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Mental health is a crucial part of human capital development and yet, there remains sparse research on this important aspect of health and economic development— more so in Africa, a region which faces the joint challenge of high disease burden and a severely underfunded health sector. Moreover, addressing mental health disorders should be of pressing…

Back in 2020 and 2021, in and around the straight economics and economic policy posts, there were quite a few on aspects of the Covid experience in New Zealand, particularly in a cross-country comparative light. More recently, you see from time to time suggestions that New Zealand’s experience may have been so good that in … Continue reading Deaths and excess deaths

Despite its small size, with a population of only 3.4 million, and its geographical location, sandwiched between two giants such as Brazil and Argentina, Uruguay frequently features in the international press. These regular appearances are generally to highlight positive aspects regarding its solid institutions, its democratic credentials, its economic stability and predictability, its social protection […]
La entrada Uruguay's high public debt and low credit risk puzzle: 'what you don't see is what you get' se publicó primero en Elcano Royal Institute.

Since the start of the war in Ukraine, we've discussed its many aspects but we haven't talked to anyone actually in or from the country. On this episode, we do both. Ukrainian economist Tymofiy Mylovanov is the president of the Kyiv School of Economics, advisor to the Zelensky administration, and former Ukrainian Minister of Economic Development, Trade and Agriculture.

Mylovanov shares what has and hasn't surprised him about the war, reveals Russia's other strategic advantages beyond energy resources, and offers a game theoretical approach to understanding the potential outcomes of this conflict. Along the way, he laments the cost of human lives as the price for democracy, and encourages us to remember history's lessons.

Please consider supporting the humanitarian aid campaign of the Kyiv School of Economics Charitable Foundation at Mylovanov's institution: https://kse.ua/we-save-lives/

We're taking the holiday off to be with our families, but that doesn't stop the economic news. And there is no story bigger than the collapse of the crypto exchange, FTX. One aspect that attracted our attention was Sam Bankman-Fried, the young CEO of FTX, officially bought into a philosophy called Effective Altruism, where you make the most money to give it to the poor. However, in a text exchange with a Vox reporter SBF said "this dumb game we woke westerns play where we say all the right things and so everybody likes us". It reminded us of what Vivek Ramaswamy said about woke capitalism on the show last year. We've decided to replay that show for you, and we'll be back in two weeks with a brand new episode of Capitalisn't.

Vivek Ramaswamy, a scientist, lawyer, and former venture capitalist and entrepreneur, has a new book out: "Woke, Inc.: Inside Corporate America's Social Justice Scam". In this book, he argues that "wokeism" has become a way for corporations to wrap themselves in a mantle, which then furthers the idea of crony capitalism and extends their power into spaces they were never meant to be in.

Luigi Zingales and Bethany McLean sit down with Ramaswamy to discuss his perspectives on the role of virtue, ethics, and politics in business and society.

In my previous blog, which you can find here, I investigated the economic rationale behind a Negative Income Tax (NIT) and a Universal Basic Income (UBI), arguing that the former exhibits greater effectiveness in combating poverty but might discourage individuals to work, while the latter incentives greater participation of low-income individuals in the labour market at the cost of a lower effectiveness in tackling poverty. However, this economic assessment is not the only lens through which these two policies can be analysed and usually fails to explain why right-wing parties tend to support a NIT while left-wing ones prefer an UBI. This political divide is mainly to be connected to the ethical – rather than the economic- differences of the two policies, with a NIT relying on a libertarian view of freedom and equality while the UBI arising from an egalitarian one.The first key aspect that distinguishes the ethical foundations of NIT and UBI relates to their perspectives on freedom. Examining freedom from a negative standpoint involves considering an individual free when they can carry out their actions without interference from others or groups (i.e., they are free from). Emphasising the concept of negative freedom is intrinsic to libertarian thinking, as it necessitates the establishment of minimal legal frameworks and a governing authority to safeguard individuals' self-determination. In contrast, from an egalitarian standpoint, an individual is deemed unfree if they lack the means necessary to pursue a goal and be autonomous, even if no other individual or institution obstructs their path. Positive freedoms can therefore be described as opportunities (i.e., they are free to), and their maximisation necessitates redistributive measures, which are ensured by a stronger and more active state.A second factor is individuals' approach to uncertainty. On one hand, the libertarian stance acknowledges that different individuals possess varying degrees of risk aversion when engaging in economic activities. This implies that individuals make choices regarding their employment status, investments, and consumption based on their unique risk preferences. In this view, the market system ensures equality of treatment among individuals. On the other hand, the egalitarian viewpoint perceives and justifies redistribution as a response to the widespread risk aversion exhibited by all individuals. This argument is rooted in the notion that, given individuals' lack of knowledge beyond moral considerations (referred to as the veil of ignorance), they would collectively support the existence of institutions dedicated to redistributing the products and benefits stemming from the arbitrary distribution of abilities and talents.Based on a libertarian view, a negative perception of freedom and a probabilistic approach to uncertainty would reject any form of equality beyond equal rights, thus opposing any form of compulsory fiscal imposition. However, assuming the necessity for the existence of such a policy, state intervention should be limited to preserving the essential tenets of libertarianism. Therefore, any public redistributive scheme should exclude any form of needs, the link with the market should be as weak as possible and the role of the state should be as less invasive as possible. In this context, a NIT scheme is often argued to be a redistributive policy that adheres to these constraints by implementing exemptions and deductions from taxable income and only taxing the portion that exceeds a certain threshold. On the other hand, a positive perception of freedom, which asserts that true freedom encompasses both the means and the rights to pursue one's desires, along with a risk-averse approach to uncertainty, leads to a policy that addresses people's needs with an unconditional requirement. This is exemplified by a UBI, which aims to meet individuals' purchasing power without imposing specific conditions.

We are inviting abstracts for the IAG 2024 in Adelaide for our session on Energy Geography and Renewable Energy.
Energy Geography and Renewable Energy
Organised by: Gareth Bryant (USyd) gareth.bryant@sydney.edu.au, James Goodman (UTS) James.Goodman@UTS.edu.au, Lisa Lumsden (Next Economy) l.lumsden@nexteconomy.com.au, Sophie Webber (USyd) sophie.webber@sydney.edu.au
Sponsored by the Economic Geography Study Group and the Nature, Risk and Resilience Study Group
Transitions from fossil fuels to renewable energy are multilevel and transformative. Energy is rescaled, from distributed and household contexts to new greenfield or 'brownfield' wind, solar and storage utilities, regional renewable development modelling, national planning frameworks and global energy and climate policy-making. There is extensive scale shifting by renewable energy corporates and financial institutions as well as by critical climate NGOs and activist networks, that often leverage variations in regulatory regimes or in commitments to decarbonisation. Drivers of transition can be complementary, as 'co-benefits', but they can also collide. Much of the renewable sector is privately owned, albeit dependent on state authority, and the priority of maintaining investor returns can take precedence over emissions reduction. Efforts at maximising returns in neoliberal renewables can exacerbate social divisions, negate community or livelihood benefit and prevent wider democratic participation, involvement or social ownership. All these aspects pose problems for renewable energy legitimacy, driving new contestations and new forms of claim-making, including for social ownership and for socio-ecological priorities to take precedence over corporate interests. We seek papers that address how people interpret these and related transitions, how lives are re-ordered and how the meaning and potential of places is thereby transformed. We are especially interested in how the new socio-ecological geographies of energy can be generative, producing new capacity for climate agency and decarbonisation.
Interested presenters should send (no more than) 250-word abstracts, with title, keywords, authors and contact information to the session organisers by Friday March 22. We will notify accepted papers before the IAG deadline.
Cover image: Illustration by Matt Rota for The Transnational Institute
The post CFP IAG 2024: Energy Geography and Renewable Energy appeared first on Progress in Political Economy (PPE).

Eighty years ago (on 10 March 1944) a short but hugely influential book was published: The Road to Serfdom. Written by the prominent economist, social theorist, and later Nobel laureate Friedrich Hayek. It sought to explain how a civilized country could fast descend into a warmongering, totalitarian dictatorship, as Germany had done.The book certainly caught the imagination of a world still at war. A US edition came out six months after the British publication, then in April 1945, Reader's Digest published a condensed version that brought it to a mass audience. But The Road to Serfdom is much more than an explanation of what had gone wrong in the country of Goethe and Beethoven those eighty years ago. It is also a stark warning to future ages of how easy it is to stumble down a road to serfdom of their own — and a warning to us today that we may already have taken fateful steps in that direction.Probably nobody in a liberal society intends to turn their country into a tyranny like Hitler's Germany, or for that matter, Stalin's Soviet Union. But Hayek's shocking thesis is that public policies that are introduced for the most noble of reasons can, and often do, create the conditions that make this fate more likely.  Then, by the time people have come to understand what is happening, it is already too late.Even more shocking is his firm belief that it is the pursuit of social democracy that is responsible for this result. Social democrats, and centrists of many varieties, promote policies that they hope will reduce inequality and boost social welfare. Such policies usually demand greater government control over the economic system, the use of taxation to redistribute wealth and income and compensate for other inequalities, and the establishment of a comprehensive welfare state to provide essentials such as housing, education, healthcare, and social benefits. But these initiatives all require the creation of new levers of political power, and at least some curbs on people's economic and social freedom. Once those two things are in place, they can potentially be exploited by politicians — not just those trying to make the policies work, but less scrupulous ones who dream of power. Moreover, these policies also give rise to perverse incentives and inefficiencies that stifle individual initiative and undermine the dynamism of markets. The resulting economic stagnation generates calls for yet more, and tougher, central planning and government intervention to correct things — which makes the rise of those unscrupulous politicians more likely. Historians may argue that this is not exactly what happened in Germany. Hitler's National Socialist German Workers' Party came to be seen as an antidote to the economic chaos of the late 1920s and early 1930s. But it did not have all the instruments of power presented to it on a tray. It had to seize power. But the fact that so many people thought that more government was the answer made it easier for it to do so.Nor did the United Kingdom, its government now furnished with all the power required to win a war, find itself too far down the road to serfdom to turn back. Rather, it found itself on a long road to economic stagnation, inflation, unemployment and decline that made British people yearn for the kind of post-war economic miracle enjoyed by the country they had so recently pummelled into defeat. Their journey down the road to road to privation was halted only in the 1980s, with Margaret Thatcher's reforms. Yet still, much of the apparatus of government intervention, planning and control remained in place, slowing any advance in a better direction. That — and its baleful result — is nowhere more obvious than in Britain's hugely government-heavy planning system for land and property, a post-war creation which the Adam Smith Institute reckons to cost the economy £66bn a year, or 3% of GDP. And much of the other apparatus of government control — in education, healthcare, housing, pensions, transport and insurance — is still there and still holding back innovation and enterprise.Today, that continuing dominance of government in so many parts of life is seriously eroding individual freedom. The government may not own utilities, transport or manufacturing operations anymore, but through law and regulation it still controls them. And as Hayek pointed out in The Road to Serfdom, if a government controls the economy, it controls freedom itself. How can critical ideas be advanced when the government controls the dominant media outlets? Or when it controls what people can and cannot say in public? How can critical ideas even arise when it sets the school curriculum and when college teachers — along with a fifth of the working population more generally — owe their living to the state? How can people find suitable accommodation when national and local government own a sixth of the land and control every aspect of how the remainder is used? Such a country is free only in name.Hayek believed that the apparatus of a state was needed to maintain freedom and deliver defence and justice, and essential public goods and services. And these are no small tasks. But he also realised the danger that government could so easily grow into the destroyer of individual freedom. That policies that start with noble intentions — sparing people from hostile views, for example — can turn into something repressive —such as the shutting down of free debate. The road to serfdom is a slippery downward slope. And we appear to be a long way down it.

In his seminal 1957 book "The Copernican Revolution," Thomas Kuhn writes that Copernicus' "astronomical innovation" was characterized by a "plurality" that "transcends the competence of the individual scholar." Studying the Copernican Revolution, he said, provides an "ideal opportunity to discover how and with what effect the concepts of many different fields are woven into a single fabric of thought."There is a similar plurality of thought present in "How Sanctions Work: Iran and the Impact of Economic Warfare" (Stanford University Press) by Narges Bajoghli, Vali Nasr, Djavad Salehi-Isfahani, and Ali Vaez. Like astronomy, the study of sanctions transcends the competence of the individual scholar. The four authors bring diverse expertise to the task of understanding the workings of sanctions. Bajoghli is a sociologist, Nasr is a political scientist, Salehi-Isfahani is an economist, and Vaez trained as a nuclear physicist before turning towards security issues.Studies on the efficacy of sanctions policies tend to focus on policy design — are they unilateral or multilateral measures, are they are primary or secondary sanctions, and what sectors, entities, or individuals do they target? In these studies, the country imposing sanctions is placed at the center of the system, exerting forces on the sanctioned countries in its orbit. The Copernican aspect of "How Sanctions Work" is its insistence that a true understanding of sanctions efficacy arises not from an analysis of the policies, but rather from an analysis of the society and economy on which they are imposed.Setting out their aim for the book, the authors declare that "policymakers and pundits" inquiring "do sanctions work?" are asking the wrong question. That question fixates on the power of the sanctioning country and has an obvious answer. "When a country with the size and economic power of the United States imposes harsh sanctions on a country, of course they 'work': sanctions create massive disruptions in the everyday lives of citizens, impact the political culture of the targeted state, and induce shocks in the economy."The better question, the authors contend, is "do sanctions work the way they 'should'?" This inquiry puts "behavioral changes in targeted states" at the center of the model. It also allows for a more sensitive examination of how sanctions may harm ordinary people, an insight no doubt furnished by the authors' personal connections to Iran.Until recently, Western policymakers have maintained a dogmatic belief in the efficacy of sanctions despite the fact that they had clearly failed to achieve their intended policy outcomes in most countries on which they had been applied, most notably Cuba, Iran, Iraq, Syria, North Korea, Venezuela, and Russia. But, like St. Augustine, who counseled against trying to understand the workings of the heavens, policymakers committed to sanctions policy felt it was "not necessary to probe into the nature of things."In 2018, the Trump administration unilaterally imposed "maximum pressure" sanctions on Iran, raising new concerns about the abuse of sanctions. But even as many former sanctions practitioners warned about the overuse of economic coercion, it was clear that sanctions would remain a mainstay of U.S. foreign policy. As Dan Drezner has observed, "two decades of war, recession, polarization, and now pandemic have dented American power. Frustrated U.S. presidents are left with fewer arrows in their quiver, and they are quick to reach for the easy, available tools of sanctions."In 2021, spurred by the Trump administration's brazen use of sanctions, which had frustrated allies and provoked adversaries, the Biden administration undertook an interagency review of its sanctions policy with the aim of ensuring that "economic and financial sanctions remain an effective tool of U.S. national security and foreign policy now and in the future." The review set out steps to "modernize sanctions," including by ensuring that sanctions policy is informed by "rigorous economic analysis, technical expertise, and intelligence to ensure that they are the right tool in our national security arsenal to pursue the identified objective." In May 2023, the Treasury Department Office of Foreign Asset Control hired a chief sanctions economist for the first time. Belatedly, policymakers in Washington are beginning to probe into the nature of their sanctions policies.A similar effort to better understand sanctions is also underway in sanctioned countries themselves. Despite the tremendous impact of sanctions on economic and social circumstances in Iran, it is only in the last few years that sanctions have been studied on their own terms. Prominent think tanks in Iran now have dedicated sanctions experts whose task is to understand how U.S. sanctions work and assess the costs borne by Iran's economy.For the analysts in Washington and Tehran newly evaluating sanctions and their effects, How Sanctions Work is a valuable resource. By centering the targeted country in the discussion of sanctions efficacy, Bajoghli, Nasr, Salehi-Isfahani, and Vaez demonstrate what a case study on sanctions should look like. To answer the question of how sanctions should work, it is necessary to describe how they are perceived in the target country.The book's first chapter does not begin with a discussion of what sanctions are, how they are designed, or their economic effects. Instead, we read about Fariba, a retired teacher, who recounts the precarious position she faces in Iran's sanctioned economy. Fariba once "led a solidly middle-class life in Tehran" but now constantly worries about how to get her diminished income to "stretch as far as possible."When in the third chapter we finally turn to the impact of sanctions on Iran's economy, we can interpret the assembled statistics with greater sensitivity. For example, when we read that "between 2011 and 2019, some 9 million people lost their middle-class status and joined the ranks of the lower-middle class and perhaps even the poor," we think back to Fariba and her struggle to make ends meet. This is the formal innovation that makes "How Sanctions Work" an important contribution. The authors are not presenting a great deal of new information, but rather presenting existing research in a new way. The book emerges from a series of research papers commissioned by the authors and published by Johns Hopkins SAIS (I was the author of one of those papers). The book also draws on eighty "long-form oral history interviews," including with Iranian researchers studying sanctions impacts. The authors weave together the findings of these papers and interviews with insights from the growing body of sanctions research, creating a first-of-its-kind cosmology of sanctions—a description of their forces, the bodies acted upon, and the orbits and trajectories altered.Again, a parallel can be drawn between "How Sanctions Work" and Copernicus' "On the Revolutions of the Heavenly Spheres," which Kuhn describes as a "relatively staid, sober, and unrevolutionary work." For Kuhn, the book's significance lies "less in what it says itself than in what it caused others to say. In other words, Copernicus had written a "revolution-making rather than revolutionary text." Kuhn's later scholarship established how the application of new "paradigms" advances scientific knowledge. Without the right paradigm, those who wish to innovate, whether scientists or policymakers, will not even know the right questions to ask."How Sanctions Work" concludes by calling for a paradigm shift in our appraisals of sanctions policy. "With the United States sanctioning larger economies such as Russia, and threatening more punishing sanctions on a country like China, it behooves us all— as scholars, policymakers, and concerned citizens — to critically examine economic sanctions. Put another way, it is time to understand how sanctions really work."

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Armed conflict and violence seldom erupt overnight, even when their visible effects seem to take many off-guard. More likely, they stem from deep-rooted, entrenched fault lines that may not always be obvious or visible because they go back decades—if not longer. Effectively mitigating the eruption or recurrence of conflict requires identifying, analyzing, and tackling the root causes of fragility, conflict, and violence (FCV)—not just what happens but why it happens.

Structural factors of FCV are systemic characteristics that underpin a country's economic, political, institutional, security, and societal evolution. They range from historical legacies and narratives to norms and values and include geography, subnational disparities, demographic trends, and many more. They may be simmering beneath the surface, deemed latent, as if no longer relevant or even self-evident, to the extent that one may not assess their full ramifications in the current context.

In the Lake Chad region, where armed conflict has been fueled by deep-rooted fragility and grievances, some groups, such as the "montagnards" from the Mandara Mountains and the Buduma, have been historically disenfranchised and still face regular barriers to representation in decision-making processes and development dividends. Geography is another important structural factor. As shown in the Lake Chad regional RRA with the exception of the capital N'Djamena, the Lake Chad region is remotely located which has fostered a sentiment of political isolation coupled with economic marginalization.

Past instances of armed conflict generate historical legacies, even when a generation or more has elapsed since violent events. Trauma, often inter-generational and collective, heals through acknowledging wrongdoings and reparative justice. In addition to direct survivors and families of victims, their descendants and the community at large can connect with the memory of violent events and how remnants of discrimination and stigmatization may still be perceived, long after these historical occurrences. Historical legacies shape a memory and group identity. It further contributes to a narrative where an individual's access to opportunities may be interpreted through the lens of whether they belong to the group of former perpetrators or survivors.

While underlying, persistent patterns of exclusion and a sense of injustice feed into strong local feelings, collective narratives, and psyche about significant elements of a society, structural factors of FCV do not necessarily determine the trajectory of a region, country, or locality. They are instead constitutive to the history and fabric of a context and, as such, shape a core part of its specificity. Think of rhizome more than direct causality.

There are many examples of this. For instance, territorial imbalances greatly contribute to inequalities and grievances. Analysts point out a crisis of pastoralism at the heart of nomadic herders' grievances in the Sahel, as well as zero-sum tendencies that prevent wider inclusion. Regional inequalities, between coastal and landlocked Saharan and Sahelian provinces, have various ramifications, such as on economic diversification, identity formation, and center-periphery relations.

Another example is the way in which governance systems inherited from colonial times have contributed to perpetuating contested and/or exclusionary patterns in settings affected by FCV. Guiding questions that may be helpful to unpack these connections include: To what extent did a colonial administration influence central or federal trajectories and power-sharing? Did independence occur as a result of a peaceful negotiation or from violent guerrilla warfare which institutionalized top-down, one-party "winner take all" mindsets? Did major milestones include and benefit all or only a few?

The recently completed Guinea Risk and Resilience Assessment (RRA) outlined the country's experimentation with different forms of governance, such as socialism. The country's exposure to various models has deeply influenced Guineans' yearning for equality and their low acceptance of economic stratification, which can still be perceived today.

How can we adjust our lens not just to the last unconstitutional change of government but to review core features that have defined a country's entire post-independence period? We cannot address the root causes of FCV unless we understand why events happen. This not only helps to mitigate their impact more effectively but also to prevent their recurrence in the future. Capturing structural factors of FCV entails augmenting a standard stakeholder mapping or conflict analysis with a recognition of these complex, intertwined connections, and the role of people's perceptions in fueling deep-rooted grievances. In line with the World Bank Group Strategy for Fragility, Conflict, and Violence, it requires attention to the following:

Mobilizing various disciplines to understand a society, its constitutive forces, and pressure points. Armed conflict and violence rarely arise simply because of economic failures and asymmetries. Rather, they stem out of power dynamics as well as actual and perceived exclusion factors. To measure them, one should understand that the structure of the economy, the country's history, geography, culture, and social divisions, set entrenched patterns and require thinking outside the realm of traditional disciplines.
Valuing people's perceptions as much as objective measures of wellbeing and development. As the 2018 Pathways for Peace report demonstrated, inequalities and perceptions of exclusions between groups matter just as much, and often more, than inequalities between rich and poor. Perception and subjectivity play a critical role in shaping people's sentiments and appraisal of inequalities and exclusion. As such, it is often not only about what happened, but how it was perceived, interpreted, digested, and narrated by the people who experienced it. Therefore, one key challenge for practitioners is often one of data. Simply put, do we have the right data to dig deeper and wider
Accepting the compounding and dynamic aspects of conflict and risks. Structural factors of FCV are mostly static but they are not relegated to the past. The extent to which these simmering attributes interact with the present makes them "living" and ever-present in the backdrop of fragile and conflict-affected situations.
This web of connections between past and present, structural, and more acute experiences of state formation and contestations, illustrates that societies are not frozen in time—they live, breathe, and evolve. They also remember. In addition to spatial, social, cultural, and economic features, structural factors of FCV influence path dependency—a historically-influenced course from which sets a rigid route—and behavioral patterns that unfold and repeat through time. They resist change and sometimes build up over time, like the sediment of a riverbed. If we don't integrate them into a risk-informed approach and engagement, we, as development practitioners, miss critical depth and breadth, two essential parameters to effectively diagnose and tackle the root causes of FCV.









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Farah Abdessamad
Consultant, Fragility, Conflict, and Violence Group
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Catherine Defontaine
Senior Operations Officer - Fragility, Conflict, and Violence Group
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Dave


October 04, 2023

Very insightful article.






Catherine


October 27, 2023

Thank you!

Let us attempt, at least, to make the argument for technocracy. There really are problems that government should be trying to solve. We all also know that politics itself is not driven by anything so mundane as facts and or logic. So, there's a case for taking the really bright people and putting them into those technocratic offices. The ones where we all agree there's a problem to be solved. We can then insulate them from those political winds and leave them be to, well, solve those specific problems. We all agree that unaearned concentrations of economic power are a bad thing, monopolies can be turned to ripping off consumers and so on. So, let's put the Rolls Royce minds into the anti-monopoly body. OK, sounds like a plan. The result: Today, the FTC and Department of Justice took action to fight algorithmic collusion in the residential housing market. The agencies filed a joint legal brief explaining that price fixing through an algorithm is still price fixing. The brief highlights key aspects of competition law important for businesses in every industry: (1) you can't use an algorithm to evade the law banning price-fixing agreements, and (2) an agreement to use shared pricing recommendations, lists, calculations, or algorithms can still be unlawful even where co-conspirators retain some pricing discretion or cheat on the agreement.The agencies' work in this space is especially important given rising residential housing rental prices. Rent is up nearly 20% since 2020, with the largest increases concentrated on lower- and middle-tier apartments rented by lower-income consumers. About half of renters now pay more than 30% of their income in rent and utilities, and rising shelter costs were responsible for over two-thirds of January inflation.Well, hmm. Landlords using a computer program to work out what the rent should be doesn't sound like collusion to us. Sounds like the gathering of market information rather. You know, bringing clarity and information to that market. But, you know, Rolls Royce minds and all that and we've never been picked to be in the FTC so obviously they're brighter than we are. Except this has been a piece of political agitation in the US for some time now. Progressive activists have been banging the drum about it. Rents are going up and of course it cannot, possibly, be that progressive policy is wrong in any manner and therefore it must be capitalist collusion. QED.That is, this investigation into, reminder about, algorithmic collusion is an intensely political act. The very thing we were insisting we were going to protect the technocrats from, right?Something we can prove too. The inflation claim of 20%. OK, but how's that compared with general ubran inflation over the same time period? Oh, it's a couple of percentage points lower you say? Really? Real rents have fallen but the FTC is having an investigation as a result of political whining. So, doesn't that just kill the idea that we've a technocracy doing technocratic stuff rather than bowing to the winds of politics. Which gives us our lesson. That technocracy isn't even possible, it will always be subject to those political winds. So if it's not a system that is even possible let's not try to do it then, right?

Hello, Fully Automated friends! For your coronavirus lockdown listening pleasure, we are today releasing a really special episode. Our guest is Dr. Magnus Paulsen Hansen, who is an Associate Professor at the Department of Social Sciences and Business, at Roskilde University. Magnus researches the role of ideas and evaluation in the legitimation of welfare state transformations. But he is also a bit of a Foucault ninja. And he is joining us today to discuss a question that has vexed me for a long time: was Foucault a neoliberal?



Veteran listeners may recall the last time we discussed this issue, when we had Mark GE Kelly on the show, all the way back in Episode 2! But I wanted to get Magnus on the show to go a little deeper into some of these arguments, as its a debate that doesn't seem to be going away. In 2015, Magnus published an article in the journal Foucault Studies, entitled Foucault's Flirt? Neoliberalism, the Left and the Welfare State; a Commentary on La dernière leçon de Michel Foucault and Critiquer Foucault. For me, it stands as one of the most exhaustively researched and argued rebuttals of the contention, by Daniel Zamora, and other fellow travelers (see also here), that Foucault bears some kind of intellectual responsibility for the rise of neoliberal thought.



Honestly, I've always been a little alarmed by the argument that Foucault was a neoliberal. Its not so much the idea itself that offends me, as the slipshod nature of the way the argument is made. With a strong tendency towards ad hominem argumentation, and little consideration for Foucault's core teachings on power, the argument appears to be quite ideologically driven. Often, it seems to boil down simply to the argument that Foucault was some sort of intellectual magpie, and all too easily distracted by shiny objects. Zamora and his fellow travelers claim that Foucault was "seduced" by the basic model of freedom offered by neoliberal thought, and that he was thus blinded to its more disciplinary tendencies. Given Foucault's prestige and influence among the left, this was an abdication from his intellectual duty, weakening the left just at the moment of Reagan and Thatcher's arrival.



In this interview, we discuss the danger of looking for "hidden" or "unconscious" intentions in an author, and the idea that such intentions might relate to any conclusion about an author's politics. We discuss the "best case" defense of the claim that Foucault was somehow seduced by neoliberal thought, and the way this argument often gets linked in an under-nuanced way to Foucault's critique of the post-war welfare state. We also explore the various ways in which Foucault, while often categorized as a libertarian, with anti-state proclivities, was equally opposed to anarchist theoretics of the state, going even so far as to refer to them as a form of "state phobia" — something that is especially interesting think about today, in light of Agamben's recent interventions on Coronavirus measures as amplifying permanent state of exception (I discussed this at length in the intro to our last episode, with Garnet Kindervater).



In the face of such weak evidence, we should note that Foucault in no way accepted or endorsed the idea that he was himself a neoliberal. To the contrary, as Magnus notes, there is a strong cautionary voice in Foucault's writings on neoliberalism. Indeed, he appears to argue that it foreshadows the dawn of a new and sinister mode of political power; at the moment of neoliberalism's birth, Foucault was warning that neoliberal theory imagines itself installing a "permanent economic tribunal" and becoming a hegemonic "model of social relations and of existence itself." Certainly, this is not to say Foucault's work has no blind spots when it comes to the question of what neoliberal theory would later become. One common objection to Foucault in this sense is his failure to anticipate the disciplinary aspects of contemporary neolibera...

It's 2024, and the U.S. has officially run out of money for Ukraine. As Congress debates what to do next, Kyiv's military position will inevitably degrade, likely leaving the country unable to mount significant attacks within a month or two, according to some experts.
Ukraine, for its part, says it has no "plan B" if U.S. funding runs out. "We are confident in plan A," said Ukrainian Foreign Minister Dmytro Kuleba on Wednesday.
It is no great exaggeration to say that what happens on Capitol Hill over the next few weeks could decisively shape the next phase of the war. So let's dive into what we know.
Senate negotiators are hopeful that they can reach a deal. Sen. Kyrsten Sinema (I-Ariz.) said Wednesday that by next week talks could yield the outline of an agreement that would adopt many Republican-favored border security measures in exchange for funding for Ukraine, Israel, and Taiwan.
But the Senate has never been the real obstacle. Speaker Mike Johnson (R-La.) argues that House Republicans should only accept a deal that includes H.R. 2, a hard-line immigration bill that lays out the GOP's ideal approach to border control, including many measures that are unacceptable to Democrats.
Some now speculate that Johnson's goal is to tank Ukraine aid by tying it to border policy. His strategy, the theory goes, would save the trouble of a solo vote on funding for Kyiv, which would likely draw a significant number of "no" votes from House Republicans.
While this approach may work for fiscal conservatives, it could draw blowback from more hawkish members of Johnson's caucus, who are eager to increase funding for Israel and Taiwan as well as Ukraine.
The main takeaway is clear: Congress may well fail to pass new funding for Ukraine aid this year. Such a possibility could force the Biden administration to make a push for negotiations to freeze the war along its current lines and find a deal that compromises on key aspects of each side's stated goals.
But an end to U.S. aid could also hurt Kyiv's negotiating position at a time when Moscow and Western officials have increasingly begun to express interest in talks, as George Beebe of the Quincy Institute argued in RS last year.
"The United States should not remove cards from its hand by ending aid to Ukraine unilaterally or playing them prematurely," Beebe wrote.
In other diplomatic news related to the war in Ukraine:
— Ukrainian President Volodymyr Zelensky struck back at claims that Russia is winning the war in an interview with the Economist. "Maybe not everything is as fast as someone imagined," he said, but Russian forces continue to face enormous losses in Avdiivka and other hotspots. On the question of peace talks, Zelensky told reporters that the Kremlin was trying to deceive the West by signaling interest in negotiations "because they don't have enough missiles, ammunition, or prepared troops." Notably, he also made clear that Ukraine's efforts in 2024 would focus on isolating Crimea and preventing Russia from launching new attacks from the peninsula.
— Nearly 500 detainees were freed Wednesday in the first prisoner swap between Russia and Ukraine in nearly five months, according to AP News. Some prisoners had been held since 2022. The United Arab Emirates facilitated the talks leading to the deal, which is the largest single prisoner swap since the war began. The swap highlights the potential role of the UAE and other neutral states in future negotiations.
— NATO head Jens Stoltenberg expects Sweden to join NATO before July, when allies will gather for a summit in Washington, according to Politico. It's unclear whether Stoltenberg's comment is realistic given continued foot-dragging from Turkey and Hungary, both of which have pushed hard to get concessions from Europe and the U.S. in exchange for allowing Sweden to join the alliance.
— Polish farmers will once again join Polish truckers in a blockade of a border crossing with Ukraine in protest of the economic impact that special rules for imports of Ukrainian goods have had on local workers, according to the Financial Times. The news is a significant step back for new Prime Minister Donald Tusk, who had hoped to leverage his ties with European and Ukrainian leaders to end the protests. The blockade, which began in early November, has led to long waits at the border and a parallel drop in trade that threatens Ukraine's export markets.
U.S. State Department news:In a Wednesday press conference, State Department spokesperson Matthew Miller denied that the U.S. has quietly let go of maximalist goals in Ukraine in favor of setting Kyiv up in a strong position for negotiations. "That is not true," Miller told reporters.

Two interviews with national security adviser Jake Sullivan this week revealed the Biden administration's continued hesitance to pressure Ukraine to open peace talks with Russia, while maintaining that it expects the war will eventually end at the negotiating table and acknowledging that Washington's ability to support Kyiv's war effort is being hamstrung by Congress's inability to approve a new tranche of aid.
During an interview with Julia Ioffe of Puck News, Sullivan quickly dismissed last week's NBC News report that asserted "U.S. and European officials have begun quietly talking to the Ukrainian government about what possible peace negotiations with Russia might entail to end the war," citing one current and one former senior U.S. official.
When asked about the assessment — including from a top Ukrainian commander —that the war has reached a stalemate, Sullivan elaborated:
"There's been a robust debate in Ukraine based on the general's interview. I don't want to get into the middle of all that. I'll just give you our perspective, which is that we believe the battlefield remains dynamic, and we are going to continue to support Ukraine with the tools and resources and capabilities that it needs to continue to try to make progress on the battlefield. We do believe that, ultimately, when Ukraine determines it—because we feel passionately about the article of faith, 'Nothing about Ukraine without Ukraine'—there will be a diplomatic phase to this. And our job is to put Ukraine in the best possible position on the battlefield so it's in the best possible position at the negotiating table."
But separate remarks from Sullivan earlier in the week suggest that Washington is struggling to fulfill what the national security adviser considers its responsibility in this war.
"Each week that passes, our ability to fully fund what we feel is necessary to give Ukraine the tools and capacities it needs to both defend its territory and continue to make advances, that gets harder and harder," Sullivan said during a press briefing on Monday. "So, for us, the window is closing."
President Joe Biden has requested that Congress approve a $104 billion emergency defense supplemental which purports to tackle a number of policy priorities, including $60 billion in aid for Ukraine. But the proposal so far remains in limbo in the Republican led-House, with new leadership instead opting to pass a short-term government funding measure that did not include any money for Ukraine.
Supporters of Ukraine aid still hope that another package will make its way through Congress eventually, but that will not happen until lawmakers return from their Thanksgiving recess, at the earliest.
The lack of funding "is already having an effect on our ability to give Ukraine everything that it needs," according to Sullivan, "and that effect will only compound over time."
In other diplomatic news related to the war in Ukraine:
— Ukrainian foreign minister Dmytro Kuleba dismissed those calling for talks with Moscow, pointing to 30 years of "negotiations with Russia that it never respected," including the Black Sea Grain Initiative from which Russia unilaterally withdrew earlier this year. "There are no conclusions to be drawn here, except that no one can seriously use the words 'Russia' and 'negotiations' in the same phrase," Kuleba wrote on the social media platform X. "Russia's tactic has remained consistent in its many wars over the last three decades: kill, grab, lie, and deny."
— Hungarian Prime Minister Viktor Orban said that the European Union should not move forward on Ukraine membership talks. "Ukraine is in no way ready to negotiate on its ambitions to join the European Union," Orban said on Monday. "The clear Hungarian position is that the negotiations must not begin." EU leaders are preparing to vote next month on whether Kyiv should be invited, and all 27 member nations must agree in order to admit a new country. Slovakia, whose new government recently rejected an aid package for Kyiv, is also expected to be a potential obstacle to Ukraine's admittance.
— President Joe Biden met with Chinese President Xi Jinping on Wednesday in San Francisco, on the sidelines of the APEC summit. While the discussion mostly focused on other aspects of the bilateral relationship, reports say that Biden reaffirmed U.S. support for Kyiv and "also pressed Xi to continue to withhold military support for Russia's invasion of Ukraine," according to the Associated Press. A CNN report from before the meeting said that "US officials believe there might be a limited role Beijing can play in the Ukraine war, notwithstanding China's deep economic alliance with Russia."
U.S. State Department news:
During a Tuesday press briefing, State Department spokesman Matthew Miller expressed concern over Congress's inability to move forward with the White House's supplemental request.
"So we are at a critical point with respect to aid to Ukraine. The Pentagon has said publicly that they have exhausted somewhere around 95 percent of their funds to provide security assistance to Ukraine – security assistance that's very important," Miller said.

Norbert Michel


A few weeks ago, American Compass released Rebuilding American Capitalism, A Handbook for Conservative Policymakers. After I provided a very brief critique of the handbook's "Financialization" chapter in a Forbes column (American Compass Points To Myths Not Facts), Oren Cass, American Compass's Executive Director, released a response titled Yes, Financialization Is Real. (Cass's response lists many reports and statistics, but it does not answer my critique of the "Financialization" chapter. I encourage everyone to read Cass's response, or one of his Twitter threads, to better understand how Cass and his organization produce research.)
To provide a more thorough critique of the "Financialization" chapter, my colleague Jai Kedia and I will release a series of Cato at Liberty posts over the next few days. The present post is the first in the series, and it expands on the most basic of my criticisms: American Compass's failure to define financialization, the most important term in the chapter.
Although the American Compass handbook does not provide a coherent definition of financialization, it still claims "financialization is a blight on capitalism" and that financialization diverts "resources away from capital intensive projects and toward financial assets." (See page 59 of the "Financialization" chapter.) In the foreword, Cass warns that "Financialization shifted the economy's center of gravity from Main Street to Wall Street, fueling an explosion in corporate profits alongside stagnating wages and declining investment."
None of these scary‐​sounding phrases define the term financialization or explain precisely what is (supposedly) diverting resources away from other projects, much less why such diversions are suboptimal. A robust research report would not make such mistakes. It would immediately define the term as clearly as possible to avoid any confusion, a bare minimum requirement to provide well‐​supported policy prescriptions to policymakers.
It is true, of course, that effective political campaigns often employ such rhetorical tactics. But American Compass isn't a political campaign. It claims to be a think tank engaged in serious analysis of economic problems. It is American Compass's responsibility to clearly define terms and problems so that policymakers (and others) can understand and evaluate American Compass's recommendations. On this score, American Compass fails miserably.
From the very beginning of the chapter, the financialization concept is so broad that it could be construed as almost anything. For instance, after the chapter introduction acknowledges that "Robust financial markets are vital to a productive economy," it states:
In recent decades, American finance has metastasized, claiming a disproportionate share of the nation's top business talent and the economy's profits, even as actual investment has declined. Businesses, rather than invest their own profits in growth and innovation, increasingly disgorge capital back into the market, where it flows into speculative frenzies that drive the prices of existing assets higher rather than creating new ones. The private equity and hedge fund industries have captured hundreds of billions of dollars in fees while underperforming simple market indices. Strategies that load debt onto companies place workers and their communities at risk while transferring the profits far away. This "financialization" of the American economy weakens the nation and threatens our future prosperity.

Based on this introduction, whatever financialization is, it consists of at least six different concepts. And just in case these concepts aren't broad enough, the chapter also warns that the "ideas and ideologies" inside of corporations, as opposed to merely financial incentives, "play a primary role in setting business investment decisions." It then states, "In this sense, 'financialization' is also a useful shorthand for the predominance of financial considerations in business management." (It would be difficult to argue this last version of financialization is some kind of new phenomenon, but I digress.) On Page 62, the "Financialization" chapter includes the following items under the financialization umbrella: "corporate profit strategies and compensation schemes, rival foreign subsidies and industrial policies, [and] cumbersome environmental and permitting regulations."
Even more confusingly, the chapter also claims the aforementioned resource diversion is both "one definition" and "the most pernicious effect" of financialization.
Further, citing a publication released by Senator Marco Rubio (R‑FL), the "Financialization" chapter argues that "For most of modern American history," corporations primarily raised capital from the "rest of the economy and spent it on non‐​financial assets." Supposedly, though, "Financialization (whether as cause or effect) disorders this cycle." The parentheses are included in the original text.
So, while it seems this idea – corporations should invest less in financial assets and more in non‐​financial assets – might be the core of American Compass's argument, it is impossible to tell whether financialization is causing the disorder or whether some disorder is causing financialization. Identifying what is cause and what is effect is a primary responsibility of the authors of such a report.
Yes, American Compass could be arguing that it is both cause and effect, but the question of precisely what financialization is remains a mystery. This critique – that American Compass fails to provide a coherent definition of financialization – is more than a technical matter. This failure is a major research flaw because it is impossible to analyze a problem without identifying the variables that would be affected by it, let alone the cause of the supposed problem.
American Compass uses the term so broadly that it can point to virtually any economic phenomenon or statistic, even a socially beneficial one, as "evidence" of how harmful "financialization" has been. (In this interview, Cass defines the term even more broadly than the "Financialization" chapter.) It allows critics of financial markets to engage in circular arguments, such as: financialization makes corporate profits explode, so public corporations are buying back shares, so investment is declining, which itself is also financialization.
Under such broad terms, anyone could easily associate "financialization" with any number of facts. For instance, financialization may have caused the female labor force participation rate to be almost 30 percentage points higher in 2022 than it was in 1950. Perhaps it caused the percentage of American households with a computer to increase from 8 percent in 1984 to 92 percent in 2018, or real median household income to rise from $50,000 in 1967 to $67,521 in 2020. Maybe it even caused workers with an associate degree to earn $157 more in median weekly earnings in 2020 than those with just a high school diploma.
The problem, of course, is that these kinds of statements amount to little more than opinions because the term "financialization" is used so broadly. And when critics provide evidence against these alleged effects (or causes?) of financialization, American Compass can easily push back by focusing on a different alleged effect or using a different piece of evidence. When critics point out that, for example, investment has not declined, American Compass can easily point to a different investment metric, thus changing the debate.
Obviously, this elusiveness is a great political strategy.
It becomes very easy, for example, to pit "Main Street" against "Wall Street" with what appears to be empirical evidence. It becomes easy to vilify the "speculators" who profit by "trading piles of assets in circles" instead of financing the "real" economic activity that provides jobs to typical Americans. American Compass can simply point out that someone earned high profits or that someone's income declined. But neither these slogans, nor these simplistic data points, amount to evidence.
This kind of populist attack on finance is hardly new, and it's one that lawmakers such as Senator Elizabeth Warren (D‑MA) use to vilify "Wall Street" for "looting" businesses. It is eerily reminiscent of the way government officials blamed Wall Street for the Great Depression, ultimately winning support for the Glass‐​Stegall Act. It also has some of the populist themes (the common man versus the banks) William Jennings Bryan used in his "Cross of Gold" speech at the 1896 Democratic National Convention, though Bryan failed, three times, to win the U.S. presidency. In fact, many aspects of American Compass's concept of financialization are virtually indistinguishable from Karl Marx's concept of fictitious capital versus real capital in Volume 3 of Capital.
With this Cato at Liberty series, we will not try to cover all the different versions and descriptions of financialization that American Compass uses. Instead, we will focus on the specific claims discussed in the original critique along with a few that didn't make the cut in that Forbes piece. In the next post, we will discuss claims involving the nation's top business talent leaving for the financial industry.