Some Good Reads

Posts I Like :

1. How Diversity Leads to Economic Growth.

2. Blaming Capitalism for Corporatism.

Forget about the "end of capitalism" and look forward to the "decline of corporatism(s)". The Phelps argument is quite similar to the one I developed in an article « La crise des capitalism's hiérarchiques » in the French review Commentaire (Hiver 2006), downloadable on my homepage.

3. “Race Against The Machine” vs. “The Great Stagnation”.

I find the book by Brynjolfsson and McAfee, “Race Against The Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy” vastly superior to Tyler Cowen’s book “The Great Stagnation” as an explanation of current problems, slower growth, and unemployment trends. But both are well worth reading, … and quite short.

4.  Niall Ferguson on American and European Perspectives.  

There is, especially, a very good paragraph on the three ways to get out of the European debt problem.

Europe, Austerity, and the New Great Depression

A Reuters' video interview of Paul Krugman in Moscow here. (Type "Krugman Great Depression" in the "Search Reuters.com" window).


We are already in the depression but European mistaken policies could make it worse. Japan's economy, on the other hand, is somewhat improving.

                                                                                   

                                                                                   

Euro or Chaos? Towards New Forms of Cooperation in Europe

Bruno Frey sees a « Europe à la carte » replacing the current forms of cooperation “if the euro collapses”.

Excerpts:

“… no chaos leading to an economic and political collapse of Europe is to be expected. Such a view is far too pessimistic.

The individual countries in Europe will quickly form new treaties among themselves. Collaboration will be maintained in all those areas where it has worked well. Some countries will remain in a newly formed and smaller Eurozone, for which the appropriate treaties will be designed. A similar reconstitution will take place with respect to Schengen, which will then encompass different members. Only those countries that find it advantageous will join a new convention on the free movement of persons. In contrast, those nations that do not find such new treaties attractive, or that are not admitted to them by the other members, will not join.”

The result, in a word, will be a new set of networks, partly overlapping as are the present European Union and the NATO, Schengen, and Euro treaties, substituting to an attempted construction of a singular hierarchical order (a superstate) in the centralized, XXth century, tradition.

This will be quite in line with the general organizational trend of the last quarter of the XXth century and of the first quarter of the XXIst, that is, the “shrinking hand” of hierarchies giving way to the development of the new network organization of large firms.

See my co-authored paper on the “shrinking hand” here.

And read the Frey piece here.

An Asymmetric Eurozone Policy Shock

From Ambrose Evans-Pritchard:

“The ECB set rates too low over much of the last decade to help Germany out of slump, setting off credit booms that destabilized half of Europe. The favour was not returned in mid-2011 when the Trichet-Stark team raised rates even though real M1 deposits were collapsing across Club Med, with consequences that are now painfully apparent.”

Yet another sign of the return of the “national motive” in European politics.