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Unexplained persistence facts for a post-colonial history
The document discusses the economic divergence between the 'North' (advanced economies) and the 'South' (developing nations), emphasizing how neoliberal policies have failed to solve problems for the North at the South's expense. It outlines key economic indicators and trends showing the persistent inequality and stagnation in growth in the South, leading to a decline in standards of living and a lack of recovery since the 1970s. The author critiques the myths surrounding economic recovery and convergence, highlighting the need for political action and development strategies in the South.
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Unexplained persistence facts for a post-colonial history
- 1. Unexplained persistence Essential factsfor a theory of the postcolonial world economy © CREATIVE COMMONS LICENSE ALAN FREEMAN, GEOPOLITICAL ECONOMY RESEARCH GROUP DATA PROJECT, UNIVERSITY OF MANITOBA PROJECT AND DATASET: HTTPS://GITHUB.COM/AXFREEMAN/ECONOMIC-HISTORY RESEARCH GROUP SITE: HTTPS://GEOPOLITICALECONOMY.ORG PAPERS:HTTPS://GEOPOLITICALECONOMY.ACADEMIA.EDU/ALANFREEMAN
- 2. Brief clarification • ‘North’means ‘Economic North’: a neutral term for ‘Advanced’, ‘Industrialised’, ‘First World’ or just plain ‘Imperialist’ • ‘South’ means everyone else • Includes transitional coutries but only when there are data • Excludes China • ‘Growth’ means average annualised growth in the given period • ‘Average Growth’ means weighted by population • ‘Divergence’ means the ratio between GDP in current dollars at market exchange rates with that of the North
- 3. Two key terms •Endogenous=the normal working of the (World) market; ‘blind’ or concealed from consciousness by the commodity relation • Exogenous=the outcome of conscious political action mainly by states but also by classes • Pluralism=a conclusion is not robust unless • All alternative measures of the same concept have been assessed in reaching a judgement (eg GDP at current, PPP, real prices) • The conclusion has been assessed against the leading contending explanations
- 4. North (long series, henceslightly fewer countries) Australia Netherlands Belgium Norway Canada Portugal Denmark Spain Finland Sweden France Switzerland Germany United Kingdom Italy United States Japan -5% -3% -1% 1% 3% 5% 7% 9% 1941 1944 1947 1950 1953 1956 1959 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 Crecimiento Anual Media móvil de cuatro años.
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- 6. Note • Declined continuouslysince 1950 • There was a ‘boom’ in the 1950s/1960s, started by the war • But the secular decline was going on even during the boom • Erupted in ‘open’ crisis in 1974 • No ‘recuperation’ (Dumenil/Levy, Husson) • No ‘new regime of accumulation’ • Financialization did not usher in a crisis not already in existence. • The ‘new normal’ level of growth is now much lower than before • At definite points accumulation rises and falls • These are endogenous: they follow the business cycle
- 7. 0% 1% 2% 3% 4% 5% 6% 7% 1949-19531954-19571957-19611961-19691969-19751975-19811981-19911991-20012001-20082008-2018 A game oftwo halves: annualised growth over NBER cycles
- 8. The story inshort • The North set out to solve its problems at the expense of the South • This was the real content of neoliberalism • It failed (the problems continued) • But the resultant political convulsion transformed the South • We are living through the combined consequences of these two facts
- 9. The North, thewhole North, and nothing but the North
- 10. 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% A game oftwo halves: before and after 1974 Crecimiento promedio anual 1950-1975 Crecimiento promedio anual 1975-2017
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- 15. 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 1950 1953 1956 1959 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 Divergence: GDPper capita of the South, except transitional economies and China, ratio to the North South = All the rest, but 1950-1970 A smaller group due to data restrictions 1970-2017 Absolutely everyone But the two series coincide with minor differences So the tendency is a robust fact and not the result of data selection
- 16. 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 1950 1953 1956 1959 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 Exogenous Volcker Shock Debt Crisis StructuralAdjustment THIS IS WHAT WE HAVE TO EXPLAIN Endogenous decline Started at least as early as 1950 Exogenous Shock Therapy and collapse of USSR
- 17. The average incomeof the richest 25% of the South is one tenth that of the poorest 25% of the North Any other fact about poverty and inequality pales into insignificance by comparison Inequality between nations is the Main causal factor for inequality within nations Yet the agencies have ceased measuring it $1,529 $1,925 $3,853 $38,265 $51,746 $72,954 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 25% mas bajo Mediano (50%) 25% mas alto Scale: the elephant in the inequality dining room: Population-weighted medians and quartiles of GDP per capita Sur Norte
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- 20. Amejoramiento (disminución) enla Divergencia País Población 1990-2017 1990-2002 2002-2012 2012-2017 China Mainland 1,408,567,808 1053% 145% 250% 35% Vietnam 95,535,024 1008% 228% 157% 32% Equatorial Guinea 1,271,085 1008% 646% 237% -56% Laos 6,884,045 419% 19% 192% 50% Myanmar 53,426,064 341% 25% 246% 2% Lebanon 6,046,806 263% 254% 8% -5% Poland 38,150,660 256% 117% 61% 3% Cambodia 16,020,147 227% 31% 78% 41% Romania 19,644,192 180% -11% 157% 23% Guatemala 16,958,840 172% 68% 23% 31% Chile 18,054,660 161% 24% 119% -3% Bangladesh 164,719,376 153% -5% 53% 75% Dominican Republic 10,779,750 138% 59% 31% 14% Czechoslovakia (Former) 16,035,373 138% 35% 75% 0% Indonesia (Former) 265,517,655 135% -6% 147% 1% India 1,340,129,280 134% -10% 106% 27% Costa Rica 4,908,432 124% 26% 57% Exception that proves the rule (1) Divergence for the remainder is worse (2) There is no comparator, other than Vietnam
- 21. 0% 50% 100% 150% 200% 250% 300% 350% 400% 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 East Asia LatinAmerica and Caribbean Middle East and North Africa South Asia Sub-Saharan Africa China North Who is ‘catching up’ and why doesn’t increased output lead to increased monetary purchasing power?
- 22. 0% 2% 4% 6% 8% 10% 12% 0% 5% 10% 15% 20% 25% 30% 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Chart 9: HighGDP per capita regions Latin America and Caribbean Middle East and North Africa South Total (right scale) 0% 2% 4% 6% 8% 10% 12% 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014 Chart 10: Low GDP per capita Regions South Asia Sub-Saharan Africa South Total (excluding Transitional) 0% 2% 4% 6% 8% 10% 12% 14% 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Chart 11: Middle GDP per capita regions East Asia Pacific Central Asia South Total (excluding Transitional)
- 23. $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 - 0.2 0.40.6 0.8 1.0 1.2 1.4 1.6 Chart 16: Relation between price level and GDP per capita, 1995 North South
- 24. Myths, dreams andnightmares • Kondratieff: the myth of endogenous recovery • Neoclassical trade theory: the myth of endogenous convergence • Marxist theories of decline (SSA, Dumenil, Husson, Financialization) that signal a ‘recuperation’ in 1980 miss the point • What really took place was a temporary respite at the expense of the South • The myth of the BRICS • What is really taking place is the relative decline of the North • Plus the end of South fragmentation and the initiation of concerted South action • The reality of Dependence, the necessity of Development • North can rely on ‘natural’ working of market and ‘prod’ at decisive moments • South has to use state (exogenous)
- 25. Northern Ideology: whythe North thinks it is special • Free trade ‘looks Good’ from the North • Is taken to be a recipe for all • Is the ‘natural’ view of the Northern and Southern elites • The only possible explanation for the South’s poverty is racial • This is rooted in colonial history • The racialization of the North-South relation • And the geneticization of labour
- 26. $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 $USMillion US outward ForeignDirect Investment -$2 $0 $2 $4 $6 $8 $10 $12 $14 1948 1952 1956 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 Billions Total Investment Outflows China The Rest Industrialised
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- 29. Project and dataset: https://github.com/axfreeman/Economic-History ResearchGroup Site: https://geopoliticaleconomy.org Papers: https://geopoliticaleconomy.academia.edu/AlanFree man