The Role of Nonattenuated Rights in Positive Economics: A Critical Appraisal

This article assesses the institutionalist elements of Friedrich Hayek's neoliberal political economy by presenting his views on the entangled relations between the state and markets in capitalism. Through the analysis of Hayek's work, the article contributes to further consolidating the view that neoliberalism is an ideological project of institutional transformation which, despite some enduring myths, has an irreplaceable role for a state with many important functions in a more limited democracy. Markets, for their part, are politically contested social constructions that depend on previous non-market institutions for their existence and legitimation. This paper argues that Hayek's work corroborates this institutionalist claim.     

Russkiy Mir: The Geopolitics of Russian Compatriots Abroad

ABSTRACT

This paper argues that the instrumental reference to Russian ‘compatriots’ in Georgia in 2008 and Ukraine in 2014 served as a discursive framing to justify contradictions in Russian approaches to state sovereignty to an international audience. Contrary to teleological readings of Russian foreign policy, however, the paper argues that while Russian diaspora policies have been tapped into, the iterative and partially contradictory development thereof on a governmental level suggests that these were not the blueprint for a revisionist foreign policy by design. It contextualizes the evolution of Russian diaspora policies against the background of the evolution of the wider ‘Russian World’ conception and shows how the discourse about the protection of ‘compatriots’ was contextual and has translated into geopolitical boundary-making at a time when relations between Russia and the West deteriorated.     

Thinking Like a Trader: The Impact of Neoliberal Doctrine on Habits of Thought

Neoliberalism has come out of the financial crisis unscathed. Moreover, it has further asserted its dominance over geopolitical discourse and ideology worldwide. I contend that neoliberal supremacy in the policy arena and upon domestic and international institutions has been largely uncontested because it has penetrated all aspects of life to the extent that it now represents what Thorstein Veblen referred to as “the modern point of view.” Understanding the global power of neoliberalism requires examining not only its well-established hegemony over institutions as social constructs, but also its impact on habits of thought as mental constructs. From a Veblenian perspective, I argue that the neoliberal doctrine generates habits of thought which legitimize the transformation of a marketoriented economy into a full-fledged market society. The impact of the normalization of the neoliberal mode of behavior may, in the end, worsen the fracture between nation and state and unravel the fabric of society by justifying fully detached, emotion-free, and self-centered actions that crowd-out pro-social behaviors and challenge any social conception of the common good.     

The Last Gasp of Neoliberalism

The ideas of both Thorstein Veblen and Karl Polanyi shed light on understanding the last gasp of neoliberalism. The last gasp refers to Donald Trump’s abandonment of free trade, long considered a cornerstone of the neoliberal agenda, and his overt attacks on democratic institutions. In Trump, neoliberalism’s attempt to overcome the gridlock of liberal democracy has revealed its fascist leanings. Both Polanyi and Veblen warned about the trend towards fascism. Trump was elected, in part, by filling the void left by the factioning of neoliberalism, in part by the injustice felt by people in rural areas, those with stagnant incomes, white males, and others. Trump has transcended the neoliberal agenda, approaching market relations from the point-of-view of the fight. The emergence of a predatory culture, in both the domestic and international realms, resembles the culture outlined in Veblen’s The Theory of Business Enterprise. Trump’s actions reveal the need to extend Polanyi’s idea of social protection given the negative effects of modern technology and Trump’s efforts to dismantle or reduce some regulatory agencies. Changing demographics and the adverse reaction to Trump’s fascist leanings may yet see the emergence of a new progressive era, suggesting, at least, that Trump represents the last gasp of neoliberalism.     

Defence and Promotion of Desired State Identity in Russia’s Strategic Narrative

This article examines how the Russian state promotes and protects its preferred self-identity, using the conceptual framework of ‘strategic narrative’. Nation branding practices, including state-funded ‘mega-projects’ like the Sochi Olympics, have contributed to the narrative by characterising Russia as a welcoming, attractive destination. However, a more salient feature of Russia’s strategic narrative is intense ‘anti-Western’ and ‘anti-American’ political and media discourse, formulated to defend against rival, threatening narratives projected from other countries. Through analysis of official statements and state television content, this article demonstrates how determination to protect ‘great power’ and ‘European’ identities underlay Russia’s strategic narrative in 2014. It considers responses which the narrative has prompted, arguing that desired results in domestic reception have been achieved at the expense of unsatisfactory results internationally. Heavy-handed attacks on the identities of other states boost collective self-esteem among Russian citizens, but they fail to produce – and arguably obstruct – desired responses among foreign audiences.     

Neoliberalism and Class Reproduction in India: The Political Economy of Privatisation in the Mineral Sector in the Indian State of Orissa

Abstract

Recent years have witnessed a process of integration of the Indian Union within the new international economic order, characterised by the ascendance of neoliberalism. Orissa, historically one of the Indian states mostly affected by severe poverty and economic stagnation though richly endowed with natural resources, has enthusiastically endorsed the neo-liberal project, implementing all the relevant national policies related to it. In the last 15 years, while the economic policy of the State of Orissa has been thus increasingly shaped according to the neoliberal guidelines recommended by the Centre, the disturbing socio-economic scenario of the State has not changed significantly. This paper aims to highlight how specific power relations in the State of Orissa are reproducing themselves in the course of the transition of the Indian Union towards the neoliberal order. This paper aims to consider as an example of this process the privatisation policies in the mining sector, namely the main economic sector of Orissa. Moving from the fundamental role historically played by Orissa within the Indian Union as a supplier of raw materials to the pan-Indian market, the paper intends to highlight the rentier character of the Orissan dominant class, traditionally capable of performing a basic intermediary function in the provision of raw materials to the Indian market. Once taken into account the socio-economic role historically played by the local dominant class in Orissa within the context of the wider capitalist dynamics at work at the all-Indian level, the paper will focus on the scenario which came into being since the start of the neoliberal economic reforms in 1991. The major shifts in the mineral policy at the central level since 1991 will be taken into account and, within this context, the implementation of privatisation policy in the mineral sector in Orissa will be analysed, with special reference its socio-economic implications. The paper aims to highlight the way in which the State of Orissa has broadened its traditional role, becoming an important supplier of raw material not only to the all-Indian market, but to the international market in general. It will be argued as well that, in continuity with the past, the intermediary function of the local dominant class in this process has remained fundamental. Therefore the paper aims to argue that the current scenario supports the proposition that the unfolding of neoliberal dynamics in Orissa opened the way for the creation of new spaces of social reproduction for the local dominant class and, with them, for the reproduction of old relations of power and social domination in the State.     

Subordinated Financial Integration and Financialisation in Emerging Capitalist Economies: The Brazilian Experience

This paper analyses the recent changes in financial practices and relations in emerging capitalist economies (ECEs) using the example of Brazil. It argues that in ECEs these financial transformations, akin to the financialisation phenomena observed in Core Capitalist Economies (CCEs), are fundamentally shaped by their subordinated integration into a financialised and structured world economy. To analyse this subordinated financialisation, the paper draws on the framework of international currency hierarchies. It shows by means of two specific processes how the existence of a hierarchic international monetary system has changed the financial behaviour of domestic economic agents, and with it the structure of the financial system. The first process highlights the phenomenon of reserve accumulation and the changing behaviour of domestic banks. The second points to ECEs’ sustained external vulnerability and its impact on the operations of Brazilian non-financial corporations. The paper also shows that not only were these financial transformations shaped by ECEs’ subordinated financial integration, but also that it was these financialisation tendencies themselves which contributed to cementing existing hierarchies and further deepened existing asymmetries between ECEs and CCEs.     

Learning from Role Models in Rwanda: Incoherent Emulation in the Construction of a Neoliberal Developmental State

In the twenty-first century, developing country policymakers are offered different market-led role models and varied interpretations of ‘developmental state role models’. Despite this confusion, African countries pursue emulative strategies for different purposes – whether they may be for economic transformation (in line with developmental state strategies), market-led reforms or simply to signal the implementation of ‘best practices’ to please donors. Rwanda has been lauded for the country’s economic recovery since the 1994 genocide, with international financial institutions and heterodox scholars both praising different facets of its development strategy. This paper argues that Rwanda is an example of a country that has simultaneously pursued emulative strategies for different purposes – often even within the same sector. Two studies of emulation are explored: the emulation of Singapore’s Economic Development Board through the establishment of Rwanda’s own Rwanda Development Board (RDB) and the evolution of Rwanda’s financial sector with reference to the use of contending market-led and developmental state models. The paper argues that in Rwanda, incoherent emulation for different purposes has resulted in contradictory tensions within its development strategy and the construction of a neoliberal developmental state.     

China's Post-Listian Rise: Beyond Radical Globalisation Theory and the Political Economy of Neoliberal Hegemony

While China's rise has been much discussed, its meaning continues to be contested. This is true in radical international political economy, where, for example, it was the subject of (often polarised) debates between Giovanni Arrighi and David Harvey prior to Arrighi's death in 2009. This reflected a broader debate in IPE between development theory and radical globalisation analysis. The key point of contention is whether China's rise represents a challenge to or further consolidation of neoliberal hegemony on a global scale. This article critically scrutinises some of the key assumptions of the radical globalisation approach, specifically, that China represents another form of the ‘competition state’ whose development aspirations have been radically constrained by global ‘new constitutionalism’ and American monetary power so as to conform to neoliberalism. Deploying a structurationist approach to global governance and an eclectic/regulatory analysis of the Chinese state, I argue that China has challenged neoliberalism by projecting its growing power through constitutionalised global governance. In the face of (declining) American power, global constitutionalism has provided an opportunity structure that may help China consolidate its long-term strategy of consensual development. Far from anchoring ‘neoliberal hegemony’, global economic governance is increasingly central to its unravelling.     

A Critique of ‘Neoliberal Autonomy’: The Rhetoric of Ownership Society

The rhetoric of the Ownership Society defined by the Cato Institute has been integral to framing the motivation behind the Social Security reform introduced by George W. Bush. This motivational frame involves a fierce advocacy of what we will call ‘neoliberal autonomy’ in a Hayekian and Friedmanite sense. For Hayek and Friedman, the social adequacy component of Social Security is problematized in the name of self-reliance and individual choice, which rejects any authoritative standards as morally indefensible. Nevertheless, the rhetoric of the Ownership Society, though it glorifies the neoliberal notion of autonomy, does not explicitly question the moral basis of Social Security. Rather, by defining the terms of debate, it frames the meaning of Social Security along neoliberal lines in an attempt to make a supposedly detached economic case for private retirement accounts. In this ‘pro-privatization’ framework, the social adequacy component of the Social Security system fades away as individual equity, or actuarial fairness, comes to the fore as the chief theme. We suggest a ‘pro-social’ rhetoric that recognizes the pursuit of social standards as providing the element of autonomy.     

Theorizing the Financial Statecraft of Emerging Powers

‘Financial statecraft’, or the intentional use of credit, investment and currency levers by the incumbent governments of creditor – and sometimes debtor – states for both international economic and political advantage, has a long history, ranging from money doctors to currency wars. A neorealist, zero-sum framing of international monetary relations is not inevitable, yet casts a persistent shadow especially during periods of prospective interstate power transitions when previously peripheral countries find themselves with unexpected new capabilities. This article seeks to understand and theorise the financial statecraft of emerging economies, moving beyond the traditional understanding that closely identifies the concept with financial sanctions imposed by a strong state on a weaker state. We propose that the aims of financial statecraft may be either ‘defensive' or ‘offensive’. Financial statecraft may be targeted either ‘bilaterally' or ‘systemically’. Finally such statecraft may employ instruments that are either ‘financial' or ‘monetary’. As emerging market economies have moved up in the ranks in the interstate distribution of capabilities, they have also expanded their financial statecraft strategies from narrowly defensive and bilateral to those involving offensive tactics and targeted at the global and systemic level. Historical and contemporary examples illustrate the analysis.     

Conditions For Successful Technology Policy In Developing Countries—Learning Rents,State Structures,And Institutions

The paper develops an analysis of the economic, political, and institutional conditions for successful design and implementation of technology policy in developing countries. After a brief introduction (Section I), we discuss contending economic theories of technological change and technology policy (Section 2). It is concluded that, despite many pro-market arguments, market imperfections inherent in the process of technological change make the creation of learning and innovation rents by the state potentially very beneficial, especially in developing countries. The next section (Section 3) analyses the political and institutional factors that determine how effectively such rents can be created and managed. After an assessment of technology policy record in developing countries (Section 4) we discuss how the scope of such policy is affected by the recent changes in domestic and international policy contexts such as domestic deregulation and the emergence of a ‘liberal’ world order represented by the WTO (Section 5). The paper ends with a brief conclusion (Section 6).     

Neoliberal growth models,monetary union and the Euro crisis. A post-Keynesian perspective

The paper offers an account of the Euro crisis based on post-Keynesian monetary theory and its typology of demand regimes. Neoliberalism has transformed social and financial relations in Europe but it has not given rise to a sustained profit-led growth process. Instead, growth has relied either on financial bubbles and rising household debt (‘debt-driven growth’) or on net exports (‘export-driven growth’). In Europe the financial crisis has been amplified by an economic policy architecture (the Stability and Growth Pact) that aimed at restricting the role of fiscal policy and monetary policy. This neoliberal economic policy regime in conjunction with the separation of monetary and fiscal spheres has turned the financial crisis of 2007 into a sovereign debt crisis in southern Europe.     

The New ‘Passive Revolution’ of the Green Economy and Growth Discourse: Maintaining the ‘Sustainable Development’ of Neoliberal Capitalism

This paper analyses the rapidly emerging discourse of a green economy based on green growth. It highlights inherent conflicts and contradictions of this discourse such as the myth of decoupling growth from the environment, pollution generations and resource consumption. Using key theoretical constructs of both Gramsci and Polanyi, the paper argues that the green economy/growth discourse can be seen as a Gramscian ‘passive revolution’ whereby the dominant sustainable development discourse, subsumed by capitalist hegemony, is protected in the context of global environmental, economic and development crises. The ‘neoliberalising of nature’, or in other words, the privatisation, marketisation and commodification of nature, akin to Polanyi's fictitious commodities, continues and intensifies with green economy/growth strategies. Greening the economy and associated strategies of green growth divert attention from the social and political dimensions of sustainability and issues of social and international justice. In this way, the inexorable march or ‘sustainable development’ of neoliberal capitalism is maintained. This paper goes on to argue that contesting the claims of green economy/growth discourse through political struggles by civil society against the neoliberalisation of nature is a sign of a slowly emerging counter-hegemonic ‘double movement’ which challenges capitalist hegemony and the commodification of society–nature relations.     

Rethinking strategy and geopolitics: Critical responses to globalisation

Rethinking geopolitics is a key feature of those disciplines concerned with rearticulating the site and nature of political space and political community in an age of globalisation causing much social protest and concern. The article focuses upon how social movements challenging globalisation are rearticulating and rethinking, through their objectives and strategies, the practices, meaning and site of state sovereignty and ‘the (geo)political’. The article focuses upon the way critical movements such as the Emiliano Zapata (Zapatista) Army of National Liberation (EZLN) are engaging with new ways of thinking about, representing and constructing political space and the relationship between the local and the global whilst cultivating an inclusionary national community project(s). The article argues that the EZLN engages in a struggle which may provide an insight into the possibility of cultivating alternative and genuinely democratic civil societies and inclusive political communities that transcend the exclusionary cartography and institutions of the neoliberal state.     

The Stagnation Tendencies of Neoliberalism: A Review Essay

In his 2012 book, From Financial Crisis to Stagnation, Thomas Palley argued that the financial crisis of 2008 would be likely to result in a period of long-term stagnation. Both the crisis and the predicted stagnation, Palley argued, were the outcomes of policies pursued since the 1980s; the persistence of those policies explains the stagnation. Underpinning the policies and their consequences are the flaws of the neoliberal macro model and the particular role played by finance in that model. The rejection of Keynesianism meant the abandonment of the commitment to full employment. The neoliberal paradigm rests upon a foundation of ‘bad ideas’ that are located in political philosophy as much as in economic theory. Palley’s argument has a bearing on recent discussions among mainstream macroeconomists, whose interest in secular stagnation has been revived by the ‘ongoing crisis’. These discussions have left mostly unanswered the question of the causes of stagnation. The present essay argues that Palley’s concept of ‘structural Keynesianism’ can benefit from a closer association with the analysis of structural transformation and its effects on policy regimes and stagnation tendencies.     

The determinants of Latin American exchange rate regimes

The experience of the last thirty years suggests that a wide range of factors affects policymakers’ choice of exchange rate regime. The initial explanation was that changes in the international sphere dominated domestic policies and strongly influenced how governments decided among the trade-offs. More recently, domestic political factors’ influence on the choice of exchange rate regimes have been emphasized, providing detailed and rich insights into the dynamics of the choice. Neither approach has been entirely successful. Both internal and external factors must be taken into account. This article builds on previous empirical work and takes into account domestic and international influences on the choice of exchange rate regimes in Latin America between 1964 and 1996. In addition, we highlight a variety of ‘interactions’, choices of economic policy that are affected by both national and international pressures and that, in turn, influence the choice of exchange rate regime. The empirical model uses multinomial ordered logit analysis to determine the factors in exchange rate determination and to compare the explanatory of the models with and without the interaction variables.     

Norman's Lament: The Greek and Euro Area Crisis in Historical Perspective

This article uses original and secondary archival sources to examine the value of the distinction between creditor and debtor states in explaining the behaviour of domestic elites in international and European macroeconomic and monetary cooperation, compared to variables like size and trade. It highlights the paradox and tension between changes in institutional forms and stronger incentives to cooperate (Montagu Norman's ‘new Europe’) and persisting patterns in strategic behaviour across space and over time. Central to this continuity is a fundamental asymmetry of power between creditor and debtor states. The imbalances that underpin creditor–debtor state relations also reveal the structural underpinnings of arguments from economic principle, ‘who argues what’ and receptiveness to economic ideas and thinkers. Not least, the case studies and arguments in the article offer fresh and different insights into British and French attitudes to European coordination.     

Rethinking the Role of State-owned Enterprises in China’s Rise

The massive overseas expansion of Chinese state-owned enterprises (SOEs) is a central aspect of China’s ‘rise’ to great-power status. There is significant disagreement, however, over how to interpret SOEs’ role. Are they instruments of Chinese statecraft, being directed purposefully from Beijing as part of a ‘grand strategy’? Or are they relatively autonomous, profit-maximising businesses, their free-wheeling behaviour often undermining Chinese foreign policy? Finding that there is evidence for both theses, we provide a framework to explain this. We propose theorising party-state/SOEs relations using the concepts of state transformation and regulatory statehood. We show that the Chinese state’s fragmentation, decentralisation and internationalisation since the late 1970s has substantially increased SOE autonomy and weakened but also transformed the executive’s control, reconfiguring it towards a regulatory mode of governance. Party-state/SOEs relations are thus characterised not by direct command and control but weak oversight and ongoing struggles within the party-state. We illustrate this using a case study of China Power Investment Corporation and its Myitsone hydropower dam project in Myanmar. Here, a central SOE clearly defied and subverted central regulations, profoundly damaging Sino-Myanmar state-to-state relations. Party-state authorities are now struggling to rein in this and other central SOEs.     

Securing Japan in the ‘West’: The US-Japan Alliance and Identity Politics in the Asian Century

Why has the military dimension of the US-Japan relationship remained the central point of reference for Japanese foreign relations, despite the demise of the Soviet Union? Why has Japan, deepening economic interdependence notwithstanding, remained politically distant from East Asia? Based on analysis of statements by Japanese and US political elites and academics regarding the US-Japan alliance, this article argues that the rise of China, coterminous with the rise of ‘Asia’, challenges the notion of the ‘West’ as, according to standards of industrial modernity, a superior social and political order. These moving ideational boundaries question Japan’s position as the most advanced Asian nation and member of the (Western) international society of states. Therefore, the US-Japan alliance has since the mid-1990s become increasingly important for securing Japan in the ‘West’ and the ‘West’s boundaries in East Asia.