigrant abuse,

incarcerated labour, etc

commercial-isation, home-based care, etc

environmental planning and greening production

pollution at point of production; infrastructure subsidies, etc

technological fixes to environmental problems

Erik Swyngedouw: urban hydro-political ecology

…water flows would narrate stories of people and powerful socio-ecological processes that produce urban spaces of • privilege and exclusion; • participation and marginality; • water-borne disease; • speculation in water-industry related futures and options; • chemical, physical and biological reactions and transformations; • the global hydrological cycle and global warming; • the capital, machinations and strategies of dam builders; • urban land developers; • the knowledges of the engineers; • the passage from river to urban reservoir.

In sum, my cup of water embodies multiple tales of the “city as a hybrid.” The rhizome of underground and surface water flows, of streams, pipes and veins that come together in urban water gushing from the stand-pipe is a powerful metaphor for the socio-ecological processes that produce the city and become embodied in city life.

‘The city as a hybrid: On nature, society and cyborg urbanization,’ Capitalism Nature Socialism, 7:2, 65-80, 1996

externalization of costs takes the form of an extraction of surpluses, both economic and thermodynamic: 1) a social debt to inadequately paid workers; 2) an embodied debt to women family caregivers; and 3) an ecological debt drawn on nature at large.

Ugandan marxist Dani Nabudere

(1929-2011) ‘financialization’ thesis vindicated

The Crash of International

Finance Capital and

The Rise and Fall of Money Capital source: The Economist

in SA race-class-gender debate, Harold Wolpe’s

‘articulation of modes of

production’

Smith: ‘it is the logic of uneven development which structures

the context for this articulation’

uneven development of • society, • sector, • space, • scale,

• sustainability

amplified during capitalist crisis, financialization

super-exploitation through capitalist/non-capitalist relations

Rosa Luxemburg ‘ Accumulation of capital periodically

bursts out in crises and spurs capital on to a continual extension of the market. Capital cannot accumulate without the aid of non-capitalist relations, nor … can it tolerate their continued existence side by side with itself.

Only the continuous and progressive disintegration of non-capitalist relations makes accumulation of capital possible.’

The Accumulation of Capital, 1913

Long waves of debt and default (by sovereign leaders) the Kondratieff Wave

crisis as moment of amplified uneven and combined development

Source: Barry Eichengreen

long waves of debt and default (by sovereign states)

finance delinks from world’s real economy: market value of financial assets and aggregate global GDP at current prices (billion US$) Source : Leda Paulani, USP with McKinsey Global Report data

26

fin.assets

GDP

‘overaccumulation’ and financialisation: sources of decline in US

manufactuing profits

• US corporate profits derived much less from manufacturing products;

• much greater sources of profits from abroad;

• profits also came more from returns on financial assets.

• Source: Gerard Dumenil and Dominique Levy

crisis of surplus value extraction

‘temporal fix’

‘spatial fix’

GDP stagnation at core of world economy, major changes in US

corporations’ fortunes

US corporate profits become finance-

addicted in mid-1980s (source: John Bellamy Foster and

Fred Magdoff, 2009)

US economy becomes debt-addicted from

early 1980s (source: John Bellamy Foster and

Fred Magdoff, 2009)

overaccumulation of capital remained

through 1980s-2000s (source: John Bellamy Foster and Fred

Magdoff, 2009)

production crash in historical terms…

…initially as bad as 1929

Source: Eichengreen and O’Rourke

trade crash in historical terms…

A worse crisis than 1929!

Source: Eichengreen and O’Rourke

…initially worse than 1929

stock market crash in historical terms…

Source: Eichengreen and O’Rourke

…initially worse than 1929

stock market volatility: all markets in ‘08

Source: Unctad

sometimes the contradictions burst … with widespread loss

of paper wealth

commodity price devaluations

Source: Unctad, The Global Economic Crisis, May 2009

change in percentage, July – December 2008

deficit spending (USA reached 13% of GDP)

fiscal deficits soar with desperation-Keynesianism

wealthy governments’ debt reached (political) ceiling…

…vast increase mainly reflects bailout of US and European banks in late

2008

Source: IMF, Global Financial Stability Report, April 2010

‘temporal fixes’: derivatives, ‘Quantitative Easing’

longer-term resort to the ‘spatial fix’ roots of crisis:

long-term stagnation of EU, US and Japan after

Post-War ‘Golden Years’

uneven development in GDP growth

spatial accumulation fix in East Asia

a spatial fix in trade emerges

the US, EU (most)

East Asia, Germany,

Middle East,

spatial trading fix hits limits

spatial investment fix hits overaccumulation and pressure rises for deglobalisation strategies

spatial financial fix bursts its boundaries emerging markets began closing capital accounts

renewed exchange controls

uneven development in GDP growth

as China slows,

Africa now looks tasty

fastest growing

continent of the 21st C?

against slavery, colonialism, neocolonialism, neoliberalism?

or within?

Manmohan Singh Xi Jinping Jacob Zuma Dilma Rousseff Vladimir Putin

Britain, France, Belgium, Portugal, Germany, Italy, Spain

in Berlin, 1884-85: ‘The Scramble for Africa’

“Africa Rising”? (# of citations)

“Africa Rising”: GDP percentage increases, 1981-2012

but isn’t it time to correct GDP bias?

world GDP, 1950-2005

what’s missing? • resource depletion • air, water, and noise pollution • loss of farmland and wetlands • unpaid women’s/community work • family breakdown, crime • other social values

Genuine Progress Indicator

world GDP, 1950-2005

new measurements: post GDP

“Africa Rising” reality check from WB

what’s rising? multinational corporate profits as a percentage of firm equity

Source: UN Conference on Trade and Development (2007), World Investment Report 2007, Geneva.

extractive industries

and Africa protests Rising Agence France Press::

Africa protests (and food prices) rising

Source: Andre Gunder Frank & Martha Fuentes

social movements in 19th & 20th century history

since 2011: Arab Spring, ‘Indignados’ of Spain, Greeks and Italians, Occupy in the US and Europe,

Nigeria Occupy, Senegal, Bulgaria, Turkey, Brazil, etc

Source: Michael Burawoy

Polanyi’s double movement: waves of market power

social, labor and environmental movements