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Aftermath: A New Global Economic Order?

Craig Calhoun
Georgi Derluguian
Copyright Date: 2011
Published by: NYU Press
Pages: 296
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  • Book Info
    Book Description:

    The global financial crisis showed deep problems with mainstream economic predictions, as well as the vulnerability of the world's richest countries and the enormous potential of some poorer ones. China, India, Brazil, and other counties are growing faster than Europe or America and have weathered the crisis better. Is their growth due to following conventional economic guidelines or to strong state leadership and sometimes protectionism? These issues are basic to the question of which countries will grow in comind decades, as well as the likely conflicts over global trade policy, currency standards, and economic cooperation. Contributors include: Ha-Joon Chang, Piotr Dutkiewicz, Alexis Habiyaremye, James K. Galbraith, Grzegorz Gorzelak, Jomo Kwame Sundaram, Manuel Montes, Vladimir Popov, Felice Noelle Rodriguez, Dani Rodrik, Saskia Sassen, Luc Soete, and R. Bin Wong.

    eISBN: 978-0-8147-4869-5
    Subjects: Sociology

Table of Contents

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  1. Front Matter
    (pp. 1-4)
  2. Table of Contents
    (pp. 5-6)
  3. Introduction
    (pp. 7-20)
    Craig Calhoun and Georgi Derluguian

    Perhaps the most significant choices to be made in the contemporary crisis involve the future of development—not just in the core countries that produced the crisis but also in the rest of the world. There is not likely to be a simple recovery, if that means a return not only to growth but to pre-crisis political and economic relations. As Saskia Sassen suggests in the opening chapter, the crisis has sorted winners and losers in a savage way. It has revealed strength in some national trajectories and policies, weakness in what had been boom levels of development elsewhere, and...

  4. Chapter 1 A Savage Sorting of Winners and Losers, and Beyond
    (pp. 21-38)
    Saskia Sassen

    The end of the Cold War launched one of the most brutal economic phases of the modern era. Following a period of Keynesian-led relative redistribution in developed market economies, a mix of government action and corporate economic interests led to a radical reshuffling of capitalism. Two logics organize this reshuffling. One is systemic and gets wired into most countries’ economic and (de)regulatory policies, most importantly privatization and the lifting of border tariffs. We can see this in the unsettling and debordering of existing arrangements within the deep structures of capitalist economies, through the implementation of specific fiscal and monetary policies...

  5. Chapter 2 The 2008 World Financial Crisis and the Future of World Development
    (pp. 39-64)
    Ha-Joon Chang

    Over the past three decades, the economic orthodoxy, both in academia and in policymaking circles, has been that free-trade, free-market policies are the best route to economic development. During this period, with the notable exception of China and India, developing countries have come to embrace this orthodoxy, sometimes voluntarily but often under external pressures. They liberalized their trade and foreign investment, privatized their state-owned enterprises (SOEs), strengthened the protection for patents and other intellectual property rights (IPRs), and implemented conservative macroeconomic policies, characterized by high interest rates and balanced budgets.

    In the spread of this orthodoxy—known as neoliberalism or...

  6. Chapter 3 Growth after the Crisis
    (pp. 65-96)
    Dani Rodrik

    The past fifty years were a remarkable period in world economic history. Not only did we experience unprecedented rates of technological advance and economic growth in this period, but an increasing number of hitherto poor countries—those in the periphery of the North Atlantic economic core—were able to participate in this progress. The current crisis presages a new era, one which may be significantly less hospitable to the growth of poor countries. It is too early to know how long it will take for financial stability to be restored in the advanced countries and for recovery to set in....

  7. Chapter 4 Structural Causes and Consequences of the 2008–2009 Financial Crisis
    (pp. 97-118)
    Jomo Kwame Sundaram and Felice Noelle Rodriguez

    The international monetary and financial system created at Bretton Woods (BW) in 1944 was supposed to address the international dimensions of the financial crisis associated with the US Crash of 1929 and the ensuing Great Depression of the 1930s. The gold standard of the prewar period was replaced by dollar-gold parity, effectively making the dollar the international reserve currency since the 1940s. The growing US current account deficit of the 1960s and other problems contributed to the crises of the early 1970s and to subsequent global economic transformations associated with economic liberalization and globalization.

    Consequent global economic asymmetries have shaped...

  8. Chapter 5 Bridging the Gap: A New World Economic Order for Development?
    (pp. 119-148)
    Manuel Montes and Vladimir Popov

    In 1500, the ratio of average per-capita income in the North to that in the South was approximately 1:1; in 1900, it increased to 6:1 and stayed at this level for the next one hundred years (if China is excluded, the ratio actually increased). It may well be that at the end of the twentieth century we reached a tipping point and that in the twenty-first century the gap between the North and the South is going to narrow (figure 5.1).

    After World War II, the colonial empires collapsed, and many developing countries started to assert their economic independence (nationalization...

  9. Chapter 6 Chinese Political Economy and the International Economy: Linking Global, Regional, and Domestic Possibilities
    (pp. 149-164)
    R. Bin Wong

    As economies across the globe work through a recovery from the contraction of economic activity occasioned by the financial-market crisis beginning in 2007, historians are fond of reminding us that this is hardly the first time that economies have been thrown into confusion and turmoil by a rapid change in perception of the financial value of certain economic assets. But it is the first time such a crisis has affected such large numbers of people across so many economies. The spatial and demographic impacts of this financial-market crisis are only possible for two basic reasons. First, far more of the...

  10. Chapter 7 The Global Financial Crisis and Africa’s “Immiserizing Wealth”
    (pp. 165-180)
    Alexis Habiyaremye and Luc Soete

    Before the onset of the current financial crisis, some African countries richly endowed with natural resources were recording unprecedented rates of economic growth, as a result of a price boom generated by the growing demand for raw materials and fossil energy by, amongst others, China and India. Almost immediately after the crisis spread to the real economy, the prices of oil and many other primary commodity items fell sharply and reverted to their pre-boom levels. The prices of most mineral ores declined considerably in response to the sluggish demand in international markets. The optimism that had started to emerge about...

  11. Chapter 8 Central and Eastern Europe: Shapes of Transformation, Crisis, and the Possible Futures
    (pp. 181-208)
    Piotr Dutkiewicz and Grzegorz Gorzelak

    In 2008, Europe was hit by the global economic crisis. Central and eastern European countries were not spared the economic turmoil. On the contrary, some of them paid a high price for their close integration with the global economy (thus importing a similar disease as the developed others), some for their own genuine policy mistakes which exacerbated the depth of the problem, and in many cases for both these processes combined. It was the second time in the post-Soviet period (1989–2010) that those countries passed through a rather deep economic turmoil. The first time, they were affected by the...

  12. Chapter 9 The Post-Soviet Recoil to Periphery
    (pp. 209-234)
    Georgi Derluguian

    The collapse of the Soviet Union in 1991 arguably served as a major enabling condition for the takeoff of globalization in its current form. The twin agenda of free markets and liberal democratization acquired a truly global reach and the exceptional stature of the sole sensible option after neoliberalism had been embraced by Moscow itself. The sudden end of state socialism evidently remains of central importance to any serious analysis of contemporary globality and its possible futures. But what exactly caused the improbable conversion of former Communists into their ideological opposite, and what came out of it?

    Curiously, a whole...

  13. Chapter 10 The Great Crisis and the Financial Sector: What We Might Have Learned
    (pp. 235-242)
    James K. Galbraith

    In subtitling this essay “What We Might Have Learned” I do not mean to imply that learning is impossible. Anyway I hope not. But if learning now comes at all, it will come late, too late probably for practical effect on public policy. And therefore it will have an academic character, suitable mainly for social scientists—for readers of a volume such as this one—rather than for political leaders.

    I would like therefore to frame four questions, in Graham-Allison fashion,¹ each from a different disciplinary standpoint: policy analysis, economics and law, political science, and, finally, sociology. In each case,...

  14. Notes
    (pp. 243-270)
  15. About the Contributors
    (pp. 271-274)
  16. Index
    (pp. 275-296)