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PROMARKET has launched a new Economic History series. Stefan Kolev's fabulous first article of the series discusses "The Ordoliberal Quest for a Privilege-Free Order". Reading recommendation!

Today, economic sanctions are generally regarded as an alternative to war. But for most people in the interwar period, the economic weapon was the very essence of total war. The... READ MORE
The post The History of Economic Sanctions as a Tool of War appeared first on Yale University Press.

|Peter Boettke| This is a lecture from 1987. Rothbard at the time was working on a comprehensive history of economic thought. I published a review of Rothbard's volumes in Economic Affairs. I cannot recommend this lecture highly enough. Rothbard was...

"The underlying problem with social justice is the failure to distinguish between negative rights, which protect liberty and property, and positive rights, which provide a license to violate established negative rights." ~ Robert F. Mulligan

Grad students with an interest in the history of economic thought should click here.

After the fall of the Berlin Wall, political scientist Francis Fukuyama famously proclaimed the "end of history" and of humankind's ideological evolution. The combination of Western liberal democracy and capitalism were seen as the final, convergent form of global human organization — surpassing geopolitical considerations.

As Russia invades Ukraine, history seems to have restarted. This time the tension is not between capitalism and socialism, but between liberal capitalism and autocratic capitalism, between globalism and nativism, between a state subordinated to economic interests and economic interests subordinated to the state. Amidst this unfolding situation, Luigi and Bethany discuss how sanctions, SWIFT, the energy sector, digital platforms, new geopolitical blocks, and more are coming together to possibly reshape the course of history.

Political Economy seminar
The Problem of History in IPE: An Intellectual History
Speaker: Randall Germain, Carleton University
When: 3-4pm, Wednesday, 24 April, 2024
Where: A02 Social Sciences Building, Room 341, The University of Sydney
About the talk: The idea of history, although present throughout much of the traditional canon of political economy and its internationalized off-shoot – international political economy (IPE) – is today largely erased as a key theoretical feature of IPE research. Where it is included as a part of the research enterprise, it is most often formulated as either context for the problem under investigation, or as a linear unit of account such as t + 1. This represents a theoretical loss for the discipline of IPE, and my effort here is to recenter the idea of history as a core feature of IPE's broad research agenda. To do this, I first revisit how the idea of history is framed in the work of Adam Smith, Karl Marx and Max Weber, to demonstrate that the idea of history was a critical element of the inspiration to political economy (and IPE). I then pick up how the idea of history informs what might be described as 'modern' IPE, most importantly in the work of foundational IPE scholars (Antonio Gramsci, Karl Polanyi, David Mitrany, E.H. Carr, Susan Strange and Robert Cox). This intellectual history reveals the important way in which the idea of history can frame the research enterprise of IPE as an examination of transformative change within the global political economy. In period marked by what appear to be deep and disruptive change, the idea of history is a necessary addition to the IPE conceptual and analytical toolkit.

About the speaker: Randall Germain is Professor of Political Science at Carleton University, Canada. His teaching and research examine the political economy of global finance, issues and themes associated with economic and financial governance, and theoretical debates within the field of international political economy. His scholarship has been published in journals such as the European Journal of International Relations, Global Governance, International Studies Quarterly, New Political Economy, Review of International Political Economy, and Review of International Studies. He is also the author of The International Organization of Credit (CUP, 1997) and Global Politics and Financial Governance (Palgrave, 2010). Most recently he edited Susan Strange and the Future of Global Political Economy (Routledge 2016). His current research explores how the idea of history has informed disciplinary debates in IPE.
The post Seminar: Randall Germain, ‘The Problem of History in IPE: An Intellectual History’ appeared first on Progress in Political Economy (PPE).

Swaminathan S. Anklesaria Aiyar


Indian Prime Minister Narendra Modi is in the United States for a state visit that is expected to highlight India's importance as a rising economic and military power, and the only country in Asia that can be a counter to China in the 21st century. Modi's Bhartiya Janata Party (BJP) has long promoted its Hindu nationalist agenda by claiming that India was the world's richest region under glorious Hindu rule for thousands of years before being conquered by Muslim invaders in the 11th century and British invaders in the 18th century. The BJP says foreign invaders transformed a sone ki chidiya—a golden bird—into an impoverished chattel. Modi has promised to make India a great world power again, and his U.S. visit aims to be a step in that direction.
The BJP often cites historian Angus Maddison, who estimated that India accounted for 32 percent of world GDP in 1 CE (during the Hindu period), a share that sank to just 4 percent by the time British rule ended in 1947. However, the BJP is cherry picking data from Maddison's work to create a false historical narrative of a once‐​rich country impoverished by foreign invaders. For a full picture, read my new Cato Policy Analysis, "Indian Nationalism and the Historical Fantasy of a Golden Hindu Period."
A close look at Maddison's magnum opus, Contours of the World Economy 1–2030 AD: Essays in Macro‐​Economic History, tells a less flattering story. India's high share of world GDP in 1 CE was due mainly to its high share (33.2 percent) in world population. Since this yielded a GDP share of 32 percent, India per capita income was slightly below the world average at just $450 per year. This did not rise at all in a thousand subsequent years of Hindu rule. So, this supposedly golden period was one of stark poverty and economic stagnancy. Conditions were almost as bad in the rest of the world. High mortality, arising from disease, drought, and war kept India's population stagnant at 75 million for a thousand years till 1000 CE. Simply staying alive was a challenge.
Under Muslim and British rule, India's GDP edged up. Falling mortality rates meant a significant rise in the population too. This rising population partly offset the rise in GDP, so per capita income grew slowly. Maddison estimates it at $550 in 1700, towards the end of the Muslim period. This edged up to $619 by the time British rule ended. Progress was very slow in the thousand years of Muslim and British rule yet was better than the stagnancy in the preceding thousand years of Hindu rule.
Colonial‐​era history books spoke of the great blessings that British imperialism had brought to India. Maddison's figures show those claims to be absurd. But they also disprove the claim that colonial rule impoverished India.
After becoming independent, India's GDP rose much faster and mortality rate fell more dramatically than ever before. By 2003, says Maddison, India's per capita income was up to $2,160. Both in terms of income and life expectancy, India's golden period—if you can call it that—is today, not in the ancient Hindu past.
India is still a lower middle‐​income country, but in PPP (purchasing power parity) terms is already the third largest economy in the world. The World Bank and the International Monetary Fund estimate that it was the fastest‐​growing major economy in the world in 2022 and will continue to be so this year. It runs a fiercely independent foreign policy and has refrained from condemning Russia for invading Ukraine. India is a major buyer of Russian oil. Even so the United States sees India as an important strategic partner, though not an ally. That is why Modi's visit is expected to include the signing of military deals for U.S. supply and coproduction of high‐​tech aircraft engines and drones. Despite foreign policy disagreements and worries about the suppression of dissent and liberal values in India, the United States wants to help Modi build an India that will become a major Asian power that can check China's dominance.

Histories are often relegated to the sidelines of economic study. But what do we lose in our theories when we only focus on the math and models?

In his new book, "Ages of American Capitalism", University of Chicago historian Jonathan Levy looks at the turning points in the history of capitalism and what those moments can teach us about today.

History has shown that Washington's international economic policies often belie its lofty rhetoric about the importance of the bilateral relationship with Japan, as domestic politics continue to triumph over sound policy.

The EU is learning the hard way to reduce dependencies on geopolitical rivals, including China and Russia. The allies are taking the first steps in this new geoeconomic reality. A brief history of the EU's geoeconomic vision For years, the US had pointed to Germany and other EU member states' dependence on Russian gas as […]
La entrada Economic security: a new age for the EU se publicó primero en Elcano Royal Institute.

The revolutionary violence that swept Kyiv's Maidan Square on the night of February 21, 2014 unleashed the forces of Ukrainian nationalism and, ultimately, Russian revanchism, and resulted in, among other things, the first full-scale land war in Europe since 1945.President Volodymyr Zelensky has called the Maidan the "first victory" in Ukraine's fight for independence from Russia. Yet too often lost in the tributes to Ukraine's 'Revolution of Dignity' are two simple, though ramifying, questions: What was the Maidan really about? And did things have to turn out this way?Revisiting the events of that time may help us more fully understand how we arrived at this fateful moment in world affairs.So, what precipitated the Maidan Revolution?In November 2013, Ukrainian President Victor Yanukovych rejected the terms of the European Union Association Agreement in favor of a $15 billion credit agreement offered by the Russian Federation. Many in the western part of Ukraine had supported the EU deal, as it would have, in their view, secured Ukraine's future within Europe.But, as the Europeans, Americans, Ukrainians and Russians knew full well, the association agreement with Brussels wasn't merely a trade deal. Section 2.3 of the EU-Ukraine association agenda would have required the signatories to:"...take measures to foster military cooperation and cooperation of technical character between the EU and Ukraine [and] encourage and facilitate direct cooperation on concrete activities, jointly identified by both sides, between relevant Ukrainian institutions and CFSP/CSDP agencies and bodies such as the European Defence Agency, the European Union Institute for Security Studies, the European Union Satellite Centre and the European Security and Defence College."In other words, the trade deal also included the encouragement of military interoperability with forces viewed, rightly or wrongly, by the Russian government as a threat to Russian national security.In addition, the EU association agenda required Ukraine to put up barriers to trade with Russia. An alternative proposal put forward by Romano Prodi (former Italian Prime Minister and EU Commission president) would have allowed Ukraine to trade with both Russia and the EU but was rejected by Brussels.Yanukovych's rejection of the EU agreement brought thousands of protesters to Kyiv's Independence (Maidan) Square. Yet policy disagreements over issues of trade and national security can and are routinely adjudicated via democratic procedures, as they are in the U.S. and Europe. And such an adjudication was eminently possible, even as late as the morning of February 21, 2014, when a deal brokered by Russia and the EU was struck between Yanukovych and the Ukrainian opposition that included a revision of Ukraine's constitution, the creation of a unity government, and an early presidential election to be held 10 months later in December 2014.But on the night of February 21, Yanukovych fled, and a new government was installed by voluntarist rather than democratic means. The immediate post-Maidan government included the far-right Svoboda Party, whose members, according to a contemporaneous Reuters report, held "five senior roles in Ukraine's new government including the post of deputy prime minister."Edmund Wilson once wrote that "it is all too easy to idealize a social upheaval which takes place in some other country than one's own." And that was a trap into which the Obama administration — along with almost the entirety of the American media, intelligentsia and think tank world — fell in the immediate aftermath of the Maidan.It would be fair of critics of this view (and there are many) to ask: What were their alternatives to the Obama administration's support for the Maidan and Kyiv's post-revolutionary government?Mr. Obama might have said "A deal was struck. Stick to it." This would have required a degree of statesmanship unusual to any American president. But, as Eurasia Group president Ian Bremmer observed only a month later, "...there was a deal that was cut with the European foreign ministers. That deal was abrogated and the Americans were very happy to jump on that immediately in ways that would have been completely unacceptable to anyone in the U.S. administration if we had been on the other side."And so, the U.S. lent its support to the post-Maidan government (and the Anti-Terrorist Operation, or ATO, launched in April 2014) against the largely, but of course far from entirely, indigenous uprising in the Donbas. Thus began the first phase of the war, which lasted until the evening of February 24, 2022 and cost 14,000 dead and 1.5 million refugees.In addition to the ATO, Kyiv also pursued a policy of decommunization in the east (later cited by Putin as among his many grievances with post-Maidan Kyiv) and repeatedly refused to implement the Minsk Accords. As a former U.S. Ambassador to the USSR, Jack F. Matlock, noted in Responsible Statecraft, "The war might have been prevented — probably would have been prevented — if Ukraine had been willing to abide by the Minsk agreement, recognize the Donbas as an autonomous entity within Ukraine, avoid NATO military advisors, and pledge not to enter NATO."The second phase of the war opened on the evening of February 24, 2022, as some 190,000 Russian troops invaded Ukraine. The costs to Ukraine have been staggering.The World Economic Forum recently estimated that the cost of Ukrainian reconstruction will reach $1 trillion. Still more, "Approximately 20% of the country's farmland has been wrecked and 30% of land either littered with landmines or unexploded ordnance." Casualty estimates are known to be among the most closely held state secrets during wartime, but some, like former Ukraine prosecutor general Yuriy Lutsenko, have estimated Ukraine suffered a combined 500,000 dead and wounded in its war with Russia. Meanwhile, the population of Ukraine has plummeted from 45.5 million in 2013 to an estimated 37 million today.Looking back, the warnings issued by a small minority in the winter of 2014, including, but not limited to: the present authors; Professor Stephen F. Cohen; The Quincy Institute's Anatol Lieven; Ambassador Jack Matlock; Professor John J. Mearsheimer; and others were dismissed by the Obama administration, policymakers, the media and the most influential think tanks in Washington. Yet the effort to wrest Ukraine into the West's orbit via revolutionary violence, despite the objections of fully a third of that country, has been nothing short of catastrophic.

The contested history of the partition of India, and ultimately Pakistan's formation, is divulged in this book. Issues arise from the authors' alignment with the Hindutva cause.

"The price system worked exceptionally well precisely because the Fed had successfully established a credible nominal anchor. As a result, the economy could sustain a historically low unemployment rate." ~ Bryan P. Cutsinger

With the failure of Ukraine's 2023 counteroffensive despite billions in armaments and months of training, the post mortems have begun.

They follow: The West was too slow in providing missiles and aircraft; Russia had too much time to prepare trenches and minefields; Ukraine needed more time to learn combined-arms tactics and employ Western armor effectively. Yet underlying all these excuses was a broader analytical failing that has yet to be acknowledged: flawed and often facile historical analogies led defense planners to underestimate Russia's resilience.

Even today, with the horrific costs of overconfidence plain to all and Ukraine at a crucial crossroads, the same flawed analysis of the Russian adversary persists.

Time and again, policymakers and commentators based their expectations of the war based on flawed historical parallels. One example is Russia's acceptance of mass casualties and use of "human wave" attacks where they lose three or more soldiers for every Ukrainian casualty.

Time and again — right up to the present — commanders and commentators cite this as a sign of severe Russian weakness. Whether discussed in the jargon of an "asymetrical attrition gradient," or simply referring to Russian soldiers as "cannon fodder," analysts frequently note that such profligacy with human lives is a legacy of ponderous Soviet and Tsarist armies.

But what they fail to note is that this tactic often brought victory. Tsarist armies took massive casualties in battles with Swedish, Persian and Turkish forces as they built the Russian empire. In defeating Napoleon, the Russians suffered as many casualties as the French despite the advantage of fighting on their home ground and their familiarity with the Russian winter.

Soviet Marshal Zhukov absorbed 860,000 casualties to the Germans' 200,000 at the Battle of Kursk in World War II. He also lost 1,500 tanks to the Germans' 500, yet Kursk is remembered as a great triumph that crushed Hitler's final hopes of victory. Can one imagine Germany celebrating its superior casualty ratio while being defeated by Stalin's hordes?

However shocking this tactic may be, it is a resource that Moscow has and Kyiv does not. Consider the battle for Bakhmut and the daily bulletins trumpeting Ukraine's success in killing thousands of Russians, right up to the moment that Bakhmut fell to Wagner Group mercenaries — weirdly reminiscent of the Pentagon's body-count bulletins in the Vietnam war.

At Bakhmut Ukraine lost the indispensable cream of its army to hordes of dispensable Russian convicts-turned-storm troopers in doomed defense of a strategically insignificant town that President Zelenskyy vowed would not fall. The average age of Ukrainian soldiers is now 43.

Losing Bakhmut hurt Ukrainian morale, but it is Russian morale that pundits say is shot. And they remind us that military disasters sparked Russian uprisings in the past — in 1905 after defeat in the Russo-Japanese War, or the debacle of WWI that led to the collapse of the Romanov dynasty in 1917.

Given their hardships and suffering, why wouldn't Russians do it again and overthrow Putin? Pundits often ignore that, after a decade of economic chaos and global humiliation in the 1990s, Putin is respected for restoring stability and national pride. Tsar Nicholas II, by contrast, was rather more like Boris Yeltsin — weak and out of touch, reliant on hated advisers, presiding over chaos.

It's also likely that, unlike a distant debacle with Japan or European carnage triggered by an Austro-Serbian dispute, many Russians believe in this war because they see Crimea and Donbas as historically and culturally Russian.

Whether it stems more from deep-seated imperial attitudes or a decade of anti-Western propaganda, Russians still back Putin and even take pride in standing up to the best NATO can throw at them. An effort to appreciate the views of Putin and his people is not being "pro Russian" even if we find those views wrong or repugnant.

On the contrary, such an approach is key to "thinking in time" with accurate historical analogies, and vital to avoiding the conceit of assuming that Russian soldiers or citizens will behave as we would.

On the eve of Ukraine's counteroffensive, U.S. Joint Chiefs chairman General Mark Milley declared that Russians "lack leadership, they lack will, their morale is poor, and their discipline is eroding." Of course, if your main historical lesson is that Russian armies crack under strain, then you look closely for signs of dissent and soon find a looming collapse.

This is how superficial history joins with confirmation bias to produce flawed analysis. Stymied by fierce Russian fighting, Ukrainians troops themselves told Milley he was wrong: "We expected less resistance. They are holding. They have leadership. It is not often you say that about the enemy."

As Kyiv's crisis deepens and recriminations spill out in public, commanders at all levels of the Ukrainian Armed Forces agree that they and their NATO advisers badly misjudged Russian tenacity: "This big counteroffensive was based on a simple calculation: when a Moskal [slur for ethnic Russian] sees a Bradley or a Leopard, he will just run away."

But what about taking the fight to Russia? Former CIA Director General David Petraeus predicted that Russian resolve could "crumble" in response to Ukrainian drone attacks on Moscow. Such strikes "bring the war to the Russian people" and might convince Putin's regime that, like the USSR's Cold War quagmire in Afghanistan, Russia's current war in Ukraine is "ultimately unsustainable."

In fact the old Soviet elite did not see the Afghan war as unsustainable, nor were they much concerned about public opinion. It took both a generational transition and a bold new leader who prioritized improving ties with the West — Mikhail Gorbachev — to finally manage an exit.

The point is not that war isn't costly. The Afghan war was, and the Ukraine war is even more so. The point is that accepting defeat in a major war that was justified as a vital national interest is unlikely until there is both a new leader and turnover in the ruling elite.

As for "bringing war to the Russian people" by bombing Moscow, when did that ever work? NATO brought the Kosovo War to the Serbian people in 1999 by bombing Belgrade, and it only rallied them to the side of dictator Slobodan Milošević; 25 years later, Serbs remain strongly pro-Russian and anti-NATO. And when Chechen rebels bombed Moscow and other Russian cities in the early 2000s, it only rallied Russians around Putin and helped justify his increasingly authoritarian rule.
These aren't mere historical quibbles, but illustrations of flawed analogies that framed both strategic expectations and tactical decisions. And they have cost dearly, in both Ukrainian lives and now Western support. Confidence in Washington-Brussels elites falls even as officials still claim that Ukraine is winning and Putin "cannot outlast" the West.

In fact, as NATO empties its warehouses of equipment and misses deadlines for producing new munitions, it's hard to conclude otherwise unless one is trapped in another oversimplified WWII analogy: that of America as the "arsenal of democracy."

Many have contrasted America's innovative private arms producers with Russia's technology-starved state factories, predicting that Moscow would soon exhaust its munitions. Instead, Russia has consistently belied the "all brawn and no brains" narrative, not only outproducing the West in tanks, artillery and shells but defying sanctions to develop new precision-guided bombs, drones and missiles. Perhaps those discounting Russian ingenuity forgot the Katyusha multiple-rocket launcher, a legendary artillery weapon that both the Germans and Americans copied in WWII.
With a looming crisis in efforts to keep Kyiv supplied with munitions, it is useful to look closer at American arms production in WWII, when the "arsenal of democracy" was in certain respects more like Putin's economy than Biden's. But today Washington faces a complex set of institutional obstacles: "least-cost production models," contractor aversion to stockpiling, export restrictions, and environmental regulations the likes of which do not trouble Putin. A final lesson from WWII's "armaments race" is a caution against technological hubris such as that seen in today's gushing about the superiority of Western Leopard or Abrams tanks over the Russian T-72 and T-80. Germany's Tiger tank was clearly superior to the Soviet T-34 in WWII, but the latter was cheap, reliable, and easy to produce in numbers; at Kursk, Soviet tanks outnumbered German ones by 2:1. So as NATO planners and media pundits take up the "cannon fodder" refrain again with reference to the heavy losses Russians are taking as they advance in the battle for Avdiivka, these planners and pundits would do well to consider a quip famously attributed to Soviet wartime leader Josef Stalin: "Quantity has a quality all its own."