The creation of wealth and poverty means and ways

“A work of searing eloquence and moral fire, informed by a scholarship that spans forgotten classics and nearly all the best new thinking All in the service of building a better world In one word: splendid.” James K Galbraith, author of Welcome to the Poisoned Chalice: The Destruction of Greece and the Future of Europe “What a passion for the abolition of enslavement by the ruling totalitarian class! What a courage to denounce the role of orthodox economists as the ‘intellectual aristocracy’ of predators! A true and deep culture is enshrined in this brilliant study, which is Professor Bougrine’s modern version of Das Kapital This is the best answer to neoliberals and should be read by everyone.” Alain Parguez, Emeritus Professor, Universitộ Franche-Comtộ, Besanỗon, France A brilliant exposition of the colonial roots of the Great Divergence An excellent analysis of the current neoliberal model Bougrine convincingly argues for a radical reform in the spirits of Keynes, Marx and Karl Polanyi.” Kari Polanyi Levitt, Emerita Professor of Economics, McGill University, Canada Author of From the Great Transformation to the Great Financialization “An excellent critical review of mainstream academic thoughts on poverty in the contemporary global system; a convincing illustration of the shortcomings of these thoughts on the case of Canada.” Samir Amin, President of the Third World Forum “Bougrine quotes Nelson Mandela: ‘Like slavery and apartheid, poverty is not natural It is man-made and it can be overcome and eradicated by the actions of human beings.’ But what actions? Many have written passionately about these and related topics What Hassan Bougrine brings to the table is that he is also an expert monetary theorist, and is therefore well able to suggest plausible ‘means and ways’.” John Smithin, York University, Toronto The Creation of Wealth and Poverty There is a failure of governments to provide the citizens of developing countries with the necessary ingredients for growth and development This can only be explained by their inability to secure the sources of financing which ultimately allow them to “command” these ingredients The Creation of Wealth and Poverty is a study of the means and ways by which wealth and poverty are created in both developed and developing countries It puts a particular emphasis on the role played by economic policy in shaping the stratification of modern societies through specific programmes dealing with issues of job creation, poverty and environmental degradation This book is concerned with the social effects of the ongoing crisis in finance, development and the environment By focusing on the political, legal and financial institutions that govern society and the economy, the book provides an analysis of wealth and poverty from a historical perspective It shows how economic and social policies of the neoliberal model have led to a rise in unemployment, poverty and inequality and, therefore, made societies more polarized This volume will be of great interest to policymakers, academics and students who study political economy, development economics and macroeconomics Hassan Bougrine holds a PhD from the University of Ottawa and has been teaching at Laurentian University for nearly 30 years where he is currently the Chair of the Economics Department He has been a Visiting Professor and scholar at many institutions in Latin America, Europe and Africa Routledge Frontiers of Political Economy For a full list of titles in this series please visit www.routledge.com/books/series/ SE0345 214 Intimate Economies of Immigration Detention Critical perspectives Edited by Deirdre Conlon and Nancy Hiemstra 215 Qualitative Methods in Economics Mirjana Radović-Marković and Beatrice Avolio Alecchi 216 Quantum Macroeconomics The legacy of Bernard Schmitt Edited by Jean-Luc Bailly, Alvaro Cencini and Sergio Rossi 217 Creative Research in Economics Arnold Wentzel 218 The Economic Ideas of Marx’s Capital Steps towards post-Keynesian economics Ludo Cuyvers 219 A New Economics for Modern Dynamic Economies Innovation, uncertainty and entrepreneurship Angelo Fusari 220 Income Distribution and Environmental Sustainability A Sraffian approach Robin Hahnel 221 The Creation of Wealth and Poverty Means and ways Hassan Bougrine The Creation of Wealth and Poverty Means and Ways Hassan Bougrine First published 2017 by Routledge Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 711 Third Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2017 Hassan Bougrine The right of Hassan Bougrine to be identified as author of this work has been asserted by him in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988 All rights reserved No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data Names: Bougrine, Hassan, author Title: The creation of wealth and poverty : means and ways / Hassan Bougrine Description: Edition | New York : Routledge, 2017 | Includes index Identifiers: LCCN 2016030487| ISBN 9781138816756 (hardback) | ISBN 9781315745954 (ebook) Subjects: LCSH: Economic policy | Economic development— Environmental aspects | Social stratification | Wealth | Poverty Classification: LCC HD87 B68 2017 | DDC 339.4—dc23 LC record available at https://lccn.loc.gov/2016030487 ISBN: 978-1-138-81675-6 (hbk) ISBN: 978-1-315-74595-4 (ebk) Typeset in Times New Roman by Swales & Willis, Exeter, Devon, UK To my children Salma Bougrine and Karim Bougrine, with love forever, as you say Contents List of illustrations Acknowledgements xiii xiv Introduction 1 The state, the market and management of class relations Introduction 9 The primitive state and its economic role  11 The neoliberal state and the policies of pauperization  16 Conclusion 26 Democracy in government: the power of policymaking 32 Introduction 32 Democracy in government  33 Economic and social democracy  39 Conclusion 44 Private wealth . . . and public debt 48 Introduction 48 Of assets and liabilities  51 Public policy and the creation of wealth  57 Conclusion 63 Full employment versus scarcity Introduction  67 Austerity and the creation of artificial scarcity  70 The necessity of full employment  73 Conclusion 81 67 140  Industrialization and environmental crisis The establishment of worker owned and managed enterprises powered by green energy – described in Chapter – is perhaps the best embodiment of such a society, which necessarily requires the elimination of economic and social inequalities among all its members However, because we live according to the ideology of the dominant class, we have been taught that it is rational to be selfish We have been conditioned to reject equality in the social realm as unnatural, illusionary and utopian In consequence, we have built a competitive society that does not care about those who cannot survive the competition and end up falling by the wayside As Graeber (2016) put it “Today we are seeing the effects of a relentless war against the very idea of working-class politics or working-class community” and that “Generations of political manipulation have finally turned that sense of solidarity into a scourge” We have developed an economic system whose dynamic requires the exploitation of other humans (as well as animals and nature) and whose ethic accepts and justifies exclusion Those who benefit from such a system obviously hope that it would last for ever The dominant class has a nagging fear about losing its privileged position, so naturally it resists any change (to the social order) that has the potential of eroding its power and domination Ideologues write books to convince us that capitalism and its democracy are the end of history – meaning that this is as best as it can ever get for humanity (see Fukuyama, 1992).16 This is why the reordering of social relations is a slow and arduous process It requires a change in culture and mentality, a change in ideology and strategy But as is often the case, it is only when injustice becomes too intolerable to bear that the necessity of change enters the social psyche In the meanwhile, however, there are important steps that can be taken immediately to reduce the negative impact on the environment Lowering the ecological footprint is a good thing even if the reduction in emissions is marginal The additional benefits of ecologically correct behaviour follow from the increased awareness of the population, which encourages the need for, and development of, alternative green technologies for powering homes, transportation and so on Democracy in government – because it gives more power to the people – is perhaps the most important lever in this transformation process The democratic state that emerges from such a political process (see Chapter 2) shall impose binding restrictions on the emissions of greenhouse gases, use taxation in an intelligent way to phase out polluting industries and encourage harmonious behaviour with nature – thus gradually paving the way towards the ultimate goal of changing the current regime of capitalist accumulation Conclusion In recent years, climate change has become a major concern for scientists, policymakers and ordinary citizens Most environmentalists are willing to forsake economic growth and pursue instead a sustainable development This strategy is consistent with the longer goal of the transition from an economy based on Industrialization and environmental crisis  141 fossil fuels to a green economy However, critics of the current regime of capitalist accumulation argue that changing the source of energy will nothing to solve the pernicious problem of unequal distribution of wealth and income, and therefore advocate the creation of an alternative system based on social and economic justice that can flourish in a harmonious relationship with nature The reasoning behind this proposal is based on the idea that the essence of human existence is simply about the realization of fulfilling lives, which give joy and happiness to individuals who instinctively yearn for a strong sense of belonging to their community and to nature The conservative ideology is trying to undermine the confidence in anything other than capitalism as a way of organizing the economy and society, but a different, better world is certainly possible The transition towards the green economy is an opportunity to work for that change and to make it happen Notes In this context, it must be noted that property rights now extend to outer space The US Congress and Senate have approved the so-called Space Act (H R 2262) in 2015, which was signed into law by the President, allowing US corporations “engaged in commercial recovery of an asteroid resource or a space resource [to] be entitled to any asteroid resource or space resource obtained, including to possess, own, transport, use, and sell it according to applicable law . . .” See details of the Act on the Congress website: www.congress.gov/bill/114th-congress/house-bill/2262, accessed 20 May 2016 There are many controversies involving industrial products and chemicals that are harmful to human health, the well-being of other species and the ecosystems A notorious case is a pesticide produced by Monsanto and licensed for use in Canada in 1969 It was later found to present an unacceptable health risk to humans and was banned in 1985, but Monsanto appealed the decision and brought forth evidence supplied by International Biotest Laboratories, a private firm doing laboratory analysis under contract The decision was reversed and the pesticide was back on the market For more details, see Leiss (1990: 145) The word ‘organic’ is commonly used to mean environmentally friendly products or processes, but that is not necessarily the meaning attached to an ‘organic economy’ In an organic economy, energy is principally derived from plant photosynthesis, which relies on burning a lot of woods – and that may lead to deforestation By contrast, a ‘fossil economy’ draws its energy from the use of fossil fuels by digging them from the underground and the consumption of these fossil fuels, namely coal, oil and natural gas, results in the emissions of carbon dioxide and other gases that are widely believed to be causing climate change (see Malm, 2016) Levasseur (1889: 74) considered steam engines to be (true slaves, the most sober, docile and tireless that one could ever imagine): “de véritables esclaves, les plus sobres, les plus dociles, les plus infatigables que l’imagination puisse rêver”, also quoted in Wrigley (2010: 28) Mokyr (1999: 20) thinks that the steam engine was “conceptually one of the most radical inventions ever made” Climate scientists agree that there has been an unusual climate stability during this period Nordhaus (2013) has made the interesting observation that the rise of our civilization coincides with this climatic stability and that any dramatic change in the climate – such as through global warming – will bring about chaos and instability, which may threaten not only civilization but the flourishing of life and the existence of humanity itself 142  Industrialization and environmental crisis Wrigley (2010: 242) estimates that “The rate of growth in coal consumption varied only slightly over the whole period [1560s–1850s], averaging about 1.3 per cent per annum, which implies a doubling roughly every half-century With organic raw materials, a rate of growth as high as this would very soon cause intolerable pressure upon the land and a sharp rise in price If, for example, wood use were to rise at a similar rate, it would require sixteen times as much land to be devoted to forest after two centuries of growth as had been needed at the start of the period, since a doubling every halfcentury implies this scale of expansion In organic economies growth of this kind is physically impossible” Richter (2014: 20) has summarized this process as follows “Our planet’s average temperature is determined by a balance that is struck between the energy coming from the Sun and the energy radiated back out into space What comes in depends on the temperature of the Sun, and what goes out depends on the Earth’s surface temperature and on what things in the atmosphere block parts of the radiation”, adding that “Over the history of the Earth, the average temperature has varied considerably as the amount of greenhouse gases in the atmosphere has changed and as the output of the Sun has changed Today, the concern about global warming focuses on human activity that causes an increase in some greenhouse gases The logic is simple: greenhouse gases are known to increase the temperature, and if we add more of what increases the temperature, we will increase the temperature more How much more is the question that thousands of scientists are trying to answer” (Richter, 2014: 25–6) The Intergovernmental Panel on Climate Change (IPCC) was set up by the United Nations Environment Programme and the World Meteorological Organization in 1988 and has become the leading international organization providing scientific explanations to climate change and its environmental and socio-economic impacts According to its website, the IPCC counts 195 countries as members and thousands of scientists from around the world contribute to its work: www.ipcc.ch/, accessed 20 March 2016 10 Even though cutting trees and shrubs for fuel is for mere survival, in Africa, for instance, it is one of the serious factors contributing to land degradation and desertification 11 See the World Bank website: http://data.worldbank.org/topic/energy-and-mining, accessed 20 March 2016 12 Wright (2004: 5) talks about many progress traps and invites humans to learn from their past He wrote, “Progress has an internal logic that can lead beyond reason to catastrophe A seductive trail of successes may end in a trap Take weapons, for example Ever since the Chinese invented gunpowder, there has been great progress in the making of bangs: from the firecracker to the cannon, from the petard to the high explosive shell And just when high explosives were reaching a state of perfection, progress found the infinitely bigger bang in the atom But when the bang we can make can blow up our world, we have made rather too much progress” In this regard, it is important to note that Albert Einstein, one of the inventors of the atomic bomb, was strongly opposed to it and to war in general – warning of catastrophe and advocating the destruction of this weapon (see Einstein, 1949: 6–7) 13 Several billionaires started their own initiatives, supposedly green but in fact designed to boost the profitability of their own businesses, see Klein (2014: chapter 7) The latest initiative by Bill Gates dubbed The Breakthrough Energy Coalition includes other billionaires whose mission is to supply the world with “energy that is reliable, affordable and that does not produce carbon” online: www.breakthroughenergycoalition.com/en/ index.html, accessed 20 March 2016 14 For details, see the website of lAgence Franỗaise de Dộveloppement: www.afd.fr/ home/pays/mediterranee-et-moyen-orient/geo/maroc?actuCtnId=89653, accessed 20 March 2016 15 Psychologists have conducted experiments by giving two individuals a fixed amount of money to divide among themselves The rules are such that one person proposes a division and the second can either accept or reject it If the division is accepted, then Industrialization and environmental crisis  143 each individual gets the proposed share If the division is rejected, then the money is taken away from them and no one gets anything As the Mexican adage goes, he who divides and distributes is expected to keep the biggest share for himself, say out of 10, whereas the second person is expected to accept whatever little is given to him, say 1, because it is free and better than nothing However, empirical evidence shows that most people reject such unequal divisions on the principle of fairness: the second person would obviously accept a – division but failing that, most people opt for – rather than – (see Pressman, 2016: 42 and references therein) 16 Wright (2004: 6) noted that “Fukuyama’s naive triumphalism strengthened a belief, mainly on the political right, that those who have not chosen the true way forward should be made to so for their own good – by force, if necessary” This is the philosophy of the neo-cons who use military power to invade countries and systematically destroy their millennia-old civilizations, claiming to help them adopt democratic values (e.g Iraq, Syria, Libya, etc.) References Acemoglu, D., U Akcigit, D Hanley and W Kerr (2016) “Transition to Clean Technology”, Journal of Political Economy, Vol 124, No 1, pp 52–104 Ackerman, F (2008) “Climate Economics in Four Easy Pieces”, Development, Vol 51, pp 325–31 Barnett, S A and H Barnett (1895) Practicable Socialism: Essays on Social Reform, revised 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Wrigley, E A (2010) Energy and the English Industrial Revolution (Cambridge, UK: Cambridge University Press) Zehner, O (ed.) (2012) Green Illusions: The Dirty Secrets of Clean Energy and the Future of Environmentalism (Lincoln, NE: University of Nebraska Press) Index Note: ‘n’ denotes chapter notes; bold denotes tables; italics denote figures Acemoglu, D 106–7, 109, 130 ACWA power international 138–9 Africa 2, 4–5, 27n1, 40–3, 112, 135–6, 138, 142n10; and colonialism 105–6, 109–11, 114, 122n7, 122nn2–4; and neoliberalism 17, 21, 27n8, 28n10; see also specific countries African Development Bank 138 Agence Franỗaise de Dộveloppement, l 138 Age of Exploration 91 agriculture 93, 101n1, 111, 113–14, 121, 128, 133 Algeria 109 Amato, M 118, 120 Americas 5, 101n1, 105, 110; see also United States Amin, S 110, 114 ancient Greece 37–8, 45n4, 71, 89 ancient societies see primitive societies Anthropocene 135, 137 anthropology 9, 11–12, 14 Argentina 73, 110, 112, 116 aristocracies 34, 48 Aristotle 37 Asia 4–5, 28n10, 42, 105, 110–11, 116, 122n7; see also specific countries Asimakopoulos, J 21, 39 Asimakou, T 90 assets 3, 51–7, 53, 57, 64n3 Athenian democracy 37–8, 45n4 atomic bomb 137, 142n12 austerity policies 1, 3, 18, 36, 58, 75, 80, 115; and artificial scarcity 69–73, 76, 81; ‘sound finance’ principle 56, 72, 79, 80–1 Australia 23, 93, 106–9 ‘baby bonuses’ Bacon, F 96 Bair, J 22 Baker, D 99–100 balance of payments 58–60, 115, 115, 118–20, 123n9; capital account 115, 118; current account 115 balance sheet 51–6, 53 bancor (currency) 119, 121 Bandung Conference (1955) 114, 122n7 banking, crisis 43–4, 45n7, 51, 58–9, 79, 115–16, 118 Bank of Canada 55 Bank of England 54 banks: commercial 6, 43–4, 52–7, 53, 57, 61, 64n8, 119; state control of 56, 62–3, 77, 112–13 Barnes, S L 68 Barnett, H 131 Barnett, S A 131 Bartlett, R 41 BAU see business as usual (BAU) Bentham, J 9, 50 Berdyaev, N A 32–3 Bernal, M 105 Bernanke, B S 54 Beveridge, W 82n12 biodiversity 130 Bond, P 27n8, 42 Boniface, P 82n9 Bougrine, H 19, 60, 63 Boulton, M 96, 108 bourgeoisie, values 88–9, 92–4, 96 Brazil 137 Breakthrough Energy Coalition, The 142n13 Brecht, B 44 Index  147 Breton Woods: conference 118; systems 117 Bristow, W 45n1 Britain 20, 41–2; and colonialism 105, 107–10, 122n1, 122n4; and the industrial revolution 105, 107, 129, 131–2; innovation in 87–8, 91–2, 93, 96, 101n1; and international finance 117–18, 122n8; see also United Kingdom Burnham, W D 36 business as usual (BAU), climate change 135–7 Canada 36, 72, 76, 93, 106–11, 141n2; economic policy 55, 58, 59, 61, 63; wealth distribution 23, 23–5, 24, 25 Canadian Income and Expenditures Accounts 58, 59 capitalism 3, 6, 16, 21, 117; and government policy 34, 38–9, 42–4, 49–51, 60, 62–3, 113–14; and the green economy 128, 139–41; and industrialization 130–5, 134; and innovation 88–9, 91, 94–8, 100, 102n3, 102n6, 108; and unemployment 71, 74–81, 82n16 carbon dioxide see greenhouse gases, CO2 carbon tax 130 Carneiro, R L 13–14, 70 Castoriades, C 37 CDOs see collateralized debts obligations (CDOs) CDSs see credit default swaps (CDSs) Central Bank 6, 51–7, 53, 57, 64, 68, 79 Chang, H J 114 chemicals, toxic 128, 141n2 Cheon, B Y 114 ‘Chicago Boys’ (economists) 20–1, 27n9 Chile 17, 20–1, 27n9 China 88–9, 91, 107, 137 Chomsky, N 17, 26, 36 Chossudovsky, M 27n9, 28n10 class, social 1, 3; and austerity 71; and democracy 37, 40, 44, 112; and employment 74–5, 77, 79–80; and energy 139; and the neoliberal state 9, 11, 15–16, 22, 24, 26, 40; and progress 95–6, 102n6 classical economics 18, 43, 82n6 Clearing Union, international 119–20 climate change 129–30, 133–7, 139–40, 141n6, 142n9 Clinton, H 122n6 closed economy 51–4, 53, 56, 58 Clowater, G B 93 Club of Rome 136 coal 129, 132–4, 142n7 collateralized debts obligations (CDOs) 43 collectivism 17 colonialism 72, 91, 108–11, 114, 122n2 colonies, old 4–5, 42, 105–10, 121, 122n7 colonization 106–7, 109, 121, 122n1, 122n6 commodities, ficticious 98–9 communal ownership 40–2, 45n6, 63, 98, 101 communism 45n3 community 9, 17, 70, 77, 141 comparative advantage theory 106 conflict theory 15 Connell, R 27n7 conservatism 22, 67, 69, 79, 94, 141 constraint, technology 6, 107, 111–13, 120, 122 copyright 3, 99 credit 43, 56, 115, 115–16, 119 credit default swaps (CDSs) 44 credit ratings 116 Crutzen, P J 135 currency: international reserve 111, 116–18; national 6, 111, 117–19; unit 117–18 Dalton, G 12, 38–9 Daly, H E 136 D’Arcy, William Knox 43 Davidson, P 74, 76 Deaton, A 40, 74 debit 56, 115, 115 De Brunhoff, S 75 debt 6, 115, 117, 119, 137; household 24, 24–5, 51–4, 53, 60–1; see also deficit decentralization 20 deficit 53, 53–4, 56–61, 64, 64n9; and austerity 69, 72; and full employment 79–80; and international finance 115, 117, 120; see also debt deflation 69, 77, 81; see also inflation deindustrialization 114–16 democracy 12, 37–8, 45n4, 48–9, 106, 111–12, 130 democracy, direct 6, 10, 36–40, 45n4 democracy, economic and social 33–4, 36, 39–45, 49, 63, 112, 139 democracy, representative 3, 32–4, 36–8, 44–5, 49, 70; in government 4, 6, 32–9, 140; inclusive 6, 36, 39, 62, 109, 112 Denmark 23, 23, 77 148  Index deprivation 22, 32, 76 deregulation 79, 114, 116–17 Desai, R 19 developing countries 2, 28n10, 42, 60–1, 71, 137; and international finance 6, 106–7, 111, 115–17, 120–2; progress and innovation in 87–8, 90, 94; see also newly industrialized countries (NICs) development 5–6, 10, 88, 95; and industrialization 105–6, 111–14, 116, 122n7; strategy 6, 111, 113–14, 130 devolution 20 dictatorships 18, 34, 112 direct democracy 6, 10, 36–40, 45n4 displacement of people 82n7, 135 distribution 2, 40, 44, 49–50, 62–4, 114; and employment 76–9, 81, 82n6; and the green economy 136, 138–9, 141, 142n15; and the neoliberal state 24, 24, 25, 26–7; and the primitive state 13–15; and scarcity 67–8, 70–1; see also redistribution Divergence, the Great 88, 91, 101n1, 107–14 division of labour see labour, division of dominant class see elite Donaldson, D 122n5 doublespeak, on full employment 73, 82n12 Dutt, A K 122n1 Enclosure Act (1773) 41–2, 45n6, 98 energy 133, 141; fossil fuels 128–30, 132–9, 134, 141, 141n3, 142n7; organic 129, 132, 137, 141n3, 142n7, 142n10; renewables 138–9 energy revolution 131–2, 137–8 Engels, F 15, 81 Enlightenment 42, 45n1, 89 enterprises: state 61–3, 88–97, 93, 101, 111–12; worker owned 77–8, 101, 140 entrepreneurialism 43, 61–3, 87, 97, 100–1 entrepreneurship 100, 106 environment, crisis 113, 128–30, 133, 135–6, 140; see also climate change; global warming equality 17–18, 33, 40 Eurobarometer survey (1997) 39 Europe 5, 21, 63, 73, 75, 129, 131; and colonialism 72, 105–11, 122n4; and democracy 36, 38–9, 42; innovation in 87, 89–90, 92, 101n1; see also specific countries European Investment Bank 138 European Monetary Union 56 Evers, S 42 exchange rates 117, 119 existentialism 32 externalities 128 extractive institutions 107–8, 110, 116–17 ‘earn-first’ principle 50 Eastern Europe 21 Eccles, M S 55 ecological debt 137 education 99, 112–13 efficiency 96, 99, 106 egalitarian: model 10; society 12–13, 17, 24, 70, 76–7, 139 Egypt 14, 20, 49, 64n2, 105, 112 Ehrlich, P R 4–5 Einstein, A 142n12 elite 1–3, 5, 11, 13–14, 18, 24, 99–100, 110; and austerity policies 70–3, 80–1; and democracy 48, 50, 64n9; and the green economy 139–40; and policymaking 33–8, 40, 43–5, 64n9; see also class, social; power emissions targets 137 employer of first/last resort (EFR/ELR), state as 79 employment 51, 67, 71, 76, 79–80, 82n16; see also full employment; unemployment factory system 96, 131 Fanon, F 33 Fantacci, L 118, 120 fascism 17, 21–2, 64n9, 75, 82n14, 96 Feldstein, M 73–4 Ferguson, T 36 feudalism 41–3 Field, A J 82n13 Fields, D 106 finance, power of 112–13, 115, 115–21 financial institutions see banks, commercial financialization 43, 76 financing, access to international 6, 90, 107, 111, 113, 116–17, 121–2 Finland 23, 23, 25–6, 26 Fordism 96, 131 foreign investment 106–9, 112, 121 foreign sector 58–9, 59 foreign technology 6, 111, 113, 120 fossil economy 6, 130–5, 134, 141n3 Fotopoulos, T 38 Foucault, M 95, 102n2 Index  149 France 23, 24–5, 63, 92, 93, 109 free market: and industrial policy 79, 112; and innovation 92, 94, 97, 102n5; and international finance 117; and the neoliberal state 10, 18–19, 22–3, 60; see also capitalism; market forces free trade 42, 72, 91, 105, 114; imperialism 91, 110 Freire, P 72 Friedman, M 17–21, 27n6, 94 Fukuyama, F 143n16 full employment 6, 44, 57, 69, 121, 139; definition 73, 82n12; necessity of 69, 73–81; strategy 69, 76–9 Fulton, R 90 ‘functional finance’ principle 80–1 Furukawa, R 139 Gaddafi, M 122n6 Galbraith, J K 5, 20, 35, 45n3, 49, 73 gas 129, 132–4 Gates, B 100–1, 142n13 George, H 45n5 Germany 23, 23, 25, 38–9, 63 Ghana 136 gift exchange 12, 27n1, 70, 81n3 Gilens, M 35–6 globalization 6, 60, 110, 113 global warming 129–30, 133, 141n6, 142n8 Godelier, M 16 Godley, W 51–3, 60, 64n3 gold 117–19 Gold Standard 118 government 1, 4, 6, 10, 15, 18, 20–2, 26; capital controls 117–19; electoral system 36; and employment 68–9, 79, 81, 82n16; and the green economy 137, 140; industrial policy 112–15, 121; policymaking 32–9, 43, 58, 61, 69, 82n16, 117; public finance 50–61, 55, 57, 59, 63, 64n9, 121; and scarcity 68–9; spending 6, 54, 56–8, 57, 60–2, 69, 79, 81, 115; see also Central Bank; intervention, of state; state Graeber, D 140 Great Acceleration 134, 135 Great Depression 45n8, 51, 69, 73, 75 Great Divergence 88, 91, 101n1 Great Recession 43–4 Great U-turn, South Korea 114 Greece 5, 20, 36, 73, 75, 115 Green, D A 76 green capitalism 138–9 green economy 6, 128, 130, 135–41 greenhouse gases, CO2 129–30, 133–4, 134, 136–40, 142n8 green technology 61, 94, 97, 140 growth 61, 64; and employment 69, 73, 76, 79, 82n13; and industrialization 106, 111–14, 117, 132; limits to 110, 136–7, 140–1; negative 114, 139; of wealth, fictitious 43, 76, 99 Guérin, D 21–2, 82n14 Haas, J 14–15, 70 Hall, R 90 Hansen, M H 37–9, 45n4 happiness 33, 139, 141; index Harrison, J 92 Hayek, F A 16–19, 27n5 Headrick, D R health care 1, 19–20, 69, 112 Henry, J F 74 Heritage Foundation (think tank) 22 Herman, E S 17 Hirschman, A 39, 108, 121 Holocene 130, 135 Hudson, M 73 Hugo, V 45n2 ICT see information and communication technology (ICT) Ike, D N 40–1 ILO see International Labour Organization (ILO) imbalances, global, in trade and finance 68, 117, 120–1 IMF see International Monetary Fund (IMF) imperialism, free trade 91, 110 income 23, 23–5, 24, 34, 40, 51, 114, 141; and austerity 67–9, 71; and full employment 74–8; and public spending 49, 51, 54, 58–60; see also wages indebtedness, households 24, 24–5, 51–4, 53, 60–1 India 5, 28n10, 42, 122n1, 137 Indian railways 109 indigenous populations 108–10 individualism 16–19, 23 industrialization 6; and the environment 128, 130–5, 134, 137; and international finance 107, 111–16, 121–2, 122n7; role of the state 87, 91 industrial policy 101, 107–14, 121 industrial revolution: and colonialism 105, 107–8; and the energy revolution 150  Index 128–32, 135; role of the state 87–9, 91, 95–7, 101n1, 102n3 inequality 1–2; and democracy 34, 40, 44; and employment 76–7; government policy against 48–9, 62–3, 112–14; and the green economy 136, 139–40; and neoliberalism 23, 23, 26–7 inflation 57, 64, 68–9, 75, 79, 81; see also deflation information and communication technology (ICT) 99 infrastructure 61, 109, 111–12, 115, 121, 131–2 inheritance 3–4, 24 innovation 61–2, 95–101, 108; state, role of 61–3, 88–97, 93, 101, 111–12 institutions 1; and democracy 34, 44; and government policy 60, 63; and the green economy 139; and industrialization 106–9, 111, 114, 131; and international finance 116; and the neoliberal state 9–10, 15, 16–17, 19–22, 26, 28n10 integration theory 15–16 intellectual property rights (IPRs) 3, 87, 90, 92, 97, 99–100, 102n5, 108 inter-bank lending rate 57 interest 116, 120 interest rates 57, 64, 67, 79, 114–15 Intergovernmental Panel on Climate Change (IPCC) 134–5, 137, 142n9 International Clearing Union 119–20 International IDEA Handbook 38 International Labour Organization (ILO) International Monetary Fund (IMF) 17, 21–2, 28n10, 114–18 international monetary system 107, 116–22, 122–3nn7–8 intervention, of state 25–6, 26, 50, 63–4, 69, 79; and industrialization 111, 113, 121, 122n7; and innovation 91–4, 100 investment 59, 59–63, 77, 80, 87, 93; foreign 106–9, 112, 121 IPCC see Intergovernmental Panel on Climate Change (IPCC) IPRs see intellectual property rights (IPRs) Iraq 21, 72, 122n6, 143n16 Ireland 23 Ishida, E H 139 Isocrates 37 Israel 109 Italy 21, 23, 25, 64n9, 92 Japan 23, 23, 93, 105, 111 Jedwab, R 122n4 Jefferson, T 33 Jessop, B 102n5 Johnson, S 107, 109 Jossa, B 78 ‘junk economics’ 73 Kalecki, M 75, 80, 82n16 Katari, R 99 Keen, S 51 Kennedy, J F 74, 81n1 Kenya 122n4 Keynes, J M 43, 45n8, 67, 77, 80, 110, 117–21, 123nn8–9 Keynesian economics 75–6, 80 Keynesianism, military 21 King, M 54 knowledge 88, 90, 92, 102n2, 111, 121–2, 135; commodification of 3, 20, 95–101 Korea see South Korea Krugman, P 35, 68–9 Kula, E 136 Kyoto agreement on climate change (1997) 137 labour, commodification of 98–9 labour, division of 1, 106, 131 labour, slave 101n1, 106, 122n2 labour force 44, 63, 68, 74–6, 78–80, 82n6, 113, 131 Lagarde, C 116–17 laissez-faire model 9–10, 49, 111; see also neoliberal state land 40–2, 45n6, 98–9, 109, 122n2; see also property landlords 43–4, 45n5 Latin America 21, 72 Lavoie, M 51–3, 64n3 Leiss, W 99, 141n2 leisure class 82n5 Lenin, V I 76, 78 Lerner, A P 57, 80–1 Levasseur, E 129, 141n4 liabilities 51–7, 53, 57, 64n3 liberalization 88–9, 92, 95, 114, 117 Liberal Theology movement 71–2 Libya 5, 72, 122n6, 143n16 Link, A N 93–4 Link, J R 93–4 Locke, J 45n1 Longitude Act (1714) 92, 93, 100 low-income workers 3, 25, 69, 82n5, 102n6, 114 low-wage full employment 77 McCloskey, D N 88–90, 109 McCormick, A L 95 Index  151 McDonald, D A 27n8 macroeconomics 51–2, 68, 82n13 Maddison, A 91, 110 Madrick, J 94 Malinowski, B 12 ‘Malthusian problem’ Mandela, N 7n1, 20 Mantoux, P 91, 96, 102n3, 129 Marikana massacre 27n8 market forces 3, 9–11, 19–22, 24, 26, 27n2; and austerity 70, 73; and development 111–13, 121; and environmental issues 128; ficticious commodities 98–9; and government policy 42–3; and unemployment 79, 81n2 Marx, K 15, 43, 71 Marxism 74 MASEN see Moroccan Agency for Solar Energy (MASEN) mass production 95–6, 131 Mazzucato, M 61–3, 94 Mehrling, P 117 Mesoamerica 15, 27n4 Mexico 20, 27n3, 116 microeconomics 21, 68 Microsoft Research 100–1, 142n13 middle classes 49, 69, 102n6, 113–14 minimum wage 27n6, 74; see also social minimum Minsky, H 51 Mirowski, P 18–20 Moggridge, D 118 Mokyr, J 141n5 money: commodification of 98–9; creation 6, 51–7, 53, 57, 64, 68, 79, 81; scarcity of 1, 63, 67–8, 70–3, 81 Monsanto 141n2 Mont Pelerin Society (MPS) 19–20, 22, 27n5 Morgan, L H 2–3, 41, 107–8, 139 Moroccan Agency for Solar Energy (MASEN) 138 Morocco 20, 27n1, 40–1, 138–9 MPS see Mont Pelerin Society (MPS) Myhrvold, N 100–1 Native Americans 41–2 natural disasters 134–5 natural resources 2–3, 42–3, 72, 107, 129–30 nature 134–5, 139, 141 Nature Technology 139 Nazis 21–2, 96 Nell, E J 131 neoclassical economics 57, 67, 94 Neocleous, M 96 neoliberal state 3, 9–11, 15–27, 23, 24, 25, 26, 27nn5–7, 28n10; and democracy 34, 39, 40, 42; and industrialization 114, 116–17; and innovation 100; and public finance 49–50, 56, 60, 63, 70–3, 78 neo-Nazis 28n10 Netherlands 23, 92 net worth 51–3, 53, 57–8, 60 Newcomen, T 90 newly industrialized countries (NICs) 93–4, 111, 137 New Zealand 23, 106–9 NGOs see non-governmental organizations (NGOs) Nicholas, T 93 NICs see newly industrialized countries (NICs) Nigeria 40–1, 122n3 non-governmental organizations (NGOs) 22 Nordhaus, W D 141n6 Nordic countries 23, 23 Norway 23, 23 Nurkse, R 108–9, 121 OA see open access (OA) Obama, B 106, 122n6 OECD see Organization for Economic Cooperation and Development (OECD) Office National de l’Électricité (ONE) 138–9 oil 42–3, 122n3, 129, 132–4, 137 oligarchy 49 open access (OA) 102n5 open economy 58, 58 organic energy 129, 132, 137, 141n3, 142n7, 142n10 Organization for Economic Cooperation and Development (OECD) 1, 4, 23, 25, 61, 76, 113, 136 ‘Original Sin’, international finance 116 Orwell Award 73 outer space, property rights 141n1 ownership 2–3; communal 40–2, 45n6, 63, 98, 101; intellectual property rights 3, 87, 90, 92, 97, 99–100, 102n5, 108; property 2–3, 22, 40–3, 45n5, 106, 108, 128, 141n1; resources 40, 43–4, 62–3 Page, B I 35–6 Palley, T I 61 Parguez, A 22, 52, 57 152  Index Paris agreement on climate change (2015) 137 part-time work 1, 73, 76 patent system 3, 88, 90, 93, 96–100, 108 Pauwels, J 21 payroll taxes 74 Perrotta, C 102n6 Peru 15, 21, 27n4 pharmaceutical companies 94, 99–100 Phelps, E S 49 Phillips curve 68–9 philosophy of science 95 Piketty, T 24 Pinochet, A 17, 21 Plant, R 18 Plato 37 Polanvyi, K 11–13, 18, 23, 33, 45n6, 97–8, 102nn4–5 Polanvyi, M 10, 97, 100, 102n4 Polanyi-Levitt, K 18, 110 policy 1–2, 4–6, 32–5; employment 68–9, 73, 79; industrial 107, 111–13; innovation 94; and international finance 107, 115, 117; neoliberal state 15–26; public finance 53–4, 56–63, 59, 68, 73 Pollard, S 89 Pollin, R 75, 139 pollution, carbon dioxide 129–30, 133–4, 134, 136–40, 142n8 Polynesia 14 Pomeranz, K 101n1 Poor Laws 50 population growth 2, 5; control of 4–5 Portugal 23 Post-Keynesianism 5, 52, 54, 77 Potter, V R 95 poverty 1–6, 7n1, 25–7, 26; developing countries 71–2, 107, 111, 114; and employment 71–2, 80–1; and the environment 133, 135–6, 139; and government policy 32–3; see also scarcity power 1–4; and artificial scarcity 70, 82n5, 82n8; and energy 139; and government policy 6, 34, 36–7, 40, 44–5; and progress 95–7, 99; and the state 9–10, 14–15, 17, 22 Prebisch, R 121 predatory lending 43 ‘priming the pump’, of innovation 93 primitive economies 12, 81n3 primitive societies 2–3, 4–5, 10–13, 33–4, 41, 70, 81n3; and nature 135–7; see also Stone Age primitive state 3, 11–16, 21–2, 26, 71 private sector 50–61, 53, 57, 59, 64, 64n3, 64n9; and employment 77–9; and the green economy 138–9, 141n2, 142n13; and industrial policy 106, 112–13; and innovation 88, 91, 93–4, 97, 99, 101, 138; and the scarcity of money 68 privatization 42, 63, 69, 79, 99, 112, 114–15; and the neoliberal state 19–21, 27n8, 28n10 prizes 92–3, 93, 99; rewards 100 profit 12, 59–60, 64n9, 77–8, 80, 108–9; and the environment 128, 130; and innovation 96, 99 progress 87–8, 95–101, 102n6; traps 110, 137, 142n12 property: intellectual rights (IPRs) 3, 87, 90, 92, 97, 99–100, 102n5, 108; ownership 2–3, 22, 40–3, 45n5, 106, 108, 128, 141n1 prosperity 50–1, 69 protest 22, 34 public sector see government; state Quran 128 Radelet, S 106 railroads 122nn4–5 R&D see Research & Development (R&D) recession 58–60, 79 reciprocity 2, 12–13, 70 redistribution 2, 4, 12–14, 70, 77, 112–13; see also distribution Reinhart, C M 118 religion 71 Renaissance 89 renewable energy 138–9 Research & Development (R&D) 61–2, 92–3, 99–101, 113, 130 resources, natural 2–3, 42–3, 72, 107, 129–30 Rhodes, C 110, 122n2 Rhodesia 109–10, 122n2 Ricardo, D 43, 106 Richter, B 130, 132–4, 142n8 Roberts, P C 35 Robinson, J A 106 Rodrik, D Rogoff, K S 118 Roman Empire 110, 122n6 Rosenberg, A 118 Rowling, J K 82n7 Roy, A 28n10, 42 Russia 105 Index  153 Saber, M 49, 64n2 Sachs, J 21 Sahlins, M D 12, 14 Salvemini, G 64n9 Sand, B M 76 SAPs see structural adjustment programmes (SAPs) Sardoni, C 79 Sartre, J P 32, 45n2 Saul, J S 27n8, 42 savings 59–60 scarcity 1–3, 14, 67–9, 121; artificial 69–73, 76, 81; of money 1, 63, 67–8, 70–3, 81; of resources 21–2 Schneider, G 74, 78 Schuler, K 118 Schumpeter, J 43, 87 science 9, 87–93, 95–6, 101, 111–13, 131, 135 science policy 92–4 Scientific American (journal) 100–1 scientific knowledge 90, 92, 95, 97, 111, 134 Seccareccia, M 18, 61, 63, 77, 79 selfishness 140 Sen, A 45n8 serfdom 41–3 Service, E R 14 service sector 121 Shakespeare, W 110 ‘shock treatment’ 20–1 Skidelsky, R 49 slavery 101n1, 106, 122n2 Smith, A 11, 82n6 Smith, J 16 Smith, L 27n8 Smithin, J 52, 79 Sobel, D 91–2, 93 Social Democrats 76 socialism 20, 22 social minimum, universal access 18–19, 76, 78–9, 82n15 social mobility 49 social programmes 17, 25, 50, 69, 73–4 social security 18, 27n6, 71 solar energy 138–9 ‘sound finance’ principle 56, 72, 79, 80–1 South Africa 14, 20, 27n8, 109 South America 21–2 South Korea 94, 112–14 sovereignty 5–6 Soviet Union 21 Space Act (2015) 141n1 Spain 21, 23, 34, 73, 92, 93 Spencer, R W 92 Spier, F 90 stagnation 75, 101 Star Trek (TV programme) 48, 87 state 6, 14–16, 49, 64n9, 77, 79–80; control of banks 56, 62–3, 77, 112–13; and the green economy 140; industrial policy 107, 111–13, 131; primitive 3, 11–16, 21–2, 26, 33–4, 71; role in innovation 61–3, 88–97, 93, 101, 111–12; see also government; intervention, of state; neoliberal state State Development Banks 56, 62–3, 77 steady-state economy 136 steam engine 90, 96, 108, 128–9, 141nn4–5 Stedman Jones, G 49–50 Steil, B 118 Stiglitz, J E 2, 6, 24, 32, 34–5, 43, 49, 99–100, 112 Stokes, S C 21 Stone Age 90, 107–8 strategy 2; development 6, 111, 113–14, 130; full employment 69, 76–9 stratification 1, structural adjustment programmes (SAPs) 4, 17, 21, 114–15 subprime crisis (2007–2008) 43–4, 45n7, 51, 58 subsidies 20–1, 62, 99, 111–13, 130, 138–9 subsistence economies see primitive societies Sumerians 136–7 surplus 54, 56–61, 115, 120–1 Susman, P 78 sustainable development 5, 7n2, 140–1 Svedberg, P 106 Sweden 23, 23, 75, 77 Switzerland 23, 38–9 Syria 72, 122n6, 143n16 tangible capital 52–3, 53 Tanzi, V 32 tariffs 111–13 taxes, taxation 54, 56–60, 57, 62, 64, 69, 74, 81; and the green economy 130, 140; and international finance 120; and the primitive state 14 Taylorism 96, 131 technology 88–9, 92–7, 99, 101, 105; constraint 6, 107, 111–13, 120, 122; and the green economy 137, 139–40 terms of trade, deterioration 115 154  Index textile industry 122n1 think tanks 19–20, 22 Thurnwald, R 12–14, 81n3 TNCs see transnational corporations (TNCs) Tocqueville, A de 4, 48–9, 64n1 totalitarianism 106 Towers, G 55 trade 59–60, 106–7, 113, 115–17, 119–21, 122n1, 122n7; terms of, deterioration 115 trademarks trade unions 76–7 transnational corporations (TNCs) 42–3 trilemma 6, 117 tripartite alliance 80 Ukraine 28n10 UNCTC see United Nations Center on Transnational Corporations (UNCTC) unemployment 1, 21–2, 33, 50, 67–9, 71, 73–81, 81n1, 82n13, 111; see also full employment UNHCR see United Nations Refugee Agency (UNHCR) United Kingdom 23, 23, 36, 54; see also Britain United Nations (UN) 2, 4, 22, 115, 122n7, 137, 142n9; Sustainable Development Goals 5, 7n2 United Nations Center on Transnational Corporations (UNCTC) 22 United Nations Refugee Agency (UNHCR) 82n7 United States: and democracy 34–6, 41, 49; and employment 73, 76; and industrialization 106–11, 122n5; innovation in 90, 92, 93, 95–6; and international finance 117–18; military invasions 21, 72, 122n6, 143n16; and wealth creation 49, 61, 64n1; wealth distribution 21, 23, 23, 25; see also Americas United States Department of Energy 134, 134 United States Federal Reserve 54–5, 68 United States Treasure and the State Department 28n10 universities 99 UN see United Nations (UN) US dollar 111, 114, 115, 117–18 Veblen, T 82n5 Vernengo, M 106 Vickery, W 82n12 violence 14–15, 28n10, 34, 81n2, 110, 122n1, 122n6, 143n16 voting rights 33–4, 36, 39 Vries, P 91, 106 wages 27n6, 51, 68–9, 71, 73–5, 80, 114; see also income Wallace, H A war 4, 21, 42, 72, 110, 122n6, 142n12, 143n16 Watt, J 90, 96, 108 wealth 1–6, 10, 82nn5–6; creation of 5, 49–51, 54, 57–64, 59, 107, 133, 136; fictitious growth of 43, 76, 99; inheritance 4, 24; see also distribution; money weapons 142n12 welfare 27n6, 81 Welfare State 24, 40, 50, 73, 78–9 White, H D 118 White, S 82n15 WHO see World Health Organization (WHO) wisdom 95 Wolff, R 77 women, sterilization wood, burning 129, 132, 136, 141n3, 142n7, 142n10 worker owned enterprises 77–8, 101, 140 workers, low-income 3, 25, 69, 82n5, 102n6, 114 ‘workfare’ proposal 50 workhouses 50 working class 77, 80, 140 World Bank 2, 4, 17, 21–2, 28n10, 114–15, 118, 122n3, 138–9 World Happiness Report, UN ‘Sustainable Development Solutions Network’ World Health Organization (WHO) World Meteorological Organization 142n9 World Top Income Database 23, 23 World Trade Organization (WTO) 22, 60 Wray, R 45n7 Wright, D 33, 41 Wright, R 90, 101n1, 142n12 Wrigley, E A 101n1, 129, 131–2, 142n7 WTO see World Trade Organization (WTO) Zimbabwe 109–10, 122n2 Zucman, M 24 Zuma, J 27n8 ... Distribution and Environmental Sustainability A Sraffian approach Robin Hahnel 221 The Creation of Wealth and Poverty Means and ways Hassan Bougrine The Creation of Wealth and Poverty Means and Ways. .. ultimately allow them to “command” these ingredients The Creation of Wealth and Poverty is a study of the means and ways by which wealth and poverty are created in both developed and developing... expert monetary theorist, and is therefore well able to suggest plausible means and ways .” John Smithin, York University, Toronto The Creation of Wealth and Poverty There is a failure of governments