The Unassuming Economist

For a list of 20th-century Indian economists, click here.

From Pro-Market:

In an interview with ProMarket, Harvard economist Dani Rodrik explained where globalization went wrong, how trade agreements serve rent-seeking by politically well-connected firms, and why the only solution to the rise of political populism is an economic populism that reimagines the institutions of capitalism.

Q: A recent report by the United Nations Conference on Trade and Development argued that the hyperglobalization of the past 30 years has led to a sharp increase in market concentration, which in turn led to a proliferation of rent-seeking. Do you agree with the assessment that globalization has increased rent-seeking?

I’m not saying that it has increased rent-seeking. I’m agnostic on that. I think it’s changed the relative power of different groups of rent-seekers and that the terrain over which the rent-seeking is taking place is different. I don’t want to make a blanket statement that we’re in a world where rent-seeking has increased. I think it’s always been there. I think what has happened is a combination of changes in our ideas and changes in the financial power and other powers of different groups, and this combination is reflected in the various parts of our global economy.

I think that by fetishizing globalization and exaggerating its benefits and understating its downsides, we have essentially privileged and prioritized a set of powerful interests. The fact that pharmaceutical companies or foreign investors find it so easy to get what they want is in part because of our existing narratives, or existing ideas, about how the world does or should work.

Q: You differentiate between two kinds of populism—political populism, the kind of autocratic populism we see from the likes of Putin in Russia and Erdoğan in Turkey—and economic populism, which you write is “occasionally necessary” and which you seem to suggest as a potential remedy to our current predicament. What is economic populism, and how is it different from political populism?

I think economic populism is a populism that takes aim at the sources of economic inequality and at concentrations of economic power. Today in the US, economic populism would take the form of bringing the financial sector down to size, reducing the influence of Wall Street in political institutions, and having much greater regulation of the financial sector. It would mean taking aim at concentrations of power in high-tech and digital industries. It would mean taking aim at our current pattern of trade agreements, which often privilege particular corporate interests and investors. All of that would be economic populism that tries to reshape the distribution of economic power and tries to reduce the concentration of economic power but does not try to turn the political system into an authoritarian one, does not necessarily concentrate political power or undermine liberal norms of pluralism and tolerance.

See my profile of Dani Rodrik here.

My tribute to Stan Fischer.

Stanley Fischer, Vice Chair of the Board of Governors of the Federal Reserve System speaks during the seminar The Elusive Pursuit of Inflation during the 2015 IMF/World Bank Spring Meetings on Thursday, April 16 in Washington, D.C. IMF Photo/Ryan Rayburn

Below is an extract from the Jerusalem Post:

“In 1924, the late English economist John Maynard Keynes deliberated on what makes a great economist: “The master-economist … must be mathematician, historian, statesman, philosopher—in some degree. He must understand symbols and speak in words. He must contemplate the particular in terms of the general and touch abstract and concrete in the same flight of thought. He must study the present in the light of the past for the purposes of the future.”

Keynes was eulogizing a colleague economist who passed 17 years before Israeli economist Assaf Razin was born in 1941. However, if you ask colleagues and students, Keynes’ words could have been describing the ideal this 2017 EMET Prize winner for social sciences aspires to achieve.

Razin studied and shared ideas about globalization before many modern commentators on the subject even heard of the word, according to Prakash Loungani, an adviser at the International Monetary Fund. Migration and its impact on welfare states, economic policies that would have to shift in a world that is smaller and more accessible – “All the issues we are dealing with now, he was writing about all of it 20 or 30 years ago,” said Loungani.

Razin’s accomplishments are most surprising, considering his upbringing in Kibbutz Shamir in the Upper Galilee. He was born to a family of modest means with Marxist ideals. The professor describes his life as one of extremes – from the kibbutz to Tel Aviv University; from Israel to different parts of the world; and from his childhood in the nursery bed of socialism to the Economics Department at the University of Chicago, the cradle of intellectual capitalism, from where he received his Ph.D. in economics.”

Despite some rather dramatic personal events, including the death of his son in 1996 at the age of 30, Razin’s academic and professional achievements are truly outstanding, said Lars E.O. Svensson, a professor in the Stockholm School of Economics.

“Assaf has an excellent standing in the international community of scholars,” said Svensson. “He is a most welcome visitor to universities, research institutes and international organizations all over the world, and he is a high appreciated participant in international conferences.”

Continue reading here.

ASSAF RAZIN. (photo credit:Courtesy)

PATH TO POWER: Ostry earned his BA from Queen’s University in Canada when he was just 18 and went on to receive a BA and MA from Oxford, an MS from the London School of Economics and a PhD in economics from the University of Chicago. He joined the IMF in 1988 as an economist in the research and European departments, and has held a variety of roles in the years since, including heading up the group’s influential biannual World Economic Outlook survey. He became deputy director of research in 2006. Ostry writes prolifically for publications including The Economist, the Financial Times and the Wall Street Journal and has been cited in economic remarks by President Obama.

POWER PLAY: Ostry has been pursuing research seemingly at odds with IMF orthodoxy for years; in a 2014 Financial Times article, for example, he decried inequality and argued for “a more redistributive tax system.” But he made his biggest splash in June of this year when he coauthored a paper simply titled “Neoliberalism: Oversold?,” published in the IMF’s own Finance & Development magazine. In it, Ostry lays out a deeply researched argument against austerity and wholesale capital account liberalization, neoliberal policies that have been gospel at the IMF for decades. The month before the paper’s release, the IMF called for massive debt relief for Greece.

PATH TO POWER: The native Parisian specialized in antitrust law at Baker & McKenzie for 24 years before entering French politics in 2005. She began as a trade minister in Jacques Chirac’s cabinet, and was Nicolas Sarkozy’s agriculture and, later, finance minister. In 2011, she took over as managing director of the IMF from Dominique Strauss-Kahn, who stepped down after being charged with attempted rape.

POWER PLAY: Though Lagarde has been widely credited with restoring the IMF’s credibility following the scandalous exit of her predecessor and for being the voice of reason during the Greek debt crisis, she has been dogged by her role in the decade-old Bernard Tapie affair involving accusations of corruption in the sale of Adidas. Her decision as French finance minister in the 2008 case led to a 404-million-euro arbitration payout for Tapie, who had ties to Sarkozy. That payment was eventually annulled and Lagarde was absolved of wrongdoing, but a recent corruption probe into the incident has her facing negligence charges and up to one year in jail. Despite this distraction, the IMF appointed Lagarde to a second term in February, and she continues to receive its board’s support.

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