Monday, September 29, 2008

Crisis Commentary: Second Installment

I just posted the second installment on my crisis commentary. Again, I would appreciate any comments, since it still needs more work.

Thanks.

http://michaelperelman.wordpress.com/2008/09/30/crisis-commentary-second-installment/

2 comments:

Brenda Rosser said...

I like the way you introduced and covered the issue of 'investment'.

the more I read the more it becomes apparent that there is such a vacuum of 'economic development'

David Skidmore has an interesting article. I've summarised/reworded some of it here:

Statists fear that a vigorous civil society will press multiplied demands upon the state. Neoliberals see matters in similar terms. The state and global corporations have formed ‘distributive coalitions' for rent seeking. The organized are rewarded at the expense of the unorganized in a zero sum game. “Organizations built around strong vertical ties - such as patron-client relationships, drug cartels, and predatory networks of corruption encompassing both state and non-state actors - rest upon relations of exploitation and coercion. Distributive coalitions take advantage of exclusive collective control over socially valuable assets to drive up returns to those inside the group” The dominant media organisations have played a major role in providing a negative portrayal of the economic consequences of community ‘associationalism’ ( unions, environmental movements, decisions by community at local government level…). Social capital – the economic potential embodied in social organisations and the norms of trust and reciprocity that they embody – has been ignored and in many spheres destroyed. Those forms of “voluntary, horizontal, non-exclusive networks” served a positive function in assisting to resolve collective action problems and “reduce transaction costs.” Democracy tends to undermine vertical associations that rest upon coercion and corruption. Globalization erodes the bases for nationally-organized distributive coalitions by exposing previously sheltered producers to renewed market competition at the international level. nations that, for complex historical and cultural reasons, have large pre-existing stocks of social capital hold greater potential for growth and social welfare than those which possess only meager stocks of social capital. Whether the state or other actors can purposefully intervene to stimulate the accumulation of positive forms of social capital in civil society is an important but largely unanswered question at this point.

David Skidmore
International Studies Association
41st Annual Convention
Los Angeles, CA
March 14-18, 2000
CIAO DATE: 9/00
http://www.ciaonet.org/isa/skd01

Eleanor said...

Nice article, though I disagree with Tolstoy. Unhappiness tends to be very sterotyped. How people manage to succeed and be happy varies a lot more than how they manage to fail.

This is not an argument for changing anything. Though it leads me to think that the failures of capitalism -- like the failures of families -- tend to repeat a lot. I suspect that good societies would vary a lot more.

I just reread Stagnation and the Financial Explosion by Magdoff and Sweezy. It was published in 1986, and it seems to be a pretty good description of what is happening now.

Does anyone here have a plan on how to get out of the mess? Magdoff and Sweesy mentioned that the 30s and WWII were good examples of what a government can do, when faced with a serious problem.