February 27th, 2021

Queen Mab's Cave


Since November 2020, thousands of Indian farmers from Punjab, Haryana, and other states have protested the implementation of national market-based agricultural reforms.

A look to a series of liberalization measures in the 1990s, which did not specifically address agriculture, reveals a dramatic restructuring of the agricultural sector. In a 2017 paper, Abhijit Sen and Jayati Ghosh investigate the impacts of these measures, highlighting shifts in investment, subsidies, and credit that inform the current debate.

From the paper:

"In the initial years, the reforms package did not include any specific policies specifically designed for agriculture. In the early 1990s, it was felt that the devaluation of the rupee had already provided sufficient incentive to agriculture, because it was expected to make it more attractive to export crops and thereby improve farm incomes. However, even if no explicit attention was paid to agriculture, various economic policies and other changes in patterns of government spending and financial measures had significant implications for the conditions of cultivation.

Over the initial period of economic reforms, which coincided with government attempts at fiscal stabilisation, there were actual declines in government expenditure on agriculture and rural development. Thereafter, there were cuts in particular subsidies such as on fertilizer in real terms, and the 1990s experienced overall decline in per capita government expenditure on rural areas in both absolute per capita terms and shares of GDP and aggregate public spending. There were also very substantial declines in public infrastructure and energy investments that affect the rural areas. These were especially marked in irrigation and transport, both of which matter for agricultural growth and productivity. In addition, financial liberalisation measures, including the emerging scope of what was designated as 'priority sector lending' by banks, effectively reduced the availability of institutional credit. Although the problem of credit access to cultivators was far from solved in India, the nationalization of banks had caused some positive differences, as public sector banks made more efforts to open rural branches and rural accounts, and to provide more crop loans to farmers. But after 1993 in particular, various financial liberalization measures, and the explicit and implicit incentives provided to public sector banks, made this much less attractive for bankers who anyway faced very high transaction costs when dealing with agricultural lending. The growth of branches, accounts and lending to agriculture all decelerated and in some states showed absolute declines. This forced many cultivators, particularly smaller farmers, tenant farmers and those without clear titles to land, to seek recourse to informal channels of credit like input dealers and traditional moneylenders. All this made farm investment and working capital for cultivation more expensive and more difficult, especially for smaller farmers."

Link to the text.

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February 20th, 2021

The Great Conspiracy


Earlier this week, millions of households lost power in the face of a powerful snowstorm. While these numbers are unusual, they are not new—the US suffers among the most frequent power outages of any industrialized country, concentrated especially in rural areas and the South.

In a recent paper, ABBY SPINAK analyzes the political trajectory of America's weak electrical infrastructure by comparing the underlying economic assumptions of the New Deal's Rural Electrification Administration (REA) with those of the Ontario Hydro-Electric Power Commission in Canada.

From the paper:

"In the early twentieth century, experiments in electricity were experiments in statecraft. A malleable technology with significant financing and distribution challenges, electricity was a proxy through which budding welfare states could hash out their responsibilities to the public. Early public electrification efforts became sites of deliberation about balancing urban and rural needs, industrial development, and the public interest. Through electrification programs, policymakers in industrializing countries proposed and tested ideas of economic citizenship, the proper role for government, and the limits of private enterprise. Vibrant forums within and between industrializing nations intensely debated whether electricity was a right or a privilege—and where and for whom.

Why did REA power flow not quite so freely as it did in Ontario? With an explicit charter not to distinguish between private, municipal, or cooperative power companies for dispersal of loans, the REA focused on keeping rates low and distributing power to areas where it could encourage rapid economic growth. It only begrudgingly supported the use of federal loans in the construction of generating stations where power could not be purchased inexpensively enough through the private market. Despite the explicit connection of the REA to Dust Bowl mitigation efforts, its emphasis was less on protecting natural resources for the common good and more on ensuring the efficiency and sustainability of natural resources for national economic growth. In the latter case, who owned what mattered much less than how capably it would be put to use."

Link to the piece

  • "Although REA programs were planned and administered in Washington, D.C., western residents rather than New Deal administrators initiated most of the region's rural electrification projects." Brian Q. Cannon on "Rural Electrical Cooperatives and the New Deal." Link. & Carl Kitchens and Price Fishback examine "The Spatial Impact of the Rural Electrification Administration 1935-1940." Link.
  • "Africa is the most undersupplied region in the world when it comes to electricity, but its economies are utterly dependent on it." David A. McDonald introduces a book of collected essays on inequality and electrification across the continent. (Also inside: river privatization and hydropower, nuclear energy in South Africa, corporate power in Uganda.) Link.
  • Wuyuan Peng Jiahua Pan with a history of rural electrification in China. Link. And from Jonathan Coopersmith's 2016 book: "Electrification transformed capital markets, the military, manufacturing, the spatial geography of cities, and many other facets of Russian life." Link.
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February 13th, 2021

The Legend


The proposed Covid-19 stimulus package in the US has reignited debate around inflation. Much contemporary concern and discussion on the topic still bears the mark of the 1970s, the Volcker disinflation, and the past consensus around the relationship between unemployment and inflation.

In a recent paper, Jonathon Hazell, Juan Herreño, Emi Nakamura, and Jón Steinsson find evidence that points instead to the determining role of expectations around future monetary policy.

From the paper:

"The episode in US economic history that has perhaps most strongly influenced the profession’s thinking regarding the slope of the Phillips curve is the Volcker disinflation. In the early 1980s, Paul Volcker’s Federal Reserve sharply tightened monetary policy. Unemployment rose sharply and inflation fell sharply. The conventional interpretation of this episode is that it provides evidence for a relatively steep Phillips curve. The insensitivity of inflation to changes in unemployment over the past few decades has led many economists to suggest that the Phillips curve has disappeared—or is 'hibernating.' During the Great Recession, unemployment rose to levels comparable to those during the Volcker disinflation, yet inflation fell by much less. The 'missing disinflation' during and after the Great Recession then gave way to 'missing reinflation' in the late 2010s as unemployment fell to levels not seen in 50 years, but inflation inched up only slightly. A similar debate raged in the late 1990s, when unemployment was also very low without this leading to much of a rise in inflation. Some have argued that the apparent flattening of the Phillips curve signals an important flaw in the Keynesian model.

An alternative to the standard narrative of the Volcker disinflation is that the decline in inflation was driven not by a steep Phillips curve but by shifts in beliefs about the long-run monetary regime in the United States that caused the rapid fall in long-run inflation expectations. Volcker’s monetary policy constituted a sharp regime shift that was imperfectly credible at the outset but became gradually more credible as time passed. This regime shift led to a large and sustained decline in long-term inflation expectations over the 1980s but also a transitory rise in unemployment. Perhaps it was this large change in inflation expectations that was the primary cause of the rapid fall in inflation over this period rather than high unemployment working through a steep Phillips curve."

Link to the paper.

  • Employ America's Skanda Amarnath and Alex Williams blog on "Inflation: the good, the bad, the transitory." Link. And Tim Barker blogs on the present inflation discourse. Link.
  • "A puzzle emerges when Phillips curves estimated over 1960-2007 are used to predict inflation over 2008-2010: inflation should have fallen by more than it did." Laurence Ball and Sandeep Mazumder analyze inflation after the Great Recession. Link. And James Stock and Mark Watson probe the question of inflation forecasting. Link.
  • Two recent Phenomenal World essays on the topic: Yakov Feygin on "The Deflationary Coalition" and Andrew Elrod on "Inflation, Specific and General." Link, and link.
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February 6th, 2021

The Villa in the Snow


While the neoliberal era appears to be in crisis, we took on a project to investigate its historical foundations. The tensions of the current political moment are commonly traced to the financial deregulation and economic liberalization of the 1980s and 1990s. The "turn" that took place in these decades has been attributed to economic necessity, ideological commitments, and the interests of powerful political actors.

But key to critiquing the economic policies of this period is the assumption of viable political alternatives. Adam Przeworski's classic 1986 text examines the details of this question.

From the piece:

"What is a 'mistake'? The very possibility of committing mistakes presupposes simultaneously a political project, some choice among strategies, and objective conditions that are independent with regard to the particular movement. If the strategy of a party is determined by economic circumstances, then the notion of mistakes is meaningless: the party can only pursue the inevitable. In a world of economic necessity, the question of errors cannot even be posed.

The notion of mistakes is also rendered meaningless within the context of a radically voluntaristic understanding of historical possibilities. If everything is always possible, then only motives can explain the course of history. For an error is a relation between projects and conditions; mistakes are possible if and only if some strategies are ineffective in advancing the realization of a given project under existing conditions, while other strategies would have advanced it under the same conditions. If we are to draw lessons from historical experience, we can assume neither that the practice of political movements is uniquely determined by any objective conditions, nor that such movements are free to act at will, independently of the conditions they seek to transform. These conditions constitute at each moment the structure of choice: the structure within which actors deliberate upon goals, perceive alternatives, evaluate them, choose courses of action, and pursue them to create new conditions."

Link to the book.

  • In Phenomenal World's first book, Market Economy, Market Society, Przeworski reconsiders the issue: "The social democratic vision of transforming society survived for nearly one hundred years, even when it was imperative to cope with immediate crises, and even when social democrats experienced political defeats. This is what faded at the end of the 1970s." Link. In the book's second introductory text, Stephanie Mudge notes, "social democratic parties can make the difference between mere rights and actual representation. But simply occupying that space isn’t enough—it matters how these parties work, the agendas and policies they promote, and how and for whom (or what) they speak." Link.
  • "It is, decisively, the Italian left’s weakness in proposing achievable reforms at the state level which has made it particularly suffer the effects of the decline of the mass workplace." In the book's first section, David Broder analyzes the "Italian Left After Keynesianism." Link. Also in this section, an interview with former Prime Minister Giuliano Amato, link, and interviews with Emanuele Macaluso and Claudio Petruccioli.
  • In the book's second section, an interview with former Spanish Prime minister Felipe González: "What worries me is that to some degree social democracy died of success. It died because it couldn’t understand that the society that it had helped create was not the society which existed when it started." Link to the interview, link to the section's introduction by Juan Andrade. Also in this section, interviews with Begoña San José and Héctor Maravall.
  • "Mitterrand shows that if the path of radical reformism is challenging and uncertain, the alternative has been disastrous." In the final section, Jonah Birch analyzes the political shifts in France. Link to the article. And the section also features interviews with Anicet Le Pors, François Morin, and Roger Martelli.
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January 30th, 2021

Turn and Burn


Next week marks the launching of our first book-length Phenomenal World publication: Market Economy, Market Society: Interviews and Essays on the Decline of European Social Democracy. The book examines the fracturing of the social democratic consensus through the eyes of policymakers, trade union leaders, and party politicians who lived through, and in some cases enacted, the liberal market reforms of the 1980s and 90s.

A 1997 essay by Eric Hobsbawm reflects on the social, political, and cultural importance of historical inquiry in shaping collective understandings of the present and future.

From the piece:

"To be a member of any human community is to situate oneself with regard to one's (its) past, if only by rejecting it. The past is therefore a permanent dimension of the human consciousness, an inevitable component of the institutions, values and other patterns of human society. The problem for historians is to analyze the nature of this 'sense of the past' in society and to trace its changes and transformations.

Paradoxically, the past remains the most useful analytical tool for coping with constant change. Some sort of historicism, that is the extrapolation of past tendencies into the future, has been the most convenient and popular method of prediction. At all events the shape of the future is discerned by searching the process of past development for clues, so that the more we expect innovation, the more history becomes essential to discover what it will be like. However, at this point a contradiction arises: the capacity to discern general tendencies does not imply the capacity to forecast their precise outcome in complex and in many respects unknown circumstances of the future. History ceases to be of use at the very moment when we need it most. The value of historical enquiry into 'what actually happened' for the solution of this or that specific problem of present and future is undoubted. Yet the nature of this often arbitrary process of dipping into the past for assistance in forecasting the future by itself does not replace the construction of adequate social models, with or without historical enquiry. It merely reflects and perhaps in some instances palliates their present inadequacy."

Link to the book containing the paper.

  • "Students of history have imagined that they were dealing with phenomena like ocean tides, whose regularities they could deduce from sufficient knowledge of celestial motion, when they were actually confronting phenomena like great floods, equally coherent occurrences from a causal perspective, but enormously variable in structure, sequences, and consequences." Charles Tilly on explaining political processes. Link.
  • "By the late twentieth century, it can be argued that concepts of identity at every level are crucially derived from highly fashioned and coherent narratives about the past." A 1995 paper by Olivia Harris examines the relationship between historical narrative and political agency. Link.
  • A 1980 reflection from Braudel: "The one thing that fascinates me in the history profession is the extent to which it can explain the life of men as it is being woven before our very eyes, with its acquiescences and reticences, its refusals, complicities, or surrenders when confronted with change or tradition." Link.
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January 23rd, 2021



Outside of Brazil, the Bolsa Familia is known as the hallmark social policy of the former President Lula and remains the world's largest conditional cash transfer program. Less well known is the history of Brazil's social policy in the early decades of the twentieth century.

In her 1996 book, BARBARA WEINSTEIN examines how industrialists influenced the nation's social programs from 1920 to 1964.

From the book:

"Although the industrialist proponents of rational organization did aspire to remake the workplace and the workforce, their concern in the first instance was to remake themselves, or at least their class image. By identifying with new currents in rational organization and scientific management, these industrialists, engineers, and educators claimed for themselves the professional authority and technical expertise necessary to modernize Brazilian society. In contrast to the 'arbitrary' authority of the old-style planter or mill owner, these new industrial owner-managers defined a wide variety of problems affecting the organization of production in the workplace, and even life beyond the factory walls, as technical, not social, questions to be resolved on a systematic, scientific basis. Such an approach, they claimed, would not only increase productivity but also promote social peace.

This effort by certain industrialists and their allies to capture the discourse of technical competence had formidable implications for labor relations and the work process, but workers were not the industrialists' sole concern. The industrialists also sought to change the perception of industry among politicians, professionals, and middle-class reformers who harbored doubts about the industry's contribution to economic progress and social peace. By asserting the centrality of technical expertise as well as their privileged access to it, industrialists attempted to protect and expand their authority within the factory and claim an authoritative role in the making of public policies and programs."

Link to the book.

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January 16th, 2021



The simultaneous integration of global markets and decentralization of government within nation states has been a hallmark of the age of globalization.

In a 2004 article, NEIL BRENNER looks to Europe to argue that through processes of decentralization and localization, national state power has been increasingly articulated through competitive forms of urban and regional governance.

From the paper:

"As in the 1970s, the reorientation of urban governance during the 1980s was initiated in part through the bottom-up strategies of local political coalitions struggling to manage the disruptive consequences of economic restructuring by means of ad hoc, uncoordinated policy adjustments. In this period, national goals of equalizing economic development capacities across the national territory was increasingly seen to be incompatible with a new priority of promoting assets within each country's most powerful cities and city-regions. Accordingly, in addition to their strategies to undercut traditional redistributive regional policy relays, national governments now mobilized a number of institutional restructuring initiatives in order to establish a new, competitive infrastructure for urban economic growth within their territories.

Local governments were granted new revenue-raising powers and an increased level of authority in determining local tax rates and user fees, even as national fiscal transfers to subnational levels were diminished. New responsibilities for planning, economic development, social services and spatial planning were devolved downwards to subnational (regional and local) governments. In a number of western European countries, local economic development projects were a key focal point for such devolutionary initiatives. Although these trends were most apparent in traditionally centralized states, such as France and Spain, various policies to enhance regional and local autonomy were also enacted in less centralized European states as well. Decentralization policies were seen as a means to limit the considerable welfare demands of urban areas and to encourage lower-level authorities to assume responsibility for growth policies that might reduce welfare burdens. Even in the United Kingdom, where major aspects of local governance were subjected to increasing central control under the Thatcher regime, the problem of local economic governance was among the key issues upon which the restructuring of intergovernmental relations was focused."

Link to the text.

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January 9th, 2021

Plucked Goose


The deep divisions in American political and social life have long been thought to explain the unique weakness of America’s welfare infrastructure, and the absence of an integrated system of universal benefits.

But on their own, demographic divisions need not necessarily fragment coalitions for universal demands—history is teeming with political movements which were capable of uniting different factions. In his 1981 book, City Trenches, political scientist IRA KATZNELSON situates a history of immigration and racial conflict within a structural account of America’s urban geography and economic development.

From the text:

"Analyses of games or contests, political or otherwise, must do more than describe the players and their adversary play. They must also say something about the boundaries of the contest, which define its limits prior to the playing of the game itself. Attempts to make sense of what is special about class in America have ordinarily proceeded without this specification. They have most frequently focused on one of three conditions of American life—the racial and ethnic fragmentation of the working class itself, the unusual economic rewards of the economy, or the values that integrate American society—and they have generally argued that these conditions have made virtually impossible the development of class-based politics.

But America’s working class was not created once and for all. It has been fashioned and refashioned as members of national, ethnic, or religious groups that had been outside of the frame of capitalist labor relations have entered the ‘free’ labor market. I argue below that the unique characteristics of American institutions are aspects of a sharply divided consciousness about class in American society that finds many Americans acting on the basis of the shared solidarities of class at work, but on that of ethnic and territorial affinities in their residential communities. Each kind of conflict has had its own separate vocabulary and set of institutions: work, class, and trade unions; community, ethnicity, local parties, churches, and voluntary associations. Class, in short, has been lived and fought as a series of partial relationships, and it has therefore been experienced and talked about as only one of a number of competing bases of social life. What is distinctive about the American experience is that the linguistic, cultural, and institutional meaning given to the differentiation of work and community, a characteristic of all industrial capitalist societies, has taken a sharply divided form, and that it has done so for a very long time."

Link to the book.

  • "The factors that lead people to see the world in class terms may not be the same as those that sustain organizations created to act on such a vision. We need to investigate the conditions which encourage both the world view and organizational longevity in critical moments." Kim Voss’s 1992 paper examines American Exceptionalism through the rise and fall of the Knights of Labor. Link.
  • Mike Davis considers the question in a 1980 NLR: "On the one hand we must discard the idea that the fate of American politics has been shaped by any overarching telos. On the other hand, we cannot underestimate the role of sedimented historical experiences as they influenced and circumscribed capacities for development in succeeding periods." Link.
  • "Perhaps the debate over American exceptionalism has gone on for so long and so inconclusively because the question itself is fundamentally flawed. Perhaps beginning our investigation with a negative question inevitably invites ahistorical answers." A 1984 article by Eric Foner casts doubt on the debate. Link.
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December 19th, 2020

Au Matin


In the wake of recent financial convulsions, central banks have emerged yet again as the first responders to crisis. But to confront the crisis of anthropogenic climate change, there is growing acknowledgement that central banks should go further, beyond their limited remit of maintaining price stability.

Central banks should be more cognizant of their own role in creating credit-fueled growth; monetary policy already features distributing the benefits and burdens of decarbonization. Crucially, stepping up ambitions for active climate change mitigation would involve abandoning spurious notions of "market neutrality."

In a recent e-book, PATRICK BOLTON , MORGAN DESPRES, LUIZ AWAZU PEREIRA DA SILVA, FRÉDÉRIC SAMAMA, and ROMAIN SVARTZMAN argue that facilitating decarbonization is in fact consistent with concerns over financial and price stability:

"An additional ambitious and controversial proposal is to apply climate-related considerations to central banks’ collateral framework. The goal of this proposal is not that central banks should step out of their traditional role when implementing monetary policies, but rather to recognise that the current implementation of market neutrality, because of its implicit bias in favour of carbon-intensive industries [...] could end up affecting central banks’ very own mandates in the medium to long term. Honohan (2019) argues that central banks’ independence will be more threatened by staying away from greening their interventions than by carefully paying attention to their secondary mandates such as climate change. Thus, and subject to safeguarding the ability to implement monetary policy, a sustainable tilt in the collateral framework could actually contribute to reducing financial risk."

Link to the book.

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December 12th, 2020

Eight View


Between 1940 and 1990, housing growth in the United States outpaced population growth by 173 to 88 percent, and the proportion of homeowners nearly doubled. The same trend is observable internationally, and scholarly debate weighs whether demographic shifts or policy decisions are to blame.

A 2015 book by NANCY H. KWAK examines the rise of homeownership in light of US foreign policy and economic objectives. Focusing on the export of low-income homeownership programs, the book situates housing policy within broader distributional debates.

From the introduction:

"In the US, the homeownership ideal had begun forming in the mid-nineteenth century. Tracts on pastoral-republican suburbinization, Calvin Coolidge's call for a 'Nation of Homeowners,' the Better Homes in American Movement and the Home Modernizing Bureau all helped build an ideology that connected national identity with single-family owner occupancy. At the end of World War II, American advisors began urging countries around the world to push local, undocumented land uses to the margins and consider formal homeownership as a long term goal for the masses. Mass homeownership fuelled globalization by standardizing local processes of housing and land valuation, use, and tenure into a uniform system facilitating national and international investment. As more people participated in a globalized property and credit system, more of the urban landscape became friendly to corporate investment, making policymakers amenable to mass urban resettlement and modernization schemes. Implicit and reinforced in this system was the belief that the middle class served as a critical anchor for political stability, and that homeownership not only anchored the middle class but created it.

The World Bank played a particularly important role in normalizing an American version of mass homeownership at the end of the twentieth century. Up until the 1970s, the Bank had not exhibited much interest in directly addressing urban poverty, and its workers thought of housing primarily as welfare provision rather than generative investment. It was only in an era of explosive urban poverty and declining congressional support for American bilateral aid programs that the Bank took a more active role, beginning in Senegal, then moving to Tanzania, Zambia, Indonesia, and others. World Bank housing experts clarified that property rights could confer 'enormous benefits on many poor families.' "

Link to the book. h/t the one and only Paul Katz.

  • "In Canada and the United States, industrialization and urbanization occurred more or less simultaneously, creating a substantial working class in the growing cities by the early 20th century. In Latin America and the Caribbean, on the other hand, dependent industrialization resulted in a rapidly growing urban population with a relatively small industrial sector, a large commercial service sector, and a significant informal urban economy." Kwak and Sean Purdy introduce a 2007 Urban History issue on "Public Housing Histories in the Americas." Link.
  • "Planning colonias proletarias required surveying and subdividing land, actions undertaken by municipal engineers, architects, and planners. But it also required negotiating with resident associations and political brokers who deftly manipulated municipal codes and blueprints." Emilio de Antuñano's dissertation on urban planning in Mexico City, 1930-60. Link. And another dissertation by Michael William Sugarman compares housing policy in Bombay, Hong Kong, and Singapore from 1894-1960. Link.
  • "Taking the city of Sydney, Australia, as exemplary of a dynamic that has unfolded across the Anglo-American economies, we explain how residential property was constructed as a financial asset and how government policies helped to generate the phenomenal house price inflation and unequal capital gains of recent years." A 2019 precursor to Lisa Adkins, Melinda Cooper, and Martijn Konings' The Asset Economy. Link. And stay tuned for Martijn Konings forthcoming Phenomenal World piece on property inflation.
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