capitalist coalitions, the state, and neoliberal economic restructuring

(526): state autonomy insufficient

(528): imp--ISI had created coalitions favoring (1) protection; (2) sectoral policies that shifted resources to industry (away from agriculture, trade(?), and finance). earlier argument was that State autonomy was important in repressing this segment; didn't think about the sectors of capital that would be interested in liberalization...

(529): FN--always the possibility of responding to the crisis by 'deepening' industrialization, as the BA regimes in Brazil and Argentina did in the 1960s

(530, 534): pace Haggard, authoritarian regimes have only large-scale capitalists/landowners affecting policy (small-scale are sidelined)

(531): pace Frieden, what matters is whether firms have liquid assets, or fixed assets. former favour market-oriented (banking, real estate, trade), latter favour sectoral (industrialists, landowners)

(532): pace Gourevitch, international- vs domestic- producers. uncompetitive domestic producers should favour protection; all others should favour liberalization.

(531): FN--thus attempting to disaggregate the 'dominant class' much more thoroughly than is typically done by Marxists

(535-): three periods

1. 1973-1975, gradual neoliberalism -- UP had split the ISI coalition, by polarizing things on class lines. gradualist coalition composition (pg. 536); labour's gone, which decreases protectionist coalition's leverage (pg. 537); diversified interests eased burden of adjustment for old protectionist coalition (pg. 538) [implications?]
2. 1975-1982, radical neoliberalism -- (1) radical deflation, and (2) reduction in protections. the power of this radical internationlist coalition was increased by (1) increasing role of private commercial banks, and (2) international liquidity, but also (3) weakness of other firms due to recession, privatizations, etc.
3. 1983-1988, pragmatic neoliberalism -- external economic shock was main catalyst, as well as intense business pressure after the debt crisis (pg. 548-550). commitment to radical neolibearlism had been thing. also the protests that were starting in '83-84 proved important.

(543): int point about accomodation between elites--gradualist coalition evidence of elite willingness to settle differences, to which underdevelopment has been attributed. bourgeoisie unwilling to play historic role. but then we got neoliberalism!

(546): between '74 and '78 Pinochet star rising, as well

(546): C. Boys were more than just technocrats

(547): Pinochet needed radical internationalists--why, exactly?

(550): recovery program--high exchange rates, some protection, reflationary monetary policy, low interest rates, debt relief, sectoral policies, etc.

(556): int. claim that States become more attentive to demands of factions, because neoliberalism gives capitalists control over investment [not sure if this is superior way to frame arg]

(556-557): argument summary

(558): Brazil, Argentina, Uruguay had less support from capitalist elites, so less 'success' in restructuring?

----

[1] int contrast to the fact that, in general, ISI was given its last legs by liquidity boom. here it is neoliberalism that becomes particularly radical as a result of liquidity boom (because previous alignments have already taken place)

rick fantasia, cultures of solidarity (1988)

- - - -

[1] ambiguity: the importance of the instances of 'cultures of solidarity' being chronicled, in the book.

(A) on the one hand, Fantasia is right to refute the argument that all Americans are entirely self-interested, and have no stake in the labour movement/unions. there isn't a lack of 'traditions of solidarity', i think we can agree with him--'solidarity' is very clearly prevalent in d-to-day existence, as practice, even in a weak labour movement (pg. 14)

all this is fine. together with the argument against survey/one-dimensional measurement of class consciousness (pg. 5, 6), that is the book's principal aim, and he carries it off well enough.

but let's be clearer than he is, also, that there are serious problems with setting this low a bar. because there is something very rotten about the American labour movement, when--instead of comparing it to (a) totally self-interested workers, you compare it to (b) other labour movements; (c) itself in the 30s (pg. 4); (d) where we would like it to be

he's alive to this, in the conclusion, and he says some general things in this regard. but it's not central to his case studies. the narrative, there, is always developed against the silly position that american workers are always selfish--he finds moments of solidarity and we're supposed to rejoice/say eureka--rather than in light of the conviction that there's something seriously wrong.

[(B) he pooh-poohs 'trade-union consciounsess'/class consciousness distinction, but it's not clear why. there is a real reason to be very critical of simply trade-union consciousness. he himself notes the limits of that understanding, in the course of his book]

[2] what this leads to is the more important, central problem with the book--the narratives he's giving us have nothing to offer, really, in the way of analytical or explanatory insight. the question that he's trying to answer is just not clear, at all; there's no real argument.

his task, as he understands it, is to look at how collective solidarity emerges--as 'praxis', rather than as a attitude/belief-system, what have you. that's fine, but it doesn't go very far at all. and it becomes quite tedious/unenlightening to read.

we really want, I would suggest, is some account of why movements emerge when and how they do. to the extent that he gives us an answer to this in his case studies, it's a very weak one--we get a story about individual triggers/contingency (pp. 234-235--'collective action was 'complex set of interactions...'; pg. 99--'spatial positioning' of workers re: foreman.) (there's also the argument that collective action begets more solidarity--but it would be difficult to make this into a coherent argument about larger shifts in the strength of labour. you just push the question back)

it may be that, partly, the things he's trying to explain are so insignificant/'small' (tens of workers on a wildcat for a few hours!?) that 'contingent'/trigger explanations are in fact sufficient, for them.

but then of course in that case we can't extrapolate, scale up, which is fatal. (unless we somehow believe that more significant waves of labour unrest are also 'contingent',) we can't really say anything about what we're really interested in-- emergence of social movements, etc.

it's also, however, a function of the fact that he just doesn't ask the question.

for that, I think you'll have to take seriously things that he, to his credit, hints at in his book (pg. 119, plant leaving--. there's a structural context for many of the things that triggered what he's noting in the book, in the 70s, when firms across the country were faced with profitability pressures, etc, and so resorted to strategies for ramping up productivity that provoked the kind of backlash we see bits and pieces of, here (pg. 123-124--mechanization, de-skilling at hospital). there's a whole book making this argument, of course. this is the direction we ought to be heading.

[3] the other 'big' question that this book raises, which I already mentioned, is the question of the 'exceptional' weakness of the American labour movement. to the extent that he's committed to an explanation, it's institutional (pg. 227--'structures of industrial relations' vs. Italy)--'Taft-Hartley' is responsible for the exceptional weakness of the American labour movement.

there's certainly something to this, but I would have liked much more, here. he's stressing the institutional facts partly because of his larger argument that 'cultures of solidarity' develop in context, and the context is 'business unionism'.

but the larger argument, if we step back from his aims, is a bit too path-dependent. as he himself notes in his conclusion, there are reasons to doubt that labour only operates within the institutional constraints set by the time--the 30s were not like that. why is it that labour can't find the strength to ignore Taft-Hartley? surely other factors matter, as well. historical-structural factors; political-strategic factors. [balance of 'class forces' vs. his slight voluntarism pg. 167]

[4] attack on rationality is misplaced -- 'feelings' are important, but 'feelings' are constructed on real ground; i.e., you won't be able to sustain optimism if the grounds for it don't exist.

[5] is micro-level assessment just off-limits? no, I don't think so--it's more the way he goes about trying to understand it. there are structural ways to do this, that would shed insight on larger cases.

globalization, social conflict, and economic growth, dani rodrik (1997)

(3, 5-6): in short-- LA vs. E. Asia is not an issue of State interventionism, ISI, what have you--it's a feature of how they deal with turbulence they confront, which is an issue of trade strategy/industrial policy. it's a question of how well you can adjust fiscal/monetary policy

(8): imp--adjustment will be easier where you have institutions of conflict management and smaller social cleavages.

(11): not whether you globalize, but how you globalize

-----

1. fiscal/monetary policy? not underlying competitiveness? export performance? again, this seems to be marred by the same assumptions as Sachs. it's plausible that devaluation will help, i guess, but it can't substitute for success in becoming internationally competitive, surely.

reviving the developmental state? myth of national bourgeoisie, vivek chibber

(227): three Marxist expectations for national bourgeoisie, which have been called into question

1. expand capitalist relations
2. abolish pre-capitalist relations (anti-feudal, etc.)
3. natural interest in opposing imperialism

(228): assumption that national bourgeoisie is natural force for development needs to be challenged

(230): n. bourgeoisie has been an obstacle to State capacity, which is what was needed for successful development

(237): actual power of State in State-led development was weak

(238) twin problems

1. fiscal drain--slack taken up by public sector, subsidies to inefficient private sector, etc.
2. external account drain--import of capital goods, failure of export-promotion programs (due to resistance from firms)

(241): key point--late-late development was very different form late development, in the role that the State would have to play (more than subsidization/protection, due to comparative severity of backwardness). this is one reason Marxists had trouble understanding.

(242): second reason: Theory of the State issue, as well--instrumentalists understood State entirely in service of capitalist class. but if you allow some independence, it becomes easier to understand the conflict between capitalists and the State. [hmm]

(244): remember, ISI was a massive transfer of resources to capitalists.

(244): co-option and repression lf labour--too often labour was complicit (you mean labour bureaucracy)

-----

1. small number of producers not sufficient to generate competition [same question as last week, which was well-answered: (1) don't want to waste resources; (2) mkt not big enough]

2. th. of the State point. really?

sunkel and griffith-jones, debt and development crisis in latin america

(31): US vs. Keynes at Bretton Woods -- ultimately former won out, which significantly reduced the scope of the international institutions that emerged

(32): 'conditionality' was part of US proposal

(33): ended up too small--only made a marginal contribution to funding of deficit countries

(34): ideally, would aid country w/ deficits

(35): Prebisch agreed that a transfer of financial resources to a country could help it, provided certain conditions were met

(36): imp--other agents stepped into the space not taken up by the IFIs. in 50s, foreign investors. in 60s, aid agencies. and in 70s, multinational banks.

(37): these flows in the 70s were themselves financed by massive influx of dollars into the US, of course

(37-38, see also 65): key--these private financial flows were very fickle, and always pro-cyclical -- dependent entirely on whether they saw a profit, or not (interest rates were also floating, which exacerbated the problems). this is in contrast, of course, to the way in which and reasons for which resources could have flown in, had the international system been better regulated/planned.

(39): convertibility to gold should have kept the holder of the reserve currency (i.e., the US) honest, since not maintaining a satisfactory payments position would cause a 'run on the dollar' (as it did during the Vietnam War--but then US got rid of the g. standard, of course)

(41): weakness of SDR--didn't become a substitute for gold and foreign exchange, but more of an afterthought

(42-43): with end of convertibility in 1970s, reserves skyrocketed.

(43): liquidity in 70s boomed. and, importantly, became a function of the market.

(45): Bretton Woods institutions, at their birth, reflected the dissatisfaction with laissez-faire after the G. Depression

(48): over post-war period, US foreign investment going more and more to 'developed countries', after being 50-50 after WWII

(49): in 60s, net transfer of 5.7 billion dollars out of LA

(50): Alliance for Progress as clear response to Cuban Revolution

(53,55): net flows during Alliance for Progress are in direction away from LA (private outflows exceed official inflows). despite this--in sum--it partly compensated these countries, in sharp contrast to the impact of private inflows in the 70s.

(58): after laissez-faire, there was protectionism at the periphery and at the center, remember

(61-62): financing to LA in 70s became much more private, multinational bank-centered, oligopolized. key--loans were taken to cover deficits, which were the result of the 'exhaustion of the ISI model', plus the jump in import prices.

(62): the petrodollars were recycled, not through a responsible international agency, but through these multinational banks

(62): IMF didn't help with this very much, at all. about 3.1 percent of CA deficit covered by them.

(65): critical--these private inflows were a colossal waste of resources, since they came in and were spent without a plan. a great increase in luxury consumption, armaments, and flight of capital.

(66-67): interesting story about the transition to less State intervention, in which all major actors seem involved [but the story is underdeveloped]

(71, 73): growth of Euro-currency market, from which Mexico and Brazil borrowed especially (but this is more than petro-dollar recycling, we're being reminded--the mkt starts in the mid-1960s). 50% of loans made, in late 1970s, were made to developing countries.

(73-75): imp--growth in lending driven, principally, by competition between multinational banks; not as much by changes in countries themselves (notes a few: expanded public investment, stagnation in official development assistance, loans w/ few strings viz-a-viz official assistance). borrower bore more risk, though

(77): by late-70s, burden is enormous (table)

(78): variable interest rates hurt LDCs severely--eventually, most borrowing was going toward paying off old debt

----------

1. causal story re: increase in 70s liquidity. ending of covertibility?

2. supporting agriculture at the center, after WWII? why, whom? (p. 58)

3. better developing the story told on pp. 66-67, about the transition to neoliberalism. surely there were major actors opposed, as well? (this relates to the 'discrediting' point, in Vivek--this can be an excuse that facilitates transition, but there have to be concrete interests behind the transition, as well)

4. birth of Euro-Dollar mkt in response to loopholes in regulations? larger shifts in economy? what's the best story, here? (not petro-dollars, I think that's quite right)

jeffrey sachs, external debt and macroeconomic performance in LA (1985)

(525): difficulties in LA not a function of size of shocks, borrowting, extent of gov't involvement--but function of exchange rate management and trade regime (failure to devalue, turn to exports)

(532): not external shock

(534): rather, debt-export ratio is central -- debt accumulation in LA was over and above current account deficits. capital flight exacerbated this problem.

(534): not taxes, not budget deficit

(548): in sum--debt was burdensome in LA because of its structure (short maturities, variable interest rate), which had to do with it coming mostly from private commercial banks, as well as insufficient exports available to service it

(550, 555): bizarre argument that E. Asian economies were outward-oriented because of the strength of their rural sector

(554): using an overvalued exchange rate, rather than an export tax, b/c ignorant?

(559): urban-industrial exporters align behind an undervalued exchange rate

(561): key--assumption here is that devaluation will make you competitive, which is not insignificantly silly.

(567): Williamson raises problem of rural-->liberalization argument

-------

1. central problem in Sachs' argument is that devaluation will lead to export competitiveness. classic free trade garbage.

2. auxiliary problem is the idea that the power of the rural sector (very poorly measured, but that's beside the point) is the explanation for why export-led growth is pursued. this can't explain ISI in SK in 50s, and then rapid switch.

3. clarify causal story behind capital flight. function of what, exactly? (social structure, policy failures, both?

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'