The reality Some, it seems, are without even a paddle. The UK’s Office for National Statistics (ONS) analysed COVID-19 related deaths during the virus’s peak between March and May, and found that, when adjusted for socio-economic factors and geographical location, the risk of death involving COVID-19 was twice as likely for black males than for their white counterparts, and 1.4 times greater for black females than theirs. Those of Bangladeshi, Pakistani, and Indian backgrounds, while not quite as endangered, also fared far worse than white ethnic groups, completing a picture of a distinctly unequal society. Although the US federal structure makes national data harder to compile - race or ethnicity is known for around half of all cases and 90% of deaths - the distribution of suffering falls on similar lines: communities of colour shoulder the greatest burden. The COVID Racial Tracker, a joint initiative of the Antiracist Research & Policy Center and the COVID Tracking Project, attempts to aggregate state data, detailing the extent to which this is true. Among its more shocking findings, it showed that nationally, Black Americans ‘are dying at a rate more than 1.5 times higher than their population share’, and that in four states, that rate was three or more times greater. Similar trends were found in relation to Hispanics and Latinx, who in 42 states make up a much greater share of confirmed cases than their proportion of the population. In eight of those states, it was reported four times greater. Battered by the virus, these communities have also felt the sharpest end of the financial fallout. In the UK, the IFS Deaton Review revealed that Bangladeshi, Pakistani, black African and black Caribbean men are far more likely to have endured loss of income, or redundancy. While in America, one study found that black adults, who already suffered far higher unemployment rates pre-COVID, ‘are twice as likely to have been laid off or furloughed as white adults’. As of June 2020, it calculated that a quarter of black workers had lost their job, a fifth of Latinx, and only a tenth of the white working population. The problem is structural The obvious, yet too infrequently asked, question is why? Why is race and ethnicity playing such a determining role in these nations’ COVID experience? And why is it that these self-professed world leaders, declared in 2019 by the Global Health Index as the two best prepared countries for pandemic response, have allowed an apparently indiscriminate disease to act so discriminatingly? The answer is not found in biology, despite what racist trolls may say. Rather, it has to do with entrenched racism and persistent structural inequality that pervades both societies. Although manifesting in different forms, informed by the countries’ respective histories and cultures, these interwoven forces combine to similar effect, often restricting black and ethnic minorities to poorer socio-economic groups, while depriving them social mobility. As a consequence, they are over-represented in under-served neighbourhoods, overcrowded housing, and are more likely to occupy ‘frontline’ jobs (supermarket workers, care workers, etc.), all of which, research has shown, expose them to more COVID, and make it harder, even when instructed, to socially distance. At the same time, with large numbers also working in the service sector, especially in Britain, their livelihoods have been disproportionately threatened. In addition to greater exposure, racialized poverty can also debilitate the body’s resilience. Adversely influencing the food you eat, air you breathe, and amount of exercise you do (whether for lack of time or green space), it creates the conditions in which comorbidities - such as heart disease, diabetes, or hypertension - thrive. And this has proven critical. Data from the Centre for Disease Control and Prevention (CDC), suggests that COVID-19 is 12 times more likely to kill those with underlying health problems than those without. Failure of government With such egregious racial inequalities exposed, exacerbated and entrenched, one may think it an appropriate time for governments to step in, to fulfil their role as protector-in-chief. Alas, the US and UK administrations have mirrored each other in their failure to acknowledge the racialised structures that lie behind the high death tolls of their BAME communities. Instead, they have opted to blame victims, bemoan bad personal choices, and neglect responsibility. Answering questions as to why so many African Americans had died, US health secretary, Alex Azar, told reporters that black Americans ‘in particular’ have ‘significant underlying diseases’. In doing so, he implicitly individualised responsibility, and revealed his ignorance of the more important question of why that may be. Meanwhile, the UK government’s review of the disproportionate effect COVID-19 has had on minorities, which was much anticipated among health advocacy groups, lacked any recommendations about how minorities could be protected, despite its contents consisting solely of grim statistics showing how vulnerable they are. A continuation It’s instinctive to be shocked by these flagrant injustices. And we should be. But it’s also worth contextualising, and remembering the times we live in. This is an era of Windrush, police brutality, and mass incarceration. One in which Black American men, living in the richest country in the world, have a lower life expectancy than their Palestinian counterparts. With this in mind, the racial injustices of COVID look less like an aberration, and more like a continuation, a predictable outcome of a prejudiced system - it's one we must dismantle. Image Credit: Tverdokhlib on Shutterstock (licensed image - copyright)
Dubbed ‘the great equalizer’ at its outset, COVID-19 has often been described as picking its victims at random. Blind to race, ethnicity, and gender, it sees just a human body, a host that enables it to do what all pathogens are programmed to do: spread. While this, from a biological perspective, may be true, the disease’s sweep of the globe has been anything but equalising. Data from both the US and UK - who along with Brazil compete for the honour of worst pandemic response - show that in terms of cases and deaths, minorities are hugely overrepresented. We may all be weathering the same storm, but as Dr Zubaida Haque has put it, ‘we are not in the same boat’.
Public Economics & Economic Policy (JEL H)
The INOMICS Questionnaire: Fratzscher vs Jackson
Esteemed economist, Stanford Professor, and friend of INOMICS, Matthew O. Jackson, generously took time out of his busy schedule to take part in the third INOMICS Handbook Questionnaire. Opposite him, in his customary role of quizmaster, was Professor Marcel Fratzscher, president of the DIW Berlin, and one of Germany’s leading voices in macroeconomics. Observing tradition, and as a nod to those involved, the encounter has been dubbed ‘Fratzscher v Jackson’. What took place was both in-depth and personal, the conversation ranging from Aristotle and gender bias, all the way to economic blogs and bicycles. For anyone connected to economics, especially those starting out, this one is not to be missed. Download the INOMICS Handbook! Marcel Fratzscher: What is your favourite place on earth? Matthew O. Jackson: My bicycle. I guess that is a trick answer, as it takes me to many places. It brings me out into nature and on many adventures. I see places from a very different perspective. And somehow, it is also great for ruminating and relaxing my mind. MF: Outside of economics, what occupation would you have if you could be absolutely anything? MOJ: I grew up during the Apollo missions and would have given anything to be an astronaut, but my eyesight precluded that path. Putting that aside, if I had to move outside of the social sciences now, I would become a biologist. The 21st century is poised to be the golden era of the biological sciences. Improvements in our ability to gather data and analyze it are very rapidly enabling huge advances in our understanding of everything from how the brain works to how and why genes express themselves. MF: What is the virtue you appreciate the most? MOJ: Empathy. It’s not normally thought of as a virtue, but you look at it as a modern take on Aristotle’s view of friendliness as a virtue. The ability to understand other people’s emotions and needs, and react to them, is one of the most important ingredients in making humans powerful as a social and cooperative species. MF: Your all-time favourite figure in economics? MOJ: Ken Arrow. I am very grateful that I was his colleague. Even in his late eighties and nineties, he was ever curious - asking questions about everything. His curiosity made him a joy to be around. I think that it was also a key driver of the breadth and depth of his contributions: he was always asking ‘why?’ and not limiting his attention to what he thought about. I learned from him that asking questions is like taking pictures: one gets great pictures by taking many of them, only some of which work out (sometimes unexpectedly), rather than waiting for that perfect one to come along. MF: Your # 1 economics blog? MOJ: I am a fan of Our World in Data. They provide consistently interesting and detailed looks at data that illuminate a variety of important topics. I always come away with new knowledge and ideas after visiting their site. MF: Your ideal student? MOJ: A great listener makes a great student; and ‘listener’ is meant broadly. It is someone who pays attention to comments, criticisms, and anything else that bears on their research, and then carefully filters that information and reacts to it. MF: What should be done to address a gender bias in research in economics? MOJ: I will broaden the question to discuss addressing gender and other biases in many areas. One aspect of affirmative action that is under-appreciated is that its effects are not limited to the people directly hired, admitted, or promoted because of the policy. There are numerous network effects that enhance the power of such policies: having more connections gives a group better support, information, and access to opportunities. Moreover, it not only enhances the experiences and productivity of those within the field, but also then helps attract more into the field in the future. Thus, there is a social multiplier associated with increasing a group’s membership in any endeavor. MF: What is the most misguided research agenda in economics? MOJ: I won’t take shots at any particular agenda, but instead will point out a couple of factors that can lead to misguided research. It is easy for research to become literature-driven: people identify new questions by searching for cases not handled by the previous literature, or by some deficiency in prior work, rather than thinking about the fundamental issues that we should really be illuminating. We are also tempted to judge research by how difficult, clever, or unexpected it is, rather than by the new knowledge it generates. I think this is the most common error made in refereeing, and it easily leads researchers and literatures astray and distorts our agendas. MF: What is the most promising current research field or issue in economics? MOJ: Technology is transforming both our economies and our methodology. We see the emergence of the gig and sharing economies, and a whole host of platforms and apps that are drastically changing the way that people connect and communicate with each other. We know little about how these changes are affecting productivity, innovation, and growth. And, simultaneously, these changes - and some of the technology behind them - are generating rich data and tools with which we can study human interaction on a scale not previously possible. MF: Where does economic research have the most influence on policy-making? MOJ: The resurgence of development economics has led to unprecedented input into the design and implementation of many policies, especially on a small scale. Esther Duflo’s paper ‘The Economist as a Plumber’ provides excellent reading on how economists can be best leveraged in improving policies and their implementation. MF: On what issues should policy listen more to economists? MOJ: Financial regulation. Financial markets are full of externalities and moral hazard problems at the same time as economies of scope and scale. This has led to the emergence of a variety of institutions that are too big-to-fail but have inefficient incentives, and yet are implicitly or explicitly insured by governments. Despite the importance of these markets and the lessons we have learned historically, we still sit on a roller coaster when it comes to regulation. MF: What is your career advice to a young economics researcher? MOJ: Ask lots of questions and dive deeply into the ones that intrigue you. Don’t base your research on what you think will get published, or fill a hole in some literature, but rather focus on the issues that grab you. They will take you on a more fulfilling and rewarding journey, and your instincts will generally lead you to questions that will have a bigger impact than if you get too strategic about your research.
Education is complicit Education is one area that could be subject to overhaul. The recent murder in America of George Floyd at the hands of Minnesotan police has sparked demonstrations across the western world, protesting not just police violence, but the system that permits such violence and ensures impunity for its perpetrators. Education, protestors claim (and this writer concurs), is a part of that system, and higher education, in particular, has drawn criticism for its failure to incorporate black and brown histories, focusing instead on white, euro-centric knowledge and methods of knowledge production. These preferences, they further assert, hide the achievements of people of colour, perpetuating hierarchies of colonialism. Ultimately, this omission, and the whitewashing of colonial violence for which it also stands accused, implicates the institution as complicit in the racism that pervades society. As such, if progress is to be made it must be ‘decolonised’. Work underway Of course, work to this end isn’t new. In the last few years, demands to decolonise education, both its curricula and campuses, have cohered into the movements ‘Rhodes Must Fall’, which has called for the removal of statues of the imperialist Cecil Rhodes from campuses, and ‘Why Is My Curriculum White?’, which, as the name suggests, has questioned the primacy of white, European thinkers in university curricula. Both have helped expand conversations about memorialisation in public space and the diversification of education, setting some important precedents. Now, however, as racism is reckoned with on both sides of the Atlantic, movements like these have been galvanised. And the momentum is only growing. <11an>limit:2;categories:jobs|courses|conferences|Professor;disciplines:Health, Education, and Welfare (JEL I)|Politics</11an> What is being asked? Although decolonising education can, and often does, mean different things, it generally refers to an interrogation of the assumptions that form the basis of the canon, and an attempt to broaden our intellectual vision to include a wider range of, in this case non-white perspectives. It questions: who’s in control of knowledge? How did they come to have this role? And what maintains their power? Indeed, in many ways its goal aligns with the professed ethics of academia itself: to enhance both our critical thinking and scepticism. Key is the recognition that colonial assumptions regarding racial hierarchy persist in academic study. SOAS University of London, for instance, an institution embracing its responsibility to modernise, has pointed to the fact that despite no longer referring to countries in the global south as ‘backward’, many theories of development rely on similarly unfavourable assumptions for their modelling - it’s these biases the decolonising process looks to address, and they’re pervasive. It also questions the relationship between the writers of knowledge, their location and identity, and the subject of their work and method of investigation. This sounds commonsensical because it is - it already takes place in many other contexts. For example, as a society we’ve grown instinctively scrutinous of male voices explaining away the female experience, and for good reason. Decolonising education asks for an extension of this same principle with respect to race. Assess the origins of source material and another problem is encountered: reading lists are composed overwhelmingly of white, male authors. This not only marginalises much excellent scholarship produced by scholars of colour, but also introduces, as academic James Muldoon has described, ‘systematic distortion to the material’. Moreover, it creates a phony impression of who constitutes intellectual authority and what works are worthy of our attention. To counter this deficit, decolonisation would diversify the sources engaged with to reflect a greater variety of perspectives . Finally, action is called upon to guarantee a university environment that addresses the attainment gap between people of colour and their white colleagues. With society wracked by structural inequalities, now compounded by COVID, it's imperative for educators to ensure students receive equal opportunity to succeed. This means defining and dealing with the racism that is woven into all aspects of university life. When students of colour report feeling alienated by certain learning materials, or dynamics in the classroom, it must be dealt with through open dialogue between students and educators, and followed by swift action. With surveys consistently showing African American undergraduates as having the lowest satisfaction rates of all students, it appears these pastoral responsibilities are currently being neglected. The pushback Despite its ethical grounding, moves to decolonise higher education have not been without controversy, attracting a sizable backlash. In the UK, for instance, Conservative politician Sam Gyimah warned that we “should be cautious of … phasing out parts of the curriculum that just happen to be unpopular or unfashionable’, his comments coming in response to English students at the University of Cambridge calling for the inclusion of more non-white writers and postcolonial thought in their syllabus. And this is a common response, calls for increased inclusivity misconstrued as moves towards eradication, of scrapping everything. In reality, no one is seeking the abolition of the canon, or the complete elimination of any white male influence from centres of learning. The game is not zero-sum. People simply want their educational systems to better reflect society, to generate more accurate portrayals of our histories, and to accept and rectify the implicit, and at times explicit, biases that as institutions they continue to perpetuate. Alas, even in this revolutionary moment, the barometer of change shows that this battle will be hard won - at the time of writing only a fifth of UK universities have formally committed to reforming their curricula to confront the harmful legacy of colonialism. Nonetheless, there is reason for optimism: pressure continues to build. The Black Lives Matter movement has proven the effectiveness of direct action and the power of mass movements. The toppling of the statue of slaver Edward Colston in Bristol has forced a review of all London street names and landmarks, in a move that will only invigorate protestors. And with higher education now in their sights, universities may be in for the shake up they so desperately need.
History, it feels, is quickening pace. Pandemics, both old and new, are rocking the world, shaking its foundations. Systemic racism, an age-old disease, continues to facilitate violence on black bodies and undermine humanity, while a novel coronavirus has killed hundreds of thousands, disproportionately affected people of colour, and compounded the often racial inequalities that characterise our societies. Protestors now fill the streets, and across much of the anglophone world a tipping point has been reached. What will emerge from this moment is hard to say. A better question may be what do we want to emerge? Either way, there can be little doubt, change is afoot - and it’s been a long time coming.
From University Campus to Remote Education: How Steep is the Learning Curve?
Distance learning is nothing new; it has existed in one form or another ever since people were first able to exchange letters and talk on the telephone. In 1858 the University of London started to offer students the opportunity to study for degrees remotely. With the invention of the record player, radio and television, the possibilities for distance learning expanded but it was not until 1969 that a national government created the first institution of Higher Education to specialise in distance learning, the Open University. With the arrival of home computing and the internet in the mid to late 1990s, online learning began to evolve as a viable means for universities to deliver their degree programmes. Yet despite the increasing ubiquity of the internet in daily life since then, enrolment in online courses has been somewhat muted. As of 2019, only 15% of registered students in the European Union were taking an online course in any subject, versus 10% of all individuals living in the EU (Figure 1). This contrasts with just under half of students who used the internet to access learning materials in 2019 (Figure 2). While the trend in online education was already positive before the coronavirus pandemic, a majority of professors and students in Europe still relied on traditional methods for their teaching and learning. As universities shut down campuses and embraced remote learning in response to the pandemic, existing technologies were quickly harnessed to shift lectures, seminars and assessment online wherever feasible. In principle, from a student perspective, there are many advantages of online learning over the traditional classroom, including increased flexibility in time management and the ability to adjust the pace to suit individual learning. However in practice, the unexpected nature of the switch to online methods has left many students dissatisfied with their instructors’ efforts and this has led to claims for refunds and reductions in tuition fees. Faced with ongoing uncertainty over the forthcoming academic year, some institutions are preparing to extend remote education across the board for the foreseeable future. It is important for institutions to organise this in ways that continue to engage students and facilitate learning. One of the strengths of a traditional on-campus education in many subjects is the ability to have students combine individual preparation for class with working in groups. Mauffette-Leenders et al. (2005) advocate a three-stage learning process in which students 1. prepare a topic individually, 2. form small study groups before 3. the whole class is brought together in a seminar for a fruitful discussion of the topic at hand. There is only so much an individual student can learn by reading alone. Feedback in a small group of fellow students can accelerate learning. Having a variety of such groups with different dynamics subsequently attend class together under the guidance of an instructor then boosts learning further. Figure 3 illustrates this simple three-stage process whereby the student effectively jumps between stages onto a steeper learning curve each time. Economists will recognise the concept of diminishing marginal returns in the graphs as the potential for additional learning at each stage lessens over time. Student learning is thus accelerated and made more efficient through the timely combination of individual and group work. The law of diminishing marginal returns is equally applicable to online learning. It is therefore useful for university administrators and course leaders to consider how learning outcomes may be reached more efficiently through different combinations of individual study formats, contact for students with their peers, as well as larger group formations, when redesigning degree programmes for remote education. Students who learn off campus have more autonomy and would also do well to bear in mind the marginal returns to time invested when structuring their study periods. Within the discipline of economics, much of the evidence on learning outcomes from remote education is based on analyses of general introductory undergraduate courses such as “Principles of Microeconomics” that are taught to some students online and to others in class. Grades of those studying online are often higher than grades of students taught in class. However selection into online variants of courses is rarely random, with students of higher ability being more likely to opt for them. Studies that control for selection bias tend to find either little difference or slightly weaker performance of students who learn online (Allgood et al., 2015). The implication of this is that stronger students who have chosen to study online may have performed better had they attended a traditional class, while weaker students who remain in class may fare worse if they switch to online learning. Government restrictions imposed to stem the coronavirus pandemic have left institutions of Higher Education with little choice but to try and teach remotely. Many lessons will have been learned from this experience. Some aspects of traditional on-campus learning may be irreplaceable, including access to physical facilities such as laboratories as well as the bonds of trust that students build with their peers and their instructors. Once universities regain control over where to locate teaching, they will in all probability move towards hybrid models that combine shorter times on campus with an increased amount of remote, online learning for students. Above all, the learning curves should be optimised and sweet spots sought where the marginal cost of learning equals the marginal value of knowledge gained. References Allgood, S., W. B. Walstad, and J. J. Siegfried (2015) Research on Teaching Economics to Undergraduates, Journal of Economic Literature 53(2), 285–325. Mauffette-Leenders, L. A., J. A. Erskine, and M. R. Leenders (2005) Learning with Cases, 3rd edition, London, ON: Richard Ivey School of Business, University of Western Ontario.
Universities around the world are currently experiencing a crash course in online education. The coronavirus pandemic has shaken the sector in a big way, leaving professors and students struggling to complete the academic year off campus and having to prepare for the next one under very uncertain circumstances. Although online learning has been around for at least two decades, adapting all courses to remote forms of education is proving a steep learning curve for most institutions. Applying a basic economic principle and considering some of the evidence on online versus traditional teaching methods can help to assess the likely effects of recent campus closures on student learning outcomes and to see how course provision and programme design may develop in the longer term.
How COVID-19 Strengthens the Case for a Green New Deal
Securing today, and tomorrow If the earth is to continue sustaining human life there is only one answer, that, to the scientists at least, is clear: a Green New Deal (GND) and the end of extractivist-based growth. Increasing numbers of economists agree, recognising that a holistic, interventionist approach - like the GND represents - is needed to reanimate economies and address inequality and unemployment, which, while pre-dating COVID-19, have been grossly exacerbated by the disease. Indeed, much that the GND promises - a basic income, job guarantee, to say nothing of climate security - has been made more pressing since the pandemic struck. The Green New Deal for Europe, has outlined its implementation as comprising a program of relief, recovery and reform. Relief in the form of a basic income and job guarantee for those out of work or adversely affected by extreme weather events; an economic recovery that swiftly transitions from fossil fuels, invests in green infrastructure, and creates jobs where they are most needed; and reform, like the introduction of a Genuine Progress Indicator, to avoid repeating the mistakes of the past and guarantee humanity’s future. In all, it’s a complete overhaul of the economy, change on a scale we've rarely, if ever, seen outside of wartime. The aims are so sweeping, leaving so little of society untouched, they can be hard to envisage - and perhaps for that reason, that at once it’s both so abstract and expensive, that it’s sometimes struggled to gain traction. Taking advantage of this, its detractors have mocked its ‘bankrupting’ expense and the ‘undue’ faith it places in government intervention. In view of recent events, however, these criticisms are beginning to look weaker. <11an>limit:2;categories:jobs|courses|conferences;countries:France|United Kingdom|Italy|Spain|Switzerland|Denmark|Ireland;disciplines:Agricultural And Environmental Economics (JEL Q)</11an> Changing perceptions ‘It costs too much’ its critics chorus. And with projected costs reaching the trillions, trepidation seems fair: it’s far from cheap. Economic research suggesting it would pay for itself - through increased tax receipts and money saved in disaster mitigation - has done little to calm nerves, and the initial down payment, the headline-grabbing trillion dollar figure, has stuck in people’s minds and undermined its viability. But that was then, pre-COVID. Things have changed. The pandemic and responses it elicited, has altered - possibly radically - how we consider government and its ability, when push comes to shove, to spend astronomical sums of money. For example, in attempting to contain the virus, the UK cities of London and Manchester ended homelessness. To keep the streets clear they provided shelter to all. A stubborn problem that had stumped policy makers suddenly disappeared overnight: the money was found, the problem was gone. Globally, billions more has been spent by governments on bailouts, furlough-schemes, and stimulus packages to prop up economies, making the price of shelter seem like pocket-change. And these outlays, numbers so large they almost lose meaning, are changing our understanding of what government can do, how transformative a force it can be. State intervention is no longer stigmatised, it’s necessary, and what was once branded unrealistic now feels attainable. Economic limitations, often declared the deciding factor in policy making, have been shown to be rather flexible, easily trumped by political will or perceived necessity. When $3 trillion has been committed to save the US economy, are people still expected to believe a GND is too expensive? What use is an economy if the world is on fire? Goodwill emerges If government action in COVID times shows a GND to be possible, the widespread solidarity that has emerged in pandemic’s wake may signal the large number who want it implemented. Like many disasters before it, and in contradiction with received wisdom, COVID-19 has revealed the better side of human beings, the side of cooperation and compassion. Under the huge pressure of social distancing, communities have rediscovered old bonds, organising efficiently online to make sure no one is left behind. In the UK, 400,000 volunteers signed up to assist its overburdened NHS in just over 24 hours. This collective feat suggests more than just a want to help one’s community, neighbours, or relatives, but a belief that everybody is entitled to a certain standard of living. It’s in these new spaces of togetherness that the case for a GND can be couched, and then demanded. It’s tapping into this inclination toward compassion that the transition away from fossil fuels should be sold, and the case made for all that the GND offers: a job for all, fresh air, universal health care, and protection of the vulnerable. It’s by making this connection that progress will be made. From the wreckage Of course, nothing can offset the tragedy of COVID-19, but we should not pass up the chance it’s offering to reconsider our current trajectory - we are unlikely to have many more. With economies yet to fully return, restrictions still in place, and the investment of huge sums now the norm, the opportunity is clear - a new and green path can be plotted. Rarely has the GND enjoyed such support, and never has it seemed so viable. Riding the wave of human togetherness that has emerged, this could be its moment - finally a solution on the scale of the problem, an escape from certain catastrophe. Will we take it?
In the midst of the destruction it’s wrought, the lives and livelihoods it’s taken, and freedom it’s limited, COVID-19 has given us one thing that may yet prove positive - the opportunity to reflect. Under lockdown, we’ve been compelled to consider our pre-COVID lives, the aspects we valued, the parts we endured, and how things could be changed. Separation from reality has renewed our perspective. And it’s come at a convenient time, for a choice hangs in the air. With swathes of the economy on life-support, and recession hitting, we have the opportunity to choose which areas we preserve, and which we let perish. Ultimately, we must decide on which values our future economies are built. As climate catastrophe looms large, the stakes could not be higher.
Agricultural and Environmental Economics (JEL Q)
Our Economies Prioritise Male Interests. They Must Be Changed
Many operate at the highest levels of governance, where economists comprise an integral cog within the policy-making machine. From this lofty position, their male experience, along with that of their political counterparts, permeates the legislative process, and consequently, male interests - intentionally or otherwise - are formally prioritised and coded into the law. For despite claims to the contrary, no economic decision can be gender neutral; the diverging roles men and women play in the economy make it impossible. And herein lies the problem: fair economic policy is predicated on recognition of this fact. Disappointingly, few policymakers seem capable of doing this, and more disturbingly, some actually seem unwilling. As a result, discriminatory economic policy continues to be passed. Whether tax breaks that benefit rich, property-owning men, or public service cuts that encumber single mothers, the pattern of prejudice is clear: when it comes to the economy, women tend to lose. The sexism of austerity Austerity politics, implemented across much of Europe following the Great Recession of 2008, embodied this bias in its most brazen and destructive form. Borrowing from the same phrasebook, governments justified its rolling out using cynically collective language. ‘Everybody must live within their means’, they implored, warning that ‘the pinch would be felt by all’. These attempts to engender a sense of national unity, an all-in-it-together camaraderie, masked the grim reality that women would shoulder most of the financial burden. Irish reduction of child benefits; Portuguese slashing of family allowance; Montenegrin cuts to family assistance - they would do so everywhere. <11an>limit:2;categories:jobs;disciplines:Economic Thought & Methodology (JEL B)|Labor and Demographic Economics (JEL J)</11an> In the UK, where austerity was rigorously imposed, the House of Commons Library found that 86% of the financial burden between 2010-2017 fell on women, and cuts were estimated to have cost them £79bn, compared to a relatively paltry £13bn for men. The distribution was so unequal that a 2018 UN report on poverty described the UK’s austerity-hit welfare system as ‘so sexist it may as well have been compiled by a group of misogynists in a room’, and branded it ‘a disgrace’. And this was no anomaly; Europe is replete which such stories. Spain’s sweeping austerity programme was another that carried a particularly gendered sting. To the sociologist, Inés Campillo Poza, the effects were flagrant: they ‘had a far greater impact on women’ and caused the ‘deepening [of] imbalances already present prior to the crisis.’ Along with the expected cuts, pay freezes and suspensions of investment - which Poza concluded ‘primarily affected women’ - the country also, rather symbolically, closed the Equality Ministry, and slashed the gender equality budget from €43 million in 2008 to €19.741 million 2017. In neighbouring Portugal the government showed similar callousness. A 2018 UN report entitled The Impact of Economic Reforms and Austerity Measures on Women’s Human Rights summarised in depressing detail how Portuguese women were ‘particularly affected by the cumulative effects of crisis, fiscal policy and austerity measures’. Such prejudice it saw as evidence that the government had ‘neither conducted an assessment on the gender equality of such measures, nor developed a strategy to balance inequality’. The damage listed in the report was all encompassing. From reduction of public spending in health and education, and raising of VAT, to the restriction of the Guaranteed Minimum Income scheme, it was primarily institutions and initiatives on which women heavily relied that were the worst cut. Discriminatory changes to taxation then compounded these problems. We care not It’s this reliance on public services - the provision and for employment - that made women so vulnerable to austerity. Indeed, investment in the sector is critical in the fight for gender equality. Its decimation, thus, has been devastating, particularly in the area of social care. On that front, Ireland, Spain, Greece and the UK have been singled out for failing to fund their social care systems, the sacrifice in each instance made on the altar of ‘public spending cutbacks’. By way of context, a study from the Economic and Social Research Institute (ESRI) in 2019 found that a quarter of lone-parents in Ireland reported unmet childcare needs. While in Spain, 22% of families were similarly deprived. That Europe’s population is ageing hasn't helped either. In the UK, analysis by Age UK found that in 2018 1.2m people over 65 were estimated to have had unmet care needs. The damaging effects of these deficits for women have been severe. Not only do they make up 70% of the dwindling social care workforce in Europe, and are both overworked (if still in a job) and underpaid, they’re also, as researcher UN researcher Magdalena Sepúlveda has shown, more likely to require care themselves, which, owing to the cuts, they’re less likely to have access to. Responding to the need, women themselves have assumed much of this responsibility that was once the state’s, giving unpaid and informal care, often at great personal cost. In fact, the increase in unpaid care has been so large a 2016 UN report found a quarter of EU women weren’t working because of additional ‘care and other family responsibilities’, to say nothing of the emotional labour exerted. This development speaks directly to a warning given by the European Women’s Lobby that the ‘shift from public care services to unpaid care work within the household poses a severe threat to gender equality in Europe’, which, if left unchecked, could usher us toward a ‘return to more traditional gender roles’ - risking years of social progress. Backward steps are also being taken in terms of equal pay, where, according to the 2016 study Austerity and Gender Wage Inequality in EU Countries, austerity has put at risk ‘the relatively little progress achieved in Europe so far’. In 2018, across the 27 EU member states, women on average earned 16% less than men. In Germany alone, the Federal Statistics Office found it was 21% less. Besides its obvious injustice, it’s sharpened the gendered impact of countless other issues, like the Europe-wide affordable housing crisis, which has left 1 in 10 EU citizens overburdened with housing costs. A 2018 investigation by the Women’s Budget Group (WBG) found that in the UK, the average cost of rent takes 43% of a woman’s median earnings, while taking just 28% of a man’s. And to varying degrees, this trend is a feature of European life. It means that job loss carries a disproportionately greater financial risk for women, and can force them to remain in employment that’s unfulfilling, unfairly remunerated, or where treatment is bad. Spearheading change Austerity has hyper-charged a bias that has long existed, and in doing so laid bare the egregious extent to which our economies favour men, who set their rules, remain their chief beneficiaries, and suffer least when they flounder. And actually, the job they’re doing isn’t a particularly good one. In much of the West, inequality, not only between genders, but regions and generations, is rampant. Indeed, it feels uncontroversial to say our economic systems are not serving us as they should. The question is: what do we do about it? In an attempt to answer this, it’s useful to remind ourselves of the UN’s declaration that ‘non-discrimination and equality constitute a fundamental aspect of states’ human rights obligations’. As the above has shown, these obligations are currently being flouted - a failure that provides an obvious starting point. States must adopt a human rights framework to audit economic policies, and the differing roles men and women occupy in the economy need recognition. In this light, honoring non-discrimination and equality principles should be immediate obligations when implementing macroeconomic policies - they should be guaranteed, it should be standard practice. How likely this is given the current gender complexion of the discipline remains questionable: as Nobel Laureate Esther Duflo has bemoaned, ‘there are not enough women in the economics profession, period’. That being said, efforts to change things are well underway, the aforementioned WBG think tank, among others, leading the push for the creation of - in its own words - a ‘caring economy that promotes gender equality’. Its analysis is guided by the simple mantra: who stands to benefit? The question is a bold one, and one bound to ruffle feathers. We must all ask it more stridently. For if we fail to do so, and economics remains disproportionately in male hands, hopes of a fairer future will likely be futile. The current custodians have shown they are content presiding over a system that preferences their own interests, seemingly irrespective of the costs. We can't allow this. The economic discrimination against women must end. Enough damage has already been done.
In the collective consciousness, the economist exists as a middle-aged man, bespectacled and clad in a suit, whose unhealthy pallor betrays a hermit-like lifestyle led in the confines of a library. Of course, this image isn’t a particularly fair reflection of the discipline, or its practitioners. Some, for instance, will be aware that in the last few years a number of economists have experimented with contact lenses. Nevertheless, the stereotype remains instructive: the large majority of economists are men, and given the positions they hold, and influence they exert, such homogeneity is a cause for concern.
The Case for Income Tax Reform in the US and UK
Always one of the key issues between left and right, the debate over higher tax rates has again seen some action over the last few years in both the UK and the US. The Labour Party in the United Kingdom proposed in 2017 a 50% tax rate for those earning over £123,000 and a 45% for those earning over £80,000, with the plan that the top 5% of earners pay a little more to fund the country and relieve the burden on the poor. Currently there are four brackets in the UK, including one for personal allowance. From £12,501 to £50,000 you pay 20%, from £50,001 to £150,000 you’ll pay 40%, and anything above that 45%. Their relatively moderate proposals resulted in a barrage of arguments for and against. And the issue blew up in America at the beginning of 2019, too, when Alexandria Ocasio-Cortez suggested that a 70% income tax rate on incomes over $10 million rate might not be too bad an idea. As might be expected, conservative politicians pushed back hard against the idea, Rep. Steve Scalise, for example, tweeting that the Democrats would ‘take away 70% of your income and give it to leftist fantasy programs’. Grover Norquist, head of Americans for Tax Reform, compared it to slavery, tweeting ‘Slavery is when your owner takes 100% of your production... Ocasio-Cortez wants 70%... What is the word for 70% expropriation?’ <11an>limit:2;categories:jobs|courses|conferences;countries:Italy|United Kingdom|United States;disciplines:Financial Economics (JEL G)</11an> On the surface these tweets show either a total misunderstanding, or worse, a deliberate misrepresentation, of how marginal taxation works. Ocasio-Cortez’s proposed tax, for example, would only tax 70% on every dollar a person earns over $10 million, which is not exactly the majority of Americans. And less than four percent of Britons earn over £100,000, meaning very few would be liable for Labour’s proposed tax bracket increase. This is how progressive tax brackets work: you pay more tax only on money earned that falls within the new bracket; any percentage increase doesn’t apply to every dollar or pound you earn. Nonetheless, there is a debate to be had around higher top rates of taxation and, more generally, comprehensive tax reform. Nothing is certain A common argument against a higher top tax bracket is that it won’t mean that the richest will pay more, but that they will retire earlier, figure out ways to keep their income from being taxed, and ultimately end up paying less. (In the 1970s in the UK something similar happened, the tax avoidance industry exploding due to extremely high upper tax rates.) Moreover, experts such as investment adviser Mark Dampier argue that traditional alleviations on tax, such as a decrease in VAT, won’t be felt by the regular person on the street while buying their shopping (whereas it would be felt by a rich person buying a yacht, for example). Instead, a simplification of the tax system and a raising of personal allowances will make much more of a difference to your average Joe Bloggs, in comparison to a redistribution of taxes on the rich which may not make that much money anyway if they can find ways of not paying. Dampier’s criticism was in response to the UK Labour Party’s aforementioned proposed tax rate increase. Since Ocasio-Cortez’s proposal, too, other big names have come out suggesting it’s a bad idea. Bill Gates argued in an interview with the Verge that in America, the highest earners gain their money through selling assets, rather than through their income: ‘the top 400 earners in the US,’ he argued, ‘are only paying something like a 20 percent tax rate.’ This means the higher tax rate won’t affect them as much of their money isn’t earned through their incomes anyway, and those it would affect would simply move their money around so they won’t have to pay. Other arguments have a more political, and less economic, basis. A flat or flatter rate tax system, in which everyone pays the same or more similar rates of tax, is sometimes argued to be fairer for the simple fact that everyone is treated the same. Moreover, some say a lack of differing tax rates encourages the poor to work harder and to earn more money, striving to reach the top. After all, being able to make of yourself anything you wish was what underpinned the Thatcher-Reagan political reforms of the 70s and 80s; it stands to reason, then, that the way they taxed the population would change in line with these policies. On a more basic level, fewer tax brackets also means simplicity in the overly-bureaucratic process of state finance. And yet, taking all of the above into account, history tells us that fewer tax brackets and lower higher rates is the exception, not the rule, and that the policies of the 80s did not make our societies more equitable. In Eisenhower’s day, the top tax bracket was 91%. In the 60s, the top rate dropped to 70%, before Reagan slashed it even further to 50%. The number of tax brackets in the US steadily decreased also, from 33 in 1965 to 7 today. The results of this decrease in both brackets and the top taxation rate (though this of course wasn’t the only cause) were steadily rising inequality, and a higher proportion of wealth being in the hands of the rich, particularly since the mid-80s - something anybody could have predicted. Currently, the richest 0.01% of Americans control around 11% of the country’s wealth, and the top 0.1%’s share of national wealth roughly equates to that of the bottom 90%. This is significantly less equal than in the 60s and 70s, as reported by Vox in 2015. It’s perhaps no surprise, then, that many of the world’s wealthiest and economically equal countries have higher top rates of tax. Denmark and Sweden have top tax rates of around 60% and 56% respectively, two of the most prosperous countries on the planet. (Admittedly, they have a relatively flat taxation system, meaning many people get taxed at such high rates, not just the rich.) Germany has a progressive tax system, with the rate increasing after the personal allowance limit of €9,169 linearly as your income increases up to 42% when you earn €265,327, before jumping three percent to 45% on all income after this. The system also means that a taxable income will never result in lower net income. Other - better - systems exist, and it’s evident some kind of tax reform is critical if we are to make society fairer. But what’s the best way to go about this? Will more tax brackets help? Or is simply a higher top bracket rate necessary? Except death and taxes 70% sounds like a huge increase in the top rate of tax, but some argue it’s not quite enough. A 2012 paper from MIT by Peter Diamond and Emmanuel Saez argued for a top bracket of 73% on incomes over $400,000. The main argument for this was that after a certain amount, an extra dollar doesn’t make a dent in a rich person’s bank account, but for a poorer person, those few bucks could mean the difference between eating or going hungry. The paper’s authors calculated that any tax rates higher than 73% lead to people working less and evading tax. And there’s a social argument for higher taxation, too: many talented people currently move into legal or financial roles, because they can earn more money. However, if taxes were high over a certain rate, these roles would be less appealing, because you’d keep less of that money. Evidently a second part of this would be to make currently lower-paying jobs, such as teachers and academics, more enticing, with higher pay and better benefits - not something necessarily related to tax. (That being said, it isn’t inconceivable that revenue generated from higher top bracket tax rates could be redistributed to make civil servant jobs more financially appealing.) The social benefits of having a bunch of talented bankers and lawyers, especially if the lawyers simply work for the bankers, are incomparably small compared to those of having extremely brilliant teachers and academics. Consider, moreover, when a company decides what it does with its revenue. With high brackets in place, instead of giving those at the top huge incomes and bonuses which simply get taxed away, that money gets sent downwards, invested back into the company, which includes in workers who normally would never see it. And so it was in the 1960s: bosses earned significantly less than today, and more money was invested into businesses at the lower levels, partly because of the influence of unions but also due to higher top tax brackets which meant paying bosses astronomical sums made no sense. As argued in a The Week article by Jeff Spross, when this system began to change in the late 70s - combined with union collapse and increasing unemployment - the US saw money rocket to the top of the chain, and inequality increased massively. Naturally the reasons for economic prosperity are complex, but in the years in both the UK and the US when tax brackets were more numerous and rates of taxation at the top higher, economic growth was greater and continued for longer, and living standards were higher. There are other obvious social reasons for higher taxes, too. Ocasio-Cortez’s suggested tax rates rise was directly related to the Green New Deal, a plan put together by young activists in the Sunrise Movement to combat climate change. It consists of a program of investments into renewable and clean energy, which, it argues, will make the economy environmentally friendlier and simultaneously juster. The money that will go into alleviating climate change isn’t money that will be spent, but rather invested; it’s clear from much research that investment in renewable energy is essential not just for saving the planet but also for helping to keep the economy afloat and fixing inequality. Indeed, without it, there won’t be an economy left. Worryingly though, some, such as Nobel Laureate Peter Diamond, have suggested the 70% suggested by Ocasio-Cortez is too little to fund the Green New Deal, arguing the top bracket must be much higher to raise the funds necessary to save the planet. Taxing reforms An important and yet often ignored part of this debate is that tax reform can’t just consist of raising rates and including more brackets. It must also focus on making the system itself less complicated, less bureaucratic, and less easy to fiddle. It needs to come down hard on tax avoidance, as well as closing loopholes and placing restrictions on the movement of capital to make tax evasion, often in that grey area between morally wrong but legal, more difficult. The common argument that fewer tax brackets equals a simpler and fairer system is disingenuous. Working out which tax bracket one falls into takes very little time and some simple maths. The difficult part is actually working out your income and declaring your tax, at least for self-employed workers or those working in complex systems such as in the US. The solution is surely threefold: simultaneously raise the highest tax bracket rates to increase government revenue, improve the system to make it significantly harder to evade and avoid tax, and increase the amount of tax brackets in order to lessen the leaps between incomes, thus making the progression fairer. These solutions aren’t mutually exclusive; indeed, it’s essential they are implemented in tandem with one another, else reform will fail. Some polls suggest the majority of people in the UK support a higher rate of taxation, showing public opinion is moving away from the received wisdom of neoliberal politics. Unfortunately, as the backlash to Labour’s and Ocasio-Cortez’s suggestions shows, some politicians are unwilling to have a considered debate on the topic, preferring instead to make misleading comments that miss the point and fail to grasp the nature of tax reform. Until they can sit down and discuss this broken system in a reasonable manner, taxes will remain as they are: inadequate and unfair. Image Credit: supawat bursuk on Shutterstock (licensed image - copyright)
Whether someone believes in higher rates of tax or not can tell you a lot about their political views. As a general rule, conservative politicians - at least since the 80s - have favoured fewer tax brackets and relatively lower rates of tax. The argument goes that this encourages people to work harder because they keep more of their money, which means more money remains in the economy; eventually it will trickle down to those not so rich. On the other end of the spectrum, more left-wing politicians argue that higher taxes on top earners are an effective way of raising government revenue for public services which help out those who need support, and that a few more dollars or pounds taken off of someone who earns astronomical sums already is a drop in the ocean.
Macroeconomics and Monetary Economics (JEL E)
It’s not enough However, despite such pledges, the panoply of bailouts, furlough schemes, and loans are failing to reach all those in need. It’s a familiar story: the effects of the crisis are driving a wedge into societies’ already pronounced divisions, entrenching and exacerbating them - they will soon be untenable. In the US, it’s ‘women, particularly women of color, communities of color, and impoverished Americans…[that] are bearing the brunt of the economic downturn’, according to data from Vox. In spite of the largest relief package in history, the so-called ‘left-behind’ are being cut further adrift. Research from the International Labour Organisation (ILO) makes for similarly depressing reading. They have estimated that the ‘lost labour income [as a result of the virus] will result in an increase in relative poverty for informal workers and their families… of almost 52 [percentage] points in high-income countries and 56 points in lower and low-income countries’, confirming the unequal distribution of the economic fallout. Over 2 billion people work informally worldwide and if they, and other vulnerable demographics, are to be protected, more is needed, more invention is due. Without additional support, societies will destabilise, leading to, as Kanni Wignaraja, UN Assistant Secretary-General, has warned, ‘a heightened risk of societal conflict’. Introducing UBI ‘This may be time for a universal basic wage’, contemplated Pope Francis in his Easter Address in April, observing the economic destruction around him. And the Pontiff may be right. No longer fringe, the case for UBI is as strong as it’s been, its popularity soaring. A 2018 poll of 28 European countries showed that 68% of Europeans are in favour of direct no-strings-attached cash payments to citizens. Since coronavirus has cruelly exposed the precarity that underpins so many people’s lives, the harsh hand-to-mouth reality, one would now expect that figure to be even higher. And this really is UBI’s greatest selling point: the stability it ensures, both psychological and material. The guarantee that no matter what happens, be it a change in work, temporary unemployment, divorce, or even a global pandemic, a modest income will always be there to break your fall and provide a baseline of security. Its benefits scale up to societal level too. Crises always risk societal cohesion, and although coronavirus has, in some areas, elicited a collective spirit, the economic downturn will be crushing, and threaten these bonds. As we know, deprivation often leads to accusation, a combustible situation readily exploited by the far right. UBI offers protection from this, and would insulate people against the worst of any economic turbulence, helping neutralise social tension and stem the need for scapegoats. It promises, in the words of its most famous champion, Rutget Bregman, what all people desire: ‘a life of dignity’. Increasing demand More immediately, and crucial to economic recovery, it would address the crisis of demand, felt everywhere. While many economies begin the process of ‘unlockdown’, there are fears that economic behaviour will take some time to return to normal, that a combination of health anxiety, reduced income, and greater inequality will contribute to a sustained decline in aggregate demand. This will compound economic hardship on a microscale that plays out as follows: despite being allowed to open, restaurants won’t fill up, meaning less profits; this will force employers to let workers go, which, in turn, will further reduce demand, as fewer people working means less money being spent in the economy. And the cycle continues. Although UBI cannot directly address health fears, it could disrupt this spiral into deep recession. Economists, Adrien Auclert and Matthew Rognlie, have shown that cash in the hands of the rich tends to be saved, and that greater inequality correlates with lower aggregate demand. UBI, or some kind of income guarantee, would counter this, putting money into the pockets of the people most in need, and on whose spending habits the health of the economy is dependent. Research from the Roosevelt Institute supports this argument, demonstrating that UBI, regardless of whether funded by debt or taxation, is an effective way to grow an economy and expand the labour force. With global GDP set to contract by 3.9% in 2020 according to Fitchratings, it’s perhaps no surprise that UBI is attracting such high-profile advocates. To the naysayers Questions of expense accompany any discussion of UBI, and people are right to query: giving citizens free money sounds expensive. Its expense, though, shouldn’t be considered in isolation and must be contextualised, made relative to the economic resources available to states, which, as the coronavirus has shown, are extensive. When deemed necessary, governments have had no issue bankrolling stimulus packages, furlough schemes and bailouts, running up deficits previously thought untenable. No one batted an eyelid. Why should UBI be any different? Even putting countries’ impressive borrowing capacity to one side, UBI still makes financial sense. US economists have calculated that a negative income tax, which guarantees a level of income just above the poverty line (in effect, a graded basic income, not universal) would only cost the US $336 billion. For perspective that’s just 1% of US GDP or about half the military budget. The same researchers then estimated the cost currently incurred by child poverty - including higher healthcare expenditure, increased crime rates, etc. - which they found was $500 billion. Their conclusion is clear: it costs more to sustain child poverty than to eradicate poverty altogether. Interestingly, they believed their findings were relevant not just to the US, predicting similar data for much of the developed world, adding, finally, that funding could be aided by removing fossil fuel subsidies and tweaking unfair tax systems. Far from a utopian pipe dream, UBI appears to be well within our grasp. The iron is warming On top of UBI’s money-saving (its simplicity would likely save billions on paperwork and bureaucrats) and poverty-alleviating attributes, it’s what it stands for which could be of most value. For UBI honours labour that typically goes unpaid, such as that done by parents and carers, labour that society could not function without, and which for too long has gone underappreciated. With coronavirus forcing a reappraisal of the current social settlement, it could be on the sentiments of gratitude and egalitarianism that the new, post-corona world is built. Implementing UBI would make a fine first step
Necessity is the mother of invention, so the old proverb goes. And with coronavirus spreading through countries, deep economic recession clambering at its coattails, the collective need has rarely been higher. In just four months, almost 300,000 lives have been taken worldwide, and lockdown, in its various forms, is threatening untold livelihoods - as of May 9th, 33 million jobs have been lost in the US alone. True to the saying, some invention has been forthcoming as incumbents have scrambled to protect their citizens and economies. The UK’s Chancellor, Rishi Sunak, for instance, has shown great ideological flexibility, committing to stimulus packages so large they’d make the most ardent of socialists blush. And similar developments can be seen across the world.
Will China Become the World’s Largest Economic Superpower Because of Coronavirus?
China’s bid to become the world’s economic superpower has been a long time coming. Following the economic stagnation and isolationism of Chairman Mao’s leadership fifty years ago, China has developed a sophisticated high-tech economy that is the envy of many in the Western world. A key part of this was a massive infrastructure drive: China owns more high-speed rail than the rest of the world put together, and has the busiest, largest ports and container storages on the planet. Middle-class growth is also tangible with home ownership on the rise, and in recent years, statistics from McKinsey show that Chinese tourists were the world’s highest spenders per single trip. Concerning the virus’ impact on the global economy, what is certainly not lacking from commentary is the price fluctuations of oil, decreased agricultural output, decreasing exports, and unemployment figures. From this, one may well form the opinion that the coronavirus pandemic has also negatively affected China’s prospects of taking pole position in the economic race. In reality we may be on the cusp of a reordering of economic superpowers. Despite China supposedly losing the recent trade wars against the US, the COVID-19 pandemic could be the final big push that catapults the Chinese economy ahead in the world order. Click here to browse our economics job listings Chinese economy recovers ahead of other countries The economic ramifications of lockdown are clear even to the layman. Fiscal packages and bailouts have been the most common ways Western countries have responded to the crisis, while, China’s strict reaction to the pandemic, which has succeeded in controlling the spread of the virus, lies in its ability to firmly curtail people’s freedoms and, as a result, the economy. Its centralised government has a capacity that extends beyond most western democracies, enabling it to act swiftly and enforce measures well. It has capitalised on both. Since March, 33 million people have lost their jobs in America, dwarfing the unemployment fallout the coronavirus has caused in China, which contributes further to China's advantage. This has compounded the economic gains it has made since the turn of the millennium. These gains were achieved because of huge development in infrastructure and foreign investments, for example, The Belt and Road Initiative (a global development strategy adopted by the Chinese government in 2013 involving infrastructure development and investments in nearly 70 countries and international organisations). It is also the largest economy in terms of Purchase Power Parity since 2014, although it still lies behind the USA in GDP, according to World Bank data. What is happening to the Chinese economy as a result of the Coronavirus is not the shrinking of the economy, nor decreased domestic and external demand. Factories and shops are opening ahead of other countries; as a result, China won’t get hit as hard as the United States. But it’s not just that businesses will have to remain shut for longer. It’s also which businesses. The US economy is far more reliant on the service industry - shopping malls, restaurants, hotels etc. - than China’s, and it is this industry that is more affected by social distancing measures. China is further advantaged by the size of its agricultural sector, which is ten times larger of the USA’s and an area of the economy far less hit by social distancing. The pandemic, therefore, will affect the world’s largest economic power far more than its rising star. <11an>limit:2;categories:jobs|courses|conferences|Professor;disciplines:International Economics (JEL F)|Economic Development, Innovation and Growth (JEL O)</11an> Speculation or logical conclusion? Due to the 2008 financial crisis and now the coronavirus pandemic, the primacy of the American economy is being threatened by the rocketing economic expansion of China. As of May this year, the American economy has not spiked to the 24% rate of unemployment seen during the Great Depression of the 1930s, but the figure it is currently at - around 14% as reported by the Guardian - is likely to increase. Less than half of all working age Americans are estimated to earn a wage in May 2020, in an economy, according to the Business Insider, where consumption contributes to nearly 70% of GDP. Compare this with the Chinese unemployment figure of just 5.9%, and it becomes clear that its recovery is several steps ahead. Chinese construction, oil refinement and power plant activity have all begun to normalise, and on top of this, China was already on the way to recovering from the brief trade war with the US which ended in a bilateral trade deal that leaves China in a good position, and could precipitate the US redirecting protectionist policies towards Europe. It is for these reasons that China could very soon take the top spot as the world’s largest economy - not least because of this pandemic.
The ascension of the Chinese economy to global preeminence is not without precedent. China was, after all, one of the largest economies in the world from the Song Dynasty (c.900 CE) until the 19th century’s ‘Great Divergence’, when European industrialisation facilitated the long period of Western economic dominance that generations alive today know all too well.
Economic Development, Innovation and Growth (JEL O)
The Best Books on Environmental Economics
However, the problem is far from solved, and how to balance the economy with climate change policies is a question that still awaits an answer. At the very least, most people currently have a lot of time to read; and what better issue to read about than the most pressing of our time? INOMICS is an Amazon Associate, meaning we are a part of their affiliate program. This article contains affiliate links, which means we may earn money through any qualifying purchases made after you click through. However, this is not a sponsored post. 1. Stephen Smith - Environmental Economics: A Very Short Introduction Another in the excellent bite-size series from Oxford University Press, this edition focuses on giving a brief overview of the field and asking some important questions to get you thinking about the topic. Designed (as the title suggests) as an introduction into the topic, Smith outlines pollution control, environmental damage and its reduction, and global climate change policies, giving some answers as to how governments should balance their economic duties with the responsibility to protect the environment. Including questions like whether the economic costs of controlling environmental damage are viable, whether some environmental damages are necessary and even desired, and how we can assess the impact environmental damage has on humans, this book offers a great (and very short) springboard into the topic of environmental economics. 2. Frank Ackerman and Lisa Heinzerling - Priceless: On Knowing the Price of Everything and the Value of Nothing Can you assign a monetary value to things like the environment and health? Many economists have tried to do this and, while it sounds rather cold and calculated, it’s often how governments decide what’s important to them. The problem is, our moral compasses are often ignored when numbers are the way we try and solve the problems we face. In Priceless, Ackerman and Heinzerling argue that the cost-benefit analysis which defines how many societies are run is hugely detrimental to the environment, and that issues such as climate change and health should be dealt with using democratic, moral values, rather than numbers. That being said, should we avoid all risks, for fear of something bad happening? Some of the analysis in Priceless seems to imply that certain things are simply too risky to take on, and they cause people to be anxious, fearful, and depressed. The book often blames the nameless ‘company’ (much like in the Alien series), and the book has been criticised for encouraging cynicism and an anxious view of progress. Nonetheless, an interesting read which poses some important questions. 3. Tim Jackson - Prosperity Without Growth: Economics for a Finite Planet Economic growth has long been touted as the solution for all problems, as the most important indicator of success in modern society. Recently, though, this idea has been challenged: particularly the Green parties of Europe have argued that endless growth is detrimental to a number of things, not least the environment. In Prosperity Without Growth, Jackson argues that economic growth in developed nations should stop, that growing consumption doesn’t improve the happiness levels of citizens, and, most importantly, that the world’s ecosystems will be destroyed unless we take a different view of progress. Jackson argues that humans can prosper while taking into consideration the limits of a planet which has very obviously finite resources. Current evidence suggests that the level of current economic activity isn’t sustainable, meaning, if we decide our planet is important, it needs to be decreased. A revolutionary read which turns fundamental ideas of economics on their head, and was based on a report Jackson wrote for the Sustainable Development Commission in the UK, which was the most downloaded in 2009. 4. Paul Hawken - The Ecology of Commerce: A Declaration of Sustainability Hawken’s book confronts the conflict between businesses and environmental protection by making the argument that businesspeople need to transform commerce and make it sustainable. His book is premised on the fact that business, as it currently functions, is contributing to our exceeding the limits of what our planet can offer us, and in the process destroying the ecosystems we need to survive. Writing ‘the promise of business is to increase the general well-being of humankind through service’, he contends that the general rule that businesses exist to make money needs to be contested, and that through innovation and creativity, commerce can be reformed to serve the needs of the planet while also serving the needs of its customers. But how? At the forefront of his idea is that businesses must manage their waste more effectively so it all is reused or recycled, and that the energy businesses use must rely solely on solar power and hydrogen. Governments can’t do this, he argues: businesses must take the lead, driven by an incentive shift from commercial gain in the short term to a wider view of ecological sustainability. A very business-centred approach that offers important ideas while perhaps not taking into account the dramatic system change which needs to take place to save the planet. 5. Jonathon Porritt - Capitalism: As If the World Matters The current world is predominantly capitalist, particularly in those states which produce the most greenhouse houses. Even countries like China which have strict socially authoritarian governments have made moves towards a capitalist economy in the last few decades. In Capitalism, Porritt addresses the question of whether this economic system is at all able to deliver the change we need to see to save the environment - can it offer us a sustainable, green future? Porritt believes it has to be able to, even though our and politicians’ faith in the system has been shaken, because it’s the only system we really have. While analysing capitalism and the role of businesses within it, the author also discusses the challenges that face the environmental movement and makes the argument that rather than emphasising the bad things that will happen if we don’t go green, it should be focusing on the (economic) positives of becoming sustainable. Porritt argues capitalism offers the best middle ground for personal well-being, economic growth, and sustainability - and anyway, we don’t have any other choice. A bit of a status-quo read that may ruffle the feathers of those who believe overall system change is the only solution. 6. Naomi Klein - This Changes Everything: Capitalism vs. The Climate In stark opposition to Porritt’s analysis, Klein writes that the status quo is no longer viable and to protect our world, radical change is needed to our economic system. She argues that climate change isn’t just another issue which needs to be dealt with by politicians, but the wake up call we have needed which tells us that our systems are failing both us and the planet. Looking at how solving climate change can help us fix some of the problems that are at the forefront of modern society, such as widening inequality and democracies that only sort-of work, Klein builds a compelling case for why the capitalist market isn’t the solution to our problems and how current environmentalist movements are too defeatist. The climate crisis, while urgent and something we have very limited time to fix, acts also as a ‘gift’ - a way to rebuild our broken relationship with nature and totally change the way we live and interact with one another. A good companion to other, more capitalist-based solutions to the crisis, and one that offers a radical alternative. 7. Charles D. Kolstad - Environmental Economics Looking for a textbook that focuses solely on environmental economics, getting straight to the point? Kolstad’s Environmental Economics does exactly that, assuming knowledge of micro- and macroeconomics from the off. While not offering newer ideas for the study and analysis of the environment in relation to economics like the other books on our list, this work will, however, give you a comprehensive overview of what the field looks like right now. The book is split into four sections, dealing with (respectively): the definition of the field; market failures; the role of government regulation; and the demand for environmental quality. Kolstad takes an international/global approach to environmental economics, acknowledging that the discipline cannot work in isolation within states. That being said, he doesn’t ignore the differences between how countries use this field of economics to deal with (or not deal with) the environmental catastrophe we are facing. Perfect for undergraduate students who want to specialise in this field.
In our current state of isolation, it’s important not to forget about some of the other issues which still beset the human race, not least climate change. Due to the fact that so fewer people are travelling both around the world and domestically each day, the levels of greenhouse gases being emitted are far lower than they have been in recent years.
How COVID-19 Could Change the Role of Government
Countries have implemented ‘war-like’ economic measures, requested ‘war-like’ solidarity, and Emmanuel Macron has even declared France ‘at war’. Its rallying qualities aside, the analogy touches on something salient: wars change the role of government, sometimes, in the case of the post-war consensus, radically. COVID-19 could do the same. Responses to the pandemic have shown that nothing is permanent about the current distribution of resources. To the contrary, things can be overhauled, and fast. Just turn on the news: state power is serially showcased, and it’s changing the way we perceive government. With the extent of its capacity laid bare, what can we expect - or even demand - of the governments of tomorrow? Governments prove their might The remarkable has become the routine. Across the world, legislation previously dismissed as profligate, pie-in-the-sky politics is being rolled out, unopposed, often at record speed. In one preventative measure, the city of London effectively ended rough sleeping by providing hotel rooms for the next 12 weeks to all those in need. When unveiling the initiative, London Mayor, Sadiq Khan, magnanimously explained ‘rough sleepers already face difficult and uncertain lives and I'm determined to do all I can to ensure they, along with all Londoners, are given the best protection possible.’ While the intervention itself is a good one, one may have doubts about Khan’s framing. Where exactly was the ‘best protection’ before? The number of those sleeping on the streets in the capital has quadrupled in the last ten years, and the Office for National Statistics (ONS) reported that in 2019, 726 people died without shelter (a rise on the previous year) in England and Wales, a fifth of them in London. A month ago, the issue was too expensive to solve. Today, the problem doesn’t exist. The resources were found and distributed accordingly. In 12 weeks time, if containment is achieved, will those same resources be withdrawn? A common retort is that these are extraordinary times, requiring extraordinary measures. But with respect to Khan’s intervention, is it all that extraordinary? Finland piloted a similar program before COVID-19 struck, and besides respecting human dignity and fulfilling the universal right to shelter, state figures show it actually saved money, reducing long-term health and policing costs. The only difference was will: the Fins wanted it; Khan’s hand was forced. But whatever the motive, the effects on how government is viewed could be similar. By acting so decisively, it’s seen as an assertive agent of positive change, possibly reframing popular expectations. People may wonder: if it can end homelessness at the drop of a hat, what else can it do? Leopards and spots Across the pond, things are no different, the US government showing even the most recalcitrant leopard can change its spots. Responding to the moribund American economy, congress passed a historic two trillion dollar stimulus, which contained a direct cash transfer. (That a Republican president put his name to a bill containing direct payments to citizens beggars belief). Under the plan, single Americans stand to receive a one-off payment of $1,200, married couples $2,400, and parents $500 for each child under age 17. Republican Senator, Mitt Romney, praised the bill, especially the inclusion of the transfer, explaining that ‘while expansions of paid leave, unemployment insurance, and SNAP benefits are crucial, the check will help fill the gaps for Americans that may not quickly navigate different government options’. His observation is right. Expanding benefits is necessary, and a direct cash transfer will ease both the financial woes and stress caused by bureaucratic backlog. Like Khan, though, the issue is the implication that the need is only recent. In reality, the need for expanded social security is anything but new; just ask America’s 57 million freelancers. Often categorised as employers, a large number lack access to unemployment insurance - a deprivation made more severe by the unpredictable nature of their work. Calls for adequate protections have largely fallen on deaf ears, American orthodoxy favouring market forces over government intervention. That is, of course, until now. On March 27th, in a hastily negotiated package debated for less than two weeks, congress abruptly answered these calls. Under the proviso, freelancers and gig workers are now entitled to half the average unemployment benefit in their state, topped up by an extra $600 per week. But for how long? With almost 80% of all Americans living paycheck to paycheck, will all these protections be withdrawn once COVID-19 passes? Or, having seen the government flex its financial muscles, will people demand their preservation, maybe even their expansion? <11an>limit:2;categories:jobs|courses|conferences|Professor;disciplines:Politics|General Economics (JEL A)</11an> Harness the change. The world needs it Transformative policies are now out of the bag, and the more they affect people’s lives, the harder they may become to wrestle back in. Certainly, the optics involved in returning them will be ugly. Attempting to do so may also be unwise, as large-scale government intervention is likely to provide a useful blueprint - in form, if not content - for future climate action. There are technological obstacles still to overcome. But the climate crisis is ultimately a political problem that will require political solutions. That is an oversimplification. But it is true that state intervention is needed on a scale associated with wartime, and with no precedent in living memory this has often seemed intangible - no longer true in a post-COVID-19 world. Governments have proven their potency, having all but stopped the running of their economies, leaving them waiting, obediently, for the next instruction. Could this control - this decisiveness - survive COVID-19 and be transposed on to the climate crisis? Climate advocates will hope so, and some, like those in the European Commission, have already touted a Green Deal as the framework for an economic recovery, asking when, ever, has there been a better time for energy transition? An uncertain future The reaction to COVID-19 is evidence that the future course can be changed - it’s neither inevitable nor pre-determined. Plotting it, though, will be fraught, requiring a delicate balance between authoritarianism - a path down which some countries look likely to travel - and government control. With each passing day we see further glimpses of what’s possible, intervention demonstrating that extreme inequality, homelessness, indeed, much of what blights society, is the result of political prioritisation that can be reversed. It's a lesson of critical importance and one we forget at our peril. Header Image Credit: Paolo Bona on Shutterstock (licensed image - copyright)
As COVID-19 has spread globally, access to the outside world has shrunk, made increasingly off-limits by government lock-down, observable now only through glass. Our digital lives have expanded to fill the void, evenings previously spent with friends now passed plugged into laptops, obsessing over the latest figures, bailouts and newly-imposed restrictions - time blurs. Amid the chorus of leaders justifying ever more draconian measures, one thing has been hard to miss: the invocations of war.
But are we too generous with our trust? Recent developments in places as far-flung as Hungary and the Philippines remind us that there’s a second history, running parallel to improving approval ratings, of governments using crises to enhance and consolidate their power. It’s a darker history, and one we would do well learning from. Alas, there are concerning signs it’s set to repeat itself. Tailored to tyrants In many ways, the current moment is primed for exploitation. If health systems are to withstand COVID-19, it’s essential that strict restrictions are placed on public life, civil liberties reduced, and, to enforce it all, state power extended. In concert, this is music to the authoritarian’s ear; a description of an idealised society. It's a world in which power-grabs can be carried out publicly, legitimised by rousing cries of unity, and all anxious voices comforted by the knowledge that everything is in the ‘national interest’. It's, above all, an opportunity. Indeed, short of war, no other emergency comes close to matching the ubiquity of COVID-19’s fallout. Consider, for example, terrorism. Terrorist attacks can scar populations and cause great economic damage, but in scale, they pale in comparison. They tend only to hit a contained area which limits the economic impact, and, despite being designed to scare, the panic created is also less widespread. A pandemic, on the other hand, knows no boundaries, equalising the terror and economic damage it wreaks, the village dweller suffering in similar ways to the city-based socialite. And this is key: while fearing for health or financial well-being, people are at their most compliant, their most likely to surrender their freedom. What further sets COVID-19 apart is that the consensus response is to stay indoors. In other emergencies - during war, after a natural disaster, or following a terrorist attack - agency can be claimed by citizens, armies can be joined, humanitarian aid contributed, or marches defiantly attended. In stark contrast, under lock-down people are, by-and-large, left impotent, reliant on their leaders. Apart from online, there’s no means to congregate in protest, a Twitter storm the most threatening collective act. Few would say it packs the same punch. They've wasted little time Nowhere in Europe has this situation been more obviously seized than in Hungary, where an already strong governing hand looks now to have an unassailable grip. In response to the crisis, Prime Minister, Victor Orban, has passed legislation that has prorogued the legislature, permitting him to rule by decree, and suspended all elections and referenda. Most alarmingly, no sunset clause has been set. To say that Hungary is now a dictatorship is no exaggeration; it’s analytically accurate. With the last window dressings on his ‘illiberal’ democracy gone, Orban is now a dictator in the European Union. He can unilaterally change any existing Hungarian law and imprison people for spreading ‘false’ information, a phrase terrifyingly, and intentionally, vague, lending it a versatility that could easily be turned on political opposition. This is threatening a beleaguered EU already struggling to cope with COVID-19. For in truth, it has few options. Many point to Article 7, which if invoked would suspend Hungary’s EU membership. But for this to pass unanimity among the EU27 is required, and as has happened in the past, Poland will likely veto any moves against Hungary, leaving an impasse. There’s logic behind Poland’s support, too. Polish President, Andrzej Duda, is also looking to benefit from the current situation. Having hollowed out much of Polish democracy, the ruling party is now refusing to cancel the early May presidential election. With the country under lock-down, opposition parties are unable to effectively campaign, and one of the only remaining channels left in which to do so, television, is monopolised by Duda. There could also be a further motivation: polling shows that higher turnout would threaten Duda’s chances of victory. Insisting that it goes ahead in a moment that would significantly decrease turnout looks very much in his political interest. But these trends are far from exclusive to Europe. In Israel, disgraced Premier, Benjamin Netanyahu, has also spied an opportunity. Currently facing a range of criminal charges that include breach of trust, accepting bribes and fraud, he’s used the pandemic as a pretext to close the courts - postponing his own trial in the process - and suspend the Israeli Parliament, allowing him to lead without oversight. Prior to the crisis, his political career looked all but over; no longer. Turkmenistan, which still implausibly claims yet to have contracted one case, has banned the use of the word ‘coronavirus’. Its utterance now carries with it a hefty fine. In the Philippines, President, Rodrigo Duterte, much like Orban, has outlawed the distribution of ‘false’ information, his violent past making the vagaries around what constitutes ‘false’ incredibly worrying. And just this week, Hong Kong has been accused of using the crisis as cover to arrest pro-democracy candidates ahead of elections in September. The trend, like the virus, is dangerously pervasive. Post-COVID-19 Although difficult to imagine, doors will eventually reopen, and we will be freed from our current imprisonment. The question is: what kind of world will we find? It will be a different world, no doubt, one wracked by suffering, recession, and impoverishment; that, at least, seems assured. But what of freedom? Once the disease is contained will seized power be relinquished? Or will clenched fists remain clamped shut? These questions are not just for Hungarians, Israelis, and Filipinos, either. Time and again, history has shown how reluctant leaders, even of democracies, can be to lift a ‘state of emergency’ and return the powers they grant. France lived under such a state for two years between 2015-17, with many complaining of the undue power it afforded the government. As things return to normal, citizens must, wherever possible, hold their representatives to account. They have to be vigilant. The virus has already taken too many lives, we must do our utmost to ensure that it does not take our freedom too.
As the world is ravaged by COVID-19, governments everywhere are enjoying burgeoning support. A glance at approval ratings finds presidents, prime ministers, even autocrats, overwhelmingly popular, in some instances irrespective of their actual performance. Of course, this is unsurprising: there’s long been a history of populations coalescing around established leaders in times of crisis. Amid uncertainty, we find their increased visibility reassuring. Speaking to the nation they look competent and confident; we feel inclined to trust them, and more often than not, we do.
INOMICS is a member of the Amazon Associates affiliate program and the Apple affiliate program. This article contains affiliate links, which means we may earn money through any qualifying purchases made after you click through. However, this is not a sponsored post. Business Simulators 1. Capitalism This classic business simulation game and its well-reviewed sequel Capitalism II allow you to live out your wildest dream: running the most successful business in the world. As CEO, you’ll have to avoid bankruptcy, fight off competition, and make sure you don’t get bought out. But don’t expect this journey to be easy - Capitalism has been ranked as one of the most difficult games ever. While the game’s beginning is not the most realistic for most of us - you can start your journey with capital of two hundred million dollars if you want - it offers an insight into how one could start a new company, providing semi-real simulations of markets and the cutthroat world of business. At the game’s outset, you can either start totally from scratch or "inherit" a business such as an agricultural company. Typically, your goal will be to dominate a certain percentage of market share within a certain time period. An expansion named Capitalism Plus released in 1996, introduced random events such as riots and technological breakthroughs, making the already-complicated game even more difficult to play. So have fun failing at your first business - thankfully, at no risk whatsoever. 2. Virtonomics Virtonomics an economics video game that is used in schools and on university campuses to help students learn the ins and outs of business markets. Both entertaining and educational, this massively multiplayer online game is similar to Capitalism in that it simulates the processes of building a business in a competitive environment. With totally open-ended gameplay and the ability to play forever if you want to (though we don’t necessarily recommend that), the turn-based game allows players to compete against not only other players but also the computer. Further, you can pick whichever market you’d like: agriculture, retail, marketing, you name it. What better way to spend your time playing a game than improving your business acumen and learning something about economics at the same time? City Builders 3. Pharaoh The sequel to Sierra’s lauded Caesar, this game was a huge success, adding new features to Impressions Games’ intricate city-building interface. Here you take control of ancient Egyptian societies, attempting to keep your citizens happy while producing enough raw materials to trade and improve the conditions of your workers. Military battles are fought in real-time with the choice between archers, soldiers, and naval vessels, and many missions require the building of monuments including the fabled pyramid. Economists will be especially intrigued by the monetary system, which is pretty tough. You’re allowed to go into debt in order to build your city, but each year you remain in debt lowers your Kingdom Standing. If this rating becomes too low, the Pharaoh will send his troops to obliterate all of your hard work. Money can be made on certain levels by mining gold deposits, but these are often located on unfavorable terrain; if your city isn’t lucky enough to have these, you’ll have to create goods like beer and pottery, open up trade routes, and pray that droughts and floods don’t hinder your ability to sell your wares. Best of luck! 4. Cities: Skylines One of the most successful city building games ever, released to compete with SimCity (which bombed, leaving space for this game), Cities: Skylines introduced an intricate but simultaneously easy-to-understand concept of how to build a large city from just a small plot of land. You’ll start off with a small budget and a tiny plot, and have to expand into a village, a town, and a city. Your ultimate aim: create a metropolis the size of New York City. As you work your way through the game, you’ll unlock new buildings and features, as well as the ability to designate parts of the city as districts. Along the way you’ll have to invite workers and provide them with jobs, which then will give you revenue, with which you can improve the city, and so forth. The city eventually becomes very complex, with transport links operating from one end to the other, different road types to reduce noise pollution, the ability to force certain districts to only offer one kind of industry, and much more. Using your economic expertise (as well as architectural and design skills) you’ll be able to manage your city's finances, infrastructure, and economic planning, until your city runs like a well-oiled machine. Theme Park Managers 5. Theme Park World Following the success of Theme Park, Theme Park World lets you build your own - well - theme park. The player takes control of a relatively simple business model: expand the park, research new attractions, remain profitable, and win keys which open up new levels and rides. You’ll also have to hire staff to maintain the parks, including cleaners, mechanics, entertainers, and guards. All of these employees are important to keep visitors happy, prevent thefts and other crime, keep the park clean, and make sure none of the rides break down. Once you’ve made enough money, you can start to upgrade your rides and train your staff, making the latter more efficient, and the former more fun! Once you’ve done all that, and your coasters pay for themselves, use the in-game currency of Golden Tickets to jump down into first-person mode and walk around your own park, even going on some of the rides you’ve created yourself. 6. Roller Coaster Tycoon A PC classic, Roller Coaster Tycoon puts you in the shoes of a theme park designer tasked with saving a series of increasingly hopeless theme park businesses. Each level gives you a new park in a new area, a set of objectives for how to save the dying business, and a pat on the back, leaving you to figure out how best to save the business on your own. In order to succeed, you’ll have to manage the happiness of your guests, find out which rides suit their tastes the most, adjust ticket and concession prices, hire staff to maintain your properties, spend money transforming the landscape, place food stalls and rides in the best possible locations to encourage spending, balance your monthly budget, and more. Become profitable by each scenario’s deadline, and you’ll have succeeded in saving the park! Of course, there’s also a sandbox mode which lets you build your own park from scratch with no time limits or pressure, so it can be quite relaxing and fun to build your own dream park. While the game linked here is the original, the success of Roller Coaster Tycoon spawned many sequels and spin-offs in similar ventures, like Zoo Tycoon. Society-building Strategy Games 7. Civilization VI One of the most famous and widely loved strategy series of all time, Civ (as it’s commonly known) allows you to choose a historical leader, create a civilization and control it all the way from an early settlement to a highly developed, industrialized world power. Whether you choose to dominate the world through military might, technological or cultural superiority, or diplomatic acumen is up to you. While there’s a mode to play against the computer, you can also play against your mates, making it a fun, turn-based competitive game as well. Civ features multiple strategic layers to consider, such as militarism, scientific research, and politics, which creates complex and long-ended gameplay. You’ll have to deploy your economics knowledge to make sure your raw materials are used correctly, your neighbors are happy and will trade with you (or avoid declaring war on you), and you’re able to continue making improvements to your cities. Newer installments, such as 2016's Civilization VI and its expansion pack Gathering Storm from 2019, include features such as the introduction of natural disasters, as well as new leaders and civilizations to control. So head in, pick your civilization, and take over the world. Miscellaneous 8. Animal Crossing: New Horizon Perhaps not the first game you think of when it comes to economics, but the latest installment of the Animal Crossing series for the Nintendo Switch, New Horizons, is special for its in-game currency of Nook Miles and the ability to craft tools, pay off your home loan debt, and furniture. The basic concept of the game is that you purchase an island on which you create a community of anthropomorphic animals. You collect items and materials which you can craft into decorations and tools, and slowly build up the infrastructure of your little slice of the world to attract more denizens and build your own paradise. The latest installment allows multiple people to play together or simply visit each other’s islands, and includes new weather conditions, as well as seasons which adjust to which hemisphere the player is in. Part of a beloved series, the game has received overwhelmingly good reviews. So get to your island and start figuring out how you’re going to make enough money to craft those decorations! 9. Real-Time Strategy Classics While not for the faint of heart, real-time strategy (RTS) games are an interesting choice from an economic standpoint. In these types of games, players compete against the computer or each other to build a functioning wartime economy while doing battle. Economic growth and efficient allocation of resources are absolutely critical for success in an RTS. For example, in the sci-fi Starcraft II, players must balance two resources - minerals, which are widely available and easily mined, and gas, which is rarer and takes a longer time to mine. Minerals are used to build most structures and economic workers for your bases, which increase your income and allow you to grow your economy quickly. But, to research important upgrades and build advanced military units, gas is needed. Even in this simple framework, the best players are set apart by mastering the balance of how many workers to build while having enough military units to defend, how to allocate workers to each resource, and optimizing when to switch workers around among resources. Other popular RTS games, like the historically-inspired Age of Empires IV, include even more resources to manage: wood, gold, stone, and food. For even more complexity check out the fantasy setting of Warcraft III, which famously includes ongoing upkeep costs for your military, throwing even more consideration into a fast-paced game. 10. Kerbal Space Program Have you ever wanted to manage the funding, research and development, and general management of a space program? Are you willing to take responsibility for the lives of cute, enthusiastic alien astronauts (the titular Kerbals)? Look no further - Kerbal Space Program (KSP) is the game for you. KSP’s Career Mode is the biggest draw here for an economist. You must complete contracts to generate funds so that you can grow your space program, but funding isn’t the only resource to manage. Reputation increases the amount of contracts your program attracts, and the size of the rewards that come your way, allowing your program to grow more efficiently. “Science” points, meanwhile, increase your selection of rocket parts. Since you’re not only the program manager, but also the designer of all of your program’s spaceships, you’ll need plenty of science to ensure you have enough realistic parts (using physical statistics based on real life space programs and real physics to determine if your rockets succeed or explode catastrophically) to complete your missions. With all of these choices, we hope you find a video game with economics themes that scratches your gaming itch.
So you’ve decided it’s time to take a break from all the hard studying you’re doing during your economics Master’s or PhD program. Why not spend time playing a video game which will help you accrue business acumen, improve your real-world economics knowledge, or reflect economics concepts in its gameplay? Sound too good to be true? Thankfully, there are some games which offer just that.
Whether America will see a wealth tax in the foreseeable future is moot - certainly, vested interests will leave no stone unturned in its attempt to thwart it. Nevertheless, it’s now part of the conversation, and its growing popularity among the public suggests it’s here to stay. But why now? How do we explain the ‘resurgence of interest in tax policy research’ that wealth taxation proposals have helped spark, and the American Economic Association (AEA) has so excitedly observed? Gaining popularity In many ways, its popularisation is surprising in how slow it’s been, for extreme wealth inequality, which it explicitly targets, has long been a sad fact of American life - and current trends offer little reason for future optimism. Over a decade ago, President Obama described it as ‘the defining challenge of our time’, hoping, implicitly, that his tackling of it would become his defining success. Despite these aspirations his administration did little to affect the underlying economic factors that contributed to its spread. That’s not to say no progress was made; it's rather to recognise that tweaking income tax rates and gently increasing tax subsidies for low-wage workers, while praiseworthy, were insufficient to reverse the effects of decades of regressive tax policies and deregulation. Consider: between 1995 and 2016 the net worth of the top one percent almost tripled, the middle class’s barely budged, and the bottom ten percent - those most vulnerable - saw theirs shrink. Clearly, the social mobility that Americans hold so dear, and upon which their collective sense of self rests, has ground to a halt - and conservative adjustments to taxation have failed to reanimate it. Wealth taxation presents a bolder approach; it's found appeal for that reason. <11an>limit:2;categories:jobs|courses|programs;disciplines:Financial Economics (JEL G)|Public Economics & Economic Policy (JEL H)</11an> Its champions Building on the work of Thomas Piketty, who catapulted the idea of wealth taxation into the mainstream, fellow French economists, Gabriel Zucman and Emmanuel Saez, have become its most public advocates. The pair came to prominence with the publication of their 2018 book, The Triumph for Injustice, which disputed the accuracy of previous estimates of inequality, claiming they had underplayed its existence. By their estimates, the top tenth of one percent of Americans (fewer than 250,000 adults) held 19.3 percent of all wealth in 2018. Their conclusion, like Piketty’s, was that wealth has to be taxed. The book sent shockwaves through policy circles, galvanising the left. Its key messages were assimilated into the tax reforms of both Warren and Sanders, the senators claiming their respective wealth taxes would earn $3.75 and $5.35 trillion over the next decade. What the critics say In a society so fiercely individualistic and inherently sceptical of government intervention, such proposals have predictably come up against staunch opposition. Of the criticisms levelled, there are a number that reappear, around which rebuttals tend to coalesce. The most popular of these is that it’s been tried before, and it failed. Critics like to recall that in 1990, twelve members of the Organisation for Economic Cooperation and Development (OECD) had wealth taxes, and now only three remain - both Germany and Sweden among those that rejected it. If, as Larry Summers contends, ‘the most egalitarian European societies’ can’t make it work, what chance do the Americans? Browse our job listings for economics opportunities In defence Ignoring that in most instances the tax was removed by conservative incumbents, this interpretation is still superficial. For one, Europe, unlike America, allows for tax competition, meaning a rich, tax-averse business person in Paris, need only cross the border to Belgium to avoid the grasping French taxman. This was a huge problem - while in operation the rich had little issue resettling, and EU member states have never taxed their nationals living abroad. America would not face this problem, as US tax responsibilities aren’t so easily escaped - certainly, moving to Canada would offer no refuge. For unlike any other nation, Americans remain answerable to their revenue service, the IRS, wherever they live, and only become exempt if they renounce their citizenship. As a disincentive to do so, under both Warren and Sanders’ proposals renunciation would accrue an exit tax of 40 percent on net worth. Enforcement for the US would be less of a problem, too. The Europeans have tolerated a high-level of tax evasion as leaks like the Panama Papers have shown, and were never able - or willing - to legislate meaningfully against it. In contrast, America has been far more assertive. The Foreign Account Tax Compliance Act, for instance, demands all foreign financial institutions send detailed information to the IRS about the accounts of Americans each year, or face sanctions. Almost all cooperate, and tax is duly collected. The European failure also owed much to the number of exemptions and deductions that were added, which eventually rendered it non-functional. Each year, as pressure applied by the rich grew, items that had previously ‘contributed to wealth’ were struck off. Paintings were exempted, main homes received reductions, etc. In large part, this was because the tax began at around one million euros, meaning many had to pay it, which led to a greater level of pushback, and eventually a longer list of exemptions. America need not fall into this trap. Warren and Sanders’ proposals show that to be lucrative, it’s only necessary to target the super rich, the 0.01%. This demarcation would help maximise support and minimise opposition. Is it workable? Is it worth it? Outside of comparisons with Europe, many question the policy’s basic workability. How, for instance, is taxable wealth calculated? With money wrapped up in art and real estate, tracking and then calculating wealth would be a difficult and time consuming task, likely involving thousands of civil servants. It overlooks, however, the form that the wealth of the super-rich increasingly takes: stocks in publicly traded corporations which often they themselves have founded. Amazon founder, Jeff Bezos, for example, has an annual salary that earns him a reported $81,840, while his net worth stands at $156 billion. His wealth derives largely from his stocks in Amazon. Taxing these untapped financial assets would raise billions, and relieve some of the pressure, financial or otherwise, in locating and valuing art, real estate, or whatever form wealth takes. And if a few Monets are left slightly undertaxed, so be it. Now’s the time Others remain unconvinced that the concentrations of wealth claimed by the likes of Piketty, Zucman, and Saez even exist. Which itself raises an interesting point. The best way to ascertain whether a wealth tax is necessary is to impose a wealth tax, as it’s the best possible source of wealth data. If the wealth is there, in the quantities and concentration believed, it will be taxed, hugely increasing government revenue. Free childcare, tuition, and healthcare, policies that hit at the heart of inequality, would suddenly become feasible goals. Society could be transformed. If it’s not there, the tax can be repealed - but at least we would know. With support among the public growing, crossing party lines, is this not reason enough?
The emergence of Joe Biden as the unassailable front-runner in the Democratic Primary belies a contest that at various turns broke new ground. From its unprecedented field, larger and more representative than ever (save the brief participation of two billionaires), to the remarkable resuscitation of one moribund campaign, the departure from custom was clear. Nowhere was this more obvious than in policy, where the inclusion of senators, Elizabeth Warren and Bernie Sanders, dragged the conversation leftwards into distinctly uncharted territory. While all candidates acknowledged America’s extreme inequality and the need for better healthcare, social security, etc., divergence came in the prescribed means of redistribution, and unusually discussion extended beyond familiar calls to raise income tax for the rich. Most liberal of the proposals was a wealth tax: an annual tax on everything an individual owns. Its mere suggestion confirmed an improbable rise of a policy that until recently was dismissed as fringe and anti-aspirational.
What Impact Has the Coronavirus Had on Higher Education?
Similarly, universities have begun shutting up shop, not willing to risk large swathes of students being affected by the virus. So what does this mean for students who are unable to study, and what are some of the potential workarounds? Universities close their doors Across many countries, universities and importantly their libraries have been shut down. In Berlin, for example, all Freie Universität libraries shut down officially on the 16/03/20 for an indeterminate period, some having already closed during the week before. In Italy, universities have already been closed for some time, as have major universities in the USA. It is surely only a matter of time before this happens broadly across most of the world, assuming the virus isn’t brought under control soon. Currently, many universities are on study break, meaning a few weeks during which there are no seminars, lectures or tutorials, allowing students to write their essays or do exams. With libraries shut, leaving students unable to find the research materials they need, deadlines for essays and exams will have to be pushed back to allow time for these students to still do their research. Moreover, with universities closed, many students who need to speak to their professors and tutors for help with their essays won’t be able to, at least, not in person! This causes problems for students who need to talk through their ideas with their supervisors, like, for example, those writing Bachelor’s or Master’s theses. With nobody to turn to for advice, many will cease to write until they are able to talk to the people advising them on their chosen topic. The economics of the virus There is an economic impact of the coronavirus on institutions, too. At the beginning of February when Australia began closing its borders, many Chinese students had gone back to their home country for the semester break, which over this period lasts around three months. Due to the travel ban that was put in place, many of these students were unable to return to continue their studies. The financial costs of this show just how reliant many universities are on international students willing to pay vast sums of money for their education: schools across Australia were expected to accrue costs of up to A$8 billion due to tuition fee refunds, accommodation costs and the reorganisation of teaching calendars. These economic costs will also affect universities in other countries, particularly those which have mandatory tuition fees. Furthermore, IELTS and TOEFL, two of the main providers of English proficiency tests, have also stopped working in China, which will drastically hinder the ability of newer students who need to show they can speak the appropriate level of English in order to study in that language. This will mean subsequent intakes of students especially from China but also all over the world will be lower as fewer students are able to provide the certificates they need. Abroad semesters and university meals Another problem has been students studying outside of their home university’s country. Many partake in a semester abroad to widen their cultural and philological understanding, and plenty go to China and Italy to do this, two of the regions hit hardest by the virus. In both instances, students were forced to fly back or, when the quarantine in Italy began, left of their own accord despite the travel restrictions. Aside from the fact that this may mean the virus spreads further outside of those respective countries, it also spells the end of a semester abroad which likely had not yet ended, an upsetting revelation for those who enjoy the excitement of studying somewhere else. And what of those students who rely on meal programs at university, something particularly common in the US? These students, who pay not only for their accommodation but also for their food through the university, may no longer be able to afford food as everything is normally provided at discount rates by their school. What are the solutions? The main way this crisis of higher education can be averted is by universities switching to online learning. Universities are already starting to do that, urging professors and seminar leaders to make sure all learning materials are online and easily accessible to all students. Obviously communication must also move to email or, if tutors allow, apps like WhatsApp which allow group functions, meaning everyone can be simultaneously notified of updates instantly. Seminars and lectures can potentially be recorded and distributed among students, and if supervisors are needed to help with term papers, that could be organised through things like Skype or even a simple telephone call. At the same time, students and university staff alike need to appreciate that in this confusing, quarantined time, nothing is going to run as normal. Professors and lecturers need to offer their students adequate attention over email to make sure their needs are met, as well as being lenient with deadlines for essays which it may now not be possible to write. On the other side, students need to be patient with supervisors and leaders who may have hundreds of students to respond to, and who may be sick themselves but still trying to work. With a little understanding and a little effort and investment into digital technologies, universities and students will be able to offer all they can to keep higher education alive during this difficult time, and ensure students get the most out of their education which, in many cases, they pay a lot of money to have. As for the other more minor problems, those who have had their abroad semesters cut short are unfortunately unlikely to receive any help from universities, which have enough on their plate right now. Those meal programs which no longer run may, however, be replaced by ‘grab and go’ meal programs offered by universities, though as buildings shut across Europe and the United States, it remains to be seen whether these programs will be put into place, and if they are, for how long they will run. As for admissions and the tests needed, there is no chance of getting hundreds of students into a hall to finish their exams: the only solution is that students wait until the virus outbreak has been contained (or a vaccine has be found!) and the next university intake begins, something that will affect both their lives and the economic interests of universities. Hopefully universities offer at the very least online practice tests and exercises so students can stay abreast of what they can expect when exam halls do open again. Until then, it looks like many students will be cut off from any physical contact to their university. In the meantime, it’s an opportunity for students to use their free time and make plans for catching up on their studies in the summer, for example during summer courses. Check out here the list of our recommendations for summer schools in the summer 2020.
As the spread of the coronavirus continues across the world, many questions remain unanswered, not least what is going to happen to those thousands of students whose universities have also been affected by the pandemic. Schools, offices, museums, restaurants and bars are being closed across the world, and curfews are in place in particularly affected countries.
The empty promises began in 1997 when the Kyoto Protocol demanded governments stop subsidizing all ‘greenhouse-gas-emitting sectors’. Posturing world leaders dutifully queued up to pay lip service, establishing a now familiar tradition. While attending various climate summits, each would (re)commit to the eradication of fossil fuel subsidies, implore others to follow suit, and then, as if nice sounding words were all it took to cleanse the world of greenhouse gases, return home and do nothing. President Obama claimed in 2012 that a hundred years of subsidies to the oil companies was over - he lied. In 2020, annual global subsidies to the fossil fuel industry were estimated at $500 billion, and following a blip between 2013-16, are on the rise again. But why? How did governments, whose raison d'être is to keep their citizens safe, come to prop up an industry that puts lives at risk? And how great a threat does it pose? It began so well... Once upon a time it actually made sense. Indeed, when fossil fuel subsidies were first implemented they were endorsed by progressives for their equalising influence. Whether direct financial transfer, preferential tax treatment, or government infrastructure spending, it didn’t matter, they did what all subsidies do: reduced prices, in this case, the price of energy. By doing so, they gave those mired in poverty access to electricity, heating, and ultimately the components needed for a dignified life. There was also the added benefit of securing national energy supplies, as supporting indigenous production reduces dependency on foreign imports, which cannot always be guaranteed. Securing the energy supply was securing the country’s future - another easy sell. Noble-sounding as these justifications may be, the refining of green technologies mean they hold diminishing credibility, especially in the developed world where 80% of all historical carbon emissions have been emitted. A recent report by the International Renewable Energy Agency (IRENA) has shown that ‘onshore wind and solar PV power are now, frequently, less expensive than any fossil-fuel option’, and ‘the costs of new solar and wind installations’ - previously the greatest obstacle to its widespread adoption - ‘will increasingly undercut even the operating-only costs of existing coal-fired plants’. Besides some relatively isolated instances, the claim that subsidies expand energy accessibility by reducing costs, although still made by its advocates, is no longer true. Just last year, UN secretary general, António Guterres, declared, unequivocally, that fossil fuel subsidies only serve ‘to boost hurricanes, spread droughts, melt glaciers, (and) bleach corals’, and instead of using taxpayers’ money to ‘destroy the world’, the same finances should be redirected towards renewables. A 2019 report from the International Institute for Sustainable Development (IISD) substantiated these demands, claiming that it would only take 10-30% of current fossil fuel subsidies to be swapped for the balance to be tipped, decisively and irrecoverably, in favour of green energy, triggering its ‘rapid global rollout’. Speed is crucial, too, for although the transition is already underway, progress has been slow relative to what’s required. This swap could be the shot in the arm renewables need to take them from ‘viable and competitive’ to the only choice. Even without transference, the elimination of fossil fuel subsidies would significantly reduce emissions, such is the industry's reliance on them. Indeed, in some areas, certain subsidies are allowing for its entrenchment and even expansion. Consider, for example, the federal tax break that allows oil producers in the US to deduct almost all the costs of constructing and drilling new wells from their taxes, by far the most costly part of the process. By lowering the amount of upfront cash-flow required by producers, (the buy-in, so to speak), new and expanding enterprises are incentivised to drill more wells than would otherwise have been financially feasible. And once established, each well can then produce oil for up to 40 years. Through this process, known as ‘carbon lock-in’, fossil fuel production accelerates and greenhouse gas emissions increases. Meanwhile, the distorted market makes it harder for new, green energy to compete. A paper published in the journal, Nature, in 2018 offers statistical support for why subsidies should be eliminated, suggesting that it would reduce emissions by ‘five hundred million to two billion metric tons of carbon dioxide per year by 2030’. For context, that amounts to roughly a quarter of the energy-related emission reductions pledged by the Paris Agreement signatories, which few are on the path to meeting. The real cost Alarmingly, the amount of subsidies are far higher when the negative externalities caused by burning fossil fuels are also considered. Using a somewhat loosened definition of what constitutes a subsidy, a study by the International Monetary Fund (IMF) found that $5.2 trillion was spent globally on subsidies in 2017. That is $10 million per minute and 6.5% of global GDP. In addition to conventional subsidies, the financial or tax support aimed at lowering the cost of fuel, the report included the indirect, often hidden costs of burning fossil fuels, primarily the spiralling healthcare costs and constant need for climate change adaptation. By including these numbers, the true damage inflicted on society is shown, allowing better informed future decisions. For instance, the IMF estimates that if subsidies were scrapped the number of early deaths from fossil fuel air pollution would be halved. Alternatively, if left ignored, the Universal Ecological Fund predicts that in America, economic losses from extreme weather combined with the health costs of air pollution will reach at least $360 billion annually over the next ten years and cripple economic growth. Click here to browse our agricultural and environmental economics job listings Vested interests Which leads to the obvious question: why not simply just stop them? The answer, in short, is lobbying. To borrow the words of Catherine Howarth, chief executive of ShareAction, ‘these companies have mastered the art of corporate doublespeak - by boasting about their climate credentials while quietly using their lobbying firepower to sabotage the implementation of sensible climate policy and pouring millions into groups that engage in dirty lobbying on their behalf’. During the 113th Congress (the 5th and 6th years in Obama’s Presidency), the oil, gas, and coal companies spent a combined $350,587,282 on lobbying and campaign contributions, the efforts of which, according to the research group, InfluenceMap, were ‘overwhelmingly in conflict with the goals of the Paris agreement and designed to maintain the social and legal license to operate and expand fossil fuel operations’. Between 2016-2019, Shell, ExxonMobil, Chevron and Total spent over $1 billion on lobbying ‘designed to control, delay, or block binding climate-motivated policy’. To gauge its success one need only look at the inclinations of the current US administration. But things must change. Politics must better insulate itself from dirty money - the consequences of not phasing out subsidies are too dire. As Chief Economist at the International Energy Agency, Fatih Birol, has said, failing to do so will mean countries fail to reach their climate targets - and down that path lies certain catastrophe. Once upon a time, it made sense for countries to support these industries, it was progressive, humane. That time, however, has now passed. Header Image Credit: Glovatskiy on Shutterstock (licensed image - copyright)
The continued existence of fossil fuel subsidies in a time of their almost universal condemnation reveals something about the governments that rule us, something pernicious, but also something all-too-predictable. Like no other area, they expose a gulf between rhetoric and action, a disconnect so stark that, if the risks it posed were less catastrophic, would almost be comical. Back in reality, though, the cognitive dissonance, cynicism, or whatever its cause, serves only to warm our planet and threaten all life.
However, in these troubled economic times, it’s increasingly unclear whether GDP remains an appropriate measure. After all, it ignores inequality, still rampant across the Western world; it doesn’t take into account the earth’s dwindling natural resources; and it fails to recognise the rapidly deteriorating environment. With such glaring omissions, should it really be trusted to measure the success of our economies, and by proxy, the quality of our lives? Here we take a closer look at the measurement’s history, the charges it faces, and its future, all in an attempt to better answer the question: is it time to bin GDP? Its birth Russian-born economist Simon Kuznets first developed GDP, initially known as Gross National Product (GNP), in the early 1930s. His design came at the behest of the US government which, during the Great Depression, was seeking a more accurate measurement of economic output to guide its interventionist governmental policy. As economist Kate Raworth describes, 'GDP enabled President Roosevelt to monitor the changing state of the US economy and so assess the impact and effectiveness of his New Deal policies'. A few years later, as America readied itself to enter the Second World War, GNP was again of use. In his book, How to Pay for the War, John Maynard Keynes explained how important aggregate economic statistics like GNP are for converting an industrial economy into a planned military one. Knowing what was available for a country to mobilise was essential to any credible war planning. Interestingly, in the 1934 report Kuznets delivered to US Congress, he warned against the use of GDP as a measure of economic welfare, and placed emphasis on maintaining a clear distinction between the quantity and quality of growth. Economic welfare, he claimed, could only be ascertained if personal distribution of income is known – something GDP does not calculate. In his own words: ‘goals for more growth should specify more growth of what and for what’. His recommendation fell on deaf ears. Economist Moses Abramovitz was something of an anomaly, when in 1959, he cautioned ‘we must be highly sceptical of the view that long-term changes in the rate of growth of welfare can be gauged even roughly from changes in the rate of growth of output.’ Such admonishments did little to slow the GDP fan train, which further gathered pace during the Cold War, as growth was seen as the best means of judging which economic ideology - the central planning of the Soviet Union or the free market of the west - could churn out more stuff. Its confirmation as the buzzword of 20th-century economics came in 1999 when the US Commerce Department heralded it as one of the ‘great inventions’ of the last 100 years. Only more recently, particularly since the financial crisis, has criticism of the measurement begun to mount, showing signs that maybe, ninety years after conception, it’s running out of track. The charges it faces One of the most regular criticisms GDP faces centres on what it doesn’t measure - the list is lengthy. Among the most conspicuous absentees are volunteer work and unpaid household labour, the latter perhaps a legacy of its wartime origins. Still, that these are not considered as ‘contributing’ towards the wellbeing of the economy is contentious, and sets a worrying moral tone for any society created using GDP as its yardstick. It's perhaps no coincidence, that it's women that have traditionally carried out these activities. A further concern is what actually contributes to GDP. Take, for instance, crime. Few in their right mind believe that crime is a signifier of a healthy, progressive society. Yet, when it comes to GDP, crime can be very helpful indeed. Consider the scenario: inequality is spiralling, concentrating wealth in the hands of a diminishing few, while increasing the number of those with very little. The disparity then prompts an increase in crime, as it so often does. And yet, for GDP this bears no burden; in fact, it's beneficial. To a growth fundamentalist, only concerned with growth, a smashed window is not seen as violation of basic social rules; it's seen as an opportunity for a glazier to make a new window, turning a profit and paying tax in the process. This logic holds for much crime and extends to the employment of police, lawyers, judges and prison guards that are tasked with dealing with it. The same logic also applies to catastrophes, which are another excellent means of boosting GDP. World War 2 helped drag the US out of an economic crisis, and countless natural disasters - like the Japanese earthquake in 2011 - have boosted economic growth in all corners of the globe, often increasing both production and employment. The environment foots the bill In our age of climate deterioration, the relentless pursuit of GDP growth also comes at a great environmental cost, one that, in the developed world, far outweighs the benefits it brings. The conversion of trees into lumber, of farmland into shopping malls, and most devastating, of fossil fuels into CO2, all underpin GDP growth, contribute to global warming, and are anathema to a sustainable way of living. If the planet is to be preserved in any recognisable state, reliance on GDP as a gauge of progress, welfare, or even health of the economy, will have to be tempered. The question is, do we have alternatives at hand? Thankfully, yes we do. Genuine progress indicator (GPI) is one of the leading candidates to replace GDP and differs in that it also takes into account social and environmental factors. Perhaps unsurprisingly given the above, it therefore defines what we currently consider ‘healthy’ economic growth completely differently. An illustrative example is Canada’s oil-rich province, Alberta. According to a study by the Pembina Institute, between 1961 and 2003 it experienced GDP growth of 500%. During the same time period, GPI performance steadily fell, responding to growing inequality, rising household debt, and an increase in greenhouse gas emissions. Exactly how different the governance of the province would have been if GPI had informed policy instead of GDP is obviously an unanswerable question. It’s safe to say, though, it would have diverged radically. The Index of Sustainable Economic Welfare (ISEW) has also sporadically been used, and includes inequality, crime, pollution and volunteer work in its estimates. How much traction these metrics will gain remains to be seen. What can be said with more certainty is that the management of the world's economies needs transformation. Climate catastrophe threatens all life, and inequality in much of the Western world has been on the rise for decades - GDP accounts for neither. Our measuring stick for progress fails to address two of the biggest problems we face. It makes no sense. It's high-time we heeded economist, Joseph Stiglitz’s, call - made now over a decade ago - to put an end to 'GDP fetishism'. We need metrics that speak to the needs of the twenty first century, not ones that exacerbate them.
Gross Domestic Product, or GDP, is the market value of all goods and services that a country produces in a given year, adjusted - to make it comparable to previous years - for inflation. In many ways, though, it's transcended this rather prosaic definition. It's become the barometer of a country’s progress, an indicator of a land’s prosperity, and the ultimate yardstick for assessing living standards. When growing (at expected rates), politicians refer to it as proof of the success of their policies. And when rates are not met, or, god forbid, GDP growth slows, it’s weaponised by those for whom it’s politically expedient. It has the power to both elect governments and bring them crashing down. In the theatre of politics, rarely is it anywhere but centre stage.
Government intervention helps women. We need more of it
These aren’t easy questions, the rancorous nature of current American politics evidence of their polarising nature. Nevertheless, as social expectations are raised, they require constant reappraisal, for certain injustices necessitate government intervention. Research has shown that gender equality, especially, is reliant on an active, intervening state to provide things the market has historically failed to offer and that are vital to progress - namely parental leave and childcare. The case for placing both in the custody of the state is compelling, and ultimately, if gender inequality is to be taken seriously, necessary. Here’s why. Historic prejudice The labour market has rarely been a friend to women. Reflecting regressive social mores, it has, for most of its history, viewed the female condition as unsuitable for the dog-eat-dog world of work - too sensitive, too fragile - while pregnancy itself carried great disruptive potential, an ever-present, ticking time-bomb. These sentiments continue to find expression in the hiring process - men preferred to women in a phenomenon economists call ‘statistical discrimination’. The preference presumes that women are more likely to quit work on account of starting a family. And being ‘more likely’ to quit, they are paid less - globally women earn 24% less than men according to Oxfam - as businesses safeguard themselves against future losses. In turn, unfair remuneration makes women actually more likely to quit, and the circle is complete. A similar logic makes women less likely to get promoted, explaining their relatively few numbers in positions of high authority. The material ramifications of this are dire, to say nothing of the ethical injustice. UN unemployment and poverty statistics are all skewed unfavorably towards women, and mothers have it particularly bad. Despite progress having been made - 39% of the global workforce are women and there’s been a haphazard re-examination of caregiving roles in society - the restrictive breadwinner/homemaker dichotomy generally persists, economic prejudice feeding social expectations and vice versa. It’s possible for politics to help disrupt this stubborn feedback loop; intervention can check female economic prejudice and address outmoded social norms - if the will is there. America provides a cautionary tale of when the opportunity is passed up. The American experience The self-styled home of freedom and opportunity - along with Suriname, New Guinea and the Marshall Islands - doesn’t have a national law on paid parental leave, preferring instead for the market - rarely known for its compassion - to adjudicate. As a result, in 2013, it was estimated that just 12% of American workers were covered by paid parental leave policies. Forbes recently reported that 25% of women in the US return to work just 2 weeks after giving birth. And many others, left overwhelmed and with little recourse, simply leave their jobs rather than return when expected. In the words of the legal team, A Better Balance, while still thought of a the primary caregivers women are effectively ‘forced to choose between their job and a healthy pregnancy’. Those who do return to work post-pregnancy then encounter further problems. As ethnographer, Kristen R. Ghodsee, has observed, ‘many professional women get completely derailed after taking time out of the labour force’ - the quickening pace economies change, and the absence of any mechanism to help ease the return, makes it increasingly difficult to re-enter the workforce after a period of inactivity. Child care then poses further problems, for in the US it costs, on average, $15,000 per child per year. Federal provision does not exist. This means that for a large number support is unavailable, and an oftentimes a career-damaging return home is left as the only option. An American Progress study found that in 2016 alone, an estimated 2 million parents made career sacrifices due to problems with child care, and mothers were 40% more likely than fathers to report that child care issues had a negative impact on their career. It’s perhaps unsurprising, therefore, that a New York Times survey recently revealed 64% of Americans had fewer children than they would like, citing the prohibitive cost of childcare - so much for the benevolent invisible hand. The Swedish model Sweden, so often a beacon of progressiveness, offers an alternative. Witnessing American plight, it was clear to Swedes that the key to this fight was comprehensive governmental intervention, specifically, intervention on behalf of young families. One mooted solution was state-sponsored paid maternity leave that guaranteed job protection. Although certainly a positive step, some were left unconvinced it went far enough, and actually feared it may further incentivise businesses to overlook women when hiring. To ward against this, Sweden has legislated that parents of both sexes are entitled to 480 days of paid parental leave at 80% of their salary, plus bonus days for twins, and, most significantly, they must share it - each partner must take at least 90 days of those 16 months. Click here to browse our economics job listings Not only is this offer more generous, it addresses the social and economic issues that conspire to straitjacket women. It reframes the traditional expectations of both mothers and fathers, equalising the roles they’re presumed to adopt in parenthood. This, by extension, also encourages a more fundamental reassessment of societal gender roles which, regardless of identification, many find restrictively narrow. And financially speaking? Well, it’s just a better deal for both parents. Given toddlers are far from self-sufficient, and workplace pressure can be unremitting, Sweden also recognised further measures to protect the careers of young parents - particularly mothers - were needed. They guaranteed affordable childcare for all. The Education Act of 2011 confirmed that parents need only ‘spend [between] one to three per cent of the family’s income on childcare’, depending on income, with the state footing the rest of the bill. The results have been clear: 80% of Swedish 1-5 year olds now attend preschool, mothers (and fathers) are able to continue their careers unencumbered, and the country itself has been ranked the best place for women to live by U.S. News. The irony apparently lost on them. Generous parental leave and quality child care will not end structural injustices faced by women, but they’re imperative first steps. Their imposition directly targets the so-called ‘statistical discrimination’, and removes key obstacles that discourage the hiring of and investing in women. They are a start, a basis from which a broader program of reform can be built that mitigates the free market’s prejudice - gender quotas, improved education, and further legislation all have parts to play. If government intervention can be called upon in other moments of perceived crisis - not least to prop up banks - why not also for the crisis of gender inequality? As America has proven, parental leave and childcare are not safe without government enforcement. Their provision needs to be taken in-house, guaranteed and made accessible to all. For any further advice - just ask the Swedes.
The jostling between market and state, and the territory that each occupies, lies at the heart of political discourse. It's the major fault line around which political parties form and debates rage. Despite their uneasy relationship, between them they generally make available all that we need, be it food, a home, healthcare, employment, or education, at varying - and often questionable - quality and cost. The demarcation between the two, rarely ever static, differs widely across states, and speaks to the values of the society in question. What, for instance, can be said of a country whose privatised higher education is financially off limits to its poorer citizens? Is it right to leave the market responsible for people’s health? And what of the provision of childcare?
But what of people's lives? With records being broken, and figures heralded as ‘the best ever’, you'd be forgiven for presuming people’s lives were improving in parallel, that the numbers translated into more than just useful soundbites. For most this is yet to happen. In explanation, economist, Joseph Stiglitz, has denied that the nation’s economic health has experienced a marked improvement, claiming ‘neither GDP nor the Dow is a good measure of economic performance, for neither tells us what’s happening to ordinary citizens’ living standards’. Indeed, if one looks to more tangible metrics - life expectancy (falling and among the lowest in the developed world), disposable income (on the decline), and household debt (skyrocketing) - a vastly different picture of American life emerges: one of stagnation, uncertainty and strife. It’s with this picture that young Americans, in particular, most identify. Instead of prosperity, millennials (Americans born between 1981 and 1996) anticipate economic future of precariousness, Trump’s creation of ‘the greatest economy… in the history of the country’ having no recognisable bearing on their reality. Optimism, the characteristic for which they were once known, is fading, and in its place has grown a shrewd pragmatism, accompanied by an acceptance that the US economy, regardless of its supposed merits, is deeply flawed. Whoever is experiencing its much touted ‘improvements’, it’s not them. <11an>limit:2;categories:Graduate / Traineeship|Internship|Junior Industry Position|PhD Candidate;countries:united states;disciplines:Economics</11an> Broken promises Remember, this was the generation that were told a college education was everything, the ticket to a comfortable life. Having held up their end of the bargain - becoming the most educated generation ever in the process - they’re now finding out the social contract to which they committed was sold on false pretences. High on the list of grievances are tuition fees - they are eye-watering. Having risen a further 25% in the last decade, they average $48,510 and $21,370 per year for private and public institutions, respectively. No one, of course, can afford this outright, and as a consequence, student loan debt has become the second highest consumer debt category, behind only mortgage debt. Added to the stagnating real wages graduates face when entering work - median purchasing power has been static for 40 years - and the rising cost of living, and you have a demographic cohort with a collective debt in excess of US$1 trillion, the highest in history. With respect to tuition at least, the accumulation of debt is not inherently bad, presuming the interests that stand to be gained are of appropriate size. Primarily, and rather obviously, this interest has typically been a job - ideally, one that's fulfilling and well paid. Nowadays, though, these are in short supply. The problem isn't an actual lack of jobs, although figures on this are nothing to celebrate; it’s the quality of jobs relative to the skills of the applicant. Millennials have been struck by underemployment, ‘the underuse of economic capacity’, or, in other words, lots of history grads working in Starbucks. According to data from the New York Fed, in September 2019, 34% of college graduates were underemployed, working in jobs that do not require a college degree. Among those more recently graduated, aged between 22-27, the rate was as high as 41.3%. And this is no post-recession fallout, either. In fact, these figures have remained relatively stable over the past 25 years. No cyclical fluctuations, as one may expect, and no identifiable long-term trends. It’s perverse. Students spend billions of dollars every year to earn degrees, and over a third of them add no value to the workforce. Ambition blocked Underemployment is also by no means the sole preserve of graduates, as the 2019 GenForward Survey, conducted by the University of Chicago, has shown. Using a nationally representative sample of 18-34 years olds, the survey reported the extent to which young people feel their aspirations are stymied. Many, for instance, believe they’re denied ‘access to good jobs, either because they are unavailable in their area or because they cannot get to them by driving or using public transportation’. A full 44% of Latinxs, 39% of African Americans, 31% of Asian Americans and 29% of whites subscribed to this sentiment, claiming that decent employment existed inaccessibly elsewhere. Moreover, those working were commonly found to dislike their jobs, large numbers citing ‘just to get by’ as their reason for being there, despite a majority strongly desiring a career-driven path. Even then, second jobs for around 25% was still needed to actually ‘just get by’, given inadequate pay. Far from exploiting the gig economy for its flexibility - its supposed redeeming quality - the data strongly suggested participation was the result of necessity, of the lack of an alternative. Candidates must listen Relative to their parents, the future for millennials is one of ‘lower earnings, fewer assets, and less wealth’, so concludes research from the Federal Reserve. The median income for 25-34 year olds has fallen in every major industry but healthcare since 2008, contributing to millennials owning just 4% of real estate value, when at the same age baby-boomers owned 32%. This is far from the picture Donald Trump describes. It’s a picture populated by physicist waiters, engineer baristas and sales people who boast an extraordinary knowledge of international relations. Ultimately, it’s picture in which talent is being squandered. With millennials on the verge of overtaking baby-boomers in number, and thus becoming a potentially election-defining voting block, candidates for President should really be taking note. Header Image Credit: Alvaro German Vilela on Shutterstock (licensed image - copyright)
The US economy is improving, so we are told. With the financial crash receding into the distance, almost out of sight, things are looking up, the future is finally brightening. Unemployment reached a 50-year low in 2019, falling to 3.5%, while US employers have added almost 5 million jobs in just two years. These are ‘the best economic numbers our country has ever experienced’, the President declared at Davos, with characteristic humility. And bombast aside, his sentiment is not without foundation, the US economy is posting some good numbers. In addition to jobs, GDP has been growing at close to 3 percent annually, and the Dow Jones has increased by 49% is the last 3 years - all of which is great election fodder for the coming campaign. Democrats should be wary.
Browse our academic job listings The problem of disciplines Inter-disciplinary dating remains a largely theoretical proposition in academia, and that is to say nothing of the taboo against undergraduates dating postgraduates - or vice versa. Whereas the first of these can be termed horizontal dating, and carries casual social penalties, the second, vertical dating, is often viewed with much more serious contempt. Indeed, for all of academia’s professed liberalism, there remains a severely entrenched elitist platform upon which status and seniority carry significant weight. As in every social and professional situation, groups quickly form, select cliques are established and patterns followed, until soon enough you find yourself surrounded solely by people on the same course and level of study as yourself. As noted above, it is a curious thing given that the university environment should provide a warm bed - no pun intended - for open-minded dating. Clearly, though, this is rarely the case. What becomes apparent when it comes to dating in academia is that it would be helpful if short manuals on dating etiquette and rules were handed out during freshers/orientation week, as these would provide a basic layout of the hostile battlefield. And yes, the library is as hostile a terrain as you will ever come across. Just try asking somebody out in a whispering voice, or try following somebody around the bookshelf corridors without appearing like a stalker, and you will know what we mean. Libraries aside, the whole set-up seems unfriendly. Even career academics seem not to have mastered the art, often electing to stay within the safe confines of their chosen academic field. Perhaps - dare it be said? - the longer you remain in academia the greater the chances are that your dating behaviour fossilises within your disciplinary speciality. In fact, the ever-increasing wave of students and teachers turning to online dating could be a result of the unfriendly character of dating in academia. In part this can be understood and explained by the nature of academic speciality. After all, how many conversation convergences can there be between a physics PhD and economics Bachelor? That is not to say, though, that it is impossible for them to converse or to find common ground, or that people of common study areas should always stick together. It is just that it sure does help in an opening conversation if there is an easy point of convergence. Hope? Even though horizontal dating is strategically difficult and vertical dating is frowned upon, that is not to say either is entirely impossible - but it's no coincidence that many of those long-term couples who say that their love first blossomed during their university years shared the same disciplinary field. So here, in summary, are the two fundamental principals to dating in academia: 1. If you want to make your dating life both easier and more successful, don’t stray far from your chosen academic field. 2. Never try to begin a romantic adventure in the library.
Dating in academia is riddled with potholes, the most immediate of which is do not stray far from your academic discipline. Curious indeed considering that the academic world is meant to be populated by an abundance of young and energetic minds from a variety of different cultures, races and ethnicities, all of whom are hungry for new information and experiences. One would think that such an environment would provide the perfect dating terrain, right? Wrong!