A Star is Born
By Shahid Yusuf
through the decades.
A Critical Look at 30 Years of
the World Development Report" - 2009
The great industrial resurgence, which gathered momentum in the 1950s, was state
directed, disciplined by targets, and frequently led by the public sector. It
tended to be autarchic or quasi-mercantilist and was buttressed by a multitude
of import restrictions. The retreat from the first globalization, which
began in 1914, entered a new phase as capitalist and socialist economies
and newly independent colonies embraced inward-looking growth policies...
Revising the Policy Framework for Sustained
Growth, Employment Creation and
From UNCTAD, "Trade and Development Report 2010" -
Full employment in the “golden age
In response to the experience of high unemployment
during the Great Depression in the 1930s and the
subsequent long period of instability and war, many
major industrialized countries established full employment
as a goal in law, and committed themselves
to implementing proactive macroeconomic policies.
In the post-war era up to the mid-1970s, a period often
referred to as the “golden age of capitalism” (Marglin
and Schor, 1990; Singh, 2009), unemployment in
developed countries was at historically low levels. In
Japan as well as several Western European countries
that even absorbed a large number of migrant workers
from Southern Europe, it was a
period of what is considered full
employment (table 5.1)...
...During the “golden age of
was historically low, even
though labour markets were
more regulated than they are
Research for action
Lessons of the Golden Age of Capitalism
Stephen A. Marglin - 1988
World Institute for Development Economics Research - United Nations University
We now have the ingredients at hand to essay a preliminary answer
to one of the key questions that has motivated this study: are we to
understand the demise of the golden age, and hence to conduct the
search for new institutions, in terms of problems internal to each of
the economies of Western Europe and the United States or in
terms of the relations among the OECD countries and between
these countries and the rest of the world? Evidently the historical
account can be read two ways: first, that the essential problem was
an internal one, the full employment profit squeeze that resulted
from the failure of the system of production and the rules of coordination
to accommodate the basic conflict between labour and capital;
second, that the essential problem lay on the international side,
in the erosion of profits that resulted from the energy shocks traceable
to the erosion of American hegemony, and the demise of
international arrangements that effectively suppressed the constraint
of external balance for the United States as hegemonic
power and allowed relatively expansionary demand management
policies both in the United States and elsewhere. In the first reading,
the end to the golden age comes about 1970, when productivity
growth began to decline markedly throughout the OECD countries.
In the second reading, the real end comes in 1979 when OPEC II
triggered a new round of inflation that revealed - revealed but did
not cause - the United States to be unable to continue to expand
the world economy by stimulating the American economy and US
imports. In this reading, the post-war regime foundered on the
shoals of pluralism...
the rise and fall of the golden age
Gerald A. Epstein - University Of Massachusetts at Amherst
Juliet B. Schor - Harvard University - June 1987
The Golden Age was the era of demand management. Originally
with monetary, and then fiscal policy, the governments of the
advanced capitalist economies attempted to enhance and guide the
accumulation process. They allocated credit, manipulated interest
rates, and presided over a dramatic expansion in state
expenditure. As the Golden Age eroded, and stagnation replaced
prosperity, governments tried to manage the decline.
actively used to reduce inflation and labor costs, enhance
international competitiveness, or maintain employment.
This paper is a brief analysis of macropolicy in six
countries during the Golden Age and its erosion. It begins with a
general account of the structural determinants of policy. Next we
turn to a discussion of policy during the Golden Age.
that our six countries divide into two groups. Germany, Japan,
France and Italy all pursued expansionary policies aimed at
maximizing the rate of accumulation. The U.S. and the U.K. were
less expansionary, on account of the international position of
their currencies, the power of internationally-oriented finance
capital, and the independence of the central bank...
The pace and distribution of health
improvements during the last 40 years: some preliminary
Giovanni Andrea Cornia and Leonardo Menchini - 2005
This paper juxtaposes changes over the last forty years in indicators of income growth and
distribution with the mortality changes recorded at the aggregate level in about 170 countries and at the
individual level in 21 countries with at least two Demographic and Health Surveys covering the last twenty
years. Over the 1980s-and 1990s, the infant-mortality rate (IMR), under-5 mortality rate (U5MR) and Life
Expectancy at Birth (LEB) mostly continued the favourable trends that characterized the 1960s and 1970s.
Yet, especially, the 1990s the pace of health improvement was slower than that recorded during the prior
decades. In addition, the distribution between countries of aggregate health improvements became
markedly more skewed. These trends are in part explained by the negative changes recorded in Sub-
Saharan Africa and Eastern Europe, but are robust to the removal of the two regions from the sample. This
tendency is observed also at the intra-regional level, with the exception of Western Europe. Thirdly, DHS
data for 21 developing countries point to a frequent divergence over time in the within-country distribution
of gains in IMR and U5MR among children living in urban vs. rural areas and belonging to families part of
different quantiles of the asset distribution, while IMR differentials by level of education of the mother
show mixed trends The paper concludes by underscoring the similarities and linkages between changes in
income inequality and health inequality and suggests some tentative explanations of these trends without,
however, formally testing them.
Inequality, Growth and Poverty
in the Era of Liberalization and
Giovanni Andrea Cornia and Julius Court - 2001
This policy brief reports the main findings of the UNU/WIDER study on changes in
within-country income inequality over the last two decades and on the links between
poverty, inequality and growth. It focuses on inequality at the national level, i.e. the
distribution of income among people within a country. As part of the project,
UNU/WIDER compiled the World Income Inequality Database (WIID)—the most
extensive database on inequality trends within countries. Analysis of the database
and research papers highlights five main issues.
First, the recent trends in income inequality are sobering. Since the early-mid 1980s
inequality has risen in most countries, and in many cases sharply.
Second, it is clear that there are some common factors causing the widespread surges
in inequality around the world. ‘Traditional causes’ of inequality, such as land
concentration, urban bias and inequality in education, do not appear to be
responsible for the worsening situation. Rather it is ‘new causes’ that are crucial.
These ‘new causes’ are linked to the excessively liberal economic policy regimes and
the way in which economic reform policies have been carried out.
Third, the persistence of inequality at high levels or its further rise have made it
much more difficult to reduce poverty. The higher the level of inequality, the less
impact economic growth has in reducing poverty—for any rate of economic growth.
Fourth, high levels of inequality can depress the rate of growth. High levels of
inequality can also have undesirable political and social impacts—on crime and
political stability, for example.
Fifth, rising inequality is not inevitable in a world dominated by technological
change and globalization. Countries can maintain low inequality and still grow
fast—Canada and Taiwan provide two of the clearest examples.
Global Capitalism Theory and the
Emergence of Transnational Elites
William I. Robinson - January 2010
The class and social structure of developing nations has undergone profound
transformation in recent decades as each nation has incorporated into an increasingly
integrated global production and financial system. National elites have experienced a
new fractionation. Emergent transnationally-oriented elites grounded in globalized
circuits of accumulation compete with older nationally-oriented elites grounded in more
protected and often state-guided national and regional circuits. This essay focuses on
structural analysis of the distinction between these two fractions of the elite and the
implications for development.
I suggest that nationally-oriented elites are often
dependent on the social reproduction of at least a portion of the popular and working
classes for the reproduction of their own status, and therefore on local development
processes however so defined whereas transnationally-oriented elites are less dependent
on such local social reproduction. The shift in dominant power relations from
nationally- to transnationally-oriented elites is reflected in a concomitant shift to a
discourse from one that defines development as national industrialization and expanded
consumption to one that defines it in terms of global market integration.
Structural Adjustment, Global Integration and Social
Adjustment: Origins and Underlying Forces
Dharam Gai - 1992
The process of structural adjustment was first
initiated in the industrialized countries and then "exported"
to developing countries. It was the result in both groups of countries of a
combination of conjunctural and secular forces. The former were represented by
the economic crisis in the post-1973 period, first in the industrialized and
then in the developing countries; the latter by the upsurge of world economic
integration in the post-war period. This section looks first at the forces which
propelled a reorientation of economic policies in the advanced countries before
turning to an analysis of the dynamics of structural adjustment in the less
developed regions of Africa, Latin America, South Asia and South-East and East
...The years immediately after the first petrol
shock in 1973 were characterized in most OECD countries by falling growth rates,
rising unemployment, increasing inflation and declining investment and profit
rates (see Table 1). This constituted a sharp reversal of the experience over
the preceding two decades. For instance, annual output growth fell from 4.9 per
cent over the period 196O-1973 to 2.7 per cent in 1974-1979. Inflation more than
doubled from 4.1 to 9.7 per cent per annum over the two periods. Productivity
growth declined from 3.8 to 1.6 per cent and investment expansion tumbled from
7.6 to 2.3 per cent per annum. The rate of unemployment rose from 3.1 to 5.1 per
cent and the expansion in trade fell from 9.1 to 4.3 per cent...
Asia’s Labour-Driven Economic
Development, Flying-Geese Style
An Unprecedented Opportunity for the Poor
Terutomo Ozawa -
The notion of ‘shared growth’ was introduced by the World Bank in recognition of East Asia’s
rapid growth accompanied by poverty reduction. It emphasizes the criticality of pro-poor
policies and institutional setups in the fast-developing East Asian economies. The efforts of
these individual countries are, however, a necessary but not sufficient condition (explanation).
There is a more essential, underlying region-wide mechanism that simultaneously promotes
regionalized growth and specifically favours Asia’s working mass of unskilled labour. Such an
efficacious mechanism is posited in the ‘flying-geese paradigm of comparative advantage
recycling in labour-intensive goods’. The paper argues that a number of favourable factors have
fortuitously coalesced to engender a considerably favourable condition for Asia’s rapid catch-up
growth in which unskilled labour (the poor) can participate as their countries’ most vital input in
Central Banks as Agents of Economic
Gerald Epstein -
In the last two decades, there has been a global sea change in the theory and practice of
central banking. The currently dominant ‘best practice’ approach to central banking
consists of the following: (1) central bank independence (2) a focus on inflation fighting
(including adopting formal ‘inflation targeting’) and (3) the use of indirect methods of
monetary policy (that is, short-term interest rates as opposed to direct methods such as
credit ceilings). This paper argues that this neo-liberal approach to central banking is
highly idiosyncratic in that, as a package, it is dramatically different from the
historically dominant theory and practice of central banking, not only in the developing
world, but, notably, in the now developed countries themselves. Throughout the early
and recent history of central banking in the US, England, Europe, and elsewhere,
financing governments, managing exchange rates, and supporting economic sectors by
using ‘direct methods’ of intervention have been among the most important tasks of
central banking and, indeed, in many cases, were among the reasons for their existence.
The neo-liberal central bank policy package, then, is drastically out of step with the
history and dominant practice of central banking throughout most of its history.
F.H. Cardoso and E. Faletto - 1979
Capitalist development and the state: bases and alternatives
(The subheadings were added by Dr. Róbinson Rojas. The text is part of
the POST SCRIPTUM, in Cardoso and Faletto, "Dependency and Development
in Latin America", University of California Press, 1979, translated from Cardoso y Faletto, "Dependencia y Desarrollo
en América Latina", Siglo XXI Editores, México, primera edición, 1969)
The more developed countries of Latin America are attempting to define
foreign policy objectives that take advantage of contradictions in the
international order and allow these countries some independent policy-
making. But these countries remain dependent and assure an internal
social order favorable to capitalist interests and consequently fail to
challenge one of the basic objectives of American foreign policy.
Multinational enterprises continue to receive support from the foreign
policies of their countries of origin, as well as from local states.
Globalization, social conflict and economic growth
by Dany Rodrik - October 1997
...But my difficulty with the conventional wisdom, as I just stated it, goes beyond the
details. I believe the development community has internalized the wrong lessons from the
experience of countries that adopted the ISI strategy in Latin America and elsewhere. The
correct interpretation, I think, goes something like this.
First, ISI worked rather well for a period of about two decades. It brought unprecedented
economic growth to scores of countries in Latin America, the Middle East, and North Africa,
and even to some in sub-Saharan Africa.
Second, when the economies of these same countries began to fail apart in the second half of
the 1970s, the reasons had very little to do with ISI policies per se or the extent of
government interventions. Countries that weathered the storm were those in which
governments undertook the appropriate macroeconomic adjustments (in the areas of fiscal,
monetary and exchange-rate policy) rapidly and decisively.
Third, and more fundamentally, success in adopting these macroeconomic adjustments was
linked to deeper social determinants. It was the ability to manage the domestic social
conflicts triggered by the turbulance of the world economy during the 1970s that made the
difference between continued growth and economic collapse. Countries with deeper social
divisions and weaker institutions of conflict management experienced greater economic
deterioration in response to the external shocks of the 1970s.
Dependency theory's reanimation
in the era of financial capital
Kenneth Surin -1998
There is now virtual unanimity about the
causes and character of the demise of capitalism's so-called 'Golden Age', i.e.
the prolonged expansion associated with high employment, growing wages and
welfare expenditures, high consumption, and benign business cycles that lasted
in the advanced industrial countries from 1945 to 1973, and which effectively
ended when the quadrupling of oil prices in that year threw most of the world's
economies into recession. Of
course the precise nature of the complex amalgam of economic, political, social,
and cultural transformations involved in this epochal shift from the 'Golden
Age' to its successor 'Leaden Age' (to use a term of Robert Pollin's) is a
matter of considerable debate among students of political economy, and these
include many who reflect on the character and import of marxian or marxisante
accounts of capitalist development.
These reflections on the transition from the
'Golden' to the 'Leaden Age' are carried out under the now well-known titles
'late capitalism', 'advanced capitalism', 'disorganized capitalism',
'deregulatory capitalism', 'actually existing world capitalism', 'integrated
world capitalism', 'postFordism', 'postindustrialization', 'overconsumptionist
economic regimes', and so forth. The deliverances of such reflection have
profound implications for any understanding of the forces and structures
associated with uneven development, late industrialization and
'peripheralization'-- all these being notions vital to the explanations and
theories of systemic international inequality sponsored by the various marxist
The International Context for
National Development Strategies:
Constraints and Opportunities in a Changing
Manfred Bienefel - 1982
struggle for national development inevitably takes place in an international
context, the changing circumstances of which define both constraints and
opportunities for the various protagonists. This chapter provides one view of
that context which emphasizes the importance of the changes it has undergone
since 1945, and suggests that each individual country's experience can be
analysed and understood only in relation to those changes.
Because of the
inadequacy of any view which conceives of these international developments as
exogenously given facts which impinge equally on all countries, so long as one
allows for differential resource endowments, it is essential to analyse the
links which transmit signals and pressures between the international and the
various national spheres, thereby attaching relative significance to the nation
state because it has the capacity, albeit a variable and limited one, to define
The discussion which follows focuses on competitive economic
relations as particularly powerful, though highly ambiguous, transmitters of
pressure, inducing national adjustment to international change. It suggests that
the benign circle of causation which free trade theory associates with such
competitive relations was experienced in the 1950s and 1960s by the (OECD)
industrialized countries, but argues that the 1970s, and the experience of most
developing countries since 1945, indicate that this result depended on a number
of conditions which have been eroded since the late 1960s.
In the Belly of
A perspective on
the global justice movement in the United States: its roots and
Sara Burke and Claudio Puty
PART I.- The Post-World War II Golden Age of Capitalism
and Crisis of the 1970s
The massive expansion in production in the US during World War II
lifted the US—and global—economies out of the crisis of the Great Depression and
into a "Golden Age" of expansion that lasted until the great economic crisis of
the 1970s. This era gave way to the neoliberal backlash of the
PART II.- The Neoliberal Years: [The 1980s]
collapse of the Mexican peso in 1982—near the beginning of the era—was to the
global economic order what the elections of Ronald Reagan and Margaret Thatcher
were to the global political order: the beginning of a new, conservative
political hegemony that shaped the world's economic policy for the decade.
Resistance to neoliberalism in Latin America.
PART III.- NAFTA and the Zapatista Uprising: [The early and mid
The North American Free Trade Agreement [NAFTA] went into effect on
January 1, 1994. The Zapatistas' autonomous revolt against NAFTA and
neoliberalism that very day came to have a powerful effect on the nascent
movement in the US.
PART IV.- The Anti-Capitalist Side of the
Movement: [The turn of the
Protest erupts in Seattle in 1999 as opponents of
neoliberalism from around the world join American demonstrators against the
World Trade Organization. The mainstream media focused on the surface: we look
Growth and Equity in Finland
Markus Jäntti,1 Juho Saari,
and Juhana Vartiainen