1. 2008 was a year of crises. First, we had a food crisis, particularly threatening to poor consumers, especially in Africa. Along with that came a record increase in oil prices, threatening all oil-importing countries. Finally, rather suddenly in the fall, came the global economic downturn, and it is now gathering speed at a frightening rate. The year 2009 seems likely to offer a sharp intensification of the downturn, and many economists are anticipating a full-scale depression, perhaps even one as large as in the 1930s. While substantial fortunes have suffered steep declines, the people most affected are those who were already worst off.

The question that arises most forcefully now concerns the nature of capitalism and whether it needs to be changed. Some defenders of unfettered capitalism who resist change are convinced that capitalism is being blamed too much for short-term economic problems—problems they variously attribute to bad governance (for example by the Bush administration) and the bad behavior of some individuals (or what John McCain described during the presidential campaign as “the greed of Wall Street”). Others do, however, see truly serious defects in the existing economic arrangements and want to reform them, looking for an alternative approach that is increasingly being called “new capitalism.”

The idea of old and new capitalism played an energizing part at a symposium called “New World, New Capitalism” held in Paris in January and hosted by the French president Nicolas Sarkozy and the former British prime minister Tony Blair, both of whom made eloquent presentations on the need for change. So did German Chancellor Angela Merkel, who talked about the old German idea of a “social market”—one restrained by a mixture of consensus-building policies—as a possible blueprint for new capitalism (though Germany has not done much better in the recent crisis than other market economies).

Ideas about changing the organization of society in the long run are clearly needed, quite apart from strategies for dealing with an immediate crisis. I would separate out three questions from the many that can be raised. First, do we really need some kind of “new capitalism” rather than an economic system that is not monolithic, draws on a variety of institutions chosen pragmatically, and is based on social values that we can defend ethically? Should we search for a new capitalism or for a “new world”—to use the other term mentioned at the Paris meeting—that would take a different form?

The second question concerns the kind of economics that is needed today, especially in light of the present economic crisis. How do we assess what is taught and championed among academic economists as a guide to economic policy—including the revival of Keynesian thought in recent months as the crisis has grown fierce? More particularly, what does the present economic crisis tell us about the institutions and priorities to look for? Third, in addition to working our way toward a better assessment of what long-term changes are needed, we have to think—and think fast—about how to get out of the present crisis with as little damage as possible.

2. What are the special characteristics that make a system indubitably capitalist—old or new? If the present capitalist economic system is to be reformed, what would make the end result a new capitalism, rather than something else? It seems to be generally assumed that relying on markets for economic transactions is a necessary condition for an economy to be identified as capitalist. In a similar way, dependence on the profit motive and on individual rewards based on private ownership are seen as archetypal features of capitalism. However, if these are necessary requirements, are the economic systems we currently have, for example, in Europe and America, genuinely capitalist?

All affluent countries in the world—those in Europe, as well as the US, Canada, Japan, Singapore, South Korea, Australia, and others—have, for quite some time now, depended partly on transactions and other payments that occur largely outside markets. These include unemployment benefits, public pensions, other features of social security, and the provision of education, health care, and a variety of other services distributed through nonmarket arrangements. The economic entitlements connected with such services are not based on private ownership and property rights.

Also, the market economy has depended for its own working not only on maximizing profits but also on many other activities, such as maintaining public security and supplying public services—some of which have taken people well beyond an economy driven only by profit. The creditable performance of the so-called capitalist system, when things moved forward, drew on a combination of institutions—publicly funded education, medical care, and mass transportation are just a few of many—that went much beyond relying only on a profit-maximizing market economy and on personal entitlements confined to private ownership.

Underlying this issue is a more basic question: whether capitalism is a term that is of particular use today. The idea of capitalism did in fact have an important role historically, but by now that usefulness may well be fairly exhausted.

For example, the pioneering works of Adam Smith in the eighteenth century showed the usefulness and dynamism of the market economy, and why—and particularly how—that dynamism worked. Smith’s investigation provided an illuminating diagnosis of the workings of the market just when that dynamism was powerfully emerging. The contribution that The Wealth of Nations, published in 1776, made to the understanding of what came to be called capitalism was monumental. Smith showed how the freeing of trade can very often be extremely helpful in generating economic prosperity through specialization in production and division of labor and in making good use of economies of large scale.

Those lessons remain deeply relevant even today (it is interesting that the impressive and highly sophisticated analytical work on international trade for which Paul Krugman received the latest Nobel award in economics was closely linked to Smith’s far-reaching insights of more than 230 years ago). The economic analyses that followed those early expositions of markets and the use of capital in the eighteenth century have succeeded in solidly establishing the market system in the corpus of mainstream economics.

However, even as the positive contributions of capitalism through market processes were being clarified and explicated, its negative sides were also becoming clear—often to the very same analysts. While a number of socialist critics, most notably Karl Marx, influentially made a case for censuring and ultimately supplanting capitalism, the huge limitations of relying entirely on the market economy and the profit motive were also clear enough even to Adam Smith. Indeed, early advocates of the use of markets, including Smith, did not take the pure market mechanism to be a freestanding performer of excellence, nor did they take the profit motive to be all that is needed.

Even though people seek trade because of self-interest (nothing more than self-interest is needed, as Smith famously put it, in explaining why bakers, brewers, butchers, and consumers seek trade), nevertheless an economy can operate effectively only on the basis of trust among different parties. When business activities, including those of banks and other financial institutions, generate the confidence that they can and will do the things they pledge, then relations among lenders and borrowers can go smoothly in a mutually supportive way. As Adam Smith wrote:

When the people of any particular country have such confidence in the fortune, probity, and prudence of a particular banker, as to believe that he is always ready to pay upon demand such of his promissory notes as are likely to be at any time presented to him; those notes come to have the same currency as gold and silver money, from the confidence that such money can at any time be had for them.[1]

Smith explained why sometimes this did not happen, and he would not have found anything particularly puzzling, I would suggest, in the difficulties faced today by businesses and banks thanks to the widespread fear and mistrust that is keeping credit markets frozen and preventing a coordinated expansion of credit.

It is also worth mentioning in this context, especially since the “welfare state” emerged long after Smith’s own time, that in his various writings, his overwhelming concern—and worry—about the fate of the poor and the disadvantaged are strikingly prominent. The most immediate failure of the market mechanism lies in the things that the market leaves undone. Smith’s economic analysis went well beyond leaving everything to the invisible hand of the market mechanism. He was not only a defender of the role of the state in providing public services, such as education, and in poverty relief (along with demanding greater freedom for the indigents who received support than the Poor Laws of his day provided), he was also deeply concerned about the inequality and poverty that might survive in an otherwise successful market economy.

Lack of clarity about the distinction between the necessity and sufficiency of the market has been responsible for some misunderstandings of Smith’s assessment of the market mechanism by many who would claim to be his followers. For example, Smith’s defense of the food market and his criticism of restrictions by the state on the private trade in food grains have often been interpreted as arguing that any state interference would necessarily make hunger and starvation worse.

But Smith’s defense of private trade only took the form of disputing the belief that stopping trade in food would reduce the burden of hunger. That does not deny in any way the need for state action to supplement the operations of the market by creating jobs and incomes (e.g., through work programs). If unemployment were to increase sharply thanks to bad economic circumstances or bad public policy, the market would not, on its own, recreate the incomes of those who have lost their jobs. The new unemployed, Smith wrote, “would either starve, or be driven to seek a subsistence either by begging, or by the perpetration perhaps of the greatest enormities,” and “want, famine, and mortality would immediately prevail….”[2] Smith rejects interventions that exclude the market—but not interventions that include the market while aiming to do those important things that the market may leave undone.

Smith never used the term “capitalism” (at least so far as I have been able to trace), but it would also be hard to carve out from his works any theory arguing for the sufficiency of market forces, or of the need to accept the dominance of capital. He talked about the importance of these broader values that go beyond profits in The Wealth of Nations, but it is in his first book, The Theory of Moral Sentiments, which was published exactly a quarter of a millennium ago in 1759, that he extensively investigated the strong need for actions based on values that go well beyond profit seeking. While he wrote that “prudence” was “of all the virtues that which is most useful to the individual,” Adam Smith went on to argue that “humanity, justice, generosity, and public spirit, are the qualities most useful to others.”[3]

Smith viewed markets and capital as doing good work within their own sphere, but first, they required support from other institutions—including public services such as schools—and values other than pure profit seeking, and second, they needed restraint and correction by still other institutions—e.g., well-devised financial regulations and state assistance to the poor—for preventing instability, inequity, and injustice. If we were to look for a new approach to the organization of economic activity that included a pragmatic choice of a variety of public services and well-considered regulations, we would be following rather than departing from the agenda of reform that Smith outlined as he both defended and criticized capitalism.

3. Historically, capitalism did not emerge until new systems of law and economic practice protected property rights and made an economy based on ownership workable. Commercial exchange could not effectively take place until business morality made contractual behavior sustainable and inexpensive—not requiring constant suing of defaulting contractors, for example. Investment in productive businesses could not flourish until the higher rewards from corruption had been moderated. Profit-oriented capitalism has always drawn on support from other institutional values.

The moral and legal obligations and responsibilities associated with transactions have in recent years become much harder to trace, thanks to the rapid development of secondary markets involving derivatives and other financial instruments. A subprime lender who misleads a borrower into taking unwise risks can now pass off the financial assets to third parties—who are remote from the original transaction. Accountability has been badly undermined, and the need for supervision and regulation has become much stronger.

And yet the supervisory role of government in the United States in particular has been, over the same period, sharply curtailed, fed by an increasing belief in the self-regulatory nature of the market economy. Precisely as the need for state surveillance grew, the needed supervision shrank. There was, as a result, a disaster waiting to happen, which did eventually happen last year, and this has certainly contributed a great deal to the financial crisis that is plaguing the world today. The insufficient regulation of financial activities has implications not only for illegitimate practices, but also for a tendency toward overspeculation that, as Adam Smith argued, tends to grip many human beings in their breathless search for profits.

Smith called the promoters of excessive risk in search of profits “prodigals and projectors”—which is quite a good description of issuers of subprime mortgages over the past few years. Discussing laws against usury, for example, Smith wanted state regulation to protect citizens from the “prodigals and projectors” who promoted unsound loans:

A great part of the capital of the country would thus be kept out of the hands which were most likely to make a profitable and advantageous use of it, and thrown into those which were most likely to waste and destroy it.[4]

The implicit faith in the ability of the market economy to correct itself, which is largely responsible for the removal of established regulations in the United States, tended to ignore the activities of prodigals and projectors in a way that would have shocked Adam Smith.

The present economic crisis is partly generated by a huge overestimation of the wisdom of market processes, and the crisis is now being exacerbated by anxiety and lack of trust in the financial market and in businesses in general—responses that have been evident in the market reactions to the sequence of stimulus plans, including the $787 billion plan signed into law in February by the new Obama administration. As it happens, these problems were already identified in the eighteenth century by Smith, even though they have been neglected by those who have been in authority in recent years, especially in the United States, and who have been busy citing Adam Smith in support of the unfettered market.

4. While Adam Smith has recently been much quoted, even if not much read, there has been a huge revival, even more recently, of John Maynard Keynes. Certainly, the cumulative downturn that we are observing right now, which is edging us closer to a depression, has clear Keynesian features; the reduced incomes of one group of persons has led to reduced purchases by them, in turn causing a further reduction in the income of others.

However, Keynes can be our savior only to a very partial extent, and there is a need to look beyond him in understanding the present crisis. One economist whose current relevance has been far less recognized is Keynes’s rival Arthur Cecil Pigou, who, like Keynes, was also in Cambridge, indeed also in Kings College, in Keynes’s time. Pigou was much more concerned than Keynes with economic psychology and the ways it could influence business cycles and sharpen and harden an economic recession that could take us toward a depression (as indeed we are seeing now). Pigou attributed economic fluctuations partly to “psychological causes” consisting of

variations in the tone of mind of persons whose action controls industry, emerging in errors of undue optimism or undue pessimism in their business forecasts.[5]

It is hard to ignore the fact that today, in addition to the Keynesian effects of mutually reinforced decline, we are strongly in the presence of “errors of…undue pessimism.” Pigou focused particularly on the need to unfreeze the credit market when the economy is in the grip of excessive pessimism:

Hence, other things being equal, the actual occurrence of business failures will be more or less widespread, according [to whether] bankers’ loans, in the face of crisis of demands, are less or more readily obtainable.[6]

Despite huge injections of fresh liquidity into the American and European economies, largely from the government, the banks and financial institutions have until now remained unwilling to unfreeze the credit market. Other businesses also continue to fail, partly in response to already diminished demand (the Keynesian “multiplier” process), but also in response to fear of even less demand in the future, in a climate of general gloom (the Pigovian process of infectious pessimism).

One of the problems that the Obama administration has to deal with is that the real crisis, arising from financial mismanagement and other transgressions, has become many times magnified by a psychological collapse. The measures that are being discussed right now in Washington and elsewhere to regenerate the credit market include bailouts—with firm requirements that subsidized financial institutions actually lend—government purchase of toxic assets, insurance against failure to repay loans, and bank nationalization. (The last proposal scares many conservatives just as private control of the public money given to the banks worries people concerned about accountability.) As the weak response of the market to the administration’s measures so far suggests, each of these policies would have to be assessed partly for their impact on the psychology of businesses and consumers, particularly in America.

5. The contrast between Pigou and Keynes is relevant for another reason as well. While Keynes was very involved with the question of how to increase aggregate income, he was relatively less engaged in analyzing problems of unequal distribution of wealth and of social welfare. In contrast, Pigou not only wrote the classic study of welfare economics, but he also pioneered the measurement of economic inequality as a major indicator for economic assessment and policy.[7] Since the suffering of the most deprived people in each economy—and in the world—demands the most urgent attention, the role of supportive cooperation between business and government cannot stop only with mutually coordinated expansion of an economy. There is a critical need for paying special attention to the underdogs of society in planning a response to the current crisis, and in going beyond measures to produce general economic expansion. Families threatened with unemployment, with lack of medical care, and with social as well as economic deprivation have been hit particularly hard. The limitations of Keynesian economics to address their problems demand much greater recognition.

A third way in which Keynes needs to be supplemented concerns his relative neglect of social services—indeed even Otto von Bismarck had more to say on this subject than Keynes. That the market economy can be particularly bad in delivering public goods (such as education and health care) has been discussed by some of the leading economists of our time, including Paul Samuelson and Kenneth Arrow. (Pigou too contributed to this subject with his emphasis on the “external effects” of market transactions, where the gains and losses are not confined only to the direct buyers or sellers.) This is, of course, a long-term issue, but it is worth noting in addition that the bite of a downturn can be much fiercer when health care in particular is not guaranteed for all.

For example, in the absence of a national health service, every lost job can produce a larger exclusion from essential health care, because of loss of income or loss of employment-related private health insurance. The US has a 7.6 percent rate of unemployment now, which is beginning to cause huge deprivation. It is worth asking how the European countries, including France, Italy, and Spain, that lived with much higher levels of unemployment for decades, managed to avoid a total collapse of their quality of life. The answer is partly the way the European welfare state operates, with much stronger unemployment insurance than in America and, even more importantly, with basic medical services provided to all by the state.

The failure of the market mechanism to provide health care for all has been flagrant, most noticeably in the United States, but also in the sharp halt in the progress of health and longevity in China following its abolition of universal health coverage in 1979. Before the economic reforms of that year, every Chinese citizen had guaranteed health care provided by the state or the cooperatives, even if at a rather basic level. When China removed its counterproductive system of agricultural collectives and communes and industrial units managed by bureaucracies, it thereby made the rate of growth of gross domestic product go up faster than anywhere else in the world. But at the same time, led by its new faith in the market economy, China also abolished the system of universal health care; and, after the reforms of 1979, health insurance had to be bought by individuals (except in some relatively rare cases in which the state or some big firms provide them to their employees and dependents). With this change, China’s rapid progress in longevity sharply slowed down.

This was problem enough when China’s aggregate income was growing extremely fast, but it is bound to become a much bigger problem when the Chinese economy decelerates sharply, as it is currently doing. The Chinese government is now trying hard to gradually reintroduce health insurance for all, and the US government under Obama is also committed to making health coverage universal. In both China and the US, the rectifications have far to go, but they should be central elements in tackling the economic crisis, as well as in achieving long-term transformation of the two societies.

6. The revival of Keynes has much to contribute both to economic analysis and to policy, but the net has to be cast much wider. Even though Keynes is often seen as a kind of a “rebel” figure in contemporary economics, the fact is that he came close to being the guru of a new capitalism, who focused on trying to stabilize the fluctuations of the market economy (and then again with relatively little attention to the psychological causes of business fluctuations). Even though Smith and Pigou have the reputation of being rather conservative economists, many of the deep insights about the importance of nonmarket institutions and nonprofit values came from them, rather than from Keynes and his followers.

A crisis not only presents an immediate challenge that has to be faced. It also provides an opportunity to address long-term problems when people are willing to reconsider established conventions. This is why the present crisis also makes it important to face the neglected long-term issues like conservation of the environment and national health care, as well as the need for public transport, which has been very badly neglected in the last few decades and is also so far sidelined—as I write this article—even in the initial policies announced by the Obama administration. Economic affordability is, of course, an issue, but as the example of the Indian state of Kerala shows, it is possible to have state-guaranteed health care for all at relatively little cost. Since the Chinese dropped universal health insurance in 1979, Kerala—which continues to have it—has very substantially overtaken China in average life expectancy and in indicators such as infant mortality, despite having a much lower level of per capita income. So there are opportunities for poor countries as well.

But the largest challenges face the United States, which already has the highest level of per capita expenditure on health among all countries in the world, but still has a relatively low achievement in health and has more than forty million people with no guarantee of health care. Part of the problem here is one of public attitude and understanding. Hugely distorted perceptions of how a national health service works need to be corrected through public discussion. For example, it is common to assume that no one has a choice of doctors in a European national health service, which is not at all the case.

There is, however, also a need for better understanding of the options that exist. In US discussions of health reform, there has been an overconcentration on the Canadian system—a system of public health care that makes it very hard to have private medical care—whereas in Western Europe the national health services provide care for all but also allow, in addition to state coverage, private practice and private health insurance, for those who have the money and want to spend it this way. It is not clear just why the rich who can freely spend money on yachts and other luxury goods should not be allowed to spend it on MRIs or CT scans instead. If we take our cue from Adam Smith’s arguments for a diversity of institutions, and for accommodating a variety of motivations, there are practical measures we can take that would make a huge difference to the world in which we live.

The present economic crises do not, I would argue, call for a “new capitalism,” but they do demand a new understanding of older ideas, such as those of Smith and, nearer our time, of Pigou, many of which have been sadly neglected. What is also needed is a clearheaded perception of how different institutions actually work, and of how a variety of organizations—from the market to the institutions of the state—can go beyond short-term solutions and contribute to producing a more decent economic world.

—February 25, 2009
Notes

[1]Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, edited by R.H. Campbell and A.S. Skinner (Clarendon Press, 1976), I, II.ii.28, p. 292.

[2]Smith, The Wealth of Nations, I, I.viii.26, p. 91.

[3]Adam Smith, The Theory of Moral Sentiments, edited by D.D. Raphael and A.L. Macfie (Clarendon Press, 1976), pp. 189–190.

[4]Smith, The Wealth of Nations, I, II.iv.15, p. 357.

[5]A.C. Pigou, Industrial Fluctuations (London: Macmillan, 1929), p. 73.

[6]Pigou, Industrial Fluctuations, p. 96.

[7]A.C. Pigou, The Economics of Welfare (London: Macmillan, 1920). Current works on economic inequality, including the major contributions of A.B. Atkinson, have been to a considerable extent inspired by Pigou’s pioneering initiative: see Atkinson, Social Justice and Public Policy (MIT Press, 1983).

Source: The New York Review of Books.

Never mind the premature obituaries. To its critics, globalization is the cause of today’s financial collapse, growing instability, unfair trade, and insecurity. To its boosters, it’s the solution to these problems. What’s not debatable is that it’s here to stay.

Evo Morales, o popular presidente esquerdista do país, que enfrenta uma eleição presidencial em dezembro, viajou à Rússia nesta semana para firmar com a Gazprom, o monopólio estatal de gás, um acordo para a exploração das reservas de gás da Bolívia até 2030.

O governo calcula que o acordo com a Gazprom, que inclui um projeto conjunto com a Total, da França, terá um valor total de US$ 3 bilhões (2,3 bilhões de euros, 2 bilhões de libras esterlinas). Ele informa que a Venezuela e a Yacimientos Petroliferos Fiscales Bolivianos (YPFB), a empresa estatal de gás boliviana, investirão juntas mais US$ 240 milhões.

O fato de a Bolívia precisar buscar ajuda assim tão longe evidencia o estrago causado pela nacionalização da sua indústria energética em 2006, afugentando companhias internacionais de grande qualificação técnica e com capacidade comprovada de obter verbas.

As consequências serão sentidas também pelos vizinhos da Bolívia, e especialmente pelo Brasil, a maior economia da região.

Carlos Alberto López, ex-ministro boliviano da Energia e consultor da Cambridge Energy Research Associates, afirma que a Bolívia, tendo minado a sua posição estratégica, volta-se agora para países como a Rússia e a Venezuela para preencher a sua lacuna de investimentos. No entanto, ele adverte que, em meio ao atual clima econômico, isso pode ser problemático.

“Por razões ideológicas este governo deseja confiar em companhias estatais. Mas a única estatal eficiente do setor é a brasileira Petrobras. A Gazprom, a Pemex, a PDVSA e o Irã não são”, diz ele, referindo-se à mexicana Pemex e à venezuelana PDVSA.

“Em períodos prósperos elas apresentam bom desempenho, mas nos períodos ruins, fracassam. A Bolívia deseja sustentar-se usando gigantes com pés de barro”.

O governo boliviano diz que espera ampliar os investimentos em petróleo e gás para US$ 530 milhões neste ano, depois que tais investimentos caíram de US$ 581 milhões em 1999 para US$ 149 milhões em 2007.

Oscar Coca, que tornou-se o quarto ministro de Hidrocarbonetos do governo Morales, tendo sido nomeado para o cargo na semana passada, disse à mídia estatal que a sua maior prioridade é atrair novos investimentos.

“As empresas não fizeram os investimentos necessários, e atualmente estamos convivendo com os efeitos disso… O nosso principal objetivo é resolver esse problema no médio e no longo prazos”, diz ele.

No entanto, as 12 companhias estrangeiras que operam na Bolívia, já abaladas pela nacionalização do setor de gás e petróleo do país, aguardam a implementação de uma legislação para os hidrocarbonetos exigida pela constituição e estão cautelosas quanto à possibilidade de envolverem-se mais.

O governo afirmou que respeitará os contratos existentes, mas um executivo de uma companhia estrangeira que foi nacionalizada expressou ceticismo em relação a essa promessa.

“O atual governo não vê problema algum em não cumprir contratos e há a percepção de que o sistema legal na Bolívia não atende aos padrões normais. Assim, se as coisas derem errado, o investidor terá que recorrer a um tribunal boliviano, e é muito improvável que tal tribunal deixe de apoiar o governo”, afirma o executivo.

López diz que a incerteza política na Bolívia acelerou a chegada de novos fornecedores na região.

“Ao contrário do que ocorria há três anos, quando a Bolívia era um fornecedor preferencial, atualmente estamos padecendo da politização do setor de hidrocarbonetos”, acusa López. “Ao tornar-se não confiável, a própria Bolívia promoveu a entrada do gás natural liquefeito na região, e agora não pode nem pensar em impor, estabelecer ou negociar preços, conforme fazia no passado”.

A Bolívia, que possui as segundas maiores reservas de gás na região, após a Venezuela, é o maior fornecedor de gás para o Brasil e a Argentina. Os seus planos para aumentar as exportações para a Argentina estão sendo atrapalhados por atrasos na construção de um gasoduto entre os dois países, e o fato de o governo boliviano não ter respeitado contratos existentes de fornecimento obrigou no ano passado a Argentina a importar gás natural liquefeito de fornecedores mais caros, de fora da região.

Buenos Aires tem importado gás da Bolívia e exportado para o Chile, mas o aumento da demanda doméstica levou os argentinos a reduzirem essas exportações a um mínimo. Atualmente tanto o Chile quanto o Uruguai cogitam importar gás natural liquefeito, que pode ser transportado por via marítima a partir de qualquer região do mundo. Os dois países veem nisso uma perspectiva mais segura no longo prazo, embora seja mais cara.

O Chile, que importa dois terços da sua energia, não pode comprar o gás de que necessita diretamente da Bolívia devido a uma disputa diplomática pendente entre os dois países.

Fonte: Financial Times.

Vejam os gráficos:

Como diferem a esquerda e a direita?

A conclusão da palestra de hoje, em Economia Básica:

Na palestra de hoje, discuti uma série de razões pelas quais os economistas mais à direita e os mais à esquerda diferem entre si, embora ambos compartilhem o mesmo arcabouço conceitual para suas análises. Aqui está um resumo:

* A direita vê grandes perdas devido ao “peso morto” associado à tributação e, portanto, está preocupada com o crescimento da participação do governo na economia. A esquerda vê menores elasticidades de oferta e demanda e, portanto, está menos preocupada com os efeitos distorcivos dos impostos.

* A direita vê as externalidades como uma falha de mercado ocasional, que pede por intervenção do governo, mas isso é uma rara exceção à regra geral, a de que os mercados levam à alocação eficiente de recursos.. A esquerda vê as externalidades como algo mais difundido na economia.

* A direita vê a competição como uma característica bem difundida na economia, e o poder de mercado é visto geralmente como limitado, tanto em magnitude, quanto em duração. A esquerda vê as grandes corporações com um grau significativo de poder de monopólio, que precisa ser avaliado por uma ativa política anti-truste.

* A direita vê os indivíduos como amplamente racionais, fazendo o melhor que podem, dados os impedimentos que têm. A esquerda vê as pessoas cometendo erros sistemáticos, e acredita que é papel do governo proteger os indivíduos de seus próprios enganos.

* A direita vê o governo como um mecanismo absurdamente ineficiente na alocação de recursos, sujeito, no melhor dos casos, aos intereses particulares dos políticos e, no pior deles, à galopante corrupção. A esquerda vê o governo como a principal instituição capaz de contrabalancear os efeitos de um mercado “todo-poderoso”.

* Há ainda um último tema que divide a direita e a esquerda – talvez o mais importante deles. É o assunto referente à distribuição de renda. A distribuição de renda baseada no mercado é justa ou injusta? E caso seja injusta, o que o governo deve fazer sobre isso? Esse é um tópico tão grande, que dedicarei minha próxima palestra exclusivamente a este tema.

Segue um trecho do texto, jutamente com o link para o artigo, disponível para download em formato pdf:

Although many experts contrast China’s grand infrastructure projects and gleaming factories built using foreign money with India’s dilapidated highways and paltry foreign-direct-investment flows, this point of view overstates the contribution of public spending and foreign investment to China’s growth. Neither of these forces assumed huge proportions in China until the late 1990s—long after relaxed financial controls and rural entrepreneurship prompted the initial growth surge, during the 1980s.

Big cities like Beijing, Shanghai, and Shenzhen are routinely extolled in the Western press as vibrant growth centers (exhibit). China’s rural areas, if mentioned at all, typically figure as impoverished backwaters. But a close analysis of the economic data reveals that these breathless descriptions of China’s modern city skylines have it exactly backward: in fact, the economy was most dynamic in rural China, while heavy-handed government intervention has stifled entrepreneurialism and ownership in the urban centers.

The McKinsey Quarterly – Private ownership: The real source of China’s economic miracle.pdf

Garças e tucanos bicam a crise

Economistas de FHC e ligados ao tucanato apresentam em livro sugestões para atenuar os efeitos da crise no Brasil.

ECONOMISTAS que integraram o governo FHC e companheiros de viagem do tucanato reuniram sugestões contra a crise num livro virtual a ser publicado em breve. Trata-se de “Como Reagir à Crise”, coletânea organizada por Edmar Bacha e Ilan Goldfajn e editada pela Casa das Garças, instituto de estudos econômicos liberal.

Do primeiro escalão do governo FHC escrevem Pedro Malan, Chico Lopes, Gustavo Franco, Edmar Bacha, Armínio Fraga e André Lara Resende. Os autores, menos um, trabalham no mercado financeiro ou são consultores financeiros. Para não baratear ainda mais os argumentos, citemos apenas sugestões de Franco, Bacha e Fraga. Franco é otimista. Não vê excessos no crédito, embora demasias nos IPOs e no mercado de capitais tenham causado exageros no setor imobiliário e de biocombustíveis.

Empresas e bancos são pouco alavancados. O contágio deveu-se à seca de crédito externo. O excesso de compulsórios, porém, piorou a crise, pois já elevava o custo de captação de bancos. Para que o crédito volte a fluir, sugere: 1) reduzir compulsórios; 2) mudar a rolagem da dívida pública de curtíssimo prazo, “com alguma “punição” para o excesso de recursos de bancos repassados ao BC”; 3) reduzir impostos sobre empréstimos a fim de baixar o “spread” bancário; 4) criar um seguro para empréstimos interbancários.

Para Franco, “não temos fraquezas fiscais”. Mas rejeita ainda mais gasto público. Sugere, ao invés, menos imposto sobre o investimento privado. Critica a inabilidade da política de reservas e de câmbio, em especial a lenta reação do BC ao estouro dos derivativos cambiais. Bacha e Fraga observam que país caminhava para déficits externos insustentáveis, dados o excesso de consumo privado e de gasto público e a valorização do real, devida também a juros altos. Tal situação se sustentava apenas devido ao boom da exportação de commodities. A seca de crédito e o fim do boom deram cabo da bonança.

Bacha propõe que se facilite a transferência de recursos, via crédito, do setor de commodities para manufaturas que ora ganham competitividade. Quanto à seca de crédito, sugere recorrer a “nossos vícios que se tornaram virtudes”. Isto é, usar as reservas internacionais (”viciadas” porque financiadas por dívida pública), bancos estatais e reduzir os altos juros e depósitos compulsórios. “Medidas de política creditícia compensatória atacam o mal pela raiz.” Fraga é mais refratário ao uso de bancos estatais contra a crise: se bancos privados limitam o crédito, é porque temem perder dinheiro. Há riscos nessa receita, diz Bacha: inflação, real ainda mais fraco, empréstimos ruins de bancos estatais. Além do mais, o risco de déficit externo alto persistirá se o crescimento seguir forte. Fraga diz o mesmo, de modo menos pessimista.

“Quanto maior controle sobre o gasto corrente do governo, maior poderá ser a expansão creditícia compensatória sem afetar negativamente as contas externas”, escreve Bacha. “Caso o governo exagere na dose anticíclica fiscal e creditícia, corre-se o risco de se desperdiçar uma possível, rara e não muito distante oportunidade de redução da taxa de juros”, escreve Fraga.

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Para fazer o download do livro, em formato pdf, clique aqui: Edmar Bacha e Ilan Goldfajn (orgs.) – Como reagir à crise.pdf

O livro dessa semana, “Development as Freedom“, não apenas um livro de economia. Na verdade, ele pouco se parece com um: não há fórmulas ou equações, e pode-se dizer que não é necessário nenhum tipo conhecimento prévio de economia para compreender o texto. A preocupação de Amartya Sen com o desenvolvimento vai muito além de índices per capita: sua questão principal é a articulação entre ética, democracia, liberalismo e desenvolvimento, que, para o autor, formam umúnico bloco de estudos. Desse modo, Sen é capaz de superar as deficiências das abordagens puramente economicistas da sociedade, assim como renegar o utilitarismo como medida válida para mensurar o bem-estar de um grupo social.

Sen sugere que a melhor medida para o bem-estar são as “capacidades” (capabilities), ou seja, as possibilidades que os homens têm para atingir seus objetivos. Daí o título do livro, “Desenvolvimento como Liberdade“: quanto mais livre uma sociedade, mais desenvolvimento possuem seus cidadãos. Devemos entender “liberdade” em seu sentido amplo: não apenas o liberalismo econômico, mas também a liberdade política, as oportunidades sociais, a transparência das decisões públicas e a segurança são fundamentais para que os grupos sociais consigam aumentar suas capacidades.

É interessante notar que o liberalismo de Amartya Sen é sustentado não pela “eficiência” dos mecanismos de mercado, mas por seus pressupostos éticos. Ecoando Adam Smith, Sen afirma que os mercados não são apenas boas ferramentas para alocação de recursos, mas também uma das liberdades fundamentais do homem: cada indivíduo deve ser livre para comprar e vender qualquer produto pelo preço que considerar adequado, buscando assim ampliar seu bem-estar. E isso só acontece em uma economia de mercado democrática. Embora nem todos os bens podem (ou devem) ser fornecidos pelo mercado, grande parte deles será melhor distribuída por esse mecanismo, que além de eficiente, amplia a liberdade de escolha de todos os cidadãos.

O argumento de que “a democracia é um luxo”, e que países pobres devem se sujeitar a regimes autocráticos para promover o desenvolvimento, para Amartya Sen, é uma enorme falácia. Se, por um lado, existem países que cresceram com métodos ditatoriais (China, URSS), há, por outro, uma série de nações cujo crescimento econômico se deu concomitantemente à democracia, como Índia, Botsuwana, Costa Rica, etc. Segundos vários estudos empíricos citados pos Sen (inclusive um de meu professor, Fernando Limongi), não existe correlação alguma entre ditadura e crescimento, mas sim entre a criação de um ambiente de negócios e desenvolvimento, seja em processos políticos fechados ou não.

Outro argumento de Sen em favor da democracia é que em nenhum país cujas liberdades políticas são cumpridas, ocorreram graves crises de fome. Os exemplos de fome nos últimos anos, segundo Sen, são todos países autocráticos: Somália, Coréia do Norte, Camboja e China, sendo que neste último houve a maior crise de fome da história da humanidade, com estimados 30 milhões de mortos durante o “Grande Salto À Frente“. A Índia, país também extremamente populoso – mas democrático -, não possui crises de fome desde 1947, quando libertou-se do domínio britânico. Mesmo se for realizada uma comparação entre oferta de comida e crescimento populacional, a província de Kerala (Índia) conseguiu, democraticamente, reduzir a natalidade de sua população de modo mais eficiente do que a China, o que mostra que não era necessária a coerção para atingir essa meta.

O livro de Amartya Sen é uma excelente fonte de inspiração para os países em desenvolvimento. Não só pelos sábios comentários a respeito de economia, mas também pela defesa intransigente dos direitos humanos e das liberdades fundamentais, temas ainda obscuros em várias nações. Leitura altamente recomendada.

pós-escrito: agradeço ao meu amigo Eric Daniele pelas discussões que tivemos a respeito do livro de Amartya Sen, e pelos comentários específicos a este post.