vivek chibber, locked in place (2003) chapter 1: introduction

(4): india's failure as a relative failure

(6-7): e. asian example teaches us that this is not so much about state intervention, but about the quality of state intervention. specifically, in two dimensions:

1. state's cohesiveness as a strategic actor
   
2. state's ability to extract performance from private firms

(9): critical--the question of the installation of this apparatus has been answered by referencing goings-on within the state. in contrast, bringing attentiont to the conflicts between the state and societal actors. two nested claims, here:

1. divergence in outcomes depended on the orientation of the business class -- state managers' agenda was frustrated by a well-organized offensive launched by domestic capitalists
2. the mechanism that caused a different reaction in India and Korea was the former's adoption of ISI, and the latter's adoption of ELI. they generated different political incentive structures.

chapter 2

(13) state intervention in the latter half of the twentieth century has been more extensive and invasive than earlier 'late development.' the hallmark is the appearance of 'development planning'.

(16-17): these demands on the state (state capacity) require institutional structures that can do two things:

1. coordinate amongst firms--guarantee inputs and coordinated investment projects
2. compel/discipline capital

(19-23): this, in turn, requires three things

1. rational bureaucracy
2. nodal agencies
3. embededness

(29-44): four theses

1. state building in India imperiled by capitalist offensive; not the case in Korea
   
2. ISI vs. ELI
3. Korea was able to switch to ELI because of unique historical conditions; this was not possible in India, ELI would not have helped appease capitalists
4. full explanation for failure in India would have to incorporate INC demobilization of the labour, which reduced State's autonomy from Capital

(52): coup of 1961, SK -- crucial

(53): not b/c of State power, but b/c of capitalist enthusiasm [this is why point about authoritarianism is misplaced]

(56): Rhee (1948-1961), pursued 'bad' ISI in 50s

(58): crux--critical factor allowing for policy change in SK was emerging alliance between K. and J. capital

(60): EPB as 'nodal agency'

(61): 1964-1965 -- the 'pact' around the export-led strategy

(62-65): control over finance/credit --> State autonomy? [no, Vivek is saying-- this doesn't render state managers indifferent to capitalists' reaction to their policies]

(66): summary page--development of dev. State in SK

(68): b. confidence went down with the coup

(69): 1961-1963 failure in SK

(71): difference between export-led and export-promotion (most countries did latter; SK was unique in pursuing former)

(72): in early 60s, Korean firms not so hot

(72): but firms will still be amenable, where a reasonable chance of success in markets, exists

(73-74): Japanese help was crucial, in SK--and it began before '64-'65

(77): FDI important or not? not a lot of the investment, but central to success in key sectors

(78): in short--the Japanese relationship [seems to suggest that Japanese supplied the credit; what does this mean in terms of importance of State monopoly of credit?]

(79-80): wrt Japanese capital, state support was critical (1) ensuring partnerships; (2) guaranteeing credit, etc. [but why not just allow State control over Japanese? why allow State control over themselves? isn't there a prisoner's dilemma, here? you might even want State to control others, but why your own firm? but maybe 'chaebols' obviate this]

(82): key--ELI causally prior to dev. state

(83): w/o this ELI analysis, you have a 'bootstraps' model

(86): three theses, re: India

1. release of Bombay Plan not motivated by desire to launch developmental State. instead, response to Quit India agitation of '42-'43, which industrialists perceived as threat. trying to preempt socialist planning, calling for capitalist planning
   
2. capitalists were quite opposed to idea of giving State any measure of power to control investment ('39 coordination fell apart', reception of BPlan, etc.). after 1945 very clear.
3. opposition to State power over private capital was generated by structural factors--partly due to flight of British capital, but mainly result of State ISI strategy

(92): Q. India went out of INC's hands

(110): by demobilizing labour, Congress was eroding its capacity to impose discipline

(113): Gandhi--singular capacity to mobilize the masses (especially rural) earned the respect of the Left; staunch defense of property earned the trust of the Right

(125): imp--question, here, of what allowed them to split the labour movement so easily. is it as simple as saying that they had political hegemony?

(128): argument re: business offensive in India

1. state managers needed to both (a) win support of capitalists; (b) impose discipline on capitalists.
   
2. but (b) was not tolerable to capitalists, and (a) made it very rational for them to resist (b) (they liked ISI largesse, which made it easy for them to make profits without ramping up productivity)
   
3. capitalist class was handicapped because self-regulation was discredited; and also 'planning' of the largesse kind was favored
4. as a result, industrial planning policy was passed--but severely compromised by State's concern to appease capitalists. PC basically became an advisory body
   

(142): political lobbying and investment strike, when things didn't seem to be going their way

(144): Nehru was concerned, but couldn't do anything: (1) departure of Left and (2) ascension of V.B. Patel left him powerless

(146): PC was neutered, as a result

(148): the State as 'doting nanny'

(163): importance of 'the nodal agency' -- need to discipline political elites, as well

(169, 172): structure of Korean business important in facilitating corporatist arrangements? made embeddedness/discipline easier? but then should have been easier in India, Vivek notes

(175): regulation in Korea vs. self-regulation in India

(182): in sum, planners weren't given institutional power

(195): why didn't reform occur?

1. not because of ideological biases--ideological argument can't explain why planners didn't pursue 'better' State intervention.
2. not because they were corrupt--in Japan and SK, corruption was compatible with effective State intervention

(196): Crisis of 1957 triggered re-think--onset of foreign-exchange crisis, exports would have to be increased.

(200-206): but trying to turn firms towards export markets, following Korea's example, in 1958-1959--floundered for three basic reasons.

1. preference for the domestic market--firms are comfortable making easy profits insulated from competition. why change? [so why change in SK, after 50s? because of historic opportunity given to them by Japanese]
2. but MNC's in India didn't play the Japanese role--corporations in India exported very little, unlike the Japanese, who had set up to export
3. b/c of this, only State export promotion schemes were left--and these didn't work, for reasons already detailed. structure of policy apparatus wasn't coherent, and firms remained committed to domestic market.
   

(207): imp--the fact that reform was understood as 'less State intervention' rather than 'better State intervention' was a function of the 'balance of forces' [Vivek adds that this was generated by the planning process itself, though I'm unclear what this means, exactly? why did the failure of the planning process produce a more powerful capitalist class? isn't it the case that we had this already--absent a labour upsurge or like increase in State autonomy, this was the destined trajectory]

(209): imp-- bureaucracy reaction to crisis is to ignore plan directives even more, allow foreign capital partnerships to aid import of machinery (this just favored luxury consumption, etc.)

(210): PC was incapacitated by its lack of clout--but it also was implicated in debacle, which made it a prime target for attack

(214): PC duly marginalized under Shastri and Gandhi--power shifted to the ministries

(212, 214): 1964 Nehru dies. 1964-1966 Lal Bahadur Shastri. 1966-1984, w/ exception of 1977-1979, Indira Gandhi. over this period, PC loses all its power.

(217): push towards 'ministerial autonomy' [how do you think of this, structurally? what is the place of the story of 'purely political' conflict?]

(218): US aid for liberalization

(227): planning possible when domestic capital resists, if you have the power, which you can have if (a) bourgeoisie is too weak; (b) labour is strong as counterweight; (c) exceptional circumstances [what would this look like? we're certainly not talking about benign State-capital cooperation anymore]

(228): Taiwan example of (a) [but Pakistan? something else has to be going on]

(228): Postwar France an example of (b)

(229): postwar Japan an example of (c)

(233-236): lots of countries tried ELI in 60s and 70s, but failed. this, largely, was b/c of pre-existing ISI and b/c lack of 'cohesive' State [but former the case in Korea, too, and it doesn't matter; and latter, if important, needs explanation--in acct explained by ELI, no? Vivek focusing, then, rightly, on the inability to reduce 'entry costs'--Korea had this b/c of Japan, but others didn't, obviously]. other possibility was their 'socialization by the State', but this is precluded because of the balance of class forces--of course, there you need a solid State structure.

(239): underdevelopment precluded ELI for most countries

(240): a postwar France, in India?






----

[1] is there an ISI that could anchor development, given suitable State discipline?

[2] authoritarianism important for overcoming resistance of political elites?

[3] question of m-term/l-term rationality, re: accepting discipline? not so much, I think -- they need coordination of investment, etc. so they accept it, on s-term grounds. but worth asking

[4] technological assistance vs. discipline?

[5] Indian capitalists' position as the 'default'

peter evans, predatory, developmental and other apparatuses (1989)

(561): main thesis--effiicacy of developmental state depends on meritocratic bureaucracy w/ strong identity AND a strong set of institutionalized links to private elites

(562): States are not homogeneous--thus, the effects of their intervention will not be homogenous

(564): neoutilitarian understanding of State actors is impoverished (that they are rent-seekers who will reward best bribers, not most efficient), even if it captures something real

(566): from within this perspective, it's very difficult to understand how any type of State business could happen.

(567, 573): Weber's picture is the mirror-image--State actors' path to personal advancement comes from good performance

(568): for Gersenkron, State has to be a surrogate entrepreneur; has to actively promote investment and offer 'disequalibriating' incentives (Hirschmann). all of this requries 'insulation', as well as intelligence, responsiveness, etc.

(570-571): Zaire as example of predatory State -- but not illustration of bureaucratization as problem. quite the opposite--lack of capacity to behave like a bureaucracy

(572): State acts as a surrogate for missing capital market, in Japan, and induced investments that transformed development path

(573): internal networks matter to coherence of bureaucracy in Japan

(573-574): external networks (links to business) matter tremendously in Japan (though they're not sufficient--State also needs 'autonomy')

(575): noting that these States emerged in a particular context: agrarian elites decimated, industrial groups disorganized, etc. [what's the importance of this, in the final analysis?]

(575): in sum, embedded autonomy

(576): there are problems generated by success, of course

(577): Brazil as intermediary case, where you see both Zaire and Japan [but can we specify what bureaucratic inefficiency is a result of? here the centrality of political appointments?]

(578-579): Brazilian state not embedded properly, b/c of landed oligarchy's resilience and active presence of transnational capital

(581): in sum, embedded autonomy seems to be a function of (1) internal organizational capacity [which is a function of what, exactly?] and (2) the surrounding social structure [how, exactly?]

weiss, transformative capacity in evolution: east asian developmental states

(42): active governments pursuing strategic intervention have been essential to E. Asian growth

(43): three questions

1. what about the State has made it effective?
2. how has this changed over time
3. is this capacity obsolete in current global context?

(45): main argument--it's not weak capital that explains State capacity, but almost opposite: strong, well-established capital complemented by a strong State (Government-industry linkages are critical). State capacity is best understood as effective co-operation

(46-47): summarizing Wade, E. Asian success was result of a strong State, which could:

1. heavy investment in high-growth competitive industry, which is different from what the mkt would have encouraged
2. deliberate outcome of strategic industrial policies
3. consistency in policy

(48): key--for Weiss, GI's key benefit is that it socializes risk, improving coordination: firms don't need to (1) raise capital; (2) develpo new products (3) find new markets; (4) train skilled engineers. this is better understood as 'coordination', rather than as an imposition.

(49): power through, not power over

(50-52): you need [to what extent to each of these have a post-hoc character? the first, especially?]

1. high-quality bureaucracy
2. intelligence gathering infrastructure
3. insulated pilot agencies which can sit back and coordinate policy

(57): consultation, not imposition

(58, 68): it almost becomes entirely a problem of 'information-sharing'/coordination. Weiss' point is that this also becomes increasingly the case, as you develop -- coordination becomes more importnat as technology becomes more complex [this threatens to underestimate the 'disciplining' aspect of what was stressed earlier--that investors actually want to invest elsewhere]

(58): chaebol is critical to facilitating cooperation

(62): imp--success is seen as a function of the form in which business and the State are organized [this, again, threatens to underestimate the importance of actually elucidating their interests in a specific context]

(64): GI requires a State that is both distant and close

(64-65): opposed to a 'negative sum' view of State strength

(67): States can't just be strong, they have to be 'catalytic'

(69): not submission, not domination

(73-79): four aspects of cooperation in E. Asian case

1. disciplined support--subsidies in exchange for performance
2. public risk absorption--require private sector, but they won't invest unless guarded against catastrophe
3. private sector governance -- getting them to self-govern (not a sign of State weakness, but of sagacity)
4. public-private innovation alliances -- coordinated approach to technological development

(79): this is a relationship that leads to win-win solutions [no clarity as to what the enabling conditions are, for this]

(82): as chaebols/business gets more powerful, this might become more difficult

alice amsden, third world industrialization: global fordism or a new model?

(6): amount of exports and dollar price were all 'highly politicized outcomes'

(7): they got prices 'deliberately wrong

(9): global Fordism cannot explain how or why mass production came to the Third World--and why it came to some places, and not others. so no explanation for divergence within the Third World

(9): there's also the fact that multinational investment has been a small part of total capital formation--which means the story of core capital driving Third World industrialization is dubious

(10): Amsden alludes to 'failure of dependency theory'--what does she mean? distinct from the failures of 'global fordism' nonsense?

(10): in short, three problems with g. Fordism

1. underconsumption is not the stumbling block, rather raising productivity and becoming internationally competitive: r. wage rate increase is greatest in history in SK (pg. 11)
2. far more political process than Fordism would suggest: it's not just State autonomy that matters, but also long-term commitments and specific State policies; support for business has to be greater than infant industry protection
3. Taylorist nuances don't really explain differences in 'management': they don't just export American Taylorism to factories in E. Asia

(14): you get intensive regimes (relative surplus value) and extensive regimes (absolute surplus value) being employed side-by-side, unlike regulation school predictions

(14): imp--lateness in E. Asia is qualitatively different, insofar as the competitive disadvantages are starker (absence of novel technology)

(15): invention (England) --> innovation (Germany, USA) --> learning (E. Asia)

(16): key--late industrialization is the era of the 'subsidy' -- but the subsidy which incentivizes exports, rewards performance. much stronger than IIP, again.

(17): the central coordination offered by chaebols might be very important

(18): good management is critical [OK -- but why would we ever expect anything else? it seems like good management can be assumed, insofar as the correct incentive structure is in place]

(18): imp--cheap labour is very important (as is the repression of that labour), but it is not itself sufficient to drive growth rates (all late developers have repressed labour)

(18): Korea much, much more educated than Germany or England at analogous times in development history

(20): foreign investment not significant

(20-21): labour-intensity was not sufficient to defeat Japan in the 60s--had to turn to productivity increases

(20): this is exactly how Japan beat Lancashire in the early 1900s--not with lower wages, but with greater efficiency

(21-22): imp--the 'subsidy' has to be the disciplining mechanism (not small firms--there are a couple of enormous chaebols, remember; nor technology, a la Schumpeter--since this is largely a question of learning, not innovation)

(22): there is pervasive corruption, but the key is that it doesn't come at the cost of competitiveness

(23): State's power over investment is critical (suggestion that this can be thought of as 'democratizing') [hmm...]

(24-25): imp-- nor is it the fact of performance standards that matters (this is true in all Third World states). it is the capacity to impose them on producers [here there is a just-so story about how Korea got this capacity; very unsatisfying]

(28): a compact management structure, leading to a relative decline in the number of white-collar workers (different from US)

(29): imp--very rapid wage growth, telescoping advance of the core countries into a couple of decades [question: if the domestic market wasn't the primary driver of growth, what did these workers buy?]

(30): serious gender divide

robert wade, east asia's economic success

(274): neoliberals think 'intervention' is responsible for E. Asian take-off only insofar as it was intervention to remedy the effects of previous intervention (so, 'less intervention')

(274): they assume technology away

(276): list of qualifications for S. Korean success -- pollution, repression, male-female wage gap, economic importance exaggerated vs. japan

(276-279): but four key indicators of success

1. gain in relative command over world resources (Korea and Taiwan reduced income gap with core in 80s)
2. trade perfomance
3. industrial transformation -- not as % of GDP, which can be misleading, but as ability to produce at world-competitive prices
4. removal of poverty--took about 100 hours to produce 100kg of wheat between 1400 and 1880, in Europe; in Korea/Taiwan this was about 150-200 hrs in 1950s, down to 40-60hrs in early 80s; in Indian village, 230 hours; in US at minimum wage about 15 hrs

(283): vs. notion that Third World was better off in the 'laissez-faire' world of 1900-1950

1. evidence that living standards fell in India; in Africa, no good evidence one way or the other
2. colonial governments were hardly laissez-faire
3. most economies grew successfully in dirigiste 50s and 60s
4. other factors explain poor performance in 2nd half, beyond gov't intervention

(285): four features of Korea, pace Amsden

1. State as entrepreneur, banker, shaper
2. distortion of price structures through subsidies, protection, price controls--different industrial structure than would otherwise have been generated
3. large, diversified business groups mean much economic activity is not on the market, but intrafirm
4. State disciplines firms with subsidies, rewards firms that do well on the export market

(286): late industrialization: handicaps experienced by market-based economies when there are technologically advanced firms on the market

(287): Amsden's central point is that investment needs to be directed to areas where there is low profitability and lots of work to be done. private firms will avoid this, unless the State can step in.

(288): the way in which firms borrow ('management' and 'learning') is as important, if not more important, than the actual act of innovating.

(289): subsidies have to be 'reciprocal', rather than unidirectional (as in, they need to reward and sanction, rather than be free handouts). State has to discipline firms (market is not sufficient, nor is pressure of technological competition [how different?])

(291-302): weaknesses in Amsden

1. getting prices 'wrong' -- not proven well, possibility that the State was just intervening to make the FM work b/c of market failures [confusing, though, since this seems her main, clearest point]
2. nothing about how the State was organized
3. could the success of industry be a scale effect, rather than a productivity effect (Korea's endowments already suited manufacture--no n. resources, basically skilled workforce, etc.)
4. didn't Korea just follow its comparative advantage? Amsden not disproving this well, either [also confusing]
5. learning is not adequately operationalized -- actually it is three concepts, and maybe even a 'frame of mind'

(303-304): Haggard's argument about why LA turned to ISI phase 2 (production of capital goods) and EA turned to export of consumer goods (and then export of capital goods?). has to do with:

1. external pressures: declining US aid in SK; balance of payments deficits
2. domestic coalitions: balance of class forces--landed elites imp in Brazil + agro-exporters
3. political institutions: authoritarian regime in SK; politicians in Brazil
4. ideas: technocrats' ideas [stupid] in SK; influence of Prebisch

(306): Haggard's argument explains 'irrational' policies in LA as a product of these factors.

(306-310): two weaknesses

1. is it true that this difference is the critical factor that explains divergence? maybe there are antecedent factors, like different endowments, that better explain this
2. description of politics is very thin, and argument is functionalist -- inferring the existence of coalitions from the fact of shared interests

(311): key--Wade wants to stress w-systemic opportunities: US buyers were looking for low-cost suppliers, but didn't turn to LA (because natural resources provision of export receipts disincentivized a turn to manufacture--'Dutch Disease'), and there was no 'basically skilled' population (either low skilled or highly skilled). LA was unlikely candidate for cheap labor manufactured exports, as a result. in EA case, they had all this, and the benefit of Japan close by ['flying geese'?]

(315): importance of authoritarianism -- not vote-seekers...

(316): imp--the importance of these w-systemic factors means that the chances for contemporary Third World states are 'slimmer' than is otherwise thought

(317): neoliberalism popularizes the myth of the 'harmony of interests' at precisely the time when the world is showing increasingly fierce competition

---

[1] significance of WTO sanctions becomes obvious from this description of E. Asian success

britain ascendant, crouzet

(346): 'free trade policy' no sure recipe -- protectionism as absolutely necessary to the survival of most Continental industries (mistake is to carry it to extreme lengths, as did the French)

(349): between 1815 and 1850, the gap between England and the Continent had enormously widened and was formidable

(351): development by 1850 in W. Europe (w/ exception of England) had a 'dualistic' character. pockets of growth, and pockets of backwardness.

(351-352): sort of catching up with Britain by 1914 was result of Britian's slowing down, also

(353): growth was not a problem of 'diffusing innovations'

(355): key--it was not a question of availability of innovations/technology, but a question of incentives. the problem is economic -- the thinness of markets

(356-358): key--constraints on demand side were (1) thinness of home markets (which was a result of agrarian backwardness, citing P. Barioch as explaining agricultural revolution starting in 1820s); and (2) external markets, could not develop a strong export trade because of Britain's dominance

(359): existence of advanced industrial countries is a problem

(360): neither transport nor banking systems are primary barriers

(360-361): imp--on supply side, factor endowments were a problem--resources, capital, labour (derivative of agrarian structure), and socio-cultural framework (which seems related to agrarian structrue)

(364): Continental countries had to look for niches -- they adapted to particular sectors of industry (manufacture of high quality fashionable luxury goods, where mechanization was not forthcoming)

(366): they 'succeeded to the extent that they were different'

(368): imp--lessons?

1. necessity of widening the market (critically, this depends on transformation of agrarian structure)
   
2. successful industrialization is not a slavish imitation of what went before

(379): French backwardness in 'big industry'

(380): origins of differences between English and French agrarian systems go to the heart of the middle ages [what does this mean for a theoretical understanding of why England developed?]

(380): French technical change did happen, in agriculture [how, if peasants had no incentives?]

(381): imp--the retention of a large agricultural population in France was responsible for the slow redistribution of labour towards industry

strategic factors in economic development, nicholas kaldor (1967)

(vii): economic constraints are critical (labour supply being central) -- not efficiency of management, what have you

(6): the major explanation for industrial take-off is going to be an economic one (response of supply to demand, response of demand to supply)

(7): fast rates of growth are centrally dependent on fast rate of growth of manufacturing (this characterizes the transition from 'immaturity' to 'maturity')

(12): it's not productivity or rate of technological change that explains why the secondary sector is central

(15): the fundamental reason is a dynamic relationship between changing rates of productivity and output (not static)

(21): mining and agriculture, on the other hand, are 'diminishing returns' industries -- growth of productivity outpaces growth of output

(22): services sector will also be insufficient [though reason given here is a bit hurried]

(23): sum

(29): three sources of demand, driving growth

1. real income/consumer demand -- the more consumers make, the more they'll spend on manufactured goods
2. capital investment -- growth of manufacturing sector generates own demand
3. changing structure of foreign trade -- here story of Phase I (where country substitutes home production in light industries, ISI) --> Phase II (where country starts exporting consumer goods) --> Phase III (where country starts to do ISI in capital goods) --> Phase IV (where country starts to export capital goods)

(33): two constraints on supply, inhibiting growth

1. domestically--when industrial sector grows, it needs to absorb goods and services; externally--will need increased imports, which can threaten balance of trade
2. manpower -- a country will need 'employment' growth, which in the early stages will come from the 'disguised unemployment' on the land.

(39): the labour-intensiveness in services means that productivity growth causes it to 'mop up' a significant proportion of the w-force

(41, 45): this can be a problem, if it prevents people from working for industry (because of decent wages in services), given manufacturing's centrality to growth (Kaldor using example of the UK)

(46): advanced vs. mature -- an advanced country is one in which the supply of labour to industry is elastic, whereas a mature country experiences a shortage of labour to industry when demand calls (all countries headed towards maturity)

(54): agriculture, even if highly productive, cannot drive growth (when highly productive it can only absorb a fraction of the working population)

(55): key--one general cause explaining underdevelopment is 'backwardness of agriculture' -- you can't grow secondary and tertiary sectors without an 'agricultural surplus'

(56): key--agricultural growth does not take 'external stimuli', but presupposed endogenous changes in the social framework of agriculture

(57): low productivity (despite low wages) make industrial development for many countries in age of 'free trade'

(59): key--the growth of domestic industry is dependent on the growth of internal purchasing power, which will demand robust growth in agriculture (suggestion that ISI was done in by the failure of the agricultural sector to respond to the stimulus adequately)

(61, 62): key-- it is important to keep developing unless one raises export potential by improving the growth of domestic output to be competitive--but this presupposes a robust internal market, which will help productivity rise to the point at which one can be competitive

(62-63): you cannot devalue/tweak exchange rates and become competitive. there is no substitute for productivity/lower costs

(65): advanced countries protect their industries, thus posing obstacles for underdeveloped countries

(66): protectionism as 'luddism'

(67): the existence of advanced countries has not been a 'bad' thing for underdeveloped countries, all things considered [hmm]

Brenner makes two serious errors. He does not pay attention to class struggle outside of northern Europe. And he does not notice that what was happening in the non-European world after 1492 was class-based commodity production, not merely "commerce." Euro-Marxism no longer needs Brenner's theory, because Euro-Marxism no longer worries much about the Third World. Euro-Marxism is not entirely sure that the Third World exists (Harris, 1986; Young, 1990). It is not entirely sure that anything exists.

If we look at the entire country from a distance, during the period between 1978 and 1992 there were two great sectors: a public sector that was still largely based on socialist production relations and a private sector in which family production relations prevailed. Looking a little closer, in urban areas, the public sector was dominant, with a thriving family economy at the margins, while in rural areas, the family economy was dominant, with a growing township and village enterprise sector, which harboured both socialist and small-scale capitalist production relations. This was, indeed, a non-capitalist market economy, although it was changing quickly. Since 1992, much more radical market reforms have changed everything.

So, despite the apparent explosion of global development finance in the past year, there has actually been no effective transfer of resources for investment to the developing world. Financial liberalisation explicitly designed to increase access to resources for new investment has instead been associated simply with much more circulation of finance around the world, instead of creating a growth-oriented intermediation for developing countries. Citizens of the developing world – apart from the privileged few who can take advantage of the newly liberal regime to transfer their wealth around the world to maximise their own returns – may well ask whether the process of capital account liberalisation has been worth it.

a history of economic thought, isaac ilych rubin (part one: mercantilism and its decline)

--- important quotes/excerpts and summary ---

(19-26): a brief history of the transition from feudalism to early capitalism in england (called the age of merchant capital by the author, standing for the period 1500-1700). insofar as this is the staple narrative against which all other history is tested, it makes sense to reconstruct this carefully.

1100s-1400s: the Later Middle Ages, characterized by a "town" or "regional" economy. Key is that "each town...comprised a single economic region, within whose confines all exchange between town and countryside took place." Rural economy involves peasants producing for their own consumption, giving some surplus to their lord as "quickrent", and selling whatever meagre portions were left on the market; also, of course, involved compulsorly labor that the feudals extracted from these peasants on their own manor. Urban economy organized into guild handicrafts--each master owns his own tools and instruments; as a member of the guild he is bound by its "strict code of rules on prices and output," even while he enjoys the monopoly that it affords him.

1500-1700: this social structure begins to break up as a result of three distinct, basic causes:

1. the rapid development of a money economy
2. the expansion of the market
3. the growing stregnth of money capital
   

colonial trade, in particular, was instrumental in bringing money capital and silver bullion to England, at this time. this caused the famous "price revolution" (which had the effect of depressing real wages for the majority of the population, but enriching the commercial bourgeoisie). peasantry begins to be displaced (and their land enclosed), as feudals look toward cash-crops, sheep, and larger/productive farmers. the guilds begin to break up under the pressure of this trade, as opportunities are sought beyond the bounds of the regional and eventually national economy (as a result of this transition, middlemen come to play an important role--these middlemen become primitive industrialists, of course, as the cottage industry takes off). an important point often elided in the apologists' history, of course, is that this nascent commercial bourgeoisie formed a ready alliance with the absolutist state, which shared their interest in undermining the authority of independent feudals.

(26): "The basic feature of mercantilist policy is that the state actively uses its powers to help implant and develop a young capitalist trade and industry and, through the use or protectionist measures, diligently defends it from foreign competition." Rubin further distinguishes between early mercantilism (which prioritizes the fiscal aims of the State--careful regulation of trade, ban on export of currency--and corresponds to period before 1600, when Britain in the main exported raw materials and lacked a native merchant class--for more, see pp 27-28) and developed mercantilism (which attempts to bolster capitalist trade and industry, defending it through protectionism).

(30): However, as "the basis of English exports shifted from raw materials (wool) to the export of finished products" (cloth) in the late 1500s and 1600s, a new merchant class is looking ever more anxiously for profitable markets in which to sell these products. "The country was now forced to purse an active colonial policy... The entire history of England from the 16th (1500s) to the 18th (1700s) centuries is a history of its struggles with these nations for commercial and colonial superiority. Its weapons in this struggle were the founding of its own colonies, commercial treaties, and wars."

(31): "And so, the money balance system, that old, outmoded set of restrictive, essentially fiscal measures, gradually gave way to the state's intervention on a broad front, as it actively fostered the growth of capitalist trade, shipping, and export industry with the aim of consolidating England's position on the world market and doing away with her foreign competitors."

(31-32): "Fully-fledged mercantlism was above all a policy of protectionism, i.e., the use of customs policies to stimulate the growth of native industry. It was protectionism which was to speed up England's transformation from an agricultural to a commercial and industrial nation. Customs duties now started to be used to further economic as well as fiscal ends. Previously, the government had, for fiscal reasons, levied duties indiscriminately on every type of export item; now, however, the state began to differentiate between raw materials and finished products. To provide English industry with cheap raw materials it required the governemtn either raised their duties or forbade their export altoghether. In the years when corn prices went up neither corn nor other agricultural products could be sent out of the country. On the other hand, when it came to finished goods, the state encouraged their export by every possible means, exempting them from duties or even offering an export subsidy... The import of wool, cotton, linen, dyestuffs, leather, and other raw materials was not only freed of customs levies, but even subsidized, and otherwise encouraged. Conversely, the import of foreign finished products was either banned or subjected to high tarriffs. Such a customs policy meant that native industry was to be shielded to the detriment of agriculture, which produced raw materials."

(32): Rubin distinguishes between mercantilist policy in England, which could only fleece agriculture so far because of the relatively speedy penetration of agriculture by the bourgeoisie, and France, where the State actively depressed trade in raw materials as part of its efforts to win the alleigance of merchants and industrialists in its fight with the feudals.

(32): Navigation Acts, issued by Cromwell in 1651.

(33): Summary of differences between early and developed mercantilism: in the former, (1) exports limited to 'staples,' (2) state exercises control over individual commercial transactions, (3) state regulates the flow of precious metals directly; in the latter, (1) policy is expansionist and colonial (aiming at maximum extension of foriegn trade and hegemony on the world market), (2) regulation is not individual but national in scale, and (3) it is understood that monetary health is acheived indirectly, by protecting the balance of trade.

(39): In the early 1800s, Rubin is saying, the bourgeoisie came into conflict with the landlords over the price of corn (the former favored a low price, because that would cheapen the price of labor-power). But in the 1600s, many English mercantilists were in complete agreement about the need for high prices of corn, since the operative problem was bringing people to work (this is the time of the maximum limit on wages, in other words).

(48-50): Thomas Mun is introduced as the first of the developed mercantilists (Hales was the represenative of the early mercantilists)--he, among other things,(1) strongly defends the carrying trade on the basis of which the East India company was making massive profits (and, in the process, losing hard currency, to the chagrin of the early mercantilists), (2) understands the link between monetary well-being and the balance of trade (so he argues that England will fix its metallic problems by crafting a strategy to export finished products, in effect).

(54-55): "The disproportionate value accorded to foreign trade by the mercantilists is to be explained not simply by its great potential for transforming products into money and attracting precious metals: the enormous profits derived from foreign trrade helped foster primitive capital accumulation by the merchant class... The process of transforming products into money was to be accompanied by the accumulation of the latter and its own conversion into profit-bearing money, that is, into capital. But for the most part, really large profits were only to be had in this period through foreign commerce, in particular through trade with the colonies... In this period the basic source of commercial profit was non-equivalent exchange. It was, then, natural that the mercantilists saw profit only in the net profit of trade, or 'profit upon alienation,' which had its source in the mark up that the merchant added to the price of the commodity."

(58): "The first person to develop a critique of the principles behind mercantilist policy was Dudley North... North is the first of the early prophets of the idea of free trade. He dedicates his tract to a discussion around two central themes: first, the restrictions which the state, in its desire to attract money into the country, has imposed upon foreign trade, and second, the legal limitation placed upon the level of interest. On both of these issues North consistently demands that the state cease its interference into economic life."

(65): Rubin takes note of a primitive labor theory of value during the age of craft production--Thomas Aquinas, for example, taught that the "value of a product depends upon the quantity of labor and the outlays expended upon its production. This, however, developed 'normatively,' and not scientifically, as the governing concern of that time was how to establish a just price for craftsmen. Beginning in the 17th century, as capitalist competition at the market congealed, these considerations ceded to a scientific appraisal of the price that was being established by supply and demand (John Locke being its pioneer)--the "process of price formation" as it occured on the market. "The normative formulation of the problem of value had given way to that of scientific theory."

(67): Similarly, as industrial capitalism became more ascendant in the 18th century, there arose a theory of price as corresponding to production costs--this was the work of James Steuart, who was one of the last mercantilists.

(69-74): William Petty, another of the last mercantilists, was developing the original insights of the labor theory of value at this time--"the magnitude of a product's value depends upon the quantity of labor expended on its production." But Petty, Rubin continues, confuses himself because of an inability to systematically distinguish between use-value and exchange-value (in the case of the former, he integrates labor and land into his argument for the source of value).

(74-75): Locke suffers from a similar confusion, though slightly inverted--for Locke, use-values are given by labor (valueless nature made valuable by labor), whereas exchange-values are determined by supply-and-demand. (Cantillon and James Steuart are insufficient in similar ways, Rubina adds)

(81): David Hume, in the 18th century, develops the "quantity theory of money" ("according to which, the value (or purchasing power) of money is determined by the latter's overall quantity"). He traces the mechanisms by which this will happen--a cascading series of consecutive increases in individual demand for various products (this introduces the temporal element into the theory, which is key).

(83-84): "Hume's theory of money is in turn a reaction against the mercantilist concept of money and a theoretical generalization fromt he price revolution of the 16th-17th centuries (when there had been a massive influx of silver and gold from America)." Yet, what is crucial, Hume doesn't understand the analytical importance of the other source of this price revolution--namely, the technological improvements in the extraction of silver/gold and the consequent fall in their value... His "nominalist conception of money as a simple token, with no value of its own but rather with a 'fictitious' value that derives from, and alters with fluctuations in the amount of money, proved to be profoundly mistaken when applied to metallic money."

(84-86): The preceding is the first revision to Hume's theory of money. The second is a complication of his understanding of causality. Hume understood that hoarded money would have no effect on prices. Rubin notes, therefore, that one obviously needs to consider what causes money to "enter circulation." One of the factors, clearly, is the price of commodities themselves. In that sense, it is not as simple as saying as "the quantity of money in circulation determines prices", is it? This was James Steuart's argument, in part: "Steuart denies that commodity prices are dependent upon the quantity of money in circulation; to the contrary, it is the quantity of money in circulation which is determined by the demands of commodity circulation, including the level of commodity prices."

(86): "The ideas that Steuart had put forward in contraposition to the quantity theory were extended in the 19th Century by Tooke, and then later on by Marx. These two theories--Hume's quantity theory, on the one hand, and Steuart's doctrine, on the other--represent in brilliant fashion the two basic tendencies in the theory of monetary circulation that even this day are vying for supremacy in economic science.

Henry Berstein, "V.I. Lenin and A.V. Chayanov: looking back, looking forward"
Journal of Peasant Studies, January 2009

And politics? The political economy in this paper is not deployed in any ‘antipeasant’ spirit or prescriptive stance on petty commodity production. Nor do any of my observations suggest withdrawing political sympathy and support for progressive struggles because they fail to satisfy the demands of an idealised (class-purist or other) model of political action. Rather, I have suggested that part of the problem with the ‘new’ agrarian question sketched is how it posits a unitary and idealised, and ostensibly world-historical, ‘subject’: ‘farmers’ or ‘peasants’ or ‘people of the land’. The point, then, is first, to recognise and, second, to be able to analyse, the contradictory sources and impulses – and typically multi-class character – of contemporary struggles over land and ways of farming that can inform a realistic and politically responsible assessment of them. This means rising to the challenges posed by a re-energised and radical agrarian populism, to engage both seriously and critically with the agrarian movements of the present time, and thereby to recover the spirit of Lenin’s ‘fresh and creative impulses’ of the early 1920s, and of Chayanov’s contributions to ‘practical theory’.

The first phase of the India’s relationship with Europe was one of mutual trade and prosperity. Until the East India Company began to establish a monopoly for itself in Indian trade, pushing out European rivals, notably the French, followed by conquest, that first phase from 1600 to 1757 was not really an unequal ‘colonial’ relationship. The East India Company had a large vested interest in promoting the export of cotton textiles and silks from India which soon began to militate against British industrial interests. Political agitation in Britain began to demand curtailment in the trading privileges of the East India Company and an end to imports of Indian textiles.
(...) The second phase of India’s relationship with Britain and the East India Company, opened with the beginning of the conquest of India in 1757. The main interest of the East India Company was still to maximise the export of Indian textiles to Britain and Europe. To that was now added the direct extraction of surplus from the Indian countryside in the form of land revenue and other taxes and impositions. Conquest and plunder joined hands with trade. In the collection of land revenue, the paternalism of Indian feudalism was replaced with the unmitigated avarice and greed of the faceless officials of the Company.
(...) [The third phase:] The East India Company had a major vested interest in the preservation and expansion of exports of Indian textiles. It obtained Indian textiles for resale in the Far East as well as Europe, where they fetched a profit of three times their cost. But there were rising pressures in England against that trade and for protection and promotion of the cotton textile industry in Britain. It was not until the middle of the seventeenth century that a cotton textile industry emerged in England. It is generally held that it was the development of the Manchester textile industry that triggered off the Industrial Revolution in England. As Landes pointed out, the ‘threshold’ of the industrial revolution in England was first crossed in cotton manufacture’. (Landes, 1970:82) It is little realised that the prior destruction of the Indian cotton textile industry was a necessary pre-condition for progress of the British Industry. It is a myth that is universally believed by economic historians (Marx among them) that it was the mechanisation of English textile production that killed the Indian textile industry. That was not so. Active steps had to be taken by the British government to suppress the flourishing Indian textile industry. The East India Company had a large interest in the continuation of Indian textile exports that conflicted with those of the rising British bourgeoisie and, especially, the British textile interests. Under pressure from them, the Company’s profitable trading monopoly was ended in 1813 and in 1833 it was required to stop its commercial operations altogether. It then became exclusively an organ of colonial government.

If we look at the entire country from a distance, during the period between 1978 and 1992 there were two great sectors: a public sector that was still largely based on socialist production relations and a private sector in which family production relations prevailed. Looking a little closer, in urban areas, the public sector was dominant, with a thriving family economy at the margins, while in rural areas, the family economy was dominant, with a growing township and village enterprise sector, which harboured both socialist and small-scale capitalist production relations. This was, indeed, a non-capitalist market economy, although it was changing quickly.
(...) Since 1992, much more radical market reforms have changed everything. Deng Xiaoping’s highly publicized tour of foreign-funded enterprises in southeast China’s special economic zones in early 1992 is conventionally cited as the key moment that marked the shift to more radical economic restructuring. After that, the ccp strongly encouraged the growth of the private capitalist sector and by the end of the decade it had presided over the privatization of the great majority of publicly owned enterprises. Between 1991 and 2005, the proportion of the urban workforce employed in the public sector fell from about 82 per cent to about 27 per cent (see Figure 1, below).
(...) This massive conversion of public into private property transformed managers into property owners and other work-unit members into disenfranchised proletarians. Work units in which previously both managers and workers had enforceable claims suddenly became the exclusive possession of the managers. In Marx’s language, labour power was separated from the means of production, as both were converted into commodities, and the responsibilities for production and consumption were severed.
(...) In order to retain some capacity to steer state-owned enterprises in line with political concerns, the ccp has held onto the power to appoint key state-sector executives, and government officials continue to use public holding companies to pursue state objectives that are broader than quarterly profits. Nevertheless, the structure of these enterprises has been fundamentally changed so that they are required—and able—to make profitability their primary goal. To accomplish this, they shed their previous obligations to their employees. Lifetime employment guarantees were eliminated, and enterprises not only reduced the size of their workforces but also discharged veteran workers and replaced them with younger workers who were less costly and more pliant. [13] State-owned coal mines, for instance, now engage contractors who compete to mine coal—using migrant labour—for the lowest cost per ton, a system that helps make Chinese coal mines the most dangerous in the world. [14] Enterprises have also closed unprofitable subsidiaries and removed themselves from the business of providing housing, health care, pensions, childcare, recreation, education and other services for employees and their families. Although these enterprises remain partly state-owned, the features that made them socialist have been eliminated.
(...) In 1978, China’s Gini coefficient (the measure used to compare international income inequality in which 0 indicates absolute equality and 1 absolute inequality) was calculated to be 0.22. This was among the lowest rates in the world. Observers were particularly impressed by it given China’s size and geographic diversity. The prc had accomplished this, despite large income differences between urban and rural areas and between more and less developed regions, because within each locality differences were minimal. Less than three decades later, in 2006, the figure was 0.496, surpassing the United States and approaching the rates of the world’s most unequal countries, such as Brazil and South Africa. [21] Inequality between regions and between rural and urban areas have both increased substantially, but the most dramatic change has been the polarization of income within localities.
(...) The data in Figure 2 indicate that all urban residents, including those at the bottom, now enjoy substantially higher incomes. These figures, however, only record cash income and, therefore, mask the loss of goods and services that had been distributed by the state and work units rather than the market, including subsidized housing, utilities, foodstuffs, household necessities, health care and education. The inadequacy of using cash income to gauge well-being across the structural transformation from a socialist to a capitalist economy becomes clear if one compares the income of the best-off urban households in the mid-1980s with that of the poorest households today. The former group, made up of managerial and professional cadres, lived in well-appointed apartments and enjoyed substantial economic comfort and security, even though they only had an average annual cash income of less than 1400 yuan; the latter group, made up mainly of unemployed or informally employed workers, despite having an average cash income of over 3800 yuan, live in deteriorating apartments, have trouble making ends meet, and avoid visiting the doctor.
(...) The sudden expansion of capitalist production relations since 1992 is what has made income inequality skyrocket in China. Before then, because the great bulk of economic activity was organized around the family labour and work-unit systems, which had responsibility for the consumption of their members, the growth of inequality was structurally constrained. The recent reforms have removed those constraints.
(...) That the current configuration of power in China may appropriately be called a capitalist state is confirmed by the government’s strong support for the expansion of the capitalist sector. Capitalist encroachment on the family labour sector and the relentless displacement of small enterprises by larger ones is fundamentally market-driven, but it is also state policy. China’s political leaders do not want backward produce markets, they want modern supermarkets, and state officials are expected to identify and support ‘winners’ in the economic competition. This expectation extends from the Political Bureau, which grooms national champions, down to county and township cadres, who are inveterate boosters of successful local enterprises. Under these conditions, it is difficult to distinguish, whether conceptually or empirically, state development strategies from the pecuniary interests of government officials and large-scale entrepreneurs, who are linked by myriad family and other ties.
(...) Arrighi correctly stresses the importance of China’s peculiar system of rural land tenure, which has barred individuals from selling land, preventing wholesale expropriation of the peasants’ means of subsistence. These laws have protected the family labour system in agriculture from capitalist encroachment, but they have not been at all incompatible with the operation of capitalist production relations in the rest of the economy, and they have permitted significant capitalist inroads in the most profitable areas of the agrarian sector. Although many entrepreneurs have certainly felt stymied by these laws, and employers of migrant labour will welcome the further influx of itinerant workers that the sale of land-use rights will produce, the land-tenure system established in the 1980s has served the broader interests of capital. For it has not only averted the social instability associated with huge landless populations, but has also allowed rural subsistence production to subsidize the employers of migrant workers, and a reserve army of rural labour to fluctuate in accord with the changing requirements of capitalist production. In fact, while the ccp’s recent decision to promote the sale of land-use rights might now permit capitalism to flourish in the countryside, it may also help to destabilize the larger system.
(...) Arrighi is right to highlight characteristics that are part of the country’s socialist legacy: a population that enjoys relatively good education and health, and a peasantry that retains possession of the land. These, however, do not change the fact that the sector of the economy that is growing most rapidly and successfully competing in international markets operates according to capitalist principles. Indeed, the enterprises in this sector are able to compete successfully because they are capitalist. Chinese entrepreneurs and their foreign partners, with strong and effective state support, have created what is—for the moment at least—the world’s most efficient system of extracting surplus labour. The features that make this system competitive in the global marketplace are the same that are producing ever greater class polarization in China.

ALBANIA

population: 3,619,778 (July 2008 est.)
religion: Muslim 70%, Albanian Orthodox 20%, Roman Catholic 10%
literacy: 98.7%
GDP by sector: agriculture 20.6%; industry 19.9%; services 59.5% (2008 est.)
labor force: 1.09 million (not including 352,000 emigrant workers)
labor force by occupation: agriculture 58%; industry 15%; services 27% (September 2006 est.)

1385-1912: Ottoman rule in the Balkan region can be dated to the Battle of Savra, when they routed Serbian forces in the region, and "the principal Albanian clans swore fealty to the Sultan." Though tribal chiefs retained their property and positions, they had to pay tribute and provide an auxiliary army to the Sultan upon request. Even so, in the 15th century, Albania saw fierce resistance to Ottoman rule. Under the leadership of Skanderberg (who, as the Muslim Iskander, had been a prominent Ottoman commander before converting and turning against the Turks), they fought against the Ottomans throughout the mid and late-1400s. Albania's flag today bears Skanderberg's family crest. The rentrenchment of Ottoman rule saw a mass exodus of Albanians to Italy; a community that would be important in the movement toward Albanian nation-hood. Throughout the five hundred year occupation, the Ottomans relied upon a never-fully-successful structure of governance, patronizing individual lords over others (with land, etc.--much like any other Empire at this time). "As the centuries passed, however, Ottoman rulers lost the capacity to command the loyalty of local pashas, who governed districts on the empire's fringes, which threatened stability in the region. The Ottoman rulers of the nineteenth century struggled to shore up central authority, introducing reforms aimed at harnessing unruly pashas and checking the spread of nationalist ideas"

1912-1914: In 1912, after a major uprising against the Ottoman Empire (there had been many others preceding this one, as well), on the eve of the First Balkan War (1912-1913: Serbia, Montenegro, Greece, and Bulgaria against the Ottomans). Given the anxiety, for Albanians and their foreign patrons, that these powers might come to control Albania, independence was declared against the claims of Serbia, Montenegro and Greece to their territory. After the Second Balkan War in 1913, however, parts of what was considered Albania proper was partitioned between Serbia, Montenegro, and Greece (particularly the Serbs)--as per the wishes of the Great powers, a principality was established in this smaller territory under the sovereignty of a German prince in February 1914. However, by September, a revolt established the authority of a local Muslim warrior, Haji Kamal.

1914-1919: As World War I broke out, however, Albania was quickly invaded by Montenegro, Serbia, Austria-Hungary, Greece, Italy, and France. At the War's end, Serb and Italian forces remained in control of much of the territory--but resistance eventually pushed these forces beyond what are today considered the borders of Albania (with the help of US influence--see below)

1919-1939: Though at the Paris Peace Conference in 1920, Albania was virtually carved up and given to the competing claimants, intervention by Woodrow Wilson saved the fledgling nation-state (though its borders remained unclear, it was admitted to the League of Nations in December 1920). Over the next few years, a struggle for power ensued (via apparently democratic institutions--assemblies, elections), all exacerbated by the fact that the Yugoslavs and the Italians were still both seeking to dominate the country. After defeating the more radical Fan Noli, who had taken power on an anti-feudal platform in June 1924, Ahmed Bay Zogu emerged victorious in December of that same year. He sought dictatorial powers (in 1928, Parliament was dissolved), against the nominally democratic provisions of the constitution. Though patronized by the Yugoslavs, he soon looked instead to Mussolini for support. What followed was harsh and repressive rule, ensured by military men in his pay. Over the latter decade of his rule, though, Zogu slowly fell out with Mussolini.

1939-1944: Mussolini invaded the country in 1939; for the next five years, Albania is under Axis occupation. With him, Mussolini brought 100,000 troops, and 10,000 Italian colonists (the purpose being to integrate the country into Greater Italia). While he initially received some support for his success in expanding the borders of Albania to Yugoslav- and Greek- occupied territories (Kosovo, for example), by mid-1942 the newly-founded Communist Party (led by Enver Hoxha) had begun to mobilize the population to resist. In October 1942 the Party organized a popular front organization, the National Liberation Movement (and the National Liberation Army), to lead the resistance. After Italy's surrender in mid-1943, the Italian establishment in Albania buckled: the Communists took control of most of Albania's south, though an anti-Communist, conservative "resistance" Balli Kombetar held Vlore. By September 1943, though, the Germans had sent paratroopers to take control of Tirana before the resistance was able to--the guerrillas were driven back. Though many Balli Kombetar units collaborated with the Nazi occupiers, the 70,000-strong NLA eventually liberated the country in November 1944 (the only East European country to do so without Soviet assistance; furthermore, Albania was the only country occupied by the Axis powers that ended the war with a higher population of Jews than it started with).

1944-1953: Enver Hoxha, as Secretary General of the Party of Labor (the Communist Party) is the de facto leader of the country after a few years of political turmoil, following the war (most of the interwar elite is forcibly exiled after the end of the Nazi occupation). These changes see a shift in authority in country from the North (the Ghegs) to the South (Tosks). In December December 1945, a new people's assembly is elected; amidst allegations of voter intimidation and terror tactics, 93% of the voters choose the Democratic Front ticket. In January 1946, this assembly convenes and annuls the monarchy. After months of debate, they also adopt a constitution modeled on the Yugoslav and Soviet examples. Hoxha becomes prime minister, defence minister, foreign minister, and the army's commander-in-chief. By early 1946, moderates have allegedly been purged. Economically, by December 1944, the State moves to take control of much of industry, trade, as well as expropriating all German- and Italian- owned property. In August 1945, significant agrarian reforms, which had been stifled in the past, are carried out. By 1946, a system of central planning is in place. Significant spending on education and health also improves social indicators considerably--most notably, illiteracy declines from about 85% to 31% in just five years.

All the while, tensions with Yugsolavia (which is expelled from the Comintern in 1948) begin to build, particularly over the question of Kosovo (which is reincorporated into Yugoslavia in January 1945). Despite the signing of a treaty of friendship and cooperation in 1946, Hoxha and his allies (in particular, Nako Spiru, the head of the planning commission) begin to believe that Yugoslavia is exploiting Albania, economically (by paying too little for raw materials, etc.). In 1947, despite some reciprocal purgues within the respective governments, Yugoslavia attempts to buy off the support of an increasingly skeptical Communist party by extending credits to the Albanian State; Spiru, for his part, proposes a path less dependent on the Yugsolav economy, but is driven to commit suicide for lack of support within the cadre. In 1947, Albania is not even invited to the Cominform meetings; Yugoslavia represents them, instead. Stalin is even reported as saying that Yugoslavia should "swallow" Albania.

However, things change dramatically in 1948. Though the pro-Yugoslav faction had held sway in Albania until this point, the dramatic fall-out between Tito and Stalin led to an about-face in Albanian policy towards Yugoslavia, as well. "The move surely saved Hoxha from a firing squad and as surely doomed Xoxe to one. Three days later, Tirana gave the Yugoslav advisers in Albania 48 hours to leave the country, rescinded all bilateral economic agreements with its neighbor, and launched a virulent anti-Yugoslav propaganda blitz that transformed Stalin into an Albanian national hero, Hoxha into a warrior against foreign aggression, and Tito into an imperialist monster."

Xoxe was soon purged (executed in May 1949, after a secret trial), as Albania moved more squarely into the Soviet orbit (despite not being contiguous, of course). "The subsequent anti-Titoist purges in Albania brought the liquidation of 14 members of the party's 31 person Central Committee and 32 of the 109 People's Assembly deputies. Overall, the party expelled about 25 % of its membership. Yugoslavia responded with a propaganda counterattack, canceled its treaty of friendship with Albania, and in 1950 withdrew its diplomatic mission from Tirana."

1953-1970: After Stalin's death in 1953, however, this unsteady skein of alliances shifts. As Nikita Kruschev moves to reconcile Moscow with Belgrade, Hoxha grows increasingly worried, defending Stalin's legacy and denouncing the rhetoric of "peaceful coexistence" and "many different socialisms." Various events in this vein set the stage for rapproachment with China--in the aftermath of the making public of the Sino-Soviet split in June 1960, Albania sides with the Chinese. In November of that same year, at a Moscow conference, Hoxha denounces the Soviet Union (and, in particular, their failure to deliver grain to Albania). Hoxha's third Five-Year plan of 1961-1965 allocated 54% of all investment to industry, directly in opposition to Kruschev's plans to make Albania into an agarian satellite of the Soviet Union. However, because of the withdrawal of much of Soviet aid (and the insufficiency of Chinese replacements), Hoxha was forced to launch an austerity program in 1962. Despite the replacement of Krushchev (with Breshnev), relations between Tirana and Moscow continued to worsen--after the 1968 invasion of Czechoslovakia, Albania withdrew from the Soviet alliance.

On the social and economic front, the pattern was similar: aggressive interventions in property regimes had destroyed old kinship patterns; women were encouraged to work, to compensate for labor shortages. In 1967, a campaign was launched to make Albania athiest; religious institutions were seized and converted into gyms, warehouses, and workshops.

1970-1983: Albania's relations with China begin to deterioriate, as the latter begins to emerge from its international isolation. Tirana, for its part, also broadens its contacts with the non-Communist world, opening trade negotiations with France, Italy, and the recently independent African and Asian states. Especially after Nixon's visit to the PRC in 1972 (completely ignored by State media in Tirana), Hoxha tried hard to diversify Albania's economic and political ties. By 1978, after Mao's death, China ended its assistance programs to Albania.

At this stage, Hoxha's health was failing, as well. A second Stalinist constitution in 1976 was an attempt to institutionalize his vision for Albania, in the hope that it would outlive his death: The document "guaranteed" Albanians freedom of speech, the press, organization, association, and assembly but subordinated these rights to the individual's duties to society as a whole. The constitution enshrined in law the idea of autarky and prohibited the government from seeking financial aid or credits or from forming joint companies with partners from capitalist or revisionist communist countries. The constitution's preamble also boasted that the foundations of religious belief in Albania had been abolished."

1983-1985: By 1983, Ramiz Alia had replaced Hoxha, who had moved into semi-retirement. The succession was bloody; Hoxha had overlooked his long-standing comrade-in-arms Mehmet Shehu, who was instead purged, along with his family and relatives (Shehu allegedly committed suicide in December 1981, but Hoxha may have had him killed). "When Hoxha died on April 11, 1985, he left Albania a legacy of repression, technological backwardness, isolation, and fear of the outside world. Alia succeeded to the presidency and became legal secretary of the APL two days later."

1985-1997: Despite Alia's own intentions, it was clear from happenings in Eastern Europe and elsewhere that change was on its way. In 1991, owing to pressure from workers and students, the country held its first pluralist elections in March. Though the Communists won, a general strike two months later collapsed the government. In new elections in March 1992, after an interim government had been in power for almost a year, the Democratic Party defeated the Communists.

1997-2005: Albania's transition to a liberal democratic order was marred by the collapse of several pyramid schemes in January 1997 (in which around 70% of the country's population had invested!). The schemes, which were actually fronts for money laundering and arms dealing, were no longer able to pay out, once the majority of Albanians became involved. As a result, the country descended into "anarchy": by March 1997, the month in which President Sali Berisha declared a State of Emergency, the protests had turned more violent, especially in the South of the country. From late-March to August, an Italian-led mission of 7,000 UN peacekeepers were called to intervene. In elections in June and July, the Socialist Party replaced the Democrats, with Rexhep Meidani as President and Fatos Nano as Prime Minister (though he was replaced by Pandeli Majko in 1998, who was, in turn, replaced by Ilir Meta in November 1999) . A new constitution was approved, despite an opposition boycott, by popular referendum in 1998. In October 2000, the Democratic Party lost elections at the local level, as well. Parliamentary elections in 2001 were also won by the Socialists.

2005-2009: After 8 years of Socialist Party rule, a pro-Berisha coalition returned to power in elections in 2005 (Berisha is today the Prime Minister). Moves are being made, now, to integrate Albania with greater Europe (NATO and the EU).

"However, a majority of the people, who did not have even Rs. 20 a day for consumption, were not touched by this euphoria. At the end of 2004-05, about 836 million or 77 per cent of the population were living below Rs.20 per day," it said.

For them the loans are often diverted to consumption since they can use the relatively large lump sum of the loan, a luxury they do not come by in their daily turnover. Since the mid 1990s research on microcredit use has found that it often goes to "help the poor smooth consumption over periods of cyclical or unexpected crises…"7 Again, there is no question that such a use of credit helps the poor, but this is not what the majority of microcredit enthusiasts claim it can do - function as capital aimed at increasing the returns to a business activity.

africa's unnatural disaster:
The World Bank's continued market fundamentalism is difficult to understand, especially in light of the fact that after more than 25 years of imposing these policies in Africa and Latin America, success stories are few and far between. Those countries that do have productive agricultural sectors (almost none of which are in Africa) either rely on huge landholders to be productive (Brazil, Argentina, Chile) or on massive subsidies (India) or both (U.S., EU). The countries that have eliminated their subsidies and privatized their grain boards, including many in Africa, are those that are doing the poorest.
(...) If one is willing to look at the events of the last 30 years without the quasi-religious belief that free markets lead to development and growth, one would undoubtedly find that the opposite is true. In his groundbreaking work Kicking Away the Ladder (2003), Ha Joon Chang documents the development of every industrialized country, showing that protectionist policies were a fundamental part of development strategy in almost every case. The process of development that emerges from this story is not maximizing comparative advantage (for if so, the U.S. would be a sparsely populated country of fur traders and fisher people) but rather shifting comparative advantage to high value goods through calculated market distortions. In the case of the U.K. and the United States, those market distortions originally came in the form of colonialism and slavery. But market distortions continue in the U.S. today in the form of agriculture and steel subsidies, not to mention the tremendous government spending on biotechnology and defense, which largely serves as a subsidy for those sectors.
(...) The report does point out that a few countries (Brazil and Chile are the examples given) have successfully used agriculture to increase growth, but in Brazil and (to a lesser extent) Chile, small farmers are all but extinct, and agriculture is big business. Given the preoccupation with small farmers and poverty alleviation in other parts of the document, the examples are odd.
(...) Since about 1970, the World Bank, other international financial institutions and the private sector have succeeded in completely transforming agriculture from a primarily local affair to a complex industrialized process. Monocropping, over-reliance on chemical pesticides and fertilizers and trans-genetic manipulation have in some cases increased yields; but these practices have not led to a significant reduction in the number of hungry people in the world. The recommendations of the Alliance for a Green Revolution in Africa and the World Bank amount to insanity - recommending more of the same and expecting better results.
(...) In the United States, Europe and elsewhere, many are beginning to understand that industrialized agriculture benefits neither those who produce nor those who consume food. In the current food crisis, more than 25 countries and the European Union have imposed tariffs, subsidies, price controls or other measures to protect consumers from the global free market. So why the double standard when it comes to Africa?
(...) For those interested in solutions, the organic and local movements aren't far off the mark. What producers and consumers in many parts of the world are beginning to understand is that the way that farmers have been growing food for millennia is more or less a good system. While there may be room for technology, (drip irrigation systems, for example) that innovation should not alter the food product nor add layers of cost. Many parts of Africa have an advantage in that they have never really lost their traditional relationships with the land. The problem has been that cheaper food from Europe and the United States is often dumped on African countries, undercutting the possibility for farmers to earn a living from their production. In the case of Africa, all that may be needed is a sensible trade policy to protect those who already grow enough food for all Africans.

the environmental movement in the global south:
Mahathir has been interpreted in the North as speaking for a South that seeks to catch up whatever the cost and where the environmental movement is weak or non-existent. Today, China is seen as the prime exemplar of this Mahathirian obsession with rapid industrialization with minimal regard for the environment. This view of the South’s perspective on the environment is a caricature. In fact, the environmental costs of rapid industrialization are of major concern to significant sectors of the population of developing countries and, in many of them, the environmental movement has been a significant actor. Moreover, there is currently an active discussion in many countries of alternatives to the destabilizing high-growth model.
(...) In both societies (Korea and Taiwan), farmers, workers, and the environment bore the costs of high-speed industrialization. Both societies, it is not surprising, saw the emergence of an environmental movement that was spontaneous, that drew participants from different classes, that saw environmental demands linked with issues of employment, occupational health, and agricultural crisis, and that was quite militant.
(...) Unlike in Korea and Taiwan, environmental movements already existed in a number of the Southeast Asian countries before the period of rapid industrialization, which in their case occurred in the mid-eighties to the mid-nineties. These movements had emerged in the seventies and eighties in struggles against nuclear power, as in the Philippines; against big hydroelectric dams, as in Thailand, Indonesia, and the Philippines; and against deforestation and marine pollution, as in Thailand and the Philippines. These were epic battles, like the struggle against the Chico River Dam in the northern Philippines and the fight against the Pak Mun Dam in the northeast of Thailand, which forced the World Bank to withdraw its planned support for giant hydroelectric projects, an outcome that, as we shall see later on, also occurred in struggle against the Narmada Dam in India. The fight against industrial associated partly with foreign firms seeking to escape strict environmental regulations at home was a case of a new front being opened up in an ongoing struggle to save the environment.
(...) The environmental movements in Southeast Asia played a vital role not only in scuttling projects like the Bataan nuclear plant but in ousting the dictatorships that reigned there in the seventies and eighties. Indeed, because the environment was not perceived by authoritarian regimes as “political,” organizing around environmental and public health issues was not initially proscribed. Thus environmental struggles became an issue around which the anti-dictatorship movement could organize and reach new people. Environmental destruction became one more graphic example of a regime’s irresponsibility. In Indonesia, for example, the environmental organization WALHI went so far as to file a lawsuit for pollution and environmental destruction against six government bodies, including the Minister of the Environment and Population5. By the time the dictatorships wised up to what was happening, it was often too late: environmentalism and anti-fascism fed on one another.
(...) The environmental crisis in China is very serious. For example, the ground water table of the North China plain is dropping by 1.5 meters (5 feet) per year. This region produces 40 percent of China's grain. As environmentalist Dale Wen remarks, “One cannot help wonder about how China will be fed once the ground aquifer is depleted” 6. Water pollution and water scarcity; soil pollution, soil degradation and desertification; global warming and the coming energy crisis—these are all byproducts of China’s high-speed industrialization and massively expanded consumption.
(...) Most of the environmental destabilization in China is produced by local enterprises and massive state projects such as the Three Gorges Dams, but the contribution of foreign investors is not insignificant. Taking advantage of very lax implementation of environmental laws in China, many western TNCs have relocated their most polluting factories into the country and have exacerbated or even created many environmental problems. Wen notes that the Pearl River Delta and Yangtze River Delta, the two Special Economic Zones where most TNC subsidiaries are located, are the most seriously affected by heavy metal and POPs (persistent organic pollutants) pollution.
(...) Global warming is not a distant threat. The first comprehensive study of the impact of the sea level rise of global warming by Gordon McGranahan, Deborah Balk, and Bridget Anderson puts China as the country in Asia most threatened by the sea level rise of up to 10 meters over the next century 8. 144 million of China’s population live in low-elevation coastal zones, and this figure is likely to increase owing to the export-oriented industrialization strategies pursued by the government, which has involved the creation of numerous special economic zones. “From an environmental perspective,” the study warns, “there is a double disadvantage to excessive (and potentially rapid) coastal development. First, uncontrolled coastal development is likely to damage sensitive and important ecosystems and other resources. Second, coastal settlement, particularly in the lowlands, is likely to expose residents to seaward hazards such as sea level rise and tropical storms, both of which are likely to become more serious with climate change”9. The recent spate of super-typhoons descending on the Asian mainland from the Western Pacific underlines the gravity of this observation.
(...) In terms of public health, the rural health infrastructure has practically collapsed, according to Dale Wen. The system has been privatized with the introduction of a “fee for service” system that is one component of the neoliberal reform program. One result is the resurgence of diseases that had been brought under control, like tuberculosis and schistosomiasis. Cuba, in contrast, has won plaudits for its rural health care system, which is ironic, says Wen, given that the Cuban system was based on the Maoist era’s “barefoot doctor” system.
(...) The combination of the industrialization of food production and the lengthening of the food chain from production to consumption is strongly suspected to be the cause of bird flu, which has migrated from China to other countries. The government has become an unreliable actor in dealing with new diseases such as bird flu and SARS, prone as it is to engage in minimizing the threat if not promoting a cover-up, as it did in the case of SARS.
(...) As in Taiwan and Korea 15 years earlier, we see unrestrained export-oriented industrialization bringing together low-wage migrant labor, farming communities whose lands are being grabbed or ruined environmentally, environmentalists, and the proponents of a major change in political economy called the “New Left.” Environment-related riots, protests and disputes in China increased by 30% in 2005 to more than 50,000, as pollution-related unrest has become “a contagious source of instability in the country,” as one report put it. Indeed, a great many of recorded protests fused environmental, land-loss, income, and political issues. From 8700 in 1995, what the Ministry of Public Security calls "mass group incidents" have grown to 87,000 in 2005, most of them in the countryside. Moreover, the incidents are growing in average size from 10 or fewer persons in the mid-1990s to 52 people per incident in 2004 11. Notable were the April 2005 riots in Huashui, where an estimated 10,000 police officers clashed with desperate villagers who succeeded in repelling strong vested interests polluting their lands.
(...) As in China, the environment and public health have been sites of struggle in India. Over the last 25 years, the movement for the environment and public health has exploded in that country. Indeed, one can say that this movement has become one of the forces that is deepening Indian democracy.
(...) Here Roy expresses an essential truth: that centralized electrification preempted the development of alternative power-systems that could have been more decentralized, more people-oriented, more environmentally benign, and less capital intensive.
(...) While these interests benefited, others paid the costs. Specifically, it was the rural areas and the environment that absorbed the costs of centralized electrification. Tremendous crimes have been committed in the name of power generation and irrigation, says Roy, but these were hidden because governments never recorded these costs. In India, Roy calculates that large dams have displaced about 33 million people in the last 50 years, about 60 per cent of them being either untouchables or indigenous peoples
(...) Equally important was the broader political impact of the Narmada struggle. It proved to be the cutting edge of the social movements that have deepened India’s democracy and transformed the political scene. The state bureaucracy and political parties must now listen to these movements or risk opposition or, in the case of parties, being thrown out of power. Social movements in the rural areas played a key role in stirring up the mass consciousness that led to the defeat in 2004 of the neoliberal coalition led by the Hindu chauvinist BJP (Bharatiya Janata Party) that had campaigned on the pro-globalization slogan “India Shining.” While its successor, the Congress Party-led coalition, has turned its back on the rural protest that led to its election and followed the same anti-agriculture and pro-globalization policies of the BJP, it risks provoking an even greater backlash in the near future.
(...) As in China, the challenge lies in building up a mass movement that might be unpopular not only with the elite but also with sections of the urban-based middle class sectors that have been the main beneficiaries of the high-growth economic strategy that has been pursued since the early 1990’s.
(...) The reason for tracing the evolution of a mass-based environmental movement in East Asia and India is to counter the image that the Asian masses are inert elements that uncritically accept the environmentally damaging high-growth export-oriented industrialization models promoted by their governing elites. It is increasingly clear to ordinary people throughout Asia that the model has wrecked agriculture, widened income inequalities, led to increased poverty after the Asian financial crises, and wreaked environmental damage everywhere.
(...) There is no doubt that the burden of adjustment to global warming will fall on the North, and that this adjustment will have to be made in the next 10 to 15 years, and that the adjustment needed might need to be much greater than the 50 per cent reduction from the 1990’s level by 2050 that is being promoted by the G 8. In the eyes of some experts, what might be required is in the order of 100 or 150 per cent reduction from 1990 levels. However, the South will also have to adjust, proportionately less than the North but also rather stringently.
(...) The South’s adjustment will not take place without the North taking the lead. But it will also not take place unless its leaders junk the export-oriented, high-growth paradigm promoted by the World Bank and most economists to which its elites and many middle strata are addicted.