Center for Social Theory and Comparative History

David Lampton presents a wide-ranging analysis of the macro-economic strengths and potential weaknesses of China since 2008. He argues that China’s has a strong foundation for economic growth in the near and medium-term and suggests multiple reasons for this conclusion. He notes that this growth is likely to be secular but with occasional falls from unexpected shocks. He also considers several large problems that China faces on the macro-economic level especially in the areas of the environment, social organization and political adjustment.

Victor Shih argues that the economic stimulus promoted by the Chinese central government from 2008 onward has been a great success on the surface. It is argued that the success of this Keynesian operation did not result in a huge growth of central government debt as a percentage of GDP. However, he goes on to show that while the central government was calling for stimulus, it was local governments who were tasked with putting the stimulus into operation. Local governments created investment companies who in turn used land titles to secure loans from banks. The borrowed capital was used for infrastructure development. However, it is unclear that infrastructure will be profitable and hence, difficult for local governments to repay the loans. The Chinese macro-economy has much more debt to GDP than the national statistics reveal and, thus, a much greater fragility to shocks.

Alan Abramowitz trains his lens on the disappearing center in US politics. He surmises that the polarization in politics has long historical roots and has only increased under both the George W. Bush and Barack Obama Administrations. The divergence between parties is at historic highs according to Congressional vote tallies. It is largely due to ideological shifts to the right especially within the Republican Party. The Democratic Party is substantially the same but has lost the Southern wing of its support. The polarization is consistent among politicians, party activists, funders and the media. It reflects economic change, rising educational status, workforce composition and changes in the nature of families. He ends his talk by noting that the 2012 elections can be won by either party and this will have huge implications for public policy.

William Domhoff considers the historic background of the two-party system in national politics. He maintains that it is important to understand US politics within power structures and to focus in on how voters are mobilized and demobilized by rival interest groups. He describes the two primary interest groups today as corporate conservative versus liberal labor admitting that this is an oversimplification. In particular, the Democratic Party has been a coalition of out-groups since its formation by Southern planters in a dynamic modernizing free labor economy. The Republicans were the party of in-groups from their formation as an Anglophile Protestant industrializing faction. He considers how these parties changed in social composition over time but were blown apart by the election of 1964 which has resulted in the polarizing alignments that have taken root today. He concludes his narrative with a discussion of the electoral system noting the near impossibility of an enduring third party.

Thomas Palley argues that the causes of the “Great Recession” are not primarily to be found in the asset bubble that was allowed to inflate in the housing market and in the financial sector. The bubbles actually reflect the longer-term basis for stagnation that originate in the macro-economic structure of the US. He presents two major dimensions of these structural problems. The first problem is the entrenchment of a “neoliberal” growth model that is hegemonic in the minds of politicians and the economics establishment that became orthodoxy in the 1980s. He then considers the second obstacle to creating a virtuous circle of demand and full employment. Secondly, Palley finds that the US model of economic engagement with the world’s other economies is flawed. He ends his presentation with an alternative policy recommendation that inverts the power of corporations in favor of workers.

Crisis is an inherent, inevitable, feature of capitalism in the findings of Anwar Shaikh. He demonstrates this historically by outlining its recurrence from at least two centuries of experience. Moreover, the crises are not limited to just one nation but are system-wide events. The current recession rises out of the generalized leveling off of the profit rate in the early 1980s that was achieved by driving down wages but increasing productivity. Moreover, the cost of capital has been historically low and, thus, particularly important for fueling financial bubbles. He concludes that there is little reason to believe that wages might be able to return to a greater balance with productivity growth given the power of capitalists and the growing army of reserve labor.

Jeff Marick trains his lens on the corruption of Wall Street and the lack of governmental regulation of the financial sector as the two most important causes of the Great Recession. The incentives for Wall Street were at odds with a self-sustaining economy. Short-term gains, huge bonuses and gaming the sector were given priority over fiducially prudent decisions for the long-term health of financial institutions and the economy as a whole. These incentives grew out of deregulation beginning with the Reagan administration, a lack of micro-economic analysis stemming from a Grenspanian ideology of banker probity, and mass delusion that economy would continue to churn along. Madrick points to recurrent market failures from the fall of junk bond kings, to the Savings and Loans collapses, to recurrent crisis in the 1990s and the blowout of the high-tech bubble at the century’s turn. Despite these warnings, the government refused to be diligent and allowed for ever-greater financial chicanery to be built with the goal of enriching corporate executives at the expense of the rest of the economy.

Marc Bousquet argues that public education has become less and less democratic. Primary and secondary public educational institutions are now run as if they were corporations. The metrics used to determine performance and productivity are vapid and intended on supporting administrations at the expense of students and faculty. Teachers and faculty are working harder to meet business-inspired goals, for example “testing to the test”, rather than producing graduates who have powerful analytical/critical skills. He demonstrates that so far the Obama Administration has consistently backed this ongoing process especially given the appointment of Arne Duncan as the Secretary of Education. Moreover, he focuses on why these changes are undermining students’ freedom of expression and democratic rights. He concludes with some suggestions on how faculty, students and the public might respond to these challenges. Christopher Newfield notes that part of the loss of US competitiveness is due to the decline of its educational system especially in California which had been the model for public education for the US from the early 1960s onward. Moreover, education funding has declined as fees have increased. He outlines how the general funding model for education has changed significantly at the expense of the middle class: larger gaps in educational attainments; plummeting access to elite institutions by lower classes; and status reproduction through selectivity of the most gifted students (weighted in favor of private institutions). He suggests that this process can be turned around if new goals are established that assess success rooted in the accumulation of social capital and new more sophisticated accounting procedures that separate out different types of funding including the number of students taught and the true cost of corporate-sponsored short-term oriented research. He finishes with an agenda to push for these reforms and others.

David Goodstein outlines the approaching peak of oil drilling that is commonly referred to as Hubbert’s Peak. He notes that most of the energy used by humans, animals and plants is from the sun. This energy is stored in various forms including oil and coal. The exact amount of these forms of energy has not been established reliably. However, the number of discoveries of new oil fields has declined significantly since 1980. Once oil production has peaked it is likely to lead to a host of problems. Goodstein asserts that oil is too important for other aspects of human activity to be wasted so much on transportation. Other energy forms must be developed especially clean forms as climate change is also a growing threat to the planet. He then considers some of the alternatives and concludes that we must address these problems immediately.

Vaclav Smil contests the point that we have reached peak oil but notes that there is a finite amount in the planet. Smil also concedes that reliance on oil has to change but energy system change is very slowly because it is so complicated and tied to the economy, society, polity and culture. He argues that consumption levels are too high, especially in US. It consumes a quarter of the world’s energy. If the US reduced its consumption through better infrastructure design, urban planning, building techniques and the like, the US would become a net exporter of oil. These policy changes would not necessarily result in a lower standard of living. He compares energy consumption levels in the US to that of Europe to make his case. He also maintains that innovation leads to both better extraction methods in oil drilling but also in energy use. He concludes that other problems are much more imminent than the threat of peak oil.

The accompanying audio files provide the complete recording of the two talks.

Richard Freeman contemplates the effects of world workforce doubling with the fall of the Soviet Union, China’s turn to the market and India’s liberalization. What effect has this globalization process had on wages worldwide? Though world wages were probably affected, Freeman emphasizes the fact that education and innovation are countervailing forces to wage repression. While he considers globalization as a “positive” especially in the long run, he suggests that the gains from the process can be reversed in the face of pandemics, climate change, ongoing terrorism, “political insanity” and capital markets failures. He ends with some good and bad scenarios for the future.

Edward Leamer takes up the question of whether tariffs on imports raise wages as a counter-factual to whether open trade markets depress wages. He outlines four economic models to answer the question: Ricardo Model, Ricardo-Viner Model, Heckscher-Ohlin Model and the Stolper-Samuelson Theorem. He concludes that wages in capital-intensive industries generally are maintained; they remain low in labor-intensive industries; and they are subject to fluctuation in mixed industries. He argues that the US must shift its policies, especially in education, from an industrial to a post-industrial perspective.

The accompanying audio files provide the complete recording of the two talks.

Diana Liverman explores the theoretical positions for reducing greenhouse gas emissions including “earth-system management”, cap and trade policies, individual and community behavioral change, political economy of carbon governance (“carbon capitalism”), and government regulation and incentives. She supports a blending of the last three to produce “political ecology”. Liverman is critical of the Kyoto Accords but argues in favor of the Clean Development Mechanism [CDM] with some significant adjustments and much clearer analysis of how much carbon offsets truly reduce greenhouse gases. She limns out the limitations of CDM as well as implications for relations between the Global North and South.

Glen MacDonald weighs the various arguments and models for climate change noting their strengths and weaknesses. He finds arguments that human activity has heightened CO2 levels in the atmosphere more compelling than those of skeptics. However, science still has not become capable of modeling carbon dioxide levels in the atmosphere with certitude. He ends his talk with a discussion of the relationship between climate change and ongoing droughts in the subtropics.

The accompanying audio files provide the complete recording of the two talks.

Robert Brenner outlines the long-term causes of the present economic meltdown. Rather than understanding the current downturn as solely a function of financial malpractice and incompetence, he demonstrates that the economy has been growing slower in most of the major indices with each passing business cycle since the 1970s. In the last two cycles, asset bubbles inclined US consumers to take on more debt in order to spend and achieve limited GDP growth. The implications for the US and the global economy are also considered including the US current account deficit, trade imbalances, the rise of China and the East Asian economies as well as declining investment in the real economy and overcapacity in manufacturing worldwide.

Gary Dymski makes the case that banks are much more responsible than borrowers for the subprime crisis that has since led to a financial crisis and economic decline in the rest of the economy. The subprime bubble had its origins in the “strategic reorientation” of banks in the neoliberal era. Deregulation allowed banks to change their profit centers from “interest margin to fee-based income”. The securitization of debt opened new possibilities to rake in higher fees. Banks targeted lower income and minorities because they could be sold products that increased bank income in the form of penalties, short maturities on loans, application fees and higher risk loans. In light of the collapse of the banks, Dymski suggests that banks can and should return to more stable and socially constructive practices.

The accompanying audio files provide the complete recording of the two talks.

Harriet Friedman describes how the world food system has shifted away from cereal production for human consumption. The "meatification of diet" has led farmers and agribusiness to produce grains for animals. This shift is also typified by production for profit more than for feeding people. Significant problems have resulted such as misallocation of food, higher pollution, and lower species diversity. Moreover, it has given multinational corporations much more power including property rights on genetic materials. She ends her presentation with some possible alternatives.

Raj Patel sets out the historical precedent for the current movement for food security and the largest obstacles to achieving this goal. He documents the changes in World Bank policy and how it has affected the food system. He concludes with some of the alternatives including those advanced by Via Campesina, the world’s largest social movement.

The accompanying audio files provide the complete recording of the two talks.

Michael Mann documents the increasing substitution of war for diplomacy by US policy elites. In part, the substitution has come about because of ideological change but also because the "Military-Industrial-Congressional Complex" maintains a high level of military spending due to the fact that most congressional districts receive some form of military expenditure from bases to munitions production.

General Wesley Clark considers foreign policy under the Bush administration. He argues that the military has a central role to play in support of US foreign policy goals especially in regards to protecting the world economy. He concludes that the Obama administration for political reasons must form national security policy from the center or he will be attacked from the right of the political spectrum. Thus, any strong change in policy will come about slowly.The accompanying audio files provide the complete recording of the two talks.