Heterodox Economics

The Nobel Illusion: Why the聽Nobel Prize in Economics Needs to be Abolished

October 22, 2024October 21, 2024 Dr. Dawa SherpaLeave a comment

Every year the Nobel Prize is awarded to different disciplines including Economics. And each year it generates a wave of euphoria and hype. But unlike literature and natural sciences, economics is the only social science where the Nobel is awarded. Even critical voices within the discipline get swayed by the hype of Nobel. Notwithstanding the problem of absolute marginalization of Blacks, Women and economists critical of Capitalism among award winners, there are other serious problems with Nobel Prize in Economics.

First of all, the Nobel Prize in Economics is not actually a Nobel Prize. The award in Economic sciences was not among the original set of disciplines included in the Nobel Prize in 1901. It was established by the Central Bank of Sweden (Sveriges Riksbank) in 1969, after 68 years, rather than by the Nobel Committee itself. The greatest irony is that this fact is mentioned even on the Nobel Prize website, which states, 鈥淭he prize in economic sciences is not a Nobel Prize.鈥� (NobelPrize.org, 2018). Hence contrary to all other Nobel prizes in different subjects/fields, the Nobel Prize in economics is called by the special name 鈥淪veriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel鈥�.Initially, members of the Nobel committee (including family members of Alfred Nobel) strongly objected to naming the prize given by the Central Bank of Sweden as the Nobel prize (Offer & S枚derberg, 2016). To quote Alfred鈥檚 great-grandnephew Peter Nobel, “Nobel despised people who cared more about profits than society’s well-being. There is nothing to indicate that he would have wanted such a prize”, and deliberate association of Nobel prizes in Economics is “a PR coup by economists to improve their reputation” (The Local – Nobel Descendant Slams Economics Prize, 2005).

C. T. Kurien and Rethinking Economics

September 6, 2024September 24, 2024 Alex M. ThomasLeave a comment

Born in 1931, C. T. Kurien contributed to rethinking economics through his various writings, particularly books and his vision for a practical B.A degree in Economics at Madras Christian College (MCC), an autonomous college situated in Chennai, a port city in Southern India. Besides MCC, another institution he contributed to was Madras Institute of Development Studies (MIDS), a research-only institute, also in Chennai. Kurien passed away in July 2024 aged 93.

This blog post provides a brief introduction to Kurien鈥檚 life and economics.

Impotent Capital

November 27, 2023November 26, 2023 Thomas F. PurcellLeave a comment

It is an uncontroversial observation that the history of capitalist development in South America is characterised by its subsumption to global capital accumulation through the production and export of agricultural and mining commodities for the world market. From this common starting point, however, there emerge divergent ways to account for the reproduction, and development limits, of this mode of insertion into the global economy. For many working in Latin American traditions of political economy it is almost common sense to assume, depending on one鈥檚 political and theoretical tastes, that a combination of centre-periphery power relations such as imperialism, monopoly capital, declining terms of trade and/or super-exploitation are the conceptual tools to understand, analyse, and strategize the overcoming of so-called 鈥榗ommodity dependence鈥� and embark on genuine development. It is noteworthy that in this new book – , edited by Javiera Rojas Cifuentes, Gabriel Rivas Castro, Mauricio Fuentes Salvo, and Juan Kornblihtt, not only are these concepts eschewed but their underlying trade premise 鈥� the transfer of 鈥榮urplus鈥� from periphery to the centre through mechanisms such as 鈥榰nequal exchange鈥� 鈥� is turned on its head. As opposed to structural power relations operating as the barrier to development, this collection opens an internal window onto the impotence of capital to develop the productive forces and, in doing so, offers distinctive strategic implications for the centralised organisation of working-class political action across the region.

The book builds on work that has been developed under the auspices of the in Buenos Aires, following the original contributions of Argentine scholar Juan I帽igo-Carrera to the Marxian critique of political economy. It is I帽igo-Carrera鈥檚 opening chapter that frames the distinguishing features of this Marxian scholarship and the original critique of structuralist and dependency theories of Latin American development. Rather than the pitfalls of international exchange determined by direct power relations between geo-spatial containers, the cause of uneven development in South America is predicated on the valorisation of capital through its position in the international division of labour through production relations. This bears emphasis because, for all the authors, capital is not an asymmetric relation between countries, a factor of production, a social group, or a firm wielding monopoly power but an objectified general social relation of private and independent production (i.e., capitalism), subsumed under the movement of formation of the general rate of profit. Indeed, the antagonistic formation of the general rate profit is the concrete form in which capital organises and reproduces itself as a social relation behind the backs of states, capitalists, labour, and landlords. The crucial category here, and what all the chapters demonstrate, is the extent to which capital valorises in South America, as an aliquot part of the international division of labour of global capitalism, through the appropriation of ground rent.

So, Global or International Development: Why Not Both? Marx in the Field, Planetary Immanent Development, and Centering Political Economy in Development Studies

October 12, 2023October 2, 2023 alemezzadriLeave a comment

In a compelling new contribution in the journal Development and Change, a political economy collective led by builds a strong case against calls to 鈥渦niversalize鈥� Development Studies shifting the focus from 鈥淚nternational鈥� to 鈥淕lobal鈥� Development. Indeed, many such calls at universalization 鈥� at least in the two influential 鈥減andemic papers鈥� the collective thoroughly revises, one is main-authored by and the other by 鈥� are misguided. As convincingly argued by the collective, these calls tone down the structural historical nature of the Global North-Global South divide; they erase development paradigms and understandings from the Global South and trivialize the nature of challenges emerging from long histories of colonialization and plunder, which still regenerate along global value chains and networks, as authors like have shown, as well as distinct regimes of social reproduction and contemporary crises, such as the COVID-19 pandemic, as I explain here and .

Yet, universalizing and globalizing are not the same thing; they can be operated in distinct ways, and through entirely different intellectual projects. Moreover, the discipline of Development Studies, in its mainstream dominant avatar, badly needs 鈥済lobalizing,鈥� given its Eurocentrism 鈥� yet in ways that center the experiences in/of the majority world; think through plural frameworks and locations; and speak to the extraordinarily diverse material realities and practices of power, inequality, and subordination across our planet. Crucially, such experiences, realities, and practices are, at once, the result of trajectories mediated by the Global North-Global South Divide, as emphasized in critical International Development frameworks, yet also always been global in nature 鈥� calling for Global Development lenses 鈥� unlike what narrow development economic theorizing heavily relying on modernization theory has and still suggest/ed. Ultimately, one may wonder: in the debate between 鈥淚nternational鈥� and 鈥淕lobal鈥� Development, why and what exactly do we need to choose?

Amartya Sen鈥檚 Work Shows Us the Human Cost of Capitalist Development

February 10, 2023February 6, 2023 benjaminselwynLeave a comment

Indian economist Amartya Sen has posed a devastating challenge to the dominant capitalist understanding of development. But Sen鈥檚 own analytical framework doesn鈥檛 go far enough in exposing the inherently exploitative logic of capitalism.

Amartya Sen is one of the most influential thinkers about development in the contemporary world. Since the 1970s, he has published widely across the disciplines of economics and philosophy. He received the Nobel Prize for Economic Science in 1998. In 2010,聽Time聽magazine rated Sen as one of the world鈥檚 one hundred most influential people.

There is a predominant notion of development trumpeted by international institutions, many academics and journalists, and politicians of most stripes. It holds that economic growth provides the basis for human development. Given that under capitalism, economic growth is for the most part rooted in capital accumulation, 鈥済rowth-first鈥� notions of development are essentially capital-first notions.

This way of thinking places capitalist firms, managers, and the states that back them at the helm of the human development project. It conveniently excuses the ways in which such growth generates, and is often based upon, novel forms of poverty and oppression for workers. Sen鈥檚 writings pose a major challenge to the growth-first/capital-first idea of development.

Ha-Joon Chang has exposed the fallacies of neoliberalism

November 27, 2022November 22, 2022 benjaminselwynLeave a comment

Korean economist Ha-Joon Chang is a brilliant, best-selling critic of neoliberal orthodoxy. But Chang stops far short of taking the necessary next step: questioning the capitalist system itself.

Ha-Joon Chang is a rarity in the contemporary world: an聽聽who is highly critical of the neoliberal free-market orthodoxy, advocates progressive social change, writes and speaks accessibly, and is very, very popular.

Chang鈥檚 books have sold millions of copies, and he is a regular contributor to mainstream media outlets. According to Chang himself, his aim is not simply to challenge free-market orthodoxy, but also to support, through his work, the kind of 鈥渁ctive economic citizenship鈥� that will demand 鈥渢he right courses of action from those in decision-making positions.鈥�

While socialists can learn a lot from Ha-Joon Chang鈥檚 work, we also need to read it critically and identify some of the gaps in his thinking. Chang鈥檚 self-professed aspiration is to promote an alternative form of capitalism, but our goal should be to develop an alternative聽迟辞听capitalism.

Want to understand industrialisation in resource-rich countries such as Uzbekistan? Read Marx (and I帽igo Carrera)

October 21, 2022October 15, 2022 fgaldini1 Comment

The commodity supercycle of the 2000s and 2010s gave rise to a rich debate in the academic literature about the possibility for resource-rich countries to muster the primary commodity price bonanza for development. As in past debates on the rise of Asia as the 鈥榳orld鈥檚 factory鈥�, industrial policy was once again at the forefront of discussion.

On the one hand, orthodox scholars insisted that the use of market distortions to channel resources towards industrialisation would be a risky gamble with little guarantee of success. Instead, as the Asian 鈥榯igers鈥� and China before them, developing countries would do well to make good use of the market to identify their comparative advantages. In this view, industrial policy continues to be inefficient and wasteful, especially as it creates plenty of opportunities for corruption rather than development. On the other hand, heterodox researchers argued that state intervention was crucial to divert resource rents to specific nascent industries that would never be able to withstand international competition without sustained support. As both the Asian 鈥榯igers鈥� and China more recently used robust industrial policy to develop globally competitive industries, developing countries should also use targeted policy intervention to 鈥榰pgrade鈥� to higher value-added manufacturing for export.

Still, one question that eludes both orthodox and heterodox literature concerns why, for decades, multinational corporations would consistently invest in manufacturing in resource-rich countries such as, for instance, Argentina, Brazil, and Egypt. This has been the case despite the small scale and high costs of production in these markets (making them inefficient, per orthodox scholars), whose output is mostly sold domestically rather than exported (pace heterodox scholars).

In a in Competition & Change, I applied Argentinian scholar 鈥檚 on Marx to the under-researched case study of the car industry in Uzbekistan to answer precisely this question. I found this same orthodox-heterodox binary to dominate the literature on 鈥榯ransition鈥� from the command to the market economy in Uzbekistan, too. Orthodox researchers averred that state-owned auto company UzAvtoSanoat failed to develop due to inefficiency and corruption, in particular due to the distortions of the government鈥檚 industrial policy. Heterodox scholars instead found industrial policy to be the very reason behind the creation of a successful export-oriented car industry, in particular during the commodity supercycle when part of total output was exported mostly to Russia. Neither, however, could explain why Korean Daewoo Motor Company (DMC) and American General Motors (GM) entered into a joint-venture with UzAvtoSanoat, despite the small domestic scale (hence high costs) of automobile production in the country, which is mostly purchased domestically.

Marx and Colonialism

October 13, 2022October 7, 2022 luguangmingLeave a comment

It is widely believed that Marx did not systematically consider the role of colonialism within the process of capital accumulation. According 迟辞听, Marx concentrated on a self-closed national economy in his main work. Although he did mention colonialism in Part 8 of聽Capital聽Volume 1 on the so-called primitive accumulation, this would only belong to a pre-history of capital, not to its everyday development. Based on a similar assumption, some postcolonial scholars criticise Marx for being Eurocentric, even a complicit supporter of Western imperialism, who ignored the agency of non-Western people.

If we read some we could think that they are right. How can we explain otherwise Marx and Engels praising the role of the bourgeoisie drawing even the most barbarian nations into civilisation or the view that the liberation of colonised peoples depended on the victory of the revolution in Europe?

Before I start, let me make a short premise. In my first book I read Marx鈥檚 Capital in the light of his writings and articles on Ireland, China, India, Russia, and the American Civil War. At the time I believed that Marx only published a significant, but still limited amount of writings on the colonial question, those available in the Collected Works and in collections like Marx & Colonialism. But then in 2007 I worked at the Berlin-Brandenburg Academy of Sciences and Humanities, contributing to the complete edition of Marx鈥檚 and Engels鈥檚 writings. I thus 鈥渄iscovered鈥� some of Marx鈥檚 20,000 print page long notebooks (just to give you an idea, the printed notebooks alone would look like a new Collected Works). These writings show that Marx was interested in colonialism all his life, including when he wrote the Manifesto.

What came out of my reading? Let me start with the question of Marx鈥檚 field of analysis in聽Capital聽Volume 1. To analyse capital reproduction 鈥榠n its integrity, free from all disturbing subsidiary circumstances鈥�, Marx treats the world of commerce as one nation (1976: 727) and presupposes the full worldwide imposition of the capitalist mode of production. Does this mean that Marx analysed a 鈥渟elf-enclosed national economy鈥� as Harvey and others believe? In my view, this abstraction means exactly the opposite. Marx鈥檚 positing a coincidence between the national and global levels is a premise for conceptualising the world market, which includes both internal and foreign markets of all nations participating in it. This abstraction makes it possible to include expansionism into the analysis of capital accumulation. In this framework, a country鈥檚 economic system is not confined within its national borders but consists of all production branches where capital is freely transferable, including the colonies and dependent economies.

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