Sunday, March 31, 2024

Should poor countries remain poor?


    The Industrial Revolution in North-Western Europe, studied in innumerable papers and books, happened largely “endogenously” by building upon the Commercial Revolution of the Middle Ages, putting science to direct economic use and creating new technologies. The Industrial Revolution in one corner of the world had been however accompanied, or perhaps even accelerated, by the four “bad” developments elsewhere.


    The first was colonization of many non-European parts of the world. European nations imposed political control over most of Africa, Asia, and Oceania, and employed it to exploit natural resources and cheap (or forced) domestic labor. This is the so-called “unrequited transfers” whose extent is widely debated although there is no doubt that it was substantial. Angus Maddison puts it, from India to the UK, and from Java to the Netherlands, between 1 and 10 percent of the colonies’ GDP per year. Utsa Patnaik thinks that it was much larger and that it contributed significantly to the British take-off by funding up to 1/3 of funds used for investment.


    The second “bad” was trans-Atlantic slavery  that added to the profits of those who controlled the trade (mostly merchants in Europe and the US), and those who used the transported slaves in plantations in Barbados, Haiti, Southern United States, Brazil etc. This was clearly another huge “unrequited” transfer of value.


    The third “bad”, as argued by Paul Bairoch and Angus Maddison among others, was that Northern countries discouraged technological advances elsewhere by imposing rules favoring themselves (bans on production of processed goods, Acts of Navigation, monopsony power, control of internal trade and national finances etc.). They are summarized in the term “colonial contract” coined by Paul Bairoch. Countries as diverse as India, China, Egypt and Madagascar come under this heading. “Deindustrialization and the fact that profits from exports have probably been appropriated by the foreign intermediaries have caused a catastrophic decline in the standard of living of the Indian masses.” (Paul Bairoch, De Jericho à Mexico, p. 514)


    These “bads” have been, and continue to be, debated and while learning about each of them is to be encouraged, they do not have direct political or financial consequences on today’s world. The ideas, floated from time to time, for monetary compensation for such ills are far-fetched and unrealizable. Nor is there any ability to clearly identify the “culprits” and the “victims”.


    However this is not the case with the fourth “bad”, the accumulation of CO2 in the atmosphere, and thus climate change, which is largely the product of industrial development. The fourth “bad” is today’s problem. It is not a simple past injustice that can be studied and debated, but regarding which nothing else can be done. The reason is that fresh industrial production continues to add to the problem of climate change. To the extent that the former Third World nations are now in the process of catching up with the “old” rich world, it is the fast-industrializing countries in Asia, as well as those who have recently discovered large deposits of oil (like Guyana), who may be significantly adding to the stock of CO2. Certainly, much more than they have done in the past. China, for example, is today the largest emitter of CO2. (It is not at all obvious that countries should be the main “parties” to this problem because it is the rich people who are the most important emitters. This is an issue I discussed here, and that for now, I leave out.)


    If newly developing countries are then held responsible for their share of annual emissions (that is, for their share in the annual “flow” of emissions) as if the responsibility for the previous “stock” of emissions does not matter, this would slow the growth of the new industrializing countries and impose unjust costs on them. The emissions that exist are a “stock” problem. It is because in the past, the world, i.e. the currently rich countries, have made so many emissions that we face the problem today. In other words, climate change cannot be treated as a “flow” problem alone, and not even primarily so.


    This holds especially true for countries that are poor today and that have not contributed to the emissions in the past. Shaming them means slowing their growth and undermining poverty reduction in the world. A poor country that is emitting 100 units of CO2 this year cannot be treated as a rich country that is emitting 100 units of CO2 this year. The rich country is more responsible because of its past emissions. (Whether the net accumulated stock of its emissions is directly proportional to its today’s GDP I do not know—but that it is positively correlated is acknowledged by all.) Thus, by any concept of fairness, the rich country would either have to commit to much lower absolute annual emissions than a poor country (which by itself would reduce income of the rich country) or to compensate poor country for all the income that it would have made through oil production or industrial output that it forgoes in order to reduce emissions.


    Rich countries would either have to emit (on per capita basis) much less than poor or developing countries –ideally, in proportion to which they are responsible for the “stock” of emissions—or to compensate poor countries for any loss of income that comes from voluntary reduction of production.  


    This means that rich countries must either reduce their income levels, or transfer significant resources to the developing countries. Neither is politically feasible. The first scenario would imply GDP per capita reductions of a third or more. No political party in the West can win votes by suggesting income declines that exceed several times those experienced during the 2007-08 recession. The second scenario is likewise unlikely since it would involve open-ended transfers of billions if not trillions of dollars.


    As rich countries cannot do either of these two things, and wish to maintain some moral high ground by speaking about the problem, we are treated to the spectacles like the recent interview on BBC where the President of Guyana was lectured about the possibility of Guyana emitting millions of tons of CO2 into atmosphere if its new oil deposits are exploited. Before the recent discovery of oil, Guyana’s per capita GDP was some $6,000 or in PPP terms about $12,000; the first number is one-eighth of that for the United Kingdom, the second, a fourth. Guyana’s life expectancy is 10 years less than that of the UK and the average number of years of schooling 8.5 vs. 12.9 in the UK.

    The conclusion is thus: if rich countries are unwilling to do anything meaningful to address climate change and their responsibility for it, they should not use moral grand-standing to stop others from developing. Otherwise, one’s seeming concern with the “world” is just a way to shift the conversation and to maintain many people in abject poverty. It is logically impossible to (a) hold moral high ground, (b) to do nothing in response to past responsibilities; and (c) to claim to be in favor of global poverty reduction.

Saturday, February 24, 2024

Before the police arrives: Bookstores on Saturdays

             I always loved Saturdays. When I was a college student, quite improbably my parents decided that I would be a “technical executor” of our family’s monthly budget. My family was part of the red bourgeoisie and we had enough, and probably more than enough,  for a comfortable life, the life that today’s middle classes might find  constrained and limited in income but attractive because of its security. What it meant was an apartment of 67 square meters, two bedrooms, enough money to go on a modest vacation once per year, very little money to travel abroad (because prices in Western Europe were a multiple of these in Yugoslavia, and one night in a hotel would cost a half of one’s salary), and enough to go to a restaurant once in a fortnight.

But enough –and this is key for the story—to allocate  every month a small amount for the purchase of books. I argued for it and won easily because my father loved reading. And he was entirely indifferent to money, that is, he would be equally happy if we had one-half of what we had, so long as there was enough to eat, drink and read. The monthly amount dedicated to books would be nicely stashed in an envelope, with the writing on the top “Knjige” (“Books”) and I would “execute” the purchase. I was allowed to buy whatever I wanted.

Having an earmarked fixed amount, I wanted to maximize pleasure from it. That meant that, if I had money to buy two or three books every month, I would go out every Saturday with an express intention to buy only one book. Never two. For if I bought two books on this Saturday, there will be no money to buy a book next Saturday. (I remember how many years later, In a bookstore in Georgetown, in Washington, I saw for the first time a person buying books by piling them in a cart the way one buys potatoes or bananas in a supermarket. That struck me as entirely disrespectful of writers. I would not like my books to be bought in such a way.)

I was lucky to have been young (assuming that I would be always growing up in the Balkans) at that time because that part of peripheral Europe was then living through what was its most intellectually interesting time—ever.  Thanks to Marxism it had direct connection to the modern Western intellectual thought; in addition, that very Marxism was  technically applied in the country which made writers from that country interesting in the eyes of the intellectual West (the West was always the paragon) as well as of the rest of the world. And Yugoslavia, indeed, through its Praxis school, produced a series of excellent political philosophers and Marxist scholars.* Freedom from Stalinist constraint, or even an official encouragement to publish as much  anti-Stalinist, but Marxist and Leninist, literature, added to the excitement. You could read everything about the “deformations” in the Soviet Union except for Trotsky. He remained, never officially spoken of, but unacceptable. Other Trotskyists were published (Antonov-Ovseyenko, Victor Serge, Isaac Deutscher), but not the Master himself, even in his purely literary or journalistic writings.

Not least importantly, these were the 1970s when Yugoslavia borrowed heavily from the West, foreign  exchange was plentiful, and that made imports of English-printed books available to whoever was interested in intellectual or political topics, and read English. When I recently reread my old books as I was writing Visions of Inequality  I was not surprised that many of them were bought in Belgrade in the mid-seventies, as tiny pencil-written notes, showing the price in dinars, inside the cover-page attest (“15,70 dinars” in pencil and a strong curling “,” which, I would wager, was in a woman’s handwriting).

Thus, on Saturdays, armed also by the book reviews that I would have read the week or month before, I would go from one bookstore to another looking at what may be the best book to buy. I would weigh the advantages and disadvantages of this or that writer,  the likelihood that I would prefer to read fiction to nonfiction—but never include in that weighting scheme my college interests. Studying to get a grade was always an entirely different matter, not at the slightest entering my decisions about what to read. I still believe this approach is good.

I read quite a lot about the Stalinist period. In high-school in Belgium I discovered Roy and Zhores Medvedev. I still love their books. In many ways, I think they are the most unbiased witnesses, and students of Stalinism. My French teacher in Belgium introduced me to William Shirer.  After reading him, I branched out to the rest of literature on Nazism and Europe in the 1930s.

Solzhenitsyn was widely published in Yugoslavia (although I think that his “Gulag Archipelago” was not immediately published because of his attacks on Lenin, nor was his “Lenin in Zurich”). The rest however was. A Yugoslav communist who was imprisoned for twenty years in the Gulag also published his memoirs around the same time: Karlo Stajner: 7,000 dana u Sibiru (“7,000 days in Siberia”). I still have his book. I went to his book talk one cold winter night in Belgrade.

The publication of Leszek Kolakowski’s Main Currents of Marxism provoked, as I learned from the literary weekly and a friend, quite a commotion. Eventually, it was published with a lengthy preface by one of the Party ideologues drawing a distinction between Lenin and Stalin and criticizing Kolakowski for not doing so sufficiently.

The books one could not buy were by Djilas. The first Djilas’s book that I read were all in English, and to this day I never read him in the original. He was published in Serbian only when the “populist-nationalist” government of Slobodan Milosevic came to power. But by then nobody cared about Djilas.  The new class had disappeared.

I was entirely indifferent to the nationalist literature  that started to flourish under the permissive, and relatively rich, atmosphere of the late 1970s. It might have been a wrong decision, because that literature (most of it, I thought then and now, composed of elementary thinking and counter-truths) became much more influential in the Balkans and all over Eastern Europe. It probably is still today, reawakened by the war between Ukraine and Russia. I saw specimens of such nonsensical literature in every East European country I travelled to after it “acceded” to democracy.

On my travels to England, I loved to go to the enchanting London bookstores. There would be—extraordinarily—several floors of books. In 1973,  I saw in the Foyles bookstore exposed all over the place and very prominently in the windows, the first English translation of Grundrisse (done beautifully by Martin Nicolaus). I did not know about the existence of Grundrisse at all. I was totally shocked to see Marx’s book so openly displayed in the heart of the capitalist world. I had already read him, and I thought that whoever had read him would immediately have to abandon the allegiance to capitalism. I was thus half-expecting the police to show up at the Foyles, and if not seize all  the books, at least put them back on the shelves. But that did not happen. In fact I freely bought my copy of Grundrisse, and almost half a century later when writing Visions of Inequality, I went over my notes, the unstuck and falling out yellowed pages, and remembered the urgency with which I then grabbed  the book—before the police arrives. 


* Just to make it less abstract, I will mention only a few who come to mind and whose books I have read then: Predrag Vranicki, Slobodan Stojanovic, Branko Horvat, Andrija Gams, Josip Zupanov

Saturday, February 17, 2024

Freedom to be “wrong”: the only real advantage of democracy

Several things came together. A friend sent me this post by N S Lyons. Then, independently, a short  conversation on Twitter followed upon the statistics showing that today’s young people get almost all their information from the social media, while old people rely (as they did in the past) on television. And, finally, and perhaps for this post most importantly, my own recent thinking on the following questions: What do you see as the main gain from democracy, as opposed to dictatorship?

Let me start with Number 3. When I thought of that, my answer was: the freedom to read and listen to whatever I want, and to say whatever I want. And I think this is all. I do not believe that democracy leads to higher growth, less corruption, or less inequality. No evidence for any of these things. To put it perhaps too strongly, I think democracy has no effect on any real social phenomena, but it does allow people, on a purely personal  level, to feel better by accessing more diverse information, and to express any option they have. (Note that this freedom applies only to the political sphere,  not to one’s place of work which in capitalist democracies is ruled dictatorially.)   

But that definition of the advantage of democracy has recently been under the attack by the people who think that social media lead to “fake news”, fragmentation of public opinion, polarization of politics and all kinds of noxious phenomena. And then they paint the picture of some fantasy-world of everybody agreeing on all issues and espousing the liberal values in which they believe. For me, this is precisely the undermining, or the destruction of the most (or the only) valuable part of democracy.

N S Lyons quotes in extenso Polish political philosopher Ryszard Legutko who equates the modern liberal project with the communist project. And indeed the similarities are strong. In both cases, a certain view of the world is supposed to be based on scientific understanding of the way the world works, and everybody who does not see it in such a way must be either “re-educated”, or,  if stubbornly clinging to the wrong views, considered morally flawed. Thus the  disagreement is with the people who are cognitively or ethically deficient.

I write this as somebody who believes in Enlightenment and economic growth. But I do not believe that people will ever have the same opinion on key matters that relate to the organization of societies. There will be always important differences in values and backgrounds. Any attempt to impose one’s views other than through discussion (while not seriously thinking that one will be successful, see my post here), or to hold others as “morally challenged” if they do not agree, is not only bound to fail. It is wrong. The segmentation of the space for public discourse is not just inevitable; it is, on balance, a good thing. Between a uniformity of opinion that is imposed through the control of the media (epitomized by television) and plurality, or even endless multitude, of views afforded by the echo-champers of the social media, one should choose the latter.

We should not be afraid of polarization and disagreements. They are much better than unanimity. Now, I am not addressing here only an enforced unanimity that comes from having one newspaper and one TV channel (It reminds me of an old Communist joke. “We just introduced the second channel. What is on the second channel? A KGB official who says, “And you comrade, you do not seem to like the first channel?”), but uniformity which comes from the current liberal project.

I remember that in the 1990s, a Dutch friend pointed out to me, the heathen, the advantages of Dutch democracy and called it “vibrant” (as opposed to enforced unanimity). But when Geert Wilders and people like him appeared on the scene, she no longer thought it was so “vibrant”. It turns out that to her “vibrant” meant that everybody would agree with her fundamental beliefs and that the dispute should center on entirely peripheral matters. She represented the pensée unique that followed upon the fall of communism when the liberal view of the world and neoliberal economics were taken to be “normal” and “common sense”, not an ideology.

This was rudely challenged by Islam (which understandably on many issues has an entirely different take), by the financial crisis of 2008,  by China’s Sonderweg, the rise of illiberal democracies, Trump’s presidency and then 75 million votes, Russia’s move to Euroasianism. It clearly does not reflect today’s realities.

The expansive liberal ideology creates unnecessary conflict by insisting that on all important political and social issues people must share the same opinion, and by denigrating those who do not. Very often they dream, especially if older, of the return of a world of three American TV channels and two weeklies that always had the same news and the same cover page. This allegedly created a consensus of sensible people. But it did so only because others had no say. That world, I think fortunately, will never return because the Internet has made it impossible. But rather than thinking that this is a bad development, we should embrace the freedom to think whatever we want, and to say whatever we want (however strange it might seem to others). For this is  probably the only real advantage of democracy.

Monday, February 5, 2024

To all the newspapers I loved

I was always in love with (in-print) newspapers.

In the past you did not have to write “in print”. There were no other newspapers. Writing “in print” was redundant; and incomprehensible.  

But now things are different. Today, we chatted (among older people) and observed that no one in the New York subway reads print newspapers any longer. People listen to podcasts, look at their smart phones, read a paper copy of a book (yes, they do that too), watch others around them.  A friend said she has not seen anyone reading a newspaper on a subway in years.

Neither have I. But I love the print newspapers, and this evening, as I do two or  three times per week, I went to the nearby convenience store to buy the last copy of “The Wall Street Journal” (it costs five dollars). I like it not only for its content (which with the exception of the editorial pages where they hire only lunatics to write them) is excellent. I love it because the smell of the paper is the same as what I remember from many  years ago.

When I was a kid, there were two dailies in Belgrade. One is/was called “Politika”. It is the Serbian equivalent of the “New York Times”. It was founded in 1904 by a rich liberal family. It has survived all regimes and has been and remains the  “newspaper of record”. It has always been close to the government, whatever that government was: royalist,  communist, nationalist, but never just a mere mouthpiece. It has a unique font, designed at its foundation and not changed since.

The other daily was “Borba” (The Struggle), the underground newspaper of the banned Communist Party. When the said party came to power, the newspaper became a daily and went very official. Very few people read it, but it was always displayed in government offices.

My family bought it on Sundays, when its heading was published in red. Whenever I think of the Sundays of the yesteryear I see these five big letters, all in red capital letters.

During my high school in Belgium, I adored “Le Monde”. It was the same: the newspaper of the thinking ruling class. Not a primitive ruling class, not even the conservative ruling class. But the liberal, bien-pensant ruling class. I thought it could never go wrong. When I would see a mistake or a typo, I  believed I was wrong. “Le Monde” could not be wrong. But it was—at times.

It was nevertheless a great newspaper. My views of the Soviet Union were influenced by its correspondent Jacques Amalric; as my views of China were influenced by an extraordinarily gifted “Politika” journalist of the 1970s, Dragoslav Rančić. The fact that I still can easily remember their names half-a-century later, while I have forgotten many others, says something about the nearly religious  attention with which I read them.

When I came to England, I was struck by the type of paper (like: real paper) and print used: newspapers always smudged your hands, and you had to wash them practically every time after you read the paper. I thought that it was some cool British custom, poorly understood by the barbarians. But rather quickly I changed my opinion. It must have been related to the cost of printing. Yet I do not know exactly why only in England have I experienced this.

My first ever evening in America was at a New York airport hotel where I grabbed a copy of a New York tabloid, without knowing anything about the newspapers in the New World. I still remember the title displayed across the whole front page: “Top Cop Fired”. I could not believe that a newspaper could print such a disrespectful title. In the newspapers I knew, this kind of news would be buried on page 4 (that is, on an even-numbered page to which people always pay less attention) under the title “The head of the New York police department released from his duties”. The directness and irreverence of New York tabloids impressed me then and still impresses me now. They do not mind publishing “Trump is a Bump” or ”Hillary, the Deplorable”. When the domestic political scene heats up, they take no prisoners: they are in-your face, brutal. I buy them, from time to time, when I take Amtrak, just to enjoy their freedom from convention. It is not the “All the news fit to print”. Often, it is the news not fit to print, but precisely for that reason more important to print.

Anwar Shaikh, the most left-wing economist in the world, introduced me to “The Wall Street Journal”.  I met him in his office as he was writing the monumental “Capitalism: Competition, Conflict, Crises”. He told that he reads the WSJ because it tells the truth about what is happening in the economy. It struck me then by the seeming oddity of the most left-wing economist in the world praising the most right-wing daily in the world. But Anwar was right. An economics daily has, in the part that deals with the real life, to be as objective as possible because if it spreads fairy tales people who believe them will lose money. Then no capitalist will buy it. For they do not like to lose money. In the trade-off between the fairy tales and cash, they chose the latter. Other dailies that appeal to the “pensée unique” do not need to worry about that kind of elemental truth. They can make things up.

I am one of the last Mohicans who reads the print news. I used to buy “China Daily” in New York and Washington for 25 cents but the booths that sell the paper have largely closed now. I think it is because the Chinese government sees it as a waste of money (it is true that at times the dailies were not “renewed”; so on a Thursday morning the most recent issue would be the one from Monday). Several years ago in Moscow I challenged my Russian friend to find a single newspaper kiosk in a thirteen-million-people city. He could not. But luckily in the hotel where I was staying they were distributing the “Kommersant” an excellent Russian version of “The Financial Times”.

One of the few countries that is resisting the onslaught of the digital print and where one can still, every day, find all the print newspapers and magazines, is Spain. I like to hang around the kiosks, deciding which newspaper’s font, color, and smell I like the most. Then I grab the paper, open it, smell its print, and think nothing has changed in fifty years.