Definition & Reality in the General Theory of Political EconomyCool, Thomas (Thomas Herman Anthonius Maria)
Science
Definition & Reality in the General Theory of Political Economy
Cool, Thomas (Thomas Herman Anthonius Maria)
Economics; Political science
Q: “According to some experts it went wrong precisely since the
economic reforms did not go far enough.” A: “Nonsense. The ruin would
only have been greater. No, precisely the reform of the state should
have been the main target. Some people actually said that ten years
ago, but they were not listened to. They were considered to be
_softies_, since they wanted to maintain parts of the communist system.
You currently see economists of the Worldbank and IMF slowly change
their minds too.” [17]
What is crucial is that the methods, by which such dissenting ‘softies’
were silenced, were unscientific. Crucial policy preparations were left
to the fric and fray of politics and bureaucrats, unworthy of a decent
democracy.
There is Robert Barro’s research in the relationship between democracy
and growth. An early report is in Barro (1996) [18] but he has been
working on it since. His results suggest that it first takes a certain
level of income before democracy has a chance. This reminds one of the
willingness of Westerners to accept dictatorships in developing
countries as long as economic welfare is increasing. Four comments can
be made: The present discussion is targetted at existing democracies,
and Barro’s finding then is only relevant as a warning of what could
happen if the risk of, say, an eco-crisis would materialise. Secondly,
Barro seems to imply that current democracies are finished, and that
there is no next stage. But we can advance. Thirdly, once the concept
of an Economic Supreme Court is clear, then one could imagine that a
dictatorship on the way to a democracy (notably China) could first
install such a Court - and the rule of law - before it moves towards
elections. Finally, we should read Sen (1999a) as an answer to the
Barro analysis, since it could rather be that democracy futhers
development and growth.
Above uses plain human survival to judge on the economic record, it
focusses on war, humantarian disasters, overpopulation, diseases,
environmental deterioration. It is sobering to regard the more standard
economic outcome. Table 1 reviews the unemployment in the European
Union for 2003, reassembling the data after the enlargement of May 1
2004.
Table 1. Unemployment in the European Union in 2003
Eurostat [19]
EU (after enlargment)
EU 15
Total population
451 million
378 million
Unemployed
19.0 million
14.2 million
Idem,
% labour force (age 15+)
%
%
%
9.1 %
8.1 %
Participation [20]
72.0 %
72.4 %
Public-domain text, read in full here on John Shaqi.
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