Rodrik: Will New Technologies Help or Harm Developing Countries? [feedly]

Will New Technologies Help or Harm Developing Countries?
https://www.globalpolicyjournal.com/blog/16/11/2018/will-new-technologies-help-or-harm-developing-countries

Trade and technology present an opportunity when they are able to leverage existing capabilities, and thereby provide a more direct and reliable path to development. When they demand complementary and costly investments, they are no longer a shortcut around traditional manufacturing-led development.

New technologies reduce the prices of goods and services to which they are applied. They also lead to the creation of new products. Consumers benefit from these improvements, regardless of whether they live in rich or poor countries.

Mobile phones are a clear example of the deep impact of some new technologies. In a clear case of technological leapfrogging, they have given poor people in developing countries access to long-distance communications without the need for costly investments in landlines and other infrastructure. Likewise, mobile banking provided through cell phones has enabled access to financial services in remote areas without bank branches.

These are instances of technology improving the lives of poor people. But for technology to make a real and sustained contribution to development, it must not only provide better and cheaper products; it must also lead to more higher-paying jobs. In other words, it must help poor people in their role as producers as well as consumers. A model of growth that the economist Tyler Cowen has called "cell phones instead of automobile factories" raises the obvious question: How do people in the developing world afford to purchase cell phones in the first place?

Consider again the examples of mobile telephony and banking. Because communications and finance are inputs into production, they are to some extent producer services as well as consumer services.

For example, a well-known study has documented how the spread of mobile phones in the Indian state of Kerala enabled fishermen to arbitrage price differences across local markets, increasing their profits by 8% on average as a result. Kenya's ubiquitous mobile banking service M-Pesa appears to have enabled poor women to move out of subsistence agriculture into non-farm businesses, providing a significant bump up the income ladder at the very bottom.

New digital technologies have been playing an important role in transforming large-scale farming in Latin America and elsewhere. Big data, GPS, drones, and high-speed communication have enabled improved extension services; optimized irrigation and pesticide and fertilizer use; provided early-warning systems; and enabled better quality control and more efficient logistics and supply-chain management. These improvements raise farm productivity and facilitate diversification into non-traditional crops with higher returns.

The introduction of these new technologies in production in developing countries often takes place through global value chains (GVCs). In principle, GVCs benefit these economies by easing entry into global markets.

Yet big questions surround the possibilities created by these new technologies. Are the productivity gains large enough? Can they diffuse sufficiently quickly throughout the rest of the economy?

Any optimism about the scale of GVCs' contribution must be tempered by three sobering facts. First, the expansion of GVCs seems to have ground to a halt in recent years. Second, developing-country participation in GVCs – and indeed in world trade in general – has remained quite limited, with the notable exception of certain Asian countries. Third, and perhaps most worrisome, the domestic employment consequences of recent trade and technological trends have been disappointing.

Upon closer inspection, GVCs and new technologies exhibit features that limit the upside to – and may even undermine – developing countries' economic performance. One such feature is an overall bias in favor of skills and other capabilities. This bias reduces developing countries' comparative advantage in traditionally labor-intensive manufacturing (and other) activities, and decreases their gains from trade.

Second, GVCs make it harder for low-income countries to use their labor-cost advantage to offset their technological disadvantage, by reducing their ability to substitute unskilled labor for other production inputs. These two features reinforce and compound each other. The evidence to date, on the employment and trade fronts, is that the disadvantages may have more than offset the advantages.

The usual response to these concerns is to stress the importance of building up complementary skills and capabilities. Developing countries must upgrade their educational systems and technical training, improve their business environment, and enhance their logistics and transport networks in order to make fuller use of new technologies, goes the oft-heard refrain.

But pointing out that developing countries need to advance on all those dimensions is neither news nor helpful development advice. It is akin to saying that development requires development. Trade and technology present an opportunity when they are able to leverage existing capabilities, and thereby provide a more direct and reliable path to development. When they demand complementary and costly investments, they are no longer a shortcut around manufacturing-led development.

Compare the new technologies with the traditional model of industrialization, which has been a powerful engine of economic growth in developing countries. First, manufacturing is tradable, which means domestic output is not constrained by demand (and incomes) at home. Second, manufacturing know-how was relatively easy to transfer across countries and, in particular, from rich to poor economies. Third, manufacturing did not make large demands on skills.

These three characteristics collectively made manufacturing a fantastic escalator to higher incomes for developing countries. New technologies present a very different picture in terms of the ease of transferring know-how and the skill requirements they imply. As a result, their net impact on low-income countries looks considerably more uncertain.

 

 

Dani Rodrik is Global Policy's General Editor and Professor of International Political Economy at Harvard University's John F. Kennedy School of Government. He is the author of The Globalization Paradox: Democracy and the Future of the World Economy, Economics Rules: The Rights and Wrongs of the Dismal Science, and, most recently, Straight Talk on Trade: Ideas for a Sane World Economy.

This post first appeared on Project Syndicate and was reposted with permission.

Image credit: Jay Hariani via Flickr (CC BY-SA 2.0)

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Tim Taylor: Superstar Firms and Cities [feedly]

Superstar Firms and Cities
http://conversableeconomist.blogspot.com/2018/11/superstar-firms-and-cities.html

Imagine two people who have seemingly equal skills and background. They go to work for two different companies. However, one "superstar" company grows much faster, so that wages and opportunities in that company also grow much faster. Or they go to work in two different cities. One "superstar" urban economy grows much faster, so that wages and opportunities in that city also grow faster.

Of course, such patterns of unequal growth have always existed  to some extent. When evaluating a potential employer or location choice, people  have always taken into account the potential for joining a superstar performer. The interesting question is whether the gap between superstar and ordinary firms, or between superstar and ordinary cities, has been growing or changing over time. For example, some argue that the rise of superstar firms, and the resulting rise in between-firm performance and labor compentiation, can explain most of the rise in US income inequality.

The McKinsey Global Institute has a nice report summarizing past evidence and offering new evidence of their own in Superstars: The Dynamics of Firms, Sectors, and Cities Leading the Global Economy (October 2018). It's written by a team led by James Manyika, Sree Ramaswamy,  Jacques Bughin, Jonathan Woetzel, Michael Birshan, and Zubin Nagpal. Short summary: Superstar firms and cities do seem to be widening their economic leadership gap, with the evidence that certain sectors are superstars seems weaker.

For superstar firms, the report notes:

"For firms, we analyze nearly 6,000 of the world's largest public and private firms, each with annual revenues greater than $1 billion, that together make up 65 percent of global corporate pretax earnings. In this group, economic profit is distributed along a power curve, with the top 10 percent of firms capturing 80 percent of economic profit among companies with annual revenues greater than $1 billion. We label companies in this top 10 percent as superstar firms. The middle 80 percent of firms record near-zero economic profit in aggregate, while the bottom 10 percent destroys as much value as the top 10 percent creates. The top 1 percent by economic profit, the highest economic-value-creating firms in our sample, account for 36 percent of all economic profit for companies with annual revenues greater than $1 billion. Over the past 20 years, the gap has widened between superstar firms and median firms, and also between the bottom 10 percent and median firms. ... The growth of economic profit at the top end of the distribution is thus mirrored at the bottom end by growing and increasingly persistent economic losses ..."

Here's an illustrative figure, showing firms by decile, and comparing the time windows from 1995-97 and from 2014-2016.

Some other patterns are that the superstar firms "come from all sectors and regions and include global banks and manufacturing companies, long-standing Western consumer brands, and fast-growing US and Chinese tech firms. The sector and geographic diversity of firms in the top 10 percent and the top 1 percent by economic profit is greater today than 20 years ago." Along with being more profitable, superstar firms spend more on R&D and on intangible investments like intellectual property, software, and brand value. In additinon, the rate of movement (or the "churn") in and out of the deciles doesn't seem to have changed much over time. 

"In the top 1 percent by economic profit, only one out of every six of today's superstar firms has been there for the past three decades. They are mostly American and European consumer goods and technology firms that have survived, often through reinvention and adaptation to a changing environment and sustained investment, and they own some of the world's most familiar brands.26 They include Altria, Coca-Cola, Intel, Johnson & Johnson,  Merck, Microsoft, Nestle, and Novartis. They are joined by several other firms that have stayed in the top ranks for two-thirds or more of the past 30 years and that come from a broader set of regions and sectors. These include firms such as Samsung, Toyota, and Walmart, and they make up another one-sixth of the top 1 percent."

The analysis also identifies 50 superstar cities, with a map below.

"Fifty cities are superstars by our definition ... The 50 cities account for 8 percent of global population, 21 percent of world GDP, 37 percent of urban high-income households, and 45 percent of headquarters of firms with more than $1 billion in annual revenue. The average GDP per capita in these cities is 45 percent higher than that of peers in the same region and income group, and the gap has grown over the past decade. ... The growth of superstar cities is fueled by gains in labor income and wealth from real estate and investor income, yet many show higher rates of income inequality within the cities than peers. ... Of the 50 superstar cities, 31 are ranked among the most globally integrated cities, 27 among the world's 50 most innovative cities, 26 among the world's top 50 financial centers, and 23 among the world's 50 "digitally smartest" cities. Twenty-two are national and regional capitals, while 22 are among the world's largest container ports." 

For individuals thinking about potential employers, and for individuals and firms thinking about location decisions, it's useful to consider the potential gains of being connected to a superstar firm or city. 

For a national economy, a different question arises. What is the "special sauce" that superstar companies and cities are using to achieve their outsized and growing levels of productivity and income? Companies and cities will always differ, or course. But the rising advantage of superstars raises a question of how at least some of those practices and policies might be more broadly disseminated across the rest of the economy.

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Report: States Can Use Tax Policy to Advance Racial Equity [feedly]

Report: States Can Use Tax Policy to Advance Racial Equity
https://www.cbpp.org/blog/report-states-can-use-tax-policy-to-advance-racial-equity

States and localities can do more to help undo the harmful legacies of racism and the damage of continuing racial bias and discrimination, a major new Center report finds. If state policymakers can design their budget and tax policies to better address these harms and create more opportunities for people of color, state economies would be more equitable and likely stronger, which in turn could benefit many state residents of all backgrounds.  

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The Case for Compensated Free Trade (i.e. Pay The Losers On a Grand Scale!) [feedly]

The Case for Compensated Free Trade
https://www.project-syndicate.org/commentary/compensated-free-trade-allows-protectionism-by-robert-skidelsky-2018-11

According to Harvard's Dani Rodrik, the nation-state, democracy, and globalization are mutually irreconcilable: we can have any two, but not all three simultaneously. In fact, there may be a solution to Rodrik's "trilemma."

LONDON – Almost all liberals support globalization and oppose economic nationalism. They ignore the mounting evidence that, in its current form, globalization is dangerously incompatible with democracy.

In his 2011 book The Globalization Paradox, Harvard's Dani Rodrik says that the nation-state, democracy, and globalization are mutually irreconcilable: we can have any two, but not all three simultaneously (he calls this a "trilemma"). All over the world, the "nation" has been revolting against globalization in the name of democracy.

That became clear this year when US President Donald Trump imposed the first of a widening set of tariffs against Chinese goods, with China retaliating in kind. Trump has also torn up two major international trade treaties and threatened to withdraw from the World Trade Organization.

The trigger for America's turn to economic nationalism is its widening trade deficit – $566 billion in 2017, and growing – as the US economy recovers. But the deeper reason is the correct perception that the resulting current-account deficits are not "benign" when they are being financed by inflows of short-term capital, or "hot" money.

A current-account deficit means that a country is importing more than it is exporting. And those excess imports can lead to a net loss of "good" jobs. Six million manufacturing jobs disappeared in the first decades of the 2000s. The Rust Belt made Trump president. "It's time to rebuild Michigan, and we are not letting them take your jobs out of Michigan any more," he told cheering crowds in Detroit in 2016.

Trump's protectionism also has a geopolitical root. Metal imports have led to the closing of many enterprises that might be needed for defense. China's strategic "Made in China 2025" plan is a high-tech industrial policy aimed at transforming China into a dominant global leader in the industries of the future. It significantly relies on stealing advanced technologies from the United States. If MIC25 is successful, the US will have a depleted economic and political future.


In strictly economic terms, the political character of one's trading partners should not matter. However, in a world of strategic competition, international commerce can be, and usually is, an instrument of policy, and its use in that context should not be denied simply because it breaches the sacred principle of free trade. As Friedrich List, the nineteenth-century pioneer of economic nationalism, pointed out, free trade assumes a peaceful world.

Selective tariffs can be useful for protecting defense-related industries or to prevent other countries from stealing cutting-edge technologies. But as an overall trade policy, tariffs are crude and inexact. The US will incur high costs and might end up without a substantially lower trade deficit or other meaningful benefits.

Is there a way to limit free trade that does not lead to trade wars? The economist Vladimir Masch has advocated an ingenious "compensated free trade" (CFT) plan as a way to achieve legitimate protectionist aims without disrupting the world economic system.

Under this plan, policymakers would establish a ceiling for the trade deficit each year and impose limits on trading partners' surpluses. (Any products needed from a surplus partner would be exempted from the partner's export limit.) In the US case, this ceiling would largely affect China, Mexico, Japan, and Germany, which contributed $375 billion, $71 billion, $69 billion, and $64 billion, respectively, to the overall trade deficit in 2017.

Under CFT, a trade surplus country can reduce its exports to the set limit. But it could also exceed its export quota if its government paid the partner government a fine equal to the value of the excess exports, either collecting the necessary sum from its export producers or using its currency reserves. (The receiving government could use the fines to enlarge its own investment programs.) But if the surplus country tried to exceed its export limit without paying the fine, its surplus exports would be blocked.

This "smart" protectionism has several advantages over crude tariffs. First and foremost, it would automatically prevent trade wars. Because CFT imposes limits just on the trader's surplus, any attempt by the surplus country to decrease the value of its imports from the US would automatically decrease the value of its allowed exports.

Second, CFT would confront, in one stroke for each partner, government subsidies, price and currency manipulations, and the other dirty tricks of international trade. In contrast to prolonged and often fruitless haggling over trade treaties, results would be obtained immediately.

Third, by re-balancing the financial and trading arrangements of the global economy's participants, CFT would represent a step toward addressing its current dysfunction. CFT is not a complete solution, because it leaves open the question of who should adjust to whom. A reformed global payments system, which mandates symmetrical adjustment of global imbalances, would need to tackle this issue.

Fourth, because of America's leverage, its adoption of CFT would "nudge" reluctant trade surplus countries to accept such a payments system. Global finance would have to operate within the limits that a balanced payments system establishes.

Fifth, in terms of economic benefits to the US, implementing CFT would stimulate the return of off-shored enterprises and jobs, thus restoring the country's industrial potential and social balance.

From a historical perspective, CFT essentially amounts to a unilateral activation of the scarce-currency clause (Article 7) of the Bretton Woods Agreement, which allowed the International Monetary Fund to declare "scarce" the currency of a country running a persistent trade surplus, permitting other members to discriminate against its goods. It is consistent with Article XII of the General Agreement on Tariffs and Trade (the WTO's predecessor), which states that any country "in order to safeguard its external financial position and its balance of payments, may restrict the quantity or value of merchandise permitted to be imported."

In short, CFT addresses trade deficits, overcomes the limitations of tariffs, fights trade manipulation, corrects current mainstream economic theory, and is a necessary step toward re-establishing a feasible global payments system. In a nutshell, it overcomes the Rodrik trilemma: one can have the nation-state, democracy, and globalization at the same time.

But only one nation-state, the US, has the clout to deliver this. By doing so, it would stop the global stampede to a virulent form of economic nationalism. For that reason alone, the Masch plan deserves serious consideration.


ROBERT SKIDELSKY

Writing for PS since 2003
145 Commentaries

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Robert Skidelsky, Professor Emeritus of Political Economy at Warwick University and a fellow of the British Academy in history and economics, is a member of the British House of Lords. The author of a three-volume biography of John Maynard Keynes, he began his political career in the Labour party, became the Conservative Party's spokesman for Treasury affairs in the House of Lords, and was eventually forced out of the Conservative Party for his opposition to NATO's intervention in Kosovo in 1999.
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Progress Radio:Tonite: The Citizens Progress Diner Program: The "Drunks Delight" Show

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Adam Gopnik : Wine, War, Donald Trump, and Emmanuel Macron : "Macron made a speech... as clearly directed at and agains... [feedly]

Adam Gopnik : Wine, War, Donald Trump, and Emmanuel Macron : "Macron made a speech... as clearly directed at and agains...
https://www.bradford-delong.com/2018/11/adam-gopnik-_wine-war-donald-trump-and-emmanuel-macronhttpswwwnewyorkercomnewsdaily-commentwine-war-donald.html

 Adam Gopnik : Wine, War, Donald Trump, and Emmanuel Macron : "Macron made a speech... as clearly directed at and agains...

Grasping Reality with Both Hands: The Semi-Daily Journal Economist Brad DeLong by J. Bradford DeLong  /  19h  //  keep unread  //  hide

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Adam Gopnik: Wine, War, Donald Trump, and Emmanuel Macron: "Macron made a speech... as clearly directed at and against Trump as any he could have made... distinguished between nationalism (bad) and patriotism (good)... in eloquent terms...

..."Patriotism is the exact opposite of nationalism," he said. "Nationalism is a betrayal of patriotism," he added, "In saying, 'Our interests first, whatever happens to the others,' you erase the most precious thing a nation can have, that which makes it live, that which causes it to be great, and that which is most important: its moral values." To use a long-forgotten Howard Cosellism, I was doubly delighted by the invocation, in part because the same terms had seemed so relevant not long ago in discussing Macron's great predecessor Charles de Gaulle. He, too, had drawn that distinction, at the risk of his own life. De Gaulle knew that the patriot loves his place and its people and its idiosyncrasies; while the nationalist, of whom, for him, Adolf Hitler was the clearest and worst example, has no particular sense of affection for the place he advocates for (he is often an outsider to it, as Hitler, an Austrian, was to Germany) but channels his obsessive grievances into acts of ethnic vengeance.

It isn't clear who first made the distinction between nationalism and patriotism. Perhaps it's one of those observations that rises naturally in several places at once. Certainly, no one has made more of it in his work than John Lukacs, the American historian of Hungarian origin. Lukacs, in fact, has made it foundational to his understanding of twentieth-century history, with nationalism as the deadly solvent of civilization, and patriotism as its (partially) restorative glue. His heroes, for that reason, are the conservative patriots, Winston Churchill highest among them, along with de Gaulle. (The conservative patriots rate highly in part because the temptation of nationalism on the right is so extreme; the parallel temptation on the left is a blind faith in rational planning, even at enormous human cost...

#shouldread #orangehairedbaboons #moralresponsibility #history

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The Liberal Conception of ‘Freedom’ is Incapable of Addressing the Problems of Contemporary Capitalism [feedly]

I can imagine Karl Marx having both a friendly, and critical, good time writing about the themes in the global policy journal loosely linked around the ideas of Dani Rodrik.

The observations below on weaknesses in classical liberalism are no doubt most interesting to "liberal" sections of upper middle to upper income classes, the professions, arts and "leading edge" business.  The discussions on the relationship of democracy and economic justice in the working classes shades differently. But questions about culture, values, progress are all profoundly affected by how conflicts between liberty and justice are resolved.

The Liberal Conception of 'Freedom' is Incapable of Addressing the Problems of Contemporary Capitalism
https://www.globalpolicyjournal.com/blog/15/11/2018/liberal-conception-freedom-incapable-addressing-problems-contemporary-capitalism

The rise of populism and 'illiberal democracies' are often viewed as a reaction to the failure of liberal capitalism to meet the needs of citizens. For Andrea Lorenzo Capussela, the liberal conception of freedom as 'non-interference' may lie at the heart of this equation. He suggests that a republican notion of freedom as 'non-domination' might be more useful in addressing the problems of contemporary capitalism.

In a forthcoming book, Branko Milanović identifies four 'troublesome features' in 'meritocratic liberal capitalism'.1 These are the rising share of capital income in total income, which undermines meritocracy; the very high concentration of capital income, which runs counter to the objective of a 'property-owning' democracy; the rising association of high capital and labour incomes in the same people or families, which exacerbates inequality and hinders attempts to curb it; and the polarisation of society, shown by the declining share and purchasing power of the middle classes, which destabilises democracy and threatens to turn it into a plutocracy or a populist regime.

My remarks concern the perspective from which to look at these traits of contemporary capitalism, and I move from the assumption that the obverse of both economic inequality and inequality of opportunity, which are cause or effect of those four problems, is often some form of private domination. An example, fairly extreme but frequent, is the relationship between workers on zero-hour or similar contracts and their employers, who have the discretion to decide how much they will work and earn.

In its simplest form, liberal theory – equal rights for all citizens, which guarantee their freedom, which is in turn conceived as absence of interference – has no obvious answer to those problems. For if freedom is non-interference, then it is compatible with both inequality and private domination, at least within certain bounds, as neither directly interferes with people's individual choices. Indeed, accepting precarious employment is a choice. And as liberals cannot say that Milanović's four 'troublesome features' pose a fundamental challenge to their idea of a good society, their answer is a Ptolemaic one: sets of diverse, if potentially effective remedies such as redistribution, poverty relief, active labour market policies, civic education, and policing fake-news.

Yet I suppose that behind much contemporary discontent is not just stagnating real incomes and high and rising inequality, but also resentment at the obverse of the latter, domination. And I equally presume that the absence of a credible and powerful liberal answer to these phenomena is one reason why demagogues and populists succeed. For instance, proponents of 'illiberal democracy' argue that as liberalism no longer works, or lacks solutions to the problems of today, we can find better ideas elsewhere. They tend to look for them outside of the field of the Enlightenment, but this critique, however unarticulated, poses a challenge that warrants reflection.

Political theories may well be superstructure. But as liberalism is hegemonic it has concrete effects on what we think possible and desirable, and therefore on what we do (here I have also Rodrik's writings on the political economy of ideas in mind). My premise is that the intrinsic bias of liberalism against public action in pursuit of goals, such as curbing inequality, which neither command unanimity nor directly advance a fundamental value, such as political liberty, does constrain our ability to protect our democracies from those threats. If so, it may be useful to sniff the air that flows outside of the house of liberalism.

For the liberal conception of freedom is not the only conceivable one. Another notion, equally negative, is the republican or neo-roman one, which views freedom as non-domination. If I depend on someone else's arbitrary will, or am subject to their enormous and unchecked power, I am not free, irrespective of how that power is exercised. Hence the paradox of the 'free slave', frequent in republican literature: liberal theory implies that the slave who has a kind master is free, as she suffers no interference in her choices; republicans object that this depends entirely on the master's benevolence, which can be revoked at will and may have to be cultivated: domination and unfreedom remain, therefore, and typically lead to self-censorship and a slavish mentality.

So the state should not merely ensure that nobody interferes in my choices, as liberals assert, but rather guarantee to me a sphere within which I am my own master. The idea is well expressed by Pettit's 'eyeball test': I am free if I can look others in the eye without reason for fear or favour. People in precarious employment would hardly pass the test, for example: in this domain of their life they are unfree. Those who pass the test in most domains of their life can walk tall in society, conversely, and a good society is one in which all can hold their head high.

The republican conception of freedom is not necessarily more demanding than the liberal one, as it all depends on how many domains of social life we want to include into that sphere of freedom, and how wide we want it to be. What matters is the change in perspective, because the republican approach dissolves the liberal bias against public action and joins freedom and democracy together, for the state and its laws must not be dominating ones. While in liberal theory freedom and democracy are separate values, in fact, republican freedom directly requires democracy and has demanding institutional implications for it: for laws not to be dominating, for instance, the usual constitutional checks and balances may have to be buttressed by a 'contestatory citizenry'.

Once the republican perspective is taken, the discussion shifts from the question of whether measures to reduce inequality and private domination interfere excessively in one's private choices onto the question of whether they enhance citizens' sphere of freedom. The questioning imposed by liberalism is a valuable counterpoise to the aspiration to expand that sphere, of course, to assess whether the chosen remedy entails unreasonable interference in citizens' choices: but the change in perspective is important.

Populists are often accused of attacking pluralism and the checks-and-balances system, for instance. The charge is well founded, of course, but also underwhelming. For pluralism and the checks-and-balances system are both compatible with inequality and private domination, and are chiefly instrumental values, if cardinal ones, serving substantive ones such as freedom and equality. Only by viewing freedom as non-domination, and by moving from the institutional theory that flows from it, can one respond powerfully to the populists' challenge also on this critical front.

'Capitalism won', Milanović's synopsis argues, chiefly because it 'agreed more profoundly with human nature which values ability to make autonomous economic decisions and cares about private property'. As liberalism is content with safeguarding those human inclinations from external interference it has no counterpoise to them. Republicans emphasise the equally profound human aspiration not to be dominated, which can come into tension with them and thus open up a dialectic, within which public debate might find ways to improve our democracies.

A chronological remark, to conclude. The liberal conception of freedom, which now reigns supreme, is fairly recent. The classical notion of freedom as non-domination was first challenged by Hobbes, in the Leviathan, but still informed Madison's and Jefferson's thinking, for instance, and Montesquieu's. Yet it was liberal theory that accompanied the demise of the ancien régime. At that juncture, coupling its universalism (equal rights) with the classical notion of freedom would have produced truly radical change – in employment relationships, for example. By conceiving of freedom as non-interference the bourgeoisie opened up societies, admirably, but avoided going too far. Now, a century and a half after 1848, we can say that that model has served its purpose, as the police no longer beats and silences us, but has run its course, as it has too little to say on the problems of advanced capitalist democracies. So we may perhaps return to the republican notion of freedom, and combine it with liberal universalism.

 

 

Note

1. While retaining full responsibility for these very tentative remarks, I would like to thank Branko Milanović for his feedback on them.

 

Andrea Lorenzo Capussela led the economic and fiscal affairs office of Kosovo's supervisor, the International Civilian Office, and is the author of State-Building in Kosovo: Democracy, Corruption, and the EU in the Balkans (I.B. Tauris, 2015), and of The Political Economy of Italy's Decline (Oxford University Press, 2018). He tweets @AndreaCapussela

This post first appeared on the LSE's EUROPP blog.

Image credit: David Brossard via Flickr (CC BY-SA 2.0)

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