Great news! AngloHigher publishes my piece on Innovative Fiscal Policy and Social Totality. Follow the link for more
Following up on the topic [rather quickly], some newer discussions seem to reconfirm the earlier view: of pragmatic fiscal policy aimed at sustainable development. There’s been talk on problems of access to education (and quality) and manufacturing jobs drain.
Separately, looking at individual cities across the world (and US specifically), there is a wide range of sporadic efforts fighting off stubbornly high unemployment, e.g. NYC attempts to keep in “manufacturing” jobs via Fashion District & FreshDirect concessions, etc.; or the Rust Belt towns.
True to the profession, economists have offered a range of options: from complete retreat from the notion of “manufacturing” per se (see recent piece by Bhagwati) to a weighted view of the “type” of manufacturing (see C. Romer’s piece in NYT). On this last point, example of “exporting architectural plans” is quite telling and interesting, but probably is limited in scope in terms of number of potential jobs.
In either case the “state” is called upon. But it’d seem that neither moving economy to a solely “service-led” model nor specializing in high-end technical sectors as either case above would suggest, leads to immediate socially acceptable solutions.
Among others, the main culprit must be in the “developed world’s” education system that produces large stocks of unskilled and mid-level trained labor pools that w/advance of less costly-yet-same or higher quality-and more mobile labor pool elsewhere have exacerbated the current situation in places like Midwest U.S.
Here’s some sci-fi prompted by all of this and re-reading Schumpeter and Minsky…
My view, is that in 30-50 years (though may occur earlier, in case of more frequent and drastic setbacks in political economy) some form of “managed capitalism” must necessarily emerge as a new acceptable norm characterizing the new production mode.
It is not a “manufacturing policy” only, but an all encompassing approach w/attention to social well-being. Simply, to avoid a wide-scale social disturbance, there’s no escape but the “state” must intervene and at a minimum provide/improve standard education facilities that lead to jobs. Subsequently a labor pool allocation mechanism will have to be worked out as a type of public-private cooperation.
The jobs must reflect a relatively higher knowledge-base and skill of the average worker pool. On the global scale this leads to continued specialization but also cooperation, as large multinationals establish operations in several countries drawing from specialized labor force. It is in their profit-maximizing interest to keep things “socially” stable.
A framework such as that has a greater stability potential, assuming a pragmatic public-private cooperation. Here “pragmatic” economic measures are those lacking politically infused pettiness and shortsightedness. It also refers to cutting the excesses in finance and ensuring proper leverage balance to sustain business operations and social stability.
Perhaps describing this as “sci-fi” scenario may seem as an understatement for some today. Yet, it’d seem probable and dialectically necessary: battling demographic pressures (stubbornly high unemployment across all economies & rising population) vs. sustaining and improving living standards.
Leaving it all to private sector may go into two opposite directions: complete disruption (welcome OWS) or concentration of power & order in which problems of market failures, limited job growth, and unequal income distribution (three excellent observations from C. Romer’s article) are intensified.
Therefore the “State” simply, b.c. it is the rules setting entity, has the capacity to smooth out the rough edges. I chose to refer to the evolving system as “managed capitalism”–for the sake of averting some quick misinterpretations…
Certainly, the concept and increased role of state is difficult to accept due to numerous inefficiencies associated with large bureaucracy and general distrust of the fiscal policy. Yet, that is needed now and will require hard work in the future from North-South and West-East…
(to be continued)