In the last weekend of June, we attended the Rethinking Economics Conference organised at UCL by the grassroots student association of the same name. Rethinking Economics is a global network of students that, together with other student associations from around the world, crafted the open letter that formed the International Student Initiative for Pluralism in Economics in May 2014. The London conference brought together frustrated academics and students from numerous countries to debate the sorry state of the economics academic discipline. Adair Turner and Ha-Joon Chang made keynote addresses on either end of two days that sought on the one hand to rethink standard concepts and research methodologies, while on the other to introduce marginalised perspectives by largely heterodox-leaning economists. Curriculum reform, admitting pluralism, was the overarching objective of the conference, which clearly sought to displace neoclassical economics from the royal box of economic investigation.
On 12 June 2013, the Gava courthouse in Barcelona filed a case against Lionel Messi. The Argentinean player and his father are suspected of using companies based in Uruguay and Belize to defraud the state of more than 4 million euros. A few months earlier, Bayern Munich’s general manager Uli Hoeness and French Budget Minister Jérôme Cahuzac were both accused of evading taxes through undeclared bank accounts in Switzerland. Ironically, the latter was leading the fight against tax fraud in France. A number of European multinationals, such as UBS and Vodafone, have also been suspected of taking part in proven or alleged evasion schemes. These high-profile cases have raised public awareness of tax dodging in Europe and given credit to its detractors. For instance, the Tax Justice Network estimated that 20 to 30 trillion dollars are currently held in tax havens worldwide. The issue is especially sensitive for European countries in the current context: securing stable tax revenue has become an urgent priority in times of recession and high public debt. Furthermore, the existence of tax havens within Europe – including Switzerland, Luxembourg and the Channel Islands – remains a pressing challenge for the continent.
On the evening of 5 March 2013, Venezuelan Vice President Nicolas Maduro announced the death of Hugo Chavez in Caracas. The President had been battling with cancer in Cuba and Venezuela for nearly two years. He came into office in 1999 as the first democratically elected leftwing leader in Latin America and remained President for over a decade. His funeral attracted more than 100,000 mourners, including many heads of state as well as American personalities such as Sean Penn and civil rights activist Jesse Jackson. Nicolas Maduro took over as interim President until an election is held on 14 April.
“An unexciting truth may be eclipsed by a thrilling falsehood”, Aldous Huxley, Brave New World
European economies have been facing severe difficulties since the outset of the global financial meltdown. The Eurozone crisis makes the headlines in financial publications and the mainstream media virtually every week. The accepted wisdom on economic recovery and debt reduction has rarely been questioned by journalists and policymakers. If a Martian were to land on earth – say in The Economist’s London press room – with no preconceived ideas or previous knowledge of our old continent, he would probably come to the following conclusions. In this world, Scandinavian countries like Sweden, with high taxes and bloated welfare states, cannot reverse their inevitable decline and will soon be faced with mountains of debt. Britain, he would think, is on the verge of becoming Europe’s new economic superpower thanks to a vibrant financial sector and courageous reforms undertaken by David Cameron’s coalition government since 2010. Southern European economies like Greece, Spain and Portugal are quickly recovering from recent debt crises and can expect a future of prosperity and competitiveness. And they lived happily ever after.
by Antoine Cerisier
Environmental issues have gained salience over the past decades due to greater awareness of ecological degradation and growing scientific research on climate change. The latter issue has been particularly present in the media in the last ten years. Numerous scientific reports on global warming and sea level rise have been made public; a recent World Bank publication observed a 4 degree rise in global temperatures by the end of the century “would push some countries or regions to the brink of collapse”. US politician and activist Al Gore even won the 2007 Nobel Peace Prize, along with the UN Intergovernmental Panel on Climate Change (IPCC). But environmentalism did not start with Al Gore and his emphatic coverage of climate change: environmental concerns lie far back in time.
It has been almost six months since French voters elected François Hollande as their new President, giving his party – Parti Socialiste – the absolute majority in Parliament several weeks later. His victory came as a great relief for those critical of the rightward shift operated by the French conservatives since Nicolas Sarkozy’s election in 2007 – which I addressed in a previous contribution to this blog. However, both Mr Hollande and his quiet Prime Minister Jean-Marc Ayrault have been suffering from a sharp decrease in popularity in the last few weeks: more than half of French citizens seem to disagree with their policies. Part of the explanation lies in the current socio-economic context. Unemployment just hit the three million mark and is expected to rise in 2013; dire growth prospects may undermine the government’s efforts to reduce the deficit; and massive layoffs often make the news, including those incurred by the recent closure of Arcelor Mittal’s blast-furnace facilities in North-Eastern France.
“There is no alternative” (Margaret Thatcher)
“Doctors often invent diseases which do not exist” (Eugène Ionesco, Rhinocéros)
Bloodletting was a common medical practice until the late 19th century, involving the withdrawal of blood from patients to prevent illness. Despite its inefficacy, this custom was very popular in Europe, the United States and the Middle East for more than 2000 years. Leeches were often used to remove so much blood that patients usually fainted; some died from this dangerous and ignorant treatment. Crooked doctors who practised bloodletting were often mocked and condemned by French playwright Molière in his 17th century theatre plays. In 21st century public policy, the medical removal of blood gave way to what could be described as financial bloodletting – or in other words, neoliberal austerity measures. The analogy seems a bit far-fetched but is worth looking into. Like bloodletting, austerity remains a common practice despite poor social and macroeconomic results around the world: recession, poverty, debt increases. Like bloodletting, painful solutions are considered more efficient; the more patients suffer the better. Replace blood with welfare and leeches with spending cuts and the analogy is complete.
So here it is: French citizens have voted for the first round of this year’s presidential election. And most candidates got the result they expected. The “Small 5” candidates only received 6% of votes, as opposed to 94% for the “Big 5”. The Greens’ score is particularly disappointing: Norwegian-born Eva Joly, a renowned anti-corruption judge, got less than 3%. Among the bigger candidates, Socialist François Hollande came first with almost 29%, ahead of Nicolas Sarkozy’s 27%; and François Bayrou, who was credited with 10% in the last polls, only got 9,1. However, the real surprise came from the balance of power between Jean-Luc Mélenchon and Marine Le Pen. In my last article I contended that “Marine Le Pen should not get more than 14% of the votes in the first round”, as opposed to 15 for Mr Mélenchon; I was wrong, and so were most polling agencies. In the end, Ms Le Pen and her Front National (FN) beat the leftwing candidate to the second place with an astonishing 18%, almost 7 points ahead of Mr Mélenchon. This came as a shock for most commentators, both in France and abroad.
2012 is a busy electoral year: a few weeks after the dubious presidential election in Russia and six months before American citizens go to the voting booths, France will elect its new president. The first round will take place on 22 April, with the two frontrunners qualifying for a second round on 6 May. As usual, there is little doubt that the latter will feature two candidates from the centre-left and the conservatives. Indeed, Parti Socialiste’s François Hollande and UMP’s incumbent Nicolas Sarkozy are both credited with over 25% of voting intentions in the first round of the election, far ahead of their eight rivals. Although Mr Sarkozy might win the first round, Mr Hollande remains the favourite for the second and therefore for French presidency, partly due to the incumbent’s huge unpopularity. While the five smaller parties – including the Greens and the Trotskyist left – share little more than 7 or 8% of voting intentions between themselves, three clear outsiders have emerged in the last few months. François Bayrou, the honest centrist candidate from South Western France, has been a prominent figure in French politics for quite some time; however, his popularity seems to be stagnating around no more than 10% in recent polls.