Tim Taylor Untangling India's Distinctive Economic Story [feedly]

From Tim Taylor, and in the interest of advancing economic literacy, an excellent review of literature on the Indian economy and history.

Untangling India's Distinctive Economic Story
http://conversableeconomist.blogspot.com/2020/02/untangling-indias-distinctive-economic.html

It's easy enough to explain why China's economic development has gotten more attention than that of India. China's growth rate has been faster. China's effect on international trade has created more a shock for the rest of the global economy. In geopolitical terms, China looks more like a rival. Also, China's basic story-line of trying to liberalize a centrally-planned economy while keeping a communist government is fairly easy to tell.

But whatever the plausible reasons why China's economy has gotten more attention than India, it seems clear to me that India's economic developments have gotten far too little attention. A symposium in the Winter 2020 issue of the Journal of Economic Perspectives offers some insights:

• "Dynamism with Incommensurate Development: The Distinctive Indian Model," by Rohit Lamba and Arvind Subramanian
• "Why Does the Indian State Both Fail and Succeed?" by Devesh Kapur
• "The Great Indian Demonetization," by Amartya Lahiri

I'll also mention an article on "Caste and the Indian Economy," by Kaivan Munshi, which appears in the December 2019 issue of the Journal of Economic Literature, a sibling journal of the JEP (that, is both are published by the American Economic Association).

Lamba and Subramanian point out that over the 38 years from 1980 (when India started making some pro-business reforms), India is one of only nine countries in world to have averaged an annual growth rate of 4.5%, with no decadal average falling below 2.9% annual growth. (The nine, listed in order of annual growth rates during this time with highest first, are Botswana, Singapore, Korea, Taiwan, Malta, Hong Kong, Thailand, India, and Malaysia.) Of course, one can tweak these cutoffs in various ways, but no matter how you slice it, India's growth rate over the last four decades has been remarkable. Moreover, India's population is likely to exceed China's in the near future.

But India's path to rapid growth has been notably different than many other countries. India is ethnically fractionalized, especially when the caste system is taken into account.In addition, India path to development has been "precocious," as Lamba and Subramanian put it, in two ways.

One involves the "modernization hypothesis" that economic development and democracy evolve together over time.  In India, universal suffrage arrived all at once when India became independent in 1948. For a sense of how dramatic this difference is, the graph below shows per capita GDP on the horizontal axis and degree of democracy on the vertical axis. The lines show the path of countries over time. Clearly, India defies the modernization hypothesis by having full democracy before development. China defies the modernization hypothesis in the other direction, by having develoment without democracy.

The other precocious factor for India is that economic development in most countries involves a movement from agriculture to manufacturing to services. However, India has largely skipped the stage of low-wage manufacturing, and moved directly toward a services-based economy. One underlying factor is India's "license raj"--the interlocking combinations of rules about starting a business, labor laws, and land use that have made it hard for manufacturing firms to become established. A related factor is that in global markets, India's attempts at low-wage manufacturing over the decades were outcompeted by Korea, Thailand, China--and now by the rise of robots.

The good side of this "precocious servicification" is that that high-income economies are primarily services and services are a rising part of international trade. The bad side is that this services economy works much better for the relatively well-educated in urban areas, and offers less opportunity for others--thus leading to greater inequality.

India faces a range of other issues as well. Environmental problems in India are severe: when it comes to air pollution for example, "22 of the top 30 most polluted cities in the world are in India." The role of women in India's economy and society is in some ways moving backward: "Female labor force participation in India has been declining from about 35 percent in 1990 to about 28 percent in 2015. For perspective, the female labor force participation rate in Indonesia in 2015 was almost 50 percent; in China, it was above 60 percent. In addition, the gap between India's labor force participation rate and the rate of countries with similar per capita GDP is widening, not narrowing. ... India's sex ratio at birth increased from 1,060 boys born for every 1,000 girls in 1970 to 1,106 in 2014, widening its gap from the biological norm of 1,050."

The capabilities of India's government are shaped by these underlying background factors. Devesh Kapur writes in JEP:

India's state performs poorly in basic public services such as providing primary education, public health, water, sanitation, and environmental quality. While it is politically effective in managing one of the world's largest armed forces, it is less effective in managing public service bureaucracies. The research literature on India has many discussions of programs that fail to deliver meaningful outcomes, or that are victims of weak implementation and rent-seeking behavior of politicians and bureaucrats, or that are vitiated by discrimination against certain social groups ...

But on the other side, the Indian state has a strong record in successfully managing complex tasks and on a massive scale. It has repeatedly conducted elections for hundreds of millions of voters—nearly 900 million in the 2019 general elections—without national disputes. In this decade, it has scaled up large programs such as Aadhaar, the world's largest biometric ID program (which crossed one billion people enrolled within seven years of its launch). Most recently, it has implemented the integrated Goods and Services Tax (GST), one of the most ambitious tax reforms anywhere in recent times. India ranks low on its ability to enforce contracts, but its homicide rate has dropped markedly from 5.1 in 1990 to 3.2 (per 100,000) in 2016 ... 

[T[he Indian state has delivered better in certain situations and settings: specifically, on macroeconomic rather than microeconomic outcomes; where delivery is episodic with inbuilt exit, rather than where delivery and accountability are quotidian and more reliant on state capacity at local levels; and on those goods and services where societal norms and values concerning hierarchy and status matter less, rather than in settings where these norms and values—such as caste and patriarchy—are resilient.

Kapur traces these issues back to the ethnic fractionalization, social cleavages and caste system in India, combined with India's early adoption of democracy. Moroever, India is a country with a low tax/GDP ratio and a relatively small number of taxpayers. He also points out that most government positions in India require a difficult civil-service examination, and by international standards India's government does not appear overstaffed. A pattern has evolved that India's government is relatively effective on big picture projects like electrification, but much less effective on local issues that are related to social expectations about caste and gender: for example, reforms related to education, or the welfare of children and women.  In countries as different as the United States and China, about 60% of all government employees are at the local level; in India, it's less than 20%.

India continues to have issues with caste differences, as explored in the article by Kaivan Munshi. he writes: 

Caste continues to play an important role in the Indian economy. Networks organized at the level of the caste or jatiprovide insurance, jobs, and credit for their members in an economy where market institutions are inefficient. Affirmative action for large groups of historically disadvantaged castes in higher education and India's representative democracy has, if anything, made caste more salient in society and in the public discourse. Newly available evidence with nationally representative data indicates that there has been convergence in education, income, occupations, and consumption across caste groups over time. ... The available evidence indicates that caste discrimination, at least in urban labor markets, is statistical, that is, based on differences in socioeconomic characteristics between upper and lower castes. ... Given the strong intergenerational persistence in human capital, the key variable driving convergence, it will be many generations before income and consumption are equalized across caste groups.

The caste-based economic networks that currently serve many functions will also disappear once markets begin to function efficiently. These networks continue to be active in the globalizing Indian economy because information and commitment problems are exacerbated during a period of economic change. In the long run, however, the markets will settle into place and the caste networks will lose their purpose. This has certainly been the experience in many developed countries. In the United States, for example, ethnic networks based on a European country (region) of origin supported their members through the nineteenth century into the middle of the twentieth century. Ultimately, however, these networks no longer served a useful role and today, outside of a few pockets, European ethnic identity in the United States is largely symbolic. We might expect caste to similarly lose its salience as India develops into a modern market economy, and there is some evidence that this process may have already begun.

 Amartya Lahiri takes up yet another issue: "On November 8, 2016, India demonetized 86 percent of its currency in circulation." Specifically, India declared that people needed to turn in their large-denomination bills at banks, and that the existing bills would be worthless moving forward. They would then be replaced with new currency. The policy had several goals, like making it impossible for organized crime to hide its accumulated gains in the form of cash, and bringing people into the banking system and the digital economy. But Lahiri argues that these larger goals were not much affected by the change. Instead, the main effect of the demonetization was causing short-term hardship and higher unemployment in the areas where the demonetization led to temporary cash shortages. I had not known that India had carried out similar demonetizations of large-denomination currency in 1946 and 1978--with, Lahiri argues, much the same minimal-to-negative effects.

India's record of sustained and strong economic growth appears to be in some danger from the "twin balance sheet challenge."  As Lamba and Subramanian put it:

The sustainability of growth—which in late 2019 has cratered to a near standstill— will be determined by structural factors salient amongst which is the "twin balance sheet challenge" initiated by the toxic legacy of the credit boom of the 2000s. Recently, the rot of stressed loans has spread from the public sector banks to the nonbank financial sector, and on the real side, from infrastructure companies to most notably the real estate sector with the latter threatening middle class savings. This contagion owes both to overall weak economic growth and slow progress in cleaning up bank and corporate balance sheets. A failure to resolve this challenge could mean a reprisal of the Japanese experience of nearly two decades of lost growth, but at a much lower level of per capita income. India's development experience could end up being a transition from socialism without entry to capitalism without exit because weak regulatory capacity and lack of social buy-in will have impeded the necessary creative destruction.

Thus, India's economy finds itself at a pivotal moment, facing both the short-run challenges of the twin balance sheet problem, the longer run economic problems of appropriate reforms to create an environment in which India's businesses can function and grow, the challenges of building transportation, energy, and communications infrastructure., and the social policy challenges of improving education and health care. Challenges never come singly.

For some previous posts on India's economy, see:

• "The Jobs Problem in India" (October 8, 2019)
• "India Economic Survey: Challenges Accepted" (July 26, 2019)
• "India: What's Needed for Sustained Growth?" (March 22, 2017)
• "The Economic Vision for Precocious, Cleavaged India" (February 16, 2017)
• "India's Economic Growth: Puzzles, Issues, Sustainability" (January 3, 2012

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Enlighten Radio:End of the Road -- the Feb 20, 2020 Show -- "The Off-white Wedding Dress"

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Workingclass Perspectives: Precarity Goes to the Movies [feedly]

Sherry Linkon and her cooperative do fascinating research into working class culture

Precarity Goes to the Movies
https://workingclassstudies.wordpress.com/2020/02/24/precarity-goes-to-the-movies/

Two recent events, vastly different in scale and importance, nonetheless point to the importance of the concept of the precariat, a relatively new coinage for the class of exploited, underemployed and temp workers of the world. The Oscars' celebration of the South Korean film Parasiteforegrounded what even mainstream critics in the New York Times and the Washington Post called a "class war" between the comfortable rich in glossy mansions and the precariat, a miserable underclass who live in Seoul's gross banjiha or semi-basements.

The other event, the pandemic of the latest coronavirus COVID-19 that, among other horrors, curtailed the yearly—and only–vacation of hundreds of millions of Chinese migratory workers, who would normally travel home to the countryside from the industrial mega-cities in which they are similarly stuffed in overcrowded living conditions in dormitories and squalid apartments.

All over the world these workers of the precariat face remarkably similar working conditions, although they labor under many different titles: zero-hour contracts (United Kingdom), casual employment (Australia), low-hour contracts (Ireland), mini-jobs (Germany), subcontracted labor (India), non-hukuo migration (China), and McJobs or the gig economy (United States). We can hardly pretend that these workers are invisible: they are "illegal immigrants," fast-food workers, Uber and Lyft drivers, retail clerks, day laborers, landscape workers, migrant workers, child laborers, farm laborers, seasonal workers, house cleaners, nannies, domestic workers, hotel and motel workers, carwasheros, tech workers, adjunct professors, convict labor, recycling scavengers, and so-called "guest workers."

The precariat are everywhere, a vast global workforce defined by their transitory and tenuous relationship with employers emboldened by declining union membership numbers and the cost-saving outsourcing of labor by corporations and government entities alike. Guy Standing, former director of the Socio-Economic Program of the United Nations International Labour Organization and the leading chronicler of the precariat, examines how their lives are marked by the lack of health and safety regulations, job training, and stable income. As he argues in his 2011 book, The Precariat: The New Dangerous Class, the precariat has replaced the traditional proletariat with "a new mass class … characterized by chronic uncertainly and insecurity." They "consist of millions of people relegated to bits and pieces living, in and out of casual flexible jobs, unable to build an occupational identity." They are "wanted by the global market system" but are not simply a lumpenproletriat or underclass. They are even more vulnerable because they have no collective voice in their workplace and no short- or long-term job protection.

In the last twenty years, I have studied how the precariat are presented in both feature and documentary films. Using a broad definition of cinema, I have explored not only the traditional genres of labor documentaries and working-class feature films, but also other genres especially relevant to precarious work, such as epidemic cinema and films of catastrophe, as well as other forms of artistic expression, such as video games and films made for art installations and political protests by non-traditional filmmakers. I analyze 300 of these texts in my new book, The Cinema of the Precariat: The Exploited, Underemployed, and Temp Workers of the World (Bloomsbury).

When we consider the visual exploration of filmmakers of radically different backgrounds and intentions, we realize that the precariat has not been so invisible after all. Many of us know, for example, the classic television documentary, Harvest of Shame, Edward R. Murrow's pioneering televised exposé of the migrant workers' plight in 1960. That program launched an extended series of television documentaries, from 1960 through the 1990s, that I see as the first series of films about the precariat, though the term had not yet been coined. These films included white, African-American, and Latino migrant workers and farm laborers. At least six major programs, from What Harvest for the Reaper?(1968) through Children of the Harvest (1998), used Murrow's model of investigative journalism to expose the scandalous conditions of this substantial arm of the precariat and their devastating effect on their families.

The closing years of the twentieth century engendered another kind of massive migration in China and other developing countries, as workers both from within and without urban centers tried to survive austerity programs that eliminated economic safety nets. Between 1970 to 2009, as many as 340 million rural workers were crowded into edge cities and satellite factory towns, working upwards of sixteen hours a day for low pay to generate the Chinese economic miracle of economic growth. Numerous films have chronicled these exploited migratory workers. Lixin Fan's Last Train Home (2009), for example, follows a single family on a visit home after working for fifteen years in a garment factory in Guangdong Province only to return to find their factory shuttered because of the 2008 world financial crisis.

Other films document how desperate workers in South American countries had no choice but to move into shanty towns among massive garbage dumps to recycle plastics dumped in ever-increasing mounds of trash. For example, Recycled Life (2006) reveals a forty-acre ravine called the Guatemala City Dump, possibly the largest in the world, where hundreds of scavengers, the guajeros (from guaje or "a thing of little value") recycle millions of pounds of paper, plastic, and metal. In White Train (1993), we see hundreds of cartoneras (the recyclers, literally "the cardboard people") gleaning the trash of Buenos Aires and transporting their finds on unmarked special trains to the recycling centers.

Films about the recycling of discarded plastics and metals from electronic equipment in China and Southeast Asia and ship-breaking in India, Pakistan, and Bangladesh reveal the dangerous and life-threatening tasks the precariat engage in a desperate race to the bottom. Plastic China (2017) focuses on one of five thousand small home factories in the province of Shandong where plastic garbage is transformed into recyclable pellets. On a different and massive scale, workers swarm over discarded ships in select "shipbreaking" ports in the Indian subcontinent, as in Graveyard for Giants (2014). We see Bangladeshi workers suspended hundreds of feet in the air, blowtorching pieces of an old freighter: "Is this a way to live?" one asks the filmmaker.

Looking beyond films that explicitly consider precarious labor, I think we also gain insight on the precariat through film genres and video games that are not so obviously focused on working-class topics. Epidemic cinema has located the spread of diseases among the precariat at least since the 1950s when Elia Kazan's Panic in the Streets (1950) dramatized an outbreak of plague among the precariat and the lumpenproletariat in New Orleans. Much more recently politically-conscious video game makers have been influenced by traditional filmmakers to offer games in which players have to identify with the precariat to survive or "win." In the videogame Fort McMoney (2013), modeled on the fracking boom-town Ft. McMurray, Canada, players "walk" around the town, interview workers, and participate in decisions about the city's future.

The title—and subject matter–of Parasite suggests, like epidemic cinema, that the precariat is a threat to the oligarchy of the 1%, epitomizing the class divide that leaves the 99% struggling for decent pay, health benefits, and job security. The Cinema of the Precariat also devotes separate chapters to the films that demonstrate the 1%'s capitalist drive for profits and economic dominance and that chronicle the rise of alt-labor and the drive to organize the unorganized of the 99%.

While films about the precariat are not new, filmmakers have begun to show the need for new films that will, like Murrow's Harvest of Shame, make the precariat visible in the 21^st century. It seems fitting that the documentary Food Chains (2014) returns to Immokalee, Florida, where Murrow began sixty years ago, to document new organizing drives among migrant labor and to take up the fight for workers' rights again.

Tom Zaniello

Tom Zaniello is a film and media scholar who has written several books on films about work and class, including Working Stiffs, Union Maids, Reds, and Riffraff, The Cinema of Globalization, and The Cinema of the Precariat. 

 -- via my feedly newsfeed

https://equitablegrowth.org/womens-history-month-u-s-womens-labor-force-participation/

https://equitablegrowth.org/womens-history-month-u-s-womens-labor-force-participation/

Women's History Month: U.S. women's labor force participation

AUTHORS:

Elisabeth JacobsKate Bahn

TOPICS

ECONOMIC WELLBEING

It's Women's History Month in the United States. What better time to discuss a key economic dynamic that both reflects and contributes to women's changing role in American society than their advances in the workplace? Specifically, how has women's labor force participation rate—the percentage of women engaged in the formal labor market by being employed or looking for work—changed over time? It's an important issue. When women join the labor force, economies tend to grow more. Indeed, there is a significant relationship between a country's per capita Gross Domestic Product and women's labor force participation rate. (See Figure 1.)

Figure 1

For women in the United States, labor force participation rates have not followed a straight path. It has been a complicated narrative, deeply affected by women's family roles, by discrimination, by the changing economy, by technological change, and by their own choices. And it is a continuing story, with surprising twists that economists continue to explore.

In a sense, this story begins with its first twist, in the 18th and 19th centuries. To be clear, this is a twist for us today, not for those who experienced it. From our modern perspective, we might assume that significant participation by women in the workforce was practically nonexistent until it began rising gradually in the 20th century. We would be wrong. A number of economists, and especially Claudia Goldin of Harvard University, have shown that women in the 18th and 19th centuries played a considerably more important role in the economy than we might have thought. They were critical to their families' economic well-being and their local economies, not in their rearing of children or taking care of household responsibilities but by their active participation in growing and making the products that families bartered or sold for a living.

But eventually, as the production of goods became mechanized and moved outside of the home, women's role in the market economy receded, and their labor force participation dropped substantially to its nadir near the end of the 19th century. Gradually, beginning after 1890 and very much into the 20th century, women had a growing place in the workforce. This path—declining from a high point in previous centuries, prior to the manufacturing economy, and then rising as the economy and society change over time—graphs as a U-shaped curve. One of Goldin's most significant contributions was to show that the U-shaped curve applied to the development of economies worldwide, though, as Boston College economist Claudia Olivetti has shown, the dip is less significant for economies that began significant development after 1950. (For an illustration of the global nature of this phenomenon, see this graph created by the IZA Institute of Labor Economics.)

Goldin cites four periods after the nadir of women's participation in the labor market, the first three of which she terms evolutionary and the final one revolutionary. In the first of these phases, from the late 19th century to the 1920s, it was primarily poor, uneducated single women who entered the workforce, often as piece workers in manufacturing or as employees in other people's homes. Married women largely stayed home, and the single women who worked generally exited the workforce upon marriage. In the 1910s, we see more women working in teaching and in clerical positions, which began a period of major growth.

From the 1930s to the 1950s, Goldin's second phase, married women entered the workforce in significant numbers, their rate rising from 10 percent to 25 percent. She notes that while 8 percent of employed women in 1890 were married, that figure rose to 26 percent in 1930 and 47 percent by 1950. These increases were the result of the rise of offices requiring clerical workers and new information technologies, along with tremendous growth in the number of women attending high school in the early 20th century. It's worth noting that women's workforce participation was negatively affected by their husbands' income. The higher his income, the less she would "need" to work outside the home. But that began to change during this period.

In the next phase, according to Goldin, women's labor force participation, driven by married women, rose substantially. And it continued to become more common for married women to continue working even as their husbands' income rose. One reason that married women worked more was the growing availability of scheduled part-time employment. In addition, societal barriers, and in some case legal barriers, to married women continuing to work were dropping.

Finally came what Goldin calls "the quiet revolution," the period from the late 1970s up to the very early 21st century. In this era, women's overall labor force participation rate rose but not by all that much. What did happen, however, was that the percentage of women of childbearing age with a child under the age of 1 in the workplace rose dramatically, from 20 percent to 62 percent. What Goldin refers to as the revolution are these changes: Young women in their late teens during the 1970s altered their "horizons" (their career expectations) so that they anticipated long, continuous careers that would not be cut short by marriage and children. This development, in turn, encouraged them to invest more in their education, with increasing numbers going to college and beyond, thus preparing them for careers that gave them status closer to men in the workplace.

At the same time, women began postponing marriage and childbearing. This was almost certainly, as shown by Goldin and by the University of Michigan's Martha Bailey and her co-authors, due in part to the introduction and growing popularity of the birth control pill, the reliable contraceptive that gave women more control over the timing of childbearing. The pill had the effects of both increasing female labor force participation and narrowing gender pay inequality. And women began to see their lives and their identities differently, with their professional selves becoming as important as their families.

And then something else happened. Beginning around 2000, the advances in women's labor force participation stopped. The rate flattened and then began to decline. To be sure, the decline is relatively small, a few percentage points, but it is real and it is unique among developed countries, according to the Organisation for Economic Co-operation and Development. (See Figure 2.)

Figure 2

We still don't know the reasons for this reversal, but we have some clues. Sandra Black of the University of Texas at Austin and her co-authors note that men's labor force participation rate has been declining for several decades. Until 2000, this caused a significant, though not nearly complete, convergence between women's and men's labor force participation rates. Since 2000, however, the relative decline for women has actually outpaced that of men. Between 2000 and 2016, prime-age women's labor force participation fell by 4.2 percent, from 78 percent to 74 percent. During the same period, prime-age men's labor force participation fell by 3.7 percent, from 91 percent to 88 percent. The decline in men's labor force participation is a trend generally attributed to poor labor market opportunities, particularly for low-skilled men. A question, therefore, is whether women's rate began to decline for the same reason. Some evidence points in that direction, but the story is not necessarily a simple demand-side tale.

As previously noted, this decline in women's labor force participation is not replicated in other OECD economies, where the rate continues to rise. Black and her co-authors point out that while the U.S. labor market is among the most flexible in its ability to accommodate changes in technology and other factors that change the nature of work, it is also among the least supportive in providing unemployment, job-search, and training benefits that could help both men and women adjust to change.

Those researchers also point to the potential positive impact of implementing paid family leave and expanded access to childcare on prime-age women's labor participation rates. It is clear from recent research by Olivetti and Barbara Petrongolo of the London School of Economics that national family policies can have a significant positive impact on women's labor force participation. The researchers examined family policy across high-income Western European countries, Canada, and the United States. What they found was that investments in childcare and early childhood learning had significant impacts on women's labor force participation. They also found a positive impact, though less pronounced, for maternity leave policies of up to 50 weeks. Interestingly, separate research finds that family policies that benefit only women can undermine their potential impact, as they might affect employers' attitudes toward female employees.

Unfortunately, what the OECD has also reported is that as of 2012, the United States ranked 33rd of 36 countries in investing in early childhood care and education, relative to overall income. This country is also the only developed country without a national paid leave program.

Another promising area for legislation to support women's ability to participate in the workforce is scheduling stability. Over the past decade, researchers have documented instability and unpredictability in the schedules of retail workers, and they are increasingly showing that providing greater stability and predictability for schedules can not only improve employer profits and strengthen the economy but also improve the health of their workers.

It seems clear that a change in direction for U.S. policies related to childcare and early education, along with a strong national paid leave policy for family leave could help to reverse the downward trend of U.S. women's labor force participation and put it back on the same path that most other developed countries are on. We have seen that while the 20th century saw a restoration of women's strong participation in the workforce, the 21st century has seen a disturbing reversal. Policymakers can do something about this, and it would benefit families and the nation's economy.

Dani Rodrik: The Changing Face of Economics [feedly]

Rodrik's take on abandoning the ideas and ideological culture contributing to austerity economics.

The Changing Face of Economics
https://www.globalpolicyjournal.com/blog/24/02/2020/changing-face-economics

Economists necessarily lack evidence about alternative institutional arrangements that are distant from our current reality. The challenge is to remain true to empiricism without crowding out the imagination needed to envisage the inclusive and freedom-enhancing institutions of the future.

Cambridge – Responding to pressures from within and without, the economics profession is gradually changing for the better. Not surprisingly, the populist backlash sweeping advanced democracies in recent years has produced some soul searching in the discipline. After all, the austerity, free-trade deals, financial liberalization, and labor market deregulation that caused it rested on the ideas of economists.

But the transformation extends beyond economic-policy tenets. Within the discipline, there is finally a reckoning with the hierarchical practices and aggressive seminar culture that have produced an inhospitable environment for women and minorities. A 2019 survey carried out by the American Economic Association (AEA) revealed that nearly half of female economists felt discriminated against or treated unfairly on account of their gender. Nearly a third of non-white economists felt treated unfairly based on their racial or ethnic identity.

These failings may be related. A profession that is less diverse and less open to different identities is more likely to exhibit groupthink and hubris. If it is to generate ideas to help society achieve inclusive prosperity, it will have to start by becoming more inclusive itself.

The new face of the discipline was on display when the AEA convened for its annual meetings in San Diego in early January. There were plenty of panels of the usual type on topics such as monetary policy, regulation, and economic growth. But there was an unmistakably different flavor to the proceedings this year. The sessions that put their mark on the proceedings and attracted the greatest attention were those that pushed the profession in new directions. There were more than a dozen sessions focusing on gender and diversity, including the headline Richard T. Ely lecture delivered by the University of Chicago's Marianne Bertrand.

The AEA meetings took place against the backdrop of the publication of Anne Case and Angus Deaton's remarkable and poignant book Deaths of Despair, which was presented during a special panel. Case and Deaton's research shows how a particular set of economic ideas privileging the "free market," along with an obsession with material indicators such as aggregate productivity and GDP, have fueled an epidemic of suicide, drug overdose, and alcoholism among America's working class. Capitalism is no longer delivering, and economics is, at the very least, complicit.

A panel called "Economics for Inclusive Prosperity" (EfIP), organized by a network of the same name which I co-direct, discussed several strands of new thinking taking over the discipline. One is the need to expand economists' focus from "average" levels of prosperity to distributive aspects and to non-economic dimensions that are equally fundamental to wellbeing, such as dignity, autonomy, health, and political rights. How economists talk about, say, trade agreements or deregulation may well change when they take such additional considerations seriously. This will require new economic indicators. One proposal that goes part of the way is for government agencies to produce distributional national income accounts.

As Samuel Bowles and Wendy Carlin argued in a paper presented in the same session, every policy paradigm embeds a set of ethical values – about what the good life entails – along with a view of how the economy works. Neoliberalism presumes individualistic, amoral individuals and a free market that delivers efficiency, thanks to complete contracts and a relative paucity of market failures. What we need, according to Bowles and Carlin, is a new paradigm that integrates egalitarian, democratic, and sustainability norms with a model of the economy as it really operates today. This paradigm would place community alongside the state-market dichotomy and would include policies such as wealth taxes, broader access to insurance to reduce risk exposure, workplace rights and voice, corporate governance reform, and substantial weakening of intellectual "property rights."

Speaking in the same session, Luigi Zingales faulted economists for foisting their own preferences on the body politic. This happens because economists tend to place greater value on certain outcomes (such as efficiency) than others (such as income distribution), and because they fall prey to groupthink and fetishize particular economic models over others. Part of the solution is to value diversity and exhibit greater modesty. Another part, according to Zingales, is to pay more attention to research in other social sciences, including history, sociology, and political science.

The implication of all these perspectives is that economics must be open to institutional alternatives and to institutional experimentation. Fostering such thinking is one of the major aims of the EfIP network. The institutional basis of a market economy is largely indeterminate. We can stick with institutional arrangements that sustain privilege and restrict opportunity. Or we can devise institutions that, in the words of Bowles and Carlin, are consistent with the pursuit of not only shared affluence but also an expanded concept of freedom.

Empirical methods – especially of causal inference – will help, and they have become much more central to the profession in recent decades. This is a very good thing insofar as real-world evidence, with all of its necessary messiness, displaces ideology. But the focus on evidence also risks creating its own blind spots. Evidence about what does and does not work can be obtained only from actual experience. We necessarily lack data on alternative institutional arrangements that are distant from our current reality.

The challenge for economists is to remain true to their empiricism without crowding out the imagination needed to envisage the inclusive and freedom-enhancing institutions of the future.

 

 

Dani Rodrik is Global Policy's Executive Editor and a Professor of International Political Economy at Harvard University's John F. Kennedy School of Government, is the author of Straight Talk on Trade: Ideas for a Sane World Economy.

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How Technology Is Changing the Future of Higher Education [feedly]

How Technology Is Changing the Future of Higher Education
https://www.nytimes.com/2020/02/20/education/learning/education-technology.html

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How Many Hidden Thresholds of Soft Authoritarianism have we Already Crossed?

http://www.lawyersgunsmoneyblog.com/2020/02/how-many-hidden-thresholds-of-soft-authoritarianism-have-we-already-crossed

Tom Pepinski, who wrote a terrific post on the banality of life under soft authoritarian regimes, has a new piece entitled "If American Democracy Collapsed, You Almost Certainly Wouldn't Notice It." Democracy, in fact, makes it particularly challenging to know if democracy has collapsed. That is because when democracy functions, challenges to it are usually …

If Only it was this Obvious

Tom Pepinski, who wrote a terrific post on the banality of life under soft authoritarian regimes, has a new piece entitled "If American Democracy Collapsed, You Almost Certainly Wouldn't Notice It."

Democracy, in fact, makes it particularly challenging to know if democracy has collapsed. That is because when democracy functions, challenges to it are usually hidden, and when they emerge in the open, they are processed through a system that presumes that challenges can be handled democratically. Political actors invoke laws and Constitutions as if they were binding constraints. Stresses that pose questions about the stability of the regime over time, therefore, are fundamentally ambiguous. They may be regime-altering, or not. And the responses to them by those who hold power may be regime-altering. Or not.

And that is why, if American democracy were to collapse, you almost certainly wouldn't notice it. Not right away, at least.

This question of democratic collapse is a different phenomenon than the suite of problems frequently labeled "democratic decline" or "democratic erosion" or "democratic dysfunction." It may be that governments perform poorly, or govern in illiberal or biased ways, or that citizens are apathetic, demobilized, "hunkering down" and turning to blind obedience and loyalty rather than embracing rights and exercising voice. But what I mean by collapse is that it no longer is the case that one follows widely-accepted practices for securing political authority by prevailing in competitive elections that enfranchise most people. It is an open question whether or not the symptoms of decline and dysfunction predict the illness of collapse.

Although the mechanisms are slightly different, I think the same general point can be made about some classes of transformations in other political orders. For example, aspects of liberal international ordering have already substantially unravelled – but it seems like many international-affairs experts either don't realize it or, at the other extreme, think that ongoing mutations in international order presage some kind of collapse into multipolar chaos.

In general, our tendency to think in "all or nothing" terms – to expect that significant transformations are always accompanied by explosions, flashing neon lights, and sirens – obscures a great deal of alteration in political orders. Even the kinds of events – such as impeachment – that I once thought would change this dynamic seem to be resolving into collective anticlimax. Meanwhile, Trump has transformed, in a way unlike any other modern president, the Republican party into his own personal patrimony. And the self-abasement of Senators before the Mad Emperor now just seems like par for the course.

Of course, Trump's acquittal slides us further down the road. There's absolutely nothing to stop him from weaponizing the executive branch to persecute his opponents and shield himself and his family. Indeed, Rand Paul's systematic efforts to intimidate the whistleblower who called out the Ukraine Shakedown seem particularly sinister in this context.

But it's worth noting that many of the most vulnerable people already live in an illiberal state, and Trump's policies have overall broadened and deepened the extent of American pocket authoritarianism. To wit:

The strangers trying to arrest his mom's boyfriend weren't wearing uniforms or badges, and they didn't have a warrant. So 26-year-old Eric Diaz did the only thing he could think of: Outside his front door, on the otherwise quiet Brooklyn street, he confronted the plainclothes officers.

Then, one of them shot him in the face — just below his right eye.

"He literally points the gun at my brother and didn't even hesitate," Kevin Yañez Cruz, who witnessed the scene on Thursday morning, told WABC. "Just pulled the trigger."

Immigration and Customs Enforcement confirmed that agents discharged "at least one firearm" in the altercation, which landed two officers and two others in the hospital, agency officials said in statements to local news outlets. Diaz and the man they were targeting are now in their custody in the hospital, activists say.

Not surprisingly, the situation is intertwined with New York's refusal to cooperate with Trump's ethnic cleansing. This leads to policies that put due process considerations first, as they should be. But, of course, ICE blames respect for basic civil liberties for what happened in this case.

Gaspar Avendano-Hernandez, the longtime boyfriend of Diaz's mother, had been deported back to Mexico twice, ICE officials said.

On Monday, he was stopped by New York police for allegedly driving with a forged Connecticut license plate, a felony criminal charge, WABC reported.

Upon the man's arrest, immigration officials issued a detainer request, asking that Avendano-Hernandez be held in jail past his release date so that they could take him into custody. New York, like other "sanctuary cities," does not comply with these orders, which many courts have said violate due process.

"This forced ICE officers to locate him on the streets of New York rather than in the safe confines of a jail," ICE spokeswoman Rachael Yong Yow said in a statement to the Wall Street Journal.

A team of officers tracked him down to a residential street in Gravesend, an ethnically diverse neighborhood in south Brooklyn, arriving around 8 a.m. Thursday to try to arrest him.

He would not budge.

"He resisted because they didn't show him no papers, like, 'Oh, I'm the police,' no badge, no nothing, no warrant, no nothing," Yañez Cruz told WABC.

They Tasered him. At that point, two sons of his live-in girlfriend, including Diaz, stepped outside, unarmed, to check on what was happening. The officers didn't say anything at all, Yañez Cruz told the station.

According to ICE, that's when the two agents were "physically attacked." The ICE spokeswoman did not identify Diaz or say whether he was among the attackers.

Speaking of abuses of federal power, how many of you live in New York and were planning on getting, or renewing, Global Entry?