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Title: Panic Rules!: Everything You Need to Know About the Global Economy by Robin Hahnel ISBN: 0-89608-609-7 Publisher: South End Press Pub. Date: 01 October, 1999 Format: Paperback Volumes: 1 List Price(USD): $12.00 |
Average Customer Rating: 4.67 (3 reviews)
Rating: 4
Summary: Gives a pretty solid understanding of the global economy
Comment: Professor Robin Hahnel of the American University in Washington D.C. presents some interesting statistics. He notes that from the early 80's until the Asian economic crises hit in July 1997, much of the world economy was said to be in the midst of an economic "boom" caused by the implementation of neoliberal policies (deregulation, removal of tarrifs and restrictions on capital flows,etc.). Well, according to figures compiled by the Organization for Economic and Commercial Development (OECD), from 1950 to 1973, the year the Bretton Woods system was dismantled and the process of neoliberalization (globalization)began, the average annual gross domestic product per capita of Western European countries was 3.8 percent. From 1973 until 1992, their average annual per capita Gross Domestic product was 1.8 percent. From 1950 until 1973, the average annual per capita gross domestic product in the U.S.A., New Zealand, Australia and Canada was 2.4 percent. From 1973 until 1992 their average annual per capita GDP was 1.4 percent. In Latin America from 1950 to 1973, the average annual per capita GDP was 2.4 percent. From 1973 to 1992 it was .4 percent. The only countries that increased economic efficiency between 1973 and 1992 were the East Asian "tigers" who combined harsh repression of labor, with tax credits and subsidies to export-oriented industries and severe restrictions on inflow and outflow of capital and foreign ownership.
Another statistic. He shows that the annual flow of capital around the world has vastly increased by a large margin since the beginning of neoliberalization in the early 70's; he also shows that whereas before that time, capital was largely used for investment and other long term activities, international capital is now largely used for speculative purposes.
So he shows very clearly that the Bretton Woods period was far more productive for the world economy than the period since 1973. He notes that in the U.S. wages have been stagnant or declining and that while a relatively large number of Americans own stocks, most of it is concentrated in 401k and other retirement accounts, pretty small stuff and that the wealth from the stocks is overwhelmingly concentrated in the top ten percent of the population.
He analyzes what caused the East Asian crises. The East Asian "tigers," under Western pressure, removed restrictions on capital flows, and cut back environmental and labor laws in the late 80's and early 90's and Western capital, mostly speculative, flowed in. Western banks made short term loans to the banks in these countries who made high interest long term loans to export-oriented local businesses. But as one "tiger" deregulated, cut environmental regulations,etc. to compete for Western capital, so did all the others and the boom that many businesses felt was relatively short lived as they faced increasing competition in other countries and were forced to lower prices. They began to have trouble repaying their loans to their local banks who in turn had trouble repaying international creditors. Then Thailand began to wobble and investors, following what Hahnel says is rule one of international finance ",panic first," rapidly sold off its currency, then investors in Malaysia panicked and did the same and then Indonesia and then South Korea..... The economies plumetted and foreign companies were allowed, as a condition for IMF rescue packages, unrestricted access to rush in and buy up local businesess and bargain basement prices. Hahnel presents a particularly interesting article from the New York Times alleging that Robert Rubin and Larry Summers blocked Japanese efforts to create a sort of Asian monetary fund to try to avert the crises at its beginning on the ground that it would interfere with U.S. "influence and interests" and that Japan would not insist on the draconian IMF-style reforms.
He also makes some good points about how the true health of a nation can hardly be measured by the common economic efficiency numbers, noting for instance that a small farmer in the third world ussually lives very poorly and contributes almost no value to the overall economy but still manages to feed himself and his family and is protected by the social safety net of his village. But when his landlord kicks him off the land because the landlord wants to grow expensive export crops and he is pushed into a diseased infested slum in the big city, this will probably increase the GDP.
Unlike the other reviewer, to some extent I really didn't find this book "easy-to-read" and certainly didn't understand everything the learned professor wrote but I feel I have a much more solid grasp of the fundamentals of the economy.
Rating: 5
Summary: Superb treatment of globalization
Comment: This is an excellent, easy-to-read, and compelling account of the role international finance played in the Asian Financial Crisis. Hahnel also demonstrates the deficiencies in the IMF response to the crisis. Overall, a superb introduction to globalization, the destructive nature of unregulated capital flows, and the irrationality and instability of the current global economy.
Rating: 5
Summary: Remarkably comprehensive
Comment: In a little more than 100 pages Hahnel does an astonishingly impressive job in setting out global economic theory and its current political situation. This is a very informative work.
Hahnel gives us his view of how the global economy works, who benefits from the rules as they currently are, and who loses. He goes on to suggest solutions to what many people perceive as terrible inequality, not only between rich countries and poor countries, but between the wealthy and the not so wealthy across the globe.
He spends some time explaining how the current economic order came about, and what's been happening since "globalization" (as we currently understand it) started about 25 years ago. He explains the Asian financial crisis of 1997/98 and shows how it could happen again.
This book starts with the supposition that one of the primary concerns of those that are wealthy is figuring out ways to hold on to their wealth and increase it if possible.
He does a very lucid job of transitioning from economics to politics and explaining the motivations behind financial and economic political decisions, the effects of which most of us don't understand or see as unimportant.
In short this is a wonderful book for figuring out how globalization effects us, why it's important in our everyday lives and what we can do to make it work for us, the people.
The most engaging book on economics in years, up-to-date and an eye-opening read
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Title: The ABC's of Political Economy: A Modern Approach by Robin Hahnel ISBN: 0745318576 Publisher: Pluto Press (UK) Pub. Date: 24 January, 2003 List Price(USD): $19.95 |
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Title: Hegemony or Survival: America's Quest for Global Dominance (The American Empire Project) by Noam Chomsky ISBN: 0805074007 Publisher: Metropolitan Books Pub. Date: 01 November, 2003 List Price(USD): $22.00 |
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Title: After the New Economy by Doug Henwood ISBN: 1565847709 Publisher: New Press Pub. Date: 01 October, 2003 List Price(USD): $24.95 |
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Title: Parecon: Life After Capitalism by Michael Albert ISBN: 185984698X Publisher: W. W. Norton & Company Pub. Date: April, 2003 List Price(USD): $21.00 |
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Title: Debunking Economics: The Naked Emperor of the Social Sciences by Steve Keen ISBN: 1856499928 Publisher: Pluto Press (Australia) Pub. Date: March, 2002 List Price(USD): $27.50 |
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