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The Divide by Jason Hickel

Book review by Mike McLoughin 

The Divide – A Brief Guide to Global Inequality and its Solutions by Jason Hickel challenges the orthodox beliefs about the roots of global inequality.

Hickel was very close to the inequality he writes about as he grew up in Swaziland and carried out fieldwork with NGOs across the developing world. What he saw and experienced led him to try to change things through academic research and teaching development studies. The book is accessible to anyone but also stimulating for a more aware audience. It questions the received wisdom on development economics and provides new ideas on the causes behind success and failure in development. It gives an historical analysis of the causes of poverty in many of today’s poor nations and shows how almost all those involved have made inequality worse.

He exposes the failure of multinational organizations to reduce inequality while attempting to make people think otherwise. He also describes the structural nature of poverty, how poor countries remain poor through the actions of rich countries and how global GDP growth can never be the solution to global poverty and demonstrates how the international agencies like the World Bank and IMF, set up to bring about the end of poverty, have achieved the opposite through the domination of neo-liberal thinking in these rich-world dominated agencies.

The text dismantles the neo-liberal arguments that favour structural adjustment with a rigorous analysis and shows how most enduring gains against poverty have happened in East Asia. In particular he uses China to show how nations should carve out their own path in order to develop in a meaningful way, rejecting the guidance of so-called development experts by nurturing and supporting their industries with a range of government assistance.

The text draws on the work of many developmental economics experts such as Thomas Pogge, Lant Pritchett, Ha-Joon Chang and Sudhir Anand but retains his own unique approach.

The Divide is a very easily read book that draws on extensive research and It is one of the best on the subject that I have read and should be top of the list for anyone interested in structural inequality, developmental politics, and challenging the economic orthodoxy.

 

The Divide – A Brief Guide to Global Inequality and its Solutions, by Jason Hickel, published by William Heinemann, 4th May 2017, 368 Pages.

 

 

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Towards an Economics Reformation

The World faces poverty, inequality, ecological crisis and financial instability.

But we do not need to accept that it has to be this way.

By Mike McLoughlin

31st of October 1517 was the start of the Reformation when Martin Luther nailed his ninety-five theses to the door of All Saints Church in Wittenburg, changing Christianity for all time. On the 12th December 2017, a few days after the 500th anniversary, a group of economists nailed (blu-tacked in this case) 33 theses to the doors of the London School of Economics. These show what issues in economics should be open to discussion if we are ever going to change the creed of neo-liberalism which is destroying the lives of people here and the world over, by sweeping up the world’s wealth into the control of the richest 1% of the world’s population.

In their introduction the two organisations, Rethinking Economics and The New Weather Institute, are concerned that economics is doing much less than it could to provide insights that would help resolve the world’s problems. They say that an unhealthy intellectual monopoly has developed within economics. The neoclassical (neo-liberal) perspective overwhelmingly dominates teaching, research, advice to policy and public debate. They believe that the argument is not about one theory being better than another but that advance only happens with a debate, and today within economics this debate has died. Mainstream economics appears to have become incapable of self-correction, developing more as a faith than as a science. Often, if theory and evidence are in conflict, it is the theory that has been upheld and the evidence discarded. These theses challenge the unhealthy intellectual monopoly of mainstream economics.

The theses are organised under nine headings. Below is a short summary of the main points under each heading.

THE PURPOSE OF THE ECONOMY: The purpose of the economy is for society to decide. Economic goals cannot be separated from politics. Economics is not value-free. We need more discussion of what sort of economy we want and how to get there.

THE NATURAL WORLD: The economy is a subset of nature and of the societies within which it emerges. It does not exist as an independent entity. Social institutions and ecological systems are not external to its functioning. An economic theory that treats the natural world as external to its model cannot understand the degradation of the natural world – it must recognise that the availability of non-renewable energy and resources is not infinite. The global economy already operates well outside the viable thresholds of ecology, yet requires further growth to function. 

INSTITUTIONS AND MARKETS: All markets are created and shaped by laws, customs and culture, and are influenced by what governments do and don’t do. Markets are outcomes of the interactions between different types of public and private organisations, the voluntary sector and civil society. Markets are more complex and less predictable than implied by just relationships of supply and demand. It is unhelpful to propose a universally applicable set of economic policies based solely on abstract economic theory. 

LABOUR AND CAPITAL: Wages, profits and returns on assets can be shown to depend on a wide range of factors, including the relative power of workers, firms and owners of assets. Economics needs a broader understanding of these factors so as to better inform choices that affect the share of income received by different groups in society. 

THE NATURE OF DECISION-MAKING: Error, bias, pattern-recognition, learning, social interaction and context are all important influences on behaviour that are not recognised in economic theory, so mainstream economic theory and practice must recognise the role of uncertainty. 

INEQUALITY: Markets often show a tendency towards increasing inequality. In turn, unequal societies fare worse across a range of social welfare indicators. Importantly the proposition that as a country gets richer, inequality must inevitably rise before it falls, has been shown to be false. 

GDP GROWTH AND DEBT: Growth is a political as much as an economic choice. If we choose to pursue ‘growth’ then we must decide growth of what, why, for whom, for how long and how much is enough. Private debt profoundly influences the rate at which the economy grows and yet is excluded from mainstream economic theory. Finance and economics cannot be separated. 

MONEY, BANKS AND CRISES: The majority of new money circulating in the economy is created by commercial banks every time they make a new loan. The way in which money is created affects the distribution of wealth within society so the method of money creation should be understood to be a political issue, not a technical one. Economics needs a better understanding of how instability and crises are created internally, rather than treating them as ‘shocks’ from outside. 

THE TEACHING OF ECONOMICS: A good economics education must offer a plurality of theoretical approaches to its students, including the history and philosophy of economic thought. Interdisciplinary courses are key to understanding the economic realities of financial crises, poverty and climate change. The present overwhelming focus on statistics and quantitative models can leave economists blinded to other ways of thinking. Economics must do more to encourage critical thinking, and not simply reward memorisation of theories.

The full text of the introduction and theses can be found here.

 

The Colloquium in Carshalton Park

Sutton for Peace and Justice brings you

The Colloquium in Carshalton Park

Throughout the day of the Environmental Fair on Bank Holiday Monday 28 August at Carshalton Park, Sutton for Peace and Justice will be hosting a series of informal and open discussions on a range of peace and justice issues:

11.30 Sutton 4 Sanctuary – Refugees welcome here
Helping refugees find a welcome and establish a new home in Sutton, including the Community Sponsorship Scheme.

12.15 Inequality is not inevitable
Inequality is bad for everyone and austerity is making it worse – but there is an alternative.

13.00 Climate Change – threat to peace & justice
Action on climate change is essential – now more than ever.

13.45 The plight of Palestinians today
How the rights of ‘the non-jewish communities of Palestine’ are ‘prejudiced’ 100 years after Balfour.

14.30 In defence of the Human Rights Act
The Human Rights Act protects us all and needs our support.

15.15 Stop nuclear proliferation – scrap Trident
Remembering Hiroshima and Nagasaki –Trident should be scrapped.

16.00 Sutton 4 Sanctuary – Refugees welcome here
Helping refugees find a welcome and establish a new home in Sutton, including the Community Sponsorship Scheme.

All at the Sutton for Peace and Justice stall J04–J05.

Come along and hear about these important issues, have your say and join the debate.

Colloquium – an informal gathering for the exchange of views, from latin ‘to talk together’; a seminar usually led by a different academic or expert speaker at each meeting.

 

See ‘This Is A Coup’ in Sutton on 24 November

Sutton for Peace and Justice is screening of  ‘This Is A Coup’ – a documentary film telling the story of Greece’s 2015 confrontation with the European Union.

coup-greek-flag

  • Thursday November 24th
  • 7.30–9.00pm doors open at 7.00
  • at Sutton Quaker Meeting Hall, Cedar Road, Sutton, SM2 5DA.

January 2015. A radical left party called Syriza wins the Greek elections. With over 50% youth unemployment, unimaginable public debt and the people struggling under crippling austerity measures, Syriza and its charismatic leader, Alexis Tsipras, is handed a clear mandate for change.

In this four-part unravelling of events, Theopi Skarlatos and Paul Mason look at how Syriza won, what they did, how they clashed with the global financial system and how it all ended. Fully exploiting their unprecedented access to politicians and venturing behind the doors where decisions were made, they chronicle a ‘war’ that highlights the democratic deficit at the heart of the EU.

Underpinning all this political posturing is also a strong vein of hope – as Skarlatos said:  “The people always felt they were stronger than the politicians who eventually didn’t live up to the promises they made back in January.”

Produced and narrated by journalist Paul Mason, with extraordinary access to key

Directed by Theopi Skarlatos, edited by Andreas Loukakos. Released by Field of Vision.

The extraordinary resilience of the Greek people – in retreat but not defeated.

There is no advance entry charge, donations will be taken on the night.
Please reserve your place by email to sutton4peace@yahoo.co.uk
or by text message to 07740 594496.

Film ‘This Is A Coup’ – 24 November

Sutton for Peace and Justice invite you to a screening of  ‘This Is A Coup’. A documentary film telling the story of Greece’s 2015 confrontation with the European Union.  Presented by journalist Paul Mason, with extraordinary access to key politicians.

coup-greek-flag

  • Thursday November 24th
  • 7.30–9.00pm doors open at 7.00
  • at Sutton Quaker Meeting Hall, Cedar Road, Sutton, SM2 5DA.

January 2015. A radical left party called Syriza wins the Greek elections. With over 50% youth unemployment, unimaginable public debt and the people struggling under crippling austerity measures, Syriza and its charismatic leader, Alexis Tsipras, is handed a clear mandate for change.

In this four-part unravelling of events, Theopi Skarlatos and Paul Mason look at how Syriza won, what they did, how they clashed with the global financial system and how it all ended. Fully exploiting their unprecedented access to politicians and venturing behind the doors where decisions were made, they chronicle a ‘war’ that highlights the democratic deficit at the heart of the EU.

Underpinning all this political posturing is also a strong vein of hope – as Skarlatos said:  “The people always felt they were stronger than the politicians who eventually didn’t live up to the promises they made back in January.”

Directed by Theopi Skarlatos, edited by Andreas Loukakos.
Produced and narrated by Paul Mason. Released by Field of Vision.

The extraordinary resilience of the Greek people – in retreat but not defeated.
There is no advance entry charge, donations will be taken on the night.
Please reserve your place by email to sutton4peace@yahoo.co.uk
or by text message to 07740 594496.

Councils against TTIP

The following Councils have declared themselves TTIP-Free zones (April 2016):

BIRMINGHAM CITY COUNCIL

BRADFORD MDC

BRIGHTON & HOVE CITY COUNCIL

BURY COUNCIL

CAMBRIDGE CITY COUNCIL

CRAWLEY BOROUGH COUNCIL

EXETER CITY COUNCIL

GWYNNEDD COUNCIL

HARTLEPOOL BOROUGH COUNCIL

HASTINGS DISTRICT COUNCIL

LANCASHIRE COUNTY COUNCIL

LANCASTER CITY COUNCIL

LEWISHAM BOROUGH COUNCIL

NORTH SOMERSET COUNCIL

NEWCASTLE CITY COUNCIL

NORTHAMPTON COUNTY COUNCIL

NORTHUMBERLAND COUNTY COUNCIL

NORWICH CITY COUNCIL

OLDHAM BOROUGH COUNCIL

OXFORD CITY COUNCIL

READING BOROUGH COUNCIL

SEFTON COUNCIL

SHEFFIELD CITY COUNCIL

SOUTHAMPTON CITY COUNCIL

SOUTHWARK BOROUGH COUNCIL

STROUD DISTRICT COUNCIL

WARWICKSHIRE COUNTY COUNCIL

Four days to the Divide in Sutton

Just four days to wait to see The Divide in Sutton, ahead of its UK release on 22 April.

The Divide image small

You can see The Divide in Sutton on Monday 14 March 2016, at Sutton Quaker Meeting Hall, Cedar Road, Sutton, SM2 5DA. Film screening 7.30–9.00pm, doors open at 7.00.

There is no advance entry charge, donations will be taken on the night.
Please reserve your place by email to sutton4peace@yahoo.co.uk or by text message to 07740 594496.