Political Economy in the 21st Century
275 Madison Avenue, Suite 2114
New York, NY 10016
What is the nature of the global economy in the 21st century? How can we understand its development and its unique characteristics? In the 1970s, a seeming post-war “Golden Age” in countries like the United States was faced with a series of crises: growing fiscal imbalances, the oil crisis, the end of the Bretton Woods system of dollar-to-gold convertibility and an expansion of the money supply, high unemployment, rampant inflation, and wage stagnation. What followed was the abandonment of Keynesian economic orthodoxy (government spending to smooth out the business cycle) in favor of the neoliberal theories of economists such as Friedrich Hayek, Milton Friedman, and James M. Buchanan. A new global financial paradigm emerged, beginning with the Volcker shock (the spike in interest rates to a peak of 20% to curb inflation), and resulting in decades of financialization and financial deregulation, unprecedented capital mobility, and the omnipresence of debt and deficits. With its global imbalances and asymmetrical growth patterns, the new neoliberal economic architecture was inherently and acutely unstable and prone to “bubbles”—the greatest of which, the so-called housing bubble, burst in 2008, nearly toppling the global economy. How can we understand the actions of central banks and regulators in 2008 to institute economic “emergency measures” to resuscitate markets? What has changed with the extraordinary redeployment of the neoliberal state at such unprecedented scale, whether through the bank bailouts or the radical new form monetary policy known as “quantitative easing”?
In this class, we will examine the political economy of the post-2008 world. Is the 2008 crisis a failure of economics or, rather, a validation of some of its central tenets? What are the properties of the 21st century economy? Will financial elites wake up one day to a system they can no longer control? What are the different possible scenarios for where the economic order might be headed? In answering these questions, we’ll survey the major ideas of classical political economy (as formulated by Adam Smith, Karl Marx, John Maynard Keynes, and Friedrich Hayek) and read, as our primary text, Modern Political Economics: Making Sense of the Post-2008 World by Yanis Varoufakis, Joseph Halevi, and Nicholas Theocarakis. We’ll analyze the dynamics of world capitalism over the course of both the last century and the last decade. Finally, paying particular attention to the sequence of events of these last several decades, we’ll ask what we can learn from classic and contemporary political economy for a dramatically changed world today.
Course ScheduleWednesday, 6:30-9:30pm
July 10 — July 31, 2019