Of course there are always articles in the Times that are relevant to comparative politics, but there are two news pieces and an opinion piece that really jumped out at me today. One is on US moves to build an agreement on trade balances, the second is on the Greek economy, and the opinion piece is Krugman's take on the British austerity budget.
The first is piece on a US effort to push negotiations on trade imbalances higher up the agenda of the G20 meeting later next month in South Korea. Its a particularly important issue in that it highlights the efforts to manage to the global economy in a very transnational manner. This potentially points to an increasing crystallization of thinking about globalization. Whereas the critique of globalization, especially on the left, had been along the lines of defending national industrial bases, there is alternatively strong logic to trying extend regulation onto the transnational level. The idea of trying to get a G20 level agreement, even if it is non-binding, on trade imbalances definitely fits into this kind of an agenda.
The second article is much more strictly a comparative politics type of piece. It focuses on the economic situation of Greece and the particular challenges that are being faced by the small business community. This piece, combined with the multimedia feature of austerity programs across Europe are excellent illustrations of the pressures that are being put on the general European population. Meanwhile, on the Opinion page, Krugman's critique of the British austerity budget adds to the overall picture. One thing I think that needs to be kept in mind is the dramatic differences in the economies across Europe, even after integration. The Greek economy is in more of a crisis than some of the others, and it is overloaded with government expenses. My sense of the crisis of social benefits in Greece isn't so much that they are "generous" but that there are not structurally efficient. They are overly complicated, and prone to exploitation. Tax evasion is rampant, licensing fees are high, and professions are overly regulated. At the same time the British economy probably doesn't need these kinds of cuts, but rather needs more stimulus and increased efforts at breathing new life into an economy that is struggling to revive.
Regardless of the details of the pieces, they all point to the intellectual convergence of comparative politics, international relations and international political economy. Understanding European politics and economics means getting a handle on Greek and British politics as well as the larger EU processes. Getting your head around transnational regulations on trade balances also means understanding the structure of German, Japanese and Chinese economies.
Here are links to the three pieces:
Nations Agree to Shrink Global Trade Imbalances
A World Upside Down for Greeks
British Fashion Victims (Krugman's piece)
Any thoughts?
I agree with Krugman's claim that fiscal austerity ought not to be the primary goal of goverments in the face of economic recession. I do agree with his claim that budget cuts in the public sector are actually hurting the economy. In addition, higher levels of unemployment that will result from these cuts in the number of public employees will lead to diminished support for the government in the long run. However, I do not agree with his claim that the Tories are using the budget deficit as an excuse to scale down the welfare state due to some blind committment to conservative ideology. I think that the British voters knew what was to be expected when they elected conservative political representatives. I do not think the Tories lied about policy goals they would pursue once they were elected. It is one thing to assert that what the Tories are doing is hindering British economic recovery. It is quite different to blame the policy decisions on ideology. Ideology is involved in many government policy decisions: even the decision to infuse large amounts of cash into the American economy represents a proactive economic stance on the government's role during a recession. In a way, the decrease in public employees could actually help the economic recovery. By citing previous historical failures as examples, Krugman cannot simply dismiss the potential success that such fiscal austerity could bring. A plan to practice fiscal austerity is in some ways similar to the "laizzez-faire" approach that the Hoover administration chose during the Great Depression. In many ways it is different. The influx of unemployed British citizens released from the public sector will saturate the labor market and drive the price of labor down. This could lead to decreasing unemployment levels due to the lowered cost of labor and perhaps an increase in economic output, thus stimulating economic recovery. Although I do not agree with the conservative regime's policy decisions, we all must agree that the British voters who elected the Tories knew, well in advance, the ideological and pragmatic goals of the Tories.
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